VILAS SHANKAR DALVI, NAVI MUMBAI V. ITO 22(3)(2), NAVI MUMBAI

ITA 1807/MUM/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3517 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2001-2002
• Appeal Filed On: 06-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Retraction

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R. K. GUPTA , JM ITA NO. 1807 / MUM/ 20 1 3 ( ASSESSMENT Y EAR : 200 1 - 20 0 2 ) SHRI VILAS SHANKAR DALVI , C - 5/13/03, SECTOR - 4, CBD BELAPUR, NAVI MUMBAI - 400 614 VS. ITO 2 2 ( 3 )( 2 ), MUMBAI PAN/GIR NO. : A INPD 2381 G ( APPELLANT ) .. ( RESPONDENT ) /ASSE SSEE BY : SHRI JITENDRA SINGH /REVENUE BY : SHRI ARUN KUMAR DATE OF HEARING : 2 2 ND MAY , 201 3 DATE OF PRONOUNCEMENT : 12 TH JUNE , 2013 O R D E R TH IS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 7 - 12 - 2012 OF CIT(A) - 19 , MUMBAI RELA TING TO THE ASSESSMENT YEAR 200 1 - 200 2 . 2 . BY THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE REOPENING OF THE ASSESSMENT AS WELL AS ADDITION OF RS. 4 LAKHS, MADE BY THE AO F ROM UNDISCLOSED SOURCES, WHICH IS CONFIRMED BY THE CIT(A). 3 . THE GROUND FOR REOPENING OF THE ASSESSMENT WAS NOT PRESSED, THEREFORE, IT IS DISMISSED AS NOT PRESSED. 4 . REMAINING ISSUE IS IN REGARD TO CONFIRMING THE ADDITION OF RS. 4,00,000/ - . ITA NO. 1807 /20 1 3 2 5 . FACTS I N BRIEF ARE THAT THE ASSESSEE TOOK ADMISSION FOR HIS SON MR. GAURAV DALVI IN RAMRAO ADIK INSTITUTE OF TECHNOLOGY. THE AO GOT CERTAIN INFORMATION THAT THE ASSESSEE HAS PAID DONATION OF RS. 4 LAKHS TO THE AFORESAID INSTITUTE FROM DIT (INV.), MUMBAI , THEREFORE , THE REOPENING OF THE PROCEEDING WAS STARTED. THEREAFTER DURING THE ASSESSMENT PROCEEDING, THE ASSESSEE REQUIRED TO EXPLAIN AS TO WHY AN AMOUNT OF RS. 4 LAKH SHOULD NOT BE ADDED IN HIS INCOME. THE ASSESSEE DENIED THE SAID INFORMATION AND SAID THAT HE WAS N O WAY CONNECTED. IT WAS ALSO STATED THAT THE ASSESSEE HAS ONLY INCOME OF RS. 55,297/ - FROM SALARY. IN VIEW OF THE AO, THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE IN HIS MEAGER SALARY OF RS. 55,297/ - AND HOW HE WAS ABLE TO PAY RS. 40,000/ - AND MADE OTHER EXPENS ES FOR HIS SON. ACCORDINGLY, HE MADE AN ADDITION OF RS. 4,00,000/ - AS UNDISCLOSED INCOME INVESTMENT IN THE HANDS OF THE ASSESSEE. WHILE MAKING THE ADDITION, THE AO IN PARA 7 OF HIS ORDER HAS OBSERVED THAT RAMARAO ADIK EDUCATION SOCIETY VIDE ITS LETTER DATE D 6 - 12 - 2008 HAVE DENIED ANY RECEIPT OF DONATION FROM MR. VILAS SHANKAR DALVI OR MR. GAURAV V. DALVI AND STATED THAT IT HAS NOT SUBMITTED LIST GIVING NAMES OF STUDENTS FROM WHOM DONATION/CAPITATION FEES WERE RECEIVED. THIS IS NOT BELIEVABLE. IT IS ACCEPTABL E. IF IT IS ACCEPTABLE QUESTION WILL ARISE FROM WHERE DY.CIT, CENTRAL CIRCLE - 2, MUMBAI GOT THIS LIST. WHETHER HE CREATED IT ? WHAT IS THE BENEFIT IN CREATING SUCH LIST ? THEREFORE, DENIAL OF TRUST IS NOTHING BUT RETRACTION FROM THE FACTS. ACCORDINGLY, HE MADE AN ADDITION OF RS. 4 LAKHS. 6 . ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) . DETAILED SUBMISSIONS WERE FILED BEFORE THE CIT(A), WHICH ARE INCORPORATED IN PARA 5.2 OF HIS ORDER. THEREAFTER THE LEARNED CIT(A) CONSIDERING THE SUBMISSION AND ITA NO. 1807 /20 1 3 3 TAKING INTO C ONSIDERATION THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF HARSH WIN CHADHA VS. DDIT , CONFIRMED THE ACTION OF THE AO IN MAKING ADDITION OF RS.4 LAKHS. 7 . NOW, THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 8 . THE CONTENTION RAISED BEFORE THE AUTHORITIES BELOW WERE REITERATED BY THE LEARNED AR HERE BEFORE THE TRIBUNAL. IT WAS SUBMITTED THAT NEITHER THE ASSESSEE WAS CONFRONTED WITH THE MATERIAL OR THE LIST ON WHICH BASIS THE AO MADE ANY ADDITION EVEN THE SOCIETY HAS DENIED HAVING RECE IVED ANY DONATION/CAPITAL FEES FROM THE ASSESSEE. THEREFORE, THERE WAS NO JURISDICTION IN MAKING THE ADDITION IN THE HANDS OF THE ASSESSEE. FURTHER RELIANCE WAS PLACED ON THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MR. BA BANRAO V. MANDE, DE CIDED IN ITA NO. 3441/M/2009, VIDE ORDER DATED 20 - 8 - 2010 , COPY OF WHICH WAS ALSO FILED. 9 . ON THE OTHER HAND, LEARNED DR PLACED RELIANCE ON THE ORDER OF AO AND CIT(A) . IT WAS FURTHER STATED THAT THE LIST WAS PROVIDED BY THE SOCIETY AND THEREAFTER WAS REJ ECTED WITHOUT ANY BASIS , THEREFORE, THE ORDER OF THE AO AND CIT(A) IS LIABLE TO BE CONFIRMED. 10 . AFTER CONSIDERING THE ORDER OF AO AND CIT(A) AND THE ORDER OF THE TRIBUNAL IN THE CASE OF MR. BABANRAO V. MANDE (SUPRA), I FOUND THAT THE ASSESSEE DESERVES T O SUCCEED IN ITS APPEAL. FIRSTLY, NO EVIDENCE WAS FOUND FROM THE ASSESSEE THAT THE ASSESSEE HAS PAID RS. 4 LAKHS TO THE INSTITUTE FOR THE ADMISSION OF HIS SON. SECONDLY, THE LIST IN WHICH THE NAME OF THE ASSESSEES SON WAS APPEARING WAS NOT PROVIDED TO THE ASSESSEE WITHOUT CONSIDERING THE SAME OR EXPLAINING THE SAME. IT IS ALSO NOT KNOWN ITA NO. 1807 /20 1 3 4 WHO PREPARED THE LIST. ENQUIRY WAS MADE BY THE AO FROM THE SOCIETY DIRECTLY AND THE SOCIETY HAS CATEGORICALLY DENIED VIDE ITS LETTER DATED 6 - 12 - 2008 THAT NO AMOUNT WAS RECE IVED FROM THE ASSESSEE AND THEY HAVE ALSO DENIED IN PROVIDING ANY LIST TO THE DEPARTMENT. THIS FACT HAS BEEN MENTIONED BY THE AO IN PARA 7 OF HIS ORDER, WHICH IS REPRODUCED SOMEWHERE ABOVE IN THE ORDER ALSO. FROM THESE FACTS, IT IS SEEN THAT THE ADDITION M ADE AND CONFIRMED BY THE CIT(A), WHICH IS MADE ON PRESUMPTION BASIS AND WITHOUT ANY EVIDENCE ON RECORD. THE LIST IS PREPARED BY A THIRD PARTY, WHICH WAS NEITHER CONFRONTED TO THE ASSESSEE NOR IT WAS BROUGHT TO THE ASSESSEE THAT WHO PREPARED THE LIST AND FO R WHAT MOTIVE THE LIST WAS PREPARED. IT MAY BE QUITE POSSIBLE THAT THE PARTY WHICH PREPARED THE LIST MAY HAVE PREPARED THE LIST FOR HIS OWN BENEFIT OR THE REASONS KNOWN TO HIM. HOWEVER, IN THE CASE OF THE ASSESSEE, ADVERSE INFERENCE DRAWN BY THE AO IS NOT CORRECT AND, THEREFORE, THE SAME IS NOT SUSTAINABLE IN THE EYES OF LAW. 11 . SIMILAR ISSUE CAME UP IN THE CASE OF MR. BABANRAO V. MANDE (SUPRA) AND THE TRIBUNAL AFTER APPRECIATING ALL THE FACTS HAS HELD THAT THERE IS NO EVIDENCE TO LINK THE ASSESSEE OR HIS DAUGHTER WITH THE ENTRIES FOUND IN THE DIARY. AS RIGHTLY CONTENDED BY THE ASSESSEE, MR. SHASHIKANT MANDAVKAR RECORDED ENTRIES IN THE DIARY BASED ON THE INSTRUCTION OF HIS SUPERIORS. THOSE SUPERIORS WERE NOT EXAMINED BY ANYBODY. FURTHER MR. SHASHIKANT M ANDAVKAR DID NOT KNOW THE ASSESSEE. MR. SHASHIKANT MANDAVKAR CLAIMED THAT THE MONIES WERE CAPITATION FEES PAID IN CASH TO THE TRUSTEE. THE ASSESSEE DENIES IN ACQUAINTANCE WITH THE TRUSTEE. THUS, ITA NO. 1807 /20 1 3 5 ADDITION HAS BEEN MADE PURELY ON THE BASIS OF ENTRY MADE IN T HE DIARY OF THE THIRD PARTY, CONTENTS OF WHICH HAVE NOT BEEN ESTABLISHED TO BE ON THE BASIS OF TRUE FACTS. BY OBSERVING THE ABOVE OBSERVATIONS, THE TRIBUNAL HELD THAT THE ADDITION MADE BY THE AO ON ASSUMPTION AND PRESUMPTION WITHOUT ANY ACCEPTABLE EVIDENC E. THEREFOR E, THE CIT(A ) WAS CORRECT IN DELETING THE ADDITION. SIMILAR FACTS ARE INVOLVED IN THE PRESENT CASE ALSO. THEREFORE, IN VIEW OF THE DECISION OF THE TRIBUNAL AND IN VIEW OF THE MY ABOVE DISCUSSION, I HOLD THAT THE AO WAS NOT JUSTIFIED IN MAKING T HE ADDITION IN THE HANDS OF THE ASSESSEE AS THEY WERE NOT ACCEPTABLE EVIDENCE ON RECORD. THE ADDITION SUSTAINED BY THE CIT(A) IS ALSO NOT JUSTIFIED. ACCORDINGLY, I DELETE THE ADDITION. 12 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF JUNE 2013 201 3 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI; DATED : 12/06 /2013 /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI