MRS. POOJA RAMESH BULANI, MUMBAI V. I.T.O WARD 3 ( 2 ) THANE, THANE

ITA 1693/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4516 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 15-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH KUMAR SINGH
• Keywords: Search and seizure; Document seized; Opportunity of being heard; Opportunity of cross examination; Third party statement; Revised return; Documents seized
• Section: 147; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER ITA NO. 1693 / MUM . /2018 ( ASSESSMENT YEAR : 20 10 1 1 ) SMT. POOJA RAMESH BULANI A 23, SHIV SOCIETY KOPRI COLONY, THANE 400 601 PAN AFZPB5013J . APPELLANT V/S INCOME TAX OFFICER WARD 3 ( 2 ), THANE . RESPONDENT ITA NO. 1694 /MUM. /2018 ( ASSESSMENT YEAR : 20 09 10 ) SMT. POOJA RAMESH BULANI A 23, SHIV SOCIETY KOPRI COLONY, THANE 400 601 PAN AFZPB5013J . APPELLANT V/S INCOME TAX OFFICER WARD 3 ( 2 ), THANE . RESPONDENT ASSESSEE BY : SHRI BHUPENDRA SHAH REVENUE BY : SHRI MANISH KUMAR SINGH DATE OF HEARING 2 0 . 03 .201 9 DATE OF ORDER 2 2 .03.2019 O R D E R 2 SMT. POOJA RAMESH BULANI PER SAKTIJIT DEY, J.M. AFORESAID APPEAL S HA VE BEEN FILED BY THE ASSESSEE CHALLENGING T WO SEPARATE ORDER S , BOTH DATED 3 RD OCTOBER 2017, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 2 , PUNE, PERTAINING TO THE ASSESSMENT YEAR S 2009 10 AND 2010 11 . 2 . T HE ONLY COMMON DISPUTE IN THE PRESENT APPEAL IS WITH REGARD TO THE ADDITION S MADE ON ACCOUNT OF PAYMENT OF ON MONEY IN CASH TOWARDS PURCHASE OF PROPERTY. 3 . BRIEF FACTS MORE OR LESS COMMON IN BOTH THE APPEALS ARE, THE ASSESSEE IS AN INDIVIDUAL. PURSUANT TO A SEARCH AND SEIZURE OPERATION CONDUCTED UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) IN THE CASE OF MAYUR SUCHAK GROUP ON 13 TH JULY 2011, CERTAIN INCRIMINATING DOCUMENTS WERE FOUND REVEALING THAT THE ASSESSEE ALONG WITH ONE VEENA G. BULANI, HAVE PURCHASED A WAREHOUSE BY PAYING ON MONEY IN CASH OVER AND ABOVE THE DECLARED SALE CONSIDERATION. ON THE BASIS OF SUCH INFORMATION, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEARS UN DER SECTION 147 OF THE ACT. IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT AS PER THE INFORMATION GATHERED DURING THE SEARCH AND SEIZURE OPERATION, THE ASSESSEE ALONG WITH ANOTHER PERSON HAD PAID ` 16 LAKH TOWARDS ON MONEY IN THE 3 SMT. POOJA RAMESH BULANI ASSESSMENT YEAR 2009 10 AND ` 5,38,500 IN THE ASSESSMENT YEAR 2010 11. THEREFORE, HE CALLED UPON THE ASSESSEE TO EXPLAIN WHY 50% OUT OF THE ON MONEY PAID IN BOTH THE ASSESSMENT YEAR S SHOULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE. IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED, THOUGH , THE ASSESSEE FILED HER REVISED RETURN OF INCOME STATING THAT APART FROM THE AMOUNT PAID IN CHEQUE S WHILE BOOKING THE WAREHOUSE, THE ASSESSEE HAD NOT PAID ANY ON MONEY AND FURTHER , THE BOOKING AMOUNT PAID WAS ALSO RETURNED BACK TO THE ASSESSEE DUE TO CANC ELLATION OF DEAL, HOWEVER , THE ASSESSING OFFICER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE. THE ASSESSING OFFICER OBSERVED THAT THE INCRIMINATING MATERIAL S FOUND DURING THE SEARCH AND SEIZURE OPERATION CLEARLY REVEALS PAYMENT OF ON MONEY BY THE ASSESSEE AND ANOTHER PERSON OVER AND ABOVE THE BOOKING AMOUNT. ACCORDINGLY, HE ADDED BACK 50% OUT OF THE ALLEGED ON MONEY PAID AT THE HANDS OF THE ASSESSEE WHICH WORKED OUT TO ` 8 LAKH IN A.Y. 2009 10 AND ` 2,69,250 IN A.Y. 2010 11. 4 . THOUGH, THE ASSESSEE CHALLENGED THE AFORESAID ADDITION S BEFORE THE FIRST APPELLATE AUTHORITY ON VARIOUS GROUNDS, HOWEVER, THE LEARNED COMMISSIONER (APPEALS) SUSTAINED THE ADDITION S MADE BY THE ASSESSING OFFICER. 5 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THOUGH THE ASSE SSING OFFICER HAD RELIED UPON INCRIMINATING MATERIALS FOUND IN 4 SMT. POOJA RAMESH BULANI COURSE OF A SEARCH AND SEIZURE OPERATION CONDUCTED IN CASE OF A THIRD PARTY, HOWEVER, SUCH MATERIAL WAS NOT CONFRONTED TO THE ASSESSEE. HE SUBMITTED , THOUGH , THE STATEMENT OF THIRD PARTIES WERE RELIED UPON FOR MAKING THE ADDITION S , HOWEVER, THE ASSESSEE WAS NEITHER CONFRONTED WITH SUCH STATEMENT NOR WAS ALLOWED OPPORTUNITY TO CROSS EXAMINE THE PERSON WHOSE STATEMENT WAS RELIED UPON. HE SUBMITTED , WHOLLY RELYING UPON THE INFORM ATION RECEIVED FROM DDIT (INV.) AND BOOKS OF ACCOUNT RELATING TO THIRD PARTIES, THE ASSESSING OFFICER HAS MADE THE ADDITIONS WHICH ARE LEGALLY UNSUSTAINABLE. IN SUPPORT OF HIS CONTENTION, LEARNED AUTHORISED REPRESENTATIVE RELIED UPON THE FOLLOWING DECISIONS: I ) H.R. MEHTA V/S ACIT, [2016] 387 ITR 561; AND II ) ANI L JAG GI V/S ACIT, [2018] 168 ITD 612. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE DRAWING OUR ATTENTION TO THE IMPUGNED ASSESSMENT ORDER S SUBMITTED , FULL OPPORTUNITY WAS GRANTED TO THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER HAS PROVIDED COPY OF SEIZED DOCUMENTS TO THE ASSESSEE. THUS, HE SUBMITTED , ASSESSEES ALLEGATION THAT ADVERSE MATERIALS WERE NOT CONFRONTED TO THE ASSESSEE IS INCORRECT. HE SUBMITTED , IF STILL THE BENCH FEELS THAT ADVERSE MATERIALS ARE REQUIRED TO BE FURNISHED TO THE ASSESSEE, THE MATTER MAY BE RESTORED BACK TO THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION. 5 SMT. POOJA RAMESH BULANI 7 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL S ON RECOR D. L EARNED AUTHORISED REPRESENTATIVE HAS CHALLENGED THE ADDITIONS MADE BY THE ASSESSING OFFICER PRIMARILY ON THE GROUND THAT ADVERSE MATERIALS SEIZED FROM THE POSSESSION OF THIRD PARTIES AND STATEMENT RECORDED FROM THIRD PARTIES WERE NEITHER CONFRONTED TO HER NOR SHE WAS GIVEN OPPORTUNITY TO CROSS EXAMINE THE PERSON WHOSE STATEMENT WAS RELIED UPON. QUA THE AFORESAID CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE, IT IS OBSERVED THAT IN PARA GRAPH 6 OF THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS SPECI FICALLY STATED THAT AT THE REQUEST OF THE ASSESSEE NOT ONLY THE REASONS FOR RE OPENING OF ASSESSMENTS WERE PROVIDED BUT C OPIES OF SEIZED DOCUMENTS WERE ALSO PROVIDE D TO THE ASSESSEE. FURTHER, ON PERUSAL OF THE ASSESSMENT ORDER AND , MORE SPECIFICALLY , PARA GRAPH 11 OF THE ASSESSMENT ORDER, IT IS OBSERVED TH AT THE ASSESSING OFFICER HAS NEITHER REFERRED TO NOR RELIED UPON ANY THIRD PARTY STATEMENT BUT HE HAS ONLY REFERRED TO INCRIMINATING DOCUMENTS SEIZED FROM MAYUR SUCHAK GROUP INCLUDING THE CASH BOOK OF THE SAID CONCERN . THEREFORE, IN VIEW OF THE AFORESAID, WE ARE UNABLE TO FULLY ACCEPT THE CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE THAT THE ASSESSING OFFICER HAS RELIED UPON THIRD PARTY STATEMENT WITHOUT CONFRONTING THEM TO THE ASSESSEE NOR ALLOWING HER TO CROSS EXAMINE THEM . THAT BEING THE CASE, THE RATIO LAID DOWN IN THE DECISIONS RELIED UPON BY THE LEARNED AUTHORISED REPRESENTATIVE ARE NOT BE APPLICABLE TO THE FACTS OF THE PRESENT 6 SMT. POOJA RAMESH BULANI APPEAL S . HOWEVER, CONSIDERING THE SUBMISSIONS OF THE LEARNED AUTHORI SED REPRESENTATIVE THAT MERELY RELYING UPON THIRD PARTY BOOKS OF ACCOUNT AND INCRIMINATING MATERIALS SEIZED FROM THE THIRD PARTIES NO ADDITION CAN BE MADE AND FURTHER CONSIDERING THE CONTENTION OF THE ASSESSEE THAT PROPER OPPORTUNITY WAS NOT GIVEN TO HER T O REPRESENT HER CASE, WE ARE INCLINED TO RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE MAKE IT CLEAR, IF THE ASSESSING OFFICER INTENDS TO UTILIZE ANY ADVERSE MATERIAL AGAINST TH E ASSESSEE, HE MUST CONFRONT SUCH MATERIALS TO THE ASSESSEE AND ALLOW PROPER OPPORTUNITY TO HER TO EXPLAIN/REBUT THEM. S IMILARLY , IF THE ASSESSING OFFICER INTENDS TO USE ANY THIRD PARTY STATEMENT AGAINST THE ASSESSEE , HE MUST NOT ONLY CONFRONT THEM TO THE ASSESSEE BUT ALSO ALLOW HER OPPORTUNITY TO CROSS EXAMINE THE PERSONS WHOSE STATEMENT IS TO BE RELIED UPON. GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 8 . IN THE RESULT, APPEAL S ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22.03.2019 SD/ - RAJESH KUMAR ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 22 .03.2019 7 SMT. POOJA RAMESH BULANI 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