Om Prakash Kailash Kumar HUF, BALOTRA v. Additional CIT, JODHPUR

ITA 485/JODH/2013 | 2006-2007
Pronouncement Date: 09-04-2014 | Result: Allowed

Appeal Details

RSA Number 48523314 RSA 2013
Assessee PAN AAAHO2881H
Bench Jodhpur
Appeal Number ITA 485/JODH/2013
Duration Of Justice 5 month(s) 9 day(s)
Appellant Om Prakash Kailash Kumar HUF, BALOTRA
Respondent Additional CIT, JODHPUR
Appeal Type Income Tax Appeal
Pronouncement Date 09-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 02-04-2014
Date Of Final Hearing 02-04-2014
Next Hearing Date 02-04-2014
Assessment Year 2006-2007
Appeal Filed On 30-10-2013
Judgment Text
IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI N.K. SAINI ACCOUNTANT MEMBER. ITA NOS. 483 484 & 485/JODH/2013 (A.YS. 2003-04 2005-06 & 2006-07) OM PRAKASH KAILASH KUMAR HUF VS. A CIT CENTRAL CIRCLE-1 PROP. M/S. L.R. INDUSTRIES JODHPUR. F-269 INDUSTRIAL AREA BALOTRA. PAN NO. AAAHO 2881 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI. DEPARTMENT BY : DR. DEEPAK SEHGAL D.R. DATE OF HEARING : 02/04/2014. DATE OF PRONOUNCEMENT : 09/04/2014. O R D E R PER BENCH THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED A GAINST THE SEPARATE ORDERS EACH DATED 02/09/2013 OF LD. CIT(A) CENTRAL JAIPUR. COMMON ISSUE IS INVOLVED IN THESE APPEALS AND THE A PPEALS WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 2. FIRST WE WILL DEAL WITH THE APPEAL IN I.T.A.NO. 483/JODH/2013. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL:- 1. THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) IS PATENTLY INVALID CONTRARY TO PROVISIONS OF LAW AND CONTRARY TO ALL C ANNONS OF NATURAL JUSTICE. 2. THE PROCEEDINGS U/S 132 AND CONSEQUENTLY ASSESSM ENTS U/S 153A IN THE CASE OF APPELLANT ARE BAD IN LAW AND BAD ON FAC TS. 3. THE ADDITION OF RS. 6 00 000/- DERIVED BY THE IN DUSTRIAL UNDERTAKING OF THE ASSESSEE AND AS CONFIRMED ON THE BASIS OF STATE MENT IS BAD IN LAW AND BAD ON FACTS. 4. THE LD. CIT(A) HAD ERRED IN GRANTING DEDUCTION U /S 80IB ON THE ADDITIONAL INCOME OF INDUSTRIAL UNDERTAKING ASSESSE D ON THE BASIS OF SURRENDER MADE. THE DEDUCTION SO DENIED WAS ALSO C ONTRARY TO THE DECISION OF HON'BLE ITAT IN THE APPELLANT OWN CASE. 5. WITHOUT PREJUDICE TO THE AFORESAID GROUNDS THE L D. CIT(A) OUGHT TO HAVE ACCEPTED THE ALTERNATIVE CONTENTION OF THE ASS ESSEE FOR APPLYING NET PROFIT RATE INSTEAD OF G.P. RATE APPLIED BY THE AO ON THE ALLEGED HYPOTHETICAL AND NOTIONAL SALES. 6. THE LD. CIT(A) OUGHT TO HAVE CANCELLED THE LEVY OF INTEREST U/S 234A 234B AND 234C. 7. THE APPELLANT CRAVES LEAVE TO ADDITIONAL AMEND ALTER MODIFY ANY OF THE GROUNDS OF APPEAL ON OR BEFORE ITS HEARING BEFO RE YOUR HONOURS. 3. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE DENIAL OF DEDUCTION UNDER SECTION 80IB OF THE I.T. ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) ON THE ADDITIONA L INCOME SURRENDERED. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSE E FILED THE RETURN OF INCOME ON 28/11/2003 DECLARING NIL INCOME. THE ASS ESSMENT WAS FINALIZED UNDER SECTION 143(3) OF THE ACT AT AN INC OME OF RS. 1 01 170/- 3 ON 28/03/2006. THEREAFTER SEARCH PROCEEDINGS UNDE R SECTION 132 OF THE ACT WERE CARRIED OUT BY THE INVESTIGATING WING OF T HE DEPARTMENT AT THE RESIDENCE AND BUSINESS PREMISES OF COPARCNER AND KA RTA OF THE ASSESSEE- HUF ON 16/07/2008. DURING THE COURSE OF SEARCH PRO CEEDINGS CERTAIN INCRIMINATING EVIDENCE WERE GATHERED AND NOTICE UND ER SECTION 153A OF THE ACT WAS ISSUED ON 12/01/2009. IN RESPONSE TO T HE SAID NOTICE ASSESSEE FILED RETURN OF INCOME UNDER SECTION 153A OF THE ACT DECLARING TOTAL INCOME OF RS. NIL ON 25/03/2009. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT DU RING THE SEARCH PROCEEDINGS DOCUMENTARY EVIDENCE WAS FOUND AND SEI ZED IN THE CASE OF THE ASSESSEE INDICATING UNACCOUNTED SALE AND ON THE ANALYSIS OF THE SAID DOCUMENTS IT WAS PROVED THAT THE ASSESSEE HAD MADE UNACCOUNTED SALES OF RS. 8 11 62 166/- FROM A.Y. 2003-04 TO 2006-07. MAIN PERSON OF THE GROUP SHRI JAI PRAKASH AGARWAL DURING THE COURSE O F SEARCH ADMITTED THAT MOST OF THOSE UNACCOUNTED SALES PERTAINED TO M /S. L.R. INDUSTRIES WHOSE PROPRIETOR WAS THE ASSESSEE HUF. THE ASSESSI NG OFFICER FURTHER OBSERVED THAT SHRI JAI PRAKASH AGARWAL CONFIRMED TH AT THOSE UNACCOUNTED SALES WERE DONE THROUGH M/S. LAXMI COTTON MILLS AND AN INCOME OF RS. 1 06 00 000/- WAS OFFERED FOR TAXATION ON ACCOU NT OF THESE SALES OUTSIDE THE REGULAR BOOKS OF ACCOUNTS AS PER FOLLOW ING DETAILS:- 4 S.NO. PERTAINING TO A.Y. AMOUNT OF UNACCOUNTED SALES ADDITIONAL INCOME SURRENDERED 1 2003 - 04 40 00 000 6 00 000 2 2004 - 05 4 53 64 819 60 00 000 3 2005 - 06 1 59 97 347 20 00 000 4 2006 - 07 1 58 00 000 20 00 000 TOTAL 8 11 62 166 1 06 00 000 THE ABOVE UNACCOUNTED INCOME WAS SURRENDERED ON TH E BASIS OF THE AVERAGE GROSS PROFIT OF EARLIER YEARS WHICH CAME TO 12.6% OF THE TURNOVER. THE ASSESSING OFFICER OBSERVED THAT ON VERIFICATION OF THE RETURN OF INCOME FILED BY THE ASSESSEE UNDER SECTION 153A OF THE ACT IT WAS SEEN THAT THE ASSESSEE HAD SHOWN SURRENDERED INCOME OF R S. 6 LAC IN THE COMPUTATION OF THE TOTAL INCOME HOWEVER IT HAD CL AIMED A DEDUCTION UNDER SECTION 80IB(5) ON THIS INCOME. THE ASSESSIN G OFFICER DID NOT ALLOW THE CLAIM OF THE ASSESSEE UNDER SECTION 80IB(5) OF THE ACT. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ISSUE WAS COVERED BY THE ORD ER DATED 30/11/2012 OF THE ITAT JODHPUR BENCH IN ASSESSEES OWN CASE IN I.T.A.NO 145/JU/2012 FOR THE A.Y. 2004-05. THE LD. CIT(A) HOWEVER HELD THAT IN THE CASE OF M/S. JAI STEEL INDIA VS. ACIT (2013) 259 CTR 281 THE 5 DEDUCTION WAS NOT ALLOWED. THE LD. CIT(A) THEREFO RE CONFIRMED THE ACTION OF THE ASSESSING OFFICER. NOW THE ASSESSEE IS IN APPEAL. 6. LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSE T STATED THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED IN FA VOUR OF THE ASSESSEE VIDE ORDER DATED 30/11/2012 PASSED BY THE ITAT IN A SSESSEES OWN CASE IN I.T.A.NO. 145/JU/2012 FOR THE A.Y. 2004-05. IT WAS FURTHER STATED THAT THE SAID ORDER HAS BEEN ACCEPTED BY THE DEPARTMENT SO THERE WAS NO REASON TO DEVIATE FROM THE VIEW TAKEN BY THE ITAT I N ASSESSEES OWN CASE ON IDENTICAL FACTS. IT WAS FURTHER STATED THAT THE CASE RELIED ON BY THE LD. CIT(A) WAS DISTINGUISHABLE ON FACTS BECAUSE IN THE CASE OF M/S. JAI STEEL INDIA VS. ACIT (SUPRA) THE ASSESSEE HAS NOT C LAIMED THE DEDUCTION OF SALES TAX INCENTIVE IN THE REGULAR ASSESSMENT AND C LAIMED THE DEDUCTION IN THE RETURN FILED UNDER SECTION 153A OF THE ACT B Y STATING THAT THE ASSESSMENT PROCEEDINGS UNDER SECTION 153A OF THE AC T WERE DENOVO FRESH ASSESSMENT. HOWEVER IN ASSESSEES CASE THE DEDUC TION UNDER SECTION 80IB(5) OF THE ACT WAS CLAIMED IN THE ORIGINAL RETU RN OF INCOME AND WAS ALLOWED BY THE DEPARTMENT. 7 . IN HIS RIVAL SUBMISSIONS LEARNED D.R. STRONGLY S UPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND REITERA TED THE OBSERVATIONS 6 MADE BY THE ASSESSING OFFICER AND THE LD. CIT(A) IN THEIR RESPECTIVE ORDERS. 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE IT IS NOTICED THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS HAS ALREADY BEEN ADJUDICATED BY THIS BENCH OF THE TRIBUNAL IN A SSESSEES OWN CASE FOR THE A.Y. 2004-05 IN I.T.A. NO. 145/JU/2012 VIDE ORD ER DATED 30/11/2012 WHEREIN THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PA RA 16 TO 18 WHICH READ AS UNDER:- 16. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH TH E PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD IN THE PRESENT CASE IT IS AN ADMITTED FACT THAT CERTAIN INCRIMINA TING DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH AND ON THE BASIS OF THOSE DOCUMENTS UNACCOUNTED TURNOVER RELEVANT TO THE ASSESSMENT YEA R UNDER CONSIDERATION WAS WORKED OUT AT RS. 4 83 06 145/- A ND THE PROFIT ON THE SAID TURNOVER WAS DETERMINED AT RS. 60 LAKHS W HICH THE ASSESSEE OFFERED FOR TAX IN THE RETURN FILED UNDER SECTION 1 53A OF THE ACT AND THE SAID ADDITIONAL INCOME WAS OFFERED FOR TAX. HOWEVE R THE ASSESSING OFFICER DID NOT ALLOW DEDUCTION UNDER SECTION 80IB( 5) OF THE ACT ON THE SAID ADDITIONAL INCOME OF RS. 60 LAKHS. IN THE PRE SENT CASE IT IS NOTICED THAT THE ASSESSING OFFICER IN PARA 8.3 OF THE ASSES SMENT ORDER OBSERVED AS UNDER:- 8.3 THE ASSESSEES ARGUMENT THAT THE INCLUSION OF ADDITIONAL INCOME AS ALLEGED INCOME FROM UNDISCLOSED SOURCES A ND TREATING THE SAME AS TAXABLE INCOME IS WRONG HAS ALSO BEEN C AREFULLY GONE THROUGH. THE DECISION RELIED UPON BY THE ASSE SSEE IN THIS REGARD HAVE ALSO BEEN CAREFULLY VERIFIED. IN THE C ASE OF THE 7 ASSESSEE DURING THE COURSE OF SEARCH EVIDENCES REGA RDING UNACCOUNTED TURNOVER WERE FOUND AND THE UNDISCLOSED INCOME HAS BEEN DETERMINED ON THE BASIS OF SUCH EVIDENCE . THEREFORE THE ASSESSEES ARGUMENT THAT THE UNDISCLOSED INCOME HAS BEEN ARRIVED AT WITHOUT ANY BASIS OR ANY ASSETS FOUND IS NOT CORRECT. IN VIEW OF THESE FACTS THE DECISION RELIED UPON BY THE ASSESSEE ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE AS T HE CASE OF THE ASSESSEE IS DISTINGUISHABLE ON THE FACTS. (EMPHASI S IS OURS) 17. SIMILARLY IN PARA 8.4 OF THE ASSESSMENT ORDER THE ASSESSING OFFICER OBSERVED AS UNDER:- 8.4 THE ASSESSEES ARGUMENT THAT NO ADDITION ON ACCOUNT OF ALLEGED UNDISCLOSED INCOME CAN BE MADE MERELY ON TH E BASIS OF STATEMENTS RECORDED DURING THE COURSE OF SEARCH IS ALSO NOT CONVINCING. THE DECISIONS RELIED UPON BY THE ASSES SEE IN THIS REGARD ARE ALSO NOT APPLICABLE TO THE FACTS OF PRES ENT CASE. HERE IN THIS CASE THE UNDISCLOSED INCOME HAS BEEN DETERM INED ON THE BASIS OF EVIDENCES REGARDING UNACCOUNTED TURNOVER F UND DURING THE COURSE OF SEARCH. THEREFORE IT CANNOT BE SAID THAT THE ADDITIONAL UNDISCLOSED INCOME IS SUBJECTED TO TAX O NLY ON THE BASIS OF STATEMENT RECORDED THERE IS A SOUND BASE FOR CALCULATION OF SUCH UNDISCLOSED INCOME WHICH HAS BE EN COMPUTE KEEPING IN VIEW THE TREND OF GROSS PROFIT IN THE CA SE OF THE ASSESSEE . (EMPHASIS OURS) 18. FROM THE ABOVE OBSERVATIONS IT IS CLEAR THAT T HE UNACCOUNTED TURNOVER WAS FOUND DURING THE COURSE OF SEARCH AND THE INCOME WAS DETERMINED ONLY ON THE BASIS OF THAT UNACCOUNTED TU RNOVER WHICH WAS OFFERED BY THE ASSESSEE AS ADDITIONAL INCOME AND TA X WAS PAID THEREON. IN THE PRESENT CASE NOTHING IS BROUGHT ON RECORD T O SUBSTANTIATE THAT THE TURNOVER IN QUESTION WAS DERIVED BY THE ASSESSE E FROM ANY OTHER SOURCE AND NOT FORM THE INDUSTRIAL UNDERTAKING. ON A SIMILAR ISSUE HON'BLE HIMACHAL PRADESH HIGH COURT IN THE CASE OF CIT VS. ALLIED INDUSTRIES [2009] 31 DTR 323 (HP) HAS HELD THAT TH E ADDITIONAL INCOME SURRENDERED BY THE ASSESSEE FIRM HAVING BEEN ADDED TO THE INCOME OF THE BUSINESS ITSELF IT IS TO BE CONSIDERED WHILE W ORKING OUT DEDUCTION UNDER SECTION 80IB OF THE ACT IN THE ABSENCE OF ANY FINDING OF ANY 8 AUTHORITY THAT THE SAID INCOME WAS DERIVED FROM ANY UNDISCLOSED SOURCE. IN THE PRESENT CASE ALSO NOTHING IS BROUG HT ON RECORD TO SUBSTANTIATE THAT THE ADDITIONAL INCOME WAS EARNED BY THE ASSESSEE ON THE UNDISCLOSED TURNOVER WHICH WAS NOT DERIVED FRO M THE INDUSTRIAL UNDERTAKING. IN THE INSTANT CASE IT IS ALSO NOTIC ED THAT THE ASSESSING OFFICER HIMSELF WHILE FRAMING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT FOR ASSESSMENT YEARS 2003-04 TO 2005-06 MAD E CERTAIN ADDITIONS ON ACCOUNT OF VARIOUS DISALLOWANCES IN T HE INCOME DECLARED BY THE ASSESSEE BUT ALLOWED DEDUCTION UNDER SECTIO N 80IB OF THE ACT BY HOLDING THAT IT WAS GENERATED FROM THE BUSINESS. F OR THE YEAR UNDER CONSIDERATION ALSO ALTHOUGH UNDISCLOSED TURNOVER BY THE ASSESSEE WAS FOUND BUT NOTHING IS BROUGHT ON RECORD TO SUBSTANT IATE THAT THIS TURNOVER WAS NOT GENERATED FROM THE INDUSTRIAL UNDE RTAKING OWNED BY THE ASSESSEE. THEREFORE THE ADDITIONAL PROFIT OF THE INDUSTRIAL UNDERTAKING WAS ELIGIBLE FOR DEDUCTION UNDER SECTIO N 80IB OF THE ACT. WE THEREFORE SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION UND ER SECTION 80IB OF THE ACT ON THE ADDITIONAL INCOME OF RS. 60 LAKHS. 9 . IN THE PRESENT CASE IT IS ALSO NOTICED THAT LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY REFERRING TO THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. JAI S TEEL INDIA VS. ACIT (SUPRA) WHEREIN THE FACTS WERE ALTOGETHER DIFFEREN T FROM THE FACTS OF THE ASSESSEES CASE BECAUSE IN THE SAID CASE NO CLAIM WAS MADE FOR THE SALES TAX INCENTIVE IN THE ORIGINAL RETURN OF INC OME FILED AND LATER ON WHEN THE RETURN WAS FILED IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE ACT AFTER A SEARCH CONDUCTED UNDER SECTION 132( 1) OF THE ACT A NEW CLAIM OF DEDUCTION ON ACCOUNT OF SALES TAX INCENTI VE WAS MADE WHILE FILING THE RETURN UNDER SECTION 153A OF THE ACT. H OWEVER IN THE PRESENT 9 CASE THE ASSESSEE HAD NOT MADE ANY NEW CLAIM IN TH E RETURN OF INCOME FILED UNDER SECTION 153A OF THE ACT AND CLAIM OF TH E DEDUCTION UNDER SECTION 80IB(5) OF THE ACT MADE IN THE ORIGINAL RET URN OF INCOME WAS ACCEPTED IN REGULAR ASSESSMENT BY THE DEPARTMENT. THEREFORE THE CASE RELIED ON BY THE LD. CIT(A) IS DISTINGUISHABLE ON F ACTS. SO BY RESPECTFULLY FOLLOWING THE EARLIER ORDER DATED 30/11/2012 IN I.T .A.NO. 145/JU/2012 FOR THE A.Y. 2004-05 IN ASSESSEES OWN CASE WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND THE ASSESSING OF FICER IS DIRECTED TO ALLOW THE CLAIM OF DEDUCTION UNDER SECTION 80IB(5) OF THE ACT ON THE ADDITIONAL INCOME OF RS. 6 LAC. 10 . AS REGARDS TO THE ISSUE RAISED IN GROUND NO. 6 RE LATING TO CHARGING OF INTEREST UNDER SECTION 234A 234B & 234C OF THE ACT . IT WAS THE COMMON CONTENTION OF BOTH THE PARTIES THAT IT IS CONSEQUEN TIAL IN NATURE. WE ORDER ACCORDINGLY. 11 THE FACTS FOR THE A.Y. 2005-06 & 2006-07 IN I.T.A. NO. 484 & 485/JODH/2013 ARE SIMILAR TO THE FACTS INVOLVED FOR THE A.Y. 2003-04 IN I.T.A.NO. 483/JODH/2013. THEREFORE OUR FINDINGS G IVEN IN FORMER PART OF THIS ORDER SHALL APPLY MUTATIS-MUTANDIS FOR THESE T WO ASSESSMENT YEARS I.E. A.YS. 2005-06 & 2006-07 ALSO. 10 12 . IN THE RESULT APPEALS OF THE ASSESSEE ARE ALLOWE D. (ORDER PRONOUNCED IN THE COURT ON 09 TH APRIL 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 09 TH APRIL 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR ITAT JODHPUR.