Dy. CIT Cen Cir 1[2] Pune., Pune v. Venkateswara Hatcheries P. Ltd,, Pune

ITA 746/PUN/2012 | 2008-2009
Pronouncement Date: 24-07-2013 | Result: Dismissed

Appeal Details

RSA Number 74624514 RSA 2012
Assessee PAN AAACV7247H
Bench Pune
Appeal Number ITA 746/PUN/2012
Duration Of Justice 1 year(s) 3 month(s) 11 day(s)
Appellant Dy. CIT Cen Cir 1[2] Pune., Pune
Respondent Venkateswara Hatcheries P. Ltd,, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 24-07-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 24-07-2013
Assessment Year 2008-2009
Appeal Filed On 13-04-2012
Judgment Text
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. 746 AND 747/PN/2012 (ASSESSMENT YEARS 2008-09 AND 2009-10) DCIT CENTRAL CIRCLE 1(2) PUNE. .. APPELLANT VS. VENKATESHWARA HATCHERIES PVT. LTD. VENKATESHWARA HOUSE S.NO.114/A/2 PUNE SINHAGAD ROAD PUNE 411030 .. RESPONDENT PAN NO.AAACV 7247H ITA NO. 756/PN/2012 (ASSESSMENT YEAR 2008-09) VENKATESHWARA HATCHERIES PVT. LTD. VENKATESHWARA HOUSE S.NO.114/A/2 PUNE SINHAGAD ROAD PUNE 411030 .. CROSS OBJECTOR PAN NO.AAACV 7247H VS. DCIT CENTRAL CIRCLE 1(2) PUNE. .. APPELLANT IN THE APPEAL ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SMT. M.N. VERMA DATE OF HEARING : 16-07-2013 DATE OF PRONOUNCEMENT : 24-07-2013 ORDER PER R.K. PANDA AM : ITA NO.746/PN/2012 & ITA NO.756/PN/2012 ARE CROSS A PPEALS THE FIRST ONE FILED BY THE REVENUE AND THE SECOND O NE FILED BY THE ASSESSEE AND ARE DIRECTED AGAINST THE ORDER DATED 2 7-12-2011 OF THE CIT(A) CENTRAL PUNE RELATING TO A.Y. 2008-09. IT A NO.747/PN/2012 FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 27-12-2011 OF 2 THE CIT(A) CENTRAL PUNE PUNE RELATING TO A.Y. 2009 -10. FOR THE SAKE OF CONVENIENCE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.746/PN/2012 (2008-09) (BY REVENUE) : 2. THE FIRST ISSUE RAISED BY THE REVENUE RELATES TO THE ORDER OF THE CIT(A) IN DELETING THE ADDITION OF RS.31.50 LAKHS M ADE ON ACCOUNT OF 31 ST DECEMBER PARTY EXPENSES. 2.1 FACTS OF THE CASE IN BRIEF ARE THAT DURING TH E COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THE AS SESSEE GROUP HOSTS A LAVISH PARTY AT THE RESIDENTIAL FARM HOUSE DURING E VERY NEW YEAR WHERE ENTRY IS STRICTLY BY INVITATION ONLY. THIS EXPENDI TURE HAS BEEN CLAIMED AS BUSINESS EXPENDITURE IN THE HANDS OF CONCERNED VH G ROUP. HE REFERRED TO THE ASSESSMENT YEAR PERTAINING TO A.Y. 2007-08 W HERE THE ISSUE IS DISCUSSED AND CERTAIN ADDITIONS WERE MADE ON THE BA SIS OF CERTAIN SEIZED DOCUMENTS. HE THEREFORE CAME TO THE CONCLUSION T HAT THE ASSESSEE WAS FOLLOWING THE SAME PRACTICE IN ALL THE YEARS. HE THEREFORE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY SUCH INFERENCE SHOULD NOT BE DRAWN AND WHY CASH EXPENSES FOR THIS YEAR ALSO SHOULD NOT BE ESTIMATED IN THE RATIO OF THE DECISION FOR THE A.Y. 2007-08 DURING WHICH C ERTAIN EVIDENCES WERE SEIZED WHICH RELATE TO A.Y. 2007-08. THE ASSE SSEE OBJECTED TO THE SAME. HOWEVER THE ASSESSING OFFICER DID NOT ACCEP T THE CONTENTION OF THE ASSESSEE AND MADE ADDITION OF RS.31.5 LAKHS ON ACCOUNT OF 31 ST DECEMBER PARTY EXPENSES. IN APPEAL THE LD.CIT(A) F OLLOWING HIS DECISION IN A.Y. 2003-04 DIRECTED THE ASSESSING OFF ICER TO DELETE THE ADDITION. 3 2.2 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. 3. AFTER HEARING BOTH THE SIDES WE FIND SIMILAR GRO UND HAS BEEN RAISED BY THE REVENUE DURING A.Y. 2003-04 TO 2006-0 7 AND THE TRIBUNAL VIDE ORDER OF EVEN DATE HAS DISMISSED THE GROUND RA ISED BY THE REVENUE BY HOLDING AS UNDER : 3.2 WE HAVE DISCUSSED AND DECIDED THE ISSUE IN FAV OUR OF ASSESSEE WITH REGARDS TO ADDITION ON ACCOUNT OF CULL SALES VIDE P ARA 2 OF THIS ORDER. THE ADDITION ON ACCOUNT OF CULL SALES WERE MADE IN ABSE NCE OF EVIDENCE WITH REGARDS TO UNACCOUNTED CULL SALES IN ABOVE SAID YEA RS AND THE SAME WERE DELETED BY THE CIT(A) BY HOLDING THAT IN ABSENCE OF ANY EVIDENCE FOR THE YEARS UNDER CONSIDERATION NO ADDITIONS ARE JUSTIFIED. S AME HAS BEEN UPHELD BY US. FOLLOWING THE SAME REASONINGS THE ADDITION ON ACCO UNT PARTY EXPENSES IN ABSENCE OF EVIDENCE FOR THE YEAR UNDER CONSIDERATIO N WAS NOT JUSTIFIED AND THE CIT(A) HAS RIGHTLY DELETED THE SAME. THIS REAS ONED FINDING OF THE CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. THIS TAKES CARE OF THE ISSUE RAISED BY WAY OF REVENUES APPEAL CAPTION ED ABOVE 3.1 RESPECTFULLY FOLLOWING THE DECISION OF THE TRIB UNAL THIS GROUND BY THE REVENUE IS DISMISSED. 4. THE SECOND ISSUE RAISED BY THE REVENUE RELATES T O THE ORDER OF CIT(A) IN DELETING RS. 30 LAKHS ON ACCOUNT OF CASH PAID FOR PURCHASE OF CAR. 4.1 FACTS OF THE CASE IN BRIEF ARE THAT DURING TH E COURSE OF SEARCH ON 22-12-2008 CERTAIN DETAILS REGARDING CASH PAYMENT I N RESPECT OF PURCHASE OF CAR NOTED ON PAGE 48 OF BUNDLE NO.2 OF PARTY PO- 1 WERE SEIZED. IT IS A KACCHA RECEIPT OF CASH OF RS.30 LAKHS AND CHEQUE OF RS.10 LAKHS PAID TO M/S. QUEST FILM ON DATED 16-04-2007. THE ASSESSING OFFICER REFERRED TO THE STATEMENT OF SRI A.P. TALELE RECORDED U/S.132(4 ) ON 22-10-2008 WHEREIN HE HAD STATED THAT RS.30 LAKHS WERE PAID IN CASH AND RS.10 LAKHS 4 WERE PAID BY CHEQUE TO M/S. QUEST FILM FOR PURCHAS E OF VINTAGE CAR BY M/S. B.V. BIO CORPORATION PVT. LTD. HE HAS FURTHER STATED THAT THIS IS FUNDED OUT OF CASH AVAILABLE OF GROUP CONCERNS WHIC H IS OFFERED TO TAX. THE ASSESSING OFFICER THEREFORE CAME TO THE CONCL USION THAT RS.30 LAKHS WERE PAID IN CASH FOR PURCHASE OF VINTAGE CAR WHICH IS REGISTERED IN THE NAME OF M/S. B.V. BIO CORPORATION PVT. LTD. IT WAS FURTHER STATED THAT THIS CASH WAS MADE OUT OF CASH AVAILABLE AND G ENERATED IN THE HANDS OF THE GROUP MAINLY THROUGH VHPL. ON BEING QUESTIO NED BY THE ASSESSING OFFICER THE ASSESSEE ADMITTED THAT THE AD DITION ON ACCOUNT OF CASH OF RS.30 LAKHS MAY BE MADE IN THE HANDS OF VHP L FOR A.Y. 2008- 09. THE ASSESSING OFFICER ACCEPTED THE ABOVE CONTE NTION OF THE ASSESSEE THAT ALL THE CONCERNS IN THE GROUP ARE EFFECTIVELY MANAGED BY DESAI/RAO FAMILIES AND THAT THE MONEY GENERATED IN VHPL IS UT ILISED FOR PAYMENT OF RS.30 LAKHS FOR PURCHASE OF VINTAGE CAR APPEARS TO BE REASONABLE. HE HOWEVER MADE ADDITION OF RS.30 LAKHS AS UNACCOUNTE D EXPENDITURE OF THE ASSESSEE U/S.69C FOR A.Y. 2008-09. 4.2 IN APPEAL THE LD.CIT(A) DELETED THE ADDITION BY HOLDING AS UNDER : 2.5 I HAVE GONE THROUGH THE GROUNDS AND ALSO CONSI DERED SUBMISSIONS MADE BY THE APPELLANT COMPANY AND MATERIAL AVAILABL E ON RECORD. I FIND THAT THE ASSESSING OFFICER HIMSELF HAS OBSERVED THAT ASS ESSEES CONTENTION THAT MONEY GENERATED IN VHPL IS UTILISED FOR PAYMENT OF RS.30 LACS FOR PURCHASE OF VINTAGE CAR APPEARS TO BE REASONABLE AND IS ACCE PTED. THE ASSESSING OFFICER HAS HOWEVER INADVERTENTLY MADE AN ADDITION IN THE COMPUTATION OF INCOME. IN VIEW OF THIS AN ADDITION OF RS.30 LACS MADE IN THE COMPUTATION OF INCOME OUGHT TO BE DELETED. THE LEARNED ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS.30 LACS TOWARDS EXPENSES FOR PURCHASE OF CAR. IN RESULT GROUND NO.1.1 AND 1.2 ARE HEREBY ALLOWED. 4.3 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. 5 5. AFTER HEARING BOTH THE SIDES WE FIND NO INFIRMIT Y IN THE ORDER OF THE LD.CIT(A). WE FIND THE ASSESSING OFFICER HIMSE LF IN THE BODY OF THE ASSESSMENT ORDER HAS ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE MONEY GENERATED IN VHPL IS UTILISED FOR PAYMENT OF RS.30 LAKHS FOR PURCHASE OF VINTAGE CAR APPEARS TO BE REASONABLE AN D ACCEPTED. HAVING ACCEPTED THE ABOVE CONTENTION AS REASONABLE THE ASS ESSING OFFICER MADE ADDITION OF RS.30 LAKHS WHICH HAS RIGHTLY BEEN DELE TED BY THE CIT(A). THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTR OVERT FACTUAL FINDINGS GIVEN BY THE LD.CIT(A). IN OUR OPINION O NCE THE EXTRA CASH GENERATED THROUGH THE GROUP HAS BEEN OFFERED TO TAX AND PART OF THE CASH IS UTILISED FOR PURCHASE OF CAR THERE IS NO NEED T O TAX THE SAME AGAIN U/S.69C OF THE INCOME TAX ACT. FURTHER THE CASH F LOW STATEMENT FURNISHED BY THE ASSESSEE AT PAPER BOOK PAGE NO.4 A LSO REFLECTS THE PURCHASE OF VEHICLE FOR RS.30 LAKHS WHICH HAS BEEN EXAMINED BY ASSESSING OFFICER AND THE SAME HAS NOT BEEN PROVED TO BE FALSE OR UNTRUE. UNDER THESE CIRCUMSTANCES WE FIND NO INFI RMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE. THE GROUNDS RAISED BY TH E REVENUE ARE ACCORDINGLY DISMISSED. ITA NO.756/PN/2012 (A.Y. 2008-09) (BY ASSESSEE) : 6. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. THE LD.CIT(A) ERRED IN CONFIRMING ADDITION OF R S.2 99 45 000/- ON THE GROUND THAT THE TOTAL UNACCOUNTED RECEIPTS FOR THIS YEAR WERE RS.15.99 CRORES AND NOT RS.13 CRORES AS CONSIDERED BY THE APPELLANT COMPANY IN ITS DECLARATION. 2. WITHOUT PREJUDICE TO THE ABOVE GROUND THE APPEL LANT COMPANY SUBMITS THAT ASSUMING WITHOUT ADMITTING THAT THE AP PELLANT COMPANY MAY HAVE GENERATED SOME UNACCOUNTED SALES. IT IS SUBMI TTED THAT THE LD.CIT(A) ERRED IN CONFIRMING THE ADDITION OF THE ENTIRE UNAC COUNTED SALES AS AGAINST THE NET PROFIT AT A REASONABLE PERCENTAGE. 6 6.1 FACTS OF THE CASE IN BRIEF ARE THAT DURING TH E COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED A CASH FLOW STATEMEN T WHICH WAS EXAMINED BY THE ASSESSING OFFICER THOROUGHLY. HE N OTED THAT THE TOTAL UNACCOUNTED RECEIPTS FOR THE YEAR COMES TO RS.15.99 CRORES AND THE ASSESSEE HAS OFFERED ONLY RS.13 CRORES AS UNDISCLOS ED INCOME. THUS THERE WAS A SHORTFALL OF RS.2 99 45 000/- IN THE DE CLARATION. ON BEING QUESTIONED BY THE ASSESSING OFFICER IT WAS EXPLAIN ED BY THE ASSESSEE THAT IT WAS AN INADVERTENT OMISSION. HOWEVER IT W AS SUBMITTED THAT THE DECLARATION WAS GIVEN ON THE BASIS OF UNACCOUNTED R ECEIPTS AND APPLICATION BOTH. THERE WAS SUBSTANTIAL DUPLICATIO N IN THE DECLARATION GIVEN BY THE ASSESSEE AND THERE WAS NO NEED FOR A S EPARATE ADDITION. HOWEVER THE ASSESSING OFFICER WAS NOT SATISFIED WI TH THE ABOVE EXPLANATION AND HELD THAT IT DOES NOT STAND THE TES T OF REASON. ACCORDING TO HIM THE ASSESSEE WAS UNABLE TO EXPLAIN THE DIFF ERENCE OF RS.2.99 CRORES WHICH DENOTES THE UNACCOUNTED INCOME OF THE BEGINNING ONLY. HE ACCORDINGLY MADE ADDITION OF RS.2 99 45 000/-. 6.2 BEFORE THE CIT(A) THE ASSESSEE SUBMITTED THAT T HE ADDITION IS NOT AT ALL JUSTIFIED. IT WAS SUBMITTED THAT THE TOTAL UNACCOUNTED SALES WERE NOT RS.15.99 CRORES AS HELD BY THE ASSESSING OFFICER BU T WERE AROUND RS.6.35 CRORES ONLY. AGAINST THIS THE ASSESSEE HAS ALREADY OFFERED RS.13 CRORES AS ADDITIONAL INCOME. THEREFORE FURTHER AD DITION OF RS.2.99 CRORES IS NOT AT ALL JUSTIFIED. IT WAS FURTHER SUB MITTED THAT DURING THE COURSE OF HEARING BEFORE THE ASSESSING OFFICER IT W AS SHOWN THAT THERE WERE MONEY WITHDRAWALS IN THE NAME OF CHETAN & MAHE SH ETC. TO THE TUNE OF RS.2 71 67 750/- AND NO PAPER OF ANY SPECIF IC APPLICATION AGAINST THIS WAS FOUND. THESE AMOUNTS ITSELF WERE AVAILABL E AS SOURCE AGAINST 7 EXPENSES OF RS.2.99 CRORES. WITHOUT PREJUDICE TO T HE ABOVE IT WAS FURTHER SUBMITTED THAT ASSESSEE MAY HAVE GENERATED SOME UNACCOUNTED SALES BUT THE ENTIRE UNACCOUNTED SALES CANNOT BE TA XED AND ONLY NET PROFIT AT A REASONABLE PERCENTAGE CAN ONLY BE TAXED. HOWE VER THE LD.CIT(A) ALSO DID NOT AGREE WITH THE SUBMISSIONS MADE BY THE ASSESSEE AND UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. 6.3 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 6.4. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO T HE CASH FLOW STATEMENT PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS INDICATING UNACCOUNTED RECEIPTS AND UNACCOUNTED EXP ENSES WHICH IS AS UNDER : CASH FLOW - VHPL & VIL COMBINED RS. LACS PARTICULARS ASSESSMENT YEAR 2009-10 2008-09 2007-08 2006-07 TOTAL OPENING BALANCE 233.71 22.90 38.95 - - RECEIPTS VIL DEBTORS 3.00 85.66 76.10 38.95 203.71 CASH RECEIPTS AS PER DIARY 562.53 470.63 1 033.16 CASH RECEIPTS AS PER DIARY 43.33 15.21 58.54 RECEIPTS FROM SEIZED 963.61 206.56 1 170.17 ADDITIONAL CASH RECEIPTS 150.00 25.00 175.00 TOTAL RECEIPTS 608.86 1 685.11 307.66 38.95 2 640.58 PAYMENTS LAND 183.78 100.00 283.78 VEHICLE 30.00 30.00 REVENUE EXPS DIARY (TALLY) 572.45 263.51 835.96 REVENUE EXPS DIARY (TALLY) - VIL 54.00 15.00 69.00 REVENUE EXPS SEIZED 132.99 92.71 225.70 621.80 621.80 REVENUE EXPENSES B NO 1 - 6 DT 0.98 0.98 8 UTTARA FOODS DONATION 311.00 231.00 542.00 TOTAL PAYMENTS 811.21 1 474.30 323.71 - 2 609.22 CLOSING BALANCE 31.36 233.71 22.90 38.95 31.36 6.5 HE SUBMITTED THAT THE ASSESSEE HAS INCURRED VAR IOUS UNACCOUNTED EXPENSES WHICH WERE FOUND DURING THE COURSE OF SEAR CH WHICH AMOUNTS TO APPROXIMATELY RS.9.50 CRORES WHICH IS NOT DISPUT ED. HE SUBMITTED THAT AS AGAINST THE TOTAL UNACCOUNTED RECEIPT OF RS .15.99 CRORES THE ASSESSEE DECLARED UNDISCLOSED INCOME AT RS.13 CRORE S. HE ACCORDINGLY SUBMITTED THAT WHEN THERE IS AN EVIDENCE OF UNACCOU NTED CASH RECEIPT AND UNACCOUNTED EXPENDITURE ONLY NET INCOME CAN BE TAXE D. SINCE THE UNDISCLOSED INCOME OF RS.13 CRORES IS MUCH MORE THA N THE DIFFERENCE BETWEEN THE UNACCOUNTED RECEIPT OF RS.15.99 CRORES AND CASH EXPENDITURE OF RS.9.50 CRORES THEREFORE NO FURTHER ADDITION I S MADE. FOR THIS PROPOSITION HE RELIED ON THE FOLLOWING DECISIONS 1. CIT VS. INDEO AIRWAYS PVT. LTD REPORTED IN 349 I TR 85 2. CIT VS. P.D. ABRAHIM REPORTED IN 349 ITR 442 6.6 THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT WHEN EVIDENCE OF ANY ON-MONEY IS FOUND ENTIRE RECEIPTS C ANNOT BE TAXED AND ONLY A REASONABLE PERCENTAGE OF INCOME CAN BE TAXED . FOR THIS PROPOSITION HE RELIED ON THE FOLLOWING DECISIONS : 1. BAKRE CONSTRUCTION ITA NO.869 & 654/PN/2002 (ITAT PUNE) 2. NAVRANG ENTERPRISES ITA NOS. 4388 TO 4390/MUM/01 (ITAT MUMBAI) 3. ANIL LODHA ITA NO.132/PN/2007 (ITAT PUNE) 4. ABHISHEK CORPORATION VS. DCIT REPORTED IN 63 TTJ 651 (AHD.) 5. WALL STREET CONSTRUCTION LTD. VS. DCIT REPORTED IN 87 ITD 43 (MUM) (TM) 6. CIT VS. PRESIDENT INDUSTRIES REPORTED IN 258 ITR 654 (GUJ.) 9 6.7 THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHE R HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 7. 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. WE HAV E ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DIS PUTE TO THE FACT THAT AS PER THE CASH FLOW STATEMENT FILED BY THE ASSESSEE T HE ASSESSING OFFICER NOTED THAT THERE IS A DIFFERENCE OF RS.2.99 CRORES BETWEEN ACCOUNTED RECEIPTS AND THE UNDISCLOSED INCOME. ACCORDINGLY THE ASSESSING OFFICER MADE ADDITION OF RS.2.99 CRORES WHICH HAS BEEN UPHE LD BY THE LD.CIT(A). IT IS THE CASE OF THE LD. COUNSEL FOR T HE ASSESSEE THAT THE SEIZED DOCUMENTS CONTAIN THE EXPENDITURE TO THE TUN E OF RS.9.50 CRORES AND THE DIFFERENCE BETWEEN UNACCOUNTED RECEIPTS AND THE CASH EXPENSES FOUND IN THE SEIZED DOCUMENTS IS ONLY RS.6.49 CRORE S. AS AGAINST THIS THE ASSESSEE HAS ALREADY DISCLOSED RS.13 CRORES AS ADDI TIONAL INCOME AND THEREFORE NO ADDITION IS CALLED FOR. IT IS THE ALT ERNATE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE THAT ONLY THE NET PROFIT O N THE UNACCOUNTED RECEIPT OF RS.2.99 CRORES AT BEST CAN BE ADDED IN V IEW OF THE SERIES OF DECISIONS CITED BEFORE HIM. 7.1 THE ASSESSEES SUBMISSION THAT HE HAS DECLARED RS.13 CRORES AS ADDITIONAL INCOME IS NOT DISPUTED BY THE ASSESSING OFFICER OR CIT(A). FURTHER THE SUBMISSION OF THE LD. COUNSEL OF THE A SSESSEE THAT AS AGAINST THE UNACCOUNTED SALE OF RS.15.99 CRORES THE SEIZED DOCUMENTS SHOW UNRECORDED CASH EXPENDITURE TO THE TUNE OF RS.9.50 CRORES AND THE 10 DIFFERENCE BETWEEN RS.15.99 CRORES AND RS.9.50 CROR ES BEING LESS THAN RS.13 CRORES DECLARED BY THE ASSESSEE AND THEREFORE NO ADDITION IS CALLED FOR FINDS SOME FORCE. 7.2 THE HONBLE DELHI HIGH COURT IN THE CASE OF IND EO AIRWAYS (P) LTD. (SUPRA) HAS OBSERVED AS UNDER (HEAD NOTES): SECTION 132 OF THE INCOME TAX ACT 1961 SEARCH A ND SEIZURE GENERAL ASSESSMENT YEARS 1998-88 AND 1999-2000 BLOCK PERI OD 1-4-1998 TO 20-8- 1998 DURING SEARCH CONDUCTED AGAINST ASSESSEE CER TAIN DOCUMENTS BOOKS OF ACCOUNT WERE RECOVERED CERTAIN RECEIPTS WERE F OUND TO HAVE BEEN RECORDED THEREIN DRAWING A PRESUMPTION UNDER SECT ION 132(4A) FROM SUCH DOCUMENTS ADDITIONS WERE MADE TO INCOME OF ASSESSE E THERE WERE ALSO CERTAIN OTHER ENTRIES RECORDED IN SUCH DOCUMENTS WH ICH PERTAINED TO ITEMS OF EXPENDITURE SAID EXPENDITURE WERE NOT ALLOWED ON GROUND THAT ASSESSEE COULD NOT PROVE THEM BY PRODUCING EVIDENCE WHETHE R ONCE A PRESUMPTION HAD BEEN DRAWN AS TO THAT CONTENTS OF DOCUMENTS SO RECOVERED DURING SEARCH WERE TRUE REVENUE COULD NOT HAVE CONSISTENTLY WIT H THAT PRESUMPTION PROCEEDED TO REQUIRE ASSESSEE TO PRODUCE MATERIALS IN SUPPORT OF EXPENDITURE ENTRIES CONTAINED IN VERY SAME DOCUMENTS HELD YE S (PARAS 14 & 16) (IN FAVOUR OF ASSESSEE). SINCE IN THE INSTANT CASE THE DIFFERENCE BETWEEN TH E UNACCOUNTED SALE OF RS.15.99 CRORES AND THE EXPENDITURE TO THE TUNE OF ABOUT RS.9.50 CRORES IS MORE THAN THE ADDITIONAL INCOME DISCLOSED AT RS.13 CRORES THEREFORE WE FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT NO FURTHER ADDITION ON ACCOUNT OF THE DIFFERENCE IS CA LLED FOR. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LD.CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION. THI S GROUND BY THE ASSESSEE IS ACCORDINGLY ALLOWED. ITA NO.747/PN/2012 (BY REVENUE) (A.Y. 2009-10) : 8. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE READS AS UNDER : 11 WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.146.9 LAKHS IN RESPECT OF LOAN TAKEN FROM MR.DIMPEEE AND INTEREST THEREON U/S.68 WHEN ASSESSEE COULD NOT ESTABLISH THE IDENTITY OF THE PERSON CRE DIT WORTHINESS AND GENUINENESS OF THE TRANSACTION 8.1 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESS ING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS ANALYSED THE DOCUM ENTS SEIZED DURING THE COURSE OF SEARCH AND FOUND THAT ASSESSEE HAD TA KEN CASH LOANS FROM ONE MR. DIMPEE. RELEVANT PAGES WHEREIN THE DETAILS OF THE TRANSACTIONS WITH MR. DIMPEE WERE RECORDED ARE AS UNDER : PARTY NO. BUNDLE NO. DATE OF SEIZURE PAGE NO. PO-1 6 20-12-2008 47 PO-1 29 22-10-2008 63 64 PO-1 6 20-12-2008 13 PO-1 1 & 2 22-10-2008 -- 8.2 THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXP LAIN AS TO WHY THIS SHOULD NOT BE ADDED TO ITS TOTAL INCOME INCLUDING I NTEREST IN THE RESPECTIVE ASSESSMENT YEAR. THE ASSESSEE IN ITS RE PLY SUBMITTED AS UNDER: THE ASSESSEE SUBMITS THAT IT HAS NOT TAKEN ANY LOA N FROM MR. DIMPEEE. IT IS SUBMITTED THAT THE LOOSE PAPERS ARE ROUGH PAPERS AND IT IS NOT KNOWN AS TO WHO HAD WRITTEN AND THEY BELONG TO WHOM. WE SUBMIT THAT AS PER OUR BOOKS AND RECORDS WE HAVE NOT TAKEN ANY LOAN FROM MR.DIMPEEE. THUS THE QUESTION OF MAKING ANY REPAYMENT OF THE SAID LOAN DOES NOT ARISE. THER EFORE WE SUBMIT THAT NO ADDITION IS TO BE MADE IN RESPECT OF THE REPAYMENT OF THE SAID LOAN AND PAYMENT OF INTEREST ON THE LOA N. IT IS SUBMITTED THAT NO WHERE THE LOOSE PAPER INDICATES A NY LOAN TAKEN BY US AND HENCE WE SUBMIT THAT NO ADDITION BE MADE ON THE BASIS OF THE SAID PAPER. IT MAY BE APPRECIATED THAT ALL THE OTHER PAPERS CLEARLY INDICATE THAT THE SURPLUS MONEY WAS AVAILAB LE WITH US. WE DID NOT REQUIRE ANY FUNDS FROM MR. DIMPEEE FOR OUR PURPOSES AND HENCE THE QUESTION OF TAKING ANY OF OUR STAFF MEMB ERS OR BUSINESS ASSOCIATES IT MAY BE POSSIBLE THAT SUCH PERSON MIG HT HAVE FORGOTTEN THE PAPER IN OUR OFFICE OR IT MAY BE OUTS TANDING BALANCE OF SOME TRADE CREDITOR. HOWEVER WE REITERATE THAT WE HAVE NOT TAKEN ANY SUCH LOAN FROM SHRI DIMPEEE. 12 8.3 IT WAS FURTHER CONTENDED BY THE ASSESSEE THAT W ITHOUT PREJUDICE TO THE ABOVE THEY HAD NO OBJECTION IF THIS WAS HELD AS UNEXPLAINED CASH CREDIT U/S.68. 8.4 HOWEVER THE ASSESSING OFFICER WAS NOT SATISFIE D WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE OBSERVED FRO M THE SEIZED DOCUMENTS THAT ASSESSEE HAS TAKEN A LOAN OF RS.125 LAKHS. THERE IS ALSO MENTION OF INTEREST @3% PER MONTH TOTALLING TO RS.2 1.90 LAKHS. THUS THE CUMULATIVE FIGURE OF THE LOAN AND INTEREST COME S TO RS.146.90 LAKHS. ACCORDING TO THE ASSESSING OFFICER IN CASE OF ANY C ASH CREDIT THE IDENTITY AND CREDIT WORTHINESS OF THE PERSON AND GENUINENESS OF THE TRANSACTION HAS TO BE ESTABLISHED. SINCE THE ASSESSEE IN THE I NSTANT CASE HAS NOT PRODUCED MR. DIMPEE TO PROVE HIS IDENTITY AND CREDI T WORTHINESS AND THE GENUINENESS OF THE TRANSACTION THEREFORE THE ASSE SSING OFFICER ADDED AN AMOUNT OF RS.146.90 LAKHS AS UNEXPLAINED CASH CREDI T U/S.68 OF THE I.T. ACT. 8.5 BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE ASS ESSING OFFICER DID NOT GIVE SET OFF OF THE ADDITION U/S.68 OF RS.1.46 CRORES FROM THE UNACCOUNTED INCOME AVAILABLE IN THE HANDS OF THE AS SESSEE. IT WAS SUBMITTED THAT ONCE SET OFF IS GIVEN NO ADDITION IS CALLED FOR. 8.6 BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE ADDITION. WHILE DOING SO HE NOTED FRO M THE SCANNED COPY OF THE SEIZED DOCUMENT WHICH IS THE BASIS FOR THIS ADD ITION THAT THE LOAN WAS TAKEN PRIOR TO 06-07-2007. HE ACCORDINGLY CAME TO THE CONCLUSION THAT THE PRINCIPAL AMOUNT OF RS.125 LAKHS CANNOT BE ADDED AS 13 UNEXPLAINED CASH CREDIT IN A.Y. 2009-10 SINCE THIS CREDIT PERTAINS TO A.Y. 2008-09 I.E. F.Y. 2007-08. HE FURTHER NOTED THAT THE ASSESSEE HAS CONSIDERED THIS AMOUNT AS UNEXPLAINED INCOME IN ITS RETURN OF INCOME FOR A.Y. 2008-09. HE FURTHER NOTED FROM THE SEIZED DOC UMENTS THAT THE REPAYMENTS OF PRINCIPAL AMOUNT AND INTEREST HAVE BE EN MADE IN THE PART OF F.Y. 2007-08 AND 2008-09. HE ACCEPTED THE CONTE NTION OF THE ASSESSEE THAT THE SAME WERE PAID OUT OF THE CASH AV AILABLE WITH IT. BASED ON THE CASH FLOW STATEMENT FILED BY THE ASSESSEE AN D NOTING FROM THE SCANNED DOCUMENT THAT THE LOAN HAS BEEN TAKEN DURIN G A.Y. 2008-09 WHICH HAS ALREADY BEEN DECLARED BY THE ASSESSEE AS UNEXPLAINED INCOME DURING A.Y. 2008-09 HE DELETED THIS ADDITION. 8.7 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. 9. 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. FROM T HE SCANNED COPY OF THE SEIZED DOCUMENT PLACED AT PAGE NO.63 AND 64 OF THE PAPER BOOK WE FIND THE LOAN WAS TAKEN PRIOR TO 06-07-2007. THE L D. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE FACTUAL FIN DING GIVEN BY THE LD.CIT(A) THAT THE LOAN WAS TAKEN PRIOR TO 06-07-20 07 AND THEREFORE THE SAME RELATES TO A.Y. 2008-09 AND CANNOT BE ADDED IN THE IMPUGNED ASSESSMENT YEAR. FURTHER FROM THE CASH FLOW STATE MENT FILED BY THE ASSESSEE WHICH HAS ALREADY BEEN REPRODUCED AT PARA 6.4 OF THE IMPUGNED ORDER WE FIND THE ASSESSEE DURING A.Y. 2008-09 HAS DECLARED ADDITIONAL CASH RECEIPTS OF RS.150 LAKHS AND THEREFORE HAS OFF ERED THE SAME TO TAX DURING A.Y. 2008-09. UNDER THESE CIRCUMSTANCES AND IN VIEW OF THE 14 DETAILED ORDER PASSED BY THE LD.CIT(A) ON THIS ISSU E AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) DELETING THE ABOVE ADDITION. A CCORDINGLY THE SAME IS UPHELD. GROUND RAISED BY THE REVENUE IS THEREFO RE DISMISSED. 10. IN THE RESULT BOTH THE APPEALS FILED BY THE RE VENUE ARE DISMISSED AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF JULY 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA ) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE DATED: 24 TH JULY 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