CHETAN S. LONDHE, Thane V. DCIT, CIRCLE-1, Thane

ITA 1575/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2351 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 15-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Assessee Lawyers: KISHORE PODDAR
• Keywords: Unexplained investment; Search and seizure; Opportunity of cross examination; Third party statement
• Section: 147; 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 1575 /MUM. /201 9 ( ASSESSMENT YEAR : 20 07 08 ) CHETAN S. LONDHE 801, CHELSEA, HIRANANDANI ESTATE GHODBUNDER ROAD, THANE 400 607 PAN AANPL3666Q . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 1, THANE . RESPONDENT ASSESSEE BY : SHRI KISHORE PODDAR REVENUE BY : S HRI SANJAY J. SETHI DATE OF HEARING 09 .11.2020 DATE OF ORDER 24.11.2020 O R D E R CAPTIONED APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 4 TH FEBRUARY 2019, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 1, NASHIK, PERTAINING TO THE ASSESSMENT YEAR 2007 08. 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE ADDITION OF AN AMOUNT OF ` 7 LAKH, TOWARDS UNEXPLAINED INVESTMENT. 3. B RIEF FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 31 ST 2 CHETAN S. LONDHE MARCH 2008, DECLARING TOTAL INCOME OF ` 9,86,963. IN COURSE OF A SEARCH AND SEIZURE OPERATION CONDUCT ED IN CASE OF HIRANANDANI GROUP OF THE BUILDERS AND DEVELOPERS ON 11 TH MARCH 2014, INFORMATION CAME TO THE NOTICE OF THE DEPARTMENT REGARDING RECEIPT OF O N MONEY THROUGH CASH FROM VARIOUS PURCHASERS OF FLAT S DEVELOPED BY THE GROUP. AS OBSERVED BY THE ASSESSING OFFICER, WHEN SUCH EVIDENCES WERE CONFRONTED TO THE DIRECTORS AND PROMOTERS OF HIRANANDANI GROUP, THEY ACCEPTED OF HAVING RECEIVED ON MONEY ON SALE O F FLATS. THE ASSESSING OFFICER ALSO STATED THAT ON MONEY RECEIVED BY HIRANANDANI GROUP WAS ALSO OFFERED AS ADDITIONAL INCOME IN RESPECTIVE ASSESSMENT YEARS. FROM THE EVIDENCES FOUND DURING THE SEARCH AND SEIZURE OPERATION CONDUCTED IN CASE OF HIRANANDANI G ROUP, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD PAID ON MONEY OF ` 7 LAKH IN CASH FOR A FLAT PURCHASED BY HIM. ON THE BASIS OF SUCH INFORMATION, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN COURSE OF ASSESSMENT PR OCEEDINGS, WHEN THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY THE ON MONEY PAID OF ` 7 LAKH SHOULD NOT BE TREATED AS UNEXPLAINED INVESTMENT, THE ASSESSEE STRONGLY OBJECTED TO SUCH ADDITION. THE ASSESSEE VEHEMENTLY DENIED OF HAVING PAID ANY ON MONEY TOWARDS PURCHASE OF FLAT. HOWEVER , THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE AND ADDED BACK THE AMOUNT OF ` 7 LAKH, TO HIS INCOME. THE 3 CHETAN S. LONDHE ADDITION SO MADE WAS ALSO SUSTAINED BY LEARNED COMMISSIONER (APPEALS ) WHILE DECIDING ASSESSEES APPEAL. 4. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE BURDEN IS ENTIRELY ON THE REVENUE TO PROVE THE PAYMENT OF ON MONEY. HE SUBMITTED , WHEN THE ASSESSEE HAS NOT PAID ANY ON MONEY HE CANNOT BE CALLED UPON TO PROVE THE NEGATIVE. HE SUBMITTED , MERELY RELYING UPON SOME INFORMATION RECEIVED DURING THE SEARCH CONDUCTED IN CASE OF A THIRD PARTY , ADDITION CANNOT BE MADE AT THE HANDS OF THE ASSESSEE. FURTHER , HE SUBMITTED , NO INCRIMINATING MA TERIAL WAS FOUND FROM THE ASSESSEE INDICATING PAYMENT OF ON MONEY. THEREFORE, ADDITION MADE SHOULD BE DELETED. IN SUPPORT OF SUCH CONTENTION, THE LEARNED AUTHORISED REPRESENTATIVE RELIED UPON THE FOLLOWING DECISIONS: I) SHRI VINAY KUMAR V/S ITO, ITA NO.2181 /MUM./2011, DATED 21.02.2014; AND II) H.R. MEHTA V/S ACIT, ITA NO.58/2001, JUDGMENT DATED 30.06.2016 (BOM.). 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND LEARNED COMMISSIONER (APPEALS). 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE FACTUAL MATRIX CLEARLY REVEAL S THAT DURING THE SEARCH AND SEIZURE OPERATION CONDUCT ED IN CASE OF HIRANANDANI GROUP CERTAIN 4 CHETAN S. LONDHE INFORMATION WAS FOUND WHICH INDICATED RECEIPT OF ON MONEY ON SALE OF FLAT S . IT APPEARS FROM THE VERSION OF THE ASSESSING OFFICER, THE BUILDER IN A STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT HAD ACCEPTED THE RECEIPT OF ON MONEY AND HAS ALSO OFFERED THEM AS ADDITIONAL INCOME. HOWEVER, FACT REMAINS, NO INCRIMI NATING MATERIAL WHICH COULD ESTABLISH PAYMENT OF ON MONEY ON PURCHASE OF FLAT WAS FOUND FROM THE ASSESSEE. IT IS ALSO EVIDENT , THE ADDITION OF ` 7 LAKH HAS BEEN MADE AT THE HANDS OF THE ASSESSEE ENTIRELY RELYING UPON THE STATEM ENT RECORDED FROM THE PROMOTE RS/ DIRECTORS OF HIR ANANDANI GROUP AND NOTHING ELSE, T HOUGH , IN THE C OURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAD CATEGORICALLY DENIED OF HAVING PAID ANY ON MONEY AND NO OTHER CORROBORATIVE EVIDENCE WAS FOUND INDICATING PAYMENT OF ON MONEY BY THE ASSESS EE. THOUGH, IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS STATED THAT RELEVANT PORTION OF THE STATEMENT RECORDED BY THE INVESTIGATION WING WAS FURNISHED TO THE ASSESSEE, HOWEVER, FROM THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE LEARNED COMMISSIONER (AP PEALS), IT IS EVIDENT, THE ASSESSEE HAS VERY CLEARLY AND CATEGORICALLY STATED THAT NO THIRD PARTY STATEMENT WAS PROVIDED TO HIM NOR OPPORTUNIT Y TO CROSS EXAMINE THE PERSON FROM WHOM STATEMENT WAS RECORDED WAS PROVIDED . THE AFORESAID SUBMISSION OF THE ASSESSEE HAS BEEN REJECTED BY LEARNED COMMISSIONER (APPEALS) ON TECHNICAL GROUNDS. IT IS FAIRLY WELL SETTLED , UNLESS , THE ADVER SE MATERIAL ON THE BASIS OF WHICH ADDITION IS CONTEMPLATED IS BROUGHT TO THE NOTICE 5 CHETAN S. LONDHE OF THE ASSESSEE , NO SUCH MATERIAL COU LD BE USED DETRIMENTAL TO THE INTERESTS OF THE ASSESSEE. IN THE FACTS OF THE PRESENT CASE, THOUGH , THE ADDITION HAS BEEN MADE PURELY ON THE BASIS OF ADVERSE MATERIAL COLLECTED FROM THIRD PARTIES, HOWEVER, PRIMA FACIE IT APPEARS THAT SUCH ADVERSE MATERIALS WERE NOT CONFRONTED TO THE ASSESSEE. FURTHER, THOUGH , THE STATEMENT RECORDED FROM A THIRD PARTY WAS RELIED UPON, HOWEVER, NO OPPORTUNITY TO CROSS EXAMINE THE PERSON FROM WHOM STATEMENT WAS RECORDED HAS BEEN PROVIDED TO THE ASSESSEE . E XCEPT THE STATEMENT RE CORDED UNDER SECTION 132(4) OF THE ACT, AS IT APPEARS , THE ASSESSING OFFICER HAD NO OTHER CORROBORATIVE EVIDENCE TO ESTABLISH PAYMENT OF ` 7 LAKH, TOWARDS ON MONEY IN CASH. THEREFORE, THE ADDITION MADE PURELY ON CONJECTURE AND SURMISES AND WITHOUT ANY CORR OBORATIVE EVIDENCE HAS TO BE DELETED. ACCORDINGLY, I DO SO. GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.11.2020 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 24.11.2020 6 CHETAN S. LONDHE COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI