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Income Tax Appellate Tribunal, ‘’ SMC” BENCH, AHMEDABAD
Before: SHRI WASEEM AHMED
आदेश/O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-22, Ahmedabad dated 13/11/2019 arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2009-2010.
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The assessee has raised following ground of appeal: 1 Because, the Ld.ClT (Appeal) -2 Ahmedabad has eared in law as well as on the facts of case, while confirming the addition on accounts unaccounted Rs.4,06,360/- fresh assessment made vide order dt.19.06.2017. 2 Because, the Ld CIT (Appeal )-2 Ahmedabad has erred in law as well as on the facts of the case, on relying page no 44 of impounded materials, submitted by AO which is without details of undisclosed / disclosed information as a prime evidence and not taken in to consideration CBDT Circular / Letter No: F.286/2/2003 IT(lnv)Dt: 11 th March 2003. 3 On the facts and circumstances of the case Ld. CIT (A) ought not to have uphold the order of AO. 4 It is therefor prayed that the order of Ld. CIT(A) may be amended and delete the addition of Rs.4,06,360/- as confirm by Ld.CIT(A) 5 The Appellant prays for leave, to amend or alter any ground or add a new ground if necessity so arise before final order.
The only issue raised by the assessee is that the learned CIT (A) erred in sustaining the disallowance of Rs. 4,06,360/- made by the AO on basis of page 44 of loose paper impounded during the survey proceeding under section 133A of the Act.
At the outset we note that this is second round of litigation before us. The fact of the case goes like this. The assessee is an individual and engaged in the profession of medical services. There was survey proceeding under section 133A of the Act dated 04-09-2009 carried at the assessee’s hospital namely “Harsh Hospital”. During the survey proceedings, several loose paper and document were found & impounded. As per loose paper marked as page No. 44, total receipt of the assessee from OPD, Normal Delivery, Caesarian delivery and Sonography was of Rs. 24,36,100/- whereas the assessee has shown receipt of Rs. 18,23,600/- leading to difference of Rs. 6,12,500/- only. On confrontation of the same, the assessee admitted to unaccounted receipt and agreed to disclose an amount of Rs. 6,12,500/- in the income tax return. However, the assessee vide letter dated 07-09-2016 retracted from the disclosure statement of undisclosed income of Rs. 6,12,500/-. But the retraction statement filed by the assessee was not accepted the AO for the
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reason discussed in his order dated 03-12-2011. Thus the AO made addition of Rs. 6,12,500/- to the total income of the assessee which was confirmed by the ld. CIT- A vide order dated 13-08-2013.
The matter reached to the ITAT in ITA No. 2526/Ahd/2013 wherein the ITAT vide order dated 28th April 2017 remitted the issue to the file of the AO with the following direction: It is by now a settled legal position that the statement recorded during the survey proceedings cannot be used as an evidence, and thus, for the reason of statement alone, the addition cannot be made. The material gathered during the survey, however, can be used against the assessee on merits. On these fundamental principles, there is no dispute. In this view of the matter, and having noted that the addition is confirmed on the basis of statement recorded, I deem it fit and proper to remit the matter to the file of/ the Assessing Officer, for adjudication de novo, in the light of the above observations, in accordance with the law, after giving yet another opportunity of hearing to the assessee and in accordance with the law. Ordered, accordingly.
The AO in the set aside proceedings accepted the contention of the assessee that the total receipt disclosed in the books of account was of Rs. 20,29,740/- instead of Rs. 18,23,600/-. However the AO, rejected the contention of the assessee that that loose paper marked as page Nos. 43-45 does not belong to him (the assessee). Thus, the AO on the basis of noting made on page number 44 of the loose paper made the addition of Rs. 4,06,360/- (24,36,100 – 20,29,740) being the difference of receipt shown and noted on page 44 of loose paper.
Aggrieved assessee preferred appeal to the learned CIT(A) who confirmed the same vide order dated 13-11-2019 by observing as under: I had called for remand report from the Assessing Officer who haw submitted page no.44, it has been clearly written that for F.Y. 2008-09, actual receipt including OPD, normal delivery, caesarean delivery, sonography etc. is Rs.24,36,100/- and receipt issued is for Rs.18,23,600/- The document was impounded from the premises of the appellant and the appellant has signed the document before the Assessing Officer. In view of the above, the contention of the appellant that the document does not belong to him is not acceptable. As regards to the appellant's contention that detail of receipts is not mentioned and only total receipt of Rs.24,36,1 GO/- was mentioned, it was up to the appellant to explain how he has summed up the total figure to Rs.24,36,100/-. In view of the above, the addition made by the Assessing Officer is confirmed.
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Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us.
The learned AR before us has filed a paper book running from pages 1 to 15 and contended that no addition can be made merely based on the statement recorded during survey proceedings. Likewise, there cannot be any addition based on the dumb document.
On the other hand the learned DR vehemently supported the order of the authorities below.
We have heard the rival contentions of both the parties and perused the materials available on record. The facts of the case have already been elaborately discussed in the preceding paragraph which are not in dispute. Therefore, for the sake of brevity and convenience, we are inclined not to repeat the same and proceed to adjudicate the issue on hand directly.
11.1 The seized document bearing page No. 44 was containing 2 figures depicting the actual receipt viz a viz as per receipt issued amounting to Rs. 24,36,100/- and Rs. 18,23,600/- respectively. Admittedly, the amount of ₹ 18,23,600/- was matching with the books of accounts of the assessee. Thus, it is transpired that to this extent the entry recorded in the seized document was not representing any dumb information. In other words, part of the information recorded in the seized document was relevant and matching with the books of accounts of the assessee. Thus, in such a situation the actual receipt of Rs. 24,36,100/- cannot be treated as dumb/irrelevant information. Once part of the seized document found to be true then it is transpired that other transactions recorded in such seized document is also correct. In holding so we draw support and guidance from the judgment of coordinate bench ITAT Pune in case of Dhanvarsha Builders & Developers (P.) Ltd. vs. DCIT reported in 102 ITD 375 where it was held as under:
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On a perusal of the seized material, it was to be seen that the assessee was found in possession of meticulous record regarding monies received in respect of various godowns and shops to be constructed by it. The details, inter alia, contained the narration about the premises number, name of the customer, total sale cost, money received by way of cash, money received by way of cheque and the balance amount to be received. All the figures were written by omitting three zeros. The assessee fairly admitted that names mentioned in the list were of its customers. He also admitted that the amounts received by way of cheque would tally with the books of account if three zeros were supplied to the amount mentioned in the seized papers. His arguments against placing reliance on that paper, inter alia, that (i) the paper did not bear the name of the assessee, (ii) no evidence had been found regarding actual receipt of cash, and (iii) the paper did not contain the dates on which respective cash amounts were allegedly received, could not be agreed with for the reason that the authenticity of the names and decoding of amounts received by way of cheques would lead to establishment of the fact that the document belonged to the assessee and various amounts entered therein were correct if three zeros were supplied. The absence of the name of the assessee, thus, got fully corroborated on the basis of said interpretation of the document. The document spoke of receipt in cash and by way of cheques. The receipts by way of cheques tallied with the books of account. Therefore, it was a natural consequence that the receipt by way of cash had also been made. The date of receipt of cash was not material for deciding the assessment year in which the profits embedded in such receipts were to be taxed. The assessee was following project-completion method and, therefore, all amounts, i.e., amounts, received in cash as well as amounts received by way of cheques, were taxable in the year in which project was completed or substantially completed. Therefore, the assessee’s arguments as regards all three grounds had to fail. Accordingly, the document was not a dumb document but it was a speaking document and it pertained to the business transactions of the assessee. [Para 6.1] So far as the argument of the assessee that the impugned papers not only showed the receipts but also the expenditure and, therefore, the document should be read as a whole and deduction for the expenditure incurred should be given to the assessee while computing undisclosed income was concerned, the seized document should be read as a whole if it has to be relied upon. It cannot be read only to the extent it is advantageous to the revenue and not read when it becomes disadvantageous to the revenue. It is an accepted principle of interpretation of documents that they should be read as a whole, as persons of common prudence will read them. They cannot be read in bits and parts to suit the convenience of one party or the other.
11.2 At this juncture, we also note that the presumption provided under section 292C of the Act also supports the view expressed by us. The provisions of section 292C of the Act in unambiguous terms provides that any document found during the course of survey then, it is presumed that such document belongs to such person and the contents of such document are true. Admittedly, such presumption is a rebuttable presumption as held by the Hon’ble Madras High Court in the case
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of Durai Murgun Kathir Anand vs. ADIT reported in 136 taxmann.com 70 where it was held as under: 44. The presumption under section 132(4A)(i) and section292C of the IT Act, 1961 that the books of account, the documents, money, bullion or other valuable article or thing are or is found in the possession or control any person is a rebuttable presumption. 45. Such a presumption under section 132 (4A)(i) and section292C of the IT Act, 1961 can be drawn against Mr.Damodaran and Mrs.Vimala Damodaran from whose premises seizure of the cash was effected.
11.3 The question arises who can rebut such presumption. The answer is amply clear that the party who denies the contents of such document found during the survey proceedings, he can only rebut. In the present case, the onus is upon the assessee to rebut the presumption based on the documentary evidence. However, we find that the assessee before us has not brought any cogent material to rebut the presumption provided under the provisions of section 292C of the Act. The Hon’ble Madras High Court in case of Durai Murgun Kathir Anand vs. ADIT (supra) has held that if the assessee fails to rebut the presumption based on the documentary evidence then the addition made by the revenue based on the document found during the survey proceedings is sustainable. The relevant extract of the judgment reads as under: 46. Though such a presumption is a rebuttable presumption, it can be rebutted only if there are adequate evidence by a person claiming ownership that they belong to any other person.
11.4 At this juncture, we note that the assessee before the learned CIT-A has made reference of various judgments by contending that there cannot be any addition in the given facts and circumstances. However, upon making a reference to these judgments, we note that the principles laid down by the Hon’ble courts are not applicable in the given facts and circumstances. In such cases the court were pleased to delete the addition made by the AO for the reason that the addition was made by the revenue merely on the basis of statements whereas in the case on hand the addition has been made based on the document found during the survey proceedings. In view of the above and after considering the facts in totality, we do
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not find any infirmity in the order of the authorities below. Accordingly we uphold the same. Hence the ground of appeal of the assessee is hereby dismissed.
In the result, the appeal filed by the assessee is hereby dismissed.
Order pronounced in the Court on 07/12/2022 at Ahmedabad.
Sd/- Sd/- (MADHUMITA ROY (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 07/12/2022 Manish