DCIT, Nashik V. Shri Vipulkumar R. Agarwal, Jalgaon

ITA 1269/PUN/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3102 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2000-2001
• Appeal Filed On: 30-09-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A S SINGH
• Keywords: Salary income; Retraction
• Section: 133A; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I.C. SUDHIR AND SHRI D. KARUNAKARA RAO ITA NO. 1269/PN/08 (ASSTT. YEAR 2000-01) DCIT, CENTRAL CIRCLE-1, NASHIK .... APPELLANT VS. SHRI VIPULKUMAR RAMESHCHANDRA AGARWAL C/O. RAJENDRA REFINERIES DHULE ROAD, CHALISGAON, DIST. JALGAON PAN NO. AFFPA7780R . RESPONDENT APPELLANT BY : SHRI A.S. SINGH RESPONDENT BY : SHRI PRAMOD S. SHINGTE ORDER PER D. KARUNAKARA RAO AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A)-I, NAGPUR DATED 07-07-2008. THE GROUNDS READ AS UNDER:- 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-I, NAGPUR HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF UNEXPL AINED SOURCE OF F.DS OF RS. 13,50,000/- AND ACCRUED INTEREST THEREON AT RS. 90,549/-. 2. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-I, NAGPUR HAS ERRED IN HOLDING THAT THERE IS NO CREDIBLE EVIDENCE ON RECORD TOM SHOW THAT INVESTMENT IS MADE BY ASSESSEE IN BENAMI NAMES AS CONFESSED IN HIS STATEME NT U/S132(4) OF THE ITACT,61. 3. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-I, NAGPUR HAS ERRED IN HOLDING THAT THE FIXED DEPOSITS IN THE NAME S OF VARIOUS PERSONS SEIZED FROM POSSESSION OF THE ASSESSEE DID NOT BELONG TO THE ASSESSEE. 4. THE LD. CIT(A)-I, NAGPUR OUGHT TO HAVE UPHELD TH E ORDER OF THE AO ON THE GROUND THAT IT IS NOW A SETTLE POSITION THAT THE ADDITION MAD E SOLELY ON THE BASIS OF CONFESSIONAL STATEMENT IS SUSTAINABLE UNLESS THE ASSESSEE PROVES BY LEADIN G EVIDENCE THAT THE ORIGINAL STATEMENT WAS MADE UNDER MISTAKEN BELIEF OF FACT OR LA W. 5. THE ORDER OF THE LD. CIT(A)-I, NAGPUR ,MAY BE VA CATED AND THAT OF THE AO BE RESTORED. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL RESIDING AT GUNA. THE ASSESSEE DERIVES INCOME FROM SALARY, INTEREST ON DE POSITS AND INCOME FROM COMPUTER JOB WORK. AN ACTION U/S. 132(1) OF THE INCOM E TAX ACT, 1961 WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF SHRI RAJENDRA AGARWAL. IN THE COURSE OF SEARCH, A CHART CONTAINING DETAILS OF FIXED DEPOSIT RE CEIPTS IN THE NAME OF FEW PERSONS WAS FOUND AT THE PREMISES OF SHRI RAJENDRA AGARW AL. ALONGWITH THE SEARCH ACTION AT THE PREMISES OF SHRI RAJENDRA AGARWAL, AN ACT ION U/S. 133A OF INCOME TAX ITA NOS. 1269/PN/08 A.Y. 2000-01 PAGE 2 OF 4 ACT, 1961 WAS UNDER TAKEN ON THE PREMISES OF M/S. SA TYAM COTTEX PVT. LTD., A COMPANY IN WHICH ASSESSEE IS DIRECTOR. SURVEY PROCEEDI NGS U/S. 133A OF INCOME TAX ACT, 1961 UNDER TAKEN ON 03/11/2004 WERE CONVERTED IN TO ACTION U/S 132(1) ON 04/11/2004. IN THE COURSE OF SEARCH PROCEEDINGS, ASSES SEE ADMITTED THAT THE INVESTMENT IN FDR IN THE NAME OF VARIOUS PARTIES AS P ER CHART FOUND AT THE RESIDENCE OF SHRI RAJENDRA AGARWAL ARE HIS INVESTMENTS. AS PER TH E AO THE AFORESAID STATEMENT WAS EXTRACTED UNDER PRESSURE AND WAS NOT VOLUNTARY. THE ASSESSEE, PURSUANT TO NOTICE ISSUED U/S. 153A OF INCOME TAX ACT, 1961 AND SUBMITTED REGULAR RETURN OF INCOME AND RETRACTED FROM THE ORIGINAL STATEMENT MADE A T THE TIME OF SEARCH PROCEEDINGS. IT WAS EXPLAINED THAT THE IMPUGNED FIXE D DEPOSITS WITH DHULE VIKAS SAHAKARI BANK (DVSB) BELONG TO THE VARIOUS PERSONS IN WHOSE NAMES THEY ARE MADE AND ASSESSEE DID NOT INVEST ANY MONEY IN THESE FIXED DEPOSITS RECEIPTS (FDRS). THESE VARIOUS DEPOSITORS ARE AGRICULTURISTS AND THEY HAVE SUBSTANTIAL LAND HOLDING AND THEREFORE THE AGRICULTURE INCOME TO EXPLAIN THE FDRS STANDING IN THE RESPECTIVE NAMES. SOME OF THE INVESTORS OF FDRS ARE A SSESSED TO INCOME TAX AND INTEREST EARNED ON FDR IS ASSESSED TO TAX AT THEIR HAN DS. FURTHER, TO SUBSTANTIATE THE SAME, THE ASSESSEE SUBMITTED TO THE AO THAT THESE V ARIOUS DEPOSITORS ISSUED LEGAL NOTICE S TO THE SAID DVSB FOR RELEASE OF FIXED DEPOSIT RECEIP TS. THE A.O ALSO INDEPENDENTLY EXAMINED THE BANK MANAGER WHEREIN THE B ANK MANAGER HAD EXPLAINED THAT THE INVESTMENT IN FIXED DEPOSITS DOE S NOT BELONG TO ASSESSEE. ON ABOVE FACTS, THE A.O HELD THAT THE INVESTMENT IN FI XED DEPOSITS WITH DHULE VIKAS SAHAKARI BANK IN THE NAME OF VARIOUS PERSONS BELONGS TO ASSESSEE AND HAS MADE ADDITION OF RS. 13,50,000/- BEING INVESTMENT IN FIX ED DEPOSITS AND SUM OF RS. 90,549/- BEING INTEREST ACCRUED THEREUPON AT HANDS OF ASSESSEE. DURING THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) GAVE RELIEF TO THE ASSESSEE AS PER THE DISCUSSION GIVEN IN PARA 4 OF THE IMPUGNED ORDER. DURING THE PROCEE DINGS BEFORE US, BOTH THE PARTIES HAVE RELIED ON THEIR FAVOURABLE ORDERS. 3. WE HAVE HEARD THE PARTIES AND EXAMINED THE CORE IS SUE. WE FIND THAT IT IS THE CASE WHERE THERE IS RETRACTION OF OATH BASED - STATEME NT GIVEN DURING THE SEARCH PROCEEDINGS AND IN THE PRESENCE OF THE INDEPENDENT WI TNESSES. THE ASSESSEE HAS NOT DEMONSTRATED AS TO HOW THE ORIGINAL STATEMENT WAS TAKEN UNDER DURESS OR UNDUE INFLUENCE. IT IS NOT CLEAR AS TO HOW AND WHY T HE INCRIMINATING DOCUMENT CONTAINING THE LIST OF FDRS WAS LYING WITH HIM IN H IS POSSESSION AND THE REASONS THEREOF. IN OUR OPINION, THE PRESUMPTION PROPOSED U/S 1 32(4) OF THE ACT AND CAST ON THE ASSESSEE HAS NOT BEEN DISCHARGED. IN OUR OPINI ON, THIS PRESUMPTION MAY EVEN EXTEND TO THE EXTEND THAT THE ASSESSEE HAS TO PROVE THAT THE IMPUGNED AGRICULTURIST ARE THE REAL NORMS OF THE IMPUGNED FDRS A ND THEY EARNED INCOME FROM ITA NOS. 1269/PN/08 A.Y. 2000-01 PAGE 3 OF 4 THEIR RESPECTIVE LAND HOLDINGS AND THE SAME IS THE SO URCE OF THE INCOME THAT FINALLY FOUND WAY IN TO THE IMPUGNED FDRS. IN FACT, AS SEEN FROM THE ORDERS OF THE REVENUE THAT THE ASSESSEE INFACT PROMISED TO PRODUCE THESE IM PUGNED FDR HOLDERS/AGRICULTURIST BEFORE THE AO AND THE ASSESSEE FA ILED TO MATERIALIZE THE SAME FOR THE REASONS KNOWN TO HIM. FURTHER, THERE IS CHANGE I N THE STAND OF THE BANK OFFICIALS TOO. THE ASSESSEES EXPLANATION THAT THE IMPUGNED FDRS OWNERS DEMANDED THE PAYMENTS FROM THE BANK, HAS NOT BEEN INVESTIGATE D BY A.O BY SURMISING THE AGRICULTURISTS AND THE BANK OFFICIALS. THUS, THE INVE STIGATION IS INCOMPLETE AND TO THAT EXTENT THERE IS LACUNA ON REQUISITE FACTS. THEREFORE, THERE IS NEED FOR BRINGING FURTHER FACTS FROM THE BANK OFFICIALS BASED ON THE DOCUMENTS WITH THE BANK CONNECTED TO THE PURCHASE TRANSACTIONS OF THE FDRS, ON THE REAL OWN ERS OF THE FDRS, ON THE ROLE OF THE ASSESSEE AND THE RAJENDRA AGARWAL ETC IN PURCH ASE OF THE IMPUGNED FDRS. THERE IS DEFINITE NEED FOR EXAMINING THE AGRICULTURIST S AND ONUS IS ON THE ASSESSEE TO FURNISH THE DETAILED AND CURRENT ADDRESSES OF THESE WITNESSES AS HE OPTED FOR RETRACTING THE INITIAL STATEMENT GIVEN DURING THE SEARC H PROCEEDINGS AFTER REASONABLE GAP. NEITHER OF THE PARTIES IN DISPUTE ARE IN A POSIT ION TO REPLY TO OUR QUARRIES IN THE HEARING PROCEEDINGS. FURTHER ALSO, WE FIND THAT THE CIT (A) HAS PREMATURELY SHIFT THE ONUS TO THE REVENUE AGAINST THE ESTABLISHED PRINCIPLE S IN SEARCH MATTERS MORE SO WHEN THERE IS SEIZURE OF INCRIMINATING DOCUMENT IN THE PREMISES SEARCHED AND SEIZED FROM THE POSSESSION OF THE ASSESSEE. 4. DURING THE PROCEEDINGS BEFORE US, BOTH THE PARTIES I N DISPUTE HAVE GIVEN THEIR CONCURRENCE TO OUR PROPOSAL FOR REFERRING THE MATTER TO THE FILES OF THE A.O FOR MAKING DE NOVO ASSESSMENT AFTER GIVING REASONABLE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. WE FIND NO REASON TO NO TO CONSIDER THE SAME UNFAVOURABLY. ACCORDINGLY, GROUNDS RAISED IN THE APPEAL ARE SET ASID E PRO-TANTO. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2010. SD/- SD/- (I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 30 TH NOVEMBER, 2010 R COPY OF THE ORDER IS FORWARDED TO : 1. DCIT, CENTRAL CIRCLE-1, NASHIK 2. ASSESSEE 3. CIT(A)-I, NAGPUR ITA NOS. 1269/PN/08 A.Y. 2000-01 PAGE 4 OF 4 4. CIT(CENTRAL), NAGPUR 5. D.R. ITAT B BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE