M/s. Enn Enn Enteprises, Mumbai V. The Income tax Officer,Vapi Ward-1, Vapi

ITA 172/AHD/2009

• Counselvise Citation: 17220514 RSA 2009
• Duration Of Justice: 6 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 23-07-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 19-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J P SHAH
• Keywords: Deemed to accrue or arise in india; Question of law; Retraction
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER AND SHRI S.S. GODARA JUDICIAL MEMBER ITA NO . 1 72 / AHD/ 20 09 A. Y .20 0 5 - 0 6 M/S. ENN ENN ENTERPRISES, C/O DESCON GROUP 8 - A, LAXMI INDUSTRIAL ESTATE, NEW L INK ROAD, ANDHERI, (W) MUMBAI 400 053 PAN: AABFE 8020 D VS ITO, WARD - 1, VAPI, GUJARAT. (APPELLANT) (RESPONDENT) REVENUE BY : S HRI KAMLESH MAKWANA, SR. D.R. , ASSESSEE(S) BY : SHRI J.P. SHAH , A.R. / DATE OF HEARING : 23 / 0 7 /201 5 / DATE OF PRONOUNCEMENT: 28 / 0 8 /201 5 / O R D E R PER S.S. GODARA , JUDICIAL MEMBER THIS ASSESSEE S APPEAL FOR A.Y .200 5 - 0 6 , ARISE S FROM ORDE R OF THE CIT(A), VALSAD , DATED 28.08.2008 PASSED I N CASE NO . CIT(A)/VLS/452/07 - 08 , CONFIRMING ADDITIONS OF UNACCOUNT ED FORM OF LAND DEVELOPMENT EXPENSES AND EXCESS CASH OF RS. 20 ITA NO. 172 /AHD/ 2009 ENN ENN ENTERPRISES. FOR A.Y. 200 5 - 0 6 - 2 - LACS AND RS. 6.23 LACS; RESPECTIVELY , IN PROCEEDINGS UNDER SECTION 143(3 ) OF TH E INCOME TAX ACT , 1961 , IN SHORT THE ACT . 2. THE ASSESSEE FIRM IS IN LAND DEVELOPMENT BUSINESS. THE DEPARTMENT CONDUCTED A SURVEY IN ITS GROUP CASE ON 9.3.2005. ITS PARTNER SHRI NITIN V. KOPIKAR GOT RECORDED HI S STATEMENT ALLEGEDLY ADMITTING ADDITIONAL INCOME S IN THE SHAPE OF UNACCOUNTED LAND DEVELOPMENT EXPENSES OF RS. 20 LACS AND EXCESS CASH FOUND IN THE COURSE OF SURVEY TO THE TUNE OF RS.6.23 LACS. THE ASSESSEE FILED ITS RETURN ON 31.12.2005 DECLARING TOTAL INCOME OF RS.1,06,094/ - ONLY. THE ASSESSING O FFICER TOOK UP SCRUTINY. HE SOUGHT FOR THE REASONS OF NON DISCLOSURE OF THE ABOVESTATED AMOUNT TOTALING TO RS.26.23 LACS AS INCOME WITH THE RETURN. 3. THE ASSESSEE FILED REPLY. IT REFERRED TO ITS PARTNER S STATEMENT AND TERMED THE SAME TO HAVE BEEN MADE UNDER DURESS RETRACTED LATER ON BY AN AFFIDAVIT SOLEMNLY AFFIRMED ON 19.12.2007. IT STATED THAT THE EARLIER STATEMENT RECORDED DID NOT CARRY ANY EVIDENTIARY VALUE. THE ASSESSEE FURTHER SUBMITTED THAT ALL ITS LAND DEVELOPMENT TRANSACTIONS WERE AS PER MARKET VALUE AND DULY REGISTERED WHEREIN THERE WAS NO SUCH EXPENDITURE INCURRED OF RS.20 LACS. IT EXPLAINED THAT THE EXCESS CASH FOUND OF RS.6.23 LACS WAS LESS THAN THAT OF RS.6,44,838/ - AS PER ITS ITA NO. 172 /AHD/ 2009 ENN ENN ENTERPRISES. FOR A.Y. 200 5 - 0 6 - 3 - RELEVANT CASH BOOK. THE ASSESSING OFFICER IN ASSESSMENT ORDER DA TED 28.12.2007 DID NOT AGREE. HE OBSERVED THAT ASSESSEE S PARTNER HAD ADMITTED THE ABOVESTATED LAND DEVELOPMENT EXPENSES OF RS.20 LACS AS PER THE LOOSE SHEETS FOUND IN THE COURSE OF SURVEY. AND ALSO THAT ITS CHARTERED ACCOUNTANT IN MUMBAI HAD CLARIFIED CAS H BALANCE TO BE ONLY RS.13,500/ - I.E. MUCH LESS THAN THAT OF RS.6.23 LACS (SUPRA). HE PLACE D HEAVY RELIANCE ON THE ASSESSEE S PARTNER S STATEMENT ADMITTING THE ABOVESTATED UNACCOUNTED LAND DEVELOPMENT AND EXCESS CASH NOT RECORDED IN THE BOOKS OF ACCOUNTS A ND TREATED THE SAME TO BE A SOLID PROOF WHICH COULD NOT BRUSHED ASIDE BECAUSE OF THE RETRACTION MADE AFTER ABOUT A PERIOD OF TWO YEARS. THIS RESULTED IN THE IMPUGNED ADDITIONS TOTALING TO RS.26.23 LACS BEING MADE IN ASSES SMENT ORDER. THE CIT(A) HAS AFFIRME D THE ASSESSING OFFICER S FINDINGS AS UNDER: - 6.2 REGARDING THE ISSUE OF THE UNDISCLOSED INCOME OF RS. 26,23,0007 - THE PARTNER OF THE ASSESSEE MR. NITIN V. KOPIKAR HAS HIMSELF STATED ON OATH DURING THE COURSE OF SURVEY IN HIS STATEMENT RECORDED HAD DECLA RED UNACCOUNTED DEVELOPMENT EXPENSES AND EXCESS CASH AGGREGATING TO RS; 26,23,000/ - AS UNDISCLOSED INCOM E. SINCE THE DECLARATION WAS MADE BY THE PARTNER OF THE APPELLANT FIRM VOLUNTARILY AN D WITH APPLICATION OF HIS MIND AFTER HAVING LOOKED AT THE NOTINGS O N THE LOOSE LEAFS AND THE DECLARATION UNDER A SPECIFIC HEAD DEVELOPMENT EXPENSES WAS MADE AND THAT ANY RETRACTION AFTER 21 MONTHS FROM WHAT HAS BEEN STATED ON OATH IS AN AFTERTHOUGHT AND SAME IS NOT JUSTIFIED. SECONDLY, IT HAS NOT BEEN ESTABLISHED BY TH E ASSESSEE THAT THE STATEMENT WAS RECORDED UNDER DURESS AT THE TIME OF SURVEY. AFTER CONSIDERING THESE FACTS, IT IS ESTABLISHED THAT THE APPELLANT HAD IN FACT EXPENDED RS. 20.00 LAKHS FOR LAND DEVELOPMENT OUTSIDE THE BOOKS ON HIS OWN LAND AND THEREFORE, TH E AO WAS JUSTIFIED IN MAKING THE ADDITION OF RS. 20.00 LAKHS ON THIS ACCOUNT. SIMILARLY, THE ADDITION O N ACCOUNT OF EXCESS CASH FOUND AMOUNTING TO RS.6,23,000/ - IS ALSO JUSTIFIED AS THE PARTNER OF THE APPELLANT, HIMSELF AS ACCEPTED THE SAME ON OATH. THUS, THE ADDITION OF RS. 26,23,000/ - I S TREATED AS DEEMED INCOME U/S 6 9 OF THE I.T. ACT AND THE SAME IS C ONFIRMED. ITA NO. 172 /AHD/ 2009 ENN ENN ENTERPRISES. FOR A.Y. 200 5 - 0 6 - 4 - 4. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE CASE FILE. THE ASSESSEE ARGUES THAT THE AUTHORITIES BELOW HAVE MADE THE IMPUGNED ADDITIO N S AGGREGATING TO RS.26.23 LACS IN THE SHAPE OF UNACCOUNTED DEVELOPMENT EXPENSES AND EXCESS CASH SOLELY ON THE BASIS OF ITS PARTNER S STATEMENT WITHOUT THERE BEING ANY CORROBORATIVE EVIDENCE. CASE LAW OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GOLDEN FINANCE (2013) 40 TAXMANN.COM 329 (GUJ.) IS QUOTED IN SUPPORT. THE REVENUE STRONGLY SUPPORTS THE CIT(A) ORDER UNDER CHALLENGE AFFIRMING BOTH THE ADDITIONS IN QUESTION. IT PRODUCES COPY OF THE TRIBUNAL S ORDER IN ITA 3250/AHD/2008 M/S. NAROLI DE VELOPERS VS. ITO DECIDED ON 30 - 12 - 2006 IN ASSESSEE S GROUP CONCERN S CASE PERTAINING TO THE VERY SURVEY AND RETRACTION OF THE SAME PARTNER SHRI KOPIKAR. THE ASSE SSEE SEE KS TO DISTINGUISH FACTS OF THE INSTANT APPEAL VIS - - VIS THOSE I NVOLVED IN CASE OF M/S. NAROLI INVESTMENTS . IT CLARIFIES THAT THE HON BLE JURISDICTIONAL HIGH COURT HAS ALREADY ADMITTED ITS APPEAL ON 11 - 02 - 2014 AFTER FRAMING SUBSTANTIAL QUESTION OF LAW. 5. WE HAVE HEAR D BOTH SIDES AND PERUSED THE CASE FILE. RELEVANT FACTS ALREADY NARRAT ED IN PRECEDING PARAGRAPHS ARE NOT REPEATED FOR THE SAKE OF BREVITY. BOTH THE AUTHORITIES BELOW ITA NO. 172 /AHD/ 2009 ENN ENN ENTERPRISES. FOR A.Y. 200 5 - 0 6 - 5 - HAVE STRONGLY RELIED UPON SURVEY STATEMENT OF ASSE S SEE S PARTNER SHRI NITIN KOPIKAR WHILST MAKING THE IMPUGNED ADDITION S TOTALING TO RS. 26.23 LACS. THERE IS NO SUPPORTIVE MATERIAL QUOTED EITHER IN THE COURSE OF ASSESSMENT OR IN LOWER APPELLATE ORDER. THE LATTER ORDER RUNS INTO 19 TH FULL FLEDGED PAGES OUT O F WHICH PAGES 5 TO 19 HIGHLIGHT LACKS OF EVIDENCE, ANY INCRIMINATING MATERIAL, SURVEY STA TE MEN T BEING OBT AINED IN COERCION ETC. THE CIT(A) BRUSHES ALL OF THEM ASIDE BY A SINGLE STROKE WITHOUT ADVERTING TO THE SAME. WE OPINE IN THIS FACTUAL BACKDROP THAT T HE LOWER APPELLANT ORDER IS NOT A DETAILED AND SPEAKING ONE WITH REASONS THEREOF . COMING TO THE REVENUE S SUBMISSION S PLACING A STRONG RELIANCE UPON THE TRIBUNAL S DECISION IN THE CONNECTED GROUP CASE, WE NOTICE THAT THE SAID ASSESSEE HAD FAILE D TO PRODUCE THE ORIGINAL RETRACTION AFFIDAV IT (SUPRA) THEREIN WHICH LED AN ADVERSE INFERENCE. THE INSTANT APPEAL D OE S NOT RAISE ANY SUCH ISSUE . WE FEEL IN THE S E PECULIAR CIRCUMSTANCES THAT ONCE THE CIT(A) HAS NOT TAKEN INTO ACCOUNT ALL OF THE ASSESSEE S ARGUMENT IN AFFIRMING THE ASSESSING OFFICER S ACTION MAKING THE IMPUGNED ADDITIONS , THE MATTER DESERVES ANOTHER INN INGS IN LOWER APPELLANT PROCEEDINGS . WE ORDER ACCORDINGLY. THE LD. CIT(A) SHALL PASS A DETAILED SPEAKING ORDER. HE SHALL BE AT LIBERTY TO TAKE INTO THE CO - ORDINATE BENCH S DECISION AS PER LAW AFTER GRANTING A DEQUATE ITA NO. 172 /AHD/ 2009 ENN ENN ENTERPRISES. FOR A.Y. 200 5 - 0 6 - 6 - OPPORTUNITY OF HEARING. THE ASSESSEE IS DIRECTED TO CO - OPERATE. THIS ASSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON THIS DAY, THE 28 TH AUGUST , 201 5 AT AHMEDABAD . SD/ - SD/ - ( PRAMOD KUMAR ) ( S.S. GODARA ) A CCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 28 / 0 8 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPEL LANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD