The ACIT, Central Circle-3,, Surat v. Shri Jitendra B.Sojitra, Surat

ITSSA 190/AHD/2010 | 2007-2008
Pronouncement Date: 18-10-2016 | Result: Dismissed

Appeal Details

RSA Number 19020516 RSA 2010
Assessee PAN ADAPB6186L
Bench Ahmedabad
Appeal Number ITSSA 190/AHD/2010
Duration Of Justice 6 year(s) 7 month(s) 25 day(s)
Appellant The ACIT, Central Circle-3,, Surat
Respondent Shri Jitendra B.Sojitra, Surat
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 18-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 18-10-2016
Date Of Final Hearing 06-10-2016
Next Hearing Date 06-10-2016
Assessment Year 2007-2008
Appeal Filed On 23-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD JUDICIAL MEMBER) IT(SS)A. NOS: 47 & 189/AHD/2010 AND IT(SS)A NOS. 48 & 190/AHD/2010 (ASSESSMENT YEARS: 2006-07 & 2007-08) SHRI JITENDRA B. SOJITRA B- 402 GOLDEN PLAZA ANKUR CHAR RASTA VARACHHA ROAD SURAT ASST. COMM. OF INCOME TAX CENTRAL CIRCLE-3 SURAT V/S V/S ASST. COMM. OF INCOME TAX CENTRAL CIRCLE-3 SURAT SHRI JITENDRA B. SOJITRA B- 402 GOLDEN PLAZA ANKUR CHAR RASTA VARACHHA ROAD SURAT (APPELLANT) (RESPONDENT) PAN: ADAPB6186L APPELLANT BY : SHRI M.K. PATEL AR RESPONDENT BY : SHRI KRISHNA MURARI CIT/ D. R. ( )/ ORDER DATE OF HEARING : 06 -10-201 6 DATE OF PRONOUNCEMENT : 18 -10-2016 PER N.K. BILLAIYA ACCOUNTANT MEMBER: IT(SS)A NOS. 47 & 189/AHD/2010 & IT(SS)A NOS. 48 & 190/AHD/2010 . A.YS. 2006 -07 & 2007-08 2 1. IT(SS)A NOS.47/AHD/2010 & 189/AHD/2010 ARE CROSS AP PEALS BY THE ASSESSEE AND THE REVENUE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-II AHMEDABAD DATED 27.11.2009 PERTAINING TO A.Y. 2006- 07 AND IT(SS)A NOS. 48/AHD/2010 & 190/AHD/2010 ARE CROSS APPEALS OF THE ASSESSEE AND THE REVENUE PREFERRED AGAINST THE VERY SAME ORDER OF TH E LD. CIT(A)-II AHMEDABAD DATED 27.11.2009 PERTAINING A.Y. 2007-08. 2. THE FIRST APPELLATE AUTHORITY HAS DISPOSED THESE AP PEALS BY A COMMON ORDER; THEREFORE ALL THESE APPEALS WERE HEARD TOGE THER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE. 3. HAVING HEARD THE RIVAL CONTENTIONS WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND WITH THE ASSISTANCE OF THE LD . COUNSEL; WE HAVE ALSO GONE THROUGH THE RELEVANT DOCUMENTARY EVIDENCES BRO UGHT ON RECORD IN THE FORM OF PAPER BOOK IN THE LIGHT OF RULE 18(6) OF TH E APPELLATE TRIBUNAL RULES. 4. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT T HE RESIDENCE OF THE ASSESSEE ON 07.11.2006. A CONSEQUENTIAL SURVEY ACTI ON WAS ALSO CONDUCTED U/S. 133A AT M/S. MAUNI STUDY CENTRE OF WHICH THE A SSESSEE IS A PROPRIETOR. BOOKS OF ACCOUNTS AND DOCUMENTS WERE SEIZED/IMPOUND ED FROM THE PREMISES. DURING THE COURSE OF SEARCH THE ASSESSEE DISCLOSED UNACCOUNTED INCOME OF RS. 1.01 CRORES BIFURCATING THE SAME AT R S. 24 49 113/- FOR A.Y. 2006-07 AND RS. 76 50 887/- FOR A.Y. 2007-08. IT(SS)A NOS. 47 & 189/AHD/2010 & IT(SS)A NOS. 48 & 190/AHD/2010 . A.YS. 2006 -07 & 2007-08 3 5. WHILE SCRUTINIZING THE RETURN OF INCOME THE A.O. N OTICED THAT THE ASSESSEE HAS NOT DISCLOSED THE INCOME OFFERED DURING THE COU RSE OF THE SEARCH PROCEEDINGS. THE ASSESSEE POINTED OUT THE RETRACTIO N MADE BY HIM BUT FAILED TO CONVINCE THE A.O. ABOUT THE RETRACTION. T HE A.O. WAS OF THE FIRM BELIEF THAT THE RETRACTION WAS AN AFTERTHOUGHT TO G ET AWAY FROM THE VOLUNTARY STATEMENT. THE A.O. CONCLUDED BY ADDING R S. 24 49 113/- THE AMOUNT DISCLOSED AT THE TIME OF SEARCH. 6. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND VEHEMENTLY CONTENDED THAT THE ADDITION CANNOT BE MADE MAINLY O N THE BASIS OF STATEMENT GIVEN AT THE TIME OF SEARCH. IT WAS BROUG HT TO THE NOTICE OF THE LD. CIT(A) THAT THE STATEMENT WAS GIVEN WITHOUT CON SULTING THE PAPER SEIZED AND IN UTTER CONFUSION. 7. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS TH E LD.CIT(A) HELD AS UNDER:- THE APPELLANT GAVE THE STATEMENT AT THE TIME OF SEARCH THAT HIS R ECEIPT WAS RS.24 49 113/- AS AGAINST THIS THE RECEIPT SHOWN IN P&L A/C. IS RS.27 95 980/-. HOWEVER THE RECEIPT FOUND IN THE SEIZED PAPER INDI CATED FEES OF RS.3 27 583/-. THE INVESTMENT MADE AS PER SEIZED PAPER FOUND IS RS . 19 21 992/- AND EXPENSES ARE RS.9 53 697/-. THEREFORE THE GROSS RECEIPT HAS TO BE TAKEN AT RS.28 75 689/- AND AFTER ACCOUNTING FOR THE EXPENSES INCURRED THE NET INCOME HAS TO BE COMPUTED AT RS. 19 21 9927- TO COVER THE INVESTMENT . HENCE IT IS REASONABLE TO COMPUTE THE NET INCOME AT RS. 19 21 992/-. THE APPE LLANT HAS DECLARED THE INCOME AT RS. 1 87 780/-. HENCE THE ADDITION IS CONFIRMED TO THE EXTENT OF RS.17 34 212/- [RS.19 21 992 - RS.1 87 780] AND THE BALANCE AMOUNT OF RS.7 14 901/- [RS.24 49 113 -RS. 17 34 212] IS DELETED. IT(SS)A NOS. 47 & 189/AHD/2010 & IT(SS)A NOS. 48 & 190/AHD/2010 . A.YS. 2006 -07 & 2007-08 4 8. AGGRIEVED BY THIS BOTH THE ASSESSEE AND THE REVENU E ARE BEFORE US. 9. IT IS NOT IN DISPUTE THAT THE ASSESSEE DISCLOSED RS . 24 49 113/- IN HIS STATEMENT DURING THE COURSE OF SEARCH PROCEEDINGS. A PERUSAL OF THE RECORD SHOWS THAT IT IS NOT CLEAR WHETHER THE ASSESSEE WAS REFERRING TO GROSS RECEIPT OR NET RECEIPT. WE FURTHER FIND THAT IN THE PROFIT AND LOSS ACCOUNT THE ASSESSEE HAS SHOWN RECEIPT OF RS. 27 95 980/- A ND THE RECEIPT FOUND IN THE SEIZED PAPER TOTALS TO RS. 3 27 583/-. IT APPEA RS THAT REFERENCE TO RS. 24 49 113/- IS FOR GROSS RECEIPT. IN THE BOOKS THE ASSESSEE HAS SHOWN RS. 27 95 980/ WHICH IS HIGHER THAN THE RECEIPT DISCLOS ED AT THE TIME OF SEARCH. EVEN IF THE RECEIPT FOUND IN THE SEIZED PAPER AT RS . 3 27 583/- IS ADDED TO THIS AMOUNT THE TOTAL RECEIPT COMES TO RS. 27 76 6 96/- WHICH IS AGAIN LESS THAN THE RECEIPT SHOWN IN THE PROFIT AND LOSS ACCOU NT. 10. AT HIS JUNCTURE IT WOULD BE PERTINENT TO UNDERSTAN D THE VIEW OF THE CBDT ON DISCLOSURES MADE AT THE TIME OF SEARCH AND THE S AME READS AS UNDER:- THE CBDT CIRCULAR NO. 286/2/2003-IT (INV) DATED 10 -3-2003 IN REFERENCE TO THE CONFESSION OF INCOME MADE DURING THE COURSE OF SEAR CH PROCEEDINGS IS REPRODUCED HEREIN BELOW: INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHER E ASSESSES HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOSED IN COME DURING THE COURSE OF THE SEARCH AND SEIZURE AND SURVEY OPERATIONS. SUCH CONF ESSIONS IF NOT BASED UPON CREDIBLE EVIDENCE ARE LATER RETRACTED BY THE CONCE RNED ASSESSEE WHILE FILING RETURNS OF INCOME. IN THESE CIRCUMSTANCES ON CONFE SSION DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS DO NOT SER VE ANY USEFUL PURPOSE. IT IS THEREFORE ADVISED THAT THERE SHOULD BE FOCUS AND C ONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WH AT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME-TAX DEPARTMENTS SIMILARLY WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH AND SEIZURES AND SURVEY IT(SS)A NOS. 47 & 189/AHD/2010 & IT(SS)A NOS. 48 & 190/AHD/2010 . A.YS. 2006 -07 & 2007-08 5 OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONF ESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FURTHER IN RESPECT OF PENDING ASSESSMENT PROCEEDIN GS ALSO ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCES / MATERIALS GATHERED DURING THE COURSE OF SEARCH / SURVEY OPERATIONS OR THEREAFTER WHILE FRAMING THE R ELEVANT ASSESSMENT ORDERS 11. IT IS ALSO AN UNDISPUTED FACT THAT NO ADDITIONS HAV E BEEN MADE IN RESPECT OF UNEXPLAINED INVESTMENT ON ACCOUNT OF CASH AND JEWEL LERY FOUND AT THE TIME OF SEARCH. THEREFORE IT CAN BE SAFELY CONCLUDED TH AT THE ALLEGED DISCLOSURE MADE BY THE ASSESSEE IS NOT CORROBORATED BY ANY UNE XPLAINED INVESTMENT/UNEXPLAINED EXPENDITURE. WE THEREFORE DO NOT FIND ANY MERIT IN MAKING THE IMPUGNED ADDITION BY THE A.O. WE ALSO DO NOT FIND ANY MERIT IN THE PART CONFIRMATION OF THE IMPUGNED ADDITION M ADE BY THE LD. CIT(A). WE ACCORDINGLY SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE ENTIRE ADDITION OF RS. 24 49 113/-. 12. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED AND THE CROSS APPEAL OF THE REVENUE IS DISMISSED. 13. BEFORE PARTING THE APPEAL OF THE REVENUE HAS TO BE DISMISSED IN THE LIGHT OF THE CBDT CIRCULAR NO.21 OF 2015 DATED 10.12.2015 BY WHICH THE CBDT HAS PRESCRIBED THE MONETARY LIMIT OF TAX EFFECT OF RS. 10 LACS AND ABOVE. THE DELETION OF THE ADDITION OF RS. 714901 HAS BEEN CON TESTED BY THE REVENUE IN ITS APPEAL THE TAX EFFECT OF WHICH OBVIOUSLY IS LESS THAN RS. 10 LACS. 14. COMING TO THE CROSS APPEALS FOR A.Y. 2007-08 WE FI ND THAT THE A.O. HAS ONCE AGAIN HEAVILY RELIED UPON THE STATEMENT OF THE ASSESSEE GIVEN AT THE IT(SS)A NOS. 47 & 189/AHD/2010 & IT(SS)A NOS. 48 & 190/AHD/2010 . A.YS. 2006 -07 & 2007-08 6 TIME OF SEARCH AND ADDED THE ENTIRE AMOUNT OF THE A LLEGED DISCLOSURE OF RS. 76 50 887/-. 15. BEFORE THE LD. CIT(A) IT WAS BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT FEES TOTALING RS. 19 40 000/- ARE DUPLICATE ENTRIES AND THEREFORE THE SAME DESERVES TO BE DEDUCTED. WE ALSO FIND THAT A REMAND REPORT WAS CALLED FOR BY THE FIRST APPELLATE AUTHORITY AND THE A.O. HAS T EST CHECKED AND VERIFIED AND FOUND CORRECT THAT RS. 19 40 000/- RELATES TO T HE DUPLICATE ENTRIES. THE LD. CIT(A) WAS CONVINCED TO THIS EXTENT AND DIRECTE D THE A.O. TO REDUCE RS. 19 40 000/-. 16. WE FURTHER FIND THAT THE ASSESSEE BROUGHT TO THE NO TICE OF THE LD. CIT(A) ENTRIES FOR RS. 5 96 100/- AND CONTENDED THAT THE S AME IS DISCLOSED IN THE HANDS OF THE WIFE OF THE ASSESSEE SMT. KANCHANBEN S OJITRA. THE LD. CIT(A) WAS NOT CONVINCED WITH THIS CONTENTION AND FINALLY CONCLUDED BY RESTRICTING THE ADDITION TO THE EXTENT OF RS. 32 02 918/-. AFTE R DEDUCTING THE RECEIPT OF RS. 38 78 550/- SHOWN BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS. 17. AGGRIEVED BY THIS BOTH REVENUE AND THE ASSESSEE AR E BEFORE US. 18. INSOFAR AS THE FEES TOTALING TO RS. 19 40 000/- IS CONCERNED WE FIND THAT THE SAME HAS BEEN ACCEPTED BY THE A.O. IN HIS REMAND RE PORT DATED 26.11.2009 AS DUPLICATE ENTRIES. TO THIS EXTENT WE DO NOT FIN D ANY INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). A PERUSAL OF THE RECORD SHOWS THAT THE A.O. HAS TAKEN THE INCOME OF RS. 90 21 468/- FROM THE SEIZED DOCUMENT BUT AT THE IT(SS)A NOS. 47 & 189/AHD/2010 & IT(SS)A NOS. 48 & 190/AHD/2010 . A.YS. 2006 -07 & 2007-08 7 SAME TIME HAS IGNORED THE EXPENDITURE OF RS. 21 35 407/- SHOWN IN THE SAME SET OF DOCUMENTS WHICH WERE SEIZED. THE REVEN UE AUTHORITIES CANNOT BLOW HOT AND COLD IN THE SAME BREATH. IF THE INCOME SIDE IS TAKEN INTO CONSIDERATION FOR MAKING THE IMPUGNED ADDITIONS TH EN THE EXPENDITURE MENTIONED IN THE VERY SAME PIECE OF PAPER HAS TO BE CONSIDERED BY THE A.O. THE FOLLOWING CHARTS BEING PART OF THE ASSESSM ENT ORDER CLARIFIES THE POSITION:- JITENDRA B. SOJITRA (RESIDENCE)- TABLE A A.Y. INCOME (A) INVESTMENT (B) EXPENSES C TOTAL (B ) + (C) 2001-02 0.00 0.00 0.00 0.00 2002-03 0.00 0.00 0.00 0.00 2003-04 0.00 18 397.00 0.00 18 397.00 2004-05 2005-06 0.00 0.00 424 000.00 0.00 0.00 0.00 424 000.00 0.00 2006-07 0.00 102 164.00 0.00 102 164.00 2007-08 36 000.00 1 099 041.00 197 265.00 1 296 306 .00 TOTAL 36 000.00 11 643 602.00 197 265.00 1 840 867 .00 JITENDRA B. SOJITRA (OFFICE)- TABLE B A.Y. INCOME (A) INVESTMENT (B) EXPENSES C TOTAL (B ) + (C) 2001-02 0.00 0.00 0.00 0.00 2002-03 21 200.00 0.00 0.00 0.00 2003-04 20 000.00 0.00 0.00 0.00 2004-05 0.00 0.00 1 350 500.00 1 350 500.00 2005-06 9 954.00 0.00 0.00 0.00 IT(SS)A NOS. 47 & 189/AHD/2010 & IT(SS)A NOS. 48 & 190/AHD/2010 . A.YS. 2006 -07 & 2007-08 8 2006-07 327 583.00 1 819 828.00 953 697.00 2 773 52 5.00 2007-08 8 985 468.00 542 816.00 735 980.00 1 278 79 6.00 TOTAL 9 364 205.00 2 362 644.00 3 040 177.00 5 402 821.00 JITENDRA B. SOJITRA (GRAND TOTAL)- TABLE C = TABLE A + TABLE B A.Y. INCOME (A) INVESTMENT (B) EXPENSES C TOTAL (B ) + (C) 2001-02 0.00 0.00 0.00 0.00 2002-03 21 200.00 0.00 0.00 0.00 2003-04 20 000.00 18 397.00 0.00 18 397.00 2004-05 0.00 424 000.00 1 350 500.00 1 774 500.00 2005-06 9 954.00 0.00 0.00 0.00 2006-07 327 583.00 1 921 992.00 953 697.00 2 875 68 9.00 2007-08 9 021 468.00 1 641 857.00 933 245.00 2 575 102.00 TOTAL 9 400 205.00 4 006 246.00 3 237 442.00 7 243 688.00 19. THE CREDIT OF EXPENDITURE HAS ALSO NOT BEEN GIVEN B Y THE FIRST APPELLATE AUTHORITY. WE ACCORDINGLY MODIFY THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO ALLOW THE CREDIT OF EXPENDITURE OF RS. 21 35 407/- FROM THE ADDITION OF RS. 32 02 918/- CONFIRMED BY THE LD. CI T(A) WHICH LEAVES WITH THE ADDITION OF RS. 10 67 511/-. WE FURTHER DIRECT THE A.O. TO VERIFY WHETHER ENTRIES FOR RS. 5 96 100/- ARE DISCLOSED IN THE HAN DS OF THE WIFE OF THE ASSESSEE SMT. KANCHANBEN SOJITRA; AND IF THE SAME I S FOUND DISCLOSED IN THE HANDS OF SMT. KANCHANBEN SOJITRA THE TOTAL ADDITIO N SHOULD BE MADE AT RS. 4 71 411/- AND IF THE ASSESSEE FAILS TO CONVINCE TH E A.O. THEN THE ADDITION SHALL BE AT RS. 10 67 511/-. IT(SS)A NOS. 47 & 189/AHD/2010 & IT(SS)A NOS. 48 & 190/AHD/2010 . A.YS. 2006 -07 & 2007-08 9 20. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED SUBJECT TO ABOVE VERIFICATION AND APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON 18 - 10 - 2016. SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHME DABAD