Income Tax Appellate Tribunal - Allahabad
Dinesh Chandra Omer,, Fatehpur vs Acit,, Allahabad on 29 August, 2017
1 ITA Nos. 348 & 350/Alld/2013
IN THE INCOME TAX APPELLATE TRIBUNAL
ALLAHABAD BENCH ALLAHABAD
BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER AND
MS.SUCHITRA KAMBLE, JUDICIAL MEMBER
ITA No.348/Alld/2013
Assessment Year: B.P 1/4/1995 TO 20.3.2002
Asstt. Commissioner of Vs. Shri Dinesh Chandra
Income-Tax Omar,
[Central Circle], Prop. M/s Jawahar Lal
Allahabad Dinesh Chandra
Mishra, Amauli,
Fatehpur
(Appellant) (Respondent)
ITA No.350/Alld/2013
Assessment Year: B.P 1996-97 to 2002-03
Shri Dinesh Chandra Omar, Vs. Asstt. Commissioner of
Prop. M/s Jawahar Lal Income-Tax
Dinesh Chandra Mishra, [Central Circle],
Amauli, Fatehpur Allahabad
(Appellant) (Respondent)
Revenue by Shri Rajkumar
Lachhiramanka, CIT DR
Assessee(s) by : Shri Praveen Godbole
सन
ु वाई क तार ख/Date of Hearing : 28/06/2017
घोषणा क तार ख /Date of Pronouncement: 29/08/2017
ORDER
PER BENCH:
Both the appeals are filed against the order date 30/8/2013 passed by Commissioner of Income Tax (Appeals) Allahabad by the Revenue as well as the assessee.
2. ITA No. 348/Alld/2013 which is filed by the Revenue is coming under the tax effect as the issue challenged by the Revenue is related to the deletion 2 ITA Nos. 348 & 350/Alld/2013 of Rs.11,95,726/- made on account of unexplained investment in pawning and money lending business. Therefore, as per the CBDT Circular No. 21/15 dated 10th December, 2015 read with Section 268A of the Income tax Act, 1961, the Revenue's appeal deserves to be dismissed being low tax effect. Accordingly ITA No. 348/Alld/2013 filed by the Revenue is dismissed being low tax effect.
3. The assessee's appeals is filed by raising two issues relating to speculation business and enhancement by CIT (A). The rest of the grounds was stated to be not pressed by the assessee. Therefore, Ground No.1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 14, 15, and 16 are dismissed as the same are not pressed. Ground No. 11, 12 & 13 are as follows:-
"11. That in any view of the matter the income from speculation business as determined by the assessing officer at Rs. 7,19,487.00 was without any basis and even no working was provided to the assessee but the learned Commissioner of Income Tax further enhanced the amount to Rs. 17,15,039.00 on the basis of working provided by the assessee in an arbitrary manner and without providing opportunity hence entire action of learned Commissioner of Income Tax (Appeals) is incorrect.
12. That in any view of the matter addition of Rs.3,00,000.00 made by the assessing officer in assessment year 2000-01 and confirmed by the Commissioner of Income Tax (Appeals)is highly unjustified in the facts and circumstances of the case.
13. That in any view of the matter addition of Rs.3,00,000.00 by saying alleged unexplained investment in Sarrafa business as confirmed by both the two lower authority are highly unjustified."
4. Dinesh Chandra Omer (Assessee) derives share income from M/s ANIL BRICK FIELD, income from agriculture, income from cloth, Sarrafa and from pawning business and for doing such business no regular books of account have been maintained. The Assessee had business premises at Amauli, 3 ITA Nos. 348 & 350/Alld/2013 District-Fatehpur, which is a village having population of not more than 10,000 people and is residing in an ancestral property. In this case a search and seizure operation was conducted on 20.03.2002 in pursuance of warrant of authorization issued by the Director of Income- tax, Investigation Circle, Kanpur, a notice under Section 158-BC of the Act was issued on 25.07.2003 served on the assessee on 28.07.2003. On receipt of the notice the Assessee requested the concerned Assessing Officer to provide photo copies of seized material and after great pursuance the photo copies of seized material were delivered and only after compilation work return was filed on prescribed form no. 2B on 21.01.2004 disclosing therein undisclosed income at Rs. 6,02,000.00. Thereafter from time to time notices were issued under Section 143(2) and 142(1) of the Act and various queries were put to the Assessee and in compliance to those queries and notices various explanations/details were filed and there after the assessment was made by order dated 29.03.2004 and by this order undisclosed income was determined at Rs. 22,28,861.00 as against the undisclosed income according to the Assessee which was Rs. 6,02,000.00.
5. Being aggrieved by the Assessment Order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) who vide order dated 30.08.2013 allowed the appeal in part but regarding income from speculation business the enhancement was made to the extent of Rs. 17,15,039.00 without considering the facts properly, without ascertaining the correct facts in figures and without providing reasonable opportunity to the assessee. The entire working and calculation done at page 47 to 52 of the order needs proper adjudication as the figures were not correctly taken by the learned Commissioner of Income Tax (Appeals). The working at page 47 to 52 has been given by the assessee but while computing the said working the learned Commissioner of Income Tax (Appeals) has taken different figures and therefore the income was enhanced at Rs. 17,15,039.00 which is not correct. The CIT(A) held that the net profit from share transactions business as per 4 ITA Nos. 348 & 350/Alld/2013 Annexure R-2 & B11 was Rs.17,15,039/-. Therefore, the income from share speculation business of the appellant for Assessment Year 2002-03 was confirmed at Rs.17,15,039/-. Thus, the CIT(A) has enhanced the original addition of Rs.5 lac to Rs. 17,15,039/-. The assessee has given all the documents related to the share business but the same was not properly verified or taken into account by the CIT(A) as CIT(A) has not taken cognizance of the share business deal by the assessee. These factual aspects has to be verified thoroughly before the Assessing Officer while enhancing the addition the same was not confronted with the Assessing Officer. Therefore, the assessee submitted that the same may be remanded back to the file of the Assessing Officer for verification.
6. The Ld. AR submitted that the said authorization is not based on any material but only on the hear say and rumours, thus in reality it is not a fit case for search. The entire search action and subsequent proceedings are illegal, unjustified and authorities have acted arbitrarily. By Assessment Order undisclosed income was determined at Rs. 22,28,861.00 as against the undisclosed income according to the Assessee which was Rs. 6,02,000.00. The aforesaid alleged undisclosed income has been determined by the assessing officer in a very arbitrary manner without taking into account the facts properly, without considering the status of the appellant, without considering the assets of appellant and by ignoring all these aspects a high pitched assessment is framed simply to justify an illegal search which was conducted by the department. The Ld. AR submitted that it is necessary to examine the assets found in the course of search i.e. nominal cash amounting to Rs. 1,645.00 was found and jewellery for Rs. 47,871.00 was found. The search party himself has admitted in the course of search action that the search was conducted without any valid material and on wrong impression and wrong idea given to the authorities. The Ld. AR further submitted that according to the Assessing Officer as on 31.03.1995 the appellant was a poorest and pauper person and during the period 01.04.1995 to 20.03.2002 he became a man of 5 ITA Nos. 348 & 350/Alld/2013 status having financial back ground, though no material was found, no loose papers were found, no jewellery or cash was found, children are studying in village school, having no sufficient bank balance but still simply because a search was conducted therefore according to the assessing officer it is necessary to determine undisclosed income at such a high figure of Rs. 22,28,861.00. Thus in this way entire assessment and entire alleged undisclosed income as determined is highly unjustified, illegal and in a arbitrary manner which is not permissible in the Act.
7. The Ld. DR did not have any objection to the sent back the said issues before the Assessing Officer.
8. We have heard both the parties and perused the material available on record. The assessee contended that all the relevant material was available despite that the enhancement was done by the CIT(A) without giving proper opportunity to the assessee for explaining the documents on record. It can be seen that the relevant material was not taken into account by the CIT(A). It is in the interest of justice that the assessee be given opportunity to explain these documents before the Assessing Officer for further verification in respect of this issue related to speculative/share business. Therefore, this issue is remanded back to the file of the Assessing Officer. Needless to say, the assessee be given proper opportunity of hearing. Other grounds are not pressed by the Assessee in his appeal therefore, the same are dismissed.
9. In the result, the appeal of the Revenue is dismissed and the assessee's appeal is partly allowed for statistical purpose.
Order pronounced on the 29th day of August, 2017.
Sd/- Sd/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER 6 ITA Nos. 348 & 350/Alld/2013 Dated: 29/08/2017 R. Naheed Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT ALLAHABAD Date 1. Draft dictated on 13/07/2017 PS 2. Draft placed before author 13/07/2017 PS 3. Draft proposed & placed before .2017 JM/AM the second member 4. Draft discussed/approved by JM/AM Second Member. 5. Approved Draft comes to the PS/PS Sr.PS/PS 12.09.2017 6. Kept for pronouncement on PS 7. File sent to the Bench Clerk 12.09.2017 PS 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 7 ITA Nos. 348 & 350/Alld/2013