ACIT, Alwar v. SATISH CHAND BANSAL, Dausa

ITA 170/JPR/2011 | 2005-2006
Pronouncement Date: 22-07-2011 | Result: Allowed

Appeal Details

RSA Number 17023114 RSA 2011
Bench Jaipur
Appeal Number ITA 170/JPR/2011
Duration Of Justice 4 month(s) 28 day(s)
Appellant ACIT, Alwar
Respondent SATISH CHAND BANSAL, Dausa
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 22-07-2011
Assessment Year 2005-2006
Appeal Filed On 24-02-2011
Judgment Text
1 ITA 170-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 170/JP/2011 ASSTT. YEAR : 2005-06. THE ACIT CIRCLE-1 VS. SHRI SATISH CHAND BANSAL ALWAR. PROP. M/S. BANSAL AUTOMOBILES AGRA ROAD MAHWA DAUSA. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.K. MEENA RESPONDENT BY : SHRI S.L. PODDAR ORDER DATE OF ORDER : 22/07/2011. PER R.K. GUPTA J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2005-06. 2. THE DEPARTMENT IS OBJECTING IN DELETING THE ADDI TION OF RS. 7 57 788/- AND DELETING ADDITION OF RS. 13 02 934/- MADE BY AO ON ACCOUNT O F UNACCOUNTED STOCK AND ON ACCOUNT OF UNACCOUNTED PURCHASE RESPECTIVELY. THE DEPARTME NT IS ALSO OBJECTING IN DELETING THE ADDITION OF RS. 74 524/- MADE BY THE AO ON ACCOUNT OF GOLD JEWELLERY. 3. THE LD. D/R HAS PLACED RELIANCE ON THE ORDER OF AO. 4. ON THE OTHER HAND LD. COUNSEL OF THE ASSESSEE PL ACED RELIANCE ON THE ORDER OF LD. CIT (A). HE FURTHER FILED A BRIEF NOTE IN THE SHAP E OF WRITTEN SUBMISSION. 5. AFTER CONSIDERING THE ORDERS OF AO AND LD. CIT ( A) AND WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE THE APPEAL IS BEING DISP OSED OFF IN THE FOLLOWING MANNER. 2 6. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME FOR THE RELEVANT PERIOD DECLARING TOTAL INCOME AT RS. 7 92 830/- ON 6.3.2006 IN RESPONSE TO NOTICE UNDER SECTION 142(1) DATED 26.12 .2005. IT MAY BE POINTED OUT THAT A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF T HE INCOME TAX ACT 1961 WAS CARRIED OUT AT THE RESIDENCE OF THE ASSESSEE AND A SURVEY U NDER SECTION 133A OF THE INCOME TAX ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF SH RI SATISH CHANDRA BANSAL PROPRIETOR OF M/S. BANSAL AUTOMOBILES AGRA JAIPUR ROAD MAHWA D ISTT. DAUSA. DURING THE COURSE OF SEARCH AND SURVEY VARIOUS INCRIMINATING DOCUMENTS W ERE FOUND AND SEIZED. AS A RESULT OF SURVEY IT WAS NOTICED THAT THERE WAS AN EXCESS STO CK FOUND. THE ASSESSEE HAS DISCLOSED EXCESS STOCK OF RS. 10 57 676/- IN THE INCOME OF TH E ASSESSEE. IN THIS CASE RECTIFICATION ORDER DATED 07.03.2007 WAS PASSED BY THE AO AND HE HAS GIVEN CREDIT OF RS. 10 57 676/- AND RS. 53 000/- AND FINALLY DIFFERENCE IN CLOSING STOCK REDUCED FROM RS. 18 68 464/- TO RS. 7 57 788/-. 7. BEFORE LD. CIT (A) IT WAS CONTENDED THAT AO HAS NOT GIVEN CREDIT OF PURCHASE BILLS WHICH WERE NOT POSTED IN THE BOOKS OF ACCOUNT AT TH E TIME OF SEARCH. HOWEVER RELEVANT PURCHASE BILLS WERE SEIZED IMPOUNDED BY THE DEPART MENT WHICH ARE IN POSSESSION OF THE DEPARTMENT. LIST OF BILLS FOR RS. 12 34 888/- R S. 6 03 067/- LIST OF CREDIT NOTES FOR RS. 70 488/- AND LIST OF DOUBLE ENTERED BILLS FOR RS. 4 06 512/- WERE FILED DURING THE ASSESSMENT PROCEEDING ITSELF. PHOTOCOPIES OF SEIZE D MATERIALS WERE PRODUCED BEFORE LD. CIT (A). THE ORIGINAL SEIZED MATERIAL WAS ALSO REQ UISITIONED BY LD. CIT (A) TO VERIFY THE SAME. ON THE BASIS OF SEIZED MATERIAL TRADING ACC OUNT WAS RECASTED WHICH IS REPRODUCED IN THE ORDER OF LD. CIT (A) AT PAGE 3. AFTER CONSI DERING THE RECASTED TRADING ACCOUNT THE LD. CIT (A) FOUND THAT NO DIFFERENCE REMAINED IN TH E STOCK THEREFORE LD. CIT (A) HELD 3 THAT THERE WAS NO JUSTIFICATION IN SUSTAINING THE A DDITION OF RS. 7 57 788/-. ACCORDINGLY HE DELETED THE ADDITION. 8. THE FINDING OF LD. CIT (A) NEITHER COULD BE CONT ROVERTED NOR ANY MATERIAL WAS BROUGHT ON RECORD TO ESTABLISH OTHERWISE. THEREFOR E WE SEE NO REASON TO INTERFERE WITH THE FINDING OF LD. CIT (A). ACCORDINGLY WE CONFIR M THE FINDING OF LD. CIT (A) IN RESPECT TO ADDITION ON ACCOUNT OF UNACCOUNTED STOCK. 9. REGARDING DELETION OF ADDITION OF RS. 13 02 934/ - ON ACCOUNT OF INVESTMENT IN UNACCOUNTED PURCHASES THE AO OBSERVED THAT THERE WAS UNACCOUNTED SALES AMOUNTING TO RS.65 14 773/- AND PURCHASE OF RS. 8 19 275/-. ASS ESSEE HAS OFFERED RS. 1.43 LAC AS GROSS PROFIT ON THE ABOVE UNACCOUNTED SALES FOR TAXATION. THE AO FOUND CONTRADICTION IN THE SUBMISSIONS OF UNACCOUNTED PURCHASE AND SALES. THE REFORE HE ESTIMATED INVESTMENT IN UNACCOUNTED PURCHASE @ 20% WHICH RESULTED IN A ADDI TION OF RS. 13 02 934/-. IT WAS CONTENDED BEFORE LD. CIT (A) THAT DURING SEARCH/SUR VEY NUMBER OF LOOSE PAPERS/NOTE BOOKS ESTIMATED CHALLAN BOOK ETC. WERE SEIZED. IN THESE PAPERS CERTAIN TRANSACTIONS OF UNACCOUNTED SALES/PURCHASES WERE NOTED. SUMMARY OF SALES AND PURCHASES WERE ALSO FILED. IT WAS FURTHER SUBMITTED THAT THE SALES AND PURCHASES WERE MADE IN EARLIER YEARS ALSO WHICH REMAINED UNACCOUNTED AND ON ACCOUNT OF U NACCOUNTED STOCK THE ASSESSEE HAS ALREADY SURRENDERED AN AMOUNT OF RS. 10 00 000/- OR ODD. THEREFORE THERE IS NO QUESTION OF MAKING ANY ADDITION ON ACCOUNT OF INVESTMENT IN PURCHASE AS THE AMOUNT OF RS. 10 00 000/- OR ODD WAS AVAILABLE WITH THE ASSESSEE FOR MAKING THE INVESTMENT IN PURCHASE. THE PROFIT ON SALES WHICH REMAINED UNACC OUNTED HAVE ALREADY BEEN OFFERED FOR TAXATION. IT WAS ALSO SUBMITTED THAT ASSESSEE WAS H AVING SUFFICIENT CASH BALANCE IN REGULAR BOOKS OF ACCOUNT AND THEREFORE THIS AMOUNT WAS AL SO UTILIZED FOR MAKING THE PURCHASE 4 WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNT. IT WAS ALSO SUBMITTED THAT MAJOR PURCHASES AND SALES WHICH REMAINED UNACCOUNTED WERE MADE IN EARLIER YEARS 2002-03 AND 03-04 AND ON THAT ACCOUNT ASSESSEE HAS ALREADY SURR ENDERED RS. 10 00 000/- OR ODD ON ACCOUNT OF EXCESS STOCK. THEREFORE FOR THIS REASO N ALSO NO ADDITION IS JUSTIFIED ON ACCOUNT OF INVESTMENT. AFTER CONSIDERING THE SUBMI SSIONS LD. CIT (A) WAS SATISFIED WITH THE CONTENTION OF THE ASSESSEE. ACCORDINGLY HE DELE TED THE ADDITION. 10. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. CIT (A) AGAIN WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A). THE LD. CIT (A) HAS NOTED THAT IN EARLIER TWO YEARS THERE WERE UNACCOUNTED PURCHASE AND SALES AND ON THAT ACC OUNT UNACCOUNTED STOCK WAS FOUND FOR ABOUT RS.10 00 000/- OR ODD WHICH HAS BEEN SURR ENDERED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THEREFORE THIS AMOUNT W AS AVAILABLE WITH THE ASSESSEE FOR MAKING UNACCOUNTED PURCHASES DURING THE YEAR UNDER CONSIDERATION. THIS OBSERVATION AND FINDING OF LD. CIT (A) ARE FINDING OF FACT WHI CH IN OUR CONSIDERED VIEW ARE CORRECT. ACCORDINGLY WE CONFIRM THIS FINDING. 11. REMAINING ISSUE IS AGAINST DELETION OF ADDITION OF RS. 74 524/- ON ACCOUNT OF JEWELLERY. 12. WHILE MAKING THIS ADDITION THE AO OBSERVED THA T THERE WERE 924 GRAMS JEWELLERY FOUND DURING THE COURSE OF SEARCH. THE AO CONSIDE RED THE STATUS AND SIZE OF THE FAMILY AND ALLOWED 400 GRAM GOLD JEWELLERY PER LADY REASON ABLE AND REMAINING 124 GRAM GOLD JEWELLERY WERE FOUND WAS HELD AS UNEXPLAINED. ACCO RDINGLY AN ADDITION OF RS.74 524/- WAS MADE. IT WAS ARGUED THAT ASSESSEE BELONGS TO THE FAMILY OF AGARWAL VAISHYA FAMILY. THEY PREFER TO PURCHASE JEWELLERY BY COMPROMISING T HEIR NEEDS. THEY PURCHASE JEWELLERY AS THEIR STATUS SYMBOL IN THE SOCIETY. IT WAS CONTE NDED THAT CBDT HAS ALLOWED 500 GRAMS 5 GOLD JEWELLERY FOR EACH MARRIED LADY AND 100 GRAMS FOR EACH MALE MEMBER OF THE FAMILY VIDE CIRCULAR NO.1916 DATED 11.05.2004. THEREFORE NO ADDITION WAS REQUIRED TO BE MADE. THE LD. CIT (A) WAS SATISFIED WITH THE CONTE NTION OF THE LD. A/R. ACCORDINGLY IMPUGNED ADDITION WAS DELETED. 13. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. CIT (A) WE ARE IN AGREEMENT WITH THE FINDING OF LD. CIT (A). IF CREDIT OF 500 GRAMS OF GOLD JEWELLERY TO THE LADY IS GIVEN THEN NO EXCESS JEWELLERY REMAIN TO BE EXPLAINED. T HE CBDT CIRCULAR IS IN SUPPORT OF HE CASE OF THE ASSESSEE. THEREFORE WE HOLD THAT LD. CIT (A) WAS JUSTIFIED IN DELETING THIS ADDITION ALSO. 14. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISM ISSED. 15. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 22 .7.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR D/- COPY FORWARDED TO :- THE ACIT CIRCLE-1 ALWAR. SHRI SATISH CHAND BANSAL DAUSA. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 170/JP/2011) BY ORDER AR ITAT JAIPUR.