Db Income Tax Appeal v. Shri Ashok Kumar Jain

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR *** DB Income Tax Appeal No.27/2014 Commissioner of Income Tax, AlwarVs.Shri Ashok Kumar Jain Date of Order :- 17/09/2014 HON'BLE MR. JUSTICE AJAY RASTOGI.HON'BLE MR. JUSTICE J.K. RANKA. Smt. Parinitoo Jain, for the appellant. By the Court : (Per Hon'ble Ranka,J.) 1.This appeal u/s 260-A of the Income Tax Act (for short, 'ITAct') is directed against the order of the Income Tax AppellateTribunal (for short, 'ITAT') dt.16/04/2013 and it relates to theassessment year 2008-09. 2.Brief facts, which can be noticed on perusal of the orderimpugned and the arguments of the counsel for the appellant,are that in the case of the respondent-assessee a survey u/s133 A of the IT Act was carried out at the business premiseson 25/11/2009 and during the course of survey someincriminating documents were found, inventorised andimpounded, inventory of cash & stock was also prepared. At thetime of survey, statement of the assessee-respondent was alsorecorded wherein on the basis of impounded loose papers,diaries, documents etc. he surrendered a total sum of Rs.8crore which comprised of income of Rs.2 crore in theassessment year 2007-08; Rs.5 crore for the current year and Rs.1 crore for the assessment year 2009-10. In the assessmentyear 2007-08, though the assessee had surrendered Rs.2 crorebut in the return of income an additional income was offered tothe tune of Rs.1.5 crore only and even the AO was satisfied andaccepted Rs.1.5 crore and he passed assessment order for theassessment year 2007-08 on 24/12/2009. 3.In the revised return, for the assessment year 2008-09which is under appeal which the respondent-assessee filedpursuant to the said surrender, he surrendered a sum of Rs.3crore only instead of Rs.5 crore which he admitted during thecourse of survey. A show cause notice was issued by theAssessing Officer (for short, 'AO') to the respondent-assesseewherein query was raised that as to when during the course ofsurvey surrender was made to the tune of Rs.5 crore, then whatwas the reason for surrendering only Rs.3 crore in the revisedreturn filed. It was explained by the assessee before the AOthat the surrender of Rs.5 crore was made by him which wasnot correct as according to the transactions, in actuality andbased on the peak credits and after having gone through theloose papers and documents, the actual surrender comes tolower than Rs.3 crore but to maintain peace and not to litigatethe matter further, he has offered Rs.3 crore. He furthercontended that though the actual surrender on the basis ofinvestment in shares application money,non-verifiable creditorsetc or transactions recorded in the diary, comes to about Rs.2.20 crore only but he had additionally surrendered anamount of Rs.80 lacs on other defects, transaction in the diaryor other transactions in the books of accounts so as to makethe total surrender to the tune of Rs.3 crore and according tothe assessee, the actual offer of Rs. 3 crore based on thematerial was proper and accordingly prayed for acceptance ofthe said surrender, however, the AO was not satisfied andmerely because the assessee had surrendered an amount ofRs.5 crore, during the course of survey an addition of Rs.2crore was made by the AO. 4.Dissatisfied with the addition of Rs.2 crore, as aforesaid,the matter was carried in appeal before the CIT(A) and the CIT(A), after analyzing the evidence on record and the explanationso offered, gave a further relief of Rs.1.50 crores and sustainedaddition to the tune of Rs. 50 lacs. 5.Dissatisfied with the deletion as well as sustenance, bothi.e. the revenue as well as the assessee preferred appealbefore the ITAT and the ITAT vide order impugned allowedappeal of the assessee and further deleted the amount of Rs.50lacs and dismissed the appeal of the revenue and thus entireaddition of Rs. 2 crore stood deleted which is assailed beforeus by the revenue. 4.Dissatisfied with the addition of Rs.2 crore, as aforesaid,the matter was carried in appeal before the CIT(A) and the CIT(A), after analyzing the evidence on record and the explanationso offered, gave a further relief of Rs.1.50 crores and sustainedaddition to the tune of Rs. 50 lacs. 5.Dissatisfied with the deletion as well as sustenance, bothi.e. the revenue as well as the assessee preferred appealbefore the ITAT and the ITAT vide order impugned allowedappeal of the assessee and further deleted the amount of Rs.50lacs and dismissed the appeal of the revenue and thus entireaddition of Rs. 2 crore stood deleted which is assailed beforeus by the revenue. 6.Ld. counsel for the revenue contended that the surrenderwas voluntary. However, during the previous year relevant tothe year under appeal, in the revised return, offer was made only to the tune of Rs. 3 crore as against to Rs.5 crore withoutassigning any reason. She contended that the assessee waswell aware of the transactions recorded in the loose papers andother material and after complete satisfaction and deliberations,during the course of survey the assessee voluntarily offered Rs.5 crores and there is no reason not to adhere to the saidsurrender and to wriggle out of the surrender or to restrict theamount at a later point of time. She further contended that nomaterial was placed as to reducing the amount by Rs.2 croreout of the surrender made by the assessee earlier andsurrender ought to have been at Rs. 5 crore, and suchreduction is improper. She further contended that order of theTribunal is perverse by accepting the total claim of theassessee and no reason is forthcoming by the ITAT andtherefore, substantial question of law arise out of the order ofthe ITAT. 7.We have considered the arguments of the counsel for the revenue and have also gone through the impugned order. 8.In our view, the ITAT, after appreciating the evidence onrecord and the evidence placed by the assessee, has acceptedthe surrender to the tune of Rs. 3 crore which was made in thereturn of income and is based on appreciation of evidence andit is a finding of fact. The assessee gave an explanationsupported by material on record, that on the basis of thedocuments and whatever was un-recorded in the diary/loose papers/other unverifiable creditors, the total amount ofsurrender came to the tune of Rs.2.20 crore only. However,additionally the assessee, on account of the other defects,transactions in diary or other transactions in the books ofaccounts, which might have escaped the attention of theassessee, offered further amount of Rs.80 lacs to make thetotal surrender to the tune of Rs.3 crore. Admittedly, even theAO has not pointed out any evidence or material entered in theloose papers or diaries or incriminating documents which couldjustify addition over and above of Rs. 3.00 crore or even Rs.5.00 crore or more. The AO has not controverted theworking/explanation offered by the assessee while working outsurrender at Rs. 3.00 crore. If the assessee has offered anexplanation then it was for the AO to highlight the mistakes orto prove that the transactions stated in loose papers/documents depicted income to the tune of more than Rs. 3crores or more. On perusal of the order of the AO, we noticethat no exercise has been made by the AO as to hold that thesurrender of Rs.3 crore made by the assessee was not proper.The explanation was offered by the assessee which was alsoconsidered by the CIT(A), who too was partly satisfied with theexplanation and sustained addition of Rs.50 lacs by giving reliefto the tune of Rs.1.5 crore. It was the claim of the assessee thatthe additional surrender made in the assessment year 2007-08had rotated and constituted a fund and was available with assessee and thus there is a direct nexus of availability offunds. The said amount and the amount of surrender madeduring this year at Rs. 3 crore was available to the assessee forthe investment in the share capital, etc. of Rs. 3,76,89,000/-requiring telescoping therein. As we have noticed earlier theAO has not found or bothered to found or traced anythingadditional as a result of survey from the assessee exceptrelying on the recorded statements at the time of survey andtherefore this view found favour with the two appellateauthorities that the funds are arising from the same businessand have a direct nexus and the income was invested/utilizedduring the year under consideration. In our view, the conclusionreached by the ITAT is based on the appreciation of evidenceand is reached on the basis of finding of fact. It is also a findingof fact admittedly that in assessment year 2007-08 despitesurrender in statements of Rs.2 crore the income was offered at Rs.1.5 crore only and accepted by the Revenue/A.O. 9.Thus, the ITAT, after appreciation of evidence, has cometo the conclusion that the amount of Rs.1.5 crore, which wassurrendered/offered in the assessment year 2007-08, was alsoavailable as a fund which came to be used partly in theinvestment of share capital, creditors or other investments aswell as other defects, unverifiable creditors etc. 10.We may add that if the assessee does not adhere to thesurrender made during the course of survey, then it is for the Assessing Officer to bring on record cogent material and otherevidences to support the addition rather than rely on statementssimplicitor. 11.In view of what we have observed herein above, noquestion much less substantial question of law can be said toemerge out of the impugned order of the ITAT and we do notfind any infirmity or perversity in the order of the ITAT so as tocall for any interference of this Court. In our view, nosubstantial question of law arise out of the order passed by theITAT. 12.Consequently, the appeal, being devoid of merit, is herebydismissed in limine. [J.K. RANKA],J. ,J. Raghu/p.7/ Certificate:All corrections made in the judgment/order havebeen incorporated in the judgment/order being e-mailed.Raghu, Sr. PA.