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This appeal by the revenue against the order dated 28.02.2011 passed by the Ld. CIT(A), Central-2, Kolkata for assessment year 2006-07.
The appellant revenue filed this appeal on 20.05.2011. The registry issued 33 notices to the assessee by RPAD by intimating the dates of hearing which are as follows:
Sl. No. Date of notice Date of hearing Remarks i. 28.10.2011 20.12.2011 No proceedings ii. 20.12.2011 02.04.2012 No proceedings iii. 02.04.2012 31.07.2012 No proceedings iv. 31.07.2012 11.01.2013 AR requested for time v. 11.01.2013 11.07.2013 No proceedings vi. 11.07.2013 23.12.2013 AR requested for time vii. 23.12.2013 23.04.2014 AR sought time viii. 23.04.2014 09.09.2014 AR request for time ix. 09.09.2014 17.12.2014 AR request for time x. 17.12.2014 24.02.2015 DR requested time xi. 24.02.2015 02.06.2015 No proceedings xii. 02.06.2015 22.07.2015 No proceedings. xiii. 22.07.2015 26.10.2015 No proceedings. xiv. 26.10.2015 30.12.2015 No proceedings. xv. 30.12.2015 22.02.2016 None appear xvi. 22.02.2016 27.04.2016 DR requested for time xvii. 27.04.2016 30.06.2016 None appeared on behalf of assessee xviii. 30.06.2016 13.09.2016 DR requested for time xix. 13.09.2016 22.01.2016 No proceedings xx. 22.11.2016 25.01.2017 None appeared on behalf of assessee. xxi. 25.01.2017 29.03.2017 None appeared on behalf of assessee. xxii. 29.03.2017 07.06.2017 None appeared on behalf of assessee. xxiii. 07.06.2017 16.08.2017 None appeared on behalf of assessee. xxiv. 16.08.2017 05.10.2017 None appeared on behalf of assessee. xxv. 05.10.2017 14.11.2017 None appeared on behalf of assessee. xxvi. 14.11.2017 28.12.2017 None appeared on behalf of assessee. xxvii. 28.12.2017 22.02.2018 None appeared on behalf of assessee. xxviii. 22.02.2018 24.04.2018 None appeared on behalf of assessee. xxix. 24.04.2018 06.06.2018 None appeared on behalf of assessee. xxx. 06.06.2018 19.09.2018 No proceedings. xxi. 19.09.2018 25.09.2018 None appeared on behalf of assessee. xxii. 25.09.2018 22.11.2018 No proceedings. xxiii. 22.11.2018 07.01.2019 None appeared on behalf of assessee.
On perusal of the record as reflected above the Registry, ITAT Kolkata Benches issued many notices and some notices were returned unserved, latest notice issued on 05.12.2018 by intimating the assessee date fixation of date of hearing on 07.01.2019 i.e. today was Shri Pradeep Kumar Jhawar 2 returned unserved as Nil endorsement. It is noted that the said notices was issued at the same address given by the assessee before two authorities below i.e. C/o, Modern Latex (I) Ltd., 4, Fairlie Place, Kolkata-700001. Therefore it is clear that the notices have been issued at the address offered by the assessee and the assessee is very much in the knowledge of proceedings before this Tribunal and we hold the notices were properly served on assessee. The respondent assessee called absent and therefore the assessee is set ex parte. We proceeded to hear the ld. DR for appellant revenue.
The appellant revenue raised following grounds which are read as under:
i) That in the facts and circumstances of the case and in law the Ld.CIT(A) has erred in deleting the addition of Rs.2,82,97,057/- made on the basis of entries appearing in seized document YK/4,which was admitted by the assessee as his undisclosed income but was subsequently retracted. ii) That in fact and circumstances of the case and in law the Ld.CIT(A) has erred in holding that the entries appearing in seized document YKl4 pertain to M/s.Dhan Daulat Holdings Ltd, without appreciating that as per provisions of section 292C of the Act the document belonged to the assessee as it was found from his possession during search and the assessee has failed to bring any evidence on record to establish that all the entries including 'Pakka' and 'Kachcha' entries as appearing therein pertained to the said M/s Dhan Daulat Holdings Ltd. iii) That in the facts and circumstances of the case and in law the Ld.CIT(A) has erred in holding that 'Kachcha' receipt appearing in seized document YK/4 pertained to M/s Dhan Daulat Holding Ltd, while holding that the assessee had invested unaccounted cash of Rs.38,26,500/-in the real estate projects of M/s Dhan Daulat Holding Ltd, as appearing in the seized documents and without appreciating that the unaccounted (Kachcha) receipts were generated out of unaccounted expenses made by the assessee. iv) That in the facts and circumstances of the case and in law the Ld.CIT (A) has erred in holding that, 'Kachcha' receipts belongs to Ms Dhan Daulat Holding Ltd without considering that unaccounted receipts out of the projects of the company Shri Pradeep Kumar Jhawar 3 was appropriated by the assessee who was a Director therein and the assessee had suo motto and voluntarily disclosed the difference of undisclosed receipts and undisclosed expenditure, as his income. v)That in the facts and circumstances of the case and in law the Ld.CIT (A) has erred in holding that retraction of disclosure of income, which was made suo-motto by the assessee on the basis of entries appearing the seized document YK/4, was correct. vi) Alternatively, that in the facts and circumstances of the case and in law that ld. CIT(A) has erred in deleting the addition of Rs. 2,82,97,057/- in the hands of the assessee in respect of ‘Kachcha ‘receipts appearing in YK/4 without giving a direction that this income should be assessed in the hands of M/s Dhan Daulat Holdings Ltd. vii) That the Departmental craves leave to add, modify or alter any of the ground(s) of appeal and/or adduce additional evidence at the time of hearing of the case.
The assessee raised as many grounds as are challenging that the action of the Ld. CIT(A) in deleting the addition on account of entries made in seized documents YK/4, on account of investment of unaccounted cash.
The brief facts of the case are that the assessee is an individual and is engaged in the business of supplying raw jute to different jute mills. A search and seizure operation was conducted at the business premises of the assessee on 18.01.2006. During the search and seizure operation certain documents were seized. According to the Assessing Officer the assessee disclosed income of Rs. 2,83,00,000/- and treating the same as undisclosed income basing on the seized documents, added the said amount to the total income of the assessee vide his order dated 31.12.2007.
The assessee challenged the action of the Assessing Officer in treating the disclosed income and undisclosed income before the CIT(A). The CIT(A) considering the submissions of the assessee , the assessment order and documents filed before him held that the respondent assessee is an investor of unaccounted cash in the projects of M/s Dhan Daulat Holdings Ltd. and directed the Assessing Officer to reduce unaccounted income of respondent assessee to Rs. 38, 26,500/- deleted the remaining amount of Rs. 24,479,557/- (2,82,97,057 – 38,26,500). The relevant portion of which is reproduced herein below:
“Therefore, I find that for the benefit acquired by the company M/s Dhan Daulat Holdings Ltd. in purchase of land and construction of building on such lands, on account of payment of unaccounted cash, should be taxed in the hands of the company and to that extent the contention of appellant is acceptable. In the seized documents, as referred above, there is an anomaly in respect of incomings under the head "Kachcha" and "Pakkaa" taken separately and the outgoings taken separately under such heads. If the incomings and outgoings mentioned in "Kachcha" and "Pakkaa" are considered separately then it is found that outgoings in "Pakka" far exceed the incoming in "Pakka" and the outgoings in "Kachcha" are far less than the incoming in "Kachcha". Therefore, there is an obvious inference that somewhere in between the "Kachcha" incoming mainly on account of receipt of advance from flat owners of the 70 DH Harbour project, has been converted into "Pakka" to be applied in "Pakka" outgoings of mainly purchase of land and construction of building, by the developer M/s Dhan Daulat Holdings Ltd. Such conversion may take place through cash credits in the company through introduction of share capital or share application money or unsecured loans or current liabilities. In any case, this issue is again in the domain of assessment of income M/s Dhan Daulat Holdings Ltd and not in the assessment of income of appellant. Assessing Officer did not report specifically whether the books of account of M/s Dhan Daulat Holdings Ltd accounted for only the "pakka" receipts from the flat owners of 70 DH Harbor project as mentioned in page 11 & 12 of YK-4 or the company M/s Dhan Daulat Holdings Ltd incorporated all the receipts mentioned in these seized pages in its accounts of Financial Year 2005- 06 before filing the return of income for the Assessment Year 2006-07 after the search was carried out on 18.01.2006. Assessing Officer reported specifically only in respect of "pakka" outgoing of page-11 & 12 of YK-4 reflected in purchase of land and construction of project in books of M/s Dhan Daulat Holdings Ltd and therefore this company may benefit to the extent of Rs. 2,07,58,082 on account of "Kachcha" expenditure as already mentioned above. However, what directly concerns the appellant is the unaccounted cash a lied or invested by the appellant in the projects Shri Pradeep Kumar Jhawar 5 of M/s Dhan Daulat Holdings Ltd. The page-12 of the seized paper YK-4 clearly shows that appellant, P.K.J., ie, Pradeep Kumar Jhawar has applied or invested unaccounted cash of Rs. 38,26,500/- in the real estate projects of M/s Dhan Daulat Holdings Ltd and therefore I find that to this extent the seized papers definitely show the existence of unaccounted income of appellant. I find that appellant had made a disclosure of income vide a written letter which he retracted vide an affidavit later on. The facts as appearing from the seized papers show that the appellant was not the beneficiary of the cash receipts on account of advance received in cash from the flat owners of 70 DH Harbour Road project. Moreover, there is no such large seizure of cash or any other .asset such as jewellery or other investment of appellant which could show that appellant was a beneficiary to such extent. At best, appellant was an investor of unaccounted cash in the projects of the company M/s Dhan Daulat Holdings Ltd and the beneficiary of such cash receipts or unaccounted expenditure in purchase of land and expenditure in construction was the company M/s Dhan Daulat Holdings Ltd. Therefore, retraction of the income of about Rs. 2.83 crore, which was disclosed by appellant on behalf of other person under the state of depression, as certified by a doctor, cannot be held to be entirely incorrect. I therefore direct the Assessing Officer to reduce the unaccounted income of appellant to Rs.38,26,500/- ,i.e., to the extent it represents unaccounted cash employed by appellant as on 30.11.2005 in the real estate projects of M/s Dhan Daulat Holdings Ltd as apparent from page-12 of seized document YK-4.”
Heard the ld. DR and perused the material available on record. It is noted from the impugned order the CIT(A) examined the seized documents i.e. YK/4 in respect of pakka outgoing relating to purchase of land and construction and held the assessee is not the beneficiary to the extent of Rs. 2,07,58,082/- on account of Kaccha expenditure as found in the books of M/s Dhan Daulat Holdings Ltd. Further he held that the respondent assessee has applied unaccounted cash of Rs. 38,26,500/- as investments in the real estate projects of M/s Dhan Daulat Holdings ltd. Thereby the CIT(A) directed the Assessing Officer to reduce the said amount from the entire addition. In the present case, in our opinion the respondent assessee has got substantial relief from the CIT(A) and in order to confirm the same the assessee should come on record by filing such evidences supporting the view of the Ld. CIT(A). It is needless to say that it is the responsibility and onus is on the respondent assessee to come on record and produce the relevant documents in evidence contending the action of the CIT(A) is correct. As discussed above, the Registry of ITAT Kolkata benches issued as many as notices under RPAD at the address available on record to the assessee. However having sought adjournment by the AR then clearly shows the respondent assessee is in the knowledge of every date of hearing before this Tribunal. Therefore having considering the same we are unable to confirm the view taken by the CIT(A) in the absence of any evidence supporting such view. Thus, the order of CIT(A) is set aside and the order of the Assessing Officer is restored. Accordingly, grounds raised by the revenue are allowed.
In the result, the appeal of the revenue is allowed.
Order pronounced in the open Court on 18-01-2019.