Income-tax Officer, V. Shri Pradeep H. Dusad, Pune

ITA 1202/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2792 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-02-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 02-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NANDITA KANCHAN
• Keywords: Income from undisclosed sources; Search and seizure; Document seized; Documents seized
• Section: 148; 132; 10; 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1202 /P U N/201 6 / ASSESSMENT YEAR : 20 07 - 08 THE INCOME TAX OFFICER, WARD 5(1), PUNE . / APPELLANT VS. SHRI PRADEEP H. DUSAD, FLAT NO. 7, 55/6/1, WINCHESTER HOUSE, SALISBURY PARK, PUNE 411037 PAN : AK WPD2864R . / RESPONDENT / APPELLANT BY : NANDITA KANCHAN / RESPONDENT BY : SHRI PRAMOD SHINGTE / DATE OF HEARING : 11 . 02 .201 9 / DATE OF PRONOUNCEME NT: 27 . 0 2 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY REVENUE IS AGAINST ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 2, PUNE , DATED 16.10.2015 RELATING TO ASSESSMENT YEAR 20 07 - 08 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 1202 /P U N/20 1 6 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUND S OF APPEAL: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSIN G OFFICER WITHOUT LOOKING INTO THE FACTS THAT THERE IS ENTRY OF RS. 7 CRORE WRITTEN IN THE NAME OF THE ASSESSEE IN THE SEIZED DOCUMENT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT TH E AO HAS FAILED TO BRING OUT ANY CORROBORATIVE EVIDENCE ON RECORD AND ALSO FAILED TO APPRECIATE THAT THE AO HAS SUFFICIENT MATERIAL ON RECORDS TO PROVE THAT THE ASSESSEE HAS RECEIVED UNACCOUNTED INCOME OF RS. 7 CRORE. 3. FOR THIS AND SUCH OTHER REASONS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL DURING THE COURSE OF APPELLAT E PROCEEDINGS BEFORE THE HON BLE TRIBUNAL. 3. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITION OF RS.7 CRORES I.E. ENTRY IN THE SEIZED DOCUMENT. 4 . BRIEFLY, IN THE FACTS OF THE CASE, THE ASSE SSING OFFICER HAD RECEIVED INFORMATION FROM THE ACIT , CENTRAL CIRCLE 1(1), PUNE THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION CONDUCTED IN THE CASE OF RMD/SOHANRAJ GROUP OF CASES , IN THE SEIZED DOCUMENTS THERE WAS UNACCOUNTED TURNOVER OF RS.7 CROR ES MADE DURING THE PERIOD 01.04.2006 TO 31.05.2006 IN THE NAME OF SHRI PRADEEP/PRAVIN KHANDELWAL/PRADEEP DUSHAT ( PAN AKWPD2864R ) . THE ASSESSING OFFICER THUS RECORDED REASONS FOR REOPENING THE ASSESSMENT AND ISSUED NOTICE U/S. 148 OF THE ACT. IN RESPONSE THERETO THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,00,000/ - . THE ASSESSEE POINTED OUT THAT HE WAS CARRYING ON THE BUSINESS OF TRADING IN JEWELLERY UP TO FINANCIAL YEAR 1999 - 200 0. HOWEVER, HE FACED SEVERE LOS S ES , BECAUSE OF WHICH B USINESS WAS CLOSED DOWN. AFTER THAT HE HAS NOT BEEN ENGAGED IN ANY BUSINESS ACTIVITY AND ITA NO. 1202 /P U N/20 1 6 3 HENCE NO SALE TRANSACTIONS DURING FINANCIAL YEAR 2006 - 07. THE ASSESSEE ALSO EXPLAINED THAT HE WAS UNMARRIED MAN DEPENDENT ON HIS FAMILY MEMBERS FOR SUSTENANCE AND HA D NO BANK ACCOUNT IN THE FINANCIAL YEAR 2006 - 07. THE ASSESSEE SOUGHT REASONS RECORDED FOR REOPENING THE ASSESSMENT WHICH WERE PROVIDED TO THE ASSESSEE. A STATEMENT ON OATH WAS RECORDED OF THE ASSESSEE ON 28.02.2014. IN THE SAID STATEMENT HE ADMITTED THA T HE KNEW SHRI R M DHARIWAL AS HE HAD SOLD GEMS TO HIM BUT HE DID NOT KNOW SHRI SOHANRAJ MEHTA. HE ALSO EXPLAINED THAT HE HAD NO BUSINESS TRANSACTION WITH THEM SINCE ASSESSMENT YEAR 2000 - 01. THE LOOSE PAPER NO.34 OF THE ANNEXURE 4 SEIZED DURING THE COURS E OF SEARCH ACTION ON 09.10.2009 FROM SHRI SOHANRAJ MEHTA WAS SHOWN TO THE ASSESSEE AND HE WAS ASKED TO EXPLAIN THE ENTRIES. THE ASSESSEE AGAIN CLARIF IED THAT HE DID NOT KNOW SHRI SOHANRAJ MEHTA AND HAD NOT TAKEN ANY MONEY FROM HIM. HE ALSO POINTED OUT T HAT HIS NAME WAS SHRI PRADEEP DUSAD AND NOT PRAVEEN KHANDELWAL OR PRADEEP KHANDELWAL. THE ENGLISH TRANSLATION OF THE DOCUMENT WHEREIN SHRI PRADEEP KHANDELWAL WAS MENTIONED TO HAVE RECEIVED RS.7 CRORES WAS SHOWN TO THE ASSESSEE AND HE WAS ASKED TO EXPLAIN THE ENTRIES. HE REITERATED THAT HE DID NOT KNOW SHRI SOHANRAJ MEHTA AND HE HAD NOT RECEIVED ANY MONEY FROM HIM. HE ALSO STRESSED THAT NOWHERE HIS NAME WAS APPEARING ON SEIZED DOCUMENT , AS THE NAME WRITTEN IN FRONT OF ENTRY OF RS.7 CRORES WAS SHRI PRAVIN KHANDELWAL. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE WAS INVOLVED IN UNACCOUNTED TURNOVER OF RS.7 CRORES AS PER THE INFORMATION FROM THE INVESTIGATION WING AND HENCE THE PLEA OF THE ASSESSEE IN THIS REGARD WAS NOT ACCEPTABLE. FURTHER, THE REQUEST OF THE ASSESSEE TO OFFER AN OPPORTUNITY TO CROSS - EXAMINE SHRI SOHANRAJ MEHTA WAS NOT ACCEPTED AS THE SAID PERSON WAS FROM BANGALORE AND NO STATEMENT OF SHRI SOHANRAJ MEHTA WAS RECORDED BY THE ASSESSING OFFICER. IN VIEW OF THE SAID INFORMATION THE ASSESSING OFFICER ADDED SUM OF RS.7 CRORES U/S. 69A OF THE ACT IN THE HANDS OF THE ASSESSEE. ITA NO. 1202 /P U N/20 1 6 4 5. THE COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT THE ASSESSEE FROM DAY ONE HAD DENIED THE ALLEGATION MADE AGAINST HIM. IT WAS ALSO SUBMITTED BY ASSESSEE THA T IN THE LOOSE PAPER IN PAGE NO.34 HIS NAME DID NOT APPEAR ANYWHERE NOR HE HAD ANY TRANSACTION WITH DHARIWAL OR SHRI SOHANRAJ MEHTA. FURTHER, THE ASSESSEE WAS ALSO NOT ALLOWED CROSS - EXAMINATION TO SHRI SOHANRAJ MEHTA. THE COMMISSIONER OF INCOME TAX (APPE ALS) FURTHER HELD THAT NO CORROBORATIVE EVIDENCE HA D BEEN BROUGHT ON RECORD TO PROVE THAT HE HAD UNACCOUNTED TRANSACTION WITH DHARIWAL. FURTHER RELYING ON THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN SHRI VINIT RANAWAT VS. ACIT IN ITA NOS. 1105 & 1106/PN/2013 RELATING TO ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 , ORDER DATED 12.06.2015 AND OTHER DECISION IN THE CASE OF SHRI PRABHAT CHANDRA S JAIN VS. ACIT IN ITA NOS. 1325 TO 1329/PN/2013 RELATING TO ASSESSMENT YEARS 2004 - 05 TO 2008 - 09, ORDER DATED 16.09 .2015 THE ADDITIONS MADE WERE DELETED. THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE FACTS IN THE PRESENT CASE WERE IDENTICAL AND HENCE THE ADDITION MADE IN THE HANDS OF THE ASSESSEE WAS DELETED. 6. THE LD. DR PLACED RELIANCE ON ORDER OF ASSES SING OFFICER. 7. THE LD. A R FOR THE ASSESSEE ON THE OTHER HAND PLACED RELIANCE ON THE DECISION OF PUNE BENCH OF TRIBUNAL IN PRABHAT CHANDRA S. JAIN VS. ACIT IN ITA NOS. 1325 TO 1329/PN/2013 RELATING TO ASSESSMENT YEARS 2004 - 05 TO 2008 - 09, ORDER DATED 16 .09.2015. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. CONSEQUENT TO THE SEARCH AND SEIZURE ACTION U/S. 132 OF THE ACT IN THE CASE OF RMD GROUP OF CASES ON 20.01.2010 , T HE ASSESSING OFFICER RECEIVED INFORMATION THAT ONE SHRI PRAVIN KHAN DELWAL HAD ENTERED INTO VARIOUS ENTRIES ITA NO. 1202 /P U N/20 1 6 5 TOTALING RS.7 CRORES WITH SHRI SOHANRAJ MEHTA. THE NAME OF THE ASSESSEE BEFORE US IS SHRI PRADEEP DUSAD. IT IS AN ADMITTED POSITION THAT SHRI PRADEEP DUSAD IS NOT MENTIONED IN THE SEIZED DOCUMENTS. HOWEVER, INVEST IGATION WING FORWARDED THE INFORMATION TO ASSESSING OFFICER OF THE ASSESSEES JURISDICTION AND THE NOTICE U/S. 148 WAS ISSUED TO THE ASSESSEE. THE ASSESSEE POINTED OUT THAT IT WAS DOING JEWELLARY BUSINESS TILL FINANCIAL YEAR 1999 - 00 AND DURING THE YEAR HE WAS NOT CARRYING OUT ANY BUSINESS ACTIVITY. IT MAY BE POINTED OUT THAT RMD/SOHANRAJ GROUP OF CASES WERE FOUND TO HAVE INDULGED IN UNACCOUNTED SALES OF GUTKA. THE ASSESSEE ADMITTEDLY HA D NOT CARRIED OUT ANY SUCH BUSINESS OF GUTKA . THE ONLY ISSUE IS WHET HER IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE FOUND AGAINST THE ASSESSEE , CAN ANY ADDITION BE MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF ANY SUCH NOTING ON SUCH DOCUMENTS. FIRST OF ALL IT IS NOT ESTABLISHED THAT THE PERSON REFERRED IN THE SAID DOC UMENTS WAS THE ASSESSEE AND ALSO IN THE ABSENCE OF ANY CROSS - EXAMINATION OF SHRI SOHANRAJ MEHTA BEING PROVIDED, THERE IS NO MERIT IN MAKING ANY ADDITION WHEREIN SHRI SOHANRAJ MEHTA ON LATER DATE HAD RETRACTED HIS EARLIER STATEMENT. 9. WE FIND THAT SIMIL AR ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN SERIES OF CASES . WE MAKE REFERENCE TO THE LATEST DECISION IN THE CASE OF PRABHAT CHANDRA S. JAIN VS. ACIT (SUPRA) WHEREIN IN TURN REFERENCE WAS MADE TO THE EARLIER DECISION OF PUNE BENCH OF TRIBUNAL IN THE CASE OF SHRI VINIT RANAWAT VS. ACIT (SUPRA) . THE TRIBUNAL CONCLUDED BY HOLDING AS UNDER : 20. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY OPPOSED THE ORDER OF THE CIT(A). SO FAR AS THE LEGAL GROUND IS CONCERNED CHALLENGING THE VALIDITY OF THE ORDER PASSED U/S. 153A HE SUBMITTED THAT THE PAPERS WERE NOT FOUND IN THE COURSE OF SEARCH OF SHRI MITTULAL AND THOSE PAPERS WERE FOUND IN THE COURSE OF SEARCH ON THE ASSESSEE. IN FACT DURING THE COURSE OF SEARCH ON THE ASSESSEE GROUP THERE WAS NO INCRIMINATING DOCUMENTS FO UND REGARDING ANY UNACCOUNTED RECEIPT/TRANSACTION WITH SHRI SOHAN RAJ MEHTA OR M/S. DHARIWAL INDUSTRIES LTD. GROUP. REFERRING TO THE PROVISIONS OF SECTION 153A HE SUBMITTED THAT THE SAME IS TO BE INVOKED FOR MAKING AN ASSESSMENT OF THE PERSON SEARCHED ON T HE BASIS ITA NO. 1202 /P U N/20 1 6 6 OF THE MATERIAL FOUND DURING THE COURSE OF SEARCH ON THAT PERSON. SINCE THE ASSESSMENT FOR A.Y. 2006 - 07 WAS ALREADY COMPLETED U/S.143(3) PRIOR TO THE SEARCH, THEREFORE, IN THE COURSE OF ASSESSMENT U/S.153A THE SCOPE SHOULD HAVE BEEN LIMITED TO THE INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH ON THE ASSESSEE GROUP. HE SUBMITTED THAT IF THE MATERIAL IS FOUND WITH SOME THIRD PARTY THE ASSESSMENT OUGHT TO BE INITIATED U/S.153C WHICH IS A SPECIFIC PROVISION FOR SUCH PURPOSES. THEREFORE, ON THE B ASIS OF THE INCRIMINATING MATERIAL FOUND WITH A THIRD PARTY, THE ADDITION CANNOT BE MADE U/S.153A. 10 . IN VIEW OF THE ISSUE BEING SETTLED ON SIMILAR FACTS BY PUNE BENCH OF TRIBUNAL , WE FIND NO MERIT IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE. UPH OLDING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , WE DISMISS THE GROUNDS OF APPEAL RAISED BY REVENUE . 11 . IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 27 TH DAY OF FEBRUARY, 201 9 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 27 TH FEBRUARY, 201 9 . RK / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 2 , PUNE ; 4. THE PR . CIT - 3 , PUNE ; 5. 6. , , / D R B , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / PRIVATE SECRETARY , / ITAT, PUNE