M/s. Daya Properties & Finance, Bhopal v. ACIT (Central)-2, Bhopal

ITA 875/Ind/2019 | 2017-2018
Pronouncement Date: 25-03-2021 | Result: Allowed

Appeal Details

RSA Number 87522714 RSA 2019
Assessee PAN AAFFD9351G
Bench Indore
Appeal Number ITA 875/Ind/2019
Duration Of Justice 1 year(s) 6 month(s) 7 day(s)
Appellant M/s. Daya Properties & Finance, Bhopal
Respondent ACIT (Central)-2, Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 25-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 25-03-2021
Last Hearing Date 13-11-2020
First Hearing Date 10-02-2021
Assessment Year 2017-2018
Appeal Filed On 17-09-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI KUL BHARAT JUDICIAL MEMBER AND SHRI MANISH BORAD ACCOUNTANT MEMBER ITA NO.875/IND/2019 ASSESSMENT YEAR 2017-18 APPELLANT BY SHRI MANOJ FADNIS AR RESPONDENT BY SHRI HARSHIT BARI SR.DR DATE OF HEARING: 10 . 0 3 .20 2 1 DATE OF PRONOUNCEMENT: 25 .0 3 .2021 / O R D E R PER MANISH BORAD: THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE O F THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 2017-18 IS D IRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX(APPEAL S)-3 (IN SHORT LD. CIT] BHOPAL DATED 26.07.2019 WHICH IS ARISIN G OUT OF THE ORDER M/S. DAYA PROPERTIES AND FINANCE BALNIKETAN TRUST HEART HAMIDIA ROAD BHOPAL VS. ACIT(CENTRAL) - II BHOPAL (APPELLANT) (REVENUE ) PAN: A AFFD9351G M/S DAYA PROPERTIES AND FINANCE ITA NO.875/IND/2019 2 U/S 143(3) OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 06.12.2018 FRAMED BY ACIT (CENTRAL)-II BHOPAL. 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE LEARNED A.O HAS ERRED IN LAW AND ON FAC TS IN MAKING THE ADDITION OF RS.15 02 020/- TO THE TOTAL RETURNED I NCOME OF THE APPELLANT. 2. THAT THE LEARNED A.O HAS ERRED IN MAKING THE AD DITION OF RS.15 02 020/- ON ACCOUNT OF TREATING IT TO BE THE UNDISCLOSED INCOME OF THE APPELLANT WHEN SUCH AMOUNT AND ITS SOURCES WAS ALREADY EXPLAINED TO AO ALONG WITH THE EVIDENCE. 3. THAT THE A.O HAS ERRED TO MAKE THE ADDITION BY IGNORING THE FACTS AND DOCUMENTS SUBMITTED BY APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 4. THAT THE A.O DOES NOT HAVE ANY COGENT MATERIAL SO AS TO LEAD THE A.O TO FORMATION OF BELIEF THAT SUCH AMOUNT IS UNDISCL OSED INCOME OF THE APPELLANT PARTICULARLY SO WHEN SUCH AMOUNT ALONG WITH THE DOCUMENTARY EVIDENCE WAS EXPLAINED TO HIM. 5. THAT THE APPELLANT RESERVES THE RIGHT TO ADD A LTER OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS DECIDED. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS A FIRM CARRYING OUT BUSINESS OF MON EY LENDING AND ALSO ACTS AS BROKER FOR ARRANGING LOANS FROM PRIVAT E PERSONS. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CARRIED OUT ON RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE A ND OTHER CONCERNS ON 30.08.2016. DURING THE COURSE OF SEARCH A CASH SUM OF M/S DAYA PROPERTIES AND FINANCE ITA NO.875/IND/2019 3 RS.37 02 020/- WAS FOUND AND SEIZED FROM THE BUSINE SS PREMISES OF THE ASSESSEE. STATEMENT OF THE PARTNER MR. AMIT THA RANI WAS RECORDED ON 31.8.2016 AND HE WAS UNABLE TO RECONCIL E THE SOURCE OF CASH AND AGREED TO OFFER RS.37 02 020/- AS ADDITION AL INCOME. REGULAR RETURN OF INCOME WAS FILED ON 11.08.2017 DE CLARING TOTAL INCOME OF RS.3 89 230/- THEREAFTER A REVISED RETUR N OF INCOME WAS FILED ON 29.09.2018 DECLARING TOTAL INCOME OF RS.25 89 299/- AFTER INCLUDING RS.22 LAKHS TOWARDS SURRENDER OF INCOME M ADE DURING THE COURSE OF SEARCH FOR UNEXPLAINED CASH. THIS AM OUNT WAS SHORT BY RS.15 02 020/- AS THE SURRENDER DURING THE SEARC H WAS MADE AT RS.37 02 020/-. DURING THE ASSESSMENT PROCEEDINGS I T WAS CONTENDED BY THE ASSESSEE THAT SINCE THE CASH IN HA ND AVAILABLE IN THE BOOKS OF M/S DAYA PROPERTIES & FINANCE AND OTHE R INDIVIDUALS AS PER THE STATEMENT OF CAPITAL PREPARED AS ON 31.3 .2016 WAS AT RS.16 50 360/- THE SAME WAS SUFFICIENT TO COVER U P THE SUM OF RS.15 02 020/- AND THUS NO ADDITION SHOULD BE MADE FOR THE SAID AMOUNT. HOWEVER LD. A.O WAS NOT SATISFIED AND TREA TED IT AS AN AFTER THOUGHT. ASSESSMENT COMPLETED U/S 143(3) OF T HE ACT BY LD. A.O AT RS.40 91 250/- MAKING ADDITION OF RS.15 02 0 20/- ON M/S DAYA PROPERTIES AND FINANCE ITA NO.875/IND/2019 4 ACCOUNT OF DISCLOSURE MADE DURING THE COURSE OF SEA RCH BUT NOT OFFERED TO TAX. 4. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. C IT(A) WHO CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE BUT FINALLY CONFIRMED THE ACTION OF LD. A.O AND THE RELEVANT EX TRACT OF HIS FINDING IS MENTIONED BELOW:- XXXXX ---XXX J) THUS FROM THE ABOVE ANALYSIS IT EMERGES THAT : I. THE RETRACTION WAS MADE AFTER A PERIOD OF TWENT Y FIVE MONTHS; II.IT WAS NEVER COMMUNICATED TO THE DEPARTMENTAL A UTHORITIES MERELY NOT DISCLOSED WITH THE RETURN OF INCOME; III. FROM RECORD IT IS IMPOSSIBLE TO HOLD THAT ANY THREAT OR COERCION HAS BEEN EXERTED DURING THE CONFESSION STATEMENT OF THE ASS ESSEE. IV. IRRESPECTIVE OF THE FORM OR VALIDITY OF THE VO LUNTARY DISCLOSURE STATEMENT OR OF THE DEPOSITION TAKEN FROM THE ASSESSEE ON 30 .08.2016 THE EVIDENCE OF TESTIMONY CANNOT BE WIPED OUT AND DOES NOT BECO ME NON-EXISTENT AND THIS EVIDENCE CAN WELL BE UTILIZED TO FRAME THE AS SESSMENT ON THAT BASIS. V. SHRI AMIT THARANI IN HIS SWORN STATEMENT RECORD ED ON OATH ON 30.08.2016 HAS ADMITTED UNDISCLOSED INCOME OF RS.3 7 02 020/-. IN VIEW OF THE ABOVE POSITION THE APPELLANTS UNS UCCESSFUL ATTEMPT TO RETRACT FROM THE DISCLOSURE IS UNTENABLE BEING AN AFTER-THOUGHT AND IS REJECTED. THEREFORE THE ADDITIONS MADE BY THE A. O AMOUNTING TO RS.15 02 020/- IS CONFIRMED. THEREFORE THE APPEA L ON THIS GROUND IS DISMISSED. M/S DAYA PROPERTIES AND FINANCE ITA NO.875/IND/2019 5 5. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 6. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE WRI TTEN SUBMISSIONS DATED 10.3.2021 PLACED ON RECORD. HE M AINLY CONTENDED THAT RETURN OF INCOME FOR ASSESSMENT YEAR 2016-17 FOR M/S DAYA PROPERTIES & FINANCE AND OTHER INDIVIDUALS NAMELY MR. AMIT THARANI MR. GHYANSHYAM THARANI AND MRS. TULSI THARANI WERE FILED ON 18.02.2017 31.03.2017 31.03.2017 AN D 08.08.2016 RESPECTIVELY AND THE TOTAL CASH IN HAND AS ON 31.3. 2016 IN THE HANDS OF THE ASSESSEE FIRM AND 3 PERSONS IS RS.16. 50 360/-. ALL THESE INCOME TAX RETURNS FOR ASSESSMENT YEAR 2016-1 7 WERE FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT AND HAVE BEEN SCRUTINIZED U/S 143(3) OF THE ACT AND NO ADDITIONS HAVE BEEN MA DE. THIS ESTABLISHES THAT THE DEPARTMENT HAS ACCEPTED THE CA SH POSITION AS ON 31.3.2016 HELD WITH THE ASSESSEE FIRM AND ITS P ARTNERS AND THE WIFE OF THE PARTNER AGGREGATING TO RS.16 50 360/-. THIS CASH SUM OF RS.16 50 360/- IS SUFFICIENT TO COVER UP THE DIFFER ENCE OF RS.15 02 020/- (AMOUNT SURRENDERED DURING THE SEARC H RS.37 02 020/- LESS AMOUNT SURRENDERED IN THE RETUR N OF INCOME AT M/S DAYA PROPERTIES AND FINANCE ITA NO.875/IND/2019 6 RS.22 LAKHS). LD. COUNSEL FOR THE ASSESSEE RELIED ON VARIOUS JUDGMENTS IN THE WRITTEN SUBMISSION. 7. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE SUPPO RTED THE ORDER OF BOTH THE LOWER AUTHORITIES AND CONTENDED T HAT ASSESSEE HAS NOT RETRACTED THE SURRENDER IN THE REASONABLE TIME AND THE PLEA TAKEN DURING THE ASSESSMENT PROCEEDINGS ARE MERELY AFTER THOUGHT AND COOKED UP STORY. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THOUGH THE ASSESSEE HAS RAISED 5 GROUNDS OF APPEAL BUT THE SOLE GRIEVANCE IS AGAINST THE ACTION OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.15 02 020/- MADE BY T HE LD. A.O TREATING IT TO BE UNDISCLOSED INCOME. WE OBSERVE T HAT DURING THE COURSE OF SEARCH CASH SUM OF RS.37 02 020/- WAS FOU ND AND ASSESSEE FAILED TO EXPLAIN ITS SOURCE AND ACCEPTED TO OFFER IT AS ADDITIONAL INCOME. NO SPECIFIC RETRACTION WAS MADE BEFORE FILING OF RETURN OF INCOME. IN THE RETURN OF INCOME ASSESSEE PARTLY HONOURED THE SURRENDER BY OFFERING RS.22 00 000/- AS UNDISCL OSED INCOME AS M/S DAYA PROPERTIES AND FINANCE ITA NO.875/IND/2019 7 AGAINST RS.37 02 020/- MADE DURING THE COURSE OF SE ARCH. IT IS TRUE THAT THE ASSESSEE HAD NOT MADE ANY SPECIFIC RETRACT ION SHOWING ITS INTENTION TO NOT TO OFFER RS.15 02 020/- TO TAX. H OWEVER BEFORE THE COMPLETION OF ASSESSMENT PROCEEDINGS HE MADE THE RE TRACTION SHOWING LESS AMOUNT OF SURRENDER IN THE RETURN OF I NCOME TO THE AMOUNT AGREED DURING THE COURSE OF SEARCH. 9. NOW WHETHER SUCH TYPE OF RETRACTION MADE BY WAY OF OFFERING LOWER AMOUNT OF INCOME THEN THE INCOME SURRENDERED DURING THE COURSE OF SEARCH BY WAY OF DISCLOSING IT IN THE RET URN OF INCOME ALONG WITH NECESSARY EVIDENCE AND EXPLANATION THERE OF SHOULD BE ACCEPTED BY THE REVENUE AUTHORITIES AND WHETHER THE ONUS TO PROVE THE BURDEN SHIFTS ON TO THE REVENUE NEEDS TO BE EXA MINED IN THE LIGHT OF JUDICIAL PRECEDENCE. 10. WE FIND THAT THE CO-ORDINATE BENCH PUNE IN THE CASE OF MORESHWAR MAHADEV BHONDVE V/S ACIT (2014) 50 TAXMAN N.COM 453 HAS HELD THAT:- M/S DAYA PROPERTIES AND FINANCE ITA NO.875/IND/2019 8 EVEN IF THE RETRACTION IS MADE AFTER A LONG GAP I T SHOULD BE REJECTED BY COGENT REASONING. THE- SAME WAS POSSIBLE BY DEMONST RATING THE STAND OF THE ASSESSEE TAKEN BY WAY OF BOOKS OF ACCOUNT PREPA RED AND PRODUCED AT ASSESSMENT STAGE AS WELL AS APPELLATE STAGE. ACCORD ING TO THE ASSESSING OFFICER SUFFICIENT DOCUMENTS WERE NOT FILED IN THI S REGARD. WHILE IN APPEAL THE COMMISSIONER (APPEAL) OBSERVED THAT THE EXPENSE S FOUND GENUINE WERE ALLOWED BY THE ASSESSING OFFICER WHILE HE EXPENSES NOT SUPPORTED BY EVIDENCE WERE DISALLOWED BY THE ASSESSING OFFICER. THIS SHOWS THAT THE DETAILS OF EXPENSES AS REFLECTED IN BOOKS OF ACCOUN T PREPARED COULD NOT BE BRUSHED ASIDE. THE REASONING OF RETRACTION SHOULD N OT BE REJECTED AT THE STRENGTH OF ADMISSION BY ASSESSEE BUT RETRACTION BA SED ON PREPARED BOOKS OF ACCOUNT SHOULD BE REJECTED BY COGENT REASONING O NLY. MATERIAL PUT FORWARD ON BEHALF OF ASSESSEE HAS BEEN REJECTED IN AD HOC MANNER WHICH IS NOT JUSTIFIED. 11. EXAMINING THE FACTS IN LIGHT OF ABOVE DECISION WE FIND THAT THE ASSESSEE HAD MADE RETRACTION BEFORE THE COMPLETION OF ASSESSMENT PROCEEDINGS WITH DOCUMENTARY EVIDENCE AND RELEVANT EXPLANATION AND THEREFORE THE ONUS TO PROVE THE BURDEN SHIFTED ON TO THE REVENUE. THE ASSESSEE DURING THE ASSESSMENT PROCEE DINGS ALSO SUBMITTED THE DETAILS OF CASH IN HAND AS ON 31.3.20 16 IN THE HANDS OF THE FIRM M/S DAYA PROPERTIES & FINANCE ITS PART NERS AND WIFE OF THE PARTNER. THE SAME ARE SUMMARIZED IN THE FOLLOWI NG TABLE:- M/S DAYA PROPERTIES AND FINANCE ITA NO.875/IND/2019 9 NAME OF THE ASSESSEE DATE OF FILING BALANCE SHEET DATE CASH IN HAND DAYA PROPERTIES 18.02.2017 31.03.2016 10 58 464 MR.AMIT THARANI 31.03.2017 31.03.2016 2 68 507 MR. GHANSHYAM THARANI 31.03.2017 31.03.2016 1 88 693 MRS. TULSI THARANI 08.08.2016 31.03.2016 1 34 696 TOTAL 16 50 360 12. WE FURTHER FIND THAT SUBSEQUENT TO THE SEARCH A ND IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT ASSESSEE HAD FILE D THE RETURN OF INCOME FOR WHICH PARTNERSHIP FIRM AND OTHER INDIVID UALS FOR ASSESSMENT YEAR 2014-15 TO ASSESSMENT YEAR 2017-18. THE INSTANT APPEAL RELATES TO ASSESSMENT YEAR 2017-18 A ND THE ISSUE BEFORE US IS THAT WHETHER THE ASSESSEE HAD SUFFICIE NT SOURCE OF CASH TO EXPLAIN THE SUM OF RS.15 02 020/- FOUND AT THE T IME OF SEARCH CONDUCTED ON 30.8.2016. 13. WE FIND THAT THE INCOME TAX RETURNS OF THE FIRM M/S DAYA PROPERTIES & FINANCE AND OTHER INDIVIDUALS FOR ASSE SSMENT YEAR 2016-17 WERE VERY MUCH BEFORE THE LD. A.O. THEY HAV E BEEN SCRUTINIZED DURING THE ASSESSMENT PROCEEDINGS AND T HE ASSESSMENT M/S DAYA PROPERTIES AND FINANCE ITA NO.875/IND/2019 10 WAS COMPLETED U/S 143(3) OF THE ACT AND NO ADDITION HAVE BEEN MADE. IF THE LD. A.O WAS NOT SATISFIED WITH THE CAS H IN HAND SHOWN BY THE ASSESSEE AND INDIVIDUALS AS ON 31.3.2016 HE SHOULD HAVE TAKEN NECESSARY ACTION DURING ASSESSMENT YEAR 2016- 17 BUT IN ABSENCE THERE OF IT HAS TO BE PRESUMED THAT THE LD. A.O HAS ACCEPTED THE POSITION OF CASH IN HAND AS ON 31.3.20 16 SHOWN BY THE ASSESSEE FIRM AND ITS PARTNERS AND WIFE OF THE PART NER WHICH STOOD AT RS.16 50 360/-. SO AS ON 1.4.2016 ASSESSEE HAD CASH IN HAND IN ITS BUSINESS CONCERN AND OTHER INDIVIDUALS REFERRED ABOVE AT RS.16 50 360/- WHICH IS SUFFICIENT ENOUGH TO COVER UP THE SHORTFALL IN SURRENDER OF INCOME OF RS.15 02 020/- FOUND DURI NG THE COURSE OF SEARCH AS ON 30.8.2016. 14. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANC ES OF THE CASE ARE OF THE CONSIDERED VIEW THAT SINCE THE ASSESSEE HAD EXPLAINED THE SOURCE OF CASH TO THE EXTENT OF RS.15 02 020/- AS O N THE DATE OF SEARCH IT HAD RIGHTLY REDUCED THE SURRENDER OF INC OME FROM RS.37 02 020/- TO RS. 22 00 000/-. WE THEREFORE AR E OF THE VIEW THAT THE LD. A.O WAS NOT JUSTIFIED IN MAKING THE AD DITION OF M/S DAYA PROPERTIES AND FINANCE ITA NO.875/IND/2019 11 RS.15 02 020/-. WE ACCORDINGLY SET ASIDE THE FINDIN G OF LD. CIT(A) AND ALLOW GROUND NO. 1 TO 4 RAISED BY THE ASSESSEE. 15. GROUND NO.5 IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 16. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER WAS PRONOUNCED IN THE OPEN COURT ON 25.03.20 21. SD/- SD/- (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 25 TH MARCH 2021 /DEV COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR INDORE