NEHA S. SANEY, NAVI MUMBAI V. ITO 22(3)(3), MUMBAI

ITA 1710/MUM/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7956 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 04-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M NEHA; SUMAN KUMAR LD DR ITA NO MUM
• Assessee Lawyers: RITIKA AGARWAL LD
• Keywords: Unexplained investment; Loose papers
• Section: 143(3); 142(1); 69; 263; 132

Judgement Text

ITA NO.1710/MUM/2013 & 7349/M/2014 NEHA S.SANEY ASSESSMENT YEAR 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 1710/MUM/2013 ( / ASSESSMENT YEAR: 2009-10) NEHA S.SANEY A-1102, PLOT NO.5 SAI PRIDE, PALM BEACH ROAD SECTOR 18, SANPADA MUMBAI 400 705 / VS. COMMISSIONER O F INCOME TAX - 22 3 RD FLOOR, TOWER NO.6 VASHI RAILWAY STATION COMPLEX VASHI, NAVI MUMBAI 400 703 ./ ./PAN/GIR NO. AEAPT-8150-L ( /APPELLANT ) : ( !' / RESPONDENT ) & ./I.T.A. NO. 7349/MUM/2014 ( / ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER 28( 2)(3) 3 RD FLOOR, TOWER NO.6 VASHI RAILWAY STATION COMPLEX VASHI, NAVI MUMBAI 400 703 / VS. NEHA S.SANEY A-1102, PLOT NO.5 SAI PRIDE, PALM BEACH ROAD SECTOR 18, SANPADA MUMBAI 400 705 ./ ./PAN/GIR NO. AEAPT-8150-L ( /APPELLANT ) : ( !' / RESPONDENT ) A SSESSEE BY : RITIKA AGARWAL, LD. AR RE VENUE BY : SUMAN KUMAR, LD.DR ITA NO.1710/MUM/2013 & 7349/M/2014 NEHA S.SANEY ASSESSMENT YEAR 2009-10 2 / DATE OF HEARING : 03/11/2017 / DATE OF PRONOUNCEMENT : 08/12/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE AS WELL AS REVE NUE ARISES OUT OF INVOCATION OF REVISIONAL JURISDICTION U/S 263 BY LD. COMMISSIONER OF INCOME TAX. ITA NO. 1710/MUM/2013 BY ASSESSEE CONTEST VALIDITY OF EXERCISE OF REVISIONAL JURISDICTION U/S 263 BY LD. COMMISSIONER OF INCOME TAX-22 WHEREAS ITA NO. 7349/MUM/2014 BY REVENUE CONTEST RE LIEF PROVIDED TO THE ASSESSEE BY FIRST APPELLATE AUTHORI TY IN THE CONSEQUENTIAL ORDER PASSED U/S 143 READ WITH SECTION 263 . SINCE, THE ASSESSEES APPEAL CONTEST THE VERY VALIDITY OF THE JURISDICTIO N AND GOES TO THE ROOT OF THE MATTER, WE TAKE UP THE SAME FIRST. 2.1 FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS ASSESSED FOR IMPUGNED AY U/S 143(3) ON 26/12/2 011 AT RS.1,76,300/- AS AGAINST RETURNED INCOME OF RS.1,72 ,950/- FILED BY THE ASSESSEE ON 31/07/2009. THE ASSESSMENT WAS FRAMED B Y LD. INCOME TAX OFFICER 22(3)(3), MUMBAI. SUBSEQUENTLY, THE LD. COMMISSIONER OF INCOME TAX-22, MUMBAI [CIT] INVOKING REVISIONAL JUR ISDICTION U/S 263 VIDE ORDER DATED 04/02/2013 QUASHED THE SAID ASSESS MENT ORDER AND DIRECTED LD. AO TO MAKE FRESH ASSESSMENT. ITA NO.1710/MUM/2013 & 7349/M/2014 NEHA S.SANEY ASSESSMENT YEAR 2009-10 3 2.2 THE REVISIONAL JURISDICTION WAS TRIGGERED PURSU ANT TO RECEIPT OF A PROPOSAL DATED 31/10/2012 FROM LD. AO THROUGH JOINT COMMISSIONER OF INCOME TAX, RANGE 22(3). THE PROPOSAL POINTED OUT THAT UPON RECEIPT OF CERTAIN INFORMATION FROM ADIT (INVESTIGATION-1), THANE VIDE LETTER NO. THN/ADIT(INV-1)/SIDDHI/09-10 DATED 14/09/2009 , THE ASSESSEE PURCHASED A SHOP NO. 108 ADMEASURING 900 SQUARE FEE T AT LITTLE WORLD MALL, PLOT NO. 21, SECTOR-2, KHARGHAR, NAVI MUMBAI JOINTLY WITH MRS. RACHNA M. SANEY. THE SAID SHOP WAS PURCHASED FOR TOTAL CONSIDERATIO N OF RS.86 LACS FROM GAYATRI HOMES , AN ENTITY BELONGING TO SIDDHI GROUP OF CASES WHO WAS SUBJECTED TO SEARCH ACTION U/S 132 ON 19/02/2009. THE PERUSAL OF SEIZED PAPERS REVEALED THAT THE OUT OF RS.86 LACS, THE AGREEMENT WAS FOR RS.36.40 LACS AND THE BALANCE AMO UNT WAS PAID IN CASH. IT WAS FURTHER STATED THAT THE INFORMATION WA S RECEIVED BY LD. AO ON 10/04/2012 I.E. WELL AFTER COMPLETION OF ASSESSM ENT U/S 143(3) AND THEREFORE, LD.AO CONTENDED THAT INCOME TO THE TUNE OF RS.25 LACS WAS NOT BROUGHT TO TAX IN THE ASSESSMENT ORDER. 2.3 CONSEQUENTLY, A SHOW-CAUSE NOTICE U/S 263 DATED 14/11/2012 WAS ISSUED AND THE ASSESSEE WAS CONFRONTED WITH THE SEI ZED MATERIAL. THE ASSESSEE DENIED HAVING MADE ANY SUCH CASH PAYMENT A ND ASSAILED THE PROCEEDINGS ON THE PREMISES THAT THE LD. AO, DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) CARRIED OUT DETAI LED INVESTIGATION REGARDING THE PURCHASE OF THE SHOP AND THEREFORE TH E ACTION U/S 263 WAS NOT VALID. THE ASSESSEE FURTHER CONTENDED THAT NO E VIDENTIARY VALUE COULD BE ATTACHED TO LOOSE SHEETS FOUND FROM THE PO SSESSION OF THIRD PARTY. HOWEVER, LD. CIT OPINED THAT THE INFORMATION FROM INVESTIGATION ITA NO.1710/MUM/2013 & 7349/M/2014 NEHA S.SANEY ASSESSMENT YEAR 2009-10 4 WING WAS RECEIVED BY LD. AO ON 10/04/2012 I.E. WELL AFTER COMPLETION OF ASSESSMENT AND THEREFORE, THE SAME COULD NOT BE UTI LIZED / APPRECIATED BY LD. AO DURING ASSESSMENT PROCEEDINGS AND THEREFO RE, ACTION U/S 263 WAS VALID SINCE THE ORDER WAS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND CONTESTS THE VERY INVOCATION OF JURIS DICTION U/S 263. 3. THE LD. COUNSEL FOR ASSESSEE [AR] SUBMITTED THAT THE LD. AO, DURING ORIGINAL ASSESSMENT PROCEEDINGS, CARRIED OUT DETAILED INVESTIGATION REGARDING PURCHASE OF THE SHOP AND WA S FULLY SATISFIED WITH ASSESSEES EXPLANATION REGARDING THE SAME AND HENCE , THE ORDER WAS IN NO WAY ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF THE REVENUE. HENCE, THE REVISIONAL JURISDICTION BEING INVOKED BY LD. CIT U/ S 263 WERE INVALID SINCE LD. AO ALREADY APPLIED HIS MIND ON THE ISSUE AND TO OK A CONSCIOUS DECISION TOWARDS THE CLAIM OF THE ASSESSEE. OUR ATT ENTION IS DRAWN TO VARIOUS DOCUMENTS PLACED IN THE PAPER BOOK SUBMITTED BY ASSESSEE. PER CONTRA , LD. DEPARTMENTAL REPRESENTATIVE [DR] CONTENDED TH AT THE PROVISIONS U/S 263 WERE MEANT TO MAKE UP FOR THE ERRORS / OMISSIONS WHICH TOOK PLACE WHILE FRAMING THE ASSESSMENT AND T HEREFORE, THE JURISDICTION WAS RIGHTLY INVOKED BY LD. CIT SINCE I T WAS NOTICED ON THE BASIS OF SEIZED MATERIAL THAT THE ASSESSEE MADE CAS H PAYMENT TOWARDS PURCHASE OF THE SHOP WHICH WAS NOT TAKEN INTO ACCOU NT WHILE FRAMING THE ORIGINAL ASSESSMENT ORDER. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. AT THIS JUNCTURE, WE ARE REQUIR ED TO EXAMINE WHETHER THE TWIN CONDITIONS VIZ. ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF ITA NO.1710/MUM/2013 & 7349/M/2014 NEHA S.SANEY ASSESSMENT YEAR 2009-10 5 REVENUE AS ENVISAGED BY SECTION 263 WERE FULFILLED OR NOT S O AS TO ACQUIRE A VALID JURISDICTION U/S 263. UPON PERUSAL OF RELEVANT DOCUMENTS, WE FIND THAT LD. AO, DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, VIDE NOTICE U/S 142(1) DATED 01/07/201 1, REQUISITIONED DETAILS OF PURCHASE / SALE OF IMMOVEABLE PROPERTIES ACQUIRED BY THE ASSESSEE DURING THE IMPUGNED YEAR AND PRECEDING THR EE YEARS WITH SUPPORTING DOCUMENTS AND SOURCE THEREOF. THE ASSESS EE, VIDE REPLY DATED 14/07/2011, SUBMITTED DETAILS OF THE SHOP ACQ UIRED BY THE ASSESSEE ALONG WITH PAYMENT DETAILS AND SOURCE OF F UNDS. HOWEVER, THERE IS NO DISCUSSION / ARGUMENTS ANYWHERE EITHER IN THE ASSESSMENT ORDER OR IN THE SUBMISSIONS MADE BY THE ASSESSEE AB OUT THE SEIZED MATERIAL AND CASH PAYMENT AS NOTED FROM THE LOOSE S HEETS FOUNDS DURING SEARCH OPERATIONS. PRIMA FACIE, THIS INFORMATION WAS EITHER NOT IN THE POSSESSION OF LD. AO OR ALTOGETHER SKIPPED THE NOTI CE OF LD. AO. THEREFORE, THE CONTENTION THAT LD. AO APPLIED HIS M IND ON THE ISSUE QUA SEIZED MATERIAL IS NOT TENABLE. HENCE, LD. CIT, UPO N NOTICING THE ERROR, RIGHTLY INVOKED JURISDICTION U/S 263. RESULTANTLY, WE DO NOT CONCUR WITH THE SUBMISSIONS MADE BY LD. AR AND HENCE, DISMISS A SSESSEES APPEAL ON THIS COUNT. 5. NOW, WE TAKE UP REVENUES APPEAL ITA NO. 7349/MU M/2014 WHICH IS AGAINST RELIEF PROVIDED TO THE ASSESSEE IN THE C ONSEQUENTIAL ORDER. PURSUANT TO DIRECTIONS U/S 263, THE QUANTUM ASSESSM ENT WAS REFRAMED BY LD. AO ON 31/12/2013 WHERE THE ASSESSEE WAS SADD LED WITH ADDITIONS OF RS.12.50 LACS U/S 69 TOWARDS HER SHARE OF UNEXPLAINED ITA NO.1710/MUM/2013 & 7349/M/2014 NEHA S.SANEY ASSESSMENT YEAR 2009-10 6 INVESTMENT AND ANOTHER ADDITION OF RS.37.50 LACS ON PROTECTIVE BASIS TO ACCOUNT FOR UNEXPLAINED INVESTMENT OF THE CO-OWNER. 6. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH SUCCESS BEFORE LD. CIT(A) VIDE ORDER DATED 12/09/2014 WHERE LD. CI T(A), AFTER CONSIDERING ASSESSEES SUBMISSIONS, ALLOWED THE APP EAL BY MAKING FOLLOWING OBSERVATIONS:- 2.26. I HAVE GONE THROUGH THE ORDER OF THE ASSESS ING OFFICER AND SUBMISSION MADE FOR THE APPELLANT AS WELL. ON APPRECIATION OF THE F ACTS OF THE CASE, IT IS SEEN THAT THE AO HAD PROVIDED AN OPPORTUNITY TO THE ASSESSEE TO C ROSS EXAMINE THE SAID SHRI KANTILAL PATEL, A PARTNER IN M/S GAYATRI HOMES. SUB SEQUENTLY IN THE COURSE OF CROSS EXAMINATION, HE RETRACTED HIS EARLIER STATEMENT WHE REIN HE STATED THAT HE HAD RECEIVED CASH AS WELL AS CHEQUE AGAINST THE SALE OF FLAT AND THE SEIZED MATERIAL REFLECTED BOTH CASH AS WELL AS CHEQUE COMPONENT. AP ART FROM THIS, IT WAS BROUGHT TO THE NOTICE OF THE AO THAT SAID SHRI KANTILAL PATEL HAD WRITTEN A LETTER WAY BACK ON 5 TH MAY, 2009 TO THE DDIT (INV) CLARIFYING THEREIN THAT HE HAD NOT RECEIVED CASH FROM ALL FLAT BUYERS. HE FURTHER CONFIRMED THE SAID STATEMEN T MADE IN THE AFORESAID LETTER ADDRESSED TO THE INVESTIGATION WING OF THE INCOME T AX DEPARTMENT AND AFFIRMED THE SAME DURING HIS CROSS EXAMINATION THAT HE INDEED RE CEIVED NO CASH FROM THE APPELLANT. THE AO MADE AN ADDITION WITHOUT MAKING F URTHER INVESTIGATION OR BRINGING ON RECORD ANY OTHER MATERIAL WHICH WOULD REBUT THE STAND TAKEN BY THE APPELLANT AND LATER ON CONFIRMED BY KANTILAL PATEL ON WHOSE STATE MENT SUCH ADDITION WAS ENVISAGED. IT MAY BE PERTINENT TO NOTE THAT PRESUMP TION UNDER SECTION 132 (4A) OF THE ACT APPLIED TO THIRD PARTY. THEREFORE, IN THE I NSTANT CASE WHEN SHRI KANTILAL PATEL HAS DENIED HAVING RECEIVED ANY CASH FROM THE APPELL ANT, ADDITION CAN NOT BE MADE IN THE HANDS OF APPELLANT WITHOUT BRINGING DOCUMENT ARY EVIDENCE OR OTHERWISE TO JUSTIFY SUCH ADDITION. IN THE PRESENT CASE, THE AO HAS MERELY RELIED UPON THE ORDER OF THE CIT UNDER SECTION 263 OF THE ACT WITHOUT BRINGI NG ON RECORD ANY MATERIAL IN SUPPORT OF SUCH ADDITION MADE. 2.27 THE APPELLANT HAS ALSO SUBMITTED BEFORE ME THA T IN THE CASE THE STAMP OFFICE VALUATION OF THE SAID SHOP IS RS.30,11,000/- AS EVI DENCED BY PURCHASE DEED. THE SAID VALUATION IS FAR LESS THAN THE TOTAL CONSIDERA TION OF RS.36,40,000/- AS PAID BY CHEQUE AND MENTIONED IN SALE DEED. THEREFORE, THE A LLEGED CASH PAYMENT OF RS.50 LAKHS WOULD MAKE THE CONSIDERATION OF THE PROPERTY AS RS.86.40 LAKHS WHICH IS MORE THAN DOUBLE OF THE STAMP OFFICE VALUATION. SUCH A C ONCLUSION IS FARFETCHED CONSIDERING THE STAMP DUTY VALUATION. HENCE, EVEN O N VALUATION FRONT THERE IS NO OCCASION WITH THE AO TO FURTHER ASSUME A PAYMENT OF RS.50 LACS IN CASH AS THAT WOULD MAKE VALUATION OF PROPERTY ABNORMALLY HIGH AN D IRRATIONAL. 2.28 THUS, THERE REMAINS ABSOLUTELY NO BASIS FOR MA KING ANY ADDITION IN THE CASE OF THE APPELLANT FOR THE ALLEGED CASH PAYMENT OF RS.50 LACS. THE AO IS DIRECTED TO DELETE THE ADDITION ACCORDINGLY. THIS GROUND OF THE APPELLANT IS ALLOWED. ITA NO.1710/MUM/2013 & 7349/M/2014 NEHA S.SANEY ASSESSMENT YEAR 2009-10 7 7. AGGRIEVED THE REVENUE IS IN FURTHER APPEAL BEFOR E US. THE LD. DR HAS CONTENDED THAT THE SEIZED MATERIAL CLEARLY REVE ALED UNEXPLAINED INVESTMENT BEING MADE BY THE ASSESSEE AND HENCE, TH E ADDITIONS WERE JUSTIFIED WHEREAS LD. AR CONTENDED THAT ADDITIONS C OULD NOT BE MADE SOLELY ON THE BASIS OF ENTRIES FOUND IN LOOSE PAPER S WHICH WERE IN POSSESSION OF THIRD PARTY. 8. WE HAVE PERUSED THE RIVAL CONTENTIONS AND PERUSE D THE RELEVANT MATERIAL ON RECORD. UPON PERUSAL OF THE SAME, WE FI ND THAT THE ADDITIONS HAVE BEEN MADE SOLELY ON THE BASIS OF ENTRIES FOUND IN LOOSE PAPERS SEIZED FROM A THIRD PARTY. NO COGENT MATERIAL HAS B EEN PLACED ON RECORD BY LD. AO TO CORROBORATE THE SAME. THE STATEMENT / MATERIAL PROCURED FROM THIRD PARTY WAS BEING USED AGAINST THE ASSESSE E AND HENCE THE ONUS WAS ON REVENUE TO CORROBORATE THE SAME PARTICU LARLY WHEN THE ASSESSEE VEHEMENTLY DENIED HAVING MADE ANY CASH PAY MENT TO THE CONCERNED PARTY, FURTHER, CONSIDERING CASH PAYMENT, THE VALUE OF THE PROPERTY FAR EXCEEDED THE STAMP DUTY VALUATION. THE REFORE, FINDING THE CONCLUSIONS OF LD. CIT(A) QUITE LOGICAL, WE DISMISS REVENUES APPEAL. 9. RESULTANTLY, BOTH THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH DECEMBER, 2017. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 08.12 .2017 SR.PS:- THIRUMALESH ITA NO.1710/MUM/2013 & 7349/M/2014 NEHA S.SANEY ASSESSMENT YEAR 2009-10 8 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. !$- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI