HEENA DASHRATH JHANGLANI, MUMBAI V. INCOME TAX OFFICER 2(5), KALYAN

ITA 1665/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7712 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 14-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURMURKHSINGH H PURSWANI
• Keywords: Unexplained investment; Search and seizure; Document seized; Principle of natural justice; Corroborative evidences; Documents seized
• Section: 143(1); 69B; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 1665 / MUM . /2018 ( ASSESSMENT YEAR : 20 07 08 ) HEENA DASHRATH JHANGLANI A 12, GURUDEV SOCIETY OPP. SAPNA GARDEN ULHASNAGAR 400 003 PAN ACJPJ0900D . APPELLANT V/S INCOME TAX OFFICER WARD 2 ( 5 ), KALYAN . RESPONDENT ASSESSEE BY : SHRI NITESH JOSHI REVENUE BY : SHRI GURMURKHSINGH H. PURSWANI DATE OF HEARING 02 . 01 .201 9 DATE OF ORDER 11.01.2019 O R D E R A FORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 2 ND JANUARY 2018 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 3 , THANE , FOR THE ASSESSMENT YEAR 20 0 7 08 . 2 . IN TOTAL, THE ASSESSEE HAS RAISED 11 GROUNDS. 3 . GROUNDS NO.10 AND 11, BEING GENERAL IN NATURE DO NOT REQUIRE ADJUDICATION. 2 HEENA DASHRATH JHANGLANI 4 . IN GROUNDS NO.1, 2, 3 4 AND 9, THE ASSESSEE HAS RAISED VARIOUS LEGAL AND JURISDICTIONAL ISSUES CHALLENGING THE VALIDITY OF THE IMPUGNED ASSESSMENT ORDER. WHEREAS, IN GROUNDS NO.5, 6, 7 AND 8, THE ASSESSEE HAS CHALLENGED THE MERITS OF THE ADDITION MADE OF ` 42 LAKH AS UNEXPLAINED INVESTMENT UNDER SECTION 69B OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) . 5 . AT THE OUTSET, THE LEARNED AUTHORISED REPRESENTATIVE PROPOSE D TO ADVANCE HIS ARGUMENT ON THE MERITS OF THE ADDITION MADE OF ` 42 LAKH AS PER GROUNDS NO.5, 6, 7 AND 7. 6 . BRIEF FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HER RETURN OF INCOME ON 29 TH FEBRUARY 2008, DECLARING TOTAL INCOME OF ` 1,70,480. INITIALLY, THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN CASE OF HIRANANDANI GROUP OF BUILDERS AND DEVELOPERS ON 11 TH MARCH 2014. IN COURSE OF SUCH SE ARCH AND SEIZURE OPERATION, CERTAIN INCRIMINATING MATERIALS WERE SEIZED WHICH REVEALED THAT THE ASSESSEE IN THE RELEVANT PREVIOUS YEAR HAD PAID ON MONEY OF ` 42 LAKH IN CASH T O M/S. CRESCENDO ASSOCIATES, A GROUP CONCERN OF HIRANANDANI GROUP, TOWARDS PURCHASE OF FLAT NO.2404, AT TORINO . IN THE COURSE OF SUCH SEARCH AND SEIZURE OPERATION, A STATEMENT UNDER SECTION 132(4) OF THE ACT WAS ALSO RECORDED FROM SHRI NIRANJAN HIRANANDANI, A 3 HEENA DASHRATH JHANGLANI DIRECTOR AND PROMOTER OF HIRANANDANI GROUP, WHEREIN, HE ADMITTED REC EIPT OF ON MONEY IN CASH OVER AND ABO VE THE REGISTERED VALUE OF THE F LAT FROM THE BUYERS. ON THE BASIS OF SUCH INFORMATION / MATERIAL FOUND DURING THE SEARCH AND SEIZURE OPERATION, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT . IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN WHY THE ON MONEY PAID IN CASH AMOUNTING TO ` 42 LAKH TOWARDS PURCHASE OF FLAT SHOULD NOT BE TREATED AS UNEXPLAINED INVESTMENT UNDER SECTION 69B OF THE ACT AND ADDED TO THE INCOME OF THE ASSESSEE. THOUGH, THE ASSESSEE BY FILING DETAILED WRITTEN SUBMISSIONS OBJECTED TO THE PROPOSED ADDITION BY SUBMITTING THAT IT NEITHER HAS INTERACTED WITH SHRI NIRANJAN HIRANANDANI, NOR PAID ANY ON MONEY IN CASH FOR PURCHASE O F FLAT, HOWEVER, THE ASSESSING OFFICER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE. HE OBSERVED , THE INFORMATION / MATERIAL FOUND AS A RESULT OF SEARCH AND SEIZURE OPERATION COUPLED WITH THE STATEMENT RECORDED FORM SHRI NIRANJAN HIRANANDANI, UNDE R SECTION 132(4) OF THE ACT CLEARLY REVEAL THAT THE ASSE SSEE HAD PAID ON MONEY IN CASH TOWARDS PURCHASE OF THE FLAT. ACCORDINGLY , HE PROCEEDED TO ADD BACK THE AMOUNT OF ` 42 LAKH TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENT. BEING AGGRIEVED WITH SUCH ADDITION, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4 HEENA DASHRATH JHANGLANI 7 . I N COURSE OF PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE AGAIN FILED WRITTEN SUBM ISSIONS CONTESTING THE ADDITION MADE BY THE ASSESSING OFFICER. IT WAS SUBMITTED BY THE ASSESSEE THAT SINCE THE ASSESSEE HAS NOT INTERACTED WITH SHRI NIRANJAN HIRANANDANI, DIRECTOR OF HIRANANDANI GROUP, ANY ADMISSION MADE BY HIM IN THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT W OULD NOT BE BINDING ON THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT IN TH E STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT , THE PERSON CONCERNED HAS NOT MADE ANY DIRECT REFERENCE TO THE ASSESSEE WITH REGARD TO RECEIPT OF ON MONEY IN CASH. IT WAS SUBMITTE D THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS NOT PROVIDED THE ENTIRE SEIZED MATERIAL AS WELL AS THE FULL STATEMENT OF SHRI NIRANJAN HIRANANDANI AND OTHER PERSONS WHO ADMITTED OF HAVING RECEIVED ON MONEY IN CASH. FURTHER, IT WAS SUBMITTE D THAT THE STATEMENT OF SHRI NIRANJAN HIRANANDANI COULD NOT BE USED ADVERSELY AGAINST THE ASSESSEE WITHOUT AFFORDING AN OPPORTUNITY TO CROSS EXAMINE HIM. THE ASSESSEE SUBMITTED THAT THE ENTIRE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER BY SIMPLY RELYING UPON INFORMATION RECEIVED FROM THE DDIT (INV.) AND WHEREIN THERE IS A REFERENCE TO A PORTION OF A STATEMENT AND EXCEL SHEET PREPARED BY THE INCOME T AX OFFICIALS ON THE BASIS OF A PEND RIVE FOUND DURING THE SEARCH AND SEIZURE OPERATION. IT WAS SUBMITTED THAT EXCEPT THE STATEMENT OF SHRI NIRANJAN HIRANANDANI AND THE EXCEL SHEET PREPARED ON THE BASIS OF MATERIAL FOUND IN THE 5 HEENA DASHRATH JHANGLANI P EN D RIVE, THERE IS NO DIRECT COR ROBORATIVE EVIDENCE TO INDICATE THAT THE ASSESSEE HAS PAID ON MONEY IN CASH. IN SUPPORT OF SUCH CONTENTION, THE ASSESSEE RELIED UPON VARIOUS JUDICIAL PRECEDENTS. ON THE BASIS OF SUBMISSIONS MADE BY THE ASSESSEE, THE LEARNED COMMISSIONER (APPEALS) CALLED FO R A REMAND REPORT FROM THE ASSESSING OFFICER. AFTER TAKING NOTE OF THE REMAND REPORT, THE LEARNED COMMISSIONER (APPEALS) ULTIMATELY HELD THAT SINCE THE SEIZED DOCUMENTS AS WELL AS STATEMENT RECORDED FROM SHRI NIRANJAN HIRANANDANI UNDER SECTION 132(4) OF TH E ACT, CLEARLY DEMONSTRATE THAT WHILE SELLING FLATS / SHOPS ON MONEY WAS RECEIVED OVER AND ABOVE THE DECLARED SALE CONSIDERATION, S UCH EVIDENCES HAVE TO BE BELIEVED AS THEY PASS THE TEST LAID DOWN IN VARIOUS JUDICIAL PRECEDENTS AS FAR AS ADMISSIBILITY OF D OCUMENTS AS PER SECTION 34 OF THE INDIAN EVIDENCE ACT, 1872, IS CONCERNED. THUS, ULTIMATELY, HE CONFIRMED THE ADDITION OF ` 42 LAKH MADE BY THE ASSESSING OFFICER. 8 . REITERATING THE STAND TAKEN BEFORE THE DEPARTMENTAL AUTHORITIES, THE LEARNED AUTHORISED REPR ESENTATIVE SUBMITTED , THE BASIS FOR ADDITION OF ` 42 LAKH ON ACCOUNT OF ON MONEY IS THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT FROM SHRI NIRANJAN HIRANANDANI AND CERT AIN INFORMATION CONTAINED IN A PEND RIVE FOUND AND SEIZED IN COURSE OF SEARCH A ND SEIZURE OPERATION CONDUCTED IN CASE OF SHRI NIRANJAN HIRANANDANI. HE SUBMITTED , BESIDE THE AFORESAID 6 HEENA DASHRATH JHANGLANI MATERIAL S THERE WAS NO OTHER CORROBORATIVE EVIDENCE TO DEMONSTRATE THAT THE ASSESSEE IN FACT HAS PAID ON MONEY IN CASH FOR PURCHASING THE FLAT. THE LEAR NED AUTHORISED REPRESENTATIVE SUBMITTED , IN THE COURSE OF ASSESSMENT PROCEEDINGS, THOUGH, THE ASSESSEE HAD REPEATEDLY REQUESTED THE ASSESSING OFFICER TO PROVIDE HIM ALL THE ADVERSE MATERIALS INCLUDING THE STATEMENT RECORDED FROM SHRI NIRANJAN HIRANANDANI I N FULL, HOWEVER, THE ASSESSING OFFICER NEVER PROVIDED THE ADVERSE MATERIAL S TO THE ASSESSEE. HE SUBMITTED , THOUGH THE STATEMENT RECORDED FROM SHRI NIRANJAN HIRANANDANI, AND OTHER PARTIES W ERE UTILIZED FOR MAKING THE ADDITION, HOWEVER, NO OPPORTUNITY WAS GR ANTED TO THE ASSESSEE TO CROSS EXAMINE THE CONCERNED PERSONS WHOSE STATEMENTS WERE UTILIZED / RELIED UPON. HE SUBMITTED , TH E INFORMATION CONTAINED IN THE PEN DRIVE DO NOT CONCLUSIVELY PROVE THE FACT THAT THE ASSESSEE HAS PAID ON MONEY SINCE THERE IS NO REFERENCE TO THE ASSESSEE EITHER IN THE STATEMENT RECORDED UNDER SECTIO N 132(4) OF THE ACT NOR IN THE PEN DRIVE . HE SUBMITTED , BEFORE THE FIRST APPELLATE AUTHORITY TH E ASSESSEE HAD SPECIFICALLY PLEADED THAT MERELY ON THE BASIS OF STATEMENT RECORDED FROM A THIRD PARTY, NO ADDITION UNDER SECTION 69B OF THE ACT CAN BE MADE. HE FURTHER SUBMITTED , BEFORE THE FIRST APPELLATE AUTHORITY THE ASSESSEE HAS ALSO PLEADED THAT THE C OMPLETE SEIZED MATERIAL AS WELL AS THE FULL TEXT OF THE STATEMENT RECORDED FROM SHRI NIRANJAN HIRANANDANI, WAS NEITHER PROVIDED TO THE ASSESSEE NOR S HE WAS PERMITTED TO CROSS EXAMINE HIM. HE SUBMITTED , 7 HEENA DASHRATH JHANGLANI ON THE BASIS OF AFORESAID PLEADING, THE LEARNED COMMIS SIONER (APPEALS) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER AND ALSO DIRECTED THE ASSESSING OFFICER THAT THE ADVERSE MATERIALS AND FULL TEXT OF THE STATEMENT RECORDED FROM SHRI NIRANJAN HIRANANDANI, IF NOT PROVIDED TO THE ASSESSEE SHOULD ALSO BE PROVIDED. IN THIS CONTEXT, HE DREW OUR ATTENTION TO THE LETTER DATED 18 TH JULY 2016, ISSUED BY THE LEARNED COMMISSIONER (APPEALS) TO THE ASSESSING OFFICER. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , IN SPITE OF SPECIFIC DIRECTIONS OF THE LEARNED COM MISSIONER (APPEALS) ON ASSESSEES PLEADING THAT ADVERSE MATERIAL / STATEMENT WERE NOT PROVIDED TO THE ASSESSEE , THE ASSESSING OFFICER DID NOT COMPLY TO SUCH DIRECTION NOR HAS OFFERED ANY COMMENT ON THE PLEADINGS OF THE ASSESSEE. IN THIS CONTEXT, HE DREW OU R ATTENTION TO THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE REMAND REPORT DATED 23 RD JUNE 2017, A COPY OF WHICH IS AT PAGE 53 OF THE PAPER BOOK. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , EVEN THE DATE ON WHICH THE ASSESSING OFFICER RE OPENED THE ASSESSMENT, HE DID NOT HAD IN HIS POSSESSION THE INFORMATION CONTAINED IN PEN D RIVE ON THE BASIS OF WHICH THE ADDITION WAS MADE. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , MERELY ON THE BASIS OF CERTAIN INFORMATION FOUND DURING THE SEARCH CONDUCTED IN CASE OF A THIRD PARTY AND THE STATEMENT RECORDED FROM SUCH THIRD PARTY , ADDITION CANNOT BE MADE AT THE HANDS OF THE ASSESSEE ON ACCOUNT OF PAYMENT OF ON MONEY IN CASH , THAT TOO, IN THE ABSENCE OF ANY OTHER 8 HEENA DASHRATH JHANGLANI CORROBORATIVE EVIDENCE TO ESTABLISH THAT THE AS SESSEE HAS PAID ON MONEY IN CASH OVER AND ABOVE THE DECLARED SALE CONSIDERATION. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , UNDER IDENTICAL FACTS AND CIRCUMSTANCES ADDITION MADE ON ACCOUNT OF ALLEGED PAYMENT OF ON MONEY IN CASH TO SOME OTHER ENTITIES OF HIRANANDANI GROUP IN RESPECT OF OTHER ASSESSEES HAVE BEEN DELETED BY THE TRIBUNAL ON THE GROUND THAT IN THE ABSENCE OF OTHER CORROBORATIVE EVIDENCES BROUGHT ON RECOR D TO PROVE THE CONTENTS OF THE PEN D RIVE AND THE STATEMENT RECORDED FROM SHRI NIRANJAN HIRANANDANI ARE CORRECT, NO ADDITION UNDER SECTION 69B OF THE ACT CAN BE MADE. IN THIS CONTEXT, HE RELIED UPON THE DECISION OF THE TRIBUNAL, MUMBAI BENCHI, IN CASE OF SHRI ANIL JAGGI V/S ACIT, ITA NO.3049/MUM./2016, DATED 20.12.2017. FURTHER, HE SUBMITTED , SINCE THE ASSESSING OFFICER MADE THE ADDITION WITHOUT CO NFRONTING THE ADVERSE MATERIALS TO THE ASSESSEE AND WITHOUT ALLOWING THE ASSESSEE TO CROSS EXAM INE THE WITNESS WHOSE STATEMENT WAS RELIED UPON , THE ADDITION MADE CANNOT BE SUSTAINED. IN SUPPORT OF SU CH CONTENTION HE RELIED UPON THE DECISION OF THE TRIBUNAL, MUMBAI BENCH, IN ITO V/S SHRI NIKHIL VINOD AGARWAL, ITA NO.2574/MUM./2017, DATED 13 TH OCTOBER 2017. 9 . THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELYING UPON THE OBSERVATIONS OF THE LEARNED CO MMISSIONER (APPEALS) AND THE ASSESSING OFFICER SUBMITTED THAT THE INCRIMINATING MATERIALS FOUND 9 HEENA DASHRATH JHANGLANI DURING THE SEARCH AND SEIZURE OPERATION CLEARLY REVEALED THAT THE ASSESSEE HAD PAID ON MONEY IN CASH TO THE BUILDER / DEVELOPER. HE SUBMITTED , IN THE FACE OF SU CH EVIDENCE THE ADDITION MADE IS JUSTIFIED. 10 . I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. UNDISPUTEDLY, THE GENESIS OF THE ADDITION MADE OF ` 42 LAKH ON ACCOUNT OF ALLEGED PAYMENT OF ON MONEY IN CASH TOWARDS PURCHASE OF A FLAT LIES I N A SEARCH AND SEIZURE OPERATION CONDUCTED IN CASE OF HIRANANDANI GROUP AND RELATED PERSONS. THOUGH, IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS NOT DISCUSSED IN DETAIL THE NATURE OF INCRIMINATING MATERIAL / EVIDENCE AVAILABLE ON RECORD TO INDICATE P AYMENT OF ON MONEY IN CASH BY THE ASSESSEE TO M/S. CRESCENDO ASSOCIATES, HOWEVER, FROM THE SHOW CAUSE NOTICE DATED 4 TH MARCH 2015, WHICH IS REPRODUCED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER , IT APPEARS THAT THE INCRIMINATING MATERIALS ARE IN THE FORM OF PEN D RIVE FOUND AND SEIZED FROM THE RESIDENCE OF ONE OF THE EMPLOYEES OF HIRANANDANI GROUP AND A STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT FROM SHRI NIRANJAN HIRANANDANI, DIRECTOR AND PROMOTER OF THE GROUP, WHEREIN, THE DETAILS OF ON MONEY PAID BY BUYERS / PROSPECTIVE BUYERS TO HIRANANDANI GROUP CONCERNS ARE MENTIONED AND FURTHER , IN THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT ON 14 TH MARCH 2014, SHRI NIRANJAN HIRANANDANI, HAS ADMITTED RECEIPT OF ON MONEY IN CASH TOWARDS SALE OF FLATS / SHOPS. THUS, IT IS CLEAR THAT 10 HEENA DASHRATH JHANGLANI EXCEPT THESE TWO PIECES OF EVIDENCES THE ASSESSING OFFICER HAD NO OTHER EVIDENCE ON RECORD WHICH DEMONSTRATES THAT THE ASSESSEE HAD PA ID ON MONEY IN CASH FOR PURCHASE OF THE FLAT. IT IS FURTHER RELEVANT TO OBSERVE , FROM THE ASSESSMENT STAGE ITSELF THE ASSESSEE HAS REQUESTED THE ASSESSING OFFICER TO PROVIDE HIM WITH ALL ADVERSE MATERIAL S AND FULL TEXT OF THE STATEMENT RECORDED UNDER SECTI ON 132(4) OF THE ACT FROM SHRI NIRANJAN HIRANANDANI. THE ASSESSEE HAD ALSO REQUESTED THE ASSESSING OFFICER FOR ALLOWING HER TO CROSS EXAMINE SHRI NIRANJAN HIRANANDANI AND OTHER PARTIES WHOSE STATEMENTS WERE RELIED UPON . APPARENTLY, THIS REQUEST OF THE ASSE SSEE WAS NOT ACCEDED TO BY THE ASSESSING OFFICER. WHEN THE ASSESSEE TOOK UP THE AFORESAID ISSUE BEFORE THE FIRST APPELLATE AUTHORITY, THE LEARNED COMMISSIONER (APPEALS) IN LETTER DATED 18 TH JULY 2016, HAD CLEARLY DIRECTED THE ASSESSING OFFICER TO PROVIDE T HE ASSESSEE ALL ADVERSE MATERIALS / DOCUMENTARY EVIDENCES AVAILABLE WITH HIM INDICATING PAYMENT OF ON MONEY. HOWEVER, ON A PERUSAL OF THE REMAND REPORT DATED 23TH JUNE 2017, A COPY OF WHICH IS AT PAGE 53 OF THE PAPER BOOK, IT IS VERY MUCH CLEAR THAT THE AS SESSING OFFICER HAS COMPLETELY AVOIDED THE ISSUE AND THERE IS NO MENTION WHETHER THE ASSESSEE WAS PROVIDED WITH ALL THE ADVERSE MATERIAL AND IF , NOT SO , WHETHER HE HAS PROVIDED THEM TO THE ASSESSEE AS PER THE DIRECTIONS OF THE LEARNED COMMISSIONER (APPEALS ). THUS, FROM THE AFORESAID FACT S , IT IS PATENT AND OBVIOUS THAT THE ADDITION OF ` 42 LAKH MADE ON ACCOUNT OF ON MONEY PAYMENT IN CASH 11 HEENA DASHRATH JHANGLANI IS WITHOUT COMPLYING WITH THE PRIMARY AND FUNDAMENTAL REQUIREMENT OF RULES OF NATURAL JUSTICE. IT IS WELL SETTLED PROPOSI TION OF LAW THAT IF THE ASSESSING OFFICER INTENDS TO UTILIZE ANY ADVERSE MATERIAL FOR DECIDING AN ISSUE AGAINST THE ASSESSEE HE IS REQUIRED TO NOT ONLY CONFRONT SUCH ADVERSE MATERIALS TO THE ASSESSEE BUT ALSO OFFER HIM A REASONABLE OPPORTUNITY TO REBUT / C ONTRADICT THE CONTENTS OF THE ADVERSE MATERIAL. FURTHER, THE ASSESSMENT ORDER REVEALS THAT THE ASSESSING OFFICER HAS HEAVILY RELIED UPON THE STATEMENT RECORDED FROM SHRI NIRANJAN HIRANANDANI, FOR MAKING THE DISPUTED ADDITION. HOWEVER, IT IS THE ALLEGATION OF THE ASSESSEE, WHICH PRIMA FACIE APPEARS TO BE CORRECT , THAT THE ASSESSING OFFICER HAS N OT PROVIDED THE FULL TEXT OF SUCH STATEMENT RECORDED AND HAS ALSO NOT ALLOWED THE ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE SHRI NIRANJAN HIRANANDANI, AND OTHER PERSON S WHOSE STATEMENTS WERE RELIED UPON. THIS, IN MY VIEW, IS IN GROSS VIOLATION OF RULES OF NATURAL JUSTICE AND AGAINST THE BASIC PRINCIPLE OF LAW. IN THIS CONTEXT, I MAY REFER TO THE DECISION OF THE TRIBUNAL, MUMBAI BENCH, IN NIKHIL VINOD AGARWAL (SUPRA). TH US, FOR THE AFORESAID REASON, THE ADDITION MADE CANNOT BE SUSTAINED. 11 . EVEN OTHERWISE ALSO, THE ADDITION MADE IS UNSUSTAINABLE BECAUSE OF THE FOLLOWING REASONS. AS DISCUSSED EARLIER IN THE ORDER, THE BASIS FOR ADDITION ON ACCOUNT OF ON MONEY IS TH E INFORMA TION CONTAINED IN THE PEN D RIVE FOUND DURING THE SEARCH AND SEIZURE OPERATION AND THE 12 HEENA DASHRATH JHANGLANI STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT. AS REGARDS TH E INFORMATION CONTAINED IN THE PEN D RIVE, IT IS THE CONTENTION OF THE ASSESSEE THAT THE SAID PEN D RIVE WA S NOT FOUND FROM THE POSSESSION OF THE ASSESSEE BUT I N COURSE OF SEARCH AND SEIZURE OPERATION CONDUCTED IN CASE OF A THIRD PARTY. THEREFORE , I N ABSENCE OF FURTHER CORROBORATIVE EV IDENCE TO ESTABLISH THAT THE CONTENTS OF THE PEN D RIVE ARE CORRECT AND AUTHENTIC TO THE EXTENT THAT THE ASSESSEE PAID ON MONEY IN CASH, NO ADDITION CAN BE MADE U NDER SECTION 69B OF THE ACT. FURTHER CONTENTION OF THE ASSESSEE IS THAT IN THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT, SHI NIRANJAN HIRANDANI HAS NOT MAD E ANY REFERENCE TO THE ASSESSEE, T HEREFORE, IN ABSENCE OF ANY OTHER CORROBORATIVE EVIDENCE TO ESTABLISH THAT ASSESSEE HAS PAID ON MONEY IN CASH, NO ADDITION CAN BE MADE. I FIND SUBSTANTIAL MERIT IN THE AFORESAID SUBMISSIONS OF THE ASSESSEE. IN MY VIEW, NEI THER TH E INFORMATION CONTAINED IN THE PEN D RIVE NOR THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT FROM SHRI NIRANJAN HIRANANDANI ARE ENOUGH TO CONCLUSIVELY ESTABLISH THE FACTUM OF PAYMENT OF ON MONEY BY THE ASSESSEE. AT BEST, THEY CAN RAISE A DOUB T OR SUSPICION AGAINST THE CONDUCT OF THE ASSESSEE TRIGGERING FURTHER ENQUIRY / INVESTIGATION TO FIND OUT AND BRING ON RECORD THE RELEVANT FACT AND MATERIAL TO CONCLUSIVELY PROVE THE PAYMENT OF ON MONEY BY THE ASSESSEE OVER AND ABOVE THE DECLARED SALE CONS IDERATION. APPARENTLY , THE ASSESSING OFFICER HAS FAILED TO BRING ANY SUCH EVIDENCE / MATERIAL ON RECORD TO PROVE THE PAYMENT OF ON 13 HEENA DASHRATH JHANGLANI MONEY BY THE ASSESSEE. MORE SO, WHEN THE ASSESSEE FROM THE VERY BEGINNING HAS STOUTLY DENIED PAYMENT OF ON MONEY IN CASH. NOT ABLY, WHILE DEALING WITH A CASE INVOLVING SIMILAR NATURE OF DISPUTE CONCERNING SIMILAR TRANSACTION WITH ANOTHER CONCERN OF HIRANANDANI GROUP, THE TRIBUNAL IN CASE OF SHRI ANIL JAGGI V/S ACIT (SUPRA) HAS HELD AS UNDER: 15. WE SHALL NOW TAKE UP THE CASE OF THE ASSESSEE ON MERITS AND DELIBERATE ON THE VALIDITY OF THE ADDITION OF RS. 2.23 CRORE MADE BY THE A.O ON THE GROUND THAT THE ASSESSEE HAD MADE A PAYMENT OF ON MONEY FOR PURCHASE OF FLATS FROM M/S LAKEVIEW DEVELOPERS. WE HAVE PERUSED THE FACTS OF THE CASE AND THE MATERIAL AVAILABLE ON RECORD ON THE BASIS OF WHICH THE ADDITION OF RS. 2.23 CRORE HAD BEEN MADE IN THE HANDS OF THE ASSESSEE. WE HAVE FURTHER DELIBERATED ON THE MATERIAL PLACED ON RECORD AND THE CONTENTIONS OF THE LD. A.R TO DRIVE HOME HIS CO NTENTION THAT NO PAYMENT OF ANY ON MONEY WAS MADE BY THE ASSESSEE FOR PURCHASE OF FLATS FROM M/S LAKEVIEW DEVELOPERS. WE FIND THAT THE GENESIS OF THE CONCLUSION OF THE A.O THAT THE ASSESSEE HAD PAID ON MONEY OF RS. 2.23 CRORE FOR PURCHASE OF PROPERTY U NDER CONSIDERATION IS BASED ON THE CONTENTS OF THE PEN DRIVE WHICH WAS SEIZED FROM THE RESIDENCE OF AN EX - EMPLOYEE OF HIRANANDANI GROUP. WE HAVE PERUSED THE PRINT OUT OF THE PEN DRIVE (PAGE 42 OF APB) AND FIND OURSELVES TO BE IN AGREEMENT WITH THE VIEW OF THE LD A.R THAT THOUGH AGAINST THE HEADING AMOUNT OF ON MONEY PAID THE NAME, ADDRESS AND PAN NO. OF THE ASSESSEE IS MENTIONED ALONGWITH THE DETAILS OF THE PROPERTY PURCHASED BY HIM, VIZ. FLAT NO.2501 IN SOMERSET BUILDING FROM LAKEVIEW DEVELOPERS (A HIR ANANDANI GROUP CONCERN), HOWEVER, THE SAME WOULD NOT CONCLUSIVELY PROVE SUPPRESSION OF INVESTMENT AND PAYMENT OF ON MONEY BY THE ASSESSEE FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION. WE FIND THAT THE INFORMATION AS EMERGES FROM THE PRINT OUT OF THE PEN DRIVE FALLS SHORT OF CERTAIN MATERIAL FACTS, VIZ. DATE AND MODE OF RECEIPT OF ON MONEY, WHO HAD PAID THE MONEY, TO WHOM THE MONEY WAS PAID, DATE OF AGREEMENT AND WHO HAD PREPARED THE DETAILS, AS A RESULT WHEREOF THE ADVERSE INFERENCES AS REGARDS PAYM ENT OF ON MONEY BY THE ASSESSEE FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION REMAIN UNCORROBORATED. WE FURTHER FIND THAT WHAT WAS THE SOURCE FROM WHERE THE INFORMATION WAS RECEIVED IN THE PEN DRIVE ALSO REMAINS A MYSTERY TILL DATE. WE FIND THAT SH. N IRANJAN HIRANANDANI IN THE COURSE OF HIS CROSS - EXAMINATION HAD CLEARLY STATED THAT NEITHER HE WAS AWARE OF THE PERSON WHO HAD MADE THE ENTRY IN THE PEN DRIVE, NOR HAD WITH HIM ANY EVIDENCE 14 HEENA DASHRATH JHANGLANI THAT THE ASSESSEE HAD PAID ANY CASH TOWARDS PURCHASE OF FLAT. WE HA VE DELIBERATED ON THE FACT THAT SH. NIRANJAN HIRANANDANI IN HIS STATEMENT RECORDED ON OATH IN THE COURSE OF THE SEARCH & SEIZURE PROCEEDINGS HAD CONFIRMED THAT THE AMOUNTS AGGREGATING TO RS. 475.60 CRORE RECORDED IN THE PEN DRIVE WERE THE ON - MONEY RECEIVED ON SALE OF FLATS, WHICH WAS OFFERED AS ADDITIONAL INCOME UNDER SEC. 132(4) AND THEREAFTER OFFERED AS SUCH FOR TAX IN THE PETITION FILED BEFORE THE SETTLEMENT COMMISSION. WE ARE OF THE CONSIDERED VIEW THAT THERE IS SUBSTANTIAL FORCE IN THE CONTENTION OF TH E LD. A.R THAT MERE ADMISSION OF THE AMOUNTS RECORDED IN THE PEN DRIVE AS THE ADDITIONAL INCOME BY SH. NIRANJAN HIRANANDANI, FALLING SHORT OF ANY SUCH MATERIAL WHICH WOULD INEXTRICABLY EVIDENCE PAYMENT OF ON MONEY BY THE ASSESSEE WOULD NOT LEAD TO DRAWIN G OF ADVERSE INFERENCES AS REGARDS THE INVESTMENT MADE BY THE ASSESSEE FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION. WE RATHER HOLD A STRONG CONVICTION THAT THE VERY FACT THAT THE CONSIDERATION PAID BY THE ASSESSEE FOR PURCHASE OF THE PROPERTY UNDER CO NSIDERATION WHEN PITTED AGAINST THE MARKET VALUE FIXED BY THE STAMP VALUATION AUTHORITY IS FOUND TO BE SUBSTANTIALLY HIGH, FURTHER FORTIFIES THE VERACITY OF THE CLAIM OF THE ASSESSEE THAT HIS INVESTMENT MADE TOWARDS PURCHASE OF THE PROPERTY UNDER CONSIDE RATION WAS WELL IN ORDER. WE ARE OF THE CONSIDERED VIEW THAT THOUGH THE MATERIAL ACTED UPON BY THE DEPARTMENT FOR DRAWING OF ADVERSE INFERENCES AS REGARDS PAYMENT OF ON MONEY BY THE ASSESSEE FORMED A STRONG BASIS FOR DOUBTING THE INVESTMENT MADE BY THE A SSESSEE FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION, BUT THE SAME FALLING SHORT OF CLINCHING MATERIAL WHICH WOULD HAVE IRREFUTABLY EVIDENCED THE SAID FACT, THUS, DOES NOT INSPIRE MUCH OF CONFIDENCE AS REGARDS THE WAY THEY HAVE BEEN CONSTRUED BY THE LO WER AUTHORITIES FOR DRAWING OF ADVERSE INFERENCES IN THE HANDS OF THE ASSESSEE. WE THUS ARE OF A STRONG CONVICTION THAT AS THE MATERIAL RELIED UPON BY THE LOWER AUTHORITIES DOES NOT CORROBORATE THE ADVERSE INFERENCES DRAWN AS REGARDS THE INVESTMENT MADE BY THE ASSESSEE, THEREFORE, THE SAME CANNOT CONCLUSIVELY FORM A BASIS FOR CONCLUDING THAT THE ASSESSEE HAD MADE PAYMENT OF ON MONEY FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS ARE OF THE CONSIDERE D VIEW THAT THE ADVERSE INFERENCES DRAWN BY THE A.O AS REGARDS PAYMENT OF ON MONEY OF RS. 2.23 CRORE BY THE ASSESSEE FOR PURCHASE OF FLAT NO. 2501 FROM M/S LAKEVIEW DEVELOPERS ARE BASED ON OF PREMATURE OBSERVATIONS OF THE A.O, WHICH IN THE ABSENCE OF ANY CLINCHING EVIDENCE CANNOT BE SUSTAINED. WE THUS ARE UNABLE TO SUBSCRIBE TO THE VIEW OF THE LOWER AUTHORITIES AND SET ASIDE THE ORDER OF THE CIT(A) SUSTAINING THE ADDITION OF RS. 2.23 CRORES IN THE HANDS OF THE ASSESSEE. 15 HEENA DASHRATH JHANGLANI 12 . FACTS IN THE INSTANT APPEAL ARE MORE OR LESS IDENTICAL , EXCEPT , THE PARTIES TO THE TRANSACTION , THE FLAT SOLD AND THE QUANTUM OF ALLEGED ON MONEY PAID IN CASH. IN FACT, THE ASSESSEES CASE STANDS IN A MUCH BETTER FOOTING SINCE IN CASE OF SHRI ANIL JAGGI (SUPRA) THE ASSESSING OFFICER HAD ALLOWED CROSS EXAMINATION OF SHRI NIRANJAN HIRANANDANI BY THE ASSESSEE WHICH IS NOT THE CASE IN THE INSTANT APPEAL. THUS, IN MY VIEW, IN ABSENCE OF ANY CORROBORATIVE EVIDENCE BROUGHT ON RECORD TO CONCLUSIVELY PROVE THAT THE ASSESSEE HAS PAID ON MONEY OF ` 42 LAKH IN CA SH TO M/S. CRESCENDO ASSOCIATES TOWARDS PURCHASE OF FLAT, I AM INCLINED TO DELETE THE ADDITION MADE BY THE ASSESSING OFFICER. 13 . IN VIEW OF MY DECISION IN GROUNDS NO.5, 6, 7 AND 8, THE ISSUES RAISED IN GROUNDS NO.1, 2, 3, 4 AND 9, BEING OF MERE ACADEMIC INTEREST DO NOT REQUIRE TO BE ADJUDICATED UPON FOR THE PRESENT. ACCORDINGLY, THESE GROUNDS ARE DISMISSED. 14 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.01.2019 SD/ SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 11.01.2019 16 HEENA DASHRATH JHANGLANI 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 (SR. PRIVATE SECRETARY) ITAT, MUMBAI