ANIRUDDHA BOSE,J. - (1.) The subject of this appeal is direction made by the Assessing Officer in his assessment order dated 31st December 2008 for addition of Rs. 6,08,43,727/- to the assessee's declared income for the assessment year 2007-08. According to the Assessing Officer, the said sum represented Rs. 5,10,32,507/- as undisclosed purchase and Rs. 98,10,222/- as unexplained expenditure made in the assessee's show room. This assessment was made under section 144 of the Income Tax Act, 1961. The assessment order contains finding and directions on certain other issues as well, but in this appeal, we are concerned with only this part of the finding and direction of the Assessing Officer. Such addition was directed by the Assessing Officer on the basis of a document in the form of a sheet found in course of a search and seizure operation under Section 132 of the Act, which contained certain figures scribbled on it. This document had been marked (Page-7 BRI/20) by the Assessing Officer. The nature of the information contained in the document and the inference of the Assessing Officer from such information would be revealed from the following passage of the assessment order:- "No explanation whatsoever was submitted by the assessee and also no Books of a/cs and supporting evidences were produced. It is seen from the above page of the seized document that the assessee had made a purchase of Rs. 7,77,35,924.55 during the year against which it made a payment of Rs. 6,43,28,726.61. Similarly, it made a sale of Rs. 3,11,85,100.90 against which the assessee company received payment of Rs. 2,63,58,743.31. On perusal of the e-return of the assessee for the A.Y. 2007-08, it is found that the assessee has shown a sale of Rs. 3,19,13,094/- and purchase of Rs. 2,67,02,417/-. It is clearly shows that the assessee company has grossly suppressed its purchase, which comes to Rs. 7,77,35,924.55 - Rs. 2,67,02,417/- = Rs. 5,10,33,507.55. Survey under section 133A of the I.T. Act, 1961 was also conducted on the date of search at the godown and show-rooms of the assessee where huge stock were found and inventoried. The assessee neither submitted any explanation on the stock found during the course of survey nor produced any Books of a/cs, stock registers and supporting evidences to explain the same. Under the circumstances, I find no other alternative but to treat the purchase of Rs. 5,10,33,507/- as the undisclosed purchase and investment in stock of the assessee and add the same to total income of the assessee. Further, it is seen from the seized document that the assessee has made investment in showroom on decoration, electrical fittings, furniture and other assets. The assessee has furnished any copy of the Audited Balance-sheet etc. despite request being made in writing vide notice dated 12/9/2008. Therefore, the e-return of the assessee was examined but no such expenditure/investment was found therein. The assessee also did submit any explanation and produce any evidence, Books of a/cs etc. Under the circumstances, I do find no other alternative but to treat the expenditure shown by the assessee as unexplained expenditure and add the same to the total income of the assessee. The addition comes to Rs. 6,84,768 + Rs. 2,70,677/- + Rs. 1,82,851/- + Rs. 36,96,085/- + Rs. 7,00,000/- + Rs. 1,50,000/- + Rs. 1,30,694/- + Rs. 2,95,145/- + Rs. 37,00,000/- = Rs. 98,10,220/-. So, the total addition on the basis of page - 7 of the seized document comes to Rs. 5,10,33,507/- + Rs. 98,10,220/- = Rs. 6,08,43,727/-"
(2.) The assessee preferred appeal against the assessment order. The Commissioner of Income Tax (Appeals), Central - III, Kolkata sustained the appeal of the assessee after obtaining a remand report from the Assessing Officer followed by a clarification from the said authority. In the appellate order of the Commissioner passed on 30th December, 2011, it was, inter alia, observed and held:- "9.4. In this connection certain clarifications were sought from the A.O. relating to the remand report furnished by him. To put the matter in proper perspective the relevant portion of my letter dated 13.12.2011 is reproduced below: "In this case you have submitted a remand report dated 29.03.2011. Ground No. 3(v) of the appeal relates to additions of Rs. 5,10,32,507/- and Rs. 98,10,222/- on account of undisclosed purchase and unexplained expenditure made in show room respectively. These additions have been made on the basis of a seized paper BRI/20 Page- 7. In your remand report you have stated that the figures regarding purchase, payment and sales could be linked with stock discrepancy detected in the course of survey. Neither quantum of stock discrepancy detected and worked out was discussed in the assessment order. In this connection you are requested to clarify after examining the seized documents whether any stock discrepancy was detected during the course of survey. You are also requested to state whether any statement of the appellant regarding stock found during the course of survey was recorded. Further, you are requested to state whether any statement of the appellant has been recorded regarding the contents of the seized documents BRI/20 Page-7 during the course of search or during post search investigation. Copies of relevant statements and stock inventory may please be enclosed." 9.5 The A.O. vide his letter dated 21.12.2011 responded to this letter by more or less reiterating the facts stated in the earlier remand report dated 29.3.2011. However, he remained silent about my query as to whether any statement of the appellant has been recorded regarding the contents of the seized documents BIR/20 Page - 7 during the course of search or during the course of post search investigation which leads me to presume that no such statement was recorded regarding the contents of this seized document. 9.6. I have carefully considered the submission of the appellant, the assessment order, both the remand reports of the A.O. and the rejoinder of the appellant. This document appears to contain some rough notings. It is undisputed fact that it does indicate the name of the assessee or any other concern. In the remand report the A.O. has observed that certain 'pay', 'pur', 'sale' figures have been jotted down but neither any date nor any year to which the document relates have been mentioned specifically except a short mention of '06-07'against one row of 'pay' and 'pur'. The appellant denied the ownership of such seized document and further contended that there being no mention of specific date or specific year the document cannot be relied upon for any addition. After perusing this document and all the facts material to issue I find that this is only a 'dumb document' on the basis of which no interpretation can be made to establish the ownership of such document and the period to which it pertains. This document has evidentiary value only if it can be corroborated by any other cogent material or evidence. In the assessment order no definite finding regarding stock discrepancy detected in the course of survey was spelt out although generalized comment was made regarding discrepancy in stock. In the remand report the A.O. has clearly stated that the figures regarding purchases, payment and sales could be linked with stock discrepancy detected in the course of survey, neither quantum of stock discrepancy detected and worked out was discussed in the assessment order. Later the A.O. was requested to examine the seized documents and clarify whether any stock discrepancy was detected during the course of survey. However, in the second remand report also no such stock discrepancy was pointed out. Secondly, the A.O. was also asked to clarify whether any statement of the appellant was recorded regarding the contents of the seized documents BRI/20 Page - 7 during the course of search or post search investigation. However, the A.O. has remained silent on this point. I found that a statement of Sri. Subrata Banik, Director of the assessee company was recorded during the course of search and seizure operation on 07.11.2006. In this statement although questions were asked about several seized documents including Page - 9 of seized document BRI/20, no question was asked about the seized document BRI/20 Page - 7 which implies that this page was considered important at the point of time. From the above discussion it is clear that no cogent material was unearthed during the search or post search investigation or assessment or remand proceedings to suggest that the assessee has indulged in making huge purchases in excess of Rs. 5 Crores outside its regular books of accounts. Similarly no cogent material has been adduced at any point of time to suggest that amounts have been spent on show-room decoration outside the books of accounts. I have already given a finding that the seized document BRI/20 Page - 7 is a dumb document. Since no cogent material could be adduced by the A.O. at any point of time to corroborate either the fact of out of book purchases or out of book expenses on show-rooms, no addition on the basis of just this seized document is justified. Therefore, I hold that the additions of Rs. 5,10,33,507/- as undisclosed purchase and Rs. 98,10,220/- as unexplained expenditure are justified and the A.O. is directed to delete the same."
(3.) The Revenue preferred appeal before the Income Tax Appellate Tribunal. In the order passed on 4th December, 2015, the Income Tax Appellate Tribunal "B" Bench, Kolkata confirmed the order of the Commissioner. This order of the Tribunal is under appeal before us. In the order under appeal, inter alia, it was observed by the Tribunal:- "9. We find that such additions have been made on the basis of pg-7 of BRI/20 which comprises of loose sheets of pages 1-89. Copy of relevant loose sheet-7 on the basis of which addition has been made is enclosed in assessee's paper book at page-85. From the perusal of which, it is seen that in this sheet certain figures have been jotted but it neither gives any date nor gives any year to which it is related except a short mention of 06-07 against one particular item and it does indicate any name which proves ownership. As regards stock found in the survey, the entire stock was found to have been duly accounted for and AO having specifically pointed out as to how much unaccounted/un-disclosed stock was found during survey no adverse inference could be drawn only on the basis of stock arises in course of survey. 10. Similarly, the addition of Rs. 98,10,220/- has been made on the basis of same seized paper comprising of Rs. 6,84,768/- + Rs. 2,70,677/- + Rs. 1,82,851/- + Rs. 36,96,085/- + Rs. 7,00,000/- + Rs. 1,50,000/- +Rs.1,30,694/- + Rs. 2,95,145/- + Rs. 37,00,000/-. In this connection, it was argued that the said seized paper indicated the amounts but any year or any date to which if relates and in absence of which it is wholly impossible to reconcile the same and in any case as stated above in detail, here being no date or year in respect of any such amount, it was wholly wrong on the part of the AO to have assumed/presumed that it related to year ended 31.03.2007 relevant to assessment year 2007-08. It is a fact on record that the seized document BRI/20, page No. 7 do specifically mention the name of the assessee company or the dates to which the figures marked as certain 'pay', 'pur', 'sale' e.t.c. relate. It is also a fact on record that while passing the assessment order, no definite finding regarding stock discrepancy detected in course of the surveys has been spelt out in the order. The figures regarding purchases (mentioned as 'pur'), payment (mentioned as 'pay') and sales could be linked with stock discrepancy detected in course of survey, neither quantum of stock discrepancy detected and work out of such detection was discussed in the assessment order. Here also, the AO having failed to pin point the value of any stock found during survey as unaccounted or un-disclosed it was argued that no addition cold be made on this account.";