Income Tax Appellate Tribunal - Pune
Lt Jawaharlal Chandulal Shah,, Satara vs Deputy Commissioner Of Income Tax,, on 27 April, 2018
आयकर अपीऱीय अधिकरण पण
ु े न्यायपीठ एक-सदस्य मामऱा पण
ु े में
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "SMC", PUNE
सश्र
ु ी सष
ु मा चावऱा, न्याययक सदस्य एवं श्री अयिऱ चतव
ु ेदी, ऱेखा सदस्य के समक्ष
BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM
आयकर अपीऱ सं. / ITA No.253/PUN/2017
यििाारण वषा / Assessment Year : 2008-09
Lt Jawaharlal Chandulal Shah,
L/H Vikalp Jawahar Shah,
At Post Vaduj, Tal. Khatav,
Dist. Satara - 415506 .... अऩीऱाथी/Appellant
PAN: ACYPS0025R
Vs.
The Dy. Commissioner of Income Tax,
Satara Circle, Satara .... प्रत्यथी / Respondent
अऩीऱाथी की ओर से / Appellant by : Shri M.K. Kulkarni
प्रत्यथी की ओर से / Respondent by : Shri Vivek Aggarwal
सन
ु वाई की तारीख / घोषणा की तारीख /
Date of Hearing : 10.04.2018 Date of Pronouncement: 27.04.2018
आदे श / ORDER
PER SUSHMA CHOWLA, JM:
The appeal filed by assessee is against order of CIT(A)-4, Pune, dated 25.09.2016 relating to assessment year 2008-09 against order passed under section 143(3) of the Income-tax Act, 1961 (in short 'the Act').
2. The assessee has raised the following grounds of appeal:-
1) On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in confirming the addition made by the A.O. of ITA No.253/PUN/2017 2 Lt Jawaharlal Chandulal Shah Rs.3,15,008/- declared in the survey action. The assessee had explained the position of excess cash included in the figure of Rs.3,15,008/- and in fact it amounted addition twice when main addition of income was made of Rs.4,86,212/- by which source of cash gets explained. The addition is not sustainable being unwarranted be deleted.
2) On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified confirming the addition of Rs.20,806/- included in addition in Rs.3,15,008/- made by the A.O. on account of unexplained stock valuation. The addition being revenue neutral is not sustainable. It be deleted.
3) On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in confirming the addition of Rs.73,101/- included in the addition of Rs.3,15,008/- made by the A.O. on account of unexplained expenditure. The addition is unwarranted. It be deleted.
4) On the facts and circumstances of the case and in law the income of Rs.4,86,212/- offered for taxation during the course of survey action and not retracted explained the source of Rs.3,15,008/- included therein excess cash of Rs.2,21,101/- unexplained stock of Rs.20,826/- and unexplained expenditure of Rs.73,101/- and therefore, no further addition was required to be made. In fact and law the additions made comprised in a figure of Rs.3,15,008/- when amount of Rs.4,86,212/- gets taxed, amounts to double addition. In view of this the addition of Rs.3,15,008/- be quashed.
3. The issue raised in the present appeal is against addition of ₹ 3,15,008/- declared in survey action. The assessee has raised the issue that once addition of ₹ 4,86,212/- is made in the hands of assessee, then source of addition of ₹ 3,15,008/- stands explained. This was the plea in respect of addition of ₹ 2,21,101/-, ₹ 20,806/- and ₹ 73,101/-, assessee claims that telescopic effect has to be allowed.
4. Briefly, in the facts of the case, the assessee was proprietor of M/s. Jawahar Chandulal & Company and engaged in selling diesel, oil and petroleum under the name and style of M/s. Jawaharlal Chandulal & Co. at Vaduj, Tal. Khatav, Dist. Satara. Survey action under section 133A of the Act was conducted at the business premises of assessee on 21.02.2008. During the course of survey proceedings, survey team came across various ITA No.253/PUN/2017 3 Lt Jawaharlal Chandulal Shah discrepancies which were confronted to the assessee. The discrepancies were as under:-
1] Excess cash found Rs.2,21,101
2] Income from Pokland Earthmover Rs.4,86,212
3] Unexplained expenditure Rs. 73,101
4] Excess stock Rs. 20,806
Total Rs.8,01,220
5. During the course of survey, assessee offered sum of ₹ 8,01,220/- as additional income for the year under consideration. The assessee furnished return of income declaring total income of ₹ 11,11,130/- after the survey. On going through return of income, the Assessing Officer noted that the assessee had not included the amount of excess cash found, excess stock and unexplained expenditure as his additional income and had only offered the amount of unrecorded income of ₹ 4,86,212/- to his Profit and Loss Account. The assessee explained that excess cash of ₹ 2,21,101/-, excess stock of ₹ 20,806/- and unexplained expenditure of ₹ 73,101/-, totaling ₹ 3,15,008/- was taken care of by the income offered of ₹ 4,86,212/-. The Assessing Officer was of the view that where the assessee had offered additional income during the course of survey voluntarily, then he could not go back on the same. The explanation of assessee was held to be an afterthought with a view to evade the payment of due taxes. The Assessing Officer thus, held that source of unexplained items were not explained at the time of survey and even at the time of assessment proceedings and the same had to be added as deemed income of the assessee. The Assessing Officer thus, made an addition of ₹ 3,15,008/-.
6. The CIT(A) upheld the said addition in view of the assessee having admitted to the voluntary disclosure made during the course of survey. ITA No.253/PUN/2017
4 Lt Jawaharlal Chandulal Shah
7. The assessee is in appeal against the order of CIT(A).
8. The learned Authorized Representative for the assessee pointed out that the assessee is deceased and the legal heir has filed the present appeal. He further referred to the disclosure made during the course of survey and pointed out that yes, sum of ₹ 4,86,212/- was offered to tax and other three items totaling ₹ 3,15,008/-, offer was retracted on the ground of telescoping.
9. The learned Departmental Representative for the Revenue strongly objected to the submissions of learned Authorized Representative for the assessee and pointed out that what has to be seen is how the items were capitalized in the books of account after survey.
10. We have heard the rival contentions and perused the record. In the facts of the present case, survey under section 133A of the Act was carried out at the business premises of assessee. During the course of survey, various discrepancies were found and the assessee in all offered sum of ₹ 8,01,220/- as his additional income. However, in the return of income, the assessee offered sum of ₹ 4,86,212/- as income which was originally offered as income from Pokland Earthmover. In respect of excess cash found of ₹ 2,21,101/-, unexplained expenditure of ₹ 73,101/- and excess stock of ₹ 20,806/-, the assessee did not offer as additional income and claimed that telescoping effect of income offered in the hands of assessee should be given against said items totaling ₹ 3,15,008/-. We find merit in the plea of assessee that once the assessee has already offered sum of ₹ 4,86,212/- as its income, then the said funds are available with the assessee for making investments in various other ITA No.253/PUN/2017 5 Lt Jawaharlal Chandulal Shah assets and / or expenditure incurred by the assessee. Hence, the assessee is entitled to the benefit of telescopic effect. Accordingly, we direct the Assessing Officer to allow the same i.e. against income offered of ₹ 4,86,212/-, the assessee is entitled to claim the benefit of availability of funds for investments in cash of ₹ 2,21,101/-, excess stock of ₹ 20,806/- and unexplained expenditure of ₹ 73,101/-. Accordingly, the addition made by CIT(A) in this regard, is deleted. The grounds of appeal raised by the assessee are thus, allowed.
11. In the result, appeal of assessee is allowed.
Order pronounced on this 27th day of April, 2018.
Sd/- Sd/-
(ANIL CHATURVEDI) (SUSHMA CHOWLA)
ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER
ऩुणे / Pune; ददनाांक Dated : 27th April, 2018.
GCVSR
आदे श की प्रयतलऱपप अग्रेपषत/Copy of the Order is forwarded to :
1. अऩीऱाथी / The Appellant;
2. प्रत्यथी / The Respondent;
3. आयकर आयुक्त(अऩीऱ) / The CIT(A)-4, Pune;
4. The Pr.CIT-3, Pune;
5. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, ऩुणे, एक-सदस्य मामऱा / DR 'SMC', ITAT, Pune;
6. गार्ड पाईऱ / Guard file.
ु ार/ BY ORDER, आदे शािस सत्यावऩत प्रतत //True Copy// वररष्ठ तनजी सधिव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण ,ऩुणे / ITAT, Pune