Shri Kishorbhai Bhagabhai Mistry, Bilimora V. The Income tax Officer,Ward-2, Navsari

ITA 1668/AHD/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6065 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-04-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 20-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH MEENA
• Assessee Lawyers: VIJAY H PATEL
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice; Opportunity of cross examination; Assessment record
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NO. 1668/AHD/2011 (ASSESSMENT YEAR:2006-07) SHRI KISHORBHAI BHAGABHAI MISTRY, C/O ARIHANT STEEL, NEAR GEB ANTALIA, BILLIMORA APPELLANT VS. THE INCOME TAX OFFICER, WARD-2, NAVSARI RESP ONDENT PAN: ABIPM20161N /BY ASSESSEE : SHRI VIJAY H. PATEL, A.R. /BY REVENUE : SHRI OM PRAKASH MEENA, SR. D.R. /DATE OF HEARING : 27.04.2017 /DATE OF PRONOUNCEMENT : 28.04.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2006-07 ARISES AGAINST THE CIT(A), VALSADS ORDER DATED 25.02.2011, PASSED IN APPEAL NO. CIT(A)/VLS/482/08-09, CONFIRMING ASSESSING OFFICER S ACTION MAKING ITA NO. 1668/AHD/2011 (SHRI KISHORBHAI B. MISTRY VS . ITO) A.Y. 2006-07 - 2 - UNEXPLAINED INVESTMENT ADDITION OF RS.15,06,500/-, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHOR T THE ACT. 2. THE ASSESSEE RAISES FOLLOWING SUBSTANTIVE GROUND S IN THE INSTANT APPEAL: (1) THE LEARNED CIT (APPEALS), VALSAD HAS ERR ED IN LAW AS WELL AS ON FACTS WHILE CONFIRMING THE ORDER OF THE ITO, WARD 2, NAVS ARI MAKING ADDITION OF RS. 15,06,500/- ON ACCOUNT OF ALLEGED UNEXPLAINED INVES TMENT. (2) THE LEARNED CIT (APPEALS), VALSAD FAILED TO OB SERVE THAT THE AO HAS ACTED IN GROSS VIOLATION OF THE PRINCIPLES OF NATUR AL JUSTICE BY NOT ALLOWING THE APPELLANT OPPORTUNITY OF BEING HEARD AND TO CROSS E XAMINE THE THIRD PARTY WHOSE STATEMENT RECORDED AT THE BACK OF THE APPELLA NT AND RELIED UPON BY HIM AND HENCE, THE ACTION OF THE AO PATENTLY IN VIOLATI ON OF THE PRINCIPLES OF NATURAL JUSTICE AS WELL IN CONTRAVENTION OF THE PROVISIONS OF LAW IS LIABLE TO BE STRUCK DOWN. (3) THE LEARNED CIT (APPEALS), VALSAD HAS ERRED IN OVERLOOKING AND IN SUMMARILY REJECTING THE DETAILED STATEMENT OF FACTS SUBMITTED ALONGWITH MEMORANDUM OF APPEAL, VARIOUS DOCUMENTS AND EVIDENC ES PLACED IN THE WRITTEN SUBMISSIONS FILED, WHILE ACCEPTING THE LOP-SIDED AN D FACTUALLY INCORRECT VERSION OF THE AO AND HENCE, THE ADDITION OF RS.15,06,500/- MADE ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT, ON MISLEADING, MISCONCEIVED , BASELESS AND 'CONJECTURAL OBSERVATIONS, DESERVES TO BE DELETED. 3. WE NOW COME TO THE RELEVANT FACTS. THIS ASSESSE E IS ASSESSED AS AN INDIVIDUAL. IT IS EVIDENT FROM THE INSTANT CASE FI LE THAT THE ABOVE IMPUGNED ADDITION HAS ARISEN FROM AN FIR DATED 20.05.2005 RE GISTERED AT V. P. ROAD, POLICE STATION, MUMBAI. THE COMPLAINANT THEREIN WA S PROPRIETOR OF AN ANGADIA FIRM M/S. RAMESHKUMAR AMBALAL & CO. NAMELY SHRI RAMESHKUMAR K. PATEL. HE ALLEGED BEFORE THE POLICE AUTHORITY T HAT ASSESSEE HAD SENT THE SUM IN QUESTION OF RS.15,06,500/- TO ONE SHRI RIYAZ LOKHANDWALA OF MUMBAI THROUGH THE ABOVE ANGADIA CARRIER AND ITS EM PLOYEE(S) HAD MISAPPROPRIATED THE SAME. THIS COMPLAINANT FURTHER FILED NECESSARY RECEIPT OF HAVING RECEIVED THE MONEY IN QUESTION IN ASSESSE ES NAME. ONE OF SUCH RECEIPT FORMS PART OF THE CASE RECORDS AT PAGE 66. ALL THIS RESULTED IN THE IMPUGNED ADDITION BEING MADE IN ASSESSEES HANDS OF THE ABOVESTATED AMOUNT ITA NO. 1668/AHD/2011 (SHRI KISHORBHAI B. MISTRY VS . ITO) A.Y. 2006-07 - 3 - OF RS.15,06,500/- AS UNEXPLAINED INVESTMENT. THE A SSESSMENT ORDER IN QUESTION DATED 31.12.2008 REVEALS THAT THE ASSESSIN G OFFICER TOOK NOTE OF THE ABOVE CRIMINAL CASE, STATEMENT OF COMPLAINANT THERE IN AS WELL AS LATTER INQUIRY PROCEEDINGS TO REJECT ASSESSEES EXPLANATION OF NOT OWNING THE MONEY ABOVE SAID. 4. THE ASSESSEE PREFERRED APPEAL. LD. CIT(A) DECLI NES THE SAME IN THE ORDER UNDER CHALLENGE WITH THE FOLLOWING FINDINGS: 4.2 DECISION : I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE ID. AR. THE FACT OF THE CAS E IS THAT THE APPELLANT ALLEGEDLY SENT MONEY TO SHRI. RIYAZKAMAL LOKHANDWAL A OF M/S. Z. V. STEEL, MUMBAI THROUGH ANGADIA COMPANY NAMED M/S. RAMESHKUM AR AMBALAL & CO. BUT DUE TO THE MISAPPROPRIATION OF THE SAME AMO UNT BY ONE OF THE EMPLOYEES OF ANGADIA COMPANY NAMED M/S. RAMESHKUMAR AMBALAL & CO, THE POLICE INTERVENTION WAS SAUGHT AND IN THE PROCE SS THE ALLEGED AMOUNT BECAME THE SUBJECT MATTER OF INCOME TAX PROCEEDING. THE MAIN CONTENTIONS OF THE ID. AR AS SUBMITTED BEFORE ME WERE; I. THE APPELLANT WAS NOT GIVEN ADEQUATE OPPORTUNITY FOR DEFENDING THE CASE AND THE ASSESSMENT WAS COMPLETED ON THIRD PARTY EVIDENCES. II. THE APPELLANT DID NOT KNOW ABOUT THE FACTS TILL HE RECEIVED THE SCN FROM THE AO. III. THE AO HAD NOT CONSIDERED THE FULL FACTS SUBMI TTED BEFORE HIM FOR MAKING ADDITIONS. IV. NO HEAVY CASH WITHDRAWALS MADE BY THE APPELLA NT IS EVIDENT FROM THE BANKS STATEMENTS AND BOOKS OF A/C. V. THE ANGADIA HAD YET TO RETURN THE MONEY SHOWS TH AT THE MONEY DOES NOT BELONG TO THE APPELLANT. VI. THE AO HAS NOT BROUGHT CORROBORATIVE EVIDENCE F OR MAKING SUCH HUGE ADDITIONS. VII. THE APPELLANT HAD ALSO RELIED ON MANY CASE LAW S TO SUPPORT THE CONTENTION. 4.3 FROM THE PERUSAL OF THE AO THE FOLLOWING F ACTS HAVE EMERGED: I. THE AO HAD OBTAINED THE INFORMATION FROM V.P.ROA D, POLICE STATION ALONG WITH THE STATEMENT OF SHRI. RAMESHKUM AR K. PATEL ONE OF THE PARTNERS OF M/S. RAMESHKUMAR AMBALAL & CO. R ECORDED BY THE POLICE AUTHORITY, IN WHICH HE HAS ADMITTED THAT SHRI. KISHORBHAI B. MISTRY OF BILLIMORA HAS GIVEN CASH TO OUR BILLIM ORA BRANCH TO HANDOVER THE SAME TO SHRI. RIYAZKAMAL LOKHANDWALA O F MUMBAI. ONE OF THE RECEIPTS ISSUED BY THE ANGADIA FOR AMOUN T RS.8.06,500/- ITA NO. 1668/AHD/2011 (SHRI KISHORBHAI B. MISTRY VS . ITO) A.Y. 2006-07 - 4 - WAS PLACED ON RECORD AS EVIDENCE OF RECEIVING MONEY FROM THE APPELLANT. II. IN REPLY TO THE LETTER DATED. 21.04.2006 FRO M THE P.S., THE APPELLANT HAD CONFIRMED THE FACTS STATED BY SHRI. R AMESHKUMAR K. PATEL ONE OF THE PARTNERS OF M/S. RAMESHKUMAR AMBAL AL & CO. VIDE THE APPELLANT'S STATEMENT RECORDED ON 24.05.2006. III. THE AO CONFRONTED ALL THE MATERIALS COLLECTED FROM THE POLICE AUTHORITY VIDE SCN DATED. 26.12.2008. IV. THE AO HAS ESTABLISHED THAT THE APPELLANT H AS BEEN IN THE KNOW OF THE MATTER SINCE 2005-06. 4.4 ON CAREFUL CONSIDERATION TO THE FACTS AND CIRCU MSTANCES, THE CORE ISSUE TO BE DECIDED IS THAT WHETHER THE MONEY IN QUESTION BE LONGS TO THE APPELLANT OR NOT ? THE FACTS ORIGINATES FROM THE POLICE RECOR DS SUGGESTS THAT THE MONEY BELONGS TO THE APPELLANT AS ADMITTED BY THE A NGADIA. TWO RECEPTS WERE ISSUED AND ONE IS ON ASSESSMENT RECORDS SUGGES TS THAT THE ANGADIA HAS RECEIVED MONEY FROM THE APPELLANT FOR DISBURSIN G TO SHRI. RIYAZKAMAL LOKHANDWALA OF MUMBAI. BEFORE THE POLICE AUTHORITY THE APPELLANT HAS ADMITTED THAT THE MONEY BELONGS TO HIM AS STATED BY SHRI. RAMESHKUMAR K. PATEL OF ANGADIA COMPANY. WHY THE ANGADIA HAS NOT Y ET RETURN THE MONEY TO THE APPELLANT IS A MATTER BETWEEN THEM TO SORT O UT. THE AO HAS GIVEN ADEQUATE OPPORTUNITY TO THE APPELLANT TO MAKE THE S TAND CLEAR INSTEAD THE APPELLANT TOOK A NEW STAND THAT THE KISHOREBHAI REF ERRED WAS NOT HIM BUT SOMEBODY ELSE. BEFORE THE AO THERE ARE EVIDENCES, I NCLUDING INDEPENDENT EVIDENCES IN THE FORM OF ANGADIA, WHICH CONCLUSIVEL Y SUGGESTS THAT MONEY BELONG TO THE APPELLANT. THE DEFENCE PUT FORTH BY T HE APPELLANT WAS DEFINITELY NOT TO THE POINT THE AO DESIRED. THE APP ELLANT HAS NOT DENIED HIS CORRESPONDENCE WITH THE POLICE AUTHORITY. ONE IMPOR TANT ASPECT MUST BE TAKEN NOTE HERE IS THAT SHRI. RIYAZKAMAL LOKHANDWAL A OF M/S. Z. V. STEEL, MUMBAI IS IN THE BUSINESS OF STEEL TRADING SO ALSO THE APPELLANT IS. IN THE STEEL TRADING CASH TRANSACTIONS ARE PREDOMINANT. TH E APPELLANT DID NOT DEMONSTRATE BEFORE THE AO NOR BEFORE ME THAT THE AP PELLANT HAD NO BUSINESS TRANSACTIONS WITH SHRI. RIYAZKAMAL LOKHAND WALA OF M/S. Z. V. STEEL, MUMBAI. IN THIS CIRCUMSTANCES, I AM CONSTRAI NED TO AGREE WITH THE FINDINGS OF THE AO AND THE CONTENTION RAISED BY THE ID. AR IS REJECTED. THUS THIS GROUND OF APPEAL IS DISMISSED. 5. WE HAVE HEARD BOTH PARTIES. CASE FILE PERUSED. LEARNED COUNSEL RAISES TWO CONTENTIONS IN THE COURSE OF HEARING. FIRST ON E IS THAT THE LOWER AUTHORITIES HAVE VIOLATED PRINCIPLES OF NATURAL JUS TICE IN NOT AFFORDING OPPORTUNITY OF CROSS EXAMINATION OF THE ABOVE COMPL AINANT BEFORE MAKING THE IMPUGNED ADDITION IN HIS HANDS. HE QUOTES HONBLE APEX COURTS DECISION IN ANDAMAN TIMBER INDUSTRIES VS. CIT (2015) 62 TAXMANN .COM 3 (SC) IN SEEKING TO ANNUL THE ENTIRE ASSESSMENT. WE HOWEVER NOTICE THAT PAGE 9 OF THE ITA NO. 1668/AHD/2011 (SHRI KISHORBHAI B. MISTRY VS . ITO) A.Y. 2006-07 - 5 - PAPER BOOK CONTAINS ASSESSEES STATEMENT BEFORE THE POLICE AUTHORITIES DATED 24.05.2005 EXPLAINING HIS BUSINESS RELATION WITH TH E MUMBAI BASED PARTY. HE FURTHER APPEARS TO HAVE SUPPORTED COMPLAINANTS VERSION THEREIN. WE MAKE IT CLEAR THAT THIS STATEMENT IS IN MARATHI LAN GUAGE. IT WAS STILL READ OVER TO LEARNED COUNSEL IN THE COURSE OF HEARING. HE ST RONGLY CONTESTED THE SAME BY STATING THAT THE ASSESSEE HAD NEVER APPEARED BEF ORE THE POLICE AUTHORITIES NOR DID HE MAKE THE IMPUGNED STATEMENT. LEARNED CO UNSEL HOWEVER AGGREED THAT THIS STATEMENT IS UNDER SECTION 161 OF THE CRI MINAL PROCEDURE CODE WHEREIN THE WITNESS IN QUESTION IS NOT SUPPORT TO P UT IN HIS SIGNATURES. HIS PLEA IS THAT THIS STATEMENT DOES NOT CARRY ANY EVID ENTIARY VALUE. WE ARE NOT IMPRESSED WITH THIS PLEA EITHER AS WE ARE SITTING I N A SUMMARY PROCEEDINGS CASE WHEREIN THE NECESSARY PROCEDURE FOLLOWS PREPON DERANCE OF PROBABILITY RATHER THAN STRICT RULES OF EVIDENCE LAW. WE ALSO TAKE NOTE OF THE FACT THAT IT WAS FOR THE ASSESSEE TO DISCHARGE ALL THE PRIMARY O NUS OF NOT HAVING ANY BUSINESS RELATION WITH THE MUMBAI BASED ALLEGED PAY EE IN ORDER TO COME CLEAN OUT OF THE IMPUGNED ADDITION. THERE IS FURTH ER NO ATTEMPT ON HIS PART TO ALLEGE ANY THREAT OR COERCION IN CHALLENGING VERACI TY OF ABOVE SECTION 161 STATEMENT. WE THEREFORE TREAT THE SAME AS SUFFICIE NT OPPORTUNITY FOR THE ASSESSEE TO CONTRADICT ALL THE RELEVANT INFORMATION IN CHALLENGING CORRECTNESS OF THE SAID COMPLAINANTS STATEMENTS WHO COULD NOT HAVE SUBSTANTIATED HIS MISAPPROPRIATION ALLEGATION WITHOUT PRODUCING HIM. WE THUS CONCLUDE IN VIEW OF ALL THESE FACTS THAT NON EXAMINATION OF THE ABOVE COMPLAINANT AT ASSESSEES INSTANCE IS IN ANY WAY NOT FATAL TO THE IMPUGNED ADDITION. WE ACCORDINGLY HOLD THAT THE ABOVESTATED HONBLE APEX COURTS DECISION DOES NOT APPLY TO FACTS OF THE INSTANT CASE. 6. THE ASSESSEES SECOND PLEA RAISED IN THE COURSE OF HEARING THAT NEITHER HE HAD APPEARED BEFORE THE POLICE AUTHORITIES NOR M ADE ANY STATEMENT IS ALSO FOUND TO BE DEVOID OF MERIT IN VIEW OF OUR DISCUSSI ON IN PRECEDING ITA NO. 1668/AHD/2011 (SHRI KISHORBHAI B. MISTRY VS . ITO) A.Y. 2006-07 - 6 - PARAGRAPHS. WE FURTHER TAKE NOTE OF SECTION 114(E) OF THE INDIAN EVIDENCE ACT TO PRESUME THAT ONCE THE ASSESSEE HIMSELF ADMIT S THE ABOVE STATEMENT TO HAVE BEEN RECORDED U/S.161 OF THE CODE OF CRIMINAL PROCEDURE IT WAS AN OFFICIAL ACT PERFORMED IN DUE PROCESS OF LAW IN TAK ING THE ASSESSEE AS A WITNESS AT THE ABOVESTATED COMPLAINANTS BEHEST. W E THUS SEE NO REASON TO INTERFERE IN WELL REASONED LOWER APPELLATE FINDINGS EXTRACTED HEREINABOVE. THE SAME ARE CONFIRMED. 7. THIS ASSESSEES APPEAL IS DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF APRIL, 2017.] SD/- SD/- ( PRADIP KUMAR KEDIA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD: DATED 28/04/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0