Sagar Arun Shendge, Pune v. ACIT, Pune

ITA 1680/PUN/2012 | 2002-2003
Pronouncement Date: 22-10-2013 | Result: Partly Allowed

Appeal Details

RSA Number 168024514 RSA 2012
Assessee PAN BDNPS4476B
Bench Pune
Appeal Number ITA 1680/PUN/2012
Duration Of Justice 1 year(s) 2 month(s) 9 day(s)
Appellant Sagar Arun Shendge, Pune
Respondent ACIT, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 22-10-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 22-10-2013
Assessment Year 2002-2003
Appeal Filed On 13-08-2012
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 1680 AND 1681/PN/2012 (ASSESSMENT YEARS 2002-03 & 2006-07) SAGAR ARUN SHENDGE 410 GANESHPETH GURUNANAK ROAD PUNE 411002. .. APPELLANT PAN NO.BDNPS4476B VS. ACIT CENTRAL CIRCLE-1(2) PUNE .. RESPONDENT APPELLANT BY : SMT. DEEPA KHARE RESPONDENT BY : SMT. M.S. VERMA DATE OF HEARING : 10-10-2013 DATE OF PRONOUNCEMENT : 22-10-2013 ORDER PER R.K. PANDA AM : THE ABOVE 2 APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE SEPARATE ORDERS DATED 31-05-2012 OF THE CIT(A) CENT RAL PUNE RELATING TO ASSESSMENT YEARS 2002-03 & 2006-07 RESPECTIVELY. F OR THE SAKE OF CONVENIENCE BOTH THE APPEALS WERE HEARD TOGETHER AN D ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.1680/PN/2012 (A.Y. 2002-03) : 2. GROUND OF APPEAL NO.1 BY THE ASSESSEE READS AS U NDER : 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFI RMING ADDITION OF RS.9 150/- TO THE COMMISSION INCOME ON THE GROUND THAT THE APPELLANT HAD SUPPRESSED THE COMMISSION 2.1 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSES SEE IS AN INDIVIDUAL AND DERIVES INCOME AS COMMISSION AGENT. A SEARCH AND S EIZURE ACTION U/S.132(1) 2 OF THE I.T. ACT WAS CARRIED OUT AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE ON 04-07-2007. IN RESPONSE TO NOTICE U/S. 153A(A) THE ASSESSEE FILED THE RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YE AR ON 13-11-2009 DECLARING TOTAL INCOME AT RS.66 520/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THE AS SESSEE HAD SHOWN RECEIPT OF GROSS COMMISSION AT RS.20 850/- AS COMMISSION AG ENT FOR RTO LIAISON WORK FOR VARIOUS TYPES OF HANDLING RTO WORK. SINCE THE ASSESSEE DID NOT PRODUCE ANY DETAILS/EVIDENCE RELATED TO SUCH COMMIS SION INCOME FOR RTO LIAISON WORK THE ASSESSING OFFICER ESTIMATED SUCH I NCOME AT RS.30 000/-. WHILE DOING SO HE NOTED THAT THIS IS THE INCOME SH OWN BY THE ASSESSEE FOR THE FIRST YEAR OF FILING HIS RETURN OF INCOME. IN APPEAL THE LD.CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER FOR WHICH THE A SSESSEE IS IN APPEAL BEFORE US. 3. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLE NGED THE ADDITION OF RS.9 150/- MADE BY THE ASSESSING OFFICER AND SUSTAI NED BY THE CIT(A). SHE SUBMITTED THAT SINCE THE ASSESSMENT HAS BEEN COMPLE TED U/S.143(3) R.W.S. 153A AND SINCE NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH THEREFORE THE ASSESSING OFFICER WAS NOT JU STIFIED IN REJECTING THE INCOME DECLARED BY THE ASSESSEE AND ESTIMATING SUCH INCOME AT RS.30 000/-. SHE SUBMITTED THAT THE ASSESSING OFFICER HAD NO EVI DENCE WHATSOEVER TO SHOW THAT THE ASSESSEE HAS EARNED MORE INCOME THAN WHAT HAS BEEN DISCLOSED BY HIM. REFERRING TO THE DECISION OF THE MUMBAI BE NCH OF THE TRIBUNAL IN THE CASE OF SHRI GURINDER SINGH BAWA VS. DCIT AND V ICE-VERSA VIDE ITA NO.2075/MUM/2010 AND ITA NO.2669/MUM/2010 ORDER DAT ED 16-11-2012 SHE SUBMITTED THAT NO ADDITION CAN BE MADE IN CASE NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH. 3 4. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A ). 5. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THERE IS NO DISPUTE TO THE FACT THAT THE SEARCH TOOK PLACE ON 04-07-2007 AND THE ASSESSEE HA D NOT FILED ANY RETURN OF INCOME PRIOR TO THE DATE OF SEARCH. THERE IS ALSO NO DISPUTE TO THE FACT THAT THE ASSESSEE FILED THE RETURN OF INCOME FOR THE FIR ST TIME IN RESPONSE TO NOTICE U/S.153A(A) DECLARING TOTAL INCOME OF RS.66 520/- O N 13-11-2009. THERE IS ALSO NO DISPUTE TO THE FACT THAT THE ASSESSEE HAD D ECLARED GROSS COMMISSION OF RS.20 850/- FOR RTO LIAISON WORK AND NO DETAILS WER E FURNISHED BEFORE THE ASSESSING OFFICER SUCH AS DETAILS/EVIDENCE RELATED TO SUCH COMMISSION INCOME. UNDER THESE FACTS AND CIRCUMSTANCES THE AS SESSING OFFICER IN OUR OPINION IS JUSTIFIED IN ESTIMATING THE INCOME. HOW EVER SUCH ESTIMATION APPEARS TO BE ON THE HIGHER SIDE. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE WE RESTRICT SUCH ESTIMATE OF INCOME TO RS.24 000/- AS AGAINST RS.30 000/- DETERMINED BY THE ASSESSING OFFICER AND UPHELD BY THE CIT(A). THUS THE ADDITION OF RS.9 150/- IS RESTRICTED TO R S.3 150/-. 6. SO FAR AS THE DECISION RELIED ON BY THE LD. COUN SEL FOR THE ASSESSEE TO THE PROPOSITION THAT IN ABSENCE OF ANY INCRIMINATIN G MATERIAL PROFIT CANNOT BE ESTIMATED BY THE ASSESSING OFFICER WE FIND THE SAM E IS NOT APPLICABL TO THE FACTS OF THE PRESENT CASE. IN THE CASE OF SHRI GUR INDER SINGH BAWA (SUPRA) THE RETURN WAS FILED PRIOR TO THE DATE OF SEARCH. FURTHER IN THAT CASE ASSESSMENT HAD BEEN PROCESSED U/S.143(1) AND NO NOT ICE U/S.143(2) HAS BEEN ISSUED. THEREFORE IT WAS HELD THAT THE ASSESSMENT HAD BECOME FINAL AND WAS NOT PENDING AND THEREFORE THERE WAS NO QUESTION OF ABATEMENT. THE TRIBUNAL 4 HELD THAT IN SUCH A CASE NO ADDITION CAN BE MADE UN LESS THERE WAS SOME MATERIAL FOUND DURING THE COURSE OF SEARCH. HOWEVE R IN THE INSTANT CASE NO SUCH RETURN WAS FILED PRIOR TO THE DATE OF SEARCH A ND THE ASSESSEE HAD FILED THE RETURN FOR THE FIRST TIME IN RESPONSE TO NOTICE U/S .153A(A) DECLARING INCOME OF RS.66 520/- WHICH INCLUDES RS.20 850/- COMMISSION F OR RTO LIAISON WORK. THEREFORE THE DECISION RELIED ON BY THE LD. COUNSE L FOR THE ASSESSEE IS NOT AT ALL APPLICABLE TO THE FACTS OF THE PRESENT CASE. I N THIS VIEW OF THE MATTER THIS GROUND BY THE ASSESSEE IS PARTLY ALLOWED. 7. GROUND OF APPEAL NO.2 BY THE ASSESSEE READS AS U NDER : 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFI RMING ADDITION OF RS.1 25 726/- OUT OF RS.1 80 726/- STATING THAT APPELL ANT HAS NO EVIDENCE REGARDING CASH BROUGHT FORWARD FROM EARLIER YEAR & F AILED TO APPRECIATE THAT THERE WAS OPENING CASH BALANCE OF RS.1 25 726/-. 7.1 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSES SING OFFICER NOTED THAT DURING THE COURSE OF SEARCH ACTION SOME FIXED DEPOS IT RECEIPTS WERE FOUND IN THE NAME OF THE ASSESSEE. FROM THE PERUSAL OF THE CAPITAL ACCOUNT AS ON 31- 03-2002 HE NOTED THAT THE OPENING BALANCE HAS BEEN SHOWN AT RS.5 51 321/-. SINCE THE ASSESSEE HAD NOT SUBMITTED ANY RETURN OF INCOME PRIOR TO A.Y. 2002-03 THE ASSESSING OFFICER ON THE BASIS OF THE D OCUMENTARY EVIDENCE FILED BEFORE HIM DETERMINED THE CAPITAL HELD BY THE ASSESSEE PRIOR TO A.Y. 2002-03 AS UNDER : I) FD WITH MAHESH SAHAKARI BANK RS.2 63 317/- II) FD WITH MAHESH MAHILA BANK RS. 49 402/- III) RECURRING DEPOSIT RS. 70 000/- IV) MAHESH SAHAKARI BANK S.B.A/C NO.9293 RS. 42 541/- ----------------- RS.4 25 260/- LESS : INCOME SHOWN IN P&L A/C. ON ABOVE FDS R.D. I) INTEREST ON FDS RS.48 541/- II) INTEREST ON S.B. A/C. RS. 1 607 /- III) INTEREST ON R.D. RS. 4 517/- ------------- RS. 54 665/- ---------------- BALANCE RS.3 70 595/- 5 8. ON BEING QUESTIONED BY THE ASSESSING OFFICER THE ASSESSEE SUBMITTED THAT THE DIFFERENCE OF RS.1 80 726/- REPRESENTING C ASH BALANCE IS OUT OF CASH WITHDRAWN BY THE ASSESSEE ON VARIOUS DATES FROM THE BANK PRIOR TO 31 ST MARCH 2002. HOWEVER THE ASSESSING OFFICER WAS NOT SATIS FIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. IN ABSENCE OF ANY DOCUMENTA RY EVIDENCE/CONVINCING REPLY HE MADE ADDITION OF RS.1 80 726/- BEING DIFFE RENCE BETWEEN THE AMOUNT OF OPENING CAPITAL SHOWN BY THE ASSESSEE AND THE CAPITAL DETERMINED BY HIM. 9. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT AN AMO UNT OF RS.60 000/- WAS WITHDRAWN FROM THE BANK ON 25-10-2001 RS.50 00 0/- ON 19-01-2002 AND RS.75 000/- ON 09-03-2002. THE CASH BALANCE OF RS.1 80 726/- IS DUE TO ABOVE CASH WITHDRAWAL FROM THE BANK ACCOUNT NO.9293 ON VARIOUS DATES AND KEEPING CASH IN HAND IN THE BUSINESS. HOWEVER THE LD.CIT(A) WAS ALSO NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSE E AND GAVE PARTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER : 4.3 AFTER CAREFUL CONSIDERATION OF MATERIAL AVAILAB LE ON RECORD REVEALS THAT THE OPENING BALANCE OF RS.5 51 321/- CONSISTED OF FIXE D DEPOSITS OF RS.2 73 700/- AND RS.42 229/- WITH MAHESH SAHAKARI BAN K AND MAHESH MAHILA RESPECTIVELY. LIKEWISE THIS OPENING BALANCE A LSO CONSISTED OF BALANCES OF RS.57 590/- RS.49 000/- AND RS.3 076/- IN RECURRING DEPOSIT MAHESH SAHAKARI BANK RECURRING DEPOSIT AND MAHESH SAH AKARI BANK ACCOUNT 9293 RESPECTIVELY. THESE BALANCES ARE BROUGHT FORWARD BALANCES FROM THE EARLIER YEAR. THEREFORE THESE AMOUNTS CANN OT REPRESENT ANY INCOME OF THE A.Y. 2002-03. THE OPENING BALANCE OF RS.5 51 321/- ALSO CONSISTED OF CASH OF RS.1 25 726/-. THE APPELLANT HAS NOT GIVEN AN Y EVIDENCE TO THE EFFECT THAT THIS CASH ACTUALLY HAS BEEN BROUGHT FORWARD FROM THE EARLIER YEAR. UNDER THE CIRCUMSTANCES THIS CASH HAS SURFACED IN THE PERIOD R ELEVANT FOR A.Y. 2002- 03 FOR THE FIRST TIME. UNDER THE CIRCUMSTANCES THIS C ASH REPRESENTS UNEXPLAINED INCOME OF THE APPELLANT FOR A.Y. 2002-0 3. THEREFORE THE ADDITION OF RS.1 80 750/- ON ACCOUNT OF OPENING BALA NCE IS RESTRICTED TO RS.1 25 726/-. THEREFORE THIS GROUND OF APPEAL IS PA RTLY ALLOWED. 9.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 6 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE LD.CIT(A) HAD GIVEN A CATEGORICAL FINDING THAT OPENING BALANCE OF RS.5 51 322/- CONSIST OF CASH OF RS.1 25 726/- APART FROM OTHER DEPOSITS AND THE ASS ESSEE HAS NOT GIVEN ANY EVIDENCE TO THE FACT THAT THIS CASH ACTUALLY HAS BE EN BROUGHT FORWARD FROM THE EARLIER YEAR. WE FIND IT IS THE EXPLANATION OF THE ASSESSEE THAT THE CASH DRAWN ON 25-10-2001 AMOUNTING TO RS.60 000/- RS.50 000/- ON 19-01-2002 AND RS.75 000/- ON 09-03-2002 EXPLAINS THE CASH AMOUNT OF RS.1 80 726/-. HOWEVER THIS IN OUR OPINION IS HIGHLY IMPROBABLE. WHEN THE ASSESSEE HAD WITHDRAWN CASH OF RS.60 000/- ON 25-10-2001 IT CAN NOT BE SAID THAT THE ASSESSEE HAS WITHDRAWN ANOTHER RS.50 000/- ON 19-01 -2002 WITHOUT EXHAUSTING THE SAME. SINCE THE REVENUE IS NOT IN A PPEAL BEFORE US AGAINST THE ORDER OF THE CIT(A) RESTRICTING THE DISALLOWANCE TO RS.1 25 726/- AS AGAINST RS.1 80 750/- DISALLOWED BY THE ASSESSING OFFICER THEREFORE THE ORDER OF THE CIT (A) IN OUR OPINION IS THE MOST REASONED ONE AND DOES NOT REQUIRE ANY INTERFERENCE. WE ACCORDINGLY UPHOLD THE SAME AND T HE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 11. SO FAR AS THE ARGUMENT OF THE LD. COUNSEL FOR T HE ASSESSEE THAT NO INCRIMINATING MATERIAL WAS FOUND AND THEREFORE NO A DDITION COULD BE MADE WE HAVE ALREADY DECIDED THE ISSUE AGAINST THE ASSES SEE WHILE DECIDING GROUND OF APPEAL NO.1 AND THEREFORE THE SAME REQUIR ES NO FURTHER ADJUDICATION. IN THIS VIEW OF THE MATTER GROUND O F APPEAL NO.2 BY THE ASSESSEE IS DISMISSED. 7 ITA NO.1681/PN/2012 (A.Y. 2006-07) : 12. GROUND OF APPEAL NO.1 BY THE ASSESSEE READS AS UNDER : 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFI RMING ADDITION OF RS.27 900/- TO THE COMMISSION INCOME ON THE GROUND THA T THE APPELLANT HAD SUPPRESSED THE COMMISSION 12.1 FACTS OF THE CASE IN BRIEF ARE THAT AS AGAIN ST DECLARATION OF RS.12 100/- ON ACCOUNT OF COMMISSION FOR RTO LIAISON WORK THE A SSESSING OFFICER ESTIMATED THE SAME AT RS.40 000/- IN ABSENCE OF ANY DOCUMENTARY EVIDENCE/PROOF FOR EARNING SUCH COMMISSION INCOME. IN APPEAL THE LD.CIT(A) UPHELD THE ADDITION OF RS.27 900/- FOR WH ICH THE ASSESSEE IS IN APPEAL BEFORE US. 13. AFTER HEARING BOTH THE SIDES WE FIND THE ABOVE GROUND IS IDENTICAL TO GROUND OF APPEAL NO.1 IN ITA NO.1680/PN/2012. FOLL OWING THE RATIO LAID DOWN THERE AND CONSIDERING THE FACT THAT THE ASSESS EE HAS BECOME A PARTNER IN A FIRM WITH M/S. SAGAR LPG AND CNG GAS KIT DURING T HE IMPUGNED ASSESSMENT YEAR ESTIMATION OF SUCH INCOME AT RS.40 000/- APPEARS TO BE ON THE HIGHER SIDE. WE THEREFORE RESTRICT SUCH INCO ME TO RS.18 000/- FOR THE IMPUGNED ASSESSMENT YEAR. SINCE THE ASSESSEE DECLA RED COMMISSION INCOME OF RS.12 100/- THE DIFFERENCE OF RS.5 900/- IS SUST AINED AS AGAINST RS.27 900/- DETERMINED BY THE ASSESSING OFFICER AND UPHELD BY THE CIT(A). GROUND OF APPEAL NO.1 BY THE ASSESSEE IS ACCORDINGL Y PARTLY ALLOWED. 14. GROUND OF APPEAL NO.2 BY THE ASSESSEE READS AS UNDER : 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFI RMING ADDITION OF RS.10 000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT. 14.1 AFTER HEARING BOTH THE SIDES WE FIND THE ASSE SSING OFFICER MADE ADDITION OF RS.10 000/- TOWARDS A NEW DEPOSIT WITH MAHESH SAHAKARI BANK IN ABSENCE OF ANY PROPER EXPLANATION BY THE ASSESSE E. IN APPEAL THE 8 LD.CIT(A) UPHELD SUCH ACTION FOR WHICH THE ASSESSEE IS IN APPEAL BEFORE US. WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION OF RS.10 000/- IS NOT WARRANTED IN VIEW OF THE ADDITION SUSTAINED BY US I N THE PRECEDING PARAGRAPHS ON ACCOUNT OF COMMISSION FOR RTO LIAISON WORK AND THE CASH AVAILABLE IN THE INITIAL ASSESSMENT ORDER I.E. A.Y . 2002-03. THE ADDITION SUSTAINED IN THE ABOVE 2 YEARS IS MORE THAN THE DEP OSIT OF RS.10 000/- AND THEREFORE NO ADDITION SHOULD BE MADE FOR WANT OF SO URCE OF THE DEPOSIT OF RS.10 000/-. WE ACCORDINGLY SET-ASIDE THE ORDER OF CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION. GROUND O F APPEAL NO.2 IS ACCORDINGLY ALLOWED. 15. IN THE RESULT BOTH THE APPEALS FILED BY THE AS SESSEE ARE PARTLY-ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF OCTOBER 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER A CCOUNTANT MEMBER PUNE DATED: 22 ND OCTOBER 2013 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A) CENTRAL PUNE 4. CIT CENTRAL PUNE 5 THE D.R A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT PUNE BENCHES PUNE