ROSHAN LAL SONI, Jaipur v. ITO, Alwar

ITA 168/JPR/2016 | 1998-1999
Pronouncement Date: 30-09-2016 | Result: Allowed

Appeal Details

RSA Number 16823114 RSA 2016
Assessee PAN AGCPS8689K
Bench Jaipur
Appeal Number ITA 168/JPR/2016
Duration Of Justice 7 month(s) 4 day(s)
Appellant ROSHAN LAL SONI, Jaipur
Respondent ITO, Alwar
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted Not Allotted
Tribunal Order Date 30-09-2016
Assessment Year 1998-1999
Appeal Filed On 25-02-2016
Judgment Text
- VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCHES (SMC) JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 168 TO 171/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR :1998-99 TO 2001-02 SHRI ROSHAN LAL SONI NEAR HERO SHOW ROOM KOTPUTLI JAIPUR CUKE VS. THE ITO WARD- BEHROR ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AGCPS 8689 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY:SHRI R.A. VERMA ADDL.CIT - DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: NONE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28/09/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30 /09/2016 VKNS'K@ ORDER PER BHAGCHAND AM THE ASSESSEE HAS FILED FOUR APPEALS AGAINST SEP ARATE ORDERS OF THE LD. CIT(A) ALWAR DATED 22-12-2015 FOR THE ASSESSM ENT YEARS 1998-99 TO 2001-02 RAISING THEREIN FOLLOWING GROUNDS OF APPEA L. THE AO HAS ERRED IN IMPOSING PENALTY U/S 271(1) OF RS. 5560 (A.Y. 1988-99) RS. 30 170 (A.Y. 1999-2000) R S. 1 49 100/- (A.Y. 2000-01 AND RS. 1 07 980 (A.Y. 2001-02) ON AC COUNT OF ITA NO. 168/JP/2016 SHRI ROSHAN LAL SONI VS. ITO WARD- BEHROR ALWAR 2 INACCURATE PARTICULARS OF INCOME. LD. CIT(A) HAS ER RED IN CONFIRMING THE SAME. 2.1 NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPIT E OF SERVICE OF NOTICE OF THIS HEARING. CONSEQUENTLY THE BENCH IS LEFT WITH NO ALTERNATIVE BUT TO DECIDE THE APPEALS ON MERITS EX PARTE QUA T HE ASSESSEES WRITTEN SUBMISSION AFTER HEARING LD. DR AND AFTER PERUSAL OF THE MATERIALS AVAILABLE ON RECORD. 2.2 IT IS NOTED FROM THE WRITTEN SUBMISSIONS OF THE ASSESSEE DATED 22-09-2016 IN WHICH THE ASSESSEE PRAYED THAT THE QU ANTUM ADDITIONS OF THE ASSESSEE RELATING TO THE ABOVE APPEALS HAVE BEE N DECIDED BY THE COORDINATE BENCH IN FAVOUR OF THE ASSESSEE. HENCE THE PENALTY CONFIRMED BY THE LD. CIT(A) SHOULD BE DELETED. 2.3 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 2.4 I HAVE HEARD THE LD. DR AND PERUSED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE WRITTEN SUBMISSION OF THE ASSE SSEE. IT IS OBSERVED THAT THE ISSUE OF QUANTUM WAS DECIDED IN FAVOUR OF THE ASSESSEE BY COORDINATE BENCH VIDE ITS ORDER DATED 04-08-20116 IN ITA NO. 677 TO ITA NO. 168/JP/2016 SHRI ROSHAN LAL SONI VS. ITO WARD- BEHROR ALWAR 3 680/JP/2011 FOR THE ASSESSMENT YEAR 1989 TO 2001-02 .2007-08 BY OBSERVING AS UNDER:- 5.10 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO TED THAT SHRI SURESH SONI SON OF THE ASSESSEE IN HIS STATEMENT RE CORDED ON 10.08.2001 I.E. THE DAY OF SURVEY VIDE ANSWER TO Q. NO. 13 & 14 HAS STATED THAT THE INVESTMENT IN THE CONSTRUCTION OF THE HOUSE AND IN THE UNACCOUNTED STOCK OF GOLD AND SILVER WA S OUT OF THE UNDISCLOSED INCOME OF PURCHASE AND SALES RELATING T O M/S ROSHAN LAL & SONS JEWELLERS BASED ON THESE LOOSE PAPERS. SHRI SURESH SONI IN HIS OWN STATEMENT RECORDED U/S 131 ON DATED 21.08.2001 CONFIRMS HIS SON STATEMENT AND IN ANSWER TO Q. NO. 2 HE STATED THAT ANN. 8 9 & 12-17 ARE RELATED TO THE BUSINESS M/S ROSHAN LAL & SONS AND THE ENTRIES MENTIONED THEREIN ARE THE OU TSTANDING RECOVERIES FROM UNRECORDED SALES. THE UNDISCLOSED I NVESTMENT IN THE HOUSE WAS THE UNDISCLOSED BUSINESS INCOME. WHAT EVER UNDISCLOSED INCOME WAS GENERATED OUT OF THE UNRECOR DED SALES WAS CONVERTED INTO CASH AND STOCK. AT BOTH THE OCCA SIONS HE STATED THE FIGURE OF THE UNDISCLOSED STOCK OF RS.26 .05 LACS AND INVESTMENT IN THE HOUSE AT RS.5 LACS AND THE OTHER UNEXPLAINED EXPENDITURE/ASSET ALSO. THUS THE RECOVERIES FROM T HE OUTSTANDING DEBTORS STOOD INVESTED/CONVERTED INTO UNEXPLAINED I NVESTMENT TOTALLING TO RS.36 13 140/- WHICH ADMITTEDLY HAS A LREADY BEEN ITA NO. 168/JP/2016 SHRI ROSHAN LAL SONI VS. ITO WARD- BEHROR ALWAR 4 DISCLOSED BY THE ASSESSEE SEPARATELY AND GOT TAXED IN A.Y.2002-03. FURTHER IT IS NOTED THAT THE FACT OF AVAILABILITY OF THE RECOVERIES MADE FROM THE DEBTORS IS ALSO EVIDENT FROM THE CONF IRMATIONS FROM THE VARIOUS DEBTORS WHEREIN THEY HAVE STATED THAT THEY GOT THE ORNAMENTS MANUFACTURED FROM THE ASSESSEE MENTI ONING THE AMOUNT THEREOF AND THAT THE PAYMENT THEREOF HAS BEE N MADE WITHIN A MAXIMUM PERIOD OF TWO MONTHS FROM THE DATE OF SUCH PURCHASE/MAKING. THE LD AR FURTHER SUBMITTED THAT T HE AO IN ALL THE YEARS WHILE MAKING ADDITION OF OUTSTANDING DEBT ORS ALLEGED THAT THIS WAS ADMITTED BY APPELLANT IN HIS STATEMEN T RECORDED ON 10.08.2001. AT THE SAME TIME THE OTHER PART OF THE STATEMENTS WHERE THE ASSESSEE HAS REPEATEDLY SUBMITTED THAT TH E UNEXPLAINED ASSETS ALREADY DISCLOSED AT RS.36 13 14 0/- CAME OUT OF THE RECOVERIES FROM THE OUTSTANDING DEBTORS AND THE INCOME THERE FROM AS DETAILED IN OUR SUBMISSION DT. 11.03 .2016 FOR OTHER YEARS MUST HAVE BEEN ACCEPTED AS WELL. 5.11 THE HONBLE SUPREME COURT IN CASE OF ANANTHARA M VEERASINGHAIAH (SUPRA) HAS HELD AS UNDER: NOW IT CAN HARDLY BE DENIED THAT WHEN AN 'INTANGIB LE' ADDITION IS MADE TO THE BOOK PROFITS DURING AN ASSE SSMENT PROCEEDING IT IS ON THE BASIS THAT THE AMOUNT REPR ESENTED BY THAT ADDITION CONSTITUTES THE UNDISCLOSED INCOME OF THE ASSESSEE. THAT INCOME ALTHOUGH COMMONLY DESCRIBED AS 'INTANGIBLE' IS AS MUCH A PART OF HIS REAL INCOME AS THAT DISCLOSED BY HIS AC COUNT BOOKS. IT ITA NO. 168/JP/2016 SHRI ROSHAN LAL SONI VS. ITO WARD- BEHROR ALWAR 5 HAS THE SAME CONCRETE EXISTENCE. IT COULD BE AVAILA BLE TO THE ASSESSEE AS THE BOOK PROFITS COULD BE. THERE CAN BE NO ESCAPE FROM THE PROPOSITION THAT TH E SECRET PROFITS OR UNDISCLOSED INCOME OF AN ASSESSEE EARNED IN AN EARLIER ASSESSMENT YEAR MAY CONSTITUTE A FUND EVEN THOUGH CONCEALED FROM WHICH THE ASSESSEE MAY DRAW SUBSEQUENTLY FOR M EETING EXPENDITURE OR INTRODUCING AMOUNTS IN HIS ACCOUNT B OOKS. BUT IT IS QUITE ANOTHER THING TO SAY THAT ANY PART OF THAT FU ND MUST NECESSARILY BE REGARDED AS THE SOURCE OF UNEXPLAINE D EXPENDITURE INCURRED OR OF CASH CREDITS RECORDED DURING A SUBSE QUENT ASSESSMENT YEAR. THE MERE AVAILABILITY OF SUCH A FU ND CANNOT IN ALL CASES IMPLY THAT THE ASSESSEE HAS NOT EARNED FURTH ER SECRET PROFITS DURING THE RELEVANT ASSESSMENT YEAR. NEITHER LAW NO R HUMAN EXPERIENCE GUARANTEES THAT AN ASSESSEE WHO HAS BEEN DISHONEST IN ONE ASSESSMENT YEAR IS BOUND TO BE HONEST IN A SUBS EQUENT ASSESSMENT YEAR. IT IS A MATTER FOR CONSIDERATION B Y THE TAXING AUTHORITY IN EACH CASE WHETHER THE UNEXPLAINED CASH DEFICITS AND THE CASH CREDITS CAN BE REASONABLY ATTRIBUTED TO A PRE-EXISTING FUND OF CONCEALED PROFITS OR THEY ARE REASONABLY EXPLAIN ED BY REFERENCE TO CONCEALED INCOME EARNED IN THAT VERY YEAR. IN EA CH CASE THE TRUE NATURE OF THE CASH DEFICIT AND THE CASH CREDIT MUST BE ASCERTAINED FROM AN OVERALL CONSIDERATION OF THE PA RTICULAR FACTS AND CIRCUMSTANCES OF THE CASE. EVIDENCE MAY EXIST T O SHOW THAT RELIANCE CANNOT BE PLACED COMPLETELY ON THE AVAILAB ILITY OF A PREVIOUSLY EARNED UNDISCLOSED INCOME. A NUMBER OF C IRCUMSTANCES OF VITAL SIGNIFICANCE MAY POINT TO THE CONCLUSION T HAT THE CASH DEFICIT OR CASH CREDIT CANNOT REASONABLY BE RELATED TO THE AMOUNT COVERED BY THE INTANGIBLE ADDITION BUT MUST BE REGA RDED AS POINTING TO THE RECEIPT OF UNDISCLOSED INCOME EARNE D DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. IT IS OPEN IN TO THE REVENUE TO RELY ON ALL THE CIRCUMSTANCES POINTING TO THAT C ONCLUSION. 5.12 THE HONBLE RAJASTHAN HIGH IN CASE OF TYARYAMAL BAL CHAND (SUPRA) HAS HELD AS UNDER: ITA NO. 168/JP/2016 SHRI ROSHAN LAL SONI VS. ITO WARD- BEHROR ALWAR 6 IT IS CLEAR FROM THE LAW DISCUSSED ABOVE THAT THE ITO WAS WITHIN HIS RIGHT TO TAX THE AMOUNT OF RS. 16 950 AS INCOME FROM UNDISCLOSED SOURCES. EVEN THOUGH HE HAD ADDED THE A MOUNT OF RS. 18 117 IN ADDITION TO THE PROFIT SHOWN BY THE RESPO NDENT-FIRM IN THEIR ACCOUNT BOOKS. HOWEVER IN THE PRESENT CASE THE RESPONDENT WAS WELL WITHIN HIS RIGHTS TO PLEAD THAT THIS AMOUN T OF RS. 16 950 IS COVERED FROM THE INTANGIBLE INCOME ASSESSED AT RS. 18 117 AND ADDED IN THE INCOME OF THE FIRM AND APART FROM THIS SINCE FOR THE LAST PRECEDING 3 YEARS SUBSTANTIAL ADDITIONS AMOUN TING TO RS. 32 797 HAVE BEEN ADDED THE AMOUNT OF RS. 16 950 CO ULD BE TAKEN AS HAVING COME OUT OF SUCH INTANGIBLE ADDITIONS. IN THE CASE OF ANANTHARAM VEERASINGHAIAH & CO. (SUPRA) THEIR LORD SHIPS OF THE SUPREME COURT HAVE HELD THAT THE ADDITIONS MADE TO THE BOOK PROFITS IN EARLIER YEARS ARE THE REAL INCOME AND CA N BE TREATED AS AVAILABLE FOR USE IN SUBSEQUENT YEARS OR EVEN IN TH E SAME YEAR. 5.13 IN THE INSTANT CASE THE SURRENDER OF RS 36 13 140 DURING AY 2002-2003 RELATES TO STOCK ACCUMULATED OU T OF INCOME EARNED FROM SALE/PURCHASE OF GOLD AND JOB WORK CHARG ES OF RS 26 50 000 CASH FOUND DURING SURVEY OF RS 63 140 I NVESTMENT IN HOUSE OF RS 5 00 000 TRADE DEBTORS OUTSTANDING OF RS 3 00 000 AND LOAN AND INTEREST OF RS 1 00 000. IN THE STATE MENT OF SHRI SURESH SONI SON OF THE ASSESSEE AND WHICH IS SUBSE QUENTLY CONFIRMED BY THE ASSESSEE IN HIS OWN STATEMENT IT HAS BEEN MENTIONED THAT INVESTMENTS MADE IN STOCK CASH FOUN D DURING SURVEY ETC ARE OUT OF THE SAME BUSINESS RECEIPTS A ND TRADE DEBTORS. NOTHING HAS BEEN BROUGHT ON RECORD BY THE REVENUE IN TERMS OF ANY TANGIBLE EVIDENCE TO PROVE OTHERWISE. THE SURRENDER OF RS 36 13 140 AND ADDITIONS OF TRADE DEBTORS OVER ALL THESE YEARS ITA NO. 168/JP/2016 SHRI ROSHAN LAL SONI VS. ITO WARD- BEHROR ALWAR 7 AMOUNTING TO RS 9 19 191 HAVE THEIR ORIGIN IN TERMS OF STATEMENTS RECORDED OF SHRI SURESH SONI THE ASSESSEE AS WELL AS SAME SET OF DOCUMENTS IN TERMS OF KATURIA NOTE BOOK AND LOOSE P APERS FOUND DURING THE COURSE OF SURVEY WHICH HAVE TO BE READ A ND CONSIDERED IN ENTIRETY AND WHICH PROVE THAT THE QUALITY OF TRA DE DEBTORS IN ALL THESE YEARS AND SURRENDER OF STOCK AND CASH AND EVE N INVESTMENT IN HOUSE IS NOT DIFFERENT. IN THE ENTIRETY OF FAC TS AND CIRCUMSTANCES OF THE CASE WHERE THE REALISATION FR OM SALES FOR THE YEAR AND PREVIOUS YEARS HAVE BEEN INVESTED IN THE S TOCK OF GOLD AND HOUSE PROPERTY AND WHICH HAVE ALREADY BEEN BROU GHT TO TAX AS SURRENDERED INCOME THE SAME TRADE DEBTORS CANNO T BE BROUGHT TO TAX AGAIN IN THE HANDS OF THE ASSESSEE. IN LIGHT OF THAT AND RESPECTFULLY FOLLOWING THE DECISIONS OF HONBLE SUPREME COURT IN CASE OF ANANTHARAM VEERASINGHAIAH (SUPRA) AND HO NBLE RAJASTHAN HIGH COURT IN CASE OF TYARYAMAL BAL CHAND (SUPRA) WE DELETE THE ADDITIONS MADE BY THE AO IN ALL THESE YE ARS TOTALLING TO RS 9 19 191. HENCE GROUND TAKEN BY THE ASSESSEE I S ALLOWED IN ALL THE YEARS UNDER CONSIDERATION. TAKING INTO CONSIDERATION THE ABOVE FACTS AND CIRCU MSTANCES OF THE CASE AND ALSO THE ORDER OF COORDINATE BENCH IN ITA NO. 6 77 TO 680/2011 FOR THE ASSESSMENT YEAR 1998-99 TO 2001-02 AS TO DELETI ON OF ADDITIONS IN THE ABOVE QUANTUM APPEALS OF THE ASSESSEE I DIRECT TO DELETE THE ABOVE ITA NO. 168/JP/2016 SHRI ROSHAN LAL SONI VS. ITO WARD- BEHROR ALWAR 8 PENALTIES IMPOSED U/S 271(1) BY THE AO AND ORDERS OF THE LD. CIT(A) ARE REVERSED. THUS THE APPEALS OF THE ASSESSEE ARE ALLOWED. 3.0 IN THE RESULT THE APPEALS OF THE ASSESSEE ARE ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 30 / 09/2016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 /09/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI ROSHAN LAL SONI KOTPUTLI 2. IZR;FKHZ@ THE RESPONDENT- THE ITO WARD- BEHROR ALWAR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR ITAT JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 168 TO 171/JP/2016) VKNS'KKUQLKJ@ BY ORDER LGK;D IATHDKJ @ ASSISTANT. REGISTRAR