Income-tax Officer, Central, Kolhapur V. Mrs. Sukhada Purushottam Gadgil, Sangli

ITA 1074/PUN/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2036 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-10-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 23-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER, AND SHRI R.S.PADVEKAR, JUDICIAL MEMBER. ITA.NO.1074/PN/2011 (ASSTT. YEAR : 2005-06) ITO, CENTRAL, KOLHAPUR. .. APPELLANT VS. SMT. SUKHADA PURUSHOTTAM GADGIL, 132-B, SOUTH SHIVAJI NAGAR, SANGLI. .. RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK DEPARTMENT BY : MS.ANN KAPTHUAMA DATE OF HEARING : 13.02.2013 DATE OF PRONOUNCEMENT : 25.02.2013 ORDER PER R.S.PADVEKAR, JM : IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD. CIT(A), KOLHAPUR, DATED 16.06.2011 FOR THE A.Y. 2005-06. THE REVENUE HAS FILED THE ADDITIONAL GROU NDS. THE LD. DR SUBMITS THAT FOR THE COMPLETENESS OF THE CASE, ADDI TIONAL GROUNDS ARE FILED AND ONLY ADDITIONAL GROUNDS MAY BE CONSID ERED FOR DECIDING THE ISSUES AND ORIGINAL GROUNDS MAY NOT BE CONSIDERED. WE HAVE HEARD THE LD. AR WHO HAS NO OBJECTION FOR A DMISSION OF THE ADDITIONAL GROUNDS WHICH ARE ALMOST A SUBSTITUTION OF THE ORIGINAL GROUNDS. 1. ON THE FACTS AND IN LAW, THE CIT(A) ERRED TO HOLD T HAT THE ADDITION ON ACCOUNT OF CASH LOAN OF RS.35,00,000/- IN ADDITION TO ACCRUED INTEREST THEREON OF RS.1,00,000/- WAS MA DE MERELY ON SURMISE; WHEN, THE ADDITION IN QUESTION WAS MADE ON CONCRETE EVIDENCE VERY WELL AVAILABLE ON RECORD, IN THE FORM OF 2 POST DATED CHEQUES (SEIZED MATERIAL) INDICATING AN HIGHER AMOUNT THAN HE ACTUAL CASH LOAN GIVEN. 2. ON THE FACTS AND IN LAW, THE CIT(A) ERRED TO HOLD T HAT THE ADDITION ON ACCOUNT OF CASH LOAN OF RS.35,00,000/- IN ADDITION TO ACCRUED INTEREST THEREON OF RS.1,00,000/- WAS MA DE ON SURMISE MERELY CONSIDERING THE LANGUAGE OF ORDER AL ONE AND IGNORING THE FACTS SUBSTANTIATED ON RECORD IN ASSES SMENT ITSELF. 2. WE HAVE HEARD THE PARTIES. THERE WAS SEARCH AND SEIZURE OPERATION U/S.132(1) OF THE ACT ON 26.10.2005 AT TH E RESIDENTIAL AS WELL AS THE BUSINESS PREMISES OF GADGIL GROUP IN SA NGLI. IN THE COURSE OF SEARCH, SOME INCRIMINATING MATERIAL IN TH E FORM OF CHEQUES DATED 28.03.2005 OF RS.17.5 LAKHS EACH ISSU ED BY SHRI MADHAV JOGLEKAR AND BY M/S.PRATHMESH SECURITIE S PVT. LTD., IN FAVOUR OF THE ASSESSEE WERE FOUND. THE ASSESSEE STATED THAT CHEQUES DATED 28.03.2005 OF RS.17.5 LAKHS ISSUED BY SHRI MADHAV JOGLEKAR AND RS.17.5 LAKHS ISSUED BY PRATHMESH SECU RITIES PVT. LTD., WERE IN RESPECT OF THE ASSESSEE WHO HAS LENT HER SHARES TO PRATHMESH SECURITIES PVT. LTD., FOR THE PURPOSE OF INVESTMENT. AN MOU WAS ALSO EXECUTED BETWEEN THE ASSESSEE AND PRAT HMESH SECURITIES PVT. LTD. AND AS PER PARA 16 OF THE SAID MOU, IT WAS SPECIFICALLY MADE OUT THAT PRATHMESH SECURITIES PVT . LTD. AND ITS DIRECTOR SHRI MADHAV JOGLEKAR WHO GAVE THE SIGNED C HEQUES EQUIVALENT TO THE MARKET VALUE OF THE SHARES AS ON 28.02.2005. AS PER THE MOU, IN CASE OF FAILURE OF THE COMPANY, NAM ELY, PRATHMESH SECURITIES PVT. LTD., TO RETURN THE SHARES LENT BY THE ASSESSEE, THE ASSESSEE WAS AT LIBERTY TO DEPOSIT THE SAID CHEQUES TO RECOVER THE VALUE OF THE SHARES. PRATHMESH SECURITIES PVT. LTD . RETURNED ALL THE SHARES LENT BY THE ASSESSEE AND ENTIRE TRANSACTION WAS DONE THROUGH THE DEMAT ACCOUNT WITH HDFC BANK. 2.1 THE ASSESSING OFFICER WAS NOT IMPRESSED WITH TH E EXPLANATION OF THE ASSESSEE. HE MADE THE ADDITION OF RS.35,00, 000/- TREATING THE SAME AS UNDISCLOSED INCOME WHICH WAS VALUE OF T HE CHEQUES FOUND DURING THE COURSE OF SEARCH, ISSUED BY PRATHM ESH SECURITIES PVT. LTD. AND SHRI MADHAV JOGLEKAR, DIRECTOR OF THE SAID COMPANY. THE ASSESSING OFFICER ALSO MADE ADDITION OF RS.1,00 ,000/- TOWARDS 3 ALLEGED AMOUNT OF THE INTEREST TO BE RECEIVED AND M ADE TOTAL ADDITION OF RS.36,00,000/-. THE ASSESSEE CHALLENGE D THE ADDITION BEFORE THE LD. CIT(A). THE LD. CIT(A) DELETED THE ENTIRE ADDITION, I.E., PRINCIPAL AS WELL AS ADDITION ON ACCOUNT OF N OTIONAL INTEREST OF RS.1,00,000/-, BY FOLLOWING THE DECISION OF THE TRI BUNAL IN ASSESSEES HUSBANDS CASE. NOW THE REVENUE IS IN A PPEAL BEFORE US. 3. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL EXPL AINED THE CASE. HE STATED THAT IN THE STATEMENT GIVEN IN COU RSE OF SEARCH BY THE ASSESSEES HUSBAND SHRI PURUSHOTTAM GADGIL, EXP LANATIONS WERE GIVEN IN RESPECT OF THE CHEQUES FOUND IN THE C OURSE OF SEARCH. HE FURTHER SUBMITS THAT MOU WAS ALSO FOUND DURING T HE COURSE OF SEARCH BETWEEN ASSESSEE AND PRATHMESH SECURITIES PV T. LTD., AND SHRI MADHAV JOGLEKAR. HE ALSO REFERRED TO THE DECI SION OF THE TRIBUNAL, PAGE NO.35 TO 39 IN THE CASE OF SHRI PURU SHOTTAM Y.GADGIL VS. ITO(CENTRAL), KOLHAPUR, IN ITA.NO.358/ PN/2009 DATED 27.01.2011 AND SUBMITS THAT ON IDENTICAL SET OF FAC TS, THE ADDITIONS IN RESPECT OF THE PRINCIPAL AS WELL AS THE INTEREST HAVE BEEN DELETED. WE HAVE ALSO HEARD THE LD. DR. 4. WE FIND THAT AS PER THE EVIDENCE ON RECORD, THE MOU WAS ALSO FOUND DURING THE COURSE OF SEARCH. WE FURTHER FIND THAT ASSESSEE HAS LENT HER SHARES TO PRATHMESH SECURITIES PVT. LT D., AND SHRI MADHAV JOGLEKAR, DIRECTOR OF THE SAID COMPANY. AS A SECURITY THEY HAVE TAKEN SIGNED CHEQUES OF RS.17.5 LAKHS EACH IN CASE PRATHMESH SECURITIES PVT. LTD., FAILS TO RETURN THE SHARES LE NT BY THE ASSESSEE. WE FURTHER FIND THAT ON THE IDENTICAL SET OF FACTS, THE TRIBUNAL HAS CONFIRMED THE ORDER OF THE LD. CIT(A) DELETING THE ADDITIONS IN THE CASE OF SHRI PURUSHOTTAM Y.GADGIL, HUSBAND OF THE A SSESSEE IN ITA.NO.314/PN/2009. IN THE ABOVE CASE, THE TRIBUNA L HAS GIVEN THE CATEGORICAL FINDING THAT CHEQUES FOUND IN THE C ASE OF HUSBAND OF THE ASSESSEE WERE IN RESPECT OF VALUE OF THE SHARES LENT TO PRATHMESH SECURITIES PVT. LTD., AT THE RELEVANT POI NT OF TIME. IN OUR OPINION, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD.CIT(A) AS FACTS ARE IDENTICAL IN RESPECT OF THE HUSBAND OF TH E ASSESSEE, I.E., 4 SHRI PURUSHOTTAM Y. GADGIL, AND AS THE SAID DECISIO N HAS BEEN FOLLOWED BY THE LD. CIT(A). WE, THEREFORE, CONFIRM THE ORDER OF THE LD. CIT(A) FOR DELETING THE ADDITIONS TOWARDS THE A LLEGED INVESTMENT OF RS.35,00,000/- AS WELL AS ALLEGED UNDISCLOSED IN TEREST OF RS.1,00,000/-. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS THE 25 TH DAY OF FEBRUARY, 2013. SD/- SD/- ( G.S.PANNU ) ( R.S.PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 25 TH FEBRUARY, 2013 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ITO, CENTRAL, KOLHAPUR. 3. THE CIT(A), KOLHAPUR. 4. THE CIT CONCERNED. 5. THE DR A BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.