IN THE INCOME TAX APPELLATE TRIBUNAL
LUCKNOW BENCH “A”, LUCKNOW
BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER
AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER
ITA No.501/LKW/2013 Assessment year:2005-06

Smt. Rajni Gupta, 51/56, Shakkarpatti, Kanpur (Appellant) Vs.  Dy.C.I.T., Central Circle-II, Kanpur (Respondent)

ORDER

PER A. K. GARODIA, A.M.
This is assessee’s appeal directed against the order passed by learned CIT(A)-I, Kanpur dated 18/03/2014 for the assessment year 2005-2006.

2. In this appeal the assessee has raised the following grounds:

“1. Because on facts and in circumstances of the case, Ld. CIT(A) has erred in dismissing the ground relating to validity of proceedings and in holding that satisfaction recorded by ld. Assessing Officer was proper and correct.

2. Because on facts and in circumstances of the case, ld. CIT(A) has erred in confirming addition of Rs.4,40,000.00 to the total income which was offered by the assessee in petition before Hon'ble income tax settlement commission without any basis. Especially when during the course of entire assessment and appellate proceedings, nothing was found unexplained and the additions made in assessment and confirmed in 1si appeal are based on estimates only.

3. Because on facts and in circumstances of the case, ld. CIT(A) has erred in going into irrelevant considerations in confirming additions and deciding on illegality of proceedings and his observations/conclusions are not based on sound reasoning and deserves to be struck down and entire claims of the assessee is to be allowed.

4. That without prejudice to above mentioned claim, if in case, addition of Rs.4,40,000.00 is found to be confirmed then the income assessed in this year as well as in other years, Apart from this addition, should be ordered to be covered by addition of Rs.4,40,000.00.

5. Because on facts and in circumstances of the case, the assessment order as well as observations of ld. Assessing Officer as well as of ld. CIT(A) are not correct both legally as well as factually.

6. That the proceedings of assessment as well as additions made in assessment order to the extent confirmed in 1 ^st appeal is bad in law as well as on facts and appropriate relief deserves to be allowed.”

3. It was submitted by Learned A.R. of the assessee that under similar facts, similar additions were made in the hands of Ram Singhare Yadav, Rajjan Lal Vinod Gupta (HUF), Rajjan Lal Neeraj Gupta (HUF), Maya Devi Vinod Neeraj Gupta (HUF) etc. who are friends/relatives of this assessee and in those cases, the matter reached up to Tribunal in I.T.A. No.503 to 512/Lkw/2013 and it was held by the Tribunal that the assessee should get benefit of telescoping in respect of additions upheld in earlier years. He submitted copy of this Tribunal decision and drawn our attention to Para No. 11 of the Tribunal order.

4. Learned D.R. of the Revenue submitted that the addition sustained in earlier years cannot be considered for giving telescoping benefit in the present year. He supported the orders of the authorities below.

5. We have considered the rival submissions. First of all, we reproduce Para No. 11 of the Tribunal order cited by Learned A.R. of the assessee, which is as under:

“11. We have considered the rival submissions. We find that this is admitted position that offer before Settlement Commission as reproduced in written submissions was a combined offer for A.Y. 1999 – 2000 to A.Y. 2005 – 06 without any year wise break up or item wise break up. No such detail could be filed by the assessee and the revenue also could not find any material in spite of search to pin point the year of earning of this income or nature of this income and therefore, addition was made in each year on protective basis and in A.Y. 2005- 06 on substantive basis. Learned CIT (A) has confirmed an addition of Rs. 16,500 in A.Y. 1999-2000, Rs. 10,500 in A.Y. 2000-2001, Rs. 22,000 in A.Y. 2001-2002, Rs. 20,500 in A.Y. 2002-2003 and Rs. 25,000 in A.Y. 2003-2004 on different account apart from confirming the addition on substantive basis in A.Y. 2005 – 06 being offer before Settlement Commission. Total of all these additions comes to Rs. 94,500 only which is much less that the addition confirmed in A.Y. 2005 – 06. In view of peculiar facts of the present case where the addition is made and confirmed on the basis of offer before Settlement Commission, which is not specific, it has to be accepted that part of such income might have been earned in these earlier years and hence, in view of these peculiar facts, we grant telescoping and direct the A.O. that the additions confirmed by learned CIT (A) in A. Y. 1999 – 2000 to 2003 – 04 as noted above should be considered as part of surrender before Settlement Commission and therefore, the net addition in this year is confirmed to the extent of Rs. 344000 only (Rs. 438500 – 94500).”

5.1 From the above Para, it is seen that in that case, the offer before the Settlement Commission was a combined offer for assessment year 1999- 2000 to assessment year 2005-2006 without giving any year wise breakup or item wise breakup. In the present case also, the offer made by the assessee before the Settlement Commission, reproduced by the Assessing Officer on page No. 2, is similar i.e. an offer of Rs.4.40 lac was made before the Settlement Commission, which is a combined offer for assessment year 1999-2000 to assessment year 2005-2006 without any year wise breakup or item wise breakup. Hence, it is seen that the facts of the present case are similar to the case cited by the Learned AR of the assessee. We also find that this is also noted by the Tribunal in that case that no such details regarding year wise breakup or item wise breakup could be filed by the assessee and Revenue also, could not find any material in spite of search to pin point the year of earning of this income or nature of this income and therefore, addition was made in each year on protective basis and in assessment year 2005-06 on substantive basis. In the present case also, the addition has been made by the Assessing Officer in assessment year 2005-06 on substantive basis and in all the earlier years from assessment year 1999-2000 to 2004-2005, the same addition was made on protective basis. The CIT(A) has confirmed the substantive addition in the present year and all the protective additions have been deleted by learned CIT(A) in the present case also as in those cases. The Tribunal has observed in the above Para that in view of the peculiar facts of the present case where the addition is made and confirmed on the basis of an offer before Settlement Commission, which is not specific, it has to be accepted that part of such income might have been earned in those earlier years and hence, in view of these peculiar facts, we grant telescoping of the income offered before Settlement Commission in the respective year where addition has been confirmed by CIT (A) and as a result, only balance of the offered income can be added in the present year. Accordingly, we direct the Assessing Officer that the additions confirmed by learned CIT(A) in assessment year 1999-2000 to 2003-04 should be considered as part of surrender before Settlement Commission. In the present case, as per the combined order of CIT(A), available with the appeal memo, we find that CIT(A) has confirmed the following additions:

   AY               Amount of Addition (Rs)
-------------           ------------------------------
1999-2000         3,550.00
1999-2000         16,600.00
2000-2001         10,000.00
2001-2002         5,500.00
2001-2002         10,000.00
2002-2003         11,200.00
2002-2003         10,000.00
2003-2004         5,000.00
2003-2004         10,000.00
Total addition so confirmed in earlier assessment years is Rs.81,650/-.

6. In fact, the Tribunal has held that out of total surrender made by the assessee before settlement Commission, addition already upheld by CIT(A) in earlier years should be reduced for confirming the addition in the present year on substantive basis. Since the facts in the present case are similar to the facts of the cases cited by Learned A.R. of the assessee, we do not find any reason to take a contrary view in the present case and therefore, respectfully following the Tribunal decision cited by Learned A.R. of the assessee, we hold that when addition of Rs.81,650/- is already upheld by learned CIT(A) in earlier years, the addition in the present year should be upheld for balance amount only i.e. Rs.4,40,000 – 81,650 =Rs.3,58,350/-. We confirm the addition to this extent.

7. In the result, the appeal of the assessee stands partly allowed.

(Order was pronounced in the open court on the date mentioned on the caption page)

Sd/.                                                      Sd/.
(SUNIL KUMAR YADAV)            ( A. K. GARODIA )
Judicial Member                        Accountant Member
Dated:30/06/2015