Income Tax Appellate Tribunal - Jaipur
Dcit, Jaipur vs Radha Govind Build Estate P Ltd., Jaipur on 23 December, 2016
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ ITA No. 957/JP/12
fu/kZkj.k o"kZ@Assessment Year : 2009-10
The DCIT, Circle-3, Jaipur cuke M/s Radha Govind Build Estate
Vs. Pvt. Ltd. Ganesham Tower, G-
4, Amrapali Circle, Vaishali
Nagar, Jaipur
LFkk;h ys[kk la-@thvkbZvkj la-@PAN No. AADCR 0186 L
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Manish Agarwal (CA)
jktLo dh vksj ls@ Revenue by : Shri D.S. Kothari (CIT)
lquokbZ dh rkjh[k@ Date of Hearing : 15.12.2016
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 23/12/2016.
vkns'k@ ORDER
PER SHRI VIKRAM SINGH YADAV, A.M.
This is an appeal filed by the Revenue against the order of ld. CIT(A)-I, Jaipur dated 19.10.2012 for AY 2009-10 wherein the Revenue has taken following ground of appeal:
"Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) was justified in deleting the addition of Rs. 3,35,31,259/-."
2. The brief facts of the case are that the assessee engaged in the business of real estate had filed its return of income for the year under consideration declaring nil income. On 18.11.2009, a survey u/s 133A of the IT Act, 1961 was conducted at the business premises of the assessee company and statements of the director of ITA No. 957/JP/12 DCIT, Circle-3, Jaipur vs. M/s Radha Govind Build Estate Pvt. Ltd. Jaipur assessee company i.e. Shri Ramesh Chand Dangayach were recorded on oath during the course of survey and several loose/rough papers were found and impounded. Subsequently, assessment was completed u/s 143(3) of the IT Act, 1961 at total income of Rs. 3,55,31,260/- by making addition of Rs. 3,55,31,259/- on the basis of admission of one of the directors of assessee company during the course of survey and ignoring the contention of the assessee that none of the papers found and impounded during the course of survey pertained to the year under appeal and therefore, no addition on basis of such papers could have been made in the year under appeal.
2.1 Aggrieved by the order of the AO, the assessee had preferred an appeal before the ld. CIT(A) who vide her impugned order dated 19.10.2012 in ITA No. 585/11-12 partly allowed the appeal of assessee and deleted the entire addition of Rs 3,55,31,260 after noting the fact that none of the papers found during the course of survey pertained to the assessment year under appeal, therefore, no addition could have been made on the basis of such papers in the year under appeal. Against the order of the ld CIT(A), the Revenue is in appeal before us.
3. Before we proceed to consider the arguments of both of the parties, it would be relevant to refer to the relevant findings of the ld. CIT(A) which are reproduced as under:
"7. Regarding the submission that the statement recorded u/s 133A is not evidence and that the retraction of the assessee is justified. I do not concur with the submission. It is usual practice to claim that the assessee was frightened or under stress at the time of recording the statements. In fact, on perusal of the statement it is seen that from the very beginning he was trying to mislead the personnel of the department by stating that the books of accounts of the company were with his accountant. When the accountant was contacted on phone he completely denied having the books of accounts of the company. When confirmed with this information Mr. Dangayach family brought all the papers pertaining to the land transaction of this company from his residence. Similarly during the course of assessment proceedings he refused to take the notices and delayed filing submissions by one and a half months and thus tried to obstruct the course of justice in determining the correct income.2 ITA No. 957/JP/12
DCIT, Circle-3, Jaipur vs. M/s Radha Govind Build Estate Pvt. Ltd. Jaipur This course of action hardly indicates a person operating under fright or stress . Given the specific evidence found/brought by him by way of papers and his detailed explanation of the notings therein it becomes very clear that unaccounted transaction of purchase and sale of land had been undertaken by the company in the past several years and a record of this had been kept by him in his personal custody. Therefore the statements of the director made on the basis of the papers is held to be valid evidence in so far as his explanation regarding these transaction is considered. However, since he did not have knowledge of the IT law the surrender was made in one A.Y only, rather than in respective A.Ys in which the transactions took place.
On perusal of all the papers it was seen that only page 56 has the date 25.02.2009 mentioned on it and seems to be an account of Shri Ramesh Dangayach regarding payment of car loans, TDS certificates etc. This does not seems to have been financial implications as far as the income of the appellant company is concerned. A chart has been prepared regarding the dates of the pages impounded and the A.Ys to which they pertain. The AO may consider taking necessary action in the respective A.Ys as per Annexure-D to this order after due verification of all the facts on record and evidence filed by the AR in view of the above observations.
Considering that the payments of purchase of land were not made in this year as per the evidence by way of papers impounded during this A.Y. nor were any papers showing receipts during A.Y. 2009-10 on sale of these plots found during the course of survey the addition of Rs.3,55,31,259/- made in this A.Y. is deleted."
4. The ld. AR of the assessee submitted that the addition made by the AO were solely based on the admission obtained during the course of survey on the basis of rough entries appearing on the loose papers found and impounded during the course of survey. However, the ld. AO has completely brushed aside the crucial fact that none of the loose paper so found pertained to the year under appeal. That is to say, that none of the alleged transactions of purchase/sale allegedly found noted on such papers took place during the financial year 2008-09 relevant to the assessment year under appeal i.e. A.Y. 2009-10 and that being so, no addition on the basis of such papers could have been made in the year under appeal. It is submitted that not a single transaction of alleged purchase/sale of land has taken place in the year under appeal as per the papers found and impounded. On most of the papers found, dates have clearly been specified and the same do not fall within the financial year relevant to assessment year under appeal. In case of undated 3 ITA No. 957/JP/12 DCIT, Circle-3, Jaipur vs. M/s Radha Govind Build Estate Pvt. Ltd. Jaipur papers without prejudice to the merits of the case, it is submitted that addition could have been only in the year in which survey took place since it cannot be ascertained as to which year they pertain. However the Ld. AO has made the addition in the year under appeal merely on the ground that in the statements of director of assessee company Shri Ramesh Chand Dangayach recorded during the course of survey, the abovementioned amount has been admitted as undisclosed income of the financial year relevant to the assessment year under appeal. In this regard it is submitted that admission has been obtained by the director in the year under appeal without referring to the books of accounts maintained in the regular course and on the basis of such statements, addition could not have been made in the year under appeal in as much as the statements are in contradiction to the loose papers found during the course of survey where the dates mentioned do not pertain to the year under appeal. These facts were considered by the ld. CIT(A) who after appreciating the same deleted the entire additions. A bare perusal of the above observations of Ld. CIT(A) would clearly show that the order of Ld. CIT(A) is very well reasoned order, passed after the due examination of actual facts and circumstances of the case and after giving due regard to the established law and thus, leaves no scope for interference on any grounds.
4.1 The ld AR further submitted that as per the directions given by the ld. CIT(A), the assessment for A.Y. 2006-07 to 2008-09 were reopened and assessment orders stood passed, copy of re-assessment order for A.Y. 2006-07 and A.Y. 2010-11 have already been submitted before the Hon'ble Bench. Further the orders passed for A.Y. 2007-08 and 2008-09 are submitted herewith for ready reference and record.
4.2 Further, a chart containing the year-wise additions made in such reassessment / assessment orders which are being made on the basis of statements recorded and the papers impounded during the survey as against the addition of Rs. 3,55,31,259/- made in the year under appeal (based on the alleged admission by one of the director of appellant company Shri Ramesh Dangayach) is submitted as under:
4 ITA No. 957/JP/12DCIT, Circle-3, Jaipur vs. M/s Radha Govind Build Estate Pvt. Ltd. Jaipur A.Y. Addition made Remarks 2006-07 2,00,000.00 Order u/s 147 / 144 of the Income Tax Act, 1961 2007-08 1,03,35,750.00 Order u/s 148 / 147 of the Income Tax Act, 1961 2008-09 3,62,32,413.00 Order u/s 147 / 143(3) of the Income Tax Act, 1961 2010-11 17,25,36,322.00 Order u/s 143(3) of the Income Tax Act, 1961 21,93,02,485.00 From the perusal of the chart above, your honours would appreciate the fact that as against the addition of Rs. 3,55,31,259/- made as a result of survey in the year under appeal, total addition of Rs. 21,93,02,485/- stood made in various assessment years based on the same set of paper by making assumptions and presumptions as per the sweet will of the assessing authorities.
4.3 It was further submitted that besides these assessment / reassessments, additions of around Rs. 10.00 crores were also made in the hands of their directors namely Shri Ramesh Dangayach, Shri Laxmi Ram Khandelwal and Shri Girraj Agarwal based on the same entries contained in the papers which were impounded during the survey and considered in company in various assessment years. All such orders are challenged before Ld. CIT(A) and the same have not yet been decided.
4.4 It was finally submitted that based on the directions of ld. CIT(A), department has already taken appropriate actions u/s 148 and completed the assessment after considering the loose papers in respective assessment years to which the entries are actually belonged thus there should not be any grievance to the department in respect to the deletion made in the year under appeal.
5. The ld CIT DR has vehemently argued the matter and took us through the statements recorded during the course of survey, various seized documents and the assessment order to establish that the impunged addition made by the AO amounting to Rs 3,55,31,259 in respect of unexplained investment in purchase of land and profit on sale of land pertains to the year under consideration.5 ITA No. 957/JP/12
DCIT, Circle-3, Jaipur vs. M/s Radha Govind Build Estate Pvt. Ltd. Jaipur
6. We have heard the rival contentions and perused the material available on record. The issue under consideration relates to addition made by the AO amounting to Rs 1,00,00,000 in respect of unexplained investment in purchase of land and Rs 2,55,31,259 towards profit on sale of land and whether the same pertains to the year under consideration or not. The contention of the ld AR is that the subject transactions of purchase and sale of land doesn't belong to the impunged year under consideration and based on the directions of ld. CIT(A), department has already taken appropriate actions u/s 148 and completed the assessment after considering the loose papers in respective assessment years to which these entries actually belongs. Further, the details of other assessment years where the additions were made based on the same set of loose papers were submitted before the Bench. After hearing both the parties, we are of the view that in the interest of justice, it would be appropriate if the matter is remanded back to the file of the AO to examine and verify the said contention of the ld AR. The AO will verify whether the additions made in the subject assessment year in purchase and sale of land totalling to Rs 3,55,31,259 has been brought to tax in other assessment years or not. Where the same has been brought to tax, the appellant deserve the necessary relief as the same transactions cannot be brought to tax twice. In light of above, ground taken by the Revenue is partly allowed for statistical purposes.
In the result the appeal filed by the Revenue is partly allowed for statistical purposes.
Order pronounced in the open court on 23/12/2016.
Sd/- Sd/-
(KUL BHARAT) (VIKRAM SINGH YADAV)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Jaipur
Dated:- 23/12/2016
6
ITA No. 957/JP/12
DCIT, Circle-3, Jaipur vs. M/s Radha Govind Build Estate Pvt. Ltd. Jaipur Pillai vkns'k dh izfrfyfi vxzfs "kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- The DCIT, Circle-3, Jaipur
2. izR;FkhZ@ The Respondent- M/s Radha Govind Build Estate Pvt. Ltd. Jaipur
3. vk;dj vk;qDr@ CIT -I, Jaipur
4. vk;dj vk;qDr¼vihy½@The CIT(A)-I, Jaipur
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No. 957/JP/2012) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar.7