SRI LALIT KUMAR TODI,KOLKATA vs. DCIT, CC-3(1), , KOLKATA

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ITSSA 152/KOL/2023Status: DisposedITAT Kolkata12 March 2024AY 2018-1926 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the seized material, including the cash book and ledger accounts, pertains to the finance/lending business carried out by the assessee, with regular inflow and outflow of cash. The Tribunal found merit in the assessee's contention regarding the applicability of the 'peak credit' theory and agreed that the peak credit calculated by the assessee, which was not disputed by the revenue, should be accepted. The Tribunal also allowed the telescoping benefit, acknowledging that income added in a preceding year is available for utilization in subsequent years. However, the Tribunal noted that the income voluntarily disclosed by the assessee in their returns for AY 2017-18 to 2019-20 was higher than the calculated peak credit balances. Therefore, the Tribunal concluded that the undisclosed income from the lending/finance business for AY 2017-18 is Rs. 72,27,773/-, for AY 2018-19 is Nil (after considering telescoping benefit from AY 2017-18), and for AY 2019-20 is Rs. 61,45,405/-. This means the voluntary disclosures made by the assessee were accepted as correct. The common grounds (5 to 10) were partly allowed, and the additional ground (11) was also allowed, resulting in the appeals being partly allowed on merits.

What were the facts?

The appeals by the assessee, Shri Lalit Kumar Todi, are against the orders of the National Faceless Appeal Centre, Delhi, for Assessment Years 2017-18, 2018-19, and 2019-20. The assessee is an individual with income from salary, rent, dividend, and interest. A search and seizure operation was conducted on January 13, 2021, at premises related to the 'Todi Group' of concerns. Documents marked SCDPL/1 to SCDPL/16 were seized from M/s South Calcutta Diesels Pvt. Ltd. (SCDPL) and individuals associated with another branch of the 'Todi Group'. The assessee claimed no association with SCDPL, but the Assessing Officer issued a notice under Section 153A of the Income Tax Act, 1961. The assessee filed returns voluntarily, including sums based on seized document SCDPL/15.

What were the issues?

1. Whether the documents seized from the premises of M/s South Calcutta Diesels Pvt. Ltd. (SCDPL/13, SCDPL/14, SCDPL/15) are incriminating documents pertaining to the appellant, and if proceedings under Section 153A are valid when documents are not seized from the appellant's possession (Section 153A). 2. Whether the impugned documents are 'dumb documents' without the appellant's name, containing unsigned entries unrelated to the appellant, and if the CIT(A) erred in upholding them as documents for the appellant's transactions (Section 153A). 3. Whether the CIT(A) erred in affirming the addition made by the AO under Section 69A, given that no tangible assets like money, bullion, or jewellery were discovered or seized, and the basic criteria for invoking Section 69A were not fulfilled (Section 69A). 4. Whether the CIT(A) erred in affirming the AO's action under Section 69A without any specified asset being found or discovered with the appellant. 5. Whether the CIT(A) erred in considering seized documents (SCDPL/15) for transactions between FYs 2016-17 to 2018-19 for the purpose of 'peak credit' theory, and if the cash book (SCDPL/15) should only be considered for deriving peak credit for the relevant period. 6. Whether the CIT(A) erred in presuming the appellant was involved in granting and taking loans and advances without evidence. 7. Whether the CIT(A) erred in considering peak balances of individual ledger accounts (SCDPL/13 & SCDPL/14) when peak credit should have been derived solely from the cash book (SCDPL/15) for the entire year. 8. Whether the CIT(A) erred in calculating individual peak balances when entries in SCDPL/13 & SCDPL/14 were reflected in the cash book (SCDPL/15), and if peak credit should only be derived from SCDPL/15. 9. Whether the CIT(A) erred in deriving the peak credit at Rs. 3,25,81,361/- based on individual ledger balances, and if the peak credit should be Rs. (-) Rs. 34,00,299/- plus foundation money of Rs. 9,45,808/-. 10. Whether the peak credit for AY 2018-19 should be derived at (-) Rs. 34,00,299/-. 11. Whether the CIT(A) erred in not granting credit of peak balances of the preceding year in the year under consideration (additional ground for AY 2018-19 and 2019-20). Assessee's Contentions: - Documents seized from SCDPL are not incriminating and not from the appellant's possession, invalidating Section 153A proceedings. - Documents are 'dumb' and unrelated to the appellant. - Section 69A is wrongly invoked as no specified asset was found. - Peak credit should be calculated based on the cash book (SCDPL/15) for the relevant period. - Telescoping benefit should be allowed for preceding year's disclosed income against current year's undisclosed income. - Peak credit calculation by the assessee is correct and not disputed by the revenue. Revenue's Contentions: - Not explicitly recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 153A,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, KOLKATA

Before: SHRI SANJAY GARG, HON’BLE & DR. MANISH BORAD, HON’BLE

For Appellant: Shri S. Jhajharia, A/R
Hearing: 16/01/2024Pronounced: 12/03/2024

आदेश क� �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Assessee 2. ��यथ� / The Respondent 3. संबंिधत आयकर आयु� / Concerned Pr. CIT 4. आयकर आयु� अपील / The CIT(A)- ( ) 5. िवभागीय �ितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाड� फाई/ Guard file.

आदेशानुसार/ BY ORDER, TRUE COPY

Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata

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