Income Tax Appellate Tribunal - Chandigarh
Shri Vijay Kumar Sood, Shimla vs Dcit, Chandigarh on 22 March, 2017
1
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH, CHANDIGARH
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND Ms. ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA Nos. 307 to 312/CHD/2014
Assessment years : 2006-07 to 2011-12
Sh. Vijay Kumar Sood Vs. The DCIT, Central Circle-II
Shimla Chandigarh
PAN No. ADNPS8077K
(Appellant) (Respondent)
Appellant By : Sh. Sudhir Sehgal
Respondent By : Sh. Manjit Singh
Date of hearing : 14.03.2017
Date of Pronouncement : 22.03.2017
ORDER
PER BHAVNESH SAINI, JM
All the appeals by the assessee are directed against the different orders of Ld. CIT(A) (Central), Gurgaon dated 7.2.2014 for assessment years 2006-07 to 2011-12
2. We have heard the Ld. Representatives of both the parties and perused the material on record. Ld. representatives of both the parties submitted that issue is same in all the appeals. Both parties have mainly argued in ITA No. 307/Chd/2014, therefore, for the purpose of disposal of all the appeals, the appeal in ITA No. 307/Chd/2014 is decided as under:- 2 ITA No. 307/Chd/2014 (assessment year 2006-07)
3. In this appeal the assessee challenged the addition of Rs. 25,72,821/- as unexplained expenditure.
4. In this case search and seizure operation was conducted on 8.10.2010 at the residential and business premises of M/s Sood Group of Cases. The assessee was also covered. The Assessing officer made above addition in assessment orders u/s 153A read with section 143(3 of the Income-tax Act, 1961.
5. Briefly, the facts of the case are that during the course of search at the residence of the assessee, books of account marked as Annexure A-1 to A-21 were found and seized. The documents were confronted to the assessee u/s 132(4) of the Act and his statement was recorded which is part of the assessment order. The assessee owned up the entries recorded in these documents and admitted that they pertain to his business expenditure. At the time of assessment these documents were again confronted to the assessee, he was asked the explain the entries recorded on these documents and reconcile them with the books of account. The assessee explained that these are copies extracted from the assessee's diary which he normall y carries alongwith him during his travelling. The contract sites are spread all across the state and the assessee normally jots down various issues, base cheques issued, client enquiries, estimates orders, banker's queries and various other matters in the same. The actual entries are made in the books of account and diary is used only to remember and refresh the 3 memory. At present the assessee is in no position to figure out what was entered therein on those dates since the diary is maintained for only short term memory and not as a record. The Assessing officer noted that the assessee admitted that entries recorded in the diaries pertain to his business activity, therefore, onus u/s 292 C of the Act is on the assessee to explain those entries. Since assessee failed to explain entries and failed to reconcile the expenses with regular books of account, therefore, Assessing officer made addition of Rs. 25,72,821/- u/s 69C of the Act.
6. The assessee submitted before Ld. CIT(A) that these entries are reflected in the books of account, therefore, addition is unjustified. The Ld. CIT(A) remanded the matter to the Assessing officer for filing the remand report. The Assessing officer refuted the assessee's contention that these business expenses are duly reflected in the books of account. The assessee, however, explained that Assessing officer has in fact admitted to these expenses as related to business and substantiated though not clearly, therefore, addition should be deleted.
7. Ld. CIT(A), however, rejected the contention and dismissed the appeal of the assessee.
8. Ld. Counsel for the assessee reiterated the submissions made before the authorities below and submitted that the entries contained in the seized papers are duly reflected in the regular books of account. The details of the same are highlighted in separate sheets. Copy of the day book, journal vouchers and land account have been filed in support of the same. He has 4 submitted that Ld. CIT(A) called for the remand report from the Assessing officer in which Assessing officer did not dispute the claim of the assessee. The Assessing officer merely contended that copy of the account submitted by the assessee do not clearly substantiate his claim. Ld. Counsel for the assessee prepared a chart on the basis of seized papers which is supported by day book, journal vouchers and land account to show that the entries contained in the seized papers are duly reflected in the regular books of account. He has, therefore, submitted that there is no unexplained expenditure incurred by the assessee. He has also filed copy of the order sheet of the Assessing officer to show that Assessing officer took up the matter for assessment only on 13.3.2013 and hearing was adjourned to 15.3.2013. The assessment order is passed on 22.3.2013. The Assessing officer did not provide any sufficient opportunity to the assessee to explain the issue. When the issue was explained before the Ld. CIT(A), the Assessing officer did not deny the explanation of the assessee. The details furnished by the assessee were provided to the Ld. DR who sought time to verif y whether all the documents filed in the paper book by the assessee are part of the record of the Assessing officer / CIT(A). There is no rebuttal to the arguments of the Ld. Counsel for the assessee.
9. The Ld. DR, however, relied on the order of the Assessing officer and submitted that since assessee admitted the contents of the seized documents, which have not been explained, therefore, addition was correctly made. Ld. DR submitted that assessee did not cooperate with the Assessing officer. Even before the Ld. CIT(A), the assessee admitted that he is not in a position to explain the contents of the seized documents. 5
10. We have considered the rival submissions. The order sheet of the assessment record clearly revealed that Assessing officer took assessment only on 13.3.2013 and finally concluded the assessment proceedings on 15.3.2013 and thereafter passed the assessment order on 22.3.2013. Therefore, no sufficient time is given to the assessee to explain the contents of the seized papers. The assessee filed detailed reply before the Ld. CIT(A), copy of which is filed in the paper book in which assessee specifically claimed that these expenses relate to the business are duly reconciled with the regular books of account and details of the same were highlighted and attached. The Assessing officer in the remand report before Ld. CIT(A) did not dispute the claim of the assessee. The Assessing officer merely contended in the remand report that copies of the acocunt submitted by the assessee do not clearly substantiate his claim. Ld. Counsel for the assessee prepared a chart as per the contents of the seized documents and each entry is explained through entries in the day book journal voucher and ledger account of advances (land). It therefore, supports the explanation of the assessee that all the expenditure mentioned in the seized papers are duly reflected in the regular books of account of the assessee. Ld. DR did not file any objection to the documents filed in the paper book were part of the record of the Ld. CIT(A). Therefore, the explanation of the assessee that all the expenditure mentioned in the seized papers are reconciled through regular books of account stands established and proved. Therefore, there is no justification to make or sustain the addition against the assessee. We, therefore, set aside the orders of the 6 authorities below and delete the addition of Rs. 25,72,821/-. The appeal of the assessee is accordingly allowed.
ITA Nos. 308 to 312/Chd/2014 (for AY's 2007-08 to 2011-12):
11. In assessment year 2007-08, the assessee did not press ground No.2, the same is accordingly dismissed as not pressed. On ground No.3, the assessee challenged the addition of Rs. 6,71,683/- as unexplained expenditure.
12. In remaining assessment years, the assessee challenged the additions of Rs. 15,89,500/-, Rs. 11,61,450/- Rs. 1,43,53,963- and Rs. 2,79,000/- as unexplained expenditure. Ld. representatives of both the parties submitted that issue is same in remaining appeals as has been argued in assessment year 2006-07 in ITA No. 307/Chd/2014 in which we have set aside the orders of the authorities below and deleted identical addition on account of unexplained expenses. Following the order for assessment year 2006-07, we set aside orders of authorities below and delete all these additions. These grounds of the appeals of the assessee are accordingly allowed.
13. In the result, all the appeals of the assessee except in assessment year 2007-08, are allowed, whereas in assessment year 2007-08, the appeal of the assessee is partly allowed.
Order pronounced in the Open Court.
Sd/- Sd/-
(ANNAPURNA GUPTA) (BHAVNESH SAINI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated : 22 n d March, 2017
Rkk
7
Copy to:
1. The Appellant
2. The Respondent
3. The CIT
4. The CIT(A)
5. The DR