Shri Harshadbhai Keshavlal Prajapati, Ahmedabad V. The Dy.CIT, Circle-9, Ahmedabad

CO 2/AHD/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3523 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 05-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Income from undisclosed sources; Principle of natural justice; Documents seized
• Section: 147

Judgement Text

, , ,, ,L LL L- -- -,E ,E,E ,E- -- -LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER !# I.T.A. NO. 3045/AHD/2015 ( / ASSESSMENT YEAR : 2009-10) ACIT, CIR.4(2), AHMEDABAD # VS. SHRI HARSHADBHAI KESHAVLAL PRAJAPATI, 20, SHIVAM TENAMENTS, K.K. NAGAR ROAD, GHATLODIA, AHMEDABAD. CROSS OBJECTION NO.02/AHD/2016 (ARISING OUT OF ITA NO.3045/AHD/2015) ( / ASSESSMENT YEAR : 2009-10) SHRI HARSHADBHAI KESHAVLAL PRAJAPATI, 20, SHIVAM TENAMENTS, K.K. NAGAR ROAD, GHATLODIA, AHMEDABAD # VS. ACIT, CIR.4(2), AHMEDABAD. $ # % & # PAN/GIR NO. : AGCPP 6870 H ( !$' / APPELLANT ) .. ( ($' # RESPONDENT ) ASSESSEE BY : SHRI UMA SHANKAR PRASAD, SR.D.R. REVENUE BY : SHRI KETAN SHAH, A.R. ) *+,- / DATE OF HEARING 09/02/2018 ./01+,- / DATE OF PRONOUNCEMENT 22/02/2018 2# O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE REVENUE ALONGWITH CROSS OBJECTION BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX ITA NO.3045/AHD /2015 & CO NO.2/AHD/2016 HARSHADBHAI K. PRAJAPATI ASST.YEAR 2009-10 - 2 - (APPEALS)-4, AHMEDABAD, DATED 15/09/2015 FOR ASSESS MENT YEAR (AY) 2009-10. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE ALS: 1. WHETHER THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.38,55,600/- MADE ON ACC OUNT OF UNACCOUNTED INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A)OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSI NG OFFICER. 3. IT IS THEREFORE, PRAYED THAT THE ORDER OF TH E LD.CIT(A) MAY BE SET ASIDE AND THE ORDER OF THE ASSESSING OFFICER BE RES TORED. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- DURING THE SEARCH OPERATION CONDUCTED IN THE CASE O F SHRI GOVINDBHAI MULJIBHAI PRAJAPATI ON 08.12.2009 AT HIS PREMISES SITUATED AT M. K. HOUSE GANDHINAGAR HIGHWAY, SABARAMATI, AHMEDA BAD A 'SAMJAUTI KARAR' DATED 26.02.2008 BETWEEN M/S WESTWING INFRAS TRUCTURE PVT. LTD. SHAILESHBHAI DUNGARBHAI PRAJAPTI, JAYESH DUNGARBHAI PRAJAPTI, GOVINDBHAI DUNGARBHAI PRAJAPATI, SURESH MULJIBHAI P RAJAPATI ON THE ONE PART AND SHRI HARSHAD KESHAVLAL PRAJAPATI AND SHRI SUNIL BABUBHAI MODI ON THE OTHER PART, WAS SEIZED AT PAGE NO.110 TO 118 OF ANNEX BS-1. IN THE SAID AGREEMENT IT WAS RECORDED THAT THE SECOND PARTY SHRI HARSHAD KESHAVLAL PRAJAPTI AND SHRI SUNILBHAI BABUBHAI MODI HAD AGREED TO SALE THE LAND LOCATED AT REVENUE SURVEY NO. 211 ADMEASUR ING 3743 SQ MTRS NA AT CHANDKHEDA FOR A TOTAL CONSIDERATION OF RS 3, 09,77,400/- AND ACCORDINGLY RS 64,26,000/- WAS TO BE PAID TO THEM B EING PROFIT. FROM THE ITA NO.3045/AHD /2015 & CO NO.2/AHD/2016 HARSHADBHAI K. PRAJAPATI ASST.YEAR 2009-10 - 3 - SAMJAUTA KARAR, IT WAS FURTHER INFERRED THAT SHRI H ARSHAD KESHAVLAL PRAJAPATI WAS A 60% PARTNER IN THE SAID TRANSACTION . THEREFORE THE TAXABILITY OF THE RECEIPT OF RS.38,55,600/- (60% OF RS 64,26,000) WAS TO BE EXAMINED IN THE HANDS OF SHRI HARSHAD KESHAVLAL PRAJAPATI. 4. IN VIEW OF THE ABOVE THE CASE OF THE ASSESSEE WA S TAKEN UP FOR REASSESSMENT FOR THE REASONS AS MENTIONED IN THE RE ASONS RECORDED BY THE THEN ASSESSING OFFICER AS UNDER: 2. ON VERIFICATION OF RECORDS MAINTAINED IN THIS O FFICE, IT HAS COME TO THE NOTICE THAT AN AGREEMENT HAS BEEN MADE BY M/ S WEST WING INFRASTRUCTURE PVT. LTD, SHRI SHALIESHBHAI D PRAJAP ATI, JAYESH D PRAJAPATI , GOVIND D PRAJAPATI, SURESH MITICHAND PRAJAPATI WITH SHRI HARSHAD KESHAVKIL PRAJAPATI AND SHRI SUNIL BABULAL MODI. IN THE SAID AGREEMENT , SHRI HARSHAD KESHAVLAL PRAJAPATI AND SH RI SUNIL BABUBHAI MODI HAVE AGREED TO SALE LAND TO ABOVE MENTIONED PE RSONS AT THE RATE OF RS 9,111 /- PER SQUARE YARD AND TOTAL CONSIDERATION OF RS.3,09, 77,400/- AND ACCORDINGLY RS 64,26,000/- WAS TO BE PAID TO TH EM BEING PROFIT. IT HAS BEEN FURTHER NOTICED THAT ONE OF THE PARTIES TO THE AGREEMENT HAS ACCEPTED TO HAVE MADE PAYMENT OF RS 64,26,000/- TO SHRI HARSHAD KESHAVLAL PRAJAPTI AND SHRI SUNIL BABUBHAI MODI IN CASH. BASED ON THESE FACTS I HAVE REASONS TO BELIEVE THAT THE ABOVE NAMED ASSESSEE SHRI HARSAHD KESHAVLAL PRAJAPATI HAS RECEI VED PROFIT IN CASH AND HAS NOT SHOWN IN HIS RETURN OF INCOME. I HAVE T HEREFORE REASONS TO BELIEVE THAT THE INCOME OF SHRI HARSHAD KESHAVLAL P RAJAPATI CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF PROVISIONS OF SECTION 147 OF THE IT ACT. I AM THEREFORE SATISFIED THAT IT IS A FIT CASE FOR REOPENING OF ASSESSMENT BY ISSUING NOTICE U/S.148 O F THE IT ACT. 5. THEREAFTER NOTICE U/S.142(1) WAS ISSUED ON 18.10 .2013 WHEREBY THE ASSESSEE WAS REQUESTED TO PROVIDE THE EXPLANATION O F RECEIPTS AS UNDER: ITA NO.3045/AHD /2015 & CO NO.2/AHD/2016 HARSHADBHAI K. PRAJAPATI ASST.YEAR 2009-10 - 4 - 'AS PER YOUR SUBMISSION DATED 29.07.2013, YOU HAVE SUBMITTED THAT OUT OF THE CASH RECEIPT OF RS.64,26,000/- DISCLOSED BY SHRI SHAILESH D PRAJAPTI, YOUR SHARE IS 60% AS PER THE BANAKHAT DAT ED 26.2.2008. YOU HAVE ALSO ACCEPTED THAT THE CASH HAS BEEN GIVEN TO YOU AS CONFIRMING PARTY. HOWEVER YOU HAVE NOT SUBMITTED FURTHER DETAI LS AND YOUR EXPLANATION FOR TREATING THE SAME AS UNDISCLOSED RE CEIPTS FOR THE RELEVANT YEAR AS ALSO MENTIONED IN REASONS RECORDED FOR REOPENING IN YOUR CASE. IF YOU FAIL TO OFFER EXPLANATION IN THIS REGARD THE ABOVE RECEIPTS IN YOUR HAD WILL BE TREATED AS YOUR INCOME FOR A. Y. 2009-10. IN RESPONSE TO THE ABOVE NOTICE, ASSESSEE DID NOT S UBMITTED ANYTHING AND IN ITS REPLY DATED 18.10.2013 IT ASKED FOR MORE TIME TO FILE ITS EXPLANATION. SIMULTANEOUSLY NOTICE U/S.133(6) H AD ALSO BEEN ISSUED TO THE PURCHASER OF THE PROPERTY AS PER THE SAMJAUTA K ARAR I.E. WEST WING INFRASTRUCTURE PVT. LTD. AND IN ITS RESPONSE VIDE L ETTER RECEIVED ON 27.12.2013. IT HAS CONFIRMED THE TRANSACTIONS AS PE R THE AGREEMENT ABOVE. THE EVIDENCE FROM THE SAID PARTY ALSO SUPPORTS THE FACTS MENTIONED IN THE BA AKHAT AGREEMENT THAT THE ASSESSEE ALONG WITH SHR I SUNIL MODI HAVE DEFINITELY RECEIVED THE CASH AMOUNTING TO RS 64,26, 000/- WHICH HAS NOT BEEN RETURNED BACK BY THESE PERSONS SUBSEQUENT TO T HE CANCELLATION OF THE DEAL. 6. IT IS PERTINENT TO MENTION THAT ASSESSEE HAS FAI LED TO OFFER ANY EXPLANATION REGARDING NOT TAKING INTO ACCOUNT THE A BOVE AMOUNT RECEIVED IN CASH IN ITS BOOKS OF ACCOUNTS AS CLEARLY MENTION ED IN THE AGREEMENT DATED 26.02.2008. THEREFORE VIDE ORDER SHEET DATED 26.02.2013, THE A.R. OF THE ASSESSEE WAS GIVEN A SHOW CAUSE IN THIS REGA RD, THE SAME IS REPRODUCED AS UNDER ITA NO.3045/AHD /2015 & CO NO.2/AHD/2016 HARSHADBHAI K. PRAJAPATI ASST.YEAR 2009-10 - 5 - 'PLEASE EXPLAIN THE CASH PAYMENT RECEIVED BY YOU AG AINST THE SALE OF LAND AT CHANDKHEDA AT SURVEY NO.211 VIDE BANAKHAT D ATED 26.02.2008. YOU ARE ASKED TO SHOW CAUSE AS TO WHY THE AMOUNT NO T REFLECTED IN THE BOOKS OF ACCOUNT SHOULD BE ADDED TO YOUR TOTAL INCO ME. IN ITS RESPONSE VIDE REPLY DATED 14.03.2014, THE AS SESSEE HAS SUBMITTED AS UNDER: 1. THIS MOU IS NOT SIGNED BY ALL THE PARTIES TO THE AG REEMENT NOT WITNESS SO THERE IS NO EVIDENTIARV VALUE IN LAW AS IT IS NOT A REGISTERED DEED BUT ONLY A MOU THAT TO UNSIGNED. 2. EVEN OTHERWISE THAT IT IS MENTIONED IN THE MOU THAT AMOUNT OF RS.38,65,600/- I.E. 60% SHARE OF RS.64,26,000/- IS TO BE PAID ON OR BEFORE 04.05.2008 AND THERE IS NO EVIDENCE, ACTU AL PAYMENT OF AN ASSESSEE. 3. FURTHER THE STATEMENT OF ACCEPTANCE OF THE OTHE R PARTIES NOT SUPPLIED TO ASSESSEE TILL TO TODAY YOU ARE REQUESTE D KINDLY SUPPLY ALL ADVERSE MATERIAL TO ASSESSEE AND ALSO GIVE US O PPORTUNITY TO CROSS EXAMINE THE RELEVANT PARTIES. 7. THE REPLY OF THE ASSESSEE HAS BEEN CAREFULLY CON SIDERED AND IT IS CLEAR FROM THE REPLY THAT THE ASSESSEE HAS NOTHING TO SUBSTANTIATE THAT IT HAS SHOWN THE AMOUNT IN THE BOOKS OF ACCOUNT OR ANY DOCUMENTARY PROOF THAT THE SAID AMOUNT HAS BEEN RETURNED BACK SUBSEQU ENT TO CANCELLATION OF THE DEAL. IT IS PERTINENT TO MENTION HERE THAT THE OTHER PARTY SHRI SHAILESH D. PRAJAPATI IN ITS SUBMISSION DATED 10.12.2011 ACC EPTED THAT PAYMENT OF RS.64,26,000/- IN CASH WAS MADE IN CONSEQUENT TO TH E AGREEMENT REFERRED ABOVE. 8. BUT LEARNED ASSESSING OFFICER WAS NOT SATISFIED WITH THE PLEA OF THE APPELLANT AND HE HOLD THAT ONUS IS ON THE ASSESSEE TO COUNTER THE EVIDENCE ITA NO.3045/AHD /2015 & CO NO.2/AHD/2016 HARSHADBHAI K. PRAJAPATI ASST.YEAR 2009-10 - 6 - CLEARLY INDICATING AMOUNT OF CASH RECEIVED BY HIM A ND WHICH WAS NOT SUBSEQUENTLY ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS . THEREFORE, HE MADE AN ADDITION OF RS.38,55,600/-. 9. AGAINST THE SAID ORDER APPELLANT PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO PARTLY ALLOWED THE APPEAL OF THE APPELLANT. 10. WE HAVE GONE THROUGH THE RELEVANT RECORD IMPUG NED ORDER. WE HAVE HEARD BOTH THE PARTIES. IN THIS CASE, THE SAM JAUTA KARAR WAS FOUND AT THE RESIDENCE OF SHRI GOVIND M. PRAJAPATI. SAME WAS BETWEEN THE PARTIES WITHOUT ANY DATE. THE DATE I.E. 26.02.2018 MENTIONED BY THE AO IS THE DATE OF BUYING OF STAMP PAPER NOT THE DATE O F AGREEMENT. 11. AS PER SAID SAMJAUTA KARAR THE FIRST PARTY IS M/S. WEST WING INFRASTRUCTURE LTD AND AUTHORIZED PERSON TO SIGN TH IS KARAR ON BEHALF OF COMPANY WAS SHRI KALPESHBHAI D. PRAJAPATI BUT IT HA S NOT BEEN SIGNED BY SHRI KALPESHBHAI D. PRAJAPATI. THE KARAR HAS NOT BEEN SIGNED BY ANY ONE FROM THE FIRST PARTY. IT IS SIGNED AS VATI (O N BEHALF OF) SHRI SHAILESH D. PRAJAPATI. MOREOVER, THIS SAMJAUTA KARAR WAS N OT SIGNED BY ANY WITNESS. 12. AS PER SARAT OF THE SAMJAUTA KARAR, RS.64,2 6,000/- WAS PAID TO THE APPELLANT AND SHRI SUNIL MODI BY 04.05.2008, BU T AS MENTIONED BY THE AO IN REMAND REPORT, ONLY RS.14 LAKHS WERE PAID BY THAT DATE. THIS ITA NO.3045/AHD /2015 & CO NO.2/AHD/2016 HARSHADBHAI K. PRAJAPATI ASST.YEAR 2009-10 - 7 - SHOWS THE CONTRADICTION BETWEEN CONTENTS OF THE SA MJAUTA KARAR AND OTHER DOCUMENTS FOUND FROM THE SAME PREMISES AND RE LIED BY THE AO FOR MAKING ADDITIONS, BUT DID NOT RECONCILE. 13. AS PER THE OTHER PAGES, FOUND AND SEIZED, WHICH SHOWS PAYMENTS OF RS.5 LAKHS TO THE APPELLANT ON 01.04.2008 AND RE ST RS.34 LAKHS TO SHRI SUNIL MODI. AGAIN PROVE THAT IF THE APPELLANT HAD 6 0% OF SHARE, HE SHOULD HAVE PAID 60% OF THE MONEY. IN CASE OF SHRI SUNIL MODI, 40% IS RS.25,70,400/- (40% OF RS.64,26,000) BUT AS PER THI S PAPER, SHRI SUNIT MODI HAD BEEN PAID RS.39 LAKHS, WHICH IS MORE THAN HIS SHARE. THIS PAGE HAS NOT BEEN DISCUSSED IN THE ASSESSMENT ORDER AND FIRST TIME MENTIONED IN REMAND REPORT. 14. SALE DEED OF THE SAID LAND WAS MADE ON 22/03/20 08 IN WHICH PARTIES TO THE TRANSACTION ARE DIFFERENT. NAME OF T HE APPELLANT AND SHRI SUNIT MODI ARE NOT THERE EVEN AS CONFIRMING PARTY, WHICH PROVE THAT THE SAMJAUTA KARAR WAS NOT EXECUTED. 15. AS MENTIONED IN THE REMAND REPORT, THE APPELLAN T SOUGHT COPIES OF DOCUMENTS USED AGAINST HIM ON 14/03/2014 BUT SAME W ERE NOT PROVIDED. THE ASSESSMENT ORDER WAS PASSED ON 26.03.2014. THE AO SHOULD HAVE PROVIDED THE DOCUMENTS OR OTHER EVIDENCES WHICH ARE GOING TO BE USED AGAINST THE APPELLANT. THIS IS REQUIRED AS PER THE PRINCIPLE OF NATURAL JUSTICE. ITA NO.3045/AHD /2015 & CO NO.2/AHD/2016 HARSHADBHAI K. PRAJAPATI ASST.YEAR 2009-10 - 8 - 16. IN VIEW OF THE ABOVE DISCUSSION, WE HOLD THAT SAMJAUTA KARAR WAS NOT VALID KARAR. IT IS HELD IN THE CASE OF CIT VS. VIVEK AGRAWAL, DELHI HIGH COURT THAT THE SAID USED PAPER WAS UNDAT ED AND UNSIGNED AND THEREFORE, NO COGNIZANCE CAN BE TAKEN. 17. IN MY OPINION, AO SHOULD HAVE GIVEN THE COPIES OF THE DOCUMENTS WHICH WERE USED AGAINST THE APPELLANT AND SAME IS A MOUNT TO MISCARRIAGE OF JUSTICE. AS IT IS HELD BY THE CO-ORDINATE BENCH IN PRARTHNA CONSTRUCTION CASE, DOCUMENTS SEIZED FROM THE THIRD PARTIES AND STATEMENTS RECORDED AT THE BACK OF THE ASSESSEE WIT HOUT OPPORTUNITY TO INTERROGATE AND THEREFORE, NO ADDITION CAN BE MADE BASED ON SO CALLED ADMISSION AND SEIZED MATERIAL. 18. IN OUR CONSIDERED OPINION, LD. CIT(A) HAS PASSE D DETAILED AND REASONED ORDER AND WE ARE NOT INCLINE TO INTERFERE IN THE ORDER PASSED BY THE LD.CIT(A). 19. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT I S DISMISSED. 20. SO FAR AS CROSS OBJECTION IS CONCERNED. ASSESSE E DOES NOT WANT TO PRESS THE SAME. THEREFORE, SAME IS DISMISSED AS NOT PRESSED. ITA NO.3045/AHD /2015 & CO NO.2/AHD/2016 HARSHADBHAI K. PRAJAPATI ASST.YEAR 2009-10 - 9 - 21. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT I S DISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO DISMISSED A S NOT PRESSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 22/02/2018 SD/- SD/- ( ) 3 4 ( N.K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 22/02/2018 PRITI YADAV, SR.PS !'# $#! # COPY OF THE ORDER FORWARDED TO : 1. !$' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 56, ) 7, / CONCERNED CIT 4. ) 7, 3!4 / THE CIT(A)-XIV, AHMEDABAD. 5. 89:,56 !-!561 ! / DR, ITAT, AHMEDABAD 6. :;<* # GUARD FILE. % & / BY ORDER, (8,, //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 20/02/2018 (DICTATION-PAD 3 PAG ES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 21/02/2018 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER