Appeal details
Counselvise Citation
[2015] 123 COUNSELVISE.COM (IT) 1528 (ITAT-PANAJI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 month(s) 25 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
20-10-2015
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
19-10-2015
Assessment Year
2010-2011
Appeal Filed On
25-08-2015
Judgement Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N. S. SAINI, HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIA L MEMBER ITA NOS. 305/PNJ/2015 (ASST. YEAR : 2010 - 11) DCIT, CENTRAL CIRCLE PANAJI, GOA. VS SHRI PRAKASH V. KITTUR, C - 1, SPARSHA LA MARVEL COLONY, NEAR NIO, DONA PAULA, GOA. PAN NO. AAZPV 6075 B ( APPELLANT) (RESPONDENT) C.O. NO. 63/ PNJ/2015 (ASST. YEAR : 2010 - 11) SHRI PRAKASH V. KITTUR, C - 1, SPARSHA LA MARVEL COLONY, NEAR NIO, DONA PAULA, GOA. VS DCIT, CENTRAL CIRCLE PANAJI, GOA. PAN NO. AAZPV 6075 B (APPELLANT) (RESPONDENT) ITA NOS. 306/PNJ/2015 (ASST. YEAR : 2010 - 11) DCIT, CENTRAL CIRCLE PANAJI, GOA. VS SMT. VRINDAP . KITTUR, C - 1, SPARSHA LA MARVEL COLONY, NEAR NIO, DONA PAULA, GOA. PAN NO. ADPPK 9982 M ( APPELLANT) RESPONDENT) 2 C.O. NO. 6 4 /PNJ/2015 (ASST. YEAR : 2010 - 11) S MT. VRINDA P. KITTUR , C - 1, SPARSHA LA MARVEL COLONY, NEAR NIO, DONA PAULA, GOA. VS DCIT, CENTRAL CIRCLE PANAJI, GOA. PAN NO. ADPPK 9982 M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHRINIVAS NAYAK C A DEPARTMENT BY : SHRI S.D. GULAWANI DR DATE OF HEARING : 19 / 1 0/2015. DATE OF PRONOUNCEMENT : 20 / 1 0/2015. O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER TH E S E ARE THE APPEALS FILED BY THE REVENUE AND THE CROSS OBJECTIONS FILED BY THE ASSE S SEE S ARE DIRECTED AGAINST THE SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX ( A PPEALS ), PANAJI - 2 , BOTH DATED 05/05/2015, PASSED IN THE CASE OF SHRI. PRAKASH V . KITTUR AND SMT. VRINDA P . KITTUR. 2 . IN THE REVENUES APPEAL GROUND N OS . 1 TO 3 ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX ( A PPEALS ) DELETING THE ADDITION ON ACCOUNT OF UNDISCLOSED INCOME ON SALE OF PROPERTY AT NERUL. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT M/S. UNICORN DEVELOPERS HAD PURCHASED A PROPERTY CALLED PIMPALA BATTA AT SURVEY NO.85/14 AT NERUL ADMEASURING 2650 SQUARE METERS FR OM MR. SUMANTH PASRICHA AND MRS. SONIA PASRICHA VIDE SALE DEED DATED 12/6/2008 FOR A CONSIDERATION OF RS.1,25,00,000/ - . THIS PROPERTY WAS SOLD BY M/S. UNICORN DEVELOPERS TO M/S. TRACK VISION AND PLANNERS PVT. LTD. 3 AND M/S. TANVI BUILDCON PVT. LTD. , VIDE SA LE DEED DATED 4/08/2009 FOR A CONSIDERATION OF RS.1 , 75 , 00 , 000/ - . HE FURTHER OBSERVED THAT MRS. VRINDA KITTUR WAS THE CONFIRMING PARTY OF THE SALE DEED. FROM THE SEIZED BOOKS OF ACCOUNTS OF M/S. UNICORN DEVELOPERS , THE AO OBSERVED THAT THE SALE OF THIS PROP ERTY WAS NOT REFLECTED IN THE PROFIT AND LOSS ACCOUNT OF FINANCIAL YEAR 2009 - 10. HE ALSO OBSERVED THAT THE AMOUNT OF RS.1 , 75 , 00 , 000/ - RECEIVED AS SALES CONSIDERATION WAS SHOWN AS ADVANCE IN THE BOOKS OF M/S. UNICORN DEVELOPERS FOR THE FINANCIAL YEAR 2009 - 1 0. 4 . DURING THE COURSE OF ASSESSMENT PROCEEDING S , IN REPLY TO THE SHOW CAUSE NOTICE ISSUED BY THE AO, THE ASSESSEE VIDE HIS LETTER DATED 20/ 0 3/2013 STATED THAT THE SAID PROPERTY AT NERUL WAS PURCHASED IN FINANCIAL YEAR 2008 - 09 FOR A TOTAL CONSIDERATION OF R S .1,22,25,210/ - AND WAS SOLD IN THE FINANCIAL YEAR 2009 - 10 TO M/S. TRACK VISION PLANNERS PVT. LTD., FOR A CONSIDERATION OF RS.1 , 75 , 00 , 000/ - . THE PROFIT OF RS.52,74,790/ - WAS DISCLOSED IN THE FINANCIAL YEAR 2009 - 10 AND DUE TAX THEREON WAS ALSO PAID. THE ASSESSEE FURNISHED A CHART SHOWING DETAILS OF RECEIPTS DECLARED ASSESSMENT YEAR WISE AND RESPECTIVE PROFITS ON EACH OF THE RECEIPT. THE A SSESSING OFFICER OBSERVED FROM THE SAID CHART THAT THE TOTAL RECEIPT OF RS.2,96,28,145/ - HAS BEEN SHOWN ON WHICH PROPERTY WISE BIFURCATION OF NET PROFIT FOR THE YEAR IS SHOWN AT RS.1,10,95,498/ - . THESE FIGURES ARE IN AGREEMENT WITH THE FIGURES REFLECTED IN THE PROFIT AND LOSS ACCOUNT FILED. FROM THIS , THE A SSESSING OFFICER INFERRED THAT THE ASSESSEE HAS NOT SHOWN THE NET PROFIT FROM NERUL SALE OF RS.52,74,790/ - , HOWEVER THE AO HAS ALSO NOTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS SHOWN AMOUNT OF RS.5 2,74,790/ - AS THE RECEIPT ON SALE OF NERUL PROPERTY, WHEREAS THE ACTUAL AMOUNT RECEIVED ON THE SALE OF SAID PROPERTY WAS R S .17500000/ - ACCORDING TO THE ASSESSING OFFICER , THE PURCHASE PRICE HAS ALREADY BEEN DEBITED AS AN EXPENDITURE BY THE ASSESSEE AND THU S THE ASSES S EE HAS SUPPRESSED RECEIPT DURING THE YEAR OF RS.1,22,25,210/ - , HENCE HE MADE ADDITION OF RS.1,22,25,210/ - AND THEREBY MADE ADDITION OF 50% OF THE SAID AMOUNT WHICH IS RS.61,12,605 / - IN THE HAND OF THE HUSBAND 4 MR.PRAKASH KITTUR AND THE BALANCE 5 0% OF THE AMOUNT RS.61,12,605/ - IN THE HANDS OF HIS WIFE MRS. VRINDA KITTUR. 5 . ON APPEAL, THE C OMMISSIONER OF INCOME TAX (A PPEALS ) DELETED THE ADDITIONS BY OBSERVING THAT AFTER GOING THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION OF THE ASSESSEE AND THE REL EVANT DETAILS AND DOCUMENTS THAT THERE IS NO DISPUTE THAT THE PROPERTY AT NERUL WAS PURCHASED BY THE ASSESSEE IN THE FINANCIAL YEAR 2008 - 09 FOR RS.1,22,25,210/ - , WHICH WAS SOLD IN THE FINANCIAL YEAR 2009 - 10 FOR RS.1 , 75 , 00 , 000/ - . THE ASSESSING OFFICER HIMSE LF MENTIONED THAT THE ASSESSEE DISCLOSED PROFIT OF RS.52,74,790/ - FROM THE SALE OF NERUL PROPERTY. ALL THE ENTRIES ARE RECORDED IN THE BOOKS OF THE ASSESSEE. THE A SSES S ING O FFICER HAS MADE AN ADDITION OF RS.1,22,25,210/ - BEING THE PURCHASE PRICE OF THE PRO PERTY. HE OBSERVED THAT THE ASSESSEE HAS CORRECTLY DECLARED THE PROFIT FROM NERUL PROPERTY AND THEREFORE , THE A SSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF COST OF THE PROPERTY IN THE HANDS OF THE ASSESSEE. HE OBSERVED THAT IF THE ADDITION IS TAKEN INTO CONSIDERATION, 100% OF THE SALE CONSIDERATION BECOMES THE PROFIT, WHICH IS IMPOSSIBL E . 6 . THE D EPARTMENTAL R EPRESENTATIVE RELIED ON THE ASSESSMENT ORDER OF THE A SSESSING OFFICER . 7 . THE AR OF THE ASSESSEE POINTED OUT FROM THE PAGE NO. 96 OF THE PAPER BOOK FILED BY HIM THAT IT IS THE LEDGER ACCOUNT OF THE NERUL PROPERTY WHICH SHOWS THE OPENING BALANCE AS ON 1/4/2009 OF RS.1,22,25,210/ - , IT ALSO SHOWS CREDIT OF RS.1,75,00,000/ - ON 25/9/2009. IT FURTHER SHOWS PROFIT FROM SALE OF LAND ON 31/10/2009 A T RS.52,74,790/ - WHICH HAS BEEN TAKEN IN THE PROFIT AND LOSS ACCOUNT. FURTHER , FROM PAGE 97 OF THE PAPER BOOK HE POINTED OUT THAT THE LEDGER ACCOUNT OF M/S. TRACK VISION AND PLANNERS PVT. LTD. SHOWS THAT DURING THE PERIOD 04/08/2009 TO 25/09/2009 THE ASSES SEE RECEIVED RS.1,75,00,000/ - WHICH WAS TRANSFERRED TO NERUL PROPERTY ACCOUNT ON 25/9/2009 AND THE NET PROFIT OF 5 RS.52,74,790/ - WAS ARRIVED AT. FURTHER FROM PAGE NO.106 OF THE PAPER BOOK HE POINTED OUT THAT THIS SHOW S THE SALES ACCOUNT OF THE ASSES S EE WHER EIN THE PROFIT ON SALE OF LAND IS SHOWN AT RS.52,74,790/ - AND SALE OF PROPERTY IS SHOWN AT RS.27,13,000/ - , AGGREGATING TO RS.79,87,790/ - WHICH FIGURE HAS BEEN SHOWN IN THE PROFIT AND LOSS ACCOUNT. HE , THEREFORE , SUBMITTED THAT THE ASSESSEE HAS SHOWN PROFIT ON SALE OF LAND IN THE PROFIT AND LOSS ACCOUNT AFTER DEDUCTING THE PURCHASES COST OF LAND OF RS.1,22,25,210/ - FROM THE SALE CONSIDERATION OF RS.1 , 75 , 00 , 000. THE A SSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION FOR THE PURCHASE PRICE OF RS.1,22,2 5,210/ - AND THE COMMISSIONER OF INCOME TAX ( A PPEALS ) HAS RIGHTLY DELETED THE ADDITION. 8 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDER S OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON THE RECORD. IN THE INSTANCE CASE , THE ASSESSEE PURCHASE D A LAND AT NERUL FOR RS.1,22,25,210/ - FROM MR. SUMANTH PASRICHA AND MRS. SONIA PASRICHA IN THE FINANCIAL YEAR 2008 - 09. THE SAID LAND WAS SOLD BY THE ASSESSEE IN FINANCIAL YEAR 2009 - 10 FOR CONSIDERATION OF RS.1,75,00,000/ - AND EARNED PROFIT OF RS.52,74,790 / - . THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT HAS DISCLOSED PROFIT ON SALE OF NERUL LAND AT RS.52 , 74 , 790/ - . THE A SSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS NOT SHOWN THE ENTIRE SALE CONSIDERATION OF RS.1 , 75 , 00 , 000/ - IN THE PROFIT AND LOSS ACC OUNT , BUT THE ASSESSEE HAS DEBITED THE COST OF LAND OF RS.1 , 22 , 25 , 210/ - IN THE BOOKS OF ACCOUNTS. THEREFORE , HE MADE ADDITION OF RS.1 , 22 , 25 , 210/ - TO THE INCOME OF THE ASSE S SEE, WHICH WAS DELETED BY THE COMMISSIONER OF INCOME TAX ( A PPEALS ) . 9 . WE FIND THAT THE LAND IN QUESTION WAS PURCHASED BY THE ASSESSEE IN THE A SSESSMENT YEAR 2009 - 10. FURTHER, FROM A PERUSAL OF THE STATEMENT OF ACCOUNT FOR THE A SSESSMENT YEAR 2009 - 10 , IT IS OBSERVED THAT THE ASSE S SEE DEBITED THE COST OF LAND OF RS.1,22,25,210/ - UNDER THE H EAD STOCK IN TRADE. THE ASSES S EE CARRIED OVER THIS AMOUNT AS DIRECTLY TO ITS 6 BALANCE SHEET UNDER THE HEAD CURRENT ASSETS . THUS , NO DEDUCTION FOR COST OF LAND IN QUESTION WAS CLAIMED AND / OR ALLOWED TO THE ASSESSEE IN THE A SSESSMENT YEAR 2009 - 10. FURTHER IN THE A SSESSMENT YEAR 2010 - 11 THE ASSESSEE IN THE LEDGER ACCOUNT OF THE PROPERTY AT NERUL HAS SHOWN OPENING BALANCE OF RS.1 , 22 , 25 , 210/ - AND HAS ALSO SHOWN SALE AT RS.1 , 75,00,000/ - TO THE CREDIT OF THE SAID ACCOUNT. THE PROFIT OF RS.52,74,790/ - HAS BEEN T AKEN TO THE PROFIT AND LOSS ACCOUNT UNDER THE HEAD SALE OF PROPERTIES . THUS , INSTEAD OF CREDITING THE ENTIRE SALE PROCEEDS OF LAND AT RS.1 , 75 , 00 , 000/ - IN THE PROFIT AND LOSS ACCOUNT, THE ASSESSEE HAS SHOWN NET CREDIT OF RS.52 , 74 , 790/ - IN THE PROFIT AND LOSS ACCOUNT AFTER DEDUCTING THE OPENING DEBIT BALANCE OF RS.1 , 22 , 25 ,210/. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE , IN OUR CONSIDERED OPINION , THE A SSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS .1 , 22 , 25 , 210/ - IN THE HANDS OF THE A SSESSEE UNDER THE HEAD UNDISCLOSED INCOME ON SALE OF PROPERTY AT NERUL AND THE C OMMISSIONER OF INCOME TAX (A PPEALS ) WAS FULLY JUSTIFIED IN DELETING THE SAME. THEREFORE , WE DISMISS THESE GROUNDS OF APPEAL OF THE REVENUE. 10 . GROUND NO.4 IN THE REVENUES APP EAL IN THE CASE OF BOTH THE ASSESSES IS THAT C OMMISSIONER OF INCOME TAX (A PPEALS ) ERRED IN DELETING THE ADDITION ON ACCOUNT OF EXPENDITURE OF RS.38,03,250/ - ON SALE OF GHANSEM PROPERTY. 11 . THE CIT(A) HAS HELD AS UNDER: - DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT SUBMITTED THAT IN THE CASE OF GHANSEM PROPERTY, THE ASSESSEE DECLARED INCOME IN ASSESSMENT YEAR 2011 - 12, BUT THE UNDERSIGNED TAXED IT IN ASSESSMENT YEAR 2009 - 10. THEREFORE CREDIT FOR THE SAME BE GIVEN. ASSESSEES CONTENTION IS RE PRODUCED AS UNDER: WE REFER TO OUR EARLIER SUBMISSIONS AND YOUR ORDER FOR ASSESSMENT YEAR 2009 - 10 DATED 28 - 01 - 2015 IN THE CASE OF SHRI PRAKASH KITTUR & SMT. VRINDA KITTUR AND NOTE THAT IN CASE OF GHANSEM LAND DEAL, PROFIT FROM THE DEAL HAS BEEN TAX IN FI NANCIAL YEAR 2008 - 09 7 RELEVANT TO ASSESSMENT YEAR 2009 - 10 AND WHILE ARRIVING AT THE PROFIT THE EXPENDITURE OF RS.47,64,191/ - (RS.38,03,250/ - + RS. 9,60,941/ - ) INCURRED IN FINANCIAL YEAR 2009 - 10 & 2010 - 11 HAS BEEN ADDED TO THE INCOME. CONSIDERING THE SAME WE REQUEST YOU TO ALLOW US THE EXPENDITURE OF 38,03,250/ - IN AY 2010 - 11 TOWARDS THE OTHER PROJECTS CARRIED OUT DURING THE YEAR. ASSESSEE WILL BE HIGHLY OBLIGED FOR TAKING THESE WRITTEN SUBMISSIONS ON RECORD AND CONSIDERING THE SAME FOR THE PURPOSE OF DIS POSAL OF THE APPEAL WHILE UPHOLDING NATURAL JUSTICE. ASSESSEES CONTENTION IS SELF - EXPLANATORY AND FACTUALLY CORRECT. THE A SSESSING OFFICER IS DIRECTED TO ALLOW EXPENDITURE OF RS.38,03,250/ - FOR A. YR. 2010 - 11 ACCORDINGLY 12 . AT THE TIME OF HEARING , BOTH TH E PARTIES BEFORE US AGREED THAT THE ORDER FOR ASSESSMENT YEAR 2010 - 11 WAS PASSED BY THE A SSESSING OFFICER ON 30/03/2013 AND THE ORDER OF C OMMISSIONER OF INCOME TAX (A PPEALS ) FOR THE A SSESSMENT YEAR 2009 - 10 WAS PASSED ON 28/ 0 1/2015 AND THEREFORE , THE A SSESSI NG OFFICER WHILE MAKING THE ASSESSMENT DID NOT HAVE THE BENEFIT OF THE ORDER OF C OMMISSIONER OF INCOME TAX (A PPEALS ) OF A SSESSMENT YEAR 2009 - 10. HENCE , THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE A SSESSING OFFICER FOR ADJUDICATION THE ISSUE A FRESH TAKING INTO CONSIDERATION THE ORDER OF THE C OMMISSIONER OF INCOME TAX (A PPEALS ) FOR A SSESSMENT YEAR 2009 - 10 AND VERIFICATION OF FACTS. THUS THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. C.O. NO.63/PNJ/2015 OF SHRI. PRAKASH KITTUR AND CO. NO.64/PNJ/2015 OF SHRI. VRINDA KITTUR 13 . IN THE CROSS OBJECTIONS FILED BY THE ASSESSEE , GROUND NOS.1, 10 & 11 ARE GENERAL IN NATURE AND THEREFORE, REQUIRES NO SEPARATE ADJUDICATION BY US. 14 . THE COMMON GROUND NOS.2 TO 4 OF THE CROSS OBJECTION ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINING THE 8 ADDITION OF RS . 1 , 60 , 000/ - (50% OF RS.3 , 20 , 000/ - ) TOWARDS CASH PAID TO M/S. HAZRAT CONSTRUCTIONS IN THE HANDS OF THE SRI PRAKASH KITTUR AND RS.1,60 ,000/ - IN THE HANDS OF SMT. VRI NDA K ITTUR. 15 . BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF SEARCH PROCEEDINGS AT THE BUSINESS PREMISES OF MR. PRAKASH KITTUR , DETAILS OF CASH PAYMENTS MADE TO M/S. HAZRAT CONSTRUCTION WERE FOUND AND SEIZED. ACCORDING TO THE ASSESSING OFFICER, M/S. HAZRAT CONSTRUCTION IS THE CONTRACTOR FOR MOST OF CONSTRUCTIONS UNDERTAKEN BY MR. PRAKASH KITTUR. ACCORDING TO THE ASSESSING OFFICER, IT IS OBSERVED FROM PAGE NO. 88 OF ANNEXURE A/PVK - 2/4 DATED 21/05/2010 THA T PAYMENT OF RS.79,20,000/ - IN CASH HAS BEEN MADE TO M/S. HAZRAT CONSTRUCTION. ACCORDING TO THE ASSESSING OFFICER, THIS PAGE IS THE EXTRACT OF THE CASH PAYMENTS MADE ON THE DATES MENTIONED ON THE SEIZED MATERIAL. THE HEADING OF THE SEIZED MATERIAL CLEARLY READS AS 'CASH PAYMENTS'. AS PER THE ASSESSING OFFICER IN THE BODY OF THE PAGE, IT IS MENTIONED THAT 'CASH PAID', 'CASH PAID BY SIR', `CASH PAID IN OFFICE'. THEREFORE, ACCORDING TO THE ASSESSING OFFICER THIS CLEARLY GOES TO SHOW THAT ACTUAL CASH WAS PAID B Y MR. PRAKASH KITTUR ON THAT PARTICULAR DATE. THE ASSESSING OFFICER FURTHER OBSERVED THAT IT IS SEEN FROM THE SEIZED PAGED UNDER REFERENCE THAT EVEN THE PROJECT/SITE DETAILS HAVE BEEN MENTIONED AGAINST THE CASH PAYMENTS VIZ. MAPUSA (PROJECT AS MAPUSA), NAV HIND DEVELOPERS (PROJECT UNDERTAKEN WITH NAVHIND DEVELOPERS PVT. LTD.), ASHA SHET (HOUSE CONSTRUCTION OF SMT. ASHA SHET). THEREFORE, THE ASSESSING OFFICER INFERRED THAT THE ABOVE EVIDENCE IS ALSO CORROBORATED BY 18 & 19 K - 2/4 DATED 21/05/2010. ACCORDING TO PAGE 18 OF A/PVK - 2/4, PAYMENTS MADE TO M/S. HAZRAT CONSTRUCTIONS WERE AT RS.2 , 96 , 60 , 435/ - . OUT OF THIS AMOUNT, PAYMENTS OF 80 LAC. WERE MADE IN CASH DURING THE PERIOD 09/05/2007 TO 03/08/2009. THE BALANCE PAYMENTS APPEAR TO BE MADE THROUGH BANKING CHANNEL S. SIMILARLY, ACCORDING TO PAGE 19 OF A/PVK - 2/4, TOTAL PAYMENTS MADE TO M/S. HAZRAT CONSTRUCTIONS WERE AT RS.3,14,75,235/ - . OUT OF THIS AMOUNT, PAYMENTS OF RS.76,50,000/ - 9 WERE MADE IN CASH DURING THE PERIOD 09/05/2007 TO 01/08/2009. ALL THE ABOVE SEIZED PA GES SHOWS THE CASH PAYMENTS FOR THE PERIOD 06/02/2008 TO 29/06/2009 AND THE BALANCE PAYMENTS APPEAR TO BE MADE THROUGH THE BANKING CHANNELS. 16 . THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ABOVE CASH PAYMENTS WERE NOT REFLECTED IN THE SEIZED BOOKS OF ACCOUNT OF M/S.UNICORN DEVELOPERS WHOSE PROPRIETOR IS MR. PRAKASH KITTUR. VERIFICATION OF THE CASH BOOK FOR THE SAME PERIOD DOES NOT CONTAIN THESE ENTRIES. HENCE, MR. PRAKASH KITTUR WAS CONFRONTED WITH THE ABOVE SEIZED EVIDENCE. HE FAILED TO EXPLAIN THESE ENTRIES AND STATED THAT HE WILL VERIFY HIS RECORDS AND FURNISH THE DETAILS. 17 . THE ASSESSING OFFICER FURTHER OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF THE TRANSACTION AND VIDE LETTER DATED 15/03/2013, THE ASSESSEE HAS EXPLAINED AS UNDER: - '1. THE SLIP SHOWN TO US IS NOT ON ANY KIND OF LETTER HEAD NOR IT IS SIGNED BY ANY OF US OR R ECIPIENT. AS SUCH THE SAME IS NOT A VALID DOCUMENT, WHICH CAN BE CONSIDERED FOR MAKING ADDITION. 2. I HAD DENIED HAVING PAID ANY CASH AMOUNT TO M/S. HAZRAT CONSTRUCTIONS IN MY STATEMENT ON OATH RECORDED UNDER SEC. 132(4) ON 24/06/2010 IN ANSWER TO QUESTION NO. 31.' 18 . THE ASSESSING OFFICER FROM THE ABOVE EXPLANATION CONCLUDED THAT THE ASSESSEE HAS MERELY DENIED HAVING PAID ANY CASH AMOUNTS TO M/S.HAZRAT CONSTRUCTIONS AND STATED THAT ALL THE PAYMENTS HAVE BEEN MADE BY CHEQUE. HOWEVER, THE FACT REMAINS THAT THE SEIZED MATERIALS DETAILED ABOVE, CLEARLY INDICATE THAT CASH HAS BEEN PAID TO M/S. HAZRAT CONSTRUCTIONS TOTALING TO RS.79,20,000/ - IN RESPECT OF ASSESSMENT YEAR 2008 - 09 TO 2010 - 11 AND 12 LAC IN RESPECT OF ASSESSMENT YEAR 2011 - - 12, THE SOURCE OF WHICH HAS NO T BEEN EXPLAINED BY THE ASSESSEE. THE 10 ASSESSING OFFICER OBSERVED THAT IT IS ALSO CLEAR THAT THE SEIZED MATERIAL HAS BEEN SEIZED FROM THE PREMISES OF THE ASSESSEE DURING THE COURSE OF SEARCH PROCEEDINGS. HENCE, IT IS THE DUTY OF THE ASSESSEE TO EXPLAIN THE TRANSACTIONS NOTED ON THE PAPERS. THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE IN SUPPORT AND THUS FAILED TO PROVE THE PRESUMPTIONS LAID DOWN UNDER SEC. 132(4A) OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER BROUGHT TO TAX UNEXPLAINED CASH PAYMENT TO TH E TUNE OF RS.79,20,000/ - IN THE HANDS OF MR. PRAKASH KITTUR FOR THE RESPECTIVE ASSESSMENT YEARS AS UNDER: - PAYMENTS MADE IN FY AY UNEXPLAINED INVESTMENTS (RS.) 2007 - 08 2008 - 09 56,50,000 2008 - 09 2009 - 10 19,50,000 2009 - 10 2010 - 11 3,20,000 THEREFORE, UNEXPLAINED PAYMENTS OF RS.3 , 20,000/ - WAS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE IN THE YEAR UNDER APPEAL. 19 . ON APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE HAS SUBMITTED AS UNDER: - '4. THE AO HAS ERRED IN ADDING RS.56,50,000/ - AS UNEXPLAINED PAYMENTS MADE IN CASH TO M/S. HAZRAT CONSTRUCTIONS BASED ON THE LOOSE SHEET OF PAPER FOUND DURING THE SEARCH, THE ADDITIONS MADE ARE FOR AY 2008 - 09 RS.56,50,000/ - , AY 2009 - 10 RS.19,50,000/ - & AY 2 010 - 11 RS.15,20,000/ - WITHOUT VERIFYING THE BASIC FACTS AS BELOW: 4.1 THE LOOSE SLIP ON THE BASIS OF WHICH THE ADDITION HAS BEEN MADE BY AO IS A COMPUTERISED STATEMENT, WHICH DOES NOT BELONGS TO THE ASSESSEE NOR IT HAS ANY SIGNATURE/WRITING OF THE ASSESSEE. 4.2 FURTHER, THE TOTAL OF THE SHEET ALSO DOES NOT MATCH TO THE AMOUNTS SHOWN IN THE STATEMENT, WHICH ITSELF PROVES THAT IT IS SOME IRRELEVANT PIECE OF PAPER WHICH THE AO HAS RELIED FOR MAKING THE ADDITION WITHOUT VERIFYING THE AUTHENTICITY OF THE SAME. ENCLOSED COPY OF THE LOOSE SHEET. ANNEXURE X. 4.3 FURTHER, ASSESSEE NEVER PAID ANY CASH TO M/S. HAZRAT CONSTRUCTIONS, WHICH HA S ALSO BEEN CONFIRMED BY M/S. 11 HAZRAT CONSTRUCTIONS IN THEIR CONFIRMATION LETTER ENCLOSED ANNEXURE XI 4.4 ALL THE PAYMENT MADE BY THE ASSESSEE TO M/S. HAZRAT CONSTRUCTIONS ARE THROUGH BANK AND AFTER DULY DEDUCTING THE APPLICABLE TAX AT SOURCE, ENCLOSE IS T HE LEDGER ABSTRACT OF THE PARTY CONFIRMING THE DEDUCTION OF TDS AND ALSO THE PAYMENTS MADE TO THEM. ANNEXURE XII. 4.5 AO HAS TOTALLY OVERLOOKED THE CONTENTION F THE ASSESSEE THAT M/S. HARZRET CONSTRUCTION WAS CONTRACTOR FOR THE ASSESSEE AND ANY AMOUNT PAID TO THEM IS REVENUE EXPENDITURE OF THE ASSESSEE. 4.6 AS DENIED BY THE ASSESSEE FROM THE START, THE LOOSE SHEET SEIZED BY THE AO DOES NOT BELONG TO THE ASSESSEE NOR HAS ANY REFERENCE FOR MAKING THE ABOVE ADDITIONS. 4.7 CONSIDERING THE ABOVE WE PRAY FOR DELETION OF THE ABOVE WRONGFUL ADDITIONS MADE BY THE AO. 4.8 WE RELY UPON THE DECIDED CASES IN THE MATTER AS BELOW: [20123 23 TAXMANN.COM 275 (JODHPUR - TRIB.) IN THE ITAT JOE). BENC H ASSISTANT COMMISSIONER OF INCOME - TAX VS. HEENA INVESTMENT (P.)LTD. [2011] 12 TAXMANN.CORN 4 (HYD.) IN THE ITAT HYDERABAD BENCH 'B' DEPUTY COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 1, HYDERABAD VS. C. KRISHNA YADAV'. 20 . THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, HELD AS UNDER: - '9.4. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. THE FACTS CAN BE SUMMARIZED AS UNDER: THERE WAS A SEARCH AT THE OFFICE PREMISES OF MR. PRAKASH KITTUR. DURING THE COURSE OF SEARCH MANY DOCUMENTS AND PAPERS, ETC. WERE FOUND. ONE SUCH DOCUMENT WAS A COMPUTERIZED SHEET OF PAPER ON WHICH DETAILS OF CASH PAYMENTS MADE TO M/S. HAZRAT CONSTRUCTION WAS WRITTEN. THE CASH PAYMENT MADE SPREAD OVER MANY FINANCIAL YEARS F.YR.2007 - 08, 2008 - 09 AND 2009 - 10. M/S. HAZRAT CONSTRUCTIONS IS A CONTRACTOR OF THE APPELLANT. SHRI. PRAKASH KITTUR. ADMITTEDLY, HAZRAT CONSTRUCTIONS HAVE ALSO BEEN PAID BY CHEQUE, THROUGH BANKING CHANNELS AND THESE PAYMENTS HAVE BEEN RECORDED IN THE BOOKS OF THE APPELLANT ASSESSEE. DETAILS OF CASH PAYMENT MADE TO M/S. HAZRAT CONSTRUCTIONS HAVE NOT BEEN RECORDED IN THE BOOKS OF THE APPELLANT. 12 THE APPELLANT WAS CONFRONTED DURING THE COURSE OF SEARCH ITSELF, BUT THE ASSESSEE DID NOT GIVE ANY EXPLANATION. DURING THE COURSE OF SEARCH ASSESSMENT, THE APPELLANT CLAIMED THAT SINCE THE COMPUTER - SHEET IS NOT SIGNED BY ANYONE, THEREFORE, VERACITY OF DOCU MENTS ARE NOT PROVED AND HE DENIED HAVING MADE ANY PAYMENT IN CASH TO M/S. HAZRAT CONSTRUCTIONS. NOW, IN CASE OF SEARCH, IT IS A BASIC PRESUMPTION THAT ANY DOCUMENT/PAPER FOUND AT THE PREMISES OF THE ASSESSEE, BELONGS TO THE ASSESSEE, UNLESS THE ASSESSEE IS ABLE TO PROVE OTHERWISE. THE ASSESSEE WAS CONFRONTED WITH THE CONTENTS OF THE PAPER FOUND DURING THE SEARCH ITSELF, BUT THE ASSESSEE DID NOT OR COULD NOT GIVE ANY EXPLANATION. THE EXPLANATION GIVEN, DENYING THE CONTENTS OF THE COMPUTER - SHEE T ON THE GROUND THAT THE SAME IS NOT SIGNED BY ANYONE DOES NOT HOLD GOOD, AS THE TRANSACTION HAS BEEN DONE IN CASH AND IS NOT REFLECTED IN THE BOOKS OF THE APPELLANT. M/S. HAZRAT CONSTRUCTION IS A CONTRACTOR OF THE APPELLANT AND IT HAS BEEN MADE PAYMENTS T HROUGH BANKING CHANNELS DURING THE PERIOD UNDER CONSIDERATION. OBVIOUSLY, PAYMENTS MADE THROUGH BANKING CHANNELS HAVE FOUND ITS PLACE IN THE BOOKS OF THE APPELLANT AND CASH PAYMENTS HAVE REMAINED OUTSIDE BOOKS. THUS, ON THE BASIS OF FACTS OF THIS CASE, I AM CONVINCED THAT THE CONTENTS OF THE COMPUTER - SHEET, FOUND DURING THE COURSE OF SEARCH AT THE BUSINESS PREMISES OF THE APPELLANT ARE TRUE AND CORRECT AND THE SAME HAVE NOT BEEN REFLECTED IN THE BOOKS OF THE APPELLANT. ADDITION OF RS.56,50,000/ - MADE FOR A.YR.2008 - 09 BY THE A.O. IS H EREBY CONFIRMED AND THE GROUND OF APPEAL OF THE APPELLANT IS DISMISSED ACCORDINGLY 21 . AT THE VERY OUTSET, BOTH THE PARTIES BEFORE US AGREED THAT THE FACTS AND THE ISSUES INVOLVED IN THESE GROUNDS OF CROS S OBJECTION ARE SIMILAR TO THE FACTS AND ISSUES INVOLVED IN GROUNDS NOS.2 TO 4 OF THE CROSS OBJECTION OF SHRI PRAKASH KITTUR AND SMT. VRINDA KITTUR IN C.O.NO. 20/PNJ/15 AND CO NO. 22/PNJ/15 VIDE ORDER DATED 12/08/2015 AND DATED 17/08/2015 W HEREIN THE TRIBU NAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESEE. FOLLOWING THE SAME IN THE PRESENT YEAR ALSO THE GROUNDS OF CROSS OBJECTION IN THE YEAR UNDER APPEAL SHOULD BE ALLOWED. 13 22 . WE FIND THAT THE TRIBUNAL IN THE CASE OF THE ASSESSEE SHRI PRAKASH V. KITTUR IN C.O .NO. 20/PNJ/15 VIDE ORDER DATED 12/08/2015 IN ASSESSMENT YEAR 2008 - 09, HELD AS UNDER: - 43. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE CASE OF THE ASSESSEE ON 16/04/2010. DURING THE COURSE OF SE ARCH, A LOOSE SHEET MARKED AS ANNEXURE A/PVK 2/4 WAS FOUND AND SEIZED FROM THE OFFICE PREMISES OF THE ASSESSEE. THE SAID LOOSE SHEET IS A COMPUTER PRINTED PAPER. ON THE SAID LOOSE SHEET AT THE TOP NAME HAZRAT CONSTRUCTIONS IS WRITTEN AND BELOW IT IS WRIT TEN CASH PAYMENT AND THEREAFTER CERTAIN DATES WITH AMOUNTS MENTIONED AGAINST THAT DATE ARE WRITTEN. AS PER THOSE DATES, THE AMOUNT RELATING TO THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2008 - 09 COMES TO RS 56,50,000/ - . 44. IN THE COURSE OF THE ASSES SMENT PROCEEDINGS, THE ASSESSING OFFICER CONFRONTED THIS LOOSE DOCUMENT TO THE ASSESSEE. THE ASSESSEE SUBMITTED THAT THIS PAPER DOES NOT BELONG TO HIM AND IT DOES NOT REFLECT THE TRANSACTIONS BETWEEN THE ASSESSEE AND THE SAID M/S. HAZRAT CONSTRUCTIONS. THE ASSESSEE ADMITTED THAT M/S. HAZRAT CONSTRUCTIONS WAS A CONTRACTOR, WHO ALSO WORKED FOR THE ASSESSEE, HOWEVER, THE PAYMENTS FOR THE WORK DONE BY M/S. HAZRAT CONSTRUCTIONS WERE MADE THROUGH BANKING CHANNEL AND, THEREFORE, RECORDED IN HIS BOOKS OF ACCOUNTS. THE ASSESSEE ALSO POINTED OUT THAT DURING THE COURSE OF SEARCH ITSELF, THE ASSESSEE STATED UNDER OATH THAT NO PAYMENT IN CASH HAS BEEN MADE BY HIM TO M/S. HAZRAT CONSTRUCTIONS. HE ALSO POINTED OUT THAT THE SAID LOOSE SHEET DOES NOT BEAR THE NAME OF ASSESSE E. NEITHER IT BEARS SIGNATURE OF THE ASSESSEE NOR WAS IT IN THE HANDWRITING OF THE ASSESSEE. IN FACT, THE SAID LOOSE SHEET ALSO DOES NOT CONTAIN ANY SIGNATURE OF M/S. HAZRAT CONSTRUCTIONS OR ANY PERSON AND IT CANNOT BE ASSUMED ON THE BASIS OF THIS LOOSE S HEET THAT IT RECORDS ANY ACTUAL OR REAL TRANSACTIONS BETWEEN ANY PERSONS. HOWEVER, THE ASSESSING OFFICER NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND ASSUMED THAT THE LOOSE SHEET REFLECTS ACTUAL TRANSACTIONS AND THAT THE TRANSACTIONS WERE ENTERED BETWE EN THE ASSESSEE AND M/S.HAZRAT CONSTRUCTIONS AND THE SAID TRANSACTIONS WERE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE. THE ASSESSING OFFICER MADE THE ADDITION OF RS 56,50,000/ - TO THE INCOME OF THE ASSESSEE OF THE YEAR UNDER CONSIDERATI ON AS UNEXPLAINED EXPENDITURE OF THE ASSESSEE. 45. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT THE LOOSE SHEET WAS FOUND IN THE OFFICER OF THE ASSESSEE. 46. BEFORE US, THE AUTHORIZED REP RESENTATIVE OF THE ASSESSEE FILED THE COPY OF LOOSE SHEET WHICH IS PLACED AT PAGE NO.177 OF THE PAPER BOOK. HE POINTED OUT THEREFROM THAT NOWHERE THERE IS NAME OF THE 14 ASSESSEE OR SIGNATURE OF THE ASSESSEE. HE ALSO SUBMITTED THAT IT DOES NOT CONTAIN HANDWRI TING OF THE ASSESSEE. THE SAID LOOSE SHEET ALSO DOES NOT BEAR THE SIGNATURE OF M/S.HAZRAT CONSTRUCTIONS. THUS, THE SAID LOOSE SHEET CANNOT BE TREATED AS AN EVIDENCE OF ANY REAL TRANSACTION, MUCH LESS OF TRANSACTION BETWEEN THE ASSESSEE AND M/S. HAZRAT CONS TUCTIONS. HE ARGUED THAT THE LOOSE SHEET HAS NO EVIDENTIARY VALUE IN THE EYES OF LAW. HE ALSO CONTENDED THAT DURING THE COURSE OF SEARCH, NO MATERIAL TO CORROBORATE THE INFERENCE OF THE ASSESSING OFFICER THAT THIS LOOSE SHEET REFLECTS ACTUAL TRANSACTIONS B ETWEEN THE ASSESSEE AND THE SAID M/S. HAZRAT CONSTRUCTIONS WAS FOUND. IN ABSENCE OF ANY CORROBORATIVE MATERIAL FOUND DURING THE COURSE OF SEARCH, NO ADDITION ON THE BASIC OF SUCH LOOSE SHEET WHICH HAS NO EVIDENTIARY VALUE COULD BE MADE IS THE ESTABLISHED P OSITION OF LAW. 47. ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 48. AFTER GOING THROUGH THE LOOSE SHEET, WE FIND THAT MERELY FROM THE SAID SHEET IT CANNOT BE CONCLUDED THAT IT RECORDS ACTUAL FINANCIAL TRANS ACTIONS BETWEEN THE ASSESSEE AND M/S. HAZRAT CONSTRUCTIONS OR ANY OTHER PERSON. FROM THE SAID LOOSE SHEET, IT CANNOT BE CONCLUDED THAT THE ASSESSEE ACTUALLY PAID THE AMOUNT STATED ON THE DATES MENTIONED THEREIN OR EVEN M/S. HAZRAT CONSTRUCTIONS ACTUALLY RE CEIVED THOSE AMOUNTS FROM ANY PERSON. THUS, THE SAID DOCUMENTS WHICH WAS NOT A PART OF REGULARLY MAINTAINED BOOKS OF ACCOUNTS CANNOT BE TREATED AS EVIDENCE OF ACTUAL TRANSACTION OF THE ASSESSEE WITHOUT ANY CORROBORATIVE EVIDENCE FOUND DURING THE COURSE OF SEARCH. IN ABSENCE OF ANY CORROBORATIVE EVIDENCE BEING BROUGHT ON RECORDS BY THE REVENUE, IN OUR CONSIDERED VIEW THE ADDITION MADE MERELY ON THE BASIS OF LOOSE SHEET WHICH DOES NOT BEAR SIGNATURE OF ANY PERSON AND WHICH DOES NOT CREATE ANY LEGAL RELATIONSH IP BETWEEN THE ASSESSEE AND ANY OTHER PERSON CANNOT BE SUSTAINED. 49. IN THE ABOVE CIRCUMSTANCES, WE ARE UNABLE TO SUSTAIN THE ADDITION MADE BY THE REVENUE AND ACCORDINGLY THE SAME IS DELETED. THUS, THESE GROUNDS OF CROSS OBJECTION ARE ALLOWED. 23 . FACTS BEING IDENTICAL RESPECTFULLY FOLLOWING THE PRECEDENT, WE ALLOW THE GROUNDS OF CROSS OBJECTION OF THE ASSESSEE. 24 . GROUND NOS.5 & 6 OF THE CROSS OBJECTION ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINING ADDITION OF RS.12, 00 , 000/ - AS UNEXPLAINED CASH PAID. 15 25 . THE BRIEF FACT OF THE CASE ARE THAT THE A SSESSING OFFICER OBSERVED THAT IN PAGE 88 OF ANNEXURE A/PVK - 1/2 THAT ON 5/8/2009 CASH PAYMENT OF RS.12 , 00 , 000/ - IS MENTIONED AGAINST CASH FOR BELGAUM. MR. PRAKASH KITTUR WAS NOT ABLE TO EXPLAIN THE ENTRY AND THE SAME WAS NOT REFLECTED IN THE BOOKS OF ACCOUNT THEREFORE , IT WAS CONCLUDED THAT HE HAS NO EXPLANATION FOR THE SAME AND THEREFORE ADDED AS UNEXPLAINED CASH PAYMENT @50% OF THE SAME I.E RS.6,00,000/ - IN THE HANDS OF PRAKASH KITTUR AND RS.6,00,000/ - IN THE HANDS OF VRINDA KITTUR. 26 . ON APPEAL C OMMISSIONER OF INCOME TAX (A PPEALS ) CONFIRMED THE ACTION OF THE A SSESSING OFFICER BY OBSERVING AS UNDER : - THIS ENTRY IS ALSO LIKE THE ENTRY AS IN THE CASE OF M/S. HAZRAT CONSTRUCTIONS. THE AO HAS CORRELATED ENTRIES FOUND AT TWO DIFFERENT PIECES OF PAPERS. THE PAPERS HAVE BEEN FOUND AT THE PREMISES OF THE APPELLANT AND IT CONTAINS CLEAR NOTING THAT THE CASH HAS BEEN SENT TO BELGAUM. THIS AMOUNT OF RS.1200000/ - DOES NOT FIND A PLACED IN T HE BOOKS OF THE APPELLANT AND THE ASSESSEE HAS FAILED TO FURNISH ANY EXPLANATION WHATSOEVER EXCEPT DENYING THAT NO SUCH CASH PAYMENT HAS BEEN MADE. IN VIEW OF THESE FACTS AND IN ABSENCE OF ANY EXPLANATION ON PART OF THE APPELLANT, THE ADDITION MADE ON THIS ACCOUNT IS CONFIRMED AND APPEAL OF THE ASSESSSEE ON THESE GROUNDS ARE DISMISSED 27 . THE AR OF THE ASSE S SEE SUBMITTED THAT THIS AMOUNT WAS FOUND WRITTEN ON THE SAME PAPER MARKED AS ANNEXURE A/PVK - 1/2 WHERE PAYMENTS TO M/S. HAZRAT CONSTRUCTIONS WERE NOTED. TH E T RIBUNAL IN THEIR ORDER FOR A SSESSMENT YEAR 2008 - 09 HAS HELD THAT MERELY FROM THE SAID SHEET IT CANNOT BE CONCLUDED THAT IT RECORDS THE ACTUAL FINA NCIAL TRANSACTIONS BETWEEN ASSE SS E E AND M/S. HAZRAT CONSTRUCTION OR ANY OTHER PERSON. FROM THE SAID LOOSE SHEET , IT CANNOT BE CONCLUDED THAT THE ASSESSEE ACTUALLY PAID THE AMOUNT MENTIONED ON THE DATES THEREIN. THE SAID DOCUMENT WHICH WAS NOT A PART OF REGULARLY MAINTAINED BOOKS OF ACCOUNT CANNOT BE TREATED AS EVIDENCE OF THE ACTUAL TRANSACTION OF THE ASSESSEE WITHOUT ANY CORROBORATIVE EVIDENCE FOUND DURING THE COURSE OF THE SEARCH. FURTHER THE LOOSE SHEET DOES NOT BEAR ANY SIGNATURE OF ANY 16 PERSON AND DOES NOT CREATE ANY LEGAL RELATIONSHIP BETWEEN THE ASSESSEE AND ANY OTHER PERSON AND THEREFORE , THE ADDITION CA NNOT BE SUSTAINED. FOLLOWING THE SAME THE ADDITION SHOULD BE DELETED. 28 . D EPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE C OMMISSIONER OF INCOME TAX (A PPEALS ) . 29 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND ON PERUSAL OF SEIZED DOCUMENTS MARKE D AS PAGE 88 OF ANNEXURE A/PVK - 1/2 THAT ALONG WITH DATE OF 5/8/2009 FIGURE OF 12 , 00 , 000/ - HAS BEEN MENTIONED. F ROM THE PERUSAL OF THE SAID LOOSE SHEET , IT IS NOT CLEAR THAT IT REPRESENT ANY ACTUAL TRANSACTION OF ANY RECE IPT OR PAYMENT BY THE AUTHOR OF THE LOOSE SHEET. WE FIND THAT ON SIMILAR NOTING MADE ON THE VERY SAME LOOSE SHEET THIS TRIBUNAL IN THE CASE OF THE ASSES S EE ITSELF FOR THE A SSESSMENT YEAR 2008 - 09 VIDE ITS ORDER DATED 12/08/2015 PASSED IN ITA NO.186/PNJ/2015 HAS HELD AS UNDER AS AGAINST THE INFERENCE OF REVENUE THAT THOSE FIGURES REPRESENTS AMOUNT PAID BY THE ASSESSEE TO M/S. HAZRAT CONSTRUCTIONS. 48. AFTER GOING THROUGH THE LOOSE SHEET, WE FIND THAT MERELY FROM THE SAID SHEET IT CANNOT BE CONCLUDED THAT IT RECORDS ACTUAL FINANCIAL TRANSACTIONS BETWEEN THE ASSESSEE AND M/S. HAZRAT CONSTRUCTIONS OR ANY OTHER PERSON. FROM THE SAID LOOSE SHEET, IT CANNOT BE CONCLUDED THAT THE ASSESSEE ACTUALLY PAID THE AMOUNT STATED ON THE DATES MENTIONED THEREIN OR EVEN M/S. H AZRAT CONSTRUCTIONS ACTUALLY RECEIVED THOSE AMOUNTS FROM ANY PERSON. THUS, THE SAID DOCUMENTS WHICH WAS NOT A PART OF REGULARLY MAINTAINED BOOKS OF ACCOUNTS CANNOT BE TREATED AS EVIDENCE OF ACTUAL TRANSACTION OF THE ASSESSEE WITHOUT ANY CORROBORATIVE EVIDE NCE FOUND DURING THE COURSE OF SEARCH. IN ABSENCE OF ANY CORROBORATIVE EVIDENCE BEING BROUGHT ON RECORDS BY THE REVENUE, IN OUR CONSIDERED VIEW THE ADDITION MADE MERELY ON THE BASIS OF LOOSE SHEET WHICH DOES NOT BEAR SIGNATURE OF ANY PERSON AND WHICH DOES NOT CREATE ANY LEGAL RELATIONSHIP BETWEEN THE ASSESSEE AND ANY OTHER PERSON CANNOT BE SUSTAINED. 30 . THE DR COULD NOT THE CONTROVERT THE SUBMISSION OF THE ASSESSEE THAT FOLLOWING THE ABOVE FINDING OF THE TRIBUNAL ON THE BASIS OF SIMILAR NOTING 17 ON THE VERY SA ME LOOSE SHEET THE ADDITION OF RS.12 , 00 , 000/ - MADE IN THE YEAR UNDER CONSIDERATION REQUIRES TO BE DELETED. 31 . WE FIND THAT NO CORROBORATIVE MATERIAL COULD BE BROUGHT ON RECORD BY THE REV ENUE TO SHOW THAT THE AFORESAID NOTING SHOWS ANY ACTUAL TRANSACTIONS OF THE ASSESSEE. WE , THEREFORE , FOLLOWING THE ABOVE STATED DECISION OF THE TRIBUNAL , DELETE THE ADDITION OF RS.12 , 00 , 000/ - IN THE YEAR UNDER APPEAL ALSO. THUS , THE GROUND OF CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. 32 . GROUND NOS. 7 TO 9 OF THE CROSS OBJECTION ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINING THE ADDITION OF RS.82,00 , 000/ - AS UNEXPLAINED INVESTMENT IN BULK FLATS PURCHASED FROM RRAS DEVELOPERS. 33 . WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDER OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF SEARCH CERTAIN LOOSE SHEETS WERE FOUND AND SEIZED FROM THE BUSINESS PREMISES OF THE ASSESSE. THE RELEVANT SIZED DOCUMENTS ARE MARKED AS PAGES 79 TO 81 OF A/PBK/29. THE AO OBSERVED THAT THE ASSESSEE HAS PURCHASED 22 FLATS IN BULK FROM M/S. RRAS DEVELOPERS. A MOU ENTERED INTO BETWEEN THE ASSESSEE AND THE SAID M/S. RRASS DEVELOPERS DATED 30/11/2009 WAS ALSO FOUND AND SIZED DURING THE COURSE OF SEARCH PROCEEDI NGS. AS PER THE SAID MOU THE ASSES S EE PURCHASED THE 22 FLATS FOR CONSIDERATION OF RS.6.00 CRORES. THE ASSESSING OFFICER OBSERVED THAT THE PAYMENT OF THESE RS.6 CRORES WERE MADE BY CHEQUE BY THE ASSES S EE FROM ITS REGULAR BANK ACCOUNT. HOWEVER, THE ASSESSING OFFICER OBSERVED THAT AT PAGE NO.80 OF THE SEIZED DOCUMENTS MARKED A/PBK/29 IT IS WRITTEN THAT 31*22 = 682 AND THAT FROM THIS THE ASSESSING OFFICER INFERRED THAT THE SAME RELATES TO THE SAID TRANSACTION OF PURCHASE OF 22 FLATS. THE ASSESSING OFFICER FURTH ER FROM WRITING SCRIBBLED AT LOOSE SHEETS MARKED 79,80 & 81, INFERRED THAT ASSESSEE HAS ALSO ACTUALLY PAID CASH OF RS.82.00 LACS ALONG 18 WITH THE CHEQUE OF RS.9.00 LACS AT THE TIME OF SIGNING OF MOU. AS THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF SAID PAYMENT OF RS.82 LACS , THE ASSESSING OFFICER ADDED RS.82 LACS TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENTS. 34 . ON APPEAL THE C OMMISSIONER OF INCOME TAX (A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER . 35 . BEFORE US THE A UTHORIZED REPRESENTATIVE OF THE ASS ESSEE V EH EMENT LY DENIED HAVING MADE ANY PAYMENT IN CASH FOR PURCHASE OF SAID 22 FLATS. HE SUBMITTED THAT FROM THE SEIZED DOCUMENTS , IT CANNOT BE HELD THAT THE ASSESSEE PAID RS.82 LACS TO M/S.RRAS DEVELOPERS FOR THE PURCHASE OF 22 FLATS IN QUESTI ON. 36 . ON THE OTHER HAND , THE D EPARTMENTAL R EPRESENTATIVE SUPPORTED THE ORDER S OF THE LOWER AUTHORITIES. 37 . WE FIND THAT FROM THE MOU DATED 30/11/2009 FOUND DURING THE COURSE OF SEARCH THE ASSESSEE ENTERED INTO AGREEMENT WITH M/S. RRAS DEVELOPERS FOR PURCHASE OF 22 FLATS AT KAREKAR R ESIDENCY FOR RS.6.00 CRORES. NO W H ERE THE SAID AGREEMENT REFERS TO THE CONSIDERATION OF RS.6.82 CRORES. THE EXPLANATION OF THE ASSESSEE IS THAT THE NOTIONAL VALUE PER FLAT WAS TAKEN AT RS. 31 LACS AT THE TIME OF NEGOTIATION WITH THE RRAS DEVELOPERS AND THE ASSES S EE WAS MAKING PURCHASES IN BULK OF 22 NOS . OF FLATS, THE ASSESSEE WAS ALLOWED A DISCOUNT OF RS.82 LACS AND THEREFORE THE TOTAL CONSIDERATION TO BE PAID BY THE ASSESSEE WAS RS.6. CRORES ONLY AND NOT RS.6.82 LACS. 38 . FURTHER, IT IS OBSERVED THAT AFTER THE DATE OF SEARCH ON 16/4/2010 A STATEMENT OF THE ASSESSEE WAS RECORDED U/S 131 OF THE ACT, WHEREIN QUESTION NO . 12 AND THE ANSWERS THERETO WERE AS UNDER. Q.NO.12 ON PAGE 80, SCHEDULE OF PAYMENTS IS WRITTEN IN THE FIRST COLUMN AND THE TOTAL OF PAYMENTS AMOUNTING TO RS.6.82 CRORES WHICH INCLUDES RS.82. LAKHS BY CASH AND RS.6 CRORES BY CHQUES. THE 19 CASH PAYMENT WAS MADE ALONG WITH FIRST INSTALLMENT OF CHEQUE PAYMENT OF RS.9. LAKHS. THE SECOND COLUMN IS HALF THE SHARE OF INVESTMENT WHIC H AMOUNTS TO RS.3.41 CRORES. IT IS ALSO SEEN THAT ON PAGE 79 NOTHINGS INDICATE THAT THEY RELATE TO FLATS DEAL. THERE IS MENTION OF CASH OF RS.41 LAKHS ON PAGE 81 AND RS.82 LAKHS ON PAGE 80. PLEASE REFER TO THE BULK PURCHASE OF FLATS FROM M/S. RRAS DEVELOP ERS AND EXPLAIN WHY IT SHOULD NOT BE HELD THAT YOU HAVE PAID CASH OF RS.82. LAKHS ALONG WITH THE FIRST INSTALLMENT OF RS.9 LAKHS. THE PAYMENT OF RS.9 LAKHS BY CHEQUE IS REFLECTED IN YOUR BANK ACCOUNT AND BOOKS OF ACCOUNT. EXPLAIN THE SOURCES FOR THE PAYMEN T OF CASH OF RS.82 LAKHS. SHOW CAUSE WHY THE SAME SHOULD NOT BE BROUGHT TO TAX IN YOUR HANDS FOR AY 2010 - 11? ANS THE AMOUNT MENTIONED OF RS.82 LAKHS IS THE DISCOUNT GIVEN TO US ON THE OFFERED PRICE OF RS.6.82 CRORES. THERE IS NO ELEMENT OF CASH INVOLVED EVEN THE AGREEMENT IS MADE FOR RS.6 CRORES ONLY. 39 . FURTHER, WE OBSERVED FROM PAGE NOS.56 TO 59 OF THE PAPER BOOK FILED BY THE ASSES S EE WHICH CONTAINED A LETTER DATED 1/6/2010 WRITTEN BY M/S . RASS DEVELOPERS ADDRESS TO DEPUTY COMMISSIONER OF INCOME TAX INV ESTIGATION, IN RESPONSE TO THE SUMMONS U/S 131 OF THE ACT, WHEREIN THE SELLER HAS CONFIRMED THAT THE 22 FLATS WERE SOLD TO THE ASSESSEE FOR A CONSIDERATION OF RS.6.00 CRORES. 40 . WE FIND THAT A COPY OF THE SIZED DOCUMENT MARKED A/PBK/29 IS FILED AT PAGE NOS . 41 TO 44 OF THE PAPER BOOK FILED BY THE ASSESSEE ON THE BASIS OF WHICH ONLY THE ASSESSING OFFICER INFERRED THAT RS. 82 LAKHS WAS PAID BY THE ASSESSEE BY CASH ON 30/11/2009 TO THE SELLERS FROM UNACCOUNTED SOURCE. ACCORDING TO THE ASSESSING OFFICER IN THE LO OSE SHEET MARKED 79 PAYMENT OF RS.175.80 LAKHS HAS BEEN WRITTEN AND ACCORDING TO THE ASSESSING OFFICER, THE SAME IS COMPRISED OF RS.9 LAKHS BY CHEQUE AND RS.82 LACS BY CASH AND RS.50 LACS, RS.25 LACS AND RS.9.80 LACS BY CHEQUE. FROM THIS CALCULATION THE AS SESSING OFFICER SUPPORTED ITS CLAIM THAT THE ASSESSEE IN FACT MADE PAYMENT OF RS.82 LACS IN CASH. 41 . A UTHORIZED REPRESENTATIVE OF THE ASSESSEE EXPLAINED BEFORE US THAT THE PAYMENT I N RESPECT OF FLAT S WERE MADE BY CHEQUE OF RS.9 LACS AT THE TIME OF SIGNING O F MOU AND THEREAFTER CHEQUES OF RS.50 LACS EACH. THE 20 ASSESSING OFFICER ASSUMPTION OF PAYMENT OF RS.25 LACS AND RS.9.80 LACS IS FACTUALLY WRONG WHICH CAN BE CLEARLY VERIFIED FROM THE COPY OF THE LEDGER ACCOUNT SUBMITTED BY THE RASS DEVELOPERS WHICH IS PLACED AT PAGE NO. 61 AND 62 OF THE PAPER BOOK WHICH WAS FILED BY THE SAID PARTY BEFORE THE DCIT - INV ON 1/6/2010 . T HIS ITSELF PROVES THAT THE AO IS INFERENCE THAT THE ASSESS EE PAID RS.175.80 LACS WHICH INTURN INCLUDED CASH OF RS.82 LACS IS ERRONEOUS AND FROM THIS IT CANNOT BE INFERRED THAT ASS E SSE E ACTUALLY PAID ANY AMOUNT IN CASH FOR PURCHASE OF 22 FLATS IN QUESTION. 42 . FURTHER, FROM LOOSE SHEET MARKED PAGE 80 IT IS OBSERVED THAT THE FIGURES OF 9 + 82 AND FIGURE OF 50 SEVEN TIMES AND FIGURE OF 241 HAS BEEN WRITTEN. FROM THIS IT CANNOT BE CONCLUDED THAT FIGURE OF 82 REPRESENT S CASH PAYMENT OF RS.82 LACS BY THE ASSES S EE ON ANY DATE. 43 . FURTHER A PERUSAL OF LOOSE SHEET MARKED AS PAGE 81 IT IS OBSERVED THAT EARLIER IT IS STATED THAT REFUND REQUIRED WITH CERTAIN FIGURES AND THEREAFTER IT IS WRITTEN PAYMENT MADE CASH 41, CHEQUE 14.30. THE ASSESSEE POINTED OUT THAT IF IT IS INFERRED FROM THIS LOOSE SHEET THAT IF THE ASSESSEE ACTUALLY MADE PAYMENT OF ANY 41 LACS THEN FOR THE SAME REASONING IT ALSO IMPLIES THAT THE ASSESSEE MADE PAYMENT OF RS.14.30 LACS BY CHEQUE FOR PURCHASE OF FLATS IN QUESTION. HOWEVER , IT CAN BE OBSERVED FROM THE MATERIAL ON RECORD THAT THE ASSESSEE PAID CHEQUE OF RS.9 LACS AND THEREAFTER CHEQUE OF RS. 50 LACS AND NO CHEQUE OF RS.14.30 LACS WAS IN FACT MA DE. THUS , THE INFERENCE DRAWN BY THE ASSESSING OFFICER ON THE BASIS OF THESE LOOSE SHEETS WAS NOT CORRECT. 44 . WE FIND THAT NO MATERIAL COULD BE BROUGHT BEFORE US BY THE REVENUE TO SHOW THAT ANY PAYMENT BY CHEQUES OF RS.14.30 LACS WAS MADE BY THE ASSESSEE. TH E ASSESSEE EXPLAINED THAT AT THE TIME OF NEGOTIATIONS VARIOUS DISCUSSIONS TOOK PLACE WHICH WAS NOTED IN THESE LOOSE SHEET AND THEY DO NOT REPRESENT THE ACTUAL TRANSACTION. 21 45 . WE FIND THAT FROM THE LOOSE SHEET IT CANNOT B E NECESSARILY CONCLUDED THAT IN FACT RS.82 LACS WAS PAID IN CASH BY THE ASSESSEE TO M/S. RRAS DEVELOPERS AT THE TIME OF ENTERING INTO MOU. 46 . NO MONEY RECEIPT OR ANY OTHER CORROBORATIVE MATERIAL TO POINT OUT THAT THE ASSESSEE IN FACT MADE CASH PAYME NT OF RS.82 LACS ON 30/11/2009 C OULD BE BROUGHT BEFORE US. IN THE ABOVE CIRCUMSTANCES , THE INFERENCE DRAWN BY THE REVENUE IN RESPECT OF THE NOTING MADE IN THE LOOSE SHEET MARKED PAGE NO 79 TO 81 OF A/PBK/29 WAS NOT A NECESSARY CONCLUSION OF THE ACTUAL TRANSACTION AND CONSEQUENTLY THE ADDITION OF RS . 82 LACS MADE MERELY ON THE BASIS OF THE SAME CANNOT BE SUSTAINED. WE , THEREFORE, DELETE THE ADDITION OF RS.82 LACS AND ALLOW THE GROUND OF CROSS OBJECTION OF THE ASSESSEE. 47 . IN THE RESULT, APPEAL S OF THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE AND THE CROSS OBJECTION S OF THE ASSESSEE S ARE ALLOWED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON MONDAY , T HE 20 TH DAY OF OCTOBER , 2015 AT GOA. SD/ - SD/ - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20 TH OCTOBER , 2015. VR/ - COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 22 DATE INITIAL T H I S O R D E R I S T Y P E D T O D I C T A T I O N I N C H A M B E R . 1. DRAFT DICTATED ON 1 9 . 10 .2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 20 . 10 .2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 20 / 10 /2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 20 / 1 0/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 20 / 1 0 /2015 SR.PS 6. DATE OF PRONOUNCEMENT 20 / 1 0/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 20 / 1 0 /2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER
