DCIT, C.C. XXIV, Kolkata v. Binay Prakash, Kolkata

ITSSA 18/KOL/2009 | misc
Pronouncement Date: 30-07-2010

Appeal Details

RSA Number 1823516 RSA 2009
Assessee PAN AGBPP6089K
Bench Kolkata
Appeal Number ITSSA 18/KOL/2009
Duration Of Justice 1 year(s) 2 month(s) 4 day(s)
Appellant DCIT, C.C. XXIV, Kolkata
Respondent Binay Prakash, Kolkata
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 30-07-2010
Appeal Filed By Department
Bench Allotted A
Tribunal Order Date 30-07-2010
Date Of Final Hearing 22-03-2010
Next Hearing Date 22-03-2010
Assessment Year misc
Appeal Filed On 26-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA () . . ! .'#. $% [BEFORE SRI B. R. MITTAL JM & SRI C. D. RAO AM] ( ) !& !& !& !& / IT(SS)A NO.18 /KOL/2009 '( '( '( '( )( *+ )( *+ )( *+ )( *+/ // / BLOCK ASSESSMENT YEARS : 1987-88 TO 1996-97 & 1997-98 (PART) DEPUTY COMMISSIONER OF INCOME-TAX -VS- BINAY PRAK ASH CENTRAL CIRCLE-XXIV KOLKATA. (PA NO. AGBPP 6089 K) (-. / APPELLANT ) (/0-./ RESPONDENT ) FOR THE APPELLANT: : 1 /SRI HOMI RAJVANSH FOR THE RESPONDENT 1 /SRI SUBASH AGARWAL $2 / ORDER PER B. R. MITTAL ( . . . . . . . . ) )) ) ) : THE DEPARTMENT HAS PREFERRED THIS APPEAL FOR THE BL OCK PERIOD 1987-88 TO 1996- 97 AND 1997-98 (PART) AGAINST THE ORDER OF LD. CIT( A) DATED 18 TH FEBRUARY 2009 ON THE FOLLOWING GROUNDS 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW BY DELETING THE ADDITION OF RS.7 28 470/- ON AC COUNT OF UNDISCLOSED INVESTMENT IN DDP MADE U/S 69 IN A.Y 1996-97 ON THE GROUND THAT A TRANSACTION RECORDED IN THE REGULAR BOOKS OF ACCOUNTS CANNOT BE TREATED AS UNDI SCLOSED INCOME WHETHER THE RETURN IS FILED OR NOT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW BY DELETING THE ADDITION OF RS.28 800/- ON ACCO UNT OF INVESTMENT IN TEAK EQUITY MADE U/S 69 IN A.Y 1996-97 ON THE GROUND THAT A TRANSACT ION RECORDED IN THE REGULAR BOOKS OF ACCOUNTS CANNOT BE TREATED AS UNDISCLOSED INCOME WH ETHER THE RETURN IS FILED OR NOT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW BY DELETING THE ADDITION OF RS.64 800/- ON ACCO UNT OF INVESTMENT IN TEAK EQUITY MADE U/S 69 IN A.Y 1997-98 ON THE GROUND THAT A TRANSACT ION RECORDED IN THE REGULAR BOOKS OF ACCOUNTS CANNOT BE TREATED AS UNDISCLOSED INCOME WH ETHER THE RETURN IS FILED OR NOT. 2. BEFORE WE TAKE UP THE ABOVE GROUNDS FOR OUR CONS IDERATION IT IS RELEVANT TO STATE THAT THERE WAS A SEARCH AND SEIZURE OPERATION U/S. 132 OF THE ACT ON 17 TH JANUARY 1997. ORIGINALLY THE ASSESSMENT WAS COMPLETED U/S. 158BC /143(3) OF THE ACT ON 26 TH FEBRUARY 1999. SINCE THE ASSESSEE FILED APPEALS B EFORE THE LD. CIT(A) AND /OR ITAT 2 ITAT VIDE ITS ORDER DATED 24 TH FEBRUARY 2006 DELETED ALL THE ADDITIONS EXCEPT TH E ADDITION OF RS.14 38 790/- WHICH WAS SET ASIDE TO THE FILE OF THE AO FOR FRESH CONSIDERATION. THE ABOVE ADDITION AGGREGATING RS.1 4 38 790/- WAS MADE BY THE AO AS FOLLOWS : INVESTMENT IN LAND IN A. YR. 1987-88 RS. 2 66 72 0/- INVESTMENT IN DDPS FOR A.YR. 1996-97 RS.7 28 470 /- INVESTMENT IN LAND FOR A.YR. 1996-97 RS.3 50 000 /- PAYMENTS FOR PURCHASE OF TEAK TREES RS. 28 80 0/- (A.YR. 1995-96) IN THE NAMES OF ASSESSEES CHILDRED RS. 64 800 /- (A.YR. 1996-97) RS.14 38 790/- PURSUANT TO THE ABOVE THE AO MADE THE ASSESSMENT D ATED 26 TH JULY 2007 U/S. 158BC(C)/143/254 AND THIS APPEAL IS ARISING AGAINST THE ABOVE ASSESSMENT ORDER. NOW WE TAKE UP THE GROUNDS OF APPEAL BEFORE US. 3. IN RESPECT OF GROUND NO. 1 OF THE APPEAL THE AO HAS STATED THAT THERE WERE INVESTMENTS IN DDPS IN THE NAME OF BABY SHRISTHI PR AKASH DAUGHTER OF THE ASSESSEE OF RS.1 84 527/- AND IN THE NAME OF M/S. CHHOTANAGPUR COAL TRADERS A CONCERN OF THE ASSESSEE OF RS.5 12 574/- AGGREGATING TO RS.6 97 1 01/-. THE AO HAS CONSIDERED THE INTEREST OF RS.31 369/-. THUS THE AGGREGATED AMOU NT COMES TO RS.7 28 470/- AND TREATED THE SAME AS UNDISCLOSED INVESTMENT FOR THE ASSESSMENT YEAR 1996-97 ON THE GROUND THAT THE ASSESSEE HAD DECLARED THE SAME AS P ER BALANCE SHEET AS AT 31 ST MARCH 1996 FILED WITH THE BLOCK RETURN. THE AO HAS STAT ED THAT THE ASSESSEE DID NOT FILE THE REGULAR RETURN FOR ASSESSMENT YEAR 1996-97 AND THE DISCLOSURES WERE MADE AFTER THE SEARCH. HENCE THE AO CONSIDERED THE SAID AMOUNT AGGREGATING TO RS.7 28 470/- AS UNDISCLOSED INVESTMENT U/S. 69 OF THE ACT FOR AY 19 96-97. BEING AGGRIEVED THE ASSESEE FILED APPEAL BEFORE THE FIRST APPELLATE AUT HORITY. 3.1 ON BEHALF OF THE ASSESSEE IT WAS CONTENDED THA T THE TRIBUNAL IN ITS ORDER OBSERVED THAT THE ABOVE INVESTMENTS WERE NOTICED DU RING THE POST SEARCH INVESTIGATION AND THE AO RELIED ON THE STATEMENT OF ACCOUNTS OF THE ASSESSEE WHICH INDICATED THE INVESTMENTS. THE AO DID NOT PAY ANY ATTENTION TO T HE LIABILITY SIDE WHICH SHOWED THE SOURCES. THE ASSESSEE ALSO CONTENDED BEFORE THE LD . CIT(A) THAT THE TRIBUNAL ACCEPTED THE EXISTENCE OF THE BALANCE SHEET AND THEREFORE THE ABOVE TRANSACTIONS WERE RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE LD. CIT(A) AFTER CONSIDERING THE ABOVE SUBMISSION OF THE ASSESEE THAT ONCE THE AMOUNT WAS DECLARED IN THE BALANCE SHEET 3 WHETHER RETURN HAD BEEN FILED OR NOT THE ADDITION MADE BY THE AO WAS UNJUSTIFIED AS THE ASSESSEE FILED THE BALANCE SHEET AS ON 31 ST MARCH 1996 WITH THE BLOCK RETURN. HENCE THE DEPARTMENT IS IN FURTHER APPEAL BEFORE THE TRIB UNAL. 3.2. DURING THE COURSE OF HEARING THE LD. DR SUBMI TTED THAT RETURN FOR THE AY 1996- 97 WAS NOT FILED BY THE ASSESSEE THOUGH THE DUE DAT E HAD EXPIRED BEFORE THE SEARCH HAD TAKEN PLACE ON 17 TH JANUARY 1997. THE LD. DR SUBMITTED THAT THE AO WA S JUSTIFIED TO TREAT THE SAID INCOME AS UNDISCLOSED INCOME FOR THE AY 1996-97 IN VIEW OF THE PROVISIONS OF SECTION 158BC(C) OF THE I. T. ACT. T HE LD. DR FURTHER SUBMITTED THAT THE ACCOUNTS OF THE ASSESSEE WAS NOT AUDITED AND THE FI LING OF THE BALANCE SHEET AS AT 31 ST MARCH 1996 DOES NOT ESTABLISH THAT THE BALANCE SHE ET EXISTED ON THE DATE OF SEARCH. HE LASTLY SUBMITTED THAT THE SAID DELETION IS NOT JUST IFIED. 3.3. ON THE OTHER HAND THE LD. AR SUPPORTED THE OR DER OF THE LD. CIT(A). HE SUBMITTED THAT THE AO HAS NOT STATED IN HIS ORDER T HAT THE BALANCE SHEET WAS NOT EXISTED ON THE DATE OF SEARCH. HE FURTHER SUBMITTED THAT TH E ADDITION HAS BEEN MADE MERELY BECAUSE THE ASSESSEE DID NOT FILE THE RETURN FOR TH E AY 1996-97 BEFORE THE DATE OF SEARCH. THE LD. AR FURTHER SUBMITTED THAT THE AO HA S NOT STATED THAT THE SAID INVESTMENTS WERE NOT ENTERED IN THE REGULAR BOOKS O F ACCOUNTS OF THE ASSESSEE ON THE DATE OF SEARCH AND MERELY BECAUSE THE RETURN WAS NO T FILED THE SAID INVESTMENTS COULD NOT BE TREATED AS UNDISCLOSED INVESTMENTS. THE LD. AR FURTHER SUBMITTED THAT THE INCOME OF THE ASSESSEE FOR THE AY 1996-97 WAS BELOW TAXABL E AND HENCE THE ASSESSEE WAS NOT REQUIRED TO FILE THE RETURN FOR AY 1996-97. 3.4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BELOW. WE OBSERVE THA T THE AO HAS STATED THAT THE SAID INVESTMENTS WERE NOT DISCLOSED BY THE ASSESSEE IN R EGULAR RETURN AND WERE DECLARED IN THE BALANCE SHEET THE COPY OF WHICH WAS FILED ALONG WITH THE RETURN FOR THE BLOCK PERI OD. WE ALSO OBSERVE THAT THE LD. CIT(A) HAS DELETED THE SAID ADDITION ON THE GROUND THAT THE SAID INVESTMENTS WERE SHOWN IN THE BALANCE SHEE T AS AT 31.3.1996. WE ALSO OBSERVE THAT THERE IS NO EVIDENCE ON RECORD TO ESTABLISH TH AT THE SAID INVESTMENTS WERE ENTERED IN THE REGULAR BOOKS OF ACCOUNTS ON THE DATE OF SEA RCH AND/OR THE COPY OF THE BALANCE SHEET AS AT 31.3.1996 WAS IN EXISTENCE ON THE DATE OF SEA RCH. IN CASE THE SAID INVESTMENTS WERE RECORDED IN THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE AND/OR THE BALANCE SHEET AS AT 31.3.1996 REFLECTING THE ABOVE INVESTMENTS WER E AVAILABLE AT THE TIME OF SEARCH 4 WE AGREE WITH THE LD. CIT(A) THAT THE SAID INVESTME NTS COULD NOT BE CONSIDERED AS AN UNDISCLOSED INVESTMENTS U/S. 158BC(C) OF THE ACT ME RELY BECAUSE THE RETURN WAS NOT FILED BY THE ASSESSEE BEFORE THE DUE DATE. HOWEVER NO EVIDENCE ARE ON RECORD TO ESTABLISH THE ABOVE FACTS. THEREFORE WE CONSIDER I T PRUDENT TO RESTORE THIS ISSUE TO THE AO TO EXAMINE THE SAME AFRESH IN THE LIGHT OF OUR A BOVE OBSERVATION AND ON SUCH EVIDENCE AS MAY BE FURNISHED BY THE ASSESSEE TO EST ABLISH THAT THE SAID INVESTMENTS WERE RECORDED IN THE REGULAR BOOKS OF ACCOUNTS AND/OR IN THE BALANCE SHEET ON THE DATE OF SEARCH. THE AO WILL GIVE DUE OPPORTUNITY OF HEARIN G TO THE ASSESSEE BEFORE DECIDING THE ISSUE AS PER PROVISIONS OF THE ACT. HENCE GROUND NO. 1 OF THE APPEAL TAKEN BY THE DEPARTMENT IS ALLOWED FOR STATISTICAL PURPOSE. 4. IN RESPECT OF GROUND NOS. 2 AND 3 OF THE APPEAL THE AO HAS STATED THAT AS PER SEIZED DOCUMENT MARKED DKP-1 CERTAIN INVESTMENTS IN TEAK TREES OF STERLING TREE MAGNUM INDIA LTD. IN THE NAMES OF THE ASSESSEES CH ILDREN WERE FOUND IN LOCKER NO. 48 IN ALLAHABAD BANK CIRCULAR ROAD BRANCH RANCHI TH E DETAILS OF WHICH ARE AS UNDER : SL. NO. N A M E FY 95-96 F.Y. 96-97 1. 2. 3. VISHAL PRAKASH SRISTHI PRAKASH SWETA PRAKASH RS.9 600/- RS.9 600/- RS.9 600/- RS.28 800/- RS.19 900/- RS.19 900/- RS.25 000/- RS.64 800/- 4.1. AT THE TIME OF ASSESSMENT THE ASSESSEE STATE D THAT THE ABOVE INVESTMENTS WERE MADE IN THE FY 1995-96 AND HAD BEEN DECLARED BY THE ASSESSEE AND HIS WIFE MRS. RITA PRAKASH. THE SAME WERE DULY REFLECTED IN THE BALA NCE SHEET AS AT 31 ST MARCH 1996 AND 31 ST MARCH 1997 UNDER THE HEAD TEAK EQUITY. THE AO HAS STATED THAT THE CLAIM OF THE ASSESSEE WAS EXAMINED AND IT IS SEEN THAT THE ASSES EE HAD NOT FILED HIS REGULAR RETURNS FOR THE AYS. 1996-97 AND 1997-98 AND ONLY FILED HIS RET URN AS PART OF THE BLOCK RETURN AFTER THE SEARCH WHERE HE MADE SUCH DISCLOSURES. THEREFO RE THE AO TREATED THE SAID AMOUNTS OF RS.28 800/- AND RS.64 800/- AS UNDISCLOSED INVES TMENTS U/S. 69 FOR THE AYS 1996-97 AND 1997-98 RESPECTIVELY. BEING AGGRIEVED THE ASS ESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4.2. ON PERUSAL OF ORDER OF THE LD. CIT(A) WE MAY STATE THAT THE LD. CIT(A) IN PARA 12.3 HAS MENTIONED RS.49 400/- WHILE ADJUDICATING T HE GROUND NO. 9 WHICH RELATES TO RS.64 800/- AS ADDED BY THE AO. IT APPEARS THAT T HE SAME IS DUE TO A TYPOGRAPHICAL 5 MISTAKE AND ACCORDINGLY WE CONSIDER THIS AMOUNT AS RS.64 800/- THE AMOUNT TAKEN BY THE DEPARTMENT IN GROUND NO. 3 OF THE APPEAL BEFORE US. 4.3. THE LD. CIT(A) HAS DELETED THE AFORESAID TWO A MOUNTS RS.28 800/- AND RS.64 800/- (NOT RS.49 400/- AS MENTIONED IN OPERA 12.3 BY THE LD. CIT(A)) ON THE GROUND THAT THE SAID AMOUNTS WERE REFLECTED IN THE COPY OF THE BALANCE SHEET AS AT 31 ST MARCH 1996. HENCE THE DEPARTMENT IS IN FURTHER A PPEAL BEFORE THE TRIBUNAL. 4.4. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND HAVE CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW. IN RESPECT OF THE DELETION OF AMOUNT OF RS.28 800/- THE LD. CIT(A) HAS STATED THE SAME REASONS AS STATED IN RESPECT OF DELETION OF RS.7 28 470/- .FOR THE REASONS STATED HEREINABOVE WE RESTORE THI S ISSUE TO THE FILE OF THE AO FOR HIS FRESH ADJUDICATION AS PER PROVISIONS OF LAW AND CON SIDERING SUCH EVIDENCE AS MAY BE PLACED BY THE ASSESSEE. 4.5. IN RESPECT OF THE DELETION OF RS.64 800/- WE OBSERVE THAT THE LD. CIT(A) HAS STATED THAT THE AMOUNT IS ALLOWED FOR THE SAME REAS ONS AS MENTIONED IN RESPECT OF DELETION OF RS.7 28 470/- . WE ARE OF THE CONSIDER ED VIEW THAT THE REASONS GIVEN BY THE LD. CIT(A) IS NOT FACTUALLY JUSTIFIABLE. THE SAID ADDITION PERTAINS TO ASSESSMENT YEAR 1997-98 AND THE AO HAS CONSIDERED THE SAID AMOUNT AS UNDISCLOSED INVESTMENT U/S. 69 OF THE ACT ON THE GROUND THAT THE ASSESSEE DID NOT FILE THE REGULAR RETURN AND ONLY FILED HIS RETURNS AS PART OF THE BLOCK RETURN AFTER SEARC H WHERE SUCH DISCLOSURES WERE MADE. WE OBSERVE THAT THE SEARCH HAD TAKEN PLACE ON 17 TH JUNE 1997 AND THEREFORE THE QUESTION OF NOT FILING THE REGULAR RETURN PRIOR TO THE DATE OF SEARCH FOR THE AY 1997-98 DOES NOT ARISE. WE ALSO OBSERVE THAT THE DATE OF I NVESTMENT OF THE SAID AMOUNT AGGREGATING RS.64 800/- PERTAINING TO FY1996-97 ARE NOT GIVEN IN THE ASSESSMENT ORDER NOR ANY OTHER DOCUMENTS HAVE BEEN FILED IN THE PAPE R BOOK GIVING THE DATES ON WHICH THE SAID INVESTMENTS WERE MADE IN THE FY 1996-97. WE ARE OF THE CONSIDERED VIEW THAT IF THE SAID INVESTMENTS WERE MADE BEFORE THE DATE O F SEARCH AND WERE REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS THE SAID INVESTMENTS COU LD NOT BE CONSIDERED AS UNDISCLOSED INVESTMENTS FOR THE AY1997-98. THE ABOVE FACTS ARE NOT ASCERTAINABLE FROM THE PAPER PLACED ON RECORD AS WELL AS FROM THE ORDERS OF THE AUTHORITIES BELOW. HENCE FOR THE REASONS STATED HEREINABOVE WE RESTORE THIS ISSUE T O THE AO TO DECIDE IT ON THE BASIS OF THE EVIDENCE AS MAY BE FILED BY THE ASSESSEE AND IN ACCORDANCE WITH LAW AFTER GIVING DUE 6 OPPORTUNITY OF HEARING TO THE ASSESSEE. THEREFORE GROUND NOS. 2 AND 3 OF THE APPEAL ARE ALSO ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30.7.2010 SD/- SD/- . .. .'# '#'# '#. .. . $% $% $% $% . . . . . . . . (C. D. RAO) (B. R. MITTAL) ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( (#% #% #% #%) )) ) DATED : 30 TH JULY 2010 34 )56 7 JD.(SR.P.S.) $2 8 /9 :$9*;- COPY OF THE ORDER FORWARDED TO: 1. -. /APPELLANT - DCIT CC-XXIV KOLKATA. 2 /0-. / SRI BINAY PRAKASH 4 GANGADHAR BABU LANE KOLKAT A 3. 2)/ THE CIT KOLKATA 4. 2) ()/ THE CIT(A) KOLKATA. 5. BC /) / DR KOLKATA BENCHES KOLKATA 09 // TRUE COPY $2)D/ BY ORDER E !6 / DEPUTY REGISTRAR .