ITAT KOLKATA BENCH ‘A’
Vivek Kumar Kathotia
versus
Deputy Commissioner of Income-tax
IT(SS)A Nos. 1 to 4, 6 & 7 (Kol.) of 2011
[ASSESSMENT YEARS 2003-04 TO 2008-09]
JULY 29, 2011
ORDER
Mahavir Singh, Judicial Member
IT(SS)A Nos. 1 to 3/Kol/2011 and IT(SS)A Nos. 4 and 6/Kol/2011 and IT(SS)A No. 7/Kol/2011 by assessee and IT(SS)A No. 10/Kol/2011 by Revenue are arising out of the orders of CIT(A), Central-1, Kolkata in Appeal Nos. 107 to 109, 110, 111 and 112/CCVI/CIT(A)-C-I/2009-10 vide dt. 26th Nov., 2010 and 29th Nov., 2010 and 30th Nov., 2010. Assessments were framed by Dy. CIT, CC-VI, Kolkata under s. 144/153A of the IT Act, 1961 (hereinafter referred to as “the Act”) for asst. yrs. 2003-04 to 2008-09 vide his orders dt. 31st Dec. 2009.
2. In respect to IT(SS)A Nos. 1, 2 and 3/Kol/2011 of assessee’s appeals for asst. yrs. 2003-04 to 2005-06, the learned counsel for the assessee stated that there is no revenue implication and Revenue is not in appeal against deletion of addition by CIT(A). Hence, he is not interested in adjudication of these three appeals and is not pressing the same. As the learned counsel for the assessee, on instructions of assessee, has not pressed these three appeals due to no revenue implication, same are dismissed as not pressed.
3. Effective interconnected issues in IT(SS)A Nos. 4, 6 and 7/Kol/2011 for asst. yrs. 2006-07 to 2008-09 of assessee’s appeal are against orders of CIT(A) confirming actions of AO as under :
(i) Rejection of books of account, revised balance sheet and P&L a/c for asst. yrs. 2006-07, 2007-08 and 2008-09;
(ii) Rejection of entries of seized documents marked as RM-1 to RM-4 by misinterpreting the provisions of s. 292C of the Act;
(iii) Confirming additions to the extent of Rs. 6,90,00,000 and Rs. 90,00,000 in asst. yrs. 2006-07 and 2007-08 respectively on account of undisclosed investment in property at Sector-V, Salt Lake, Kolkata disregarding the fact that the source of investment is explained on the basis of entries made in RM-1 and RM-2, the seized documents, whereby the claim made by assessee regarding sale of paintings at Rs. 7.25 crores.
For this, the assessee has raised following grounds in IT(SS)A No. 4/Kol/2001 for asst. yr. 2006-07 :
“2. On the facts and in the circumstances of the case, the learned CIT(A) erred in disregarding the noting recorded in the seized documents marked as RM-1 and RM-2 by misinterpreting the provisions of s. 292C of the IT Act, 1961 and thereby in rejecting the claim of the appellant about sale of paintings at Rs. 7,25,00,000.
3. On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming the rejection of books of account of the assessee.
4. On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming the addition on account of the alleged unaccounted payment to Sr. Bagga to the extent of Rs. 6,00,90,000 for the purpose of so-called undisclosed investment as recorded in seized document marked as ‘RM/4’ without considering the source of the said investment as recorded in the revised balance sheet for financial year 2005-06 filed by the appellant during the course of the assessment proceedings.”
4. In IT(SS)A No. 6/Kol/2011 for asst. yr. 2007-08, assessee has raised following grounds :
“2. On the facts and in the circumstances of the case, the learned CIT(A) erred in disregarding the noting recorded in the seized documents marked as RM-1 and RM-2 by misinterpreting the provisions of s. 292C of the IT Act, 1961 and thereby in rejecting the revised balance sheets and P&L a/cs for the earlier years filed during the course of the assessment proceedings.
3. On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming the rejection of books of account of the assessee.
4. On the facts and in the circumstances of the case, the learned CIT(A) erred in rejecting the claim of the appellant about the source of the current investment of Rs. 90,00,000 in property at Salt Lake from sales of diamonds, gold and paintings made during earlier years and duly recorded in the above-mentioned seized documents.
5. On the facts and in the circumstances of the case, the learned CIT(A) erred in not only confirming the addition of Rs. 75,10,000 made by the AO towards alleged undisclosed investment in property but also in enhancing the same to Rs. 90,00,000.”
5. In IT(SS)A No. 7/Kol/2011 for asst. yr. 2008-09 of assessee’s appeal, issue raised is regarding making fresh addition of Rs. 18.60 crores, as against undisclosed cash receipt added by AO at Rs. 19,07,35,000, on account of alleged undisclosed investment in shares of different companies. The assessee has raised following grounds :
“2. On the facts and in the circumstances of the case, the learned CIT(A) erred in disregarding the noting recorded in the seized documents marked as RM-1 and RM-2 by misinterpreting the provisions of s. 292C of the IT Act, 1961 and thereby in rejecting the revised balance sheets and P&L a/cs for the earlier years filed during the course of the assessment proceedings.
3. On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming the rejection of books of account of the assessee.
4. On the facts and in the circumstances of the case, the learned CIT(A) erred in rejecting the claim of the appellant about the exempted receipt of Rs. 19,07,35,000 declared on account of sales of diamond and gold duly recorded in the above-mentioned seized documents, and thereby in confirming the addition of Rs. 18,60,00,000 on account of alleged of undisclosed investment in shares of different companies.”
These being common and interconnected issues, we will deal with them by consolidating the same.
6. Brief facts leading to the above issues are that search and seizure operations under s. 132 of the Act was carried out in Fort Group of cases on 28th Feb., 2008. The assessee, director in Fort Projects (P) Ltd. was also searched, who is a resident of Ballygunge Park, Kolkata-19. During the course of search on assessee group, cash, jewellery, silver utensils and various documents seized as RM-1 to RM-5 were found. As alleged by assessee, seized documents annexed as RM-5 was forcibly got manufactured by search party of IT Department and assessee was forced to write seized document RM-5 and make an exorbitant disclosure of Rs. 9.02 crores on the basis of the same in respect of on-money receipts. According to assessee, this disclosure was made to buy peace and to avoid unnecessary and protracted litigation in the matter. Subsequently, entire alleged on-money receipts of Rs. 9.02 crores was offered as undisclosed income in the return of income filed in response to notices under s. 153C of the Act for asst. yr. 2008-09 in the case of Fort Projects (P) Ltd. and paid taxes thereon. Simultaneously, survey action under s. 133A of the Act was also conducted in the office premises of group companies, from where books of account/documents were impounded. In consequent to search action, notice under s. 153A was issued on 1st Aug., 2009 and assessee filed his return under s. 153A on 28th Jan., 2009 declaring year-wise income (for the sake of clarity, we want to reproduce the income assessed by AO under s. 153A also) as under :
