ITO (Central)-I, Nashik V. M/s. Suyojit Infrastructure Pvt. Ltd., Nashik

ITA 1687/PUN/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1030 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-07-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 04-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Keywords: Unexplained expenditure; Income from undisclosed sources; Search and seizure; Document seized; Commercial expediency; Documents seized
• Section: 40A(3); 143(3); 153A; 132; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO S . 1687 & 1 688 /PN/20 1 3 / ASSESSMENT YEAR S : 20 1 0 - 11 & 20 1 1 - 1 2 THE INCOME TAX OFFICER (CENTRAL) - I , THE INCOME TAX OFFICER (CENTRAL) - I , NASHIK . / APPELLANT VS. M/S. SUYOJIT INFRASTRUCTURE PVT. LTD., F - 1/2, 1 ST FLOOR, SUYOJIT HEIGHTS, SHARANPUR ROAD , OPP. RAJIV GANDHI BHAWAN, NASHIK . / RESPONDENT PAN: AA FCS1381N PAN: AA FCS1381N / APPELLANT BY : S HRI S.K. RASTOGI, CIT / RESPOND ENT BY : SHRI PRAMOD SHINGTE / DATE OF HEARING : 2 1 .0 7 .2 01 6 / DATE OF PRONOUNCEMENT: 09 . 0 9 .201 6 / ORDER / ORDER PER SUSHMA CHOWLA, JM: BOTH THE APPEAL S FILED BY THE REVENUE ARE AGAINST SEPARATE ORDER S OF CIT (A) - I , NASHIK , BOTH DATED 03 . 0 6 .201 3 RELATING TO ASSESSMENT YEAR S 20 1 0 - 11 AND 20 1 1 - 1 2 AGAINST THE ORDERS PASSED UNDER SECTION 143(3) R.W.S. 153A AND 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) , RESPECTIVELY . ITA NO S. 1 687 & 1 688 /PN/201 3 M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. 2 2. BOTH THE APPEALS RELATING TO THE SAME ASSESSEE ON IDENTICAL ISSUE S WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, REFERENCE IS BEING MADE TO THE FACTS IN ITA NO.1 687 /PN/201 3 TO ADJUDICATE THE ISSUE. 3 . THE REVENUE IN ITA NO. 1 687 /PN/201 3 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. ON THE F AC TS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.50,00,000 / - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED EXPENDITURE. 2 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE INCRIMINATING DOCUMENT IN ANNEXURE A - 47 PAGES FROM PAGE NO. 1 TO 6, 8 AND 9 TO 12, 'BHARNA PAWATI' SEIZED FROM THE BUSINESS PREMISES OF THE ASSESSEE COMPANY AND AS PER PAGE NO.44 TO 48 OF ANNEXURE A - 3, SEIZED FROM M / S ANANT TECHNOCRATS, CLEARLY SHOW THAT THE ASSESSEE HAS PAID A SOME OF RS.50 LAKHS TO SHRI N. CHANDRA TOWARDS CANCELLATION OF AGREEMENT. 3 ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIAT ING THE FACT THAT THE PRIMARY ONUS WAS CAST ON THE ASSESSEE, AS THE DOCUMENT CITED ABOVE WAS FOUND AT THE BUSINESS ON THE ASSESSEE, AS THE DOCUMENT CITED ABOVE WAS FOUND AT THE BUSINESS PREMISE OF THE ASSESSEE, WHICH THE ASSESSEE FAILED TO DISCHARGE AND THE DOCUMENTS FOUND AND SEIZED WERE EVIDENCE, A O C O - RELATED THE ABOVE EVI DENCE / TRANSACTION WITH THE BUSINESS ACTIVITY OF THE ASSESSEE. AS SUCH, ADDITION MADE BY THE AO WAS FULLY JUSTIFIED 4 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE SUBSE QUENT SUBMISSION OF THE ASSESSEE, DURING THE COURSE OF SCRUTINY; BEFORE THE A O , AND BEFORE THE APPELLATE AUTHORITY, IS NOTHING BUT AN 'AFTER - THOUGHT' TO EVADE TAX. 5 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS E RRED IN NOT APPRECIATING THE FACT THAT THE CONTENTION RAISED AND SUBSEQUENT EXPLANATION SUBMITTED BEFORE THE APPELLATE AUTHORITY BY THE ASSESSEE, WAS NEVER RAISED DURING SEARCH OR BEFORE THE A.O. THE ENTIRE SUBMISSION IS AND 'AFTER - THOUGHT', JUST TO EVADE TAX. 4. THE ISSUE ARISING IN THE PRESENT APPEAL BY THE REVENUE IS AGAINST DELETION OF ADDITION OF RS.50 LAKHS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXPENDITURE. ITA NO S. 1 687 & 1 688 /PN/201 3 M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. 3 5. BRIEFLY, IN THE FACTS OF THE CASE, SEARCH AND SEIZURE OPERATIONS UNDER SECTION 132 OF THE ACT WERE CONDUCTED IN THE SUYOJIT GROUP OF CASES ON 17.09.2010. NOTICE UNDER SECTION 153A OF THE ACT WAS ISSUED TO THE ASSESSEE AND IN RESPONSE, THE ASSESSEE FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 7,44,533/ - . THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY. IN RESPONSE TO VARIOUS NOTICES ISSUED BY THE ASSESSING OFFICER, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ATTENDED AND FURNISHED THE INFORMATION FROM TIME TO TIME AND ALSO PRODUCED THE BOOKS OF ACCOU NT WHICH WERE AUDITED UNDER SECTION 44AB OF THE ACT. THE ASSESSING OFFICER IN PARA 3 NOTES THAT REGULAR BOOKS OF ACCOUNT WERE MAINTAINED SUCH AS CASH BOOK, LEDGER, BANK BOOK, AGREEMENTS, BILLS AND VOUCHERS , ETC. WHICH WERE PRODUCED FOR VERIFICATION. THE ASSESSING OFFICER LOOKED THROUGH SEIZED MATERIAL AND STATEMENT RECORDED AND NOTED THE FACTUAL ASPECTS OF THE CASE. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF LAND DEVELOP MENT AND CIVIL CONSTRUCTION. AS PER PAGES 1 TO 5, 6 TO 8 AND 9 TO 12 OF ANNEXURE A - 47 , BHARNA PAVTIS WERE SEIZED FROM THE OFFICE PREMISES OF M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. AND AS PER PAGES 44 TO 48 OF ANNEXURE A - 3 SEIZED FROM THE OFFICE PREMISES OF M/S. ANANT TECHNOCRATS PVT. LTD., THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HA D MADE CASH PAYMENTS TO SHRI N. CHANDRA, DIRECTOR OF M/S. N. CHANDRA G. INFOTAINMENT LTD. THE DETAILS AS NOTED BY THE ASSESSING OFFICER WERE AS UNDER: - 06....... 1 . PAGES 1 TO 5 IS A COPY OF BHARNA PAVTI DATED 06.03.2010 BETWEEN ASSESSEE AND M/S. N. CHANDRA G. INFOTAINMENT LTD. IT HAS BEEN RECORDED THEREIN THAT AN MOU DATED 04.04.2002 WAS ENTERED INTO BETWEEN ASSESSEE AND M/S. N. CHANDRA G. INFOTAINMENT LTD FOR PURCHASE OF AREA OF 42,487 SQ. FT. IN MULTIPLEX THEATRE TO BE BUILT AT NASHIK - PUNE ROAD, NASHIK. TH E SAID AGREEMENT WAS CANCELLED AND ASSESSEE HAD GIVEN A SUM OF R S .50 LACS BY CHEQUE NO.899905 DATED 06.02.2010 TOWARDS CONSIDERATION. IT HAS BEEN FURTHER RECORDED THAT INSTEAD OF CHEQUE ASSESSEE HAS PAID CASH OF RS.5 0 LACS TO M/S. N. CHANDRA G. INFOTAINMEN T LTD. IT HAS ALSO BEEN RECORDED THAT, SUIT FILED UNDER NO. 1291/2008 BEFORE SPECIAL CIVIL COURT FOR SPECIFIC PERFORMANCE AND OTHER ISSUES WILL NOT BE PRESSED BY M/S. N. CHANDRA G. INFOTAINMENT LTD. 2 . PAGES 6 TO 8 IS A COPY OF ANOTHER BHARNA PAVTI DATED 18.0 6.2010 BETWEEN ASSESSEE AND M/S. N. CHANDRA G. INFOTAINMENT LTD. IT HAS BEEN RECORDED ITA NO S. 1 687 & 1 688 /PN/201 3 M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. 4 THEREIN THAT AN MOU DATED 04.04.2002 WAS ENTERED INTO BETWEEN ASSESSEE M/S. N. CHANDRA G. INFOTAINMENT LTD FOR PURCHASE OF AREA OF 42,487 SQ. FT. IN MULTIPLEX THEATRE TO BE BUILT AT NASHIK - PUNE ROAD, NASHIK. THE SAID AGREEMENT WAS CANCELLED AND ASSESSEE HAD GIVEN A SUM OF R S .50 LACS BY CHEQUE NO.899906 DATED 06.06.2010 TOWARDS CONSIDERATION. IT HAS BEEN FURTHER RECORDED THAT INSTEAD OF CHEQUE ASSESSEE HAS PAID CASH OF R S . 15 LACS TO M/S. N. CHANDRA G. INFOTAINMENT LTD. FROM TIME TO TIME AND ANOTHER CASH OF RS.10 LACS ON 03.07.2010. 3 . PAGES 9 TO 12 IS A COPY OF ANOTHER BHARNA PAVTI DATED 11.08.2010 BETWEEN ASSESSEE AND M/S. N. CHANDRA G. INFOTAINMENT LTD. IT HAS BEEN RECORDED THEREIN THAT AN MOU DATED 04.04.2002 WAS ENTERED INTO BETWEEN ASSESSEE AND M/S. N. CHANDRA G. INFOTAINMENT LTD FOR PURCHASE OF AREA OF 42,487 SQ. FT. IN MULTIPLEX THEATRE TO BE BUILT AT NASHIK - PUNE ROAD, NASHIK. THE SAID AGREEMENT WAS CANCELLED AND ASSESS EE HAD GIVEN A SUM OF R S .50 LACS BY CHEQUE NO.899906 DATED 06.06.2010 TOWARDS CONSIDERATION. IT HAS BEEN FURTHER RECORDED THAT INSTEAD OF CHEQUE ASSESSEE HAS PAID CASH OF R S .15 LACS ON 18.06.2010, R S .10 LACS ON 03.07.2010, R S .20 LACS ON 11.08.2010 AND R S . 5 LACS ON 15.08.2010 TO M/S. N. CHANDRA G. INFOTAINMENT LTD. THUS, AMOUNT OF R S .50 LACS HAS BEEN PAID IN CASH. THIS BHARNA PAVATI HOWEVER INCLUDES THE CASH OF R S .25 LACS PAID AS PER BHARNA PAVTI DATED 18.06.2010, WHICH IS DISCUSSED IN SR. NO. 2 ABOVE. 4 . FUR THER, DOCUMENTS SEIZED FROM THE OFFICE PREMISES OF M/S. ANANT TECHNOCRATS PVT. LTD. AT CROWN COMMERCIAL COMPLEX, OPP. RAJEEV GANDHI BHAVAN, NASHIK, AS PER ANNEXURE - A/3, PAGE NO. 44 TO 48 IS BHARNA PAVTI DTD. 06/03/2010 ALSO CONFIRMS THE ABOVE TRANSACTIONS. 6. THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE OF TRANSACTIONS UNDER WHICH 6. THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE OF TRANSACTIONS UNDER WHICH IT HAD PAID SUM OF RS.50 LAKHS DURING THE YEAR UNDER CONSIDERATION TOWARDS CANCELLATION OF AGREEMENT DATED 04.04.2002 . THE ASSESSEE VIDE WRITTEN SUBMISSIONS CLAIMED THAT THE SA ID TRANSACTION WAS NOT RELATED TO THE ASSESSEE AND PAYMENT TO SHRI N. CHANDRA WAS MADE BY THE ASSOCIATE CONCERN OF THE ASSESSEE NAMELY M/S. SUYOJIT BUILDTECH, WHICH WAS A PARTNERSHIP FIRM , IN WHICH THE ASSESSEE AND M/S. N. CHANDRA G. INFOTAINMENT LTD. WERE PARTNERS. THE EXPLANATION OF THE ASSESSEE IS INCORPORATED AT PAGES 3 AND 4 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER REJECTED THE EXPLANATION FILED BY THE ASSESSEE BEING AN AFTERTHOUGHT AND HELD THAT THE ASSESSEE HAD PAID SUM OF RS.50 LAKHS OUT OF ITS UNDISCLOSED SOURCES, WHICH WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ANOTHER ADDITION MADE IN THE HANDS OF ASSESSEE WAS ON ACCOUNT OF DISALLOWANCE UNDER SECTION 40A(3) OF THE ACT AT RS. 15 LAKHS. ITA NO S. 1 687 & 1 688 /PN/201 3 M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. 5 7. THE CIT(A) CONSIDERED THE SUBMISSIONS OF THE A SSESSEE AND DELETED THE ADDITION OBSERVING AS UNDER: - 5.4 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE IMPUGNED ASSESSMENT ORDER AND THE RIVAL SUBMISSIONS. IT IS AN UNDISPUTED FACT THAT THE CASH PAYMENT OF RS.50,00,000/ - TO M/S. N. CHANDRA GLO BAL INFOTAINMENT LTD. IS DISCLOSED IN THE BOOKS OF ACCOUNT OF M/S. SUYOJIT BUILDTECH AND THE SAID PAYMENT WAS MADE BY THE SAID FIRM OUT OF THE AMOUNT RECEIVED BY THE SAID FIRM FROM THE APPELLANT TOWARDS THE CAPITAL CONTRIBUTION. IT IS AL SO UNDISPUTED FACT THAT ALL THE IMPUGNED TRANSACTIONS ARE RECORDED IN THE BOOKS OF ACCOUNT OF THE RESPECTIVE PARTIES AND THE SOURCES OF THE IMPUGNED PAYMENT ARE ALSO NOT IN DISPUTE. THE REASONS GIVEN BY THE LD. A.R. FOR PREPARING THE BHARNA PAVTI IN THE NAME OF APPELLANT ALS O APPEARS TO BE PRUDENT. FURTHER, IT IS FOR THE ASSESSEE TO DECIDE TO HOW TO CONDUCT ITS BUSINESS. IT IS WELL SETTLED LAW THAT THE COMMERCIAL EXPEDIENCY IS TO BE JUDGED FROM THE POINT OF VIEW OF TAX PAYER AND NOT TAX COLLECTOR. THEREFORE, IN WHOSE NAME THE BHARNA PAVTI IS PREPARED IS A CONCERN OF THE APPELLANT TO SAFEGUARD ITSELF. HOWEVER, WHEN THE SOURCE OF PAYMENT IS NOT IN DISPUTE THE IMPUGNED ADDITION SHOULD NOT HAVE BEEN MADE BY THE A.O . THE CONTENTION OF THE A.O. THAT THE SUBMISSION OF THE APPELLANT IS AN AFTERTHOUGHT IS BASED ON SURMISES. THE APPELLANT HAS DEMONSTRATED THE ABOVEMENTIONED FACT OF THE IMPUGNED PAYMENT MADE BY M/S. SUYOJIT BUILDTECH IN WHICH THE APPELLANT AS WELL AS M/S. N. CHANDRA GLOBAL INFOTAINMENT LTD. ARE PARTNERS FROM THE DATE OF SEARCH ACTION. CONSIDERING THE ABOVE FACTUAL ASPECTS AND THE POSITION OF LAW THE IMPUGNED ADDITION OF RS.50,00,000/ - MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED PAYMENT IS UNJUSTIFIED AND, THEREFORE, DIRECTED TO BE DELETED. THEREFORE, GROUND NO. 1 IS ALLOWE D. 8. THE SECOND ADDITION MADE ON ACCOUNT OF DISALLOWANCE UNDER SECTION 8. THE SECOND ADDITION MADE ON ACCOUNT OF DISALLOWANCE UNDER SECTION 40A(3) OF THE ACT WAS ALSO DELETED BY THE CIT(A). 9. THE REVENUE IS IN APPEAL BEFORE US IN RELATION TO THE DELETION OF ADDITION OF RS. 50 LAKHS. 10. THE LEARNED DEPARTMENTAL REPRESE NTATIVE FOR THE REVENUE POINTED OUT THAT THE ASSESSEE HAD FURNISHED ORIGINAL RETURN OF INCOME ON 01.04.2011 DECLARING TOTAL INCOME OF RS.8,19,290/ - . HOWEVER, IN RESPONSE TO NOTICE ISSUED UNDER SECTION 153A OF THE ACT, THE RETURN OF INCOME WAS FILED ON 31. 05.2012 AT RS.7,44,533/ - . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT BOTH THESE RETURNS OF INCOME WERE FILED AFTER SEARCH BEING CONDUCTED AT THE PREMISES OF ASSESSEE ON 17.09.2010. HE FURTHER STATED THAT DURING THE COURSE OF SEARCH, BHARNA PAVTI I.E. PAYMENT RECEIPT WAS FOUND AND ALSO CERTAIN DOCUMENTS WERE ITA NO S. 1 687 & 1 688 /PN/201 3 M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. 6 SEIZED FROM THE SISTER CONCERN, WHEREIN THERE IS MENTION OF PAYMENT OF RS.50 LAKHS IN ASSESSMENT YEAR 2010 - 11 AND ANOTHER RS.50 LAKHS IN ASSESSMENT YEAR 2011 - 12. OUR ATTE NTION WAS DRAWN TO THE COPY OF PARTNERSHIP DEED PLACED AT PAGES 43 TO 48 OF THE PAPER BOOK OF M /S. SUYOJIT BUILDTECH, IN WHICH THE ASSESSEE FIRM WAS PARTNER ALONG WITH M/S. N. CHANDRA G. INFOTAINMENT LTD. , WHEREIN IT WAS PROVIDED THAT 95% SHARE BELONGS TO M/S. N. CHANDRA G. INFOTAINMENT LTD. AND 5% TO THE ASSESSEE AND LOSS OF 100% WAS TO M/S. N. CHANDRA G. INFOTAINMENT LTD. FURTHER, REFERENCE WAS MADE TO THE COPY OF ACCOUNTS AND CAPITAL ACCOUNT OF M/S. N. CHANDRA G. INFOTAINMENT LTD. AND M/S. SUYOJIT BUILD TECH AND M/S. SUYOJIT INFRA STRUCTURE PVT. LTD. AND IT WAS POINTED OUT THAT THE PERUSAL OF SAME DOES NOT ESTABLISH THE CASE OF ASSESSEE. 11. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE TOTAL CONSIDERATION FIXED BETWEEN THE P ARTIES WAS RS.1.37 CRORES, AGAINST WHICH FIRST CHEQUES WERE GIVEN. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED OUT THAT ALL THESE AND EVEN CASH PAYMENT ENTRIES WERE REFLECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND CASH BOOK WAS PRODUCED BEFORE THE ASSESSING OFFICER. OUR ATTENTION WAS DRAWN TO THE PARA 3 OF THE ASSESSMENT ORDER, WHEREIN THE ASSESSING OFFICER ADMITS THAT THE BOOKS OF ACCOUNT HAD BEEN PRODUCED. HE STRESSED THAT NO NEW EVIDENCE WAS FILED BEFORE THE CIT(A) AND THE ALLEGATION OF REVENUE IN THIS REGARD WAS INCORRECT. HE FURTHER POINTED OUT THAT DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSING OFFICER WAS ALSO PRESENT AND THERE IS NO MERIT IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE. IN RESPECT OF SEQ UENCE OF EVENTS, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT FIRST CHEQUES WERE GIVEN TO THE SAID PARTY WHICH GOT BOUNCED AND THERE WAS LEGAL NOTICE, AGAINST WHICH CASH PAYMENT WAS MADE. THE ASSESSEE POINTED OUT THAT THERE WAS SETTLEMENT BETWEEN ITA NO S. 1 687 & 1 688 /PN/201 3 M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. 7 THE PARTIES OF PAYMENT OF RS.1.37 CRORES, UNDER WHICH RS.37 LAKHS WAS PAID BY CHEQUE AND ALSO RS.50 LAKHS TWICE BY CHEQUES AND THERE IS NO DISPUTE WITH THAT REGARD. RS.50 LAKHS WAS GIVEN TO M/S. N. CHANDRA G. INFOTAINMENT LTD. IN CASH B Y M/S. SUYOJIT BUILDTECH. REFERENCE WAS MADE TO THE COPY OF ACCOUNTS PLACED AT PAGES 71 TO 7 3 OF THE PAPER BOOK AND THE EVIDENCE OF BOUNCING OF CHEQUES AT PAGES 76 AND 77 OF THE PAPER BOOK. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT THE ENTRIES IN THE SEIZED DOCUMENTS WERE MERE ACCOUNTING ENTRIES AND THE CASH WAS ROUTED THROUGH PARTNERSHIP CONCERN IN ORDER TO COMPLETE THE ENTRIES AND NO CASH WAS PAID OUT OF UNDISCLOSED SOURCES. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE PREMISES OF THE ASSESSEE WAS SEARCHED ON 17.09.2010 AND CERTAIN DOCUMENTS BY WAY OF PAYMENT RECEIPT S , BHARNA PAVTI S WERE FOUND WHICH REFLECTED CERTAIN CASH PAYMENTS. THE CASE OF THE ASSESSEE BEFORE US WAS THAT THE AFORESAID CASH PAYMENTS WERE REFLECTED IN THE BOOKS OF ACCOUNT OF PARTNERSHIP CONCERN AND WERE DULY ACCOUNTED FOR AND WERE NOT OUT OF UNACCOUNTED INCOME. IN THE FACTS OF THE ISSUE, THE ASSESSEE WAS PROPOSING TO CONSTRUCT MULTIPLEX THEATRE AT NASHIK, WHICH IN TURN, W AS PROPOSED TO BE BOUGHT BY M/S. N. CHANDRA G. INFOTAINMENT LTD. A MEMORANDUM OF UNDERSTANDING WAS ENTERED INTO BETWEEN THE PARTIES ON 04.04.2002, ACCORDING TO WHICH M/S. N. CHANDRA G. INFOTAINMENT LTD. AGREED TO PURCHASE THE SAID PROPOSED MULTIPLEX THEATRE FROM THE ASSESSEE. AS PER MOU, AN APPLICATION FOR EXEMPTION FROM LEVY OF ENTERTAINMENT TAX WAS FILED BY THE ASSESSEE WITHIN STIPULATED DATE AND SUCH STIPULATED DATE FOR FILING THE SAID APPLICATION HAD ALREADY EXPIRED. THEREFORE, IN ORDER TO AVAIL THE BENEFIT OF E XEMPTION FROM PAYMENT OF ENTERTAINMENT TAX, WHICH WAS NOT AVAILABLE TO M/S. N. CHANDRA G. INFO TAINMENT LTD., A SPECIAL PURPOSE VEHICLE I.E. SPV WAS FORMED BY WAY OF PARTNERSHIP FIRM OF BOTH THE PARTIES I.E. THE ASSESSEE AND M/S. N. CHANDRA G. ITA NO S. 1 687 & 1 688 /PN/201 3 M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. 8 INFOTAINMENT LTD. THE SAID PARTIES HAVE ENTERED INTO PARTNERSHIP AGREEMENT NAME LY M/S. SUYOJIT BUILDTECH. AFTER ENTERING INTO PARTNERSHIP DEED, CERTAIN TRANSACTIONS WITH M/S. N. CHANDRA G. INFOTAINMENT LTD. WERE ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF THE SAID FIRM. HOWEVER, M/S. N. CHANDRA G. INFOTAINMENT LTD. FAILED TO MAKE FURTHER PAYMENTS AS PER THE TERMS AND ALSO THE APPLICATION FOR LOAN MA DE BY THE FIRM WITH PUNJAB NATIONAL BANK WAS REJECTED. THE PROCESSING FEES OF RS.2 LAKHS PAID BY M/S. N. CHANDRA G. INFOTA INMENT LTD. WAS ALSO FORFEITED BY THE SAID BANK. FURTHER THE OWNER OF LAND ON WHOSE LAND THE MULTIPLEX PROJECT WAS PROPOSED TO BE CONSTRUCTED ON DEVELOPMENT BASIS ALSO WAS PRESSING FOR BALANCE PERFORMANCE OF CONTRACT AND FOR OUTSTANDING BALANCE PAYMENT. M/S. N. CHANDRA G. INFOTAINMENT LTD. IN THIS SITUATION WISHED TO CANCEL THE AGREEMENT AND ASKED FOR COMPENSATION FROM THE ASSESSEE SINCE THE ASSESSEE HAD UTILIZED THE MONEY RECEIVED FROM M/S. N. CHANDRA G. INFOTAINMENT LTD. IN THE YEAR 2002. M/S. N. CHAND RA G. INFOTAINMENT LTD. ALSO FILED A SUIT IN THE COURT OF LAW AGAINST THE ASSESSEE AND IN SUCH SCENARIO, A COMPROMISE WAS AGREED UPON, UNDER WHICH SUM OF RS.1,37,00,000/ - W AS AGREED TO BE PAID TO M/S. SUYOJIT BUILDTECH AND BALANCE SUM OF RS.50 LAKHS BY THE ASSESSEE. THE ASSESSEE EXPLAINED THAT M/S. N. CHANDRA G. INFOTAINMENT LTD. WAS A PARTNER IN M/S. SUYOJIT BUILDERS, THE PAYMENT WAS ROUTED THROUGH PARTNERSHIP FIRM. HOWEVER, BHARNA PAVTI WAS EXECUTED IN THE NAME OF ASSESSEE TO PROTECT THE INTEREST OF ASS ESSEE FOR THE REASON THAT INITIAL AGREEMENT WAS ENTERED INTO BY M/S. N. CHANDRA G. INFOTAINMENT LTD. WITH THE ASSESSEE AND IN M/S. SUYOJIT BUILDTECH, M/S. N. CHANDRA G. INFOTAINMENT LTD. WAS ONE OF THE PARTNERS. ALL THIS EXPLANATION WAS FILED BEFORE THE A SSESSING OFFICER. THE CASE OF THE ASSESSEE BEFORE THE CIT(A) WAS THAT THE CASH PAYMENT OF RS.50 LAKHS TO M/S. N. CHANDRA G. INFOTAINMENT LTD. WAS NOT IN DISPUTE AND THE SAID PAYMENT BEING ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF PARTNERSHIP FIRM M/S. SUYO JIT BUILDTECH , WAS ALSO NOT IN DISPUTE. HOWEVER, THE ASSESSING OFFICER FAILED ITA NO S. 1 687 & 1 688 /PN/201 3 M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. 9 TO APPRECIATE THE SAID FACT AND THE PURPOSE OF MAKING THE PAYMENT ON THE BASIS OF BHARNA PAVTI , SINCE THE INITIAL AGREEMENT WAS ENTERED INTO BETWEEN THE ASSESSEE AND M/S. N. CHA NDRA G. INFOTAINMENT LTD. AND FIRM WAS CREATED LATER AS SPECIAL PURPOSE VEHICLE. THEREFORE, AS FAR AS THE AGREEMENT FOR PURCHASE OF PROPERTY WAS CONCERNED, THE SAME WAS ENTERED INTO BY M/S. N. CHANDRA G. INFOTAINMENT LTD. WITH THE ASSESSEE AND NOT WITH TH E FIRM M/S. SUYOJIT BUILDTECH. FURTHER, SUIT FOR RECOVERY WAS FILED BY M/S. N. CHANDRA G. INFOTAINMENT LTD. AGAINST THE ASSESSEE AND NOT AGAINST THE FIRM M/S. SUYOJIT BUILDTECH. EVEN THE DEVELOP MENT AGREEMENT WAS ENTERED INTO WITH LANDLORD BY THE ASSESSE E AND NOT BY THE FIRM M/S. SUYOJIT BUILDTECH . S O IN ORDER TO PROTECT THE INTEREST / TITLE OF THE ASSESSEE, THE DOCUMENT WAS SO EXECUTED. HOWEVER, IT IS NOT DISPUTED THAT ACTUAL MOTIVE BEHIND THE EXECUTION OF SAID DOCUMENT WAS TO PROTECT THE ASSESSEE SINC E THE PAYMENTS WERE BEING ROUTED THROUGH THE FIRM M/S. SUYOJIT BUILDTECH TO M/S. N. CHANDRA G. INFOTAINMENT LTD. 13. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE, WHERE THE IMPUGNED TRANSACTION OF CASH PAYMENT OF RS.50 LAKHS TO M/S. N. CHANDRA G. INFOTAINMENT LTD. IS RECORDED IN THE BOOKS OF ACCOUNT OF THE FIRM M/S. SUYOJIT BUILDTECH AND ADMITTEDLY, ONLY ONE SET OF PAYMENT OF RS.50 LAKHS HAS BEEN MADE DURING THE YEAR TO M/S. N. CHANDRA G. INFOTAINMENT LTD. , THERE IS NO MERIT IN F URTHER THRUSTING THE SAID PAYMENT UPON THE ASSESSEE. THE ASSESSEE HAS EXPLAINED THE BASIS AND NEED FOR EXECUTING BHARNA PAVTI BETWEEN THE ASSESSEE AND M/S. N. CHANDRA G. INFOTAINMENT LTD. , WHEREIN THE INITIAL AGREEMENT TO DEVELOP THE PROPERTY WAS BETWEEN THE ASSESSEE AND THE OWNER OF PROPERTY AND LATER, THERE WAS AN AGREEMENT ENTERED INTO BETWEEN THE ASSESSEE AND M/S. N. CHANDRA G. INFOTAINMENT LTD. FOR CARRYING ON THE BUSINESS OF MULTIPLEX. EVEN THE CIVIL SUIT FILED BY M/S. N. CHANDRA G. INFOTAINMENT LTD . WAS AGAINST THE ASSESSEE, THEN IN CASE ITA NO S. 1 687 & 1 688 /PN/201 3 M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. 10 NO SUCH DOCUMENTATION IS EXECUTED , THERE CAN BE CASE OF HARDSHIP TO THE ASSESSEE AND IN ORDER TO PROTECT ITSELF, THE AFORESAID DOCUMENT W AS EXECUTED. THE ASSESSEE HAS PLACED ON RECORD THE COPIES OF ACCOUNTS IN THE BOOKS OF ACCOUNT OF M/S. SUYOJIT BUILDTECH FROM WHERE THE CASH PAYMENT OF RS.50 LAKHS WAS MADE TO M/S. N. CHANDRA G. INFOTAINMENT LTD. THE ASSESSEE HAS ALSO PLACED ON RECORD EVIDENCES OF PAYMENT OF RS.1.37 CRORES, WHICH WAS DUE TO M/S. N. CHANDRA G. INFOT AINMENT LTD. AND IT MAY BE CLARIFIED HEREIN THAT SUM OF RS.37 LAKHS WAS PAID SEPARATELY AND RS.1 CRORE BY WAY OF TWO CHEQUES OF RS.50 LAKHS EACH WERE PAID TO M/S. N. CHANDRA G. INFOTAINMENT LTD. FURTHER, OVER AND ABOVE THE SAID RS.1.37 CRORES, THERE WAS A N UNDERSTANDING TO PAY FURTHER SUM OF RS.50 LAKHS AS COMPENSATION WHICH WAS PART OF SETTLEMENT OF CIVIL PROCEEDINGS AND AS AGREED UPON BETWEEN THE PARTIES. THE SAID AMOUNT WAS INITIALLY PAID BY WAY OF CHEQUE BUT THE CHEQUE GOT BOUNCED AND THEREAFTER , THE PAYMENT WAS MADE IN CASH THROUGH CAPITAL ACCOUNT OF M/S. N. CHANDRA G. INFOTAINMENT LTD. IN M/S. SUYOJIT BUILDTECH. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE, THERE IS NO MERIT IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE A S COMPLETE EVIDENCE WAS FILED BEFORE THE ASSESSING OFFICER WHICH HA D NOT BEEN CONSIDERED BY HIM. IN THE TOTAL PERSPECTIVE AND ALSO IN VIEW OF THE FACT THAT THE ASSESSING OFFICER HIMSELF WAS PRESENT BEFORE THE CIT(A) DURING THE COURSE OF APPELLATE PROCEEDING S, THERE IS NO MERIT IN THE CLAIM OF REVENUE THAT FURTHER EXPLANATION AND CONTENTIONS WERE RAISED BEFORE THE APPELLATE AUTHORITY WHICH WERE NEVER RAISED DURING SEARCH OR BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. REJECTING T HE SAME, WE UPHOLD THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS.50 LAKHS SINCE THE CASH PAYMENT IS DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF M/S. SUYOJIT BUILDTECH OF WHICH THE ASSESSEE AND M/S. N. CHANDRA G. INFOTAINMENT LTD. WERE PARTNERS. THE SAID SPECIAL PURPOSE VEHICLE WAS CONSTITUTED IN ORDER TO CARRY ON THE BUSINESS OF MULTIPLEX, WHICH COULD NOT BE CARRIED AND THE SETTLEMENT WAS ITA NO S. 1 687 & 1 688 /PN/201 3 M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. 11 REACHED BETWEEN THE PARTIES IN THIS REGARD FOR CLEARING THE DUES AND ALSO PAYMENT OF COMPENSATION OF RS.50 LAKHS . UPHOLDING THE ORDER OF CIT(A), WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 1 4 . THE FACTS A ND ISSUE IN ITA NO. 1 688 /PN/201 3 ARE IDENTICAL TO THE FACTS AND ISSUE IN ITA NO. 1 687 /PN/201 3 AND OUR DECISION IN ITA NO. 1687 /PN/201 3 SHALL APPLY MUTATI S MUTANDIS TO ITA NO. 1 688 /PN/201 3 . 1 5 . IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 9 TH DAY OF SEPTEMBER , 201 6 . SD/ - SD/ - ( R.K. PANDA ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 9 TH SEPTEMBER , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / TH E APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - I , NASHIK ; 4. / THE CIT (CENTRAL), NAGPUR ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE