IN INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER ITA No. 168 to 171/JP/2016 Assessment Year :1998-99 to 2001-02 Shri Roshan Lal Soni cuke ITO Near Hero Show Room Vs. Ward- Behror Kotputli, Jaipur Alwar PAN/GIR No.: AGCPS 8689 K Appellant Respondent Revenue by:Shri R.A. Verma,Addl.CIT - DR Assessee by: None Date of Hearing : 28/09/2016 Date of Pronouncement : 30 /09/2016 ORDER PER BHAGCHAND, AM assessee has filed four appeals against separate orders of ld. CIT(A),Alwar dated 22-12-2015 for assessment years 1998-99 to 2001-02 raising therein following grounds of appeal. AO has erred in imposing penalty u/s 271(1) of Rs. 5560 (A.Y. 1988-99), Rs. 30,170 (A.Y. 1999-2000), Rs. 1,49,100/- (A.Y. 2000-01 and Rs. 1,07,980 (A.Y. 2001-02) on account of 2 ITA No. 168/JP/2016 Shri Roshan Lal Soni vs. ITO, Ward- Behror, Alwar inaccurate particulars of income. Ld. CIT(A) has erred in confirming same. 2.1 None appeared on behalf of assessee in spite of service of notice of this hearing. Consequently, Bench is left with no alternative but to decide appeals on merits, ex parte qua assessee s written submission, after hearing ld. DR and after perusal of materials available on record. 2.2 It is noted from written submissions of assessee dated 22-09-2016 in which assessee prayed that quantum additions of assessee relating to above appeals have been decided by Coordinate Bench in favour of assessee. Hence, penalty confirmed by ld. CIT(A) should be deleted. 2.3 ld. DR relied on orders of lower authorities. 2.4 I have heard ld. DR and perused materials available on record including written submission of assessee. It is observed that issue of quantum was decided in favour of assessee by Coordinate Bench vide its order dated 04-08-20116 in ITA No. 677 to 3 ITA No. 168/JP/2016 Shri Roshan Lal Soni vs. ITO, Ward- Behror, Alwar 680/JP/2011 for assessment year 1989 to 2001-02.2007-08 by observing as under:- 5.10 We have heard rival contentions and perused material available on record. It is noted that Shri Suresh Soni son of assessee in his statement recorded on 10.08.2001 i.e. day of survey vide answer to Q. No. 13 & 14 has stated that investment in construction of house and in unaccounted stock of gold and silver, was out of undisclosed income of purchase and sales relating to M/s Roshan Lal & Sons Jewellers, based on these loose papers. Shri Suresh Soni in his own statement recorded u/s 131 on dated 21.08.2001 confirms his son statement and in answer to Q. No. 2, he stated that Ann. 8, 9 & 12-17 are related to business M/s Roshan Lal & Sons and entries mentioned therein are outstanding recoveries from unrecorded sales. undisclosed investment in house was undisclosed business income. Whatever undisclosed income was generated out of unrecorded sales was converted into cash and stock. At both occasions, he stated figure of undisclosed stock of Rs.26.05 Lacs and investment in house at Rs.5 Lacs and other unexplained expenditure/asset also. Thus, recoveries from Outstanding debtors stood invested/converted into unexplained investment totalling to Rs.36,13,140/- which, admittedly has already been 4 ITA No. 168/JP/2016 Shri Roshan Lal Soni vs. ITO, Ward- Behror, Alwar disclosed by assessee separately and got taxed in A.Y.2002-03. Further, it is noted that fact of availability of recoveries made from debtors is also evident from confirmations from various debtors, wherein they have stated that they got ornaments manufactured from assessee, mentioning amount thereof and that payment thereof has been made within maximum period of two months from date of such purchase/making. ld AR further submitted that AO in all years while making addition of outstanding debtors alleged that this was admitted by appellant in his statement recorded on 10.08.2001. At same time, other part of statements where assessee has repeatedly submitted that unexplained assets already disclosed at Rs.36,13,140/- came out of recoveries from outstanding debtors and income there from, as detailed in our submission dt. 11.03.2016 for other years, must have been accepted as well. 5.11 Hon ble Supreme Court in case of Anantharam Veerasinghaiah (supra) has held as under: Now it can hardly be denied that when 'intangible' addition is made to book profits during assessment proceeding, it is on basis that amount represented by that addition constitutes undisclosed income of assessee. That income, although commonly described as 'intangible', is as much part of his real income as that disclosed by his account books. It 5 ITA No. 168/JP/2016 Shri Roshan Lal Soni vs. ITO, Ward- Behror, Alwar has same concrete existence. It could be available to assessee as book profits could be. There can be no escape from proposition that secret profits or undisclosed income of assessee earned in earlier assessment year may constitute fund, even though concealed, from which assessee may draw subsequently for meeting expenditure or introducing amounts in his account books. But it is quite another thing to say that any part of that fund must necessarily be regarded as source of unexplained expenditure incurred or of cash credits recorded during subsequent assessment year. mere availability of such fund cannot, in all cases, imply that assessee has not earned further secret profits during relevant assessment year. Neither law nor human experience guarantees that assessee who has been dishonest in one assessment year is bound to be honest in subsequent assessment year. It is matter for consideration by taxing authority in each case whether unexplained cash deficits and cash credits can be reasonably attributed to pre-existing fund of concealed profits or they are reasonably explained by reference to concealed income earned in that very year. In each case, true nature of cash deficit and cash credit must be ascertained from overall consideration of particular facts and circumstances of case. Evidence may exist to show that reliance cannot be placed completely on availability of previously earned undisclosed income. number of circumstances of vital significance may point to conclusion that cash deficit or cash credit cannot reasonably be related to amount covered by intangible addition but must be regarded as pointing to receipt of undisclosed income earned during assessment year under consideration. It is open in to revenue to rely on all circumstances pointing to that conclusion. 5.12 Hon ble Rajasthan High in case of Tyaryamal Bal Chand (supra) has held as under: 6 ITA No. 168/JP/2016 Shri Roshan Lal Soni vs. ITO, Ward- Behror, Alwar It is clear from law discussed above, that ITO was within his right to tax amount of Rs. 16,950 as income from undisclosed sources. Even though he had added amount of Rs. 18,117 in addition to profit shown by respondent-firm in their account books. However, in present case, respondent was well within his rights to plead that this amount of Rs. 16,950 is covered from intangible income assessed at Rs. 18,117 and added in income of firm and apart from this, since for last preceding 3 years, substantial additions amounting to Rs. 32,797 have been added, amount of Rs. 16,950 could be taken as having come out of such intangible additions. In case of Anantharam Veerasinghaiah & Co. (supra), their Lordships of Supreme Court have held that additions made to book profits in earlier years are real income and can be treated as available for use in subsequent years or even in same year. 5.13 In instant case, surrender of Rs 36,13,140 during AY 2002-2003 relates to stock accumulated out of income earned from sale/purchase of gold and job work charges of Rs 26,50,000, cash found during survey of Rs 63,140, investment in house of Rs 5,00,000, trade debtors outstanding of Rs 3,00,000 and loan and interest of Rs 1,00,000. In statement of Shri Suresh Soni, son of assessee and which is subsequently confirmed by assessee in his own statement, it has been mentioned that investments made in stock, cash found during survey, etc are out of same business receipts and trade debtors. Nothing has been brought on record by Revenue in terms of any tangible evidence to prove otherwise. surrender of Rs 36,13,140 and additions of trade debtors over all these years 7 ITA No. 168/JP/2016 Shri Roshan Lal Soni vs. ITO, Ward- Behror, Alwar amounting to Rs 9,19,191 have their origin in terms of statements recorded of Shri Suresh Soni, assessee as well as same set of documents in terms of katuria note book and loose papers found during course of survey which have to be read and considered in entirety and which prove that quality of trade debtors in all these years and surrender of stock and cash and even investment in house is not different. In entirety of facts and circumstances of case, where realisation from sales for year and previous years have been invested in stock of gold and house property and which have already been brought to tax as surrendered income, same trade debtors cannot be brought to tax again in hands of assessee. In light of that and respectfully following decisions of Hon ble Supreme Court in case of Anantharam Veerasinghaiah (supra) and Hon ble Rajasthan High Court in case of Tyaryamal Bal Chand (supra), we delete additions made by AO in all these years totalling to Rs 9,19,191. Hence, ground taken by assessee is allowed in all years under consideration. Taking into consideration above facts and circumstances of case and also order of Coordinate Bench in ITA No. 677 to 680/2011 for assessment year 1998-99 to 2001-02 as to deletion of additions in above quantum appeals of assessee, I direct to delete above 8 ITA No. 168/JP/2016 Shri Roshan Lal Soni vs. ITO, Ward- Behror, Alwar penalties imposed u/s 271(1) by AO and orders of ld. CIT(A) are reversed. Thus appeals of assessee are allowed. 3.0 In result, appeals of assessee are allowed Order pronounced in open court on 30 /09/2016 Sd/- (Bhagchand) Accountant Member Jaipur Dated:- 30 /09/ 2016 Copy of order forwarded to: s 1. Appellant- Shri Roshan Lal Soni, Kotputli 2. Respondent- ITO, Ward- Behror ,Alwar 3. CIT(A). 4. CIT, 5. DR, ITAT, Jaipur 6. Guard File (ITA No. 168 to 171/JP/2016) By order, Assistant. Registrar Roshan Lal Soni v. ITO Ward- Behror, Alwar