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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI G. S. PANNU, AM & SHRI AMARJIT SINGH, JM
Assessee by: Prayag Jha Department by: Shri Saurabh Deshpande (DR) सुनवाईकीतारीख / Date of Hearing: 09.02.2018 घोषणाकीतारीख /Date of Pronouncement: 09.02.2018 आदेश / O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 22.01.2013 passed by the Commissioner of Income Tax (Appeals)- 20, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 2008-09.
The assessee has raised the following grounds:- “1. The Ld. CIT(A) erred in assessing the total income at Rs.4,90,78,057/- as against the returned income of Rs.4,36,80,110/- and while doing so he amongst others failed to appreciate that:
ITA. No.2551/M/2013 A.Y. 2008-09 (a) On the facts and circumstances of the case and in law the addition of Rs.29,22,949/- was wrong, erroneous and improper; (b) No additions could be made in the hands of the appellant on account of the notings on papers maintained by Shri Dharmesh Chhadva, employee of M/s. Bhaving Glass, proprietary concern of Mr. Amarshi Avchar Gala; (c) No additions could be made in the hands of the appellant on account of the notings on papers found form the premises of Bhaving Glass, proprietary concern of Mr. Amarshi Avchar Gala; 2. The Learned Commissioner of Income Tax (Appeals) erred in assessing Rs.24,75,000/- on account of undisclosed sales merely on the basis of the statement recorded on oath u/s133A during the course of survey proceedings on 22.08.2007.
3. Without prejudice to the above, the Ld. Commissioner of Income Tax (Appeals) erred in not granting telescoping benefit while assessing the total income of the appellant.”
The brief facts of the case are that the assessee filed his return of income declaring total income to the tune of Rs.4,36,80,110/- including Short Term Capital Gains of Rs.1,59,161/- on 30.09.2008. Thereafter, the case was selected for scrutiny and notice u/s143(2) of the Act dated 24.09.2009 and notice u/s 142(1) of the Act dated 10.06.2010 were issued and served upon the assessee. The assessee was deriving his income from trading in glass, glass decorative items and sanitary wares. The assessee is a proprietor in M/s Sejal Glass House as well as Chairman & Director in M/s Sejal Float Glass Ltd., M/s. Sejal Finance Ltd., M/s Sejal Architectural Glass Ltd.
A survey was conducted on the assessee by the ITO (Inv.) Unit- III(2), Mumbai u/s 133A of the I.T. Act on 21.08.2007. During the ITA. No.2551/M/2013 A.Y. 2008-09 course of survey proceedings some documents pertaining to M/s Bhavin Glass were found. A statement of Mr. Rohit Gada was recorded. The question no. 4 & 6 are hereby reproduced below.:- “Q4. Please state that when this concern i.e., Bhavin Glass House was started and who is the proprietor/ partners. Ans. This concern was started in April 2007 and Shri Amrrut Gada is the proprietor of this concern. Q6. Please state that who is the owner of this premises. Ans. Shri Amarshi A Gada who is brother in law of Shri Amrit Gada is the owner of this shop. We have taken this shop on rent and we are paying him Rs.30,000/- P.M.
In view of the said statement Shri Amrut Gada was treated as proprietor of M/s. Bhavin Glass. However, the assessee took the stand that he has no relation with the M/s Bhavin Glass. The paper no. 1 to 7 of Annexure A-1, were found and according to the said papers the sale to the tune of Rs.6,95,987/- was not explained, hence, the same was added to the income of the assessee. On page no. 8 of the Annexure A-1 certain deposition of amount was found on different dates to the tune of Rs.2,21,650/- which was also not explained, hence, the same was added to the income of the assessee. On page no. 9 of the Annexure A-1 some noting to the tune of Rs.62,500/-was found with Amarshi Gala and some noting was found with the name of Shanti La Gala in connection with an amount of Rs.17,755/- total to the tune of Rs.80,255/- which was also not explained, therefore, the said amount was added to the income of the assessee. On page no. 10
ITA. No.2551/M/2013 A.Y. 2008-09 of Annexure A-1 certain amount i.e., an amount of Rs.11,200/- with the name of Gebi Glass, an amount of Rs.17,780/- with the name of Ankeet Glass, an amount of Rs.3,840/- with the name of Paras Glass were found which were also not explained, therefore, the total amount to the tune of Rs.32,820/- was added to the income of the assessee. On page no. 11 of Annexure A-1, the noting with the name of Mr. Dharmesh to the tune of Rs.31,473/- was found which was also not explained, therefore, the said amount was added to the income of the assessee. On page no. 12 of Annexure A-1, the noting of an amount of Rs.1,620/- with the name of Mr. Sachin, Santosh, Raj Kishore, Ramesh, Rahim and Pariket were found which was also not explained, therefore, the said amount to the tune of Rs.1,620/- was added to the income of the assessee. On page no. 13 of Annexure A-1of the impounded material, the noting with the name of Mr. Rohit R Gala to the tune of Rs.45,000/-was found which was also not explained, therefore, the same was added to the income of the assessee. On page no. 14 of Annexure A-1 of the impounded material, the noting with the name of Glitopiam Hardware & Hamali Charge to the tune of Rs.3,300/- was found which was also not explained, therefore, the same was added to the income of the assessee. On page no. 16 of Annexure A-1, The noting pertaining to SAGL, Rakesh Jain & Glass Galleria to the tune of Rs.3,300/- was found which was also not explained, therefore, the same was added to the income of the assessee. On page no. 17 of Annexure A-1, a noting pertaining to SIL
ITA. No.2551/M/2013 A.Y. 2008-09 & SGCPL to the tune of Rs.68,820/- was found which was also not explained by the assessee therefore, the same was added to the income of the assessee. On page no. 18 of Annexure A-1, a noting pertaining to MTNL & Electricity to the tune of Rs.27787/- was found which was also not explained, therefore, the said amount also added to the income of the assessee. On page no. 19 of Annexure A1, a noting pertaining to SGH to the tune of Rs.2,47,429/- was found which was also not explained, therefore, the amount to the tune of Rs.2,47,429/- was added to the income of the assessee u/s 68 of the I.T. Act, 1961.
On page no. 1 of Annexure A-2 certain entry to the tune of Rs.1,74,616/- was found which were not explained, therefore, the same was also added to the income. On page no. 4 of Annexure A-2, the entry with the name of SGH to the tune of Rs.356124/- and an entry with the name of SGCPL to the tune of Rs.46255/- was found which was also not explained, therefore, total amount to the tune of Rs.4,02,379/- was added to the income of the assessee. On page no. 7 of the Annexure A-2 an entry in connection with the amounting of Rs.5,22,909/- was found which was also not explained, therefore, the same was added to the income of the assessee. On page no. 8 of Annexure A-2 an entry in connection with of Rs.4,78,180/- was found which was also not explained, therefore, the same was added to the income of the assessee.
ITA. No.2551/M/2013 A.Y. 2008-09
Some document were impounded from the premises of Sejal Glass house reflected in Annexure A-1, the entry to the tune of Rs.44,779/- and an entry to the tune of Rs.2,88,594/- and an entry to the tune of Rs.1,70,840/- were not explained, therefore, the said amount was added to the income of the assessee. A document Annexure A-2 was found in which the entry to the tune of Rs.5,79,600/- and 41,375/- were not explained, therefore, the said amount was added to the income of the assessee. The total income of the assessee was assessed to the tune of Rs.5,04,72,310/-. The assessee has filed an appeal before the CIT(A) who allowed the claim of the assessee partly but the assessee was not satisfied, therefore, the assessee filed the present appeal before us. ISSUE NO. 1:- 8. We have heard the argument and advanced by the Ld. Representative of the parties and perused the record. The contention of the assessee is that the statement of Shri Dharmesh Chhadva was recorded who was the employee of M/s. Bhavin Glass, proprietary concern of Mr. Amarshi Avchar Gala but the addition to the tune of Rs.29,22,949/- was made on account of the assessee wrongly and illegally, therefore, the same is not liable to be sustainable. However, the Ld. DR has argued that the M/s. Bhavin Glass was under the ownership of Amarshi Gala in view of the statement of Rohit Gala, therefore, the addition was rightly made, hence, the appeal of the ITA. No.2551/M/2013 A.Y. 2008-09 assessee on this ground is liable to be dismissed. The statement of Shri Dharmesh is on the file which was recorded at the premises of M/s. Bhavin glass who made the statement in connection with M/s. Bhavin Glass only. Loose paper found in the premises of M/s. Bhavin glass belonging to the said firm. The contention of the revenue is that the Amrur S Gada was the proprietor of M/s. Bhavin Glass whereas the contention of the assessee is that M/s. Bhavin Glass was not belonging to him. The assessee also submitted the copy of acknowledgment of written of income filed by the Mr. Amrashi Gala proprietor of Bhavin Glass house and profit & loss account and balance-sheet of Bhavin Glass House. The copy of bank account in DCO Bank of Bhavin Glass was also given. These contentions nowhere verified and taken into consideration by the CIT(A). M/s. Bhavin Glass is under the proprietary concern of Mr. Amarshi Gala or not and this fact could only be verified with the other corroborative piece of evidence relied by the assessee. Oral evidence is not sufficient if documentary evidence is available being existence of firm can easily be established with the record of firm. Since this contention was nowhere examined by the CIT(A), therefore, we are of the view that the said addition to the tune of Rs.29,22,949/- is not justifiable. Therefore, we set aside the finding of the CIT(A) on this issue and remand this issue before the CIT(A) to decide the matter of controversy afresh specifically in view of the contention raised by the assessee and observation made above by giving an opportunity of ITA. No.2551/M/2013 A.Y. 2008-09 being heard to the assessee in accordance with law. Accordingly, this issue is decided in favour of the assessee against the revenue. ISSUE NO. 2:- 9. Issue no. 2 is in connection with the confirmation of the addition to the tune of Rs.24,75,000/- on account of disclosure statement u/s 133A of the Act during the course of survey. The appellant admitted unexplained expenditure incurred on incasha building of Rs.2,55,00,000/-, investment in land at Kandivali for incasha building of Rs.14800,000/- and unaccounted cash sale of Rs.27,50,000/- total to the tune of Rs.4,30,50,000/-. At the time of filing the return, the assessee showed undisclosed income to the tune of Rs.4,05,75,000/-. There was a less disclosure to the tune of Rs.24,75,000/-. On notice, the Representative of the assessee admitted that it was effected on account on wrong entry of figure of Rs.2,75,000/- against declared income of Rs.27,50,000/-. No doubt the assessee raised the issue before the CIT(A) as well as before us but there is no plausible explanation on record to which it can be assumed that the addition of Rs.24,75,000/- is not liable to be confirmed. This entry is on the basis the disclosure statement made by the assessee voluntarily during the course of survey u/s 133A of the Act. The statement is in connection with the unexplained expenditure, therefore, no telescopic benefit could be given. No doubt in the said
ITA. No.2551/M/2013 A.Y. 2008-09 circumstances, we find no ground to interfere with the finding of the CIT(A) on this issue.