ACIT CIR 2, THANE v. ARVIND PARASRAMPURIA, THANE

ITSSA 39/MUM/2010 | misc
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 3919916 RSA 2010
Assessee PAN AAKPP6504A
Bench Mumbai
Appeal Number ITSSA 39/MUM/2010
Duration Of Justice 1 year(s) 8 month(s) 11 day(s)
Appellant ACIT CIR 2, THANE
Respondent ARVIND PARASRAMPURIA, THANE
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-03-2012
Assessment Year misc
Appeal Filed On 19-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI P.M.JAGTAP ACCOUNTANT MEMBER & SHRI V. DURGA RAO JUDICIAL MEMBER. I.T(SS)A.NO.39/MUM/2010. BLOCK PERIOD 0 1-04-1987 TO 13-11-1987. ASSTT. COMMISSIONER OF ARVIND PARASRAMPURIA INCOME TAX CIRCLE-2 VS. FLAT NO. 201 2 ND FLOOR THANE. BLDG. NO.5 SALASAR NAGA R BHAYANDER (E) THA NE. PANAAKPP6504A. APPELLANT. RESPONDENT. APPELLANT BY : MS. USHA NAIR. RESPONDENT BY : SHRI DEVENDRA MEHTA. DATE OF HEARI NG : 22-03-2012. DATE OF PRONOUNC EMENT : 30-03-2012 O R D E R PER P.M. JAGTAP A.M. : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF LEARNED CIT(APPEALS)-II THANE DATED 15-03-2010 AND THE GRI EVANCE OF THE REVENUE AS PROJECTED THEREIN IS THAT THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO TO THE UNDISCLOSED INCOME OF THE ASS ESSEE ON ACCOUNT OF INITIAL INVESTMENT OF RS.84 70 876/- IN THE UNACCOUNTED BUS INESS. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO WAS SUBJECTED TO A SEARCH ACTION U/S 132 ON 13-11-1997. DURING THE COU RSE OF SEARCH CASH OF RS.22 590/- AND JEWELLERY WORTH RS.90 000/- WERE FO UND BESIDES SOME INCRIMINATING DOCUMENTS. THEREAFTER A NOTICE U/S 15 8BC WAS ISSUED BY THE AO IN 2 I.T.(SS)A.NO.39/MUM/2010 RESPONSE TO WHICH THE RETURN FOR THE BLOCK PERIOD W AS FILED BY THE ASSESSEE ON 13- 11-1999 DECLARING UNDISCLOSED INCOME OF RS.28 230/- . ON THE BASIS OF DOCUMENTS FOUND DURING THE COURSE OF SEARCH THE ASSESSEE WAS FOUND TO BE CARRYING ON BUSINESS AS A TRADER IN YARN IN HIS INDIVIDUAL NAM E AND THE TURNOVER OF THE SAID BUSINESS FOR FINANCIAL YEARS 1996-97 AND 1997-98 WA S TO THE TUNE OF RS.5 06 72 083/- AND RS.60 32 271/- RESPECTIVELY. T HE ASSESSEE WAS ALSO FOUND TO BE CARRYING ON TRADING IN YARN IN THE NAME OF M/S S AURABH FABRICS AND THE TURNOVER OF SAID BUSINESS DURING FINANCIAL YEARS 1 996-97 AND 1997-98 WAS FOUND TO BE TO THE TUNE OF RS.3 40 36 677/- AND RS.76 67 296/-. TAKING THE PROFIT MARGIN OF THE SAID BUSINESS AT 12% THE UNDISCLOSED INCOME OF THE ASSESSEE FROM HIS OWN BUSINESS FOR FINANCIAL YEARS 1996-97 AND 1997-98 WA S ESTIMATED BY THE AO AT RS.60 80 649/- AND RS.7 23 873/- RESPECTIVELY WHILE THE UNDISCLOSED INCOME OF THE ASSESSEE FROM THE BUSINESS CARRIED ON IN THE NAME O F M/S SAURABH FABRICS FOR FINANCIAL YEARS 1996-97 AND 1997-98 WAS ESTIMATED B Y THE AO AT RS.40 84 401/- AND RS.9 20 076/-. THE AO ALSO ESTIMATED THE CAPITA L INVESTMENT REQUIRED TO BE MADE BY THE ASSESSEE TO CARRY ON THE UNDISCLOSED BU SINESS IN HIS OWN NAME AND IN THE NAME OF SAURABH FABRICS AT RS.84 70 876/- BEING 10% OF THE TOTAL TURNOVER AND THE SAID AMOUNT WAS TREATED BY HIM AS UNDISCLOSED I NCOME OF THE ASSESSEE FOR FINANCIAL YEAR 1996-97. ON APPEAL THE LEARNED CIT( APPEALS) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS MATERIA L AVAILABLE ON RECORD RESTRICTED THE ADDITION MADE BY THE AO ON ACCOUNT OF UNDISCLOS ED PROFIT ON UNACCOUNTED SALES MADE BY THE ASSESSEE IN HIS OWN NAME AND IN T HE NAME OF SAURABH FABRICS TO RS.15 45 816/- ALLOWING A RELIEF OF RS.1 02 63 182/ - TO THE ASSESSEE ON THIS ISSUE. THE ADDITION OF RS.84 70 876/- MADE BY THE AO ON AC COUNT OF INITIAN INVESTMENT ALLEGEDLY MADE BY THE ASSESSEE IN THE UNACCOUNTED B USINESS TO THE EXTENT OF RS.84 70 876/- BEING 10% OF THE UNACCOUNTED TURNOVE R HOWEVER WAS ENTIRELY 3 I.T.(SS)A.NO.39/MUM/2010 DELETED BY THE LEARNED CIT(APPEALS) FOR THE FOLLOWI NG REASONS GIVEN IN PARAGRAPH NO. 4.3 AND 4.3.1 OF HIS IMPUGNED ORDER : 4.3 I HAVE PERUSED THE ASSESSMENT ORDER OF THE AO AND THE WRITTEN SUBMISSION AND OTHER DETAILS FILED BY THE APPELLANT S COUNSEL AND ORAL SUBMISSION MADE IN THE COURSE OF APPELLATE PROCEED INGS. THERE IS A MERIT IN THE ABOVE CONTENTION OF THE APPELLANT. IT IS A SETT LED LEGAL POSITION THAT THE UNDISCLOSED INCOME HAS TO BE DETERMINED ON THE BASI S ON SEIZED MATERIAL. THERE IS NO SCOPE FOR ANY ASSUMPTION OR PRESUMPTION IN THIS REGARD IN THE SCHEME OF CHAPTER XIV-B. IN THE CASE UNDER CONSIDER ATION THE SEIZED MATERIAL DID NOT REVEAL ANY UNACCOUNTED INVESTMENT IN YARN TRADING BUSINESS BY THE APPELLANT. MOREOVER THE APPELLANT DID NOT H AVE ANY OFFICE PREMISES AND OFFICE SET-UP STOCK DEBTORS EMPLOYEES ETC. WHICH COULD HAVE REQUIRED ANY INVESTMENT. HE MERELY HAD A SMALL RESIDENTIAL F LAT AT BHAYANDER (EAST) THE INVESTMENT IN WHICH WAS SHOWN IN HIS RETURN OF INCOME. 4.3.1 MOREOVER ON ANALYSIS OF THE SEIZED MATERIAL NO SUCH EVIDENCE WAS FOUND WHICH COULD HAVE INDICATED ANY UNDISCLOSED I NVESTMENT BY THE APPELLANT IN HIS YARN TRADING BUSINESS. ALSO THE A NALYSIS OF SEIZED MATERIAL REVEALED THAT THE PAYMENT TO MILLS WAS MADE AFTER R EALIZING MONEY FROM DEBTORS AND THE APPELLANT DID NOT MAKE ANY PAYMENT TO THE MILLS OUT OF HIS OWN FUNDS OR CAPITAL. ACCORDING TO THE APPELLANT T HERE WAS NO REQUIREMENT FOR ANY WORKING CAPITAL. THIS RELIEF GIVEN BY THE LEARNED CIT(APPEALS) BY DE LETING THE ENTIRE ADDITION MADE BY THE AO ON ACCOUNT OF INITIAL INVESTMENT ALLEGEDL Y MADE BY THE ASSESSEE IN UNACCOUNTED BUSINESS HAS BEEN DISPUTED BY THE REVEN UE IN THE PRESENT APPEAL FILED BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS FOUND BY THE LEARNED CIT(APP EALS) THERE WAS NO BASIS WHATSOEVER GIVEN BY THE AO IN SUPPORT OF THE ESTIM ATE OF INITIAL INVESTMENT OF THE 4 I.T.(SS)A.NO.39/MUM/2010 ASSESSEE MADE BY HIM AT 10% OF THE UNACCOUNTED TURN OVER. AS FURTHER FOUND BY THE LEARNED CIT(APPEALS) THE ESTIMATE OF ASSESSEES IN ITIAL INVESTMENT SO MADE BY THE AO WAS ALSO NOT SUPPORTED BY ANY MATERIAL FOUND DUR ING THE COURSE OF SEARCH. THE SEARCH ON THE CONTRARY REVEALED THAT THE ASSESSEE D ID NOT MAINTAIN ANY INFRASTRUCTURE FOR THE PURPOSE OF HIS UNACCOUNTED B USINESS WHICH COULD REQUIRE ANY INVESTMENT. IT ALSO REVEALED THAT PAYMENTS TO MILLS WERE MADE BY THE ASSESSEE ONLY AFTER REALIZING MONEY FROM HIS DEBTORS AND THERE WA S NO PAYMENT MADE BY THE ASSESSEE TO THE MILLS OUT OF OWN FUNDS OR CAPITAL. ALL THESE FINDINGS OF FACTS RECORDED BY THE LEARNED CIT(APPEALS) CLEARLY SHOW T HAT THE UNACCOUNTED BUSINESS CARRIED ON BY THE ASSESSEE DID NOT REQUIRE ANY INI TIAL INVESTMENT AND THERE WAS NOTHING FOUND DURING THE COURSE OF SEARCH TO SHOW T HAT ANY SUCH INVESTMENT WAS ACTUALLY MADE BY THE ASSESSEE. KEEPING IN VIEW THES E FINDINGS OF FACTS RECORDED BY THE LEARNED CIT(APPEALS) WHICH THE LEARNED DR HAS N OT BEEN ABLE TO REBUT OR CONTROVERT WE AGREE WITH THE LEARNED CIT(APPEALS) THAT THE ADDITION MADE BY THE AO ON ACCOUNT OF INITIAL INVESTMENT ALLEGEDLY MADE BY THE ASSESSEE WAS NOT SUSTAINABLE AND UPHOLDING THE IMPUGNED ORDER OF THE LEARNED CIT(APPEALS) GIVING RELIEF TO THE ASSESSEE ON THIS ISSUE WE DISMISS TH IS APPEAL FILED BY THE REVENUE. 4. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF MARCH 2012. SD/- SD/- (V.DURGA RAO) (P.M. JAGTAP) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI DATED: 30 TH MARCH 2012. 5 I.T.(SS)A.NO.39/MUM/2010 COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR A-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR ITAT MUMBAI. WAKODE