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2015 (12) TMI 1504 - ITAT DELHI

2015 (12) TMI 1504 - ITAT DELHI - TMI - Undisclosed receipts through post office - source of information - CIT(a) deleted the addition - Held that:- CIT (A) rightly observed that third party information is important for the purposes of assessment but it should be corroborated by relevant documentary evidences otherwise it cannot be acted upon to saddle the assessee with additions. Though the source of the information is a government organization, like in this case is a post office, the correctne .....

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us, the contention of the assessee that there can be posting or compilation or totaling error cannot be ruled out unless the AO had called for the records from the post office and verified the same. Without doing the said exercise, the AO ought not to have made the addition simply by relying on the information given by the post office, when the assessee also has documentary evidence certified by the Post Master to support its claim. We further take note of the fact that the Post Master issued th .....

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filed by the AO along with the appeal, vide letter dated 17.02.2005, the post office has brought to the notice of the AO that the documents for a period from 1999 to March 2002 has been weeded out. It was clearly mentioned that documents pertaining to period from April 2003 to July 2004 comprising of 1353 pages has been taken away by the Investigation Officer, C.O. Dalanwala, Dehradun on 04.09.2004. So, from the said letter, we can safely infer that records pertaining to the relevant assessment .....

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statement on oath of Shri Lalit Mohan Joshi, the Post Master was recorded on 25.02.2009 which has been incorporated verbatim at page 3 of the ld. CIT (A)'s order wherein he simply states that the information given by them must have been based on the basis of cash book and money order payment book and could not be based on wrong facts and the documents have been weeded out. So, we find that the AO, during the original assessment, could have summoned the documents and could have verified the verac .....

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revenue - ITA No. 3633/Del./2012 - Dated:- 20-11-2015 - A. T. Varkey, JM And O. P. Kant, AM For the Appellant : Shri V K Tulsiyan, CA For the Respondent : Shri P Dam Kanunjna, Sr. DR ORDER Per A. T. Varkey, Judicial Member This appeal, at the instance of the revenue, is directed against the order of the Commissioner of Income-tax (Appeals)-I, Dehradun dated 31.03.2006 for the assessment year 2003-04. 2. The facts of the case as emanating from the CIT (A) order are that the assessee company was e .....

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as in receipt of information from the Senior Post Master (HSG)- I, Mukhya Dak Ghar, Rishikesh that from the account of the assessee company maintained in the post office, payment of ₹ 11,61,30,008/- was made to Mr. R.K. Gupta, Managing Director (MD) of the assessee company and from the sister concern during the previous year. A monthly break-up of the aforesaid payment has been given by the CIT (A) in page nos.1 & 2 of the impugned order. Since there was a difference of ₹ 36,72,0 .....

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t of the sister concern; and separate receipts as issued by the Post Office (PO) daily were available with the assessee in which the name of the concern has been mentioned separately; and in order to corroborate the aforesaid modus operandi, the assessee produced few receipts issued by the post office daily before the AO. According to the assessee, separate PO receipts were issued by the Post Master on each and every day for the collection in both the concerns separately and separate books of ac .....

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explanation of the assessee and according to him, Mr. R.K. Gupta, the MD of the assessee company had received the money on behalf of the assessee and its sister concern and observed that the explanation of the assessee company to explain the difference of ₹ 36,72,074/-, was not acceptable and it did not make any difference whether the receipt was computed on daily basis or monthly basis. Thus, when there was a difference in the gross receipt of ₹ 36,72,074/- and since the assessee f .....

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ee's figure was based on the daily certificate of payment issued by the very same post office which had communicated to the AO the figures computed based on monthly basis. Taking note of this discrepancy, the ld. CIT (A) directed the AO to seek clarification from the post office and to furnish report to him. Further, it had been taken note by the ld. CIT (A) that the AO, pursuant to the said direction of the CIT (A), had recorded the statement of Shri Lalit Mohan Joshi, the Post Master at th .....

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ds cannot be made available now because they have been weeded out as per the departmental rules. Since the information was made available on the basis of cash book and money orders payment book, it could not be based on wrong facts. But no documentary evidence can be made available to substantiate it because the same has been weeded out." 2.3 In his report to the ld. CIT (A), the AO took note of the fact that since the financial year concerned was 2002-03 (AY 2003-04), according to him, the .....

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two weeks after consulting Senior Superintendent of Post, Dehradun, however, he did not turn up before him. So the ld. CIT (A) noted that after the said assurance by the Post Master, three years had lapsed and no update on this information had come back to his office from the AO. In the said circumstances, the ld. CIT (A) thought it prudent to go ahead with the appeal and adjudicate the issue before him. 2.4 Thereafter, we find that the ld. CIT (A) has adjudicated the issue holding as under :- & .....

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lso important to note that the information supplied by the post office to the AO was monthly compilation of its transactions with the assessee which were done on day-to-day basis. Thus, It was a secondary document and there could be posting or compilation or totaling error therein. The certificates issued by the same post office to the assessee, on the other hand, constitute primary evidence in so far as they were issued on day-tobasis in the regular course of its business and each such certific .....

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sis to hold that the extra amount came to the assessee and not to the sister concern. The same AO assessed both the concerns if he did not take an adverse view in the case of the sister concern, it is difficult to appreciate how he could do so in this case. It is also noticed that the post office mentioned that the payments had been made to Mr. R.K. Gupta on behalf of said two concern In the case of B.S.Gupta Charitable society, the AO accepted the assessee's figure. In this case, the assess .....

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nt was received and appropriated by Mr. Gupta and should be taxed in his hands only as his income. If that situation arises, the AO may initiate proceeding u/s 147 of the I.T. Act in his case in accordance with the provision of section 150 r.w.s.153(3) of the I.T. Act. As far as this case is concerned, there no justification for the addition. In view of the discussion above, the addition is deleted." 3. Aggrieved by the said decision of the ld. CIT (A), the revenue is in appeal before us by .....

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of such amount). 3. The order of the Ld. CIT(A) be set aside and that of the AO be restored." 4. The ld. DR while assailing the impugned order of the ld. CIT (A), wondered as to how there can be such a discrepancy to the tune of ₹ 36,72,074/- being variation in the accounts maintained by the assessee and that furnished by the post office. The ld. DR contended that whether the money is accounted for daily or monthly basis, it does not make a difference when calculating the yearly rece .....

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ed since there is information directly from the post officer itself stating that there is a difference of ₹ 36,72,074/-. According to him, therefore, the AO correctly added this amount as unaccounted income in the hands of the assessee. The ld. DR contended that the ld. CIT (A) erred in deleting the said addition simply because the Post Master did not turn up to give certain clarification regarding data stored in computer cannot be a ground to delete the addition made by the AO. Therefore, .....

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first the patients suffering from Epilepsy need to be thoroughly checked by the Doctors and thereafter, medicines are prescribed for 3 - 5 years which the patients have to consume without a break. Since the patients are from all around India, the medicines are sent by post through VPP and the amount collected is remitted through the post office by money orders. It was pointed out by the ld. AR that the daily receipts of money order are issued by the PO separately for the assessee and society. Th .....

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ing to him, the AO erred in making the addition of ₹ 36,72,074/- which is based on information only from the post office which is nothing but a mixed up receipts for both the concerns. The ld AR pointed out that Ld. CIT (A), during the appellate proceedings, had directed the AO to take evidence from the Post Master to clarify the issue as to whether the Post Master has submitted that the records pertaining to the relevant assessment year for which the Post Master replied that the said docu .....

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information has been given by the post office, the addition cannot be made when the same post office has issued certificates based on which the assessee has calculated its income. In the absence of any evidence to support the impugned addition, the ld. CIT (A) has rightly deleted the said addition. 5.1 The ld. AR submitted that the CIT (A) has passed an order u/s 150 read with section 153 (3) wherein it has been specifically observed that in case if there is any information from the post office .....

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from Epilepsy. The assessee company has a sister concern known as B.S. Gupta Medical Charitable Society which is for poor people suffering from the same disease. We find that once patient suffering from Epilepsy contacts them and a thorough check up is done by the Doctors and then they advice the patients either to take medicine for 3 to 5 years depending upon the seriousness of the disease, which the patients have to consume without a break. The assessee company caters for patients who can affo .....

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whereas the assessee received the same information on daily basis and accordingly, the ld. CIT (A) asked the AO to seek clarification from the post office in this regard and accordingly, the AO recorded the statement of Shri Lalit Mohan Joshi, the Post Master on 25.02.2009 u/s 131 of the Act. We further take note the said Post Master submission that, "The information supplied by the post office to the AO must have been based on the record available at that time. As regards the discrepancy o .....

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hat the AO tried to get the clarification on the aspect of weeding out and asked the Post Master to produce the information available from the computer of the Post Office, Rishikesh. However, we find that the Post Master did not furnish with the said information and so the AO could not get any documentary evidence in this regard. We find that the ld. CIT (A) rightly observed that third party information is important for the purposes of assessment but it should be corroborated by relevant documen .....

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t the first place. In this regard, the ld. CIT (A) has noted that the information supplied by the post office to the AO was on monthly basis whereas it was supplied to the assessee on dayto- day basis. Thus, the contention of the assessee that there can be posting or compilation or totaling error cannot be ruled out unless the AO had called for the records from the post office and verified the same. Without doing the said exercise, the AO ought not to have made the addition simply by relying on .....

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company, the addition made simply on the basis of information from the post office without being corroborated or verified cannot be accepted. We further find that from a perusal of the statement of facts filed by the AO along with the appeal, vide letter dated 17.02.2005, the post office has brought to the notice of the AO that the documents for a period from 1999 to March 2002 has been weeded out. It was clearly mentioned that documents pertaining to period from April 2003 to July 2004 comprisi .....

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