Rameshbhai Gandhi, Pune V. ITO Ward 2(1), Pune

ITA 1132/PUN/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0389 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 28-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 24-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Assessee Lawyers: SANJAY N KAP ADIA
• Keywords: Search and seizure; Loose papers; Document seized; Documents seized
• Section: 143(3); 133A; 153A; 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1132/PN/2013 %' ( ')( / ASSESSMENT YEAR : 2009-10 RAMESHBHAI GANDHI, 502-B, SHAN GANGA SOCIETY, SALISBURY PARK, GULTEKDI, PUNE-37 PAN : AFLPK5081M ....... / APPELLANT ' /VS. INCOME TAX OFFICER, WARD-2(1), PUNE / RESPONDENT ASSESSEE BY : SHRI SANJAY N. KAPADIA REVENUE BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 08-11-2016 / DATE OF PRONOUNCEMENT : 30-11-2016 * / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 24-01 -2013 FOR THE ASSESSMENT YEAR 2009-10. IN APPEAL, THE ASSESSEE HAS ASSAILED THE ADDITION OF ` 1,10,43,000/- CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ON ACCOUNT OF ALLEGED PAYMENT OF ON-MONEY FOR PURCHASE 2 ITA NO. 1132/PN/2013, A.Y. 2009-10 OF FLATS. THE ASSESSEE HAS ALSO ASSAILED THE ASSESSMENT P ROCEEDINGS ON THE GROUND THAT ADDITION HAS BEEN MADE ON THE BASIS OF STATEMENT AND THE ASSESSEE WAS NOT GIVEN OPPORTUNITY TO CROSS-EXAMIN E THE PERSON ON WHOSE STATEMENT IMPUGNED ADDITION HAS BEEN MADE. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: SEARCH AND SEIZURE ACTION U/S. 132 AND 133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS CARRIED OUT IN THE CASE OF DARODE JOG GROUP ON 28-04-2009. CERTAIN LOOSE PAPERS WERE SEIZED FROM THE BUSINESS/RESIDENTIAL PREMISES OF DARODE JOG BUILDER S PVT. LTD. ONE OF THE SEIZED DOCUMENT WAS COMPUTER GENERATED SHE ET. IT WAS ALLEGED THAT AS PER THE CONTENTS OF SEIZED COMPUTER SHE ET, THE ASSESSEE HAD PAID ON-MONEY FOR THE FLATS PURCHASED FROM M/S. DAROD E JOG BUILDERS PVT. LTD. IN THE PROJECT SHREEENIWAS VASANT VA STU. ON THE BASIS OF SAID SEIZED PAPERS AND THE STATEMENT OF SMT. MEG HA DEEPAK KELKAR ONE OF THE EMPLOYEE OF M/S. DARODE JOG BUILDERS ADD ITION OF ` 1,10,43,000/- AS UNDISCLOSED INCOME WAS MADE IN THE INCOME RETURNED BY THE ASSESSEE. AGGRIEVED BY THE ASSESSMENT ORDER DATED 30-12-2011 P ASSED U/S. 143(3) R.W.S. 153A, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF I NCOME TAX (APPEALS) VIDE IMPUGNED ORDER DISMISSED THE APPEAL OF TH E ASSESSEE. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE T HE TRIBUNAL ASSAILING THE FINDINGS OF FIRST APPELLATE AUTHORITY. 3. SHRI SANJAY N. KAPADIA APPEARING ON BEHALF OF THE ASSES SEE SUBMITTED THAT ADDITION HAS BEEN MADE ON THE BASIS OF CO MPUTER SHEET 3 ITA NO. 1132/PN/2013, A.Y. 2009-10 SEIZED DURING SEARCH OPERATIONS AT THE BUSINESS PREMISES OF DARODE JOG BUILDERS PVT. LTD. THE SAID SHEET IS NEITHER SIGNED BY THE ASSESSEE NOR BY ANY PERSON FROM THE OFFICE OF DARODE JOG BUILDERS. THE LD. AR CONTENDED THAT THERE ABOUT 20 FLATS IN THE HOUSING SCHE ME SHREENIWAS VASANT VASTU FLOATED BY DARODA JOG ZANJALE VENTURE. T HE COMPUTER SHEET WHICH HAS BEEN SEIZED REFERS TO ONLY 8 FLATS AND E VEN IN THOSE 8 FLATS ONLY 3 FLATS I.E. FLAT NOS. 101, 103 AND 702 WERE BOOKED BY THE ASSESSEE. IT IS ALLEGED THAT IN RESPECT OF FLATS MENTIONED IN THE SEIZED DOCUMENTS ON-MONEY HAS BEEN PAID FOR THE PURCHASE O F THE FLATS. THE ASSESSING OFFICER HAS PLACED HEAVY RELIANCE ON THE STATEME NT OF SMT. MEGHA DEEPAK KELKAR ONE OF THE EMPLOYEE OF DARODE JOG B UILDERS WHO HAS ADMITTED THAT ON-MONEY IN CASH WAS RECEIVED AND WA S NOT SHOWN IN THE AGREEMENT TO SALE. IT IS FURTHER CONTENDED THAT SHRI SUDHIR DARODE, DIRECTOR OF DARODE JOG BUILDERS HAS ALSO ADMITTED UNDISCLOSED ADDITIONAL INCOME OF ` 2.55 CRORES. THE LD. AR VEHEMENTLY SUBMITTED THAT THE ASSESSEE WAS NOT PROVIDED OPPORTUNITY TO CRO SS-EXAMINE EITHER SMT. MEGHA DEEPAK KELKAR OR SHRI SUDHIR DARODE. THE ADD ITION HAS BEEN MADE ONLY ON THE BASIS OF DOCUMENT SEIZED FROM THE PREMISES OF THIRD PARTY. THE STATEMENT OF ASSESSEE WAS RECORDED O N 26-06-2009 U/S. 131 BY THE INVESTIGATION WING. THE ASSESSEE NEVER A DMITTED TO HAVE PAID ANY ON-MONEY IN HIS STATEMENT. THE SALE VALU E OF THE FLATS AGREED BETWEEN THE ASSESSEE AND THE DEVELOPERS IS THE MARKET VALUE. THE ASSESSEE HAD CANCELLED THE BOOKING OF FLAT NO. 103. TH E ASSESSEE HAD PAID ` 42 LAKHS IN RESPECT OF THAT FLAT AS AGAINST THE SALE CONSIDERATION OF ` 1,06,75,350/-. SUBSEQUENTLY, THE DEVELOPER SOLD THE FLAT TO SHRI RAMCHANDRA RATANCHAND & OTHERS VIDE AGREEM ENT DATED 29-08-2009 FOR A CONSIDERATION OF ` 1,10,14,2501/-. THE ASSESSEE WAS CONSENTING PARTY IN THE SAID AGREEMENT. THE DEVELOPER/P ROMOTER 4 ITA NO. 1132/PN/2013, A.Y. 2009-10 RETAINED ` 60 LAKHS AND THE REMAINING AMOUNT COMPRISING OF BOOKING AMOUNT AND PROFIT ON SALE OF FLAT WAS RECEIVED BY THE ASSE SSEE. THE ASSESSEE OFFERED THE GAIN OF ` 3,38,900 ARISING ON SALE OF FLAT IN HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2010-11. THIS CLEAR LY SHOWS THAT THAT THE ASSESSEE HAD NOT PAID ANYTHING OVER AND ABOV E THE CONSIDERATION MUTUALLY AGREED BETWEEN THE DEVELOPER/PRO MOTER AND THE ASSESSEE. THE LD. AR CONTENDED THAT THE ASSESSING OFFICE R HAS USED STATEMENT OF SMT. MEGHA DEEPAK KELKAR AND SHRI SUDHIR D ARODE RECORDED DURING THE SEARCH PROCEEDINGS IN THE CASE OF D ARODE JOG BUILDERS GROUP AGAINST THE ASSESSEE BUT THE SAID STATEM ENTS ARE NOT SUPPORTED BY ANY CORROBORATIVE EVIDENCE. THE MAKERS O F AN ADMISSION CAN BIND THEMSELVES BUT THEY CANNOT BIND OTHERS WITH TH E STATEMENT WITHOUT THEIR BEING ANY CORROBORATIVE EVIDENCE ON RECORD . IN THE ABSENCE OF CORROBORATIVE EVIDENCE, ADDITION OF ` 1,10,43,000/- AS UNDISCLOSED INCOME CANNOT BE MADE IN THE HANDS OF THE A SSESSEE. MERELY ON THE BASIS OF ENTRIES IN UNSIGNED LOOSE SHEETS R ECOVERED FROM THE PREMISES OF THIRD PARTY NO ADDITION CAN BE MADE IN TH E HANDS OF THE ASSESSEE. NO INCRIMINATING DOCUMENT WAS AT ANY STAGE RE COVERED FROM THE ASSESSEE. FURTHER, NO OPPORTUNITY OF CROSS-EXAMINAT ION OF THE PERSONS ON THE BASIS OF WHOSE STATEMENT ADDITION IS MADE WAS AFFORDED TO THE ASSESSEE. THE LD. AR FURTHER STATED AT THE BAR THAT AS PER HIS INSTRUCTIONS NO ADDITION HAS BEEN MADE IN THE NAMES OF O THER PERSONS I.E. MR. SATISH B. SHAH, MR. PRADIP C. MUTHA AND MR. JAIN WHOSE NAMES APPEAR ALONG WITH THE NAME OF ASSESSEE IN THE CO MPUTER SHEET SEIZED DURING SEARCH. 4. ON THE OTHER HAND SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIO NER OF 5 ITA NO. 1132/PN/2013, A.Y. 2009-10 INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION. THE LD. DR S UBMITTED THAT THE ADDITION HAS BEEN MADE IN THE HANDS OF THE ASS ESSEE ON ACCOUNT OF ON-MONEY PAID BY THE ASSESSEE TO M/S. DAROD E JOG BUILDERS PVT. LTD. FOR PURCHASE OF THREE FLATS IN HOUSING PROJECT SHREENIWAS VASANT VASTU. DARODE JOG BUILDERS GROUP IN THEIR RETU RN OF INCOME IN PURSUANCE TO THE SEARCH PROCEEDINGS HAD OFFERED ON-MON EY RECEIVED TO TAX. SMT. MEGHA DEEPAK KELKAR HAD ADMITTED IN HER STATE MENT THAT ON-MONEY WAS RECEIVED AND THE SAME HAS NOT BEEN REFLE CTED IN SALE AGREEMENT. AS REGARDS OPPORTUNITY OF CROSS-EXAMINATION TO ASSESSEE, THE LD. DR SUBMITTED THAT THE ASSESSEE NEVER ASKED FOR CROSS- EXAMINATION OF THE SAID PERSONS. THIS FACT HAS BEEN RECOR DED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IN PARA 3.7 OF HIS ORDE R. THE ASSESSEE NOW AT LATER STAGE CANNOT ARISE OBJECTION THA T OPPORTUNITY OF CROSS-EXAMINATION WAS NOT GIVEN TO THE ASSESSEE WHEN T HE ASSESSEE HIMSELF LOST THE OPPORTUNITY TO ASK FOR CROSS-EXAMINATION O F THE PERSONS ON WHOSE STATEMENT ADDITION WAS MADE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE ASSESSEE HAS ASSAILED THE ADDITION OF ` 1,10,43,000/- ON THE GROUND THAT NO ON-MONEY HAS BEEN PAID BY THE ASSESSEE AND THE ADDITION HAS BEEN MADE ON THE BASIS OF UNSIGNED COMPUTER SHEET SEIZE D FROM THE PREMISES OF THIRD PARTY AND THE STATEMENT OF ONE OF A PE RSON WHO WAS NOT CROSS-EXAMINED BY ASSESSEE. A PERUSAL OF COMPUTER SHEET SEIZED FROM THE PREMISES OF DARODE JOG BUILDERS GROUP SHOW THAT THE DETAILS OF 8 FLATS ARE GIVEN. OUT OF 8 FLATS, 3 FLATS I.E. FLAT NOS. 101, 103 AND 702 ARE BOOKED IN THE NAME OF THE ASSESSEE. AS PER THE CO NTENTION OF THE DEPARTMENT, THE AMOUNT MENTIONED IN COLUMN RECD B RE PRESENTS ON- 6 ITA NO. 1132/PN/2013, A.Y. 2009-10 MONEY RECEIVED BY THE DARODE JOG BUILDERS FROM THE FLAT HOLDERS. THE RELEVANT EXTRACT OF THE SEIZED COMPUTER SHEET IS REPROD UCED HERE-IN- UNDER : SR. #. FLAT #. TYPE SAL FLAT HOLDERS NAME AG AMT RECD B TOTAL COST 1 101 3BHK 1855 MR. RAMESH M GANDHI 5843250 2504250 8347500 2 102 3BHK 2108 MR. PRADIP C MUTHA 6640200 2845800 9486000 3 103 D 3BHK 3389 MR. RAMESH M GANDHI 10675350 4575150 15250500 4 301 3BHK 1855 MR. SATISH B SHAH 5843250 2504250 8347500 5 501 3BHK 1855 JAIN 5843250 2504250 8347500 6 603 3BHK 1801 MR. SATISH B SHAH 5673150 2431350 8104500 7 702 D 4BHK 2936 MR. RAMESH M GANDHI 9248400 3963600 13212000 8 801 P 3BHK 3073 MR. SATISH B SHAH 9679950 4148550 13828500 18872 TOTAL 59446800 25477200 84924000 6. OSTENSIBLY, THE ASSESSEE HAS CANCELLED FLAT NO. 103. THE PROMOTER/DEVELOPER HAS RESOLD THE SAID FLAT TO SHRI RAMCH ANDRA RATANCHAND & OTHERS VIDE AGREEMENT DATED 29-08-2009. A COPY OF THE SAID AGREEMENT IS PLACED ON RECORD AT PAGES 38 TO 73 O F THE PAPER BOOK. A PERUSAL OF THE AGREEMENT SHOWS THAT THE FLAT HAS BEEN SOLD FOR ` 1,10,14,2501/-. THE ASSESSEE HAD AGREED TO PURCHASE TH E SAID FLAT FOR ` 1,06,75,350/-, THE ASSESSEE HAD PAID ` 42 LAKHS TO THE PROMOTER. THE REMAINING AMOUNT OF LITTLE MORE THAN ` 60 LAKHS WAS STILL OUTSTANDING WHEN THE BOOKING OF FLAT WAS CANCELLED BY ASSESSEE. ACCOR DING TO THE AGREEMENT THE PURCHASER OF FLAT WAS TO PAY ` 60 LAKHS TO THE PROMOTER AND THE BALANCE AMOUNT COMPRISING OF ` 42 LAKHS PAID BY THE ASSESSEE 7 ITA NO. 1132/PN/2013, A.Y. 2009-10 AND THE GAIN ON SALE OF FLAT ` 3,38,900/- WAS TO BE RECEIVED BY THE ASSESSEE. THE LD. AR OF THE ASSESSEE CONTENDED THAT TH E ASSESSEE HAS ALREADY OFFERED THE GAIN ARISING FROM SALE OF FLAT FOR TAXATION IN ASSESSMENT YEAR 2011-12. THIS FACT HAS NOT BEEN DISPUT ED BY THE LD. DR. 7. WE FIND THAT THERE ARE SEVERAL INFIRMITIES IN THE FINDINGS O F AUTHORITIES BELOW IN MAKING ADDITION. THE AUTHORITIES BELOW ARE PROBABLY CARRIED AWAY BY THE STATEMENT OF SMT. MEGHA D EEPAK KELKAR WITHOUT CONSIDERING THE ENTIRE FACTS OF THE CASE. THE LD. A R HAS POINTED THAT EXCEPT FOR IN THE CASE OF ASSESSEE ADDITION HAS NOT BEEN MADE IN THE HANDS OF OTHER PERSONS WHOSE NAMES APPEAR IN THE COMPUTER SHEET SEIZED DURING SURVEY. THE LD. DR HAS NOT BEEN ABLE TO R EBUT THE CONTENTIONS OF THE ASSESSEE THAT NO ADDITION HAS BEEN MADE IN THE CASE OF OTHER PERSONS VIZ. MR. SATISH B. SHAH, MR. PRADIP C. MUTH A AND MR. JAIN WHO ARE SIMILARLY PLACED. FURTHER, WE OBSERVE THAT A NOTHER SHEET SEIZED WHICH IS PART OF PAGE 5 OF BUNDLE NO. 1 THAT ALLEGED LY GIVES THE DETAIL OF INVESTMENT MADE BY MR. SATISH B. SHAH AND MR. RA MESH M. GANDHI SHOW TWO DIFFERENT RATES. HOWEVER, THERE IS NO FUR THER EVIDENCE TO LINK THE CALCULATIONS TO THE PURPORTED ON-MONEY PAID B Y THE ASSESSEE. THE ADDITION HAS BEEN MADE MERELY ON THE BA SIS OF PROBABILITIES AND THE STATEMENT OF MEGHA DEEPAK KELKAR WIT HOUT THERE BEING ANY CORROBORATIVE EVIDENCE. THE CALCULATION SHEET A T PAGE 5 OF BUNDLE NO. 1 DOES NOT SHOW IN ANY MANNER THAT ON-MONE Y HAS BEEN PAID BY THE ASSESSEE TO DARODE JOG BUILDERS FOR PURCHA SE OF FLATS. ON THE CONTRARY, A PERUSAL OF SUBSEQUENT AGREEMENT FOR SALE OF FLAT NO. 103 SUPPORTS THE CASE OF ASSESSEE. THE CONSIDERATION SETTLE D BETWEEN ASSESSEE AND DARODE JOG BUILDERS IN RESPECT OF FLAT NO. 10 3 WAS IN FACT 8 ITA NO. 1132/PN/2013, A.Y. 2009-10 THE ONLY PRICE AND THERE IS NO REFERENCE OF ANY PREMIUM IN THE AGREEMENT FOR RE-SALE OF FLAT NO. 103. HAD THERE BEEN A NY PAYMENT OF ON-MONEY OR PREMIUM THE SALE PRICE MENTIONED IN THE AGRE EMENT WOULD HAVE BEEN MUCH MORE. THE SAID AGREEMENT IS REGISTERED. A PERUSAL OF REGISTRATION DOCUMENT SHOWS THAT VALUE OF PROPERTY FOR S TAMP DUTY PURPOSE IS ` 91,01,340/-. THE ASSESSEE COULD MANAGE TO SALE THE FLAT FOR A CONSIDERATION OF ` 1,10,14,250/- I.E. HIGHER THEN THE STAMP VALUE OF FLAT. THIS SHOWS THAT THE ASSESSEE HAS SOLD THE FLAT AT T HE MARKET PRICE. IN SUCH CIRCUMSTANCES PAYMENT OF ON-MONEY IS HIGHLY IM PROBABLE. THE DOCUMENTS ON RECORD DOES NOT SUGGEST IN ANY MANN ER PAYMENT OF ON-MONEY BY THE ASSESSEE. THUS, IN VIEW OF OUR ABOVE OBSERVATIONS GROUND NO. 1 RAISED IN THE APPEAL OF THE ASSESSEE IS ALLOWED. 8. IT IS AN UNDISPUTED FACT THAT THE STATEMENT OF SMT. MEGHA DEEPAK KELKAR RECORDED ON 28-04-2009 U/S. 132(4) OF THE ACT WAS USED BY THE DEPARTMENT TO MAKE ADDITION IN THE CASE OF ASSESSEE. WH EREAS, THE ASSESSEE HAS NOT CROSS-EXAMINED SMT. MEGHA DEEPAK KE LKAR. THE COMMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDER HAS GIVEN A CATEGORIC FINDING THAT THE ASSESSEE HAD NEVER MADE ANY REQUEST FOR CROSS-EXAMINING SMT. MEGHA DEEPAK KELKAR. THE LD. AR HAS NOT BEEN ABLE TO PLACE ON RECORD ANY EVIDENCE TO SHOW THAT THE REQUEST WAS MADE BY THE ASSESSEE TO CROSS-EXAMINE SMT. MEGHA DEEPAK KE LKAR. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT NO OPPOR TUNITY OF CROSS- EXAMINATION OF SMT. MEGHA DEEPAK KELKAR ON WHOSE STATEM ENT THE IMPUGNED ADDITION HAS BEEN MADE, LACKS MERITS. ACCORDINGLY , GROUND NO. 2 RAISED IN THE APPEAL OF THE ASSESSEE IS DISMISSED. 9. THE ASSESSEE HAS RAISED ADDITIONAL GROUND CHALLENGING TH E IMPUGNED ORDER ON THE GROUND THAT NO SEARCH PROCEEDIN GS U/S. 132 9 ITA NO. 1132/PN/2013, A.Y. 2009-10 WERE CARRIED OUT ON THE ASSESSEE AND NO WARRANT WAS ISSUED AT ANY POINT OF TIME IN RESPECT OF ADDITION OF ` 1,10,43,000/-, THEREFORE, THE ASSESSMENT ORDER PASSED U/S. 153A IS BAD IN LAW AND UNLAWFUL. THE LD. AR HAS NOT MADE ANY SUBMISSIONS IN RESPECT OF ADDITIONAL G ROUND. NO DOCUMENT HAS BEEN PLACED ON RECORD TO SUBSTANTIATE TH E GROUND RAISED. ACCORDINGLY, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS LIABLE TO BE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED IN THE AFORESAID TERMS. ORDER PRONOUNCED ON WEDNESDAY, THE 30 TH DAY OF NOVEMBER, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 30 TH NOVEMBER, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-2, NASHIK 4. ' / THE CIT-2, NASHIK 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE