Shri Bharatbhai Kantilal Sheth, Ahmedabad V. The Income Tax Officer,Ward- 5(2)(3), Old Ward-10(3), Ahmedabad

ITA 1514/AHD/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7674 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-08-2017
• Assessment Year: 1999-2000
• Appeal Filed On: 27-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Unexplained investment; Income from undisclosed sources; Set aside
• Section: 143(3); 133(6); 147; 131; 132

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER &SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./I.T.A. NO. 1514/AHD/2015 ( / ASSESSMENT YEAR: 1999-00) BHARATBHAIKANTILALSHETH D/3, 3 RD FLOOR, PUSHPAMBUNGLOW, ST. XAVIERS COLLEGE CORNER, NAVRANGPURA, AHMEDABAD 380009 / VS. ITO WARD- 5(2)(3), AHMEDABAD (OLD JURISDICTION ITO, WARD 10(3), AHMEDABAD ./ ./PAN/GIR NO. : ADR PS3 111 N ( /APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENTBY: SMT. SONIA KUMAR, SR. DR ! /DATE OFHEARING 12/07/2019 '# ! / DATE OF PRONOUNCEMENT 23/07/2019 $% /O R D E R PER AMARJIT SINGH - AM: THE APPEAL FILED BY THE ASSESSEE FOR A.Y. 1999-00, ARISE FROM ORDER OF THE CIT(A)-5, AHMEDABAD DATED 25.03.2015, IN PROCEEDINGS UNDER SECTION 143(3)R.W.S. 254 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IN THE INSTANT APPEAL IS AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE ADDITION MADE BY THE AO TO THE AMOUNT OF RS. 12,00,000/- TREATING IS AT INCOME FRO M UNDISCLOSED SOURCES. 3. THE FACT IN BRIEF IS THAT ORIGINAL RETURN OF INCO ME WAS FILED ON 30.08.1999 DECLARING TOTAL INCOME AT RS. 30,326/-. THE ASSESSM ENT U/S. 147 R.W.S. 143(3) OF THE ITA NO. 1514/AHD/2015 A.Y. 1999-00 2 ACT WAS PASSED ON 11.12.2006 DETERMINING THE TOTAL INCOME AT RS. 12,30,180/-. IN THE AFORESAID ASSESSMENT AN ADDITION OF RS. 12,00,0 00/- WAS MADE IN THE CASE OF THE ASSESSEE ON THE BASIS OF INFORMATION GATHERED FROM THE SEARCH ACTION CARRIED OUT U/S. 132 OF THE ACT IN THE CASE OF MASTER GROUP ON 20.10.2000. DURINGTHE SEARCH ACTION AT THE ABOVE MENTIONED GROUP AN AGREEMENT WA S SEIZED IN WHICH IT WAS CATEGORICALLY MENTIONED THAT ASSESSEE HAD PAID RS. 12,00,000/- IN CASH TO PARTH HOUSING & ESTATE DEVELOPMENT LTD. TOWARDS BOOKING OF SHOP. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NOT EX PLAIN THE SOURCE OF THE AFORESAID CASH AMOUNT PAID TOWARDS BOOKING OF THE S HOP, THEREFORE, AN AMOUNT OF RS. 12,00,000/- WAS ADDED TO THE TOTAL INCOME OF TH E ASSESSEE. THUS, THE CIT(A) HAS SUSTAINED THE ADDITION MADE BY THE AO. HOWEVER , THE CO-ORDINATE BENCH OF THE ITAT AHMEDABAD VIDE ORDER NO. 1931/AHD/2008 HAS R ESTORED THE MATTER TO THE FILE OF AO TO RE-ADJUDICATE THE SAME AFTER KEEP ING IN VIEW THE OBSERVATION OF THE ITAT IN THE CASE OF PERTH HOUSING AND ESTATE DEVE LOPMENT PVT. LTD. DURING THE COURSE OF SET ASIDE PROCEEDING IN CONSEQUENCE T O DIRECTION OF THE ITAT AS MENTIONED ABOVE THE ASSESSEE HAS STATED THAT THERE WAS NO TRANSACTION WITH HIM AND THE PERTH HOUSING AND ESTATE DEVELOPMENT LTD. HOWEV ER, THE ASSESSEE HAS CONFIRMED HIS STATEMENT RECORDED U/S. 131 OF THE AC T IN WHICH HE HAS ADMITTED THAT HE HAD MADE AGREEMENT WITH THE PERTH HOUSING AND ES TATE DEVELOPMENT LTD. DURING THE COURSE OF SET ASIDE ASSESSMENT PROCEEDIN G THE AO HAS ALSO ISSUED NOTICE U/S. 133(6) OF THE ACT TO THE PERTH HOUSING AND ESTA TE DEVELOPMENT PVT. LTD. BUT IT HAS NOT MADE ANY COMPLIANCE. THEREAFTER, A SHOW-CAU SE NOTICE WAS ISSUED TO THE ASSESSEE TO SHOW-CAUSE WHY NOT UNDISCLOSED AMOUNT O F RS. 12,00,000/- SHOULD BE ADDED TO HIS TOTAL INCOME. THE ASSESSEE HAS NOT MAD E ANY COMPLIANCE THEREFORE THE AFORESAID AMOUNT WAS ADDED TO THE TOTAL INCOME OF T HE ASSESSEE TREATING IT AS INCOME FROM UNDISCLOSED SOURCES. 4. THE AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE TH E LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL. ITA NO. 1514/AHD/2015 A.Y. 1999-00 3 5. DURING THE COURSE OF APPELLATE PROCEEDING BEFORE US NOBODY HAS ATTENDED FROM THE SIDE OF THE AO. HOWEVER, THE WRITTEN SUBM ISSION HAS BEEN FILED. ON THE OTHER HAND, THE LD. DR HAS CONTENDED THAT IN SPITE OF ISSUING NUMBER OF NOTICES THE ASSESSEE HAS NOT MADE ANY COMPLIANCE AND DURING THE COURSE OF SET ASIDE PROCEEDING THE ASSESSEE HAS FAILED TO SUBSTAN TIATE THE SOURCE OF CASH PAID TO THE PARTH HOUSING AND ESTATE DEVELOPMENT. 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIALS ON RECORD. THE AO HAS MADE ADDITION OF RS. 12,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF THE SHOP IN PARTH SHOPS & FLATS CO. OP. HOUSING SOCIETY. DURING THE COURSE OF SEARCH ACTION CARRIED OUT IN THE MASTER G ROUP OF CASES ON 20.10.2000AN AGREEMENT FOR CANCELLATION OF THE MEMBERSHIP OF A F LAT AND SHOP DATED 12.09.1998 WAS FOUND AND SEIZED IN WHICH IT WAS CATEGORICALLY MENTIONED THAT ASSESSEE HAD PAID CASH OF RS. 12,00,000/- IN CASH TO PARTH HOUSI NG AND ESTATE DEVELOPMENT PVT. LTD. IT WAS ALSO CATEGORICALLY MENTIONED THAT THE C ASH WAS RETURNED TO THE ASSESSEE ON CANCELLATION OF THE BOOKING BY THE ASSESSEE. ON THE BASIS OF AFORESAID INFORMATION ASSESSMENT U/S. 147 R.W.S. 143(3) OF TH E ACT WAS MADE AND THE AMOUNT WAS ADDED AS UNDISCLOSED INCOME TO THE TOTAL INCOME OF THE ASSESSEE. SUBSEQUENTLY, THE CO-ORDINATE BENCH OF THE ITAT HAS S ET ASIDE THE ASSESSMENT TO THE FILE OF THE AO FOR DECIDING THE ISSUE AFRESH AF TER KEEPING IN VIEW THE OBSERVATION OF THE ITAT IN THE CASE OF PARTH HOUSING AND ESTATE DEVELOPMENT PVT. LTD. DURING THE COURSE OF SET ASIDE ASSESSMENT PROC EEDINGS THE ASSESSEE HAS REITERATED ITS EARLIER SUBMISSION. THE ASSESSEE HA S ALSO CONFIRMED HIS ALREADY STATEMENT RECORDED U/S. 131 ADMITTING AGREEMENT MAD E WITH PERTH HOUSING AND ESTATE DEVELOPMENT PVT. LTD. THE AO HAS ISSUEDNOTICE U /S. 133(6) OF THE ACT TO THE DIRECTOR OF PARTH HOUSING AND ESTATE DEVELOPMENT PVT . LTD. REQUESTING TO CONFIRM THE TRANSACTION AS CITED ABOVE TAKEN PLACE BETWEEN THEIR COMPANY AND THE ASSESSEE. HOWEVER, THE NOTICE WAS RETURN UNSERVED. THE AO HAS NOT RECEIVED ANY RESPONSE FROM THE PARTH HOUSING & ESTATE DEVELOPERS PVT. LTD. WITH WHOM THE ASSESSEE HAS ITA NO. 1514/AHD/2015 A.Y. 1999-00 4 ENTERED INTO AGREEMENT. THESE FACTS AND DEVELOPMENT S WERE BROUGHT TO THE NOTICE OF THE ASSESSEE VIDE SHOW-CAUSE NOTICE DATED 11.03. 2013 HOWEVER THE ASSESSEE HAS ALSO NOT MADE ANY COMPLIANCE TO THE SHOW-CAUSE NOTI CE. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES IT IS ESTABLISHED THAT THE ASSESSEE HAS TRIED TO AVOID MAKING EXPECTED COMPLIA NCE BEFORE THE AO EVEN DURING THE COURSE OF SET ASIDE ASSESSMENT PROCEEDINGS INIT IATED AS PER THE DIRECTION OF THE ITAT. THE ASSESSEE HAS NEITHER MADE COMPLIANCE TO TH E SHOW-CAUSE NOTICE DATED 11.03.2013 NOR CITED ANY CIRCUMSTANCES WARRANTING A NY FURTHER INTERVENTION OF THE AO, THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE CIT(A). ACCORDINGLY, APPEAL OF THE ASSESSEE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUN TANT MEMBER AHMEDABAD: DATED 23/07/2019 TANMAY TRUE COPY / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. $ / ASSESSEE 3. &' ( / CONCERNED CIT 4. ( - / CIT (A) 5. )*+ ' , ! ' , ,-$&$ / DR, ITAT, AHMEDABAD 6. +. / / GUARD FILE. BY ORDER / $% , 0 / , ! ' , ,-$&$ 1 THIS ORDER PRONOUNCED IN OPEN COURT ON 23/ 07/2019