9911796707
TMI Blog2013 (5) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... be due to courier, which is duly supported by an affidavit stating reasons for this delay in filing of the appeal. We find the stated reasons to be genuine and sufficient enough to condone the delay. Therefore, we condone this delay and admit the appeal at its original number. This appeal arises out of the assessment order passed under section 143(3) read with section 153A and 153B of the IT Act, 1961 (hereinafter referred to as the Act, for short) for assessment year 2007-08 dt. 31-12-2010 passed by the Dy. CIT, Central Circle, Bikaner. 2.1 Briefly stated, the facts of the case are that Shri Anil Kumar Tantia is engaged in the business of purchase and sale of jewellery. A search and seizure operation under section 132 of the Act and simultaneous survey under section 133A of the Act, were conducted by the IT Department at many of the business premises of this group on 27-2-2009. During these operations, numerous incriminating evidence in the form of documents, loose papers, cash, etc. were found and inventorised and some of them were seized/impounded. The assessee resides in the town of Sriganganagar and falls under that jurisdiction. However, the jurisdiction over the cases of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) Residence of Shri J.R. Tantia Dr. Shyam Sunder Tantia, Main Road, Sukhadia Nagar, Sriganganagar (3) Residence of Shri Anil Kumar Tantia, 3-D, Jawahar Nagar, Sriganganagar (4) Tantia Jewellers, 23B, Sadar Bazar, Sriganganagar. 2.3 A survey action under section 133A was carried out in the business premises of the Tantia Higher Education Institution Campus and J.R. Tantia Charitable Trust, Hanumangarh Road near RICCO Bus Stand, Sriganganagar. During these operations, cash and jewellery were found and seized. 2.4 It was found that Shri Anil Tantia has been doing jewellery business in the name and style of M/s. Tantia Jewellers, Sriganganagar but was not disclosing the actual income and has been suppressing purchases/sales and was booking bogus expenses and was even making payments/expenses out of books. As per the assessing officer, the above modus operandi of the assessee is substantiated with the help of seized material. During the search operation, undisclosed stock of ₹ 1,05,00,000 was found in the premises of M/s. Tantia Jewellers. The incriminating documents relating to the unaccounted sales/purchases, unaccounted income/receipts/bogus expenses/unexplained expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off of various undisclosed expenses which has not been accepted by the assessing officer 2.6 The assessee is existing assessee of ITO, Sriganganagar. After conducting search on 27-2-2009, the CIT, Bikaner issued notice under section 127 dt. 13-5-2009. The order has been passed by the CIT under section 127 of the Act on 7-7-2009. The Dy. CIT Circle, Bikaner to whom the assessment record has been transferred by virtue of order under section 127 issued notice under section 153A of the IT Act dt. 24-8-2009. The assessee objected to the jurisdiction vide letter dt. 21-9-2009. The objections were rejected vide order dt. 25-9-2009. The assessee submitted returns of income under section 153A being the compliance of notice of the assessing officer for the period 2003-04 to 2009-10. The assessment has been completed by the assessing officer for these assessment years out of which the appeal related to the assessment year 2007-08 to 2009-10 were decided only by the Commissioner (Appeals) Central Circle, Jaipur. The assessee is id appeal for the assessment year 2007-08 to 2009-10 and the Department is in appeal for the assessment year 2008-09 and 2009-10 only. 2.7 The Commissioner (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -ordination and effective investigation can be a cause of transfer from one place to another. On the other hand the learned CIT-Departmental Representative placed reliance on the judgment of Rajasthan High Court delivered in case of J.R. Tantia Charitable Trust v. Du. CIT & Ors.: (2011) 245 CTR (Raj) 162 : (2011) 62 DTR (Raj) 313, judgment on which the learned Commissioner (Appeals) has also relied. Section 127 reads as under: (1) The Director General or Chief CIT or CIT may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so transfer any case from one or more assessing officers subordinate to him (whether with or without concurrent jurisdiction) to any other assessing officer or assessing officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the assessing officer or AOs from whom the case is to be transferred and the assessing officer or AOs to whom the case is to be transferred are not subordinate to the same Director General or Chief CIT or CIT,-- (a) where the Directors General or Chief CITs or CITs to whom such AOs are subo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e common in all the years and relate to the method of valuation of closing stock. The case of the assessee is a case of search. The notice under section 153A has been issued by the Department therefore the assessee submitted return of income from the assessment year 2003-04 to 2008-09 under section 153A of the IT Act and return for the assessment year 2009-10 was submitted in response to notice under section 139/142(1). The assessee submitted return of income in compliance of provision of section 153A of the IT Act and 139 of the IT Act but while filing the return of income in compliance of notice changed the method of valuation of closing stock. Previously the assessee adopted the method of valuation of closing stock as market rate and while furnishing the return changed from market rate to weighted average cost price. The assessing officer rejected the claim of the assessee in respect of change in method of valuation and valued the closing stock on the basis of market price. The issue whether the method of valuation of closing stock can be changed and switched over from the market price to cost price is in dispute. The assessee submitted reply and claimed before the assessing aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to three judgments in respect of rejection of claim but all the judgments as Goetze (India) Ltd. v. CIT (2006) 204 CTR (SC) 182 : (2006) 284 ITR 323 (SC), Abhay Kumar Shroff v. CIT (2007) 210 CTR (Jharkhand) 602 : (2007) 290 ITR 114 (Jharkhand), Suncity Alloys (P) Ltd. v. Asstt. CIT (2009) 124 TTJ (Jd) 674 : (2009) 27 DTR (Jd)(Trib) 139 are found to be distinguishable on facts. It was further argued that the assessing officer made the addition only by rejecting the explanation of the assessee and the Commissioner (Appeals) has improved the assessment order without following the due procedure and this action is not permissible as per the order of the Hon'ble-Bench of Tribunal Calcutta reported in 118 Taxman 53 (sic). 2.11 We have considered the rival submissions and also written submission filed by the assessee. The learned Departmental Representative has relied upon the order of the Commissioner (Appeals) It was strongly argued that the method of valuation of closing stock cannot be changed in search case because search is in favour of the Revenue. Let us now examine whether the method of valuation of closing stock can be changed or not. Whether it is permissible or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that such change results in the reduction in or a postponement of the tax liability, per se, is not relevant. If change was bona fide then it will have to be accepted. The Hon'ble Madras High Court in case of CIT v. Venkatesa Spinners (P.) Ltd. (2008) 296 ITR 205 (Mad) held that the basis of valuation of closing stock can be rejected if it is not based on genuine reasons. The Hon'ble Court further observed that it must be noted that irrespective of change of method in the method of accounting or valuation the Act enjoins or casts a duty on the assessing authority to get into accounts to reduce what would be correct and to determine profit and gain from the business. Therefore the Hon'ble Court is of the view that the issue of the reduction of income is not material. The above judgments are very much clear in respect of taxing the notional income as well as real income, what we feel that in the present case, if we will permit the Revenue to apply the method of valuation of closing stock on market rate it will tantamount to taxing of the notional income which is not permissible in the taw. Before parting away from this subject of valuation of closing stock we wis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases were shown in respect of silver and gold ornaments. The assessing officer made addition of ₹ 6,81,333 for the assessment year 2007-08 being interest there upon as has been mentioned on the page which is at page No. 51 of the paper book and ₹ 6,44,000 in the year 2008-09. The assessing officer made addition under section 68 of the IT Act whereas the assessee himself surrendered the amount in his income. The learned Commissioner (Appeals) has sustained this addition. The Commissioner (Appeals) has observed that ₹ 60 lakhs is unexplained loan taken and the same has been offered by the appellant in his return of income. He has further observed that since this interest has been paid out of undisclosed source, the assessing officer was justified in making addition as assessees unexplained income. Before us it was argued that the interest was paid on alleged loan of ₹ 60 lakhs for the assessment year 2007-08 and 2008-09. The very same amount of ₹ 60 lakhs itself was surrendered then there is no question of making further addition as interest paid in the assessment year 2007-08 and 2008-09. If the interest have even been received and paid it will nu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper book. The assessing officer did not accept the books of accounts prepared from the seized documents and available at page 6 and 13 of the assessment order. In paras 3 and 4 it has been said that this is an afterthought document of the assessee in preparing the books of accounts in respect of unrecorded transactions and shown cash available as per these books. Similarly, he has shown purchases of stock of jewellery out of cash available as per these books. 4.1 Before the learned Commissioner (Appeals), the assessee reiterated the same ground. The learned Commissioner (Appeals), at p. 22 of the order in para 6.8, rejected the books of accounts by alleging that there are certain discrepancies and, therefore, the cash book so prepared is not giving a true and correct picture of the affairs of the assessee. 4.2 Before us the learned Authorised Representative has relied upon his earlier arguments and has strongly stated that the books of accounts so prepared are reliable and give a true and correct picture. It was also argued that if it is considered being a chart even then same should have been accepted. In the chart form also the assessee submitted cash book table which is at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee mentioned that all the entries were in the said cash book. The version is as under: At the time of filing the return the assessee also submitted copy of the cash book prepared in respect of unexplained amount and the same was submitted along with the return of income. The assessee incorporated and entered all the unexplained entries in the cash book prepared by him. The fact is subject to verification therefrom. 5.1 The provisions of section 145(3) was applied by the assessing officer. The provision of section 145 can be applied when the assessing officer is admitting the same as books of accounts only then and then the provision can be applied. If the assessing officer is of the view that the compilation is not books of accounts, can the same be rejected at all by mentioning that he has not accepted them as books of accounts. When the learned Commissioner (Appeals) has treated it as a book of accounts, now the only issue remaining with us is as to whether in the circumstance of the case, the same can be rejected or not. The provisions of section 145 speak about the reasons when the books of account can be rejected. The assessing officer as well as the learned Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave already been dealt with. 7. Ground No. 10 of assessment order for 2007-08 and ground No. 11 for 2008-09 and 2009-10 in respect of acceptance of the affidavit. The assessee submitted affidavit of his own and his wife Smt. Sarita which is at pp. 111 and 112 of the paper book. In the affidavit the assessee explained in respect of ornaments found at the time of search and in respect of maintenance of books of accounts. The affidavit was not accepted. The assessee submitted two affidavits of Smt. Sarita Tantia wife of Sunil Tantia and Anil Tantia s/o J.R. Tantia assessee himself. The assessing officer admittedly has not accepted the affidavit and rejected the same by giving reliance on CIT v. Durga Prasad More (supra). The learned Commissioner (Appeals) also confirmed the rejection of affidavit. The issue is regarding acceptance of affidavit when the deponent is not cross-examined. This Bench has already taken a view on this issue. The contents of the affidavit should be accepted if the deponent is not cross-examined. The view taken by this Bench in the earlier para as well as in other case is by following the judgment of Hon'ble Supreme Court reported in case of Mehta Pareek ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 157 of the paper book. The evidence produced before us is a letter issued by the Dy. CIT dt. 14-10-2010. The assessee relied upon the judgment reported in Paras Bansilal Patel v. B.M. Jindal, Chief CIT (2004) 187 CTR (Guj) 613 : (2004) 135 Taxman 125 (Guj) which is in the identical circumstances in which the Hon'ble Court has held that the interest upto the supply of copies of books of accounts shall be waived. In the case of appellant we also direct that interest upto the final supply of copies of documents/accounts is waived. This ground is to be decided in the light of the above directions. Otherwise, charging of interest is mandatory. 9. The ground No. 9 of the assessment year 2009-10 is in respect of the excess cash found and surrendered by the assessee during the search operation. The cash amounting to ₹ 10,82,790 was found at the residence and in the statement assessee surrendered a sum of ₹ 10 lakhs as per the statement recorded on 15-5-2009. A cash balance of ₹ 2,82,482 was found at the business premises and cash balance of ₹ 2,82,482 was found as not explainable. In this way, the total cash amount, as observed at p. 5 of the order of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in the letter to the Department that in case regular books of accounts are in your possession supply us copy thereof because the same is not available in the copies so supplied by the Department from the seized document/record. The learned Departmental Representative has relied upon the order of the lower authority. The learned Authorised Representative reiterated the arguments taken before authorities below and also produced the copies of the books of the accounts in which these entries are available. It was stated that the assessing officer failed to reply submission, copy of which is placed at p. 62 of paper book of 2009-10. 9.4 We have considered the material on record and have found that addition so made by the assessing officer is without any basis because all the entries are reflected in the regular books of account available with the assessee and the assessing officer failed to provide the material on which he was relying. Therefore, the addition is deleted. 10. Ground No. 8 pertains to excess stock. During search, excess stock of ₹ 1,05,83,107 was found, out of which the assessee surrendered a sum of ₹ 1,05,00,000 in his statement recorded in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit of ₹ 60 lakhs surrendered in the assessment year 2007-08 is given in the assessment year 2007-08 and treated that the gold and silver were purchased out of the amount of ₹ 60 lakhs surrendered by the assessee. The entire record does not reveal that the assessee is carrying on other business than the gold and silver. The Department also failed to prove that the amount of ₹ 60 lakhs was invested elsewhere it was upto the Department to prove that the amounts were invested elsewhere. In the absence of any contrary proof the explanation given by the assessee cannot be rejected. Therefore, the closing stock/stocks found during the course of search are treated as explained. The assessee also submitted affidavit, which cannot be discarded also in absence of any evidence. The assessee also explained the jewellery related to the wife of the assessee as well as of his own in the affidavit. If these are considered, the stock shall be surplus more than found in course of search. 11. The additional ground is in respect of the brought forward losses and allowability of depreciation. The learned Authorised Representative argued that the losses are on account of change of me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lery found and seized: Modus Operandi of the group as per AO: Dr. Shyam Sunder Tantia is providing his services to Sriganganagar CAT Scan & Heart Centre (P) Ltd., SGNR and Sriganganagar E.E.G. Centre, SGNR and getting salary for the same. The hospital is not showing actual income either by not showing actual receipts/income or by booking bogus expenses and making payments/expenses out of books through its unaccounted income. The same has been substantially proved as incriminating papers/documents related to unaccounted income/receipts/bogus expenses/unexplained expenditure have been found and seized from business premises and also from the residential premises of Dr. Shyam Sunder Tantia which are discussed at pp. 3 to 10 of the assessing officers order. Thereafter the assessing officer has observed that the assessee has failed to deduct TDS from the payments made to the contractors for construction activities. The above transactions are not reflected in the books of account. In view of the above, the said expenditure aggregating to ₹ 13,88,592 is found to be unexplained and added to the assessees total income as unexplained expenditure under section 69C of the Act for the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed under section 143(3) of the Act and the amount of assessed income besides date of order passed under section 153A/143(3)/153(B) of the Act and the figure at which income assessed. The chart is as under: In first appeal the learned Commissioner (Appeals) has given part relief in assessment year 2008-09 and 2009-10. Thus, Revenue has also filed appeal in the above two assessment years. In other assessment years, it was ascertained that the Revenue has not filed appeals. The grounds raised by the assessee are almost identical in all the years. The grounds of any appeal would give a feel of grounds raised in other appeals. Therefore, for the sake of convenience, we extract grounds raised in ITA No. 140/Jd/2013 for assessment year 2005-06. The grounds raised are as under: (1) That the order passed by the learned Commissioner (Appeals) is illegal and against the law. (2) That the jurisdiction acquired by the Asstt. CIT, Bikaner and confirmed by the learned Commissioner (Appeals) is not in accordance with law, therefore, the order passed is illegal furthermore the assessing officer fails to follow the direction of the Hon'ble jurisdictional High Court as well as the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Asstt. CIT is illegal, against the law as well as out of his jurisdiction/power. (13) That the observations made by the Commissioner (Appeals) are out of his jurisdiction and power so as to issue direction in respect of assessment of income in the hands of any particular assessee. (14) That the act of the assessing officer in respect of utilization of case law behind the back is illegal because he failed to confront the same and as such in absence of confrontation, the, addition is not justified. (15) That the order passed by the Asstt. CIT and sustained by the Commissioner (Appeals) without considering the judgment of Supreme Court referred in course of proceedings is illegal. (16) That without rejection of books of account the addition so made and sustained by the Commissioner (Appeals) is illegal and against the law. (17) That the charging of interest is illegal and against the law. The grounds raised by the Revenue, being correlated to the above grounds will be discussed later on. 14. We have heard rival submissions and have carefully perused the entire record available before us. Ground Nos. 1 to 4 pertain to acquisition of jurisdiction by Asstt. CIT, Central C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n vide his letter dt. 10-11-2011, While redressing the objections, the assessing officer has reproduced the letter in the assessment order wherein the following facts are recorded: (1) There was a survey operation under section 133A at the trusts premises situated at Hanumangarh Road, Sriganganagar. However, the name of the Trust was found mentioned in the search warrants as well, issued notice under section 131(1) in respect of the other premises of the group such as Tantia General Hospital, M/s. Sriganganagar CAT Scan & Heart Center (P.) Ltd., Sriganganagar, and all the other premises of the trustees On perusal of the office records it was verified by the assessing officer that photocopy of the Panchnamas, seizure memos, warrants had been provided by the then DCIT, Central, Bikaner in the cases of Shri S.S. Tantia, Sriganganagar CAT Scan & Heart Centre (P.) Ltd. Shri Jagdish Rai Tanita, J.R. Tantia Charitable Trust, Anil Tantia, Tantia Jewellers on 14-10-2010, to Dr. Shyam Sundar Tantia trustee of the assessee Trust and Shri Suresh Ojha, advocate and Authorised Representative of the trust. (2) A certificate stating that all the photostat copies had been obtained was also plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the search warrants under section 132(1) that the warrant issued under section 132(1) included the name of the appellant trust. Copies of the warrants/seizure memos/Panchnamas were given to Shri S.S. Tantia trustee of the appellant and the Authorised Representative Shri Suresh Ojha. A copy of the receipt issued by them to this effect was placed on record. Thus on basis of these facts recorded in the assessment order I do not find any infirmity in initiating proceedings under section 153A in the case of the appellant. On perusal of the copy of trust deed, dt. 24-10-1995, registration deed of the trust by the Sub-Registrar, Sriganganagar (Raj) dt. 9-1-1996, and the order under section 12A issued by the CIT Administration, Jodhpur dt. 30-3-1997 it is seen that no specific address of the appellant Trust has been mentioned. In all these documents it has merely been mentioned--J.R. Tantia Charitable Trust, Sriganganagar. On the date of issue of warrant under section 132(1) in this group it is seen that the appellant-trust was running twelve institutes. Given the fact that a proper address was never mentioned anywhere by the trust and the fact that the search warrant was issued in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm statement that took it is the proof of assessee being searched as a sequel to the search warrant issued in assessees name. He has referred to a Panchnama and seizure memo, in which the name of this assessee-trust does figure. But, at the same time there are 3 Panchnamas in which the name of this assessee-trust does not figure. In the Panchnama, the trusts name has been, unusually, written after the addresses(s) of the other persons against whom search warrants were verily issued. The copy of the authorization issued under section 133A dt. 26-2-2009 is also a good evidence which speaks in the favour of the assessee. It is not the case of the Revenue that the survey was converted in search by the survey party. But the Hon'ble High Court of judicature has held that the assessing officer has correctly assessed (sic-assumed) jurisdiction under section 127 vide order dt. 7-7-2009 and has dismissed assessees writ petition to that extent. 16. The next issue, raised vide ground Nos. 5 and 6, is regarding the application of sections 11 and 12 of the Act. The assessing officer has discussed this issue, in detail, at pp. 23 to 28 of his order. The gist of assessing officers observation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture account. 16.1 With the support of above mentioned observations the assessing officer has treated the assessee as an AOP and not as a trust; and has also denied the claimed exemptions available to charitable trust under the Act. 16.2 The learned Commissioner (Appeals) has decided this issue vide para 5.3 of his order, and it would be profitable to extract this entire para in this order. Para 5.3 of Commissioner (Appeals)s order reads as under: I have carefully perused the order of the assessing officer and the submissions of the Authorised Representative and do not concur with the submissions of the Authorised Representative on the ground that during the course of search and seizure proceedings certain incriminating documents were found wherein it was found that the assessee-trust was indulging in financial transactions outside the regular books of accounts. It was claiming bogus expenditure etc. The main executive trustee of the Trust, Shri S.S. Tantia has also admitted to financial irregularities in the affairs of the trust during the course of his statements taken during the course of search and subsequent to search. The trust is not a vague entity, independent of its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cided this issue vide order dt. 26-3-2013 and has treated the assessee-trust as eligible to claim benefit of sections 11 and 12. The Trust has been found to have fulfilled the requirements of application of its income and no contrary evidence to disentitle it from this benefit. The assessee-trust is containing (sic-claiming) to be registered as a charitable trust. Its objects are found to be charitable in nature. The observations made by the assessing officer are not found to be correct in the assessment order under challenge. The assessing officer is required to complete his order within the parameters of sections 11 to 13 of the Act. The assessing officer has not noted or found violations of the provisions/conditions of section 13 of the Act. So, he cannot hold the assessee-trust as not eligible for the exemptions provided under sections 11 to 13 of the Act. In this regard the decision rendered in the case of Dy. CIT v. Mrs. Mayurika S. Poddar (1997) 59 TTJ (Mumbai) 372 is relevant. In this case it has been held that the assessment of a trust has to be completed under Chapter III and its sections 11 to 13 and not under the provisions of sections 28 to 44 of the Act. It is not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in his hands. These facts we will discuss and consider while deciding Dr. S.S. Tantias case. The assessing officer assessed his income partly on substantive basis and partly on protective basis. The income which has been assessed on protective basis, on the basis of incriminating documents found from his residence and apparently pertained to this assessee-trust, has been assessed on substantive basis in the hands of assessee-trust. Likewise certain incomes which were found to relate to EEC Centre and to Dr. Mahesh Maheshwari have been assessed on protective basis in his hands and on substantive basis in the hands of EEG Centre and Dr. Mahesh Maheshwari. 17.1 The above observations shall be relevant for the case of Dr. S.S. Tantia. Thus, the addition on merits has been made on substantive basis in the hands of the assessee-trust, and on protective basis in the hands of Dr. S.S. Tantia, as discussed above. 17.2 Now, the submission of learned Authorised Representative Shri Ojha is that no such addition can be made in Trusts hands. Apart from legality, his case is that when Dr. S.S. Tantia has been found in possession of all the incriminating documents, and at the office of the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T v. Cosmopolitan Education Society: (2000) 244 ITR 494 (Raj); (2) Lancer Army School Society v. Asstt. CIT (2004) 90 TTJ (Ahd) 1024. 17.7 We are in agreement with learned Authorised Representative that Commissioner (Appeals) cannot improve the case of the assessing officer by filling in the lacunae as he is not so permitted by law. However, he can enhance the assessed income as per the procedure laid down in law. But this is not a case of enhancement of income by learned Commissioner (Appeals). We rely on the decision of Smt. Bhagwati Devi 118 Taxation 83. We have noticed that the learned Commissioner (Appeals) has given 3 instances of the transactions of purchases and sales (or expenditure) at p. 22 of his order, and has alleged that the Authorised Representative had conceded those mistakes. We have checked each entry and have found the observations to be not correct as per the record. Finally, we hold that there being no defect much less any material defect(s) in the books of accounts, they cannot be rejected. 18. Charging of interest under sections 234A, 234B and 234C is mandatory. But when no addition is sustained, no interest can be charged, under the law. The decision ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.2 Ground No. 1 is general in nature and does not require any specific adjudication. 21.3 Ground No. 2 is in respect of the jurisdiction. The Authorised Representative of the assessee argued that assumption of jurisdiction by the assessing officer is illegal and against the law. The argument is based on the reason that the assessing officer did not record any satisfaction. He also argued that the show-cause notice issued is vague. Therefore, by relying on the judgment of Supreme Court in case of Appropriate Authority of IT v. Jagdish Electricians India (P) Ltd. & Ors. (supra) in case of Ajantha Industries & Ors. v. CBDT & Ors. (supra) Nfoorul Islam Educational Trust v. CIT (supra), he has submitted that the order becomes null and void. However, the learned Commissioner (Appeals) has observed in para 2.3.2 that appellant has no objection to the proposed transfer. It was argued that the learned Authorised Representative cannot create jurisdiction by giving consent unless both the CITs--transferor and transferee-give consent to that effect. The condition precedent is that both the CITs should have given their consent. The assessee had been assessed to tax at Jaipur and his assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tantia. The appeal of Dr. S.S. Tantia has been decided also in whose case we have discussed this issue at length and accepted the appeal of Dr. S.S. Tantia on this ground that the addition has to be made in his hands. The assessee submitted a written submission dt. 3-1-2012 before the Commissioner (Appeals), which is enclosed at pp. 23 to 25 of assessees paper book. The assessee has relied on three judgments, refer p. 24 of the paper book. It is seen that two of them are the orders of Tribunal, Jaipur Bench. The orders of the Co-ordinate Benches of the Tribunal have a binding effect in view of the judgment of Hon'ble Supreme Court reported in the case of Union of India Kamlakshi Finance Corporation Ltd. (1994) 72 Taxman 43 (SC)(Mag.) and in the case of Avon Apparel v. ITO 22 Tax World 399, in which the Hon'ble Co-ordinate Bench held that the Commissioner (Appeals) was not right at all in not considering and following the decision of this Bench. It is evident that these were referred but not considered. Therefore, the addition cannot be sustained. We have already expressed similar view while deciding other appeals of this group. We, therefore, delete the impugned addition m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... changed every now and then. The law laid down in this direction by the Hon'ble Supreme Court in the case of Berger Paints India Ltd. v. CIT (2004) 266 ITR 99 (SC) is a good piece of advice, being the statement of law of the land. 23.3 After careful consideration of the rival submissions, we are inclined to reverse the finding of the learned Commissioner (Appeals) and hold that there is no ground for the assessing officer to deny exemption under section 10(22) of the Act while making the block assessment. Section 10(22) is an exemption provision and has been enacted by the legislature so as to advance the cause of education. It is well-settled that liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the ambit of the exemption clause, then it being in the nature of exemption is to be construed strictly. But once ambiguity about the applicability is visited, full play should be given to the exemption clause and it calls for a wider and liberal construction keeping in view the purpose underlying. Exemption from tax granted by the statute should be given full scope and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessing officer also records a finding that the principal and the trustees have misappropriated the funds of the school. 23.4 We may look at, the issue from another angle. Insofar as the assessee-trust is concerned, the genuineness of the trust and the objects of the trust being charitable have not been disputed by the Revenue authorities. Even if the principal and trustees have mismanaged or misutilised the funds of the school, as presumed by the Revenue, we feel this cannot be a ground for denial of exemption under section 10(22). The view taken by us is directly supported by the decision of the Rajasthan High Court in the case of Dy. CIT v. Cosmopolitan Education. Society (supra) cited by the learned counsel. In the said decision the Rajasthan High Court observed at p. 495 of the reports as under: The Commissioner (Appeals) has recorded a finding of fact; it was not known that any part of the income of the assessee-society was misutilised. For so saying, the appellate authority referred to the balance sheet. The appellate authority further noticed that the assessee-society is a registered society under the Rajasthan Societies Act and that it is also recognized by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of interest under section 234A. The charting of interest is mandatory but consequential relief is to be allowed. The view taken earlier elsewhere in this order at pp. 32-33 in para 8 will apply mutatis mutandis to the charging of interest under section 234A of the Act. 24. In the result this appeal of the assessee is partly allowed. Shyam Sunder Tantia cases 25. This is a bunch of six cross-appeals pertaining to assessment years 2007-08 to 2009-10. These are being decided simultaneously. Main facts, leading to these appeals have already been narrated. Most of the grounds raised in these appeals are common. 26. The assessee is a trustee of M/s. J.R. Tantia Charitable Trust, Sriganganagar. His wife is a partner of Sriganganagar EEG Center and Director of Sriganganagar CAT Scan (P) Ltd., Sriganganagar. The assessee is the main trustee of the trust apart from being the director in the company but has no official capacity except for overlooking its work because his wife is a partner in the firm. Statements of the assessee were recorded during search investigations and during post search. In his statements the assessee has surrendered the income relating to the trust, the firm, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be allowed as deduction under any head of income. Therefore, the deduction claimed by assessee as per books of accounts prepared in respect of unaccounted transaction is not acceptable. 29.1 The above observation is self contained in which the AO has himself admitted that the assessee has declared all the undisclosed transactions in the books of accounts Furthermore, the AO has not pointed out a single instance where any entry is not reflected in the books of accounts prepared on the basis of seized documents. Therefore, we are left with no option but to accept them as books of accounts prepared from the seized documents. We have discussed this issue in detail in case of Shri Anil Tantia. Therefore, we are accepting the said books as books of accounts and hold that provision of s. 145(3) is not applicable to the facts of this case. This issue is decided in favour of the assessee. 30. Ground No. 6 in all the years are in respect of the protective addition. 30.1 The AO has added the credit side as well as debit side of the seized documents, in the income of the assessee and has made a protective addition whereas the assessee had submitted return of income on the basis of boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature recorded under section 132, therefore, the statement cannot be interpreted in different manner. The statement has to be read as a whole and cannot be read in the piecemeal. 30.3 Per contra, the CIT (Departmental Representative) has strongly supported the order of the lower authority and also argued that the surrender was not made in true sense but it is a device adopted by the assessee to evade tax as per law. 30.4 We have considered the arguments of both sides and have also gone through the paper book and written submissions submitted before the Bench. First of all we wish to mention that the books of accounts prepared from the seized material has been accepted by us in case of Shri Anil Tantia, therefore, we are also accepting the books prepared from the seized record in this case and hold that these books cannot be rejected as the entire entries are supported by the relevant papers/documents. Revenue cannot be permitted to use a part of the statement which is suitable to it and reject the other which is detrimental to its interest. The surrender made is verifiable from the statement of Dr. Shyam Sunder Tantia. The statement has to be considered in its entirety and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entre is given in the order but the addition was made amounting to ₹ 50,000. The addition made by the AO in the hands of the assessee on protective basis is not correct, the assessee has relied upon one judgment of Hon'ble Supreme Court in case of Dr. Subhramanyam Swami v. Dr. Manmohan Singh, Civil Appeal No. 1193 of 2012. The attention was drawn towards page No. 42 of the judgment, though, the judgment is not applicable in toto, but inspiration can be drawn therefrom that the doer of an act should be held responsible and not the supervisory authority. 30.9 This Bench has decided the case of Dinesh Tobacco Industries on 22-3-2013 in ITA No. 186/Jd/2011 (supra). Though, the matter is in respect of the company wherein the search was conducted and papers related to the company were found and the director surrendered the income in his own hands the Hon'ble Bench accepted the income as belonging to the director and not the company, therefore, the case of Dinesh Tobacco Industries (supra) is applicable. The addition made in the hands of the assessee as protective should be taxed on substantive basis. The statement recorded also cannot be interpreted in different manner and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mon are decided as above and accept this ground. 33. Ground Nos. 7 and 9 are related to unexplained jewellery. 33.1 The AO while deciding the case of the assessee not accepted the jewellery declared by the assessee. The ITO made addition of ₹ 74,97,300. The additions were made on the basis of uncounted jewellery as admitted vide question Nos. 36 & 37 of the statement dt. 27-2-09. The assessee submitted explanation in respect of the jewellery before the AO as well as Commissioner (Appeals). The position of the jewellery found during the search is as under: Jewellery found during the search The Commissioner (Appeals) has accepted a part of the jewellery and as per the observation made at p. 25, he has decided as under: Thus gold jewellery diamond silver of value of ₹ 52,53,415 is to be taken as unexplained as against ₹ 74,97,300 added by the AO. The claim of the appellant is allowing credit of income offered in respect of transaction with Dr. is rejected. Since such income is assessed in the hands of appellant oh protective basis. However, out of the income assessed on the basis of loose papers, there is an availability of funds of ₹ 17,27,678 As per th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at p. 18 of the order in para 11. Before the Commissioner (Appeals) It was argued that no such income has been directly accrued or received by the appellant at all. It was also argued before the CIT(A) that if any addition is made on account of income from commission set off of the same be given to the appellant against the unexplained expenditure found in the search. The Commissioner (Appeals) rejected the ground and observed that if in kind as per the directions of the appellant received, the same is still liable to be assessed in his hands. The argument of set off was also discarded. The assessee submitted the same ground before the bench. In the written submission at page 16 also reproduced the question and answer given by Dr. S.S. Tantia in which bifurcation of the amount is given. It was argued that the addition is illegal, the amount have already been surrendered in the books prepared from seized material. 35.2 It was alternatively argued that only ₹ 80,000 is relevant to the assessment year 2009-10 and rest of the amount of ₹ 2,00,000 belongs to the financial year 2006-07 and ₹ 2,17,015 belongs to the financial year 2007-08. Therefore, addition to the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of learned Commissioner (Appeals) Bikaner, dt. 1-1-2013. 37.1 Briefly stated, the facts of this case are that the assessee filed return of income (ROI) on 30-9-2008 declaring total income of ₹ 3,30,580. As a result of search, notice under section 153A was issued to this assessee by the Asstt. CIT, Central Circle, Bikaner. Subsequently, the action initiated under section 153A was dropped by the AO himself. However, assessment proceedings under section 147 read with section 148 were initiated on 31st Dec, 1010 after recording the reasons for escapement of income chargeable to tax. The assessee filed return on 29-3-2011 in response to notice under section 148. Assessment was completed vide order dt. 16-12-2011 at a total income of ₹ 52,92,680 as the AO made various additions amounting to ₹ 4,15,132, ₹ 5,00,000, ₹ 2,20,787, ₹ 2,65,051 and ₹ 35,61,130 on different counts. The assessee went in the appeal and the learned Commissioner (Appeals) has deleted additions and has also declared the action taken under section 147/148 as illegal. However, he has sustained the addition of ₹ 2,45,374 being the amount related to the surrender ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
