RAJU R THAKWANI, Pune V. DCIT, Pune

ITA 1121/PUN/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5237 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-11-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 31-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VERMA
• Assessee Lawyers: VIPIN GUJATHI
• Keywords: Loose papers; Document seized; Opportunity of being heard; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1121 AND 1122/PN/2012 (ASSTT.YEARS : 2006-07 & 2007-08) RAJU R. THAKWANI, 4 TH FLOOR, SAN MAHU COMMERCIAL COMPLEX, 5, BUND GARDEN ROAD, OPP: POONA CLUB, PUNE-411001 .. APPELLANT PAN NO. AAJPT0518K VS. DCIT CENTRAL CIRCLE-1(1), PUNE .. RESPONDENT APPELLANT BY : SHRI VIPIN GUJATHI RESPONDENT BY : SMT. M.S. VERMA DATE OF HEARING : 13-11-2013 DATE OF PRONOUNCEMENT : 27-11-2013 ORDER PER R.K. PANDA, AM : THE ABOVE 2 APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE SEPARATE ORDERS DATED 03-11-2011 OF THE CIT(A)-I, P UNE RELATING TO ASSESSMENT YEARS 2006-07 AND 2007-08 RESPECTIVELY. FOR THE SAKE OF CONVENIENCE, BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.1121/PN/2012 (A.Y. 2006-07) : 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND IS A PARTNER IN NUMBER OF PARTNERSHIP FIRMS ENGAGED IN R EAL ESTATE DEVELOPMENT AND CONSTRUCTION OF RESIDENTIAL AS WELL AS COMMERCI AL PROJECTS. A SEARCH U/S.132 OF THE INCOME TAX ACT WAS CONDUCTED IN THE CASE OF SHRI HASMUKH JAIN GROUP OF CASES ON 10-08-2006. THE ASSESSEES CASE WAS ALSO COVERED IN 2 THE SAID SEARCH. THE ASSESSING OFFICER ISSUED NOTI CE U/S.153A(A) TO THE ASSESSEE ON 04-04-2007. SINCE THERE WAS NO RESPONS E FROM THE ASSESSEES SIDE, A REMINDER WAS ISSUED ON 04-02-2008. SINCE T HE ASSESSEE DID NOT FILE HIS RETURN IN RESPECT OF THE REMINDER ON 04-02-2008 , THE ASSESSING OFFICER ISSUED A QUESTIONNAIRE DATED 29-09-2008 WITH A NOTI CE U/S.142(1) TO THE ASSESSEE WHICH WAS SERVED ON THE ASSESSEE ON 03-10- 2008. EVEN THEN ALSO, THERE WAS NO RESPONSE FROM THE ASSESSEE. THEREFORE , THE ASSESSING OFFICER ISSUED ANOTHER LETTER DATED 10-10-2008. THE ASSESS EE IN RESPONSE TO THE ABOVE FILED HIS RETURN OF INCOME FOR THE FIRST TIME ON 19-11-2008 DISCLOSING TOTAL INCOME OF RS.30,590/- AFTER CLAIMING SHARE OF PROFIT FROM DIFFERENT FIRMS AT RS.44,52,030/- AS EXEMPT U/S.10(2A). 2.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT SEVERAL LOOSE PAPERS WERE SEIZED IN THE COURSE OF SEARCH FROM THE RESIDENCE OF THE ASSESSEE. PAGE NO.13 AND 14 OF BU NDLE NO.1 IS SOME SORT OF ACCOUNT BETWEEN SHRI RAJU THAKWANI AND SHRI RAJENDR A GOEL, BOTH OF THEM PARTNERS IN SEVERAL CONCERNS. THE ASSESSING OFFICE R NOTED THAT NOTINGS ON THESE PAPERS CLEARLY INDICATE THAT SHRI RAJENDRA GO EL OWNS SUBSTANTIAL AMOUNT TO SHRI RAJU THAKWANI. HE REFERRED TO THE S TATEMENT OF THE ASSESSEE WHICH WAS RECORDED DURING THE COURSE OF SEARCH ON 1 0-08-2006. IN RESPONSE TO QUESTION NO.11, THE ASSESSEE HAD ADMITTED THAT P AGE NOS. 13 AND 14 ARE INTERNAL ACCOUNTS BETWEEN SHRI RAJU THAKWANI AND SH RI RAJENDRA GOEL. THE ASSESSING OFFICER NOTED THAT ON 11-08-2006 THE ASSE SSEE WAS EXAMINED ON OATH AND THE RELEVANT QUESTIONS AND ANSWERS WHICH W ERE PUT TO HIM AND WHICH ARE REPRODUCED BY THE ASSESSING OFFICER IN TH E BODY OF THE ASSESSMENT ORDER ARE AS UNDER : 3 'QUESTION NO: 24 : ON BASIS OF ANSWER TO THE EARLIER Q UESTION REGARDING PAGES 14, IF THE SAME ASSUMPTIONS ARE TO BE ADOPTED AND A PPLIED TO FIGURE ON PAGE 14, THE FIGURE OF 84865.34 COMES TO 8 CRORES 48 LAKHS PLEAS E EXPLAIN? ANSWER: YOUR PRESUMPTION 84865.34 COMES TO 8 CRORES 4 8 LAKHS, CAN BE PRESUMED TO INFINITY ALSO, BUT THE FACTS ON THE PAG E 14 REMAIN FACTS. SINCE I AM A SITE MAN, I NEED TO CARRY OUT PETTY EXPENDITURE, PE TTY PAYMENTS TO LABOUR CONTRACTORS & EVEN CERTAIN PURCHASES THE FIGURE OF 84865.34 REPRESENTS THE SAME AND WE RECOVER THE SAME FROM VARIOUS SITES AS MENTIONED. THE DEMAND IS STILL RECEIVABLE FROM R. S. G AND DEMAND IS GIVEN TO HIM SINCE HE IS THE PERSON WHO IS ALWAYS SITTING IN THE OFFICE. ON THIS PAGE THERE AR E PARTICULAR INITIALS BY HIM WHICH HE DISAGREES AND OTHER PAYMENTS HE WANTS CONFIRMATI ON FROM ME AND SINCE THEY ARE PETTY JOBS, I DON'T HAVE ANY ILL TO SUBSTANTIAT E THE SAME, BUT THOSE SMALL PIECES OF WORK AS PURCHASES COULD BE IDENTIFIED ON HE GIVE N SITES. QUESTION 25: ON PAGE 14, THE DATES 1/12/04 TO 31/12 /05 HAS BEEN MENTIONED. DOES THE PAYMENTS REFERRED TO THEREIN HAVE BEEN REF LECTED IN YOUR BOOKS OF ACCOUNTS? ANSWERS: THESE AMOUNTS BEFORE AND AFTER THE PARTICU LARS PAGE INCLUSIVE OF THIS PAGE ARE GENERALLY TREATED AS HAND LOANS TO PARTICU LAR SITES AS AND WHEN THEY HAVE CARRIED. THAT IS WHY IT IS NOT MENTIONED IN MY BOOK S THIS PARTICULAR PAGE IS A DISPUTE BETWEEN PARTICULAR. QUESTION 26: PLEASE REFER TO ANSWER TO Q. 24 WHEREI N YOU HAVE STATED THAT THE FIGURE 84865.34 REPRESENTS RS. 84865.34. BUT AFTER GOING THROUGH PAGE 14, AGAIN IT IS OBSERVED THAT AMOUNTS 857.60, 1244.66, 1649.5 3, 3049.74 IN GENERAL DAY TO DAY PRACTICE, THE PAYMENTS ARE ROUNDED AT LEAST TO NEAREST FIGURE & NOT IN PIECES SUCH AS I PIECE3, PIECE WHICH PAPER SHOWN AS STATED BY YOU. THEREFORE ARE THESE AMOUNTS WRITTEN IN CODES OF THOUSAND OR HUNDRED AS IN PAGE 15? ANSWER: THESE TRANSACTION WHICH OCCUR ARE JOBS WHIC H GIVEN ON AREA X RATE. HENCE, THE FRACTION OCCURS & FINALLY I AGREE WITH YO U IT IS DISBURSED TO THE NEAREST UNIT. QUESTION 27:1 AM SHOWING YOU PAPER NO. 13 OF BUNDLE NO. 1 TO WHICH YOU HAD EXPLAINED THAT THIS IS INTERNAL ACCOUNTS BETWEEN TH AKWANI & GOEL BUT WHEREAS SOME MORE NAMES APPEAR THEREIN. PLEASE EXPLAIN OF W HICH PROJECT AND PERIOD OF WHICH THIS INTERNAL A/C PERTAIN ? ANSWER: AS MENTIONED ON PAGE 13 SITES CONCERNED ARE SWASTIC GANGA & SNEH GANGA, SWASTIC GANGA IS AN INVOLVEMENT OF GOEL PAEL THAKWANI, SNEH GANGA IS INVOLVEMENT OF GOEL THAKWANI THESE AMOUNTS ARE FOR SW ASTIC GANGA RS. 34090 & 12000 THESE AMOUNTS ARE ADVANCES BY THE CONCERNED PURCHASERS FOR CERTAIN CHANGES MENTIONED IN THE CONCERNED FLATS & HENCE TH ESE AMOUNTS OF SWASTIC GANGA ARE DECIDED BETWEEN 3 PARTNERS & FOR THE SNEH GANGA BETWEEN TWO PARTNERS. QUESTION 28: ARE THESE AMOUNTS REFLECTED IN YOUR BO OKS OF ACCOUNTS? ANSWER: THIS PARTICULAR DIVISION IS MADE TO ALL PAR TNER AND AS & WHEN THE EXPENDITURE IS INCURRED, IT IS EQUALLY CONTRIBUTED. QUESTION 29: CONSIDERING YOUR EXPLANATION IN REPLY TO EARLIER QUESTIONS, THE AMOUNT OF RS. 14363.33 APPEARING AT END OF PAGE 13, WHY THE FIGURE NOT BE TREATED AS 1.43 THE FIGURE NOT BE TRADED AS 1.43 CR ORES? 4 ANSWER: I HAVE ALREADY SAID THAT YOUR PRESUMPTION CAN BE CONTENDED TO INFINITY.' FROM THE ABOVE, THE ASESSING OFFICER CAME TO THE CO NCLUSION THAT THE ASSESSEE IS GIVING EVASIVE REPLIES. HE, THEREFORE, ASKED THE ASSESSEE TO FURNISH THE FULL DETAILS REGARDING THE TRANSACTION OF RS.92,71,505/- AND CLARIFY WHETHER THE SAME IS RECORDED IN THE BOOKS AND IF SO TO PRODUCE THE SAME WITH PROOF. 2.2 IN RESPONSE TO THE SAME THE ASSESSEE REPLIED TH AT HE HAD ANSWERED ALL THE QUESTIONS SATISFACTORILY DURING THE COURSE OF S EARCH. HE SUBMITTED THAT NO POST SEARCH ENQUIRIES WERE MADE BY THE INVESTIGATIO N WING OF THE INCOME TAX DEPARTMENT, PUNE IN RESPECT OF THESE PAGES. IF THE SEARCH PARTY HAD ANY DOUBT OR RESERVATION IN RESPECT OF HIS ANSWER, THEY SHOULD HAVE CALLED HIM FOR CLARIFICATION AFTER THE CONCLUSION OF THE SEARCH. HOWEVER, NO SUCH ENQUIRY WAS MADE. THE ASSESSEE SUBMITTED THAT HE IS IN THE HABIT OF WRITING FULL FIGURES. FURTHER, NO ADMISSION WAS MADE BY HIM IN RESPECT OF THE FIGURES. IT WAS SUBMITTED THAT THE STATEMENT RECORDED DURING TH E COURSE OF SEARCH ACTION U/S.132(4) HAS THE EVIDENTIARY VALUE AND THE STATEM ENT CANNOT BE BRUSHED OFF WITHOUT ASSIGNING ANY REASON FOR THE SAME. 3. AS REGARDS THE ALLEGATION OF THE ASSESSING OFFIC ER THAT THE ASSESSEE IS IN RECEIPT OF RS.18,04,971/- UPTO 03-03-2006, HE SU BMITTED THAT HE HAS NOT RECEIVED ANY SUCH AMOUNT FROM MR. RAJENDRA GOEL. H E ALSO STATED THAT THE ALLEGATION OF THE ASSESSING OFFICER THAT THE FIGURE S WRITTEN ARE IN CODED FORM ARE NOT CORRECT AND THEY ARE THE ACTUAL FIGURES TO THE NEAREST PAISA. FINALLY, THE ASSESSEE STATED THAT THE AMOUNT RECEIVABLE FROM MR. RAJENDRA GOEL AMOUNTING TO RS.92,415.05 IS ON ACCOUNT OF PETTY CO NTRACT WORK AT DIFFERENT SITES AND NOT RS.92,41,505/- AS ALLEGED BY HIM. 5 4. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE ABOVE EXPLANATION GIVEN BY THE ASSESSEE. HE OBSERVED THA T THE ASSESSEE IS NOT COMING OUT WITH TRUE FACTS. HE REJECTED THE SUBMIS SION OF THE ASSESSEE THAT THE SEIZED DOCUMENT IS ONLY ROUGH WORK REGARDING TH E RECEIVABLES FROM MR. RAJENDRA GOEL WHICH HAS NOT BEEN RECEIVED. SINCE T HE ASSESSEE HAD CATEGORICALLY ADMITTED THAT THE TRANSACTIONS HAVE N OT BEEN RECORDED IN THE REGULAR BOOKS AND SINCE THE ASSESSEE AND MR. RAJEND RA GOEL ARE PARTNERS IN SEVERAL CONCERNS THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE SAME AMOUNT IS TO BE RECEIVED BY THE ASSESSEE FROM MR.RA JENDRA GOEL WHICH HAS NOT BEEN RECORDED IN THE BOOKS. SINCE THE ASSESSEE HAS NOT COME OUT WITH CORRECT FACTS AND WAS EVASIVE IN HIS REPLY, THE ASS ESSING OFFICER, REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE MADE ADDITION OF RS.92,41,505/- BEING HIGHEST AMOUNT RECEIVABLE IN T HE PAPER. 5. BEFORE THE CIT(A) THE ASSESSEE REITERATED THE SA ME SUBMISSIONS AS MADE BEFORE THE AO. HOWEVER, THE LD.CIT(A) WAS ALS O NOT CONVINCED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD TH E ADDITION MADE BY THE ASSESSING OFFICER. WHILE DOING SO, HE NOTED THAT A LTHOUGH THE NAME OF MR. RAJENDRA GOEL APPEARS IN THE PAPER, THERE IS NOTHIN G ON RECORD WHICH COULD SHOW THAT THE CLAIM OF THE ASSESSEE REGARDING THE N ATURE OF THE TRANSACTION, I.E. BEING RELATING TO PETTY EXPENSES CAN BE ACCEPT ED. MERELY BECAUSE A CLAIM HAS BEEN MADE ABOUT THE NATURE OF TRANSACTION, IT C ANNOT BE ACCEPTED UNLESS THERE ARE CORROBORATIVE EVIDENCES AVAILABLE TO SUPP ORT THE SAID CLAIM. NO ATTEMPT HAS BEEN MADE BY THE ASSESSEE TO EXPLAIN TH E SAME WITH EVIDENCE. HE FURTHER OBSERVED THAT SO FAR AS THE ASSESSMENT O F AMOUNT APPEARING IN THE SEIZED DOCUMENT IS CONCERNED, THERE IS NO DISPUTE. BOTH THE PARTIES HAVE MORE OR LESS AGREED TO THE SAME. THE REAL DISPUTE RELATES TO THE FIGURE WHICH 6 IS REQUIRED TO BE TAKEN AS THE UNDISCLOSED INCOME B ASED ON THE ABOVE REFERRED SEIZED PAPER. THE FIGURE OF 92,425.05 NOTED IN THE SEIZED DOCUMENT IS TO BE READ AS RS.92,415/- OR RS.92,41,505/- IS THE REAL D ISPUTE. SINCE THE ASSESSING OFFICER HAS DISPLAYED THAT THE ASSESSEE DID NOT COO PERATE WITH THE DEPARTMENT BY EXPLAINING EACH AND EVERY ENTRY APPEARING IN THE SEIZED PAPER WITH SUPPORTING EVIDENCES, THEREFORE, THE CLAIM MADE BY THE ASSESSEE REGARDING THE NATURE OF TRANSACTION AND ITS ACCEPTANCE ON THE FACE VALUE CANNOT BE ACCEPTED. HE OBSERVED THAT THE ASSESSEES CLAIM TH AT THE FIGURES APPEARING IN THE SEIZED PAPER WERE EXPLAINED SATISFACTORILY IS T OTALLY INCORRECT. HE NOTED THAT IT IS APPARENT FROM THE RECORD THAT THE ASSESS EE HAS BLOCKED THE PATH OF INVESTIGATION BY WITHHOLDING RELEVANT INFORMATION A ND THEREFORE HE CANNOT CLAIM NOW THAT THE ADDITION CANNOT BE MADE ON THE G ROUND THAT NO INVESTIGATION WAS CARRIED OUT BY THE DEPARTMENT. ACCORDING TO THE LD.CIT(A) HAD THE ASSESSEE SUBMITTED THE EVIDENCES, IN THAT CASE HE COULD HAVE CLAIMED THE SAME. HE ACCORDINGLY UPHELD THE A DDITION MADE BY THE ASSESSING OFFICER. 5.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLE NGED THE ORDER OF THE CIT(A). REFERRING TO PAGES 1, 2 AND 3 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENCH TO THE SEIZED PAPERS FOUND F ROM THE RESIDENCE OF THE ASSESSEE. REFERRING TO PAGE 2 OF THE PAPER BOOK HE SUBMITTED THAT THE ASSESSEE HAS WRITTEN THE FIGURES TO THE NEAREST PAI SA SINCE HE WAS IN THE HABIT OF WRITING CORRECT FIGURES. REFERRING TO PAGE 1 AN D 3 OF THE PAPER BOOK HE SUBMITTED THAT THERE IS NO DISPUTE IN THE MANNER OF WRITING IN THE ABOVE PAGES AND THERE IS NO ADDITION ON ACCOUNT OF THE SAME. H OWEVER, ONLY FOR PAGE 2 7 OF THE PAPER BOOK THE ASSESSING OFFICER TRIED TO MA KE THE ADDITION HOLDING THAT THE FIGURES ARE WRITTEN IN CODED FORMS. 6.1 THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTEN TION OF THE BENCH TO PAGE 1 OF THE PAPER BOOK AND SUBMITTED THAT THERE I S ONE FIGURE OF 10,000.00 AGAINST WHICH THE NAME MARSHALL HAS BEEN WRITTEN. R EFERRING TO PAGE 2 OF THE PAPER BOOK HE SUBMITTED THAT THE SAME 10,000.00 IS APPEARING IN PAGE 2. HE SUBMITTED THAT THE REVENUE AUTHORITIES HAVE ACCEPTE D THE FIGURE OF 10,000.00 AS RS.10,000/- IN PAGE 1 OF THE PAPER BOOK. HOWEVER , THEY HAVE CONSIDERED THE FIGURE OF 10,000.00 APPEARING IN PAGE 2 AS RS. 10 LAKHS. THUS, THE APPROACH OF THE DEPARTMENT IS INCORRECT. 6.2 REFERRING TO THE PROVISIONS OF SECTION 132(4A) HE SUBMITTED THAT DURING THE COURSE OF ANY SEARCH ANY BOOKS OF ACCOUN T OR OTHER DOCUMENTS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON, I T MAY BE PRESUMED THAT SUCH BOOKS ACCOUNT OR OTHER DOCUMENTS BELONG TO SUC H PERSON AND THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMEN TS ARE TRUE. SINCE NOTHING HAS BEEN BROUGHT ON RECORD BY THE REVENUE A UTHORITIES THAT THESE FIGURES APPEARING IN PAGE 2 ARE INFACT CODED FIGURE S, THEREFORE, NO ADDITION IS CALLED FOR. 6.3 REFERRING TO THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. P.D. ABRAHAM REPORTED IN 349 ITR 442 HE SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND UPHELD B Y THE CIT(A) SHOULD BE DELETED. 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). SHE SUBMITTED THAT BY NOT FILING THE RETURN IN TIME AND FILING THE RETURN TOWARDS THE FAG END OF T HE TIME BARRING ASSESSMENT 8 ITSELF SHOWS THE NON-COOPERATIVE ATTITUDE OF THE AS SESSEE. SHE SUBMITTED THAT THE ASSESSEE HAD NOT COME OUT WITH CORRECT FACTS WH ICH WERE WITHIN HIS EXCLUSIVE KNOWLEDGE. WHEN THE ASSESSEE AND HIS PART NER ARE REPUTED BUILDERS IT IS UNTHINKABLE THAT ASSESSEE WILL MAINTAIN THE F IGURES TO THE NEAREST PAISA SUCH AS RS.857.60, RS.7216.25, RS.12.644.66. SINCE THE FIGURES APPEARING IN PAGE 2 OF THE PAPER BOOK WHICH IS PAGE 14 OF THE SE IZED DOCUMENT DOES NOT APPEAR IN THE REGULAR BOOKS OF ACCOUNT AND SINCE TH E ASSESSEE WAS EVASIVE AND HAS NOT BROUGHT THE CORRECT STATE OF AFFAIRS TO THE NOTICE OF THE ASSESSING OFFICER, THEREFORE, THE ADDITION MADE BY THE ASSESS ING OFFICER AND SUSTAINED BY THE CIT(A) SHOULD BE UPHELD. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS RELIED ON BY BOTH THE SIDES. THERE IS NO DISPUTE TO THE FACT THAT THE LOOSE PAPERS BEARING PAGES 13 AND 14 OF BUNDLE NO.1 DEPICT SOME SORT OF TRANSACTION BETWEEN MR.RAJU THAKWANI AND MR. RAJEND RA GOEL WHO ARE PARTNERS IN SEVERAL CONCERNS. AS PER THE SEIZED DO CUMENT MR.RAJENDRA GOEL OWNS SUBSTANTIAL AMOUNT TO THE ASSESSEE. THE SCANN ED COPY OF PAGE 14 OF BUNDLE NO.1 WHICH HAS BEEN REPRODUCED AT PAGE 3 OF THE ASSESSMENT ORDER SHOWS AN AMOUNT OF RS.84,365.34 AS PAYABLE BY MR.RA JENDRA GOEL. THE MAXIMUM AMOUNT THAT IS PAYABLE BY MR.RAJENDRA GOEL IS RS.92,415.05. ACCORDING TO THE ASSESSING OFFICER, THE NOTINGS IN PAGE 2 OF THE SEIZED DOCUMENT ARE IN CODED FORMS AND THE SAME SHOULD BE READ AS RS.92,41,505/-. ACCORDING TO THE ASSESSEE, THESE ARE NOT IN CODED F ORMS AND ARE ACTUAL FIGURES SINCE HE WAS IN THE HABIT OF WRITING SUCH COMPLETE FIGURES TO THE NEAREST PAISE. 9 8.1 FROM THE VARIOUS DETAILS FURNISHED IN THE ASSES SMENT ORDER, WE FIND DESPITE SERVICES OF NOTICES U/S.153A TO THE ASSESSE E ON 04-04-20007 THE ASSESSEE WAS NOT FORTHCOMING IN FILING OF HIS RETUR N. AFTER SEVERAL REMINDERS, THE ASSESSEE FINALLY FILED HIS RETURN OF INCOME FOR THE FIRST TIME ON 19-11- 2008 AND THE ASSESSMENT WAS COMPLETED ON 31-12-2008 . THERE WAS HARDLY ANY TIME LEFT WITH THE ASSESSING OFFICER TO MAKE PR OPER ENQUIRIES. NEVERTHELESS THE ASSESSING OFFICER HAS ALSO NOT BOT HERED EITHER TO SUMMON MR.RAJENDRA GOEL OR ASK THE ASSESSEE TO PRODUCE THE SAID PERSON. FURTHER, WHEN THE ASSESSEE AND MR.RAJENDRA GOEL ARE BUSINESS PARTNERS IT IS ALSO UNTHINKABLE AS TO HOW HE HAD TO DO PETTY CONTRACT W ORK AND OBTAIN MONEY FROM MR.RAJENDRA GOEL. AT THE SAME TIME, WE FIND T HE FIGURE OF 10,000.00 AGAINST THE NAME MARSHALL APPEARING IN PAGE 13 OF T HE SEIZED DOCUMENT (PAPER BOOK PAGE 1) IS ALSO APPEARING IN PAGE 14 OF THE SEIZED DOCUMENT (PAGE 2 OF THE PAPER BOOK) AND THE AMOUNT HAS BEEN ACCEPTED AS RS.10,000/- IN PAGE 13 OF THE SEIZED DOCUMENT BUT SAME IS TREAT ED AS RS.10 LAKHS IN PAGE 14 OF THE SEIZED DOCUMENT (PAGE 2 OF THE PAPER BOOK ). ALL THESE THINGS SHOW THAT THE MATTER HAS NEITHER BEEN EXAMINED PROPERLY BY THE ASSESSING OFFICER NOR THE ASSESSEE HAS COME OUT WITH CORRECT FACTS AN D FIGURES GIVING VERY LITTLE TIME TO THE ASSESSING OFFICER TO PROCEED WITH THE M ATTER. NOTHING EXTRAORDINARY WAS PRODUCED BEFORE THE LD.CIT(A) FOR WHICH HE UPHELD THE ORDER OF THE ASSESSING OFFICER. THE FACTS WHICH WE RE WITHIN THE EXCLUSIVE KNOWLEDGE OF THE ASSESSEE WERE NEVER BROUGHT TO NOT ICE OF THE AO BY THE ASSESSEE. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE WHEN IT WAS PROPOSED THAT THE MATTER REQUIRES THOROUGH INVESTIG ATION AT THE LEVEL OF THE ASSESSING OFFICER BOTH THE SIDES HAVE FAIRLY AGREED . WE, THEREFORE, RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO ADJUDICATE THE 10 ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVIN G DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDIN GLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE S. ITA NO.1122/PN/2012 (A.Y. 2007-08) : 9. ALTHOUGH A NUMBER OF GROUNDS HAVE BEEN RAISED BY THE ASSESSEE THEY ALL RELATE TO THE ADDITION OF RS.90,45,000/- MADE B Y THE ASSESSING OFFICER WHICH HAS BEEN UPHELD BY THE CIT(A). 9.1 FACTS OF THE CASE, IN BRIEF, ARE THAT DURING TH E COURSE OF SEARCH CERTAIN DOCUMENTS WERE SEIZED FROM THE RESIDENCE OF THE ASS ESSEE. PAGE 3 OF BUNDLE NO.1 IS RELATING TO PURCHASE OF TDR ON A PROJECT NA MED SWASTIK GANGA AT SOPAN BAUG, PUNE. THE CONTENTS OF THE SEIZED DOCUM ENT READS AS UNDER : -- .00 MADWANI 60% 5000.00 6675.00 PATIL 7000.00 2000.00 RAJESH 5000.00 RAJESH 10000.00 MARSHALL 6415.00 -------------- ------------- 34090.00 12000.00 ------------- 2 =6000.00 34090.00 -900.00 (SWT. GANGA PATIL) -6000.00 (SNEH GANGA PATIL) -------------- 32,590.00 ------------- 42090 ----------- 3 =10863.33 PATEL =10863.33-500.00 =RS.10363.33 +6000.00 =RS.16363.33-2000.00 RT =RS.14363.33 RT 9.2 THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXP LAIN THE TRANSACTIONS RECORDED THEREIN AND ASKED THE ASSESSEE TO CLARIFY AS TO WHY RS.90,45,000/- 11 SHOULD NOT BE TAXED IN HIS CASE ON THIS ISSUE. IT WAS EXPLAINED THAT THESE ARE CALCULATIONS OF 2 PROPOSALS IN RESPECT OF TDRS TO B E PURCHASED FOR THE PROJECT NAMED SWASTIK GANGA AT SOPAN BAUG, PUNE BY PARTNE RSHIP FIRM NAMED GOEL PATIL THAKWANI PROMOTERS (IN SHORT GPTP) A ND NONE OF THEM WERE ACTUALLY CARRIED OUT. IT WAS EXPLAINED THAT THE FI RST PROPOSAL APPEARING UNDER THE CAPTION CHEQUE SHOWS RS.13400SQ.FT. X 625. A GAINST THIS AN AMOUNT OF RS.83,75,000/- HAS BEEN WRITTEN. IT WAS CLAIMED TH AT THE ABOVE AMOUNT REPRESENTS PURCHASE OF TDRS FOR 13,400SQ.FT @625 BY GPTP, A PARTNERSHIP FIRM FOR WHICH THE ASSESSEE IS A PARTNER. IT WAS S UBMITTED THAT THE SAID DEAL WAS NEGOTIATED WITH ONE MR.JAIPRAKASH SITARAM GOEL. THE AGREED CONSIDERATION FOR TDR ADMEASURING 13,400SQ.FT WAS R S.83,75,000/- FOR WHICH GPTP HAD MADE THE PAYMENT OF RS.70 LAKHS TO WARDS THE PROPOSED PROJECTS FOR TDR AND THE AMOUNT OF RS.13,75,000/- W AS THE BALANCE CONSIDERATION PAYABLE TO MR.JAIPRAKASH SITARAM GOEL . THE AMOUNT OF RS.70 LAKHS WAS PAID BY CHEQUE DRAWN ON INDIAN OVERSEAS B ANK AND THE DETAILS WERE FURNISHED TO THE ASSESSING OFFICER. ACCOUNT E XTRACT COPY OF MR.JAIPRAKASH SITARAM GOEL APPEARING IN THE BOOKS O F THE SAID FIRM WAS ALSO ENCLOSED IN THE SUBMISSION BEFORE THE ASSESSING OFF ICER. IT WAS EXPLAINED THAT THE TRANSACTION OF PURCHASE OF TDR DID NOT MAT ERIALISE FOR WHICH AN AMOUNT OF RS.50 LAKHS WAS RETURNED BACK. AS REGARD S THE SECOND NOTINGS APPEARING IN THE SAID PAPER HAVING THE DETAILS OF P URCHASE OF TDR FOR 13,400SQ.FT IN CASH @RS.675/- IT WAS SUBMITTED THAT THE VERY SAME FIRM RECEIVED ANOTHER PROPOSAL FOR PURCHASE OF TDR IN CA SH WHICH WAS NOT FOLLOWED. TO ESTABLISH THE CLAIM THAT THE SAID CAS H TRANSACTION FOR THE PURCHASE OF TDR WAS NOT CARRIED OUT, IT WAS SUBMITT ED THAT AFTER THE AMOUNT OF RS.90,45,000/-, CALCULATED FOR THE WHOLE 13,400S Q.FT TDR @ RS.675/- PER SQ.FT. AN AMOUNT OF RS.16 LAKHS IS DEDUCTED AND THE BALANCE IS ARRIVED AT 12 RS.74,45,000/- AGAINST WHICH THE WORD BALANCE OR TO PAY ARE WRITTEN. BELOW THE SAID AMOUNT OF RS.74,45,000/-, TWO FIGURE S, I.E. RS.54,45,000/- AND RS.20 LAKHS ARE APPEARING WHICH WERE CLAIMED TO BE PROPOSALS BY THE ASSESSEE. IT WAS SUBMITTED THAT THE TWO FIGURES, I .E. RS.54,45,000/- AND RS.20 LAKHS REPRESENT THE AMOUNT TO BE PAID IN TWO INSTAL MENTS AND THE SAID TRANSACTION WAS NOT CARRIED OUT. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT IT WAS A PROPOSAL RECEIVED FROM ANOTHE R PARTY FOR SALE OF TDR FOR AN AMOUNT OF RS.90,45,000/- WHICH WAS BEING NEG OTIATED. AS PER THIS AGREEMENT, AN AMOUNT OF RS.16 LAKHS WAS TO BE PAID AT THE TIME OF AGREEMENT AND THE BALANCE AMOUNT WAS TO BE PAID IN TWO INSTAL MENTS, I.E. RS.54,45,000/- AND RS.20 LAKHS AFTER BUILDING PLAN SANCTION. IT W AS SUBMITTED THAT THE FIRST PROPOSAL @ RS.625/- WAS BENEFICIAL AND THEREFORE TH E SECOND PROPOSAL NEVER MATERIALISED AND NO PAYMENT WAS MADE. IT WAS FURTH ER EXPLAINED THAT THE TDR WAS NEITHER PURCHASED FROM MR.JAIPRAKASH SITARA M GOEL NOR FROM ANY OTHER PARTY. THE TDR REQUIREMENT OF THE SAID PARTN ERSHIP FORM GPTP WAS ONLY 578.78 SQ.MTRS AND THEREFORE THE AMOUNT PAID W AS RETURNED BY THE SAID PARTY. IT WAS SUBMITTED THAT THE TDR ADMEASURING A BOUT 578.78 SQ.MTRS ONLY WAS ACTUALLY PURCHASED FROM ONE DEEPAK KURLE. 10. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIE D WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE OBSERVED THAT IF ONE CAR EFULLY LOOKS AT THE SEIZED DOCUMENT AN AMOUNT OF RS.16 LAKHS HAS BEEN DEDUCTED FROM RS.90,45,000/- WHICH INDICATES PAYMENT. ACCORDING TO THE ASSESSIN G OFFICER TO PAY HAS BEEN WRITTEN BEFORE RS.74,45,000/- AND THEREFORE, R S.16 LAKHS HAS BEEN PAID IS CLEAR. SINCE RS.54,45,000/- HAS BEEN DEDUCTED F ROM THIS AMOUNT, THEREFORE, POSSIBILITY OF THIS AMOUNT HAVING BEEN P AID ALSO CANNOT BE RULED OUT. HE OBSERVED THAT THE TDR IS A MARKETABLE COMM ODITY AND POSSIBILITY OF 13 ASSESSEE HAVING PURCHASED THE TDR AGAINST CASH ALSO CANNOT BE RULED OUT. HE ACCORDINGLY MADE ADDITION OF RS.90,45,000/- BEING C ONSIDERATION PAID ON ACCOUNT OF TDR PURCHASED. 11. BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE ASS ESSEE NEVER TRADED IN TDR IN ANY OF THE YEARS AND THEREFORE THE CONCLUSIO N OF THE ASSESSING OFFICER IS INCORRECT. IT WAS SUBMITTED THAT THE SE IZED DOCUMENT CONTAINS THE NAME SOPAN BAUG AND THEREFORE IT MUST BE PRESUMED THAT IT RELATED TO THE PROJECT OF THE FIRM AND THE ASSESSEE HAS NOT TRADED IN TDR. IT WAS SUBMITTED THAT TDR CAN ONLY BE PURCHASED THROUGH REGISTERED A GREEMENT AFTER PAYING STAMP DUTY @3% OF THE TDR VALUE AND THEREFORE IT CA NNOT BE TRADED IN CASH. IT WAS SUBMITTED THAT NO OTHER EVIDENCE WAS FOUND D URING THE SEARCH INDICATING THE INVOLVEMENT OF THE ASSESSEE IN THIS LINE OF BUSINESS. 11.1 IN THE ALTERNATE CONTENTION, IT WAS SUBMITTED THAT THE ADDITION AT BEST BE RESTRICTED TO RS. 16 LAKHS WHICH CAN BE PRESUMED TO HAVE BEEN PAID AS PER THE SEIZED DOCUMENT. 12. HOWEVER, THE LD.CIT(A) ALSO WAS NOT CONVINCED W ITH THE ARGUMENTS ADVANCED BY THE ASSESSEE AND UPHELD THE ADDITION MA DE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER : I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND F IND THAT THE IMPUGNED ADDITION IS EMANATING FROM A DOCUMENT SEIZED FROM THE PREMISE OF THE APPELLANT DURING SEARCH AND THEREFORE, SECTION 132(4A ) WILL BE APPLICABLE. UNDISPUTEDLY, THE DETAILS AVAILABLE IN THE SEIZED DOCU MENT RELATES TO TRANSACTION IN TDR. IT CAN ALSO BE SEEN THAT THERE AR E TWO DEALS RECORDED IN THIS PIECE OF PAPER RELATING TO TDRS OF 13,400 SQ.FT. ONE DEAL IS IN CHEQUE WHICH IS @RS.625/- PER SQ.FT. AND OTHER IS IN CASH @ RS.6 75/- PER SQ.FT. SO FAR AS THE DEAL IN CHEQUE IS CONCERNED, THE APPELLANT HA S SUBMITTED THE RELEVANT DETAILS AND HAS DEMONSTRATED THAT DEAL WAS ENTERED WIT H MR.JAIPRAKASH GOEL, TO WHOM RS.70,00,000/- WAS PAID BY TWO CHEQUES AND ON CANCELLATION OF THE DEAL RS.50,00,000/- WAS ALSO RETURNED BANK BY CHEQUE O N 12-07-2006. THOUGH THE APPELLANT HAS NOT EXPLAINED WHY ONLY RS.50 ,00,000 WAS RETURNED WHEN THE AMOUNT PAID FOR THE TDR WAS OF RS.70,00,000, BUT THE ASSESSING OFFICER HAS TREATED THE SAID TRANSACTION ENTERED INTO BY THE APPELLANT AS EXPLAINED IN VIEW OF THE AFORESAID DETAILS/ EVIDENCES PRODUCED BEFORE HIM. 14 HOWEVER, IN MY CONSIDERED OPINION, THE DETAILS SUBMITT ED BY THE APPELLANT WERE NOT COMPLETE. IN RESPECT OF TRANSACTIONS RECORDED IN CASH, THE APPELLANT HAS CLAIMED THAT A PROPOSAL WAS RECEIVED WHICH WAS NOT PURSUED. HOWEVER, THE DETAILS AVAILABLE IN THE PAPER, SHOWING THE PAYME NT OF RS.16,00,000 AND THE INSTALLMENT IN WHICH THE REMAINING AMOUNT WAS TO BE PAID, CONTRADICTED THE CLAIM OF THE APPELLANT. THE APPELLANT HAS UNDISPU TEDLY NOT SUBMITTED THE RELEVANT DETAILS AND THE EVIDENCES IN RESPECT OF THIS C LAIM. HE HAS NOT STATED FROM WHOM THE PROPOSAL WAS RECEIVED AND HOW COULD SUCH A DEAL BE CONSIDERED ONLY A PROPOSAL WHEN THE NOTINGS AVAILABLE IN THE PAPER CLEARLY SHOWS THAT PART PAYMENTS WERE MADE. IN THE ABSENCE OF SU CH RELEVANT AND VERIFIABLE DETAILS AND EVIDENCES, IT CANNOT BE HELD T HAT THE APPELLANT HAS DISCHARGED THE ONUS CAST ON IT U/S 132(4A) OF THE IT. A CT. IN SUCH A VIEW OF THE MATTER, THE ASSESSING OFFICER HAS TO BE HELD TO BE CORR ECT IN ASSESSING THE INCOME IN THE HANDS OF THE APPELLANT AS UNDISCLOSED IN VESTMENT IN THE TRADE OF TDR IN CASH. THE CLAIM OF THE APPELLANT THAT THE ADDITION SHOULD BE RESTRICTED TO RS.16,00,000 ALSO CANNOT BE ACCEPTED, AS FOR THE SAME THE APPELLANT IS REQUIRED TO ESTABLISH THAT THE DEAL WAS EI THER CANCELLED AFTER PART PERFORMANCE OF TERMS OR WAS PART FINANCED BY SOME OTHE R PARTY OR WAS CARRIED OUT IN SOME OTHER ASSESSMENT YEAR. IN THE ABSENCE OF ANY SUCH DETAILS AND EVIDENCES, IT IS LOGICAL TO ACCEPT THAT THE DEAL HAS BEEN FINALIZED IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND THE ADDITION IS L OGICALLY CORRECT. IN VIEW OF THE AFORESAID DISCUSSIONS, GROUND NO. 1 IS TREATE D AS DISMISSED. 12.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE AS SESSEE IS IN APPEAL BEFORE US. 13. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT THAT THE SEIZED DOCUMENT BEING PAGE 3 OF BUNDLE NO.1 (PAGE 1 OF THE PAPER BOOK) CONTAINS CERTAIN NOTINGS ON ACCOUNT OF SOME TDR. THE FIRST AMOUNT, I.E. RS.13,400 X 625 AMOUNTING TO RS.83,75,000/- DID NOT MATERIALISE FOR WHICH AN AMOUNT OF RS.50 LAKHS WAS REFUNDED OUT OF THE PAYMENT OF RS.7 0 LAKHS. THERE IS NO DISPUTE ABOUT THE FIRST TRANSACTION AND THE REVENUE HAS ACCEPTED THE SAME, THEREFORE, WE ARE NOT CONCERNED ABOUT THE SAME. 13.1 SO FAR AS THE SECOND NOTINGS IS CONCERNED, I.E . 43400 X 675 IT IS THE CASE OF THE ASSESSEE THAT THIS IS JUST A PROPOSAL W HICH NEVER TOOK PLACE. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT ONLY RS.16 LAKHS AT 15 THE MOST CAN BE ADDED IF THE SAME IS CONSIDERED TO HAVE BEEN PAID AND THE BALANCE AMOUNTING TO RS.74,45,000/- CANNOT BE ADDED SINCE NO SUCH AMOUNT HAS BEEN PAID. IT IS AN UNDISPUTED FACT THAT THE A SSESSEE IS A PARTNER IN VARIOUS FIRMS ENGAGED IN REAL ESTATE AND DEVELOPMEN T AND THE PARTNERS AS WELL AS ASSESSEE ARE REPUTED PERSONS. IF THEY HAVE MADE SOME PROPOSAL FOR PURCHASE OF TDR AMOUNTING TO MORE THAN RS.70 LAKHS, THERE MUST BE SOME PERSON/PERSONS FROM WHOM SUCH TDR WAS TO BE PURCHAS ED. THE INFORMATION WAS IN THE EXCLUSIVE KNOWLEDGE OF THE ASSESSEE WHIC H HE HAS NEVER PARTED WITH. BY FILING THE RETURN TOWARDS THE FAG END OF THE TIME BARRING ASSESSMENT SHOWS THAT THE ASSESSEE WAS NON-COOPERATIVE. SINCE THE AO WAS NOT GIVEN ADEQUATE TIME TO CONDUCT ENQUIRIES NOR THE ASSESSEE HAS PARTED WITH THE INFORMATION WHICH WAS IN HIS EXCLUSIVE POSSESSION, THEREFORE, THE SUBMISSION OF THE ASSESSEE FOR DELETION OF THE AMOUNT CANNOT B E ACCEPTED. 13.2 THE FURTHER CLAIM OF THE LD. COUNSEL FOR THE A SSESSEE THAT THE ADDITION SHOULD BE RESTRICTED TO RS.16 LAKHS ALSO CANNOT BE ACCEPTED IN ABSENCE OF ANY DETAILS TO SUBSTANTIATE THAT THE DEAL WAS EITHER CA NCELLED AFTER NON PERFORMANCE OR ON PART PERFORMANCE OR WAS CARRIED O UT IN SOME OTHER ASSESSMENT YEAR. CONSIDERING THE TOTALITY OF THE F ACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, WE DEEM IT PROPER TO RESTORE T HE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE WITH EVIDENCE TO HIS SATISFACTION REGA RDING THE NATURE OF TRANSACTION, NAME OF THE PARTY WITH WHOM SUCH DEAL WAS PROPOSED OR HAS BEEN CARRIED OUT. THE AO SHALL SUMMON THE PARTIES CONCERNED AND EXAMINE THEM AND SHALL DECIDE THE ISSUE IN ACCORDANCE WITH LAW. WE HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE AR E ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 16 14. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 27-11-2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PAN DA) JUDICIAL MEMBER ACCOUNTANT M EMBER PUNE, DATED : 27 TH NOVEMBER, 2013 SATISH COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. D.R. A BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE