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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
Assessment Year: 2013-14 Aliasagar Inayathusain Bohari, Vs. ITO, Ward-3, Dhule. M/s. Saifee Machinery, Shop No.6, Opp. Panchayat Samiti Chopda, Dist. Jalgaon- 425405. PAN : ABAPB5558K Appellant Respondent Assessee by : None Revenue by : Shri Ramnath P. Murkunde Date of hearing : 05.09.2024 Date of pronouncement : 21.11.2024 आदेश / ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 07.09.2023 passed by Ld. CIT(A)-11, Pune [‘Ld. CIT(A)’] for the assessment year 2013-14.
The appellant has raised the following grounds of appeal :- “1) On the facts and in the circumstances of the case and in law, the Learned CIT(A) is not justified in confirming the addition of Rs.70,00,000 when the impounded material is covered in the finalized books of accounts which were duly audited nothing Auditor and has been duly verified by the Learned AO during the course of assessment. The addition may please be deleted. 2) On the facts and in the circumstances of the case and in law, the Learned CIT(A) is not justified in confirming the addition of Rs.70,00,000 when the then Learned Assessing Officer has duly verified that the impounded material has duly been considered by the appellant while filing the ITR. The addition may be deleted. 3) On the facts and in the circumstances of the case and in law, the Learned CIT(A) is not justified in confirming the addition of Rs.70,00,000 when the then Learned AO has duly verified that the impounded material has duly been considered by the appellant while filing the ITR. The additions amount to double taxation. The addition may be deleted. 4) On the facts and in the circumstances of the case and in law, the Learned CIT(A) is not justified in confirming the addition in respect of Bore well income when the business is run by the wife of appellant which has been duly disclosed by in her ITR. This amounts to double taxation. The same may please be deleted. Without prejudice to the above 5) On the facts and in the circumstances of the case and in law, the Learned CIT(A) is not justified in confirming the addition in respect of Bore well by adopting the profit @20% amounting to Rs. 2,20,869 without bringing on any clinching evidence on records by Learned AO. The addition may be deleted. 6) On the facts and in the circumstances of the case and in law, the Learned CIT(A) is not justified in not considering the decisions quoted by the appellant in its proper and pragmatic perspective. The same may please be evaluated in proper perspective. 7) On the facts and in the circumstances of the case and in law, the Learned CIT(A) is not justified relying on the decisions which can be distinguished on the facts. 8) The appellant craves leave to add, alter or delete any of the ground of appeal.”
3. The facts of the case, in brief, are that the assessee is an individual and furnished his return of income on 30.09.2013 declaring total income of Rs.26,46,907/-. As a result of survey u/s 133A of the IT Act on 21.11.2012, the above case was selected for scrutiny and notices u/s 143(2) and 142(1) of the IT Act were issued along with questionnaire. In his statement recorded u/s 133A of the IT Act while replying to question no.21, the assessee has declared income to the tune of Rs.70,00,000/- voluntarily due to the following discrepancies found by the survey team :- Shortage of stock Rs.32,89,825/- Excess cash found Rs.89,001/- Cash investment made in plot Rs.3,41,320/- Cash purchases from single party in a day Rs.28,31,686/- 4. It was found by the Assessing Officer that no such income was offered/declared by the assessee in the income tax return filed for the period under consideration. After considering the reply of the assessee, the assessment was completed u/s 143(3) of the IT Act by determining total income of Rs.98,67,776/- as against the income returned by the assessee at Rs.26,46,907/-. The above assessed income includes two additions, namely, Rs.70,00,000/- 133A and Rs.2,20,869/- towards net profit of bore well business activity being 20% of Rs.11,04,345/-.
In first appeal, after considering the reply of the assessee, Ld. CIT(A) dismissed the appeal of the assessee. It is this order against which the assessee is in appeal before this Tribunal.
When the appeal was called for hearing, none appeared on behalf of the assessee nor any application for adjournment was filed despite due service of notice of hearing. It is also seen that the case is being listed continuously since 15.11.2023 and nobody has represented since last three hearings. We therefore proceed to decide the appeal after hearing Ld. DR and on the basis of material available on record.
Ld. DR appearing for the Revenue submitted before us that this is the second round of litigation before this Tribunal. Earlier also the assessee approached this Tribunal and the case was set-aside to the file of Ld. CIT(A) for deciding the appeal afresh after hearing the assessee. Now, Ld. CIT(A) has decided the appeal after providing reasonable opportunity of hearing to the assessee and after considering the written submission furnished by the assessee.
Ld. DR heavily relied on the order passed by Ld. CIT(A) and requested to confirm the same.
We have heard Ld. DR and perused the material available on record. We find that Ld. CIT(A) has dismissed the appeal of the assessee by observing as under :- “7. The first argument of the appellant is that the statement recorded during the survey operation does not have any evidentiary value and no addition can be made on the basis of a statement recorded during the survey. The said argument cannot be accepted because in the present case, various deficiencies as discussed above were found during the survey operation and when confronted, the appellant accepted the same and offered an additional income of Rs.70,00,000/- in order to cover the deficiencies. The said statement under oath has not been retracted by the appellant till dateas against the case of S. Khader Khan Sons (2007-7 TMI 182-Madras High Court) relied upon by the appellant where the statement was retracted within 10 days of survey operation. Since the statement under oath recorded during the survey has not been retracted in the present case, the said statement has evidentiary value and can be used against the assessee for making assessment as held in the following case laws: Pebble Investment and Finance Ltd VS ITO (ITA No. 988/2014) (Bombay HC). This decision was subsequently upheld by Hon'ble SC in SLP (C) No. 11784/2017 dated 05/07/2017. PCIT vs Avinash Kumar Setia 81 taxmann.com 476 (Delhi High Court). Raj Hans Towers (P) Ltd vs CIT 230 Taxman 567 (Delhi HC). Navdeep Dhingra 56 taxmann.com 75 (P&H HC). Dr. S.C. Gupta 118 Taxman 252 (Allahabad HC). 8.1 The appellant has submitted that after completion of survey, he obtained certified copies of the impounded material and after inspection of impounded material, he completed his books of accounts 30/09/2013 by declaring total income of Rs.26,46,907/-. It has been stated that the appellant has not retracted the declaration made during the survey but it has included the income arising from the impounded material in the post survey period as can be seen from the post survey trading account. Trading A/c. post-survey from 20.11.2012 to 31.03.2013 PARTICULARS PERIOD 20-11-2012 PARTICULARS PERIOD 20-11-2012 TO 31-03-2013 TO 31-03-2013 TO OP. STOCK 5837273 BY SALES 63033231 BY SALES 5205491 IMPOUNDED IT TO PURCHASE 63088540 TO PURCHASE 2696845 CLOSIONG STOCK 7105944 IMPOUNDED IT TO GROSS 3722008 PORIFT 75344666 75344666 G.P. RATIO 5.45 8.2 The appellant has claimed that during the post survey period, the GP rate declared was 5.45% as against GP rate of 3.23% considered for the period up to the date of survey. It has been submitted that the final GP rate declared by the appellant is 4.66% as against the GP rate of 3.79% declared during A.Y. 2012-13. It has also been claimed that during the post survey period, the appellant has shown additional sales amounting to Rs. 52,05,491/- and additional purchases shown at Rs. 26,96,845/-. Thus, the discrepancies noted during the survey have been included in the P/L Account.
9. I have considered the above submission of the appellant but I do not agree with the same because of following reasons: 9.1 In the consolidated P/L Account, the appellant has claimed additional purchases amounting to Rs. 26,96,845/-, however, the basis of such quantification has not been furnished by the appellant. Moreover, the appellant has not furnished any documentary evidences for such additional purchases debited in the P/L Account. 9.2 During the survey operation, it was found that the appellant made cash purchases amounting to Rs. 28,31,686/- from M/s A.M. Jalgaoanwala Agro. Products Pvt. Limited, Shirpur. These cash purchases were made for an amount exceeding Rs. 20,000/- in a single day. Till date, the appellant has not denied these survey findings. However, no disallowance u/s 40A(3) has been made by the appellant on this account. Thus, a major discrepancy found during the survey has not been considered while filing the return of income. 9.3 The appellant has invested cash amount of Rs. 3,41,320/- in a land being S. No. 890/1B 14 & 890/1/B15. At the time of survey, it was found that the said cash was paid by the appellant on 30/05/2012 and the same was not entered in the books of accounts. During the appellate proceedings, the appellant has simply submitted that the said plot has been included in the fixed assets of the balance sheet. Merely, inclusion of the said land in the balance sheet does not prove the source of cash payment made by the appellant at the time of purchase of the said land. No explanation regarding the source of this investment has been filed by the appellant. Accordingly, it is held that this discrepancy found during the survey has not been properly explained by the appellant. 9.4 At the time of survey operation, excess cash amounting to Rs.89,001/- was found. However, till date no explanation regarding this excess cash has been filed by the appellant. 9.5 At the time of the survey operation, shortage of stock amounting to Rs. 32,89,825/- was found. This discrepancy was admitted by the appellant during the survey. Till date, the appellant has not denied the said discrepancy found during the survey. Neither any explanation, regarding this discrepancy has been filed by the appellant. Therefore, this specific issue also remained unexplained.
The above discussion clearly suggests that the amount of Rs.70,00,000/- was declared by the appellant during the survey operation on account of specific discrepancies as discussed above as well as other discrepancies such as cash sales and cash purchases as coming out of the impounded material. As noted above, these specific discrepancies have not been explained by the appellant before the Assessing Officer. Accordingly, the Assessing Officer made an addition of Rs. 70,00,000/- on the basis of declaration made during the survey in order to cover the various deficiencies. As discussed above, no specific explanation regarding the deficiencies found during the survey operation has been filed before me. Furthermore, it is an admitted fact, that a disclosure of Rs. 70,00,000/- was made in the statement recorded during the survey operation, to cover up various deficiencies. The said statement has not been retracted till date and therefore, carries evidentiary value as held by jurisdictional High Court. Therefore, considering the totality of facts of the case, I am of the opinion that the Assessing Officer has rightly made the addition of Rs. 70,00,000/-. Accordingly, the said addition of Rs. 70,00,000/- is upheld.
11. The second addition made by the Assessing Officer is regarding the undisclosed income of Rs. 2,20,869/- on the borewell business activity. Facts leading the said addition are that during the survey operation, various documents indicating the borewell business activity were found and impounded. As per these impounded documents, the total receipts from this business were quantified at Rs. 11,04,345/-. In the ITR, no income on account of borewell business was declared by the appellant. When asked by the Assessing Officer, the appellant submitted that this business activity is being run by his wife which is duly declared in her audited accounts. The Assessing Officer, however, found that the impounded boring bills were prepared on the vouchers of proprietorship firm of the appellant namely M/s Saifee Machinery. Thus, the Assessing Officer did not accept the submission of the appellant and held that these bills belong to the assessee. The Assessing Officer estimated income @ 20% of these bills and accordingly an addition of Rs. 2,20,869/- was made by the Assessing Officer.
During the appellate proceedings, the appellant has reiterated the submission made before the Assessing Officer. However, no attempt has been made by the appellant to substantiate that the amount mentioned on impounded bills has been considered as business receipts of his wife. In the absence of any documentary evidence, the general contention of the appellant that the amount mentioned on impounded bills stands included in the books of accounts of his wife, especially when the bills were prepared on the vouchers of appellant firm, cannot be accepted. In view of these facts, the addition of Rs. 2,20,869/- made by the Assessing Officer is upheld.
In view of above, the grounds of appeal
raised by the appellant are DISMISSED. In the result, the appeal of the appellant for A.Y. 2013-14 is DISMISSED.”
10. A perusal of the order of Ld. CIT(A) shows that he has meticulously discussed all the points raised by the assessee and has passed a detailed speaking order. In absence of any contrary material before us, we do not find any infirmity in the order of Ld.