SUSHILA BEN G. DALAL, MUMBAI V. ITO WD 19(1)(4), MUMBAI

ITA 1864/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3624 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 19-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMACHANDRANDR
• Keywords: Income from undisclosed sources; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 142(1); 133A; 131; 148

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 1864 /MUM/2014 ( / ASSESSMENT YEAR : 2008-09) SMT. SUSHILABEN G. DALAL, 302, BLOSSOM, OPP. STANDARD CHARTERED BANK, S.V. ROAD, SANTACRUZ (W), MUMBAI 400 054. / V. THE INCOME TAX OFFICER, WARD 19(1)(4), 3 RD FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI 400 012. ./ PAN : AAAPD7752J ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY SHRI VIMAL PUNMIYA REVENUE BY : SHRI RAMACHANDRAN,DR / DATE OF HEARING : 25-2-2016 / DATE OF PRONOUNCEMENT : 13-05-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 1864/MUM/2014, IS DIRECTED AGAINST THE ORDER DATED 10-12-2013 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 30, MUMBAI (HEREINAFTER CA LLED THE CIT(A) ), FOR THE ASSESSMENT YEAR 2008-09, THE APPELLATE PROCEEDINGS BEFORE THE CIT(A) ARISING FROM THE ASSESSMENT ORDER DATED 31-01-2013 PASSED B Y THE ASSESSING OFFICER (HEREINAFTER CALLED THE AO) U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT,1961(HEREINAFTER CALLED THE ACT). ITA 1864/MUM/2014 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READS AS UNDER:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN FACT AND IN CONFIRMING AN ADDITION OF RS. 4,04,024/- BEI NG INCOME FROM UNDISCLOSED SOURCES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 2 ND SEPTEMBER, 2009 DECLARING TOTAL INCOME AT RS. 3,97 ,700/-. THEREAFTER, NOTICE U/S 148 OF THE ACT WAS ISSUED AN D SERVED UPON THE ASSESSEE ON 29 TH MARCH, 2012 , AFTER RECORDING OF REASONS FOR RE-OP ENING . IN RESPONSE TO THE SAID NOTICE THE ASSESSE STATED THAT ORIGINAL RETURN OF INCOME FILED ON 2 ND SEPTEMBER, 2009 MAY BE TREATED AS RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. 4. DURING THE COURSE OF SURVEY ACTION U/S 133A OF T HE ACT CONDUCTED BY THE REVENUE IN THE CASE OF M/S SHIVAM CORPORATION (A BU ILDER) ON 26 TH AUGUST, 2008, SHRI. DEEPAK B. SAHANI, ONE OF THE PARTNERS O F SAID FIRM M/S SHIVAM CORPORATION VIDE HIS STATEMENT ON OATH U/S 133A OF THE ACT DATED 26 TH AUGUST, 2008 HAVE OFFERED FOR TAXATION UNACCOUNTED CASH ITEMS TOTALLING RS. 1.98 CRORES. DURING THE COURSE OF ASSESSMENT PROCEE DINGS , SHRI DEEPAK B. SAHANI STATED THAT CASH TO THE TUNE OF RS. 1.58 CRO RES WAS RECEIVED FROM AS DIFFERENCE BETWEEN READY RECKONER PRICE AND THE AGR EEMENT PRICE AND THE JCIT HAVING JURISDICTION OVER THE M/S SHIVAM CORPORATION HAVE INFORMED THE A.O. THAT THE ASSESSEE IS ONE OF THE PARTY TO WHOM FLAT HAS BEEN SOLD BY THE SAID BUILDER AND THE QUANTUM OF CASH PAYMENT INVOLVED IS THE DIFFERENCE BETWEEN THE READY RECKONER PRICE OF RS. 72,04,024/- AND AGR EEMENT PRICE OF RS. 68,00,000/- WHICH COMES OUT TO RS. 4,04,024/-. THE SAID FINDINGS ARE BASED ON THE DOCUMENTARY EVIDENCES GATHERED DURING THE CO URSE OF SURVEY AS WELL AS THE ASSESSMENT PROCEEDINGS AND INQUIRY. THUS, THE ASSESSEE DURING THE ITA 1864/MUM/2014 3 ASSESSMENT YEAR 2008-09 HAS MADE CASH PAYMENT WHICH IS AN UNDISCLOSED INCOME WHICH HAS ESCAPED ASSESSMENT. IT WAS OBSERVE D BY THE A.O. THAT THE ASSESSEE HAS PURCHASED FLAT NO. 302 IN THE BUILDING KNOWN AS BLOSSOM ADMEASURING ABOUT 915 SQ. FT. FROM M/S SHIVAM CORPO RATION FOR A TOTAL CONSIDERATION OF RS. 68 LACS AND THE SAME WAS DECLA RED IN HER RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR, HOWEVER, T HE READY RECKONER PRICE OF THE SAID FLAT IS RS. 72,04,024/-. THE ASSESSEE WAS SHOW CAUSED AND NOTICE U/S 142(1) OF THE ACT WAS ISSUED AS TO WHY THE AMOUNT OF RS. 4,04,024/- SHOULD NOT BE T REATED AS UNDISCLOSED INCOME AND ADDED TO THE TOTAL INCOME OF THE ASSESSE E. THE ASSESSEE SUBMITTED THAT NO CASH PAYMENT WAS MADE TO M/S SHIV AM CORPORATION OR ITS PARTNER MR. DEEPAK SAHANI AND THE ASSESSEE HAS NO R ECOURSE TO THE STATEMENT MADE BY THE PARTNER DURING THE SURVEY U/ S 133A OF THE ACT CARRIED OUT BY THE REVENUE AGAINST SHIVAM CORPORATION. THE ASSESSEE SUBMITTED THAT THE STATEMENT OF SHRI DEEPAK SAHANI IS BASICA LLY TO DEFLECT THE RESPONSIBILITY OF CASH FOUND IN THE PREMISES OF SHI VAM CORPORATION , ON THE FLAT OWNERS WHO HAVE BOOKED THE FLAT IN THE BUILDIN G BLOSSOM. M/S SHIVAM CORPORATION HAS NOT PRODUCED ANY EVIDENCE OF HAVING RECEIVED SUCH PAYMENT IN CASH. THE ASSESSEE SUBMITTED THAT IN CASE THE D OCUMENTARY EVIDENCE IS AVAILABLE, SHE WOULD LIKE TO CROSS EXAMINE MR. DEEP AK SAHANI, PARTNER OF M/S SHIVAM CORPORATION. MR. DEEPAK SAHANI, PARTNER OF M/S SHIVAM CORPORATI ON WAS EXAMINED AND STATEMENT ON OATH U/S 131 OF THE ACT WAS RECORDED O N 23 RD JANUARY, 2013 AND CROSS EXAMINED BY SMT. SUSHILA G. DALAL. IN TH E SAID STATEMENT DATED 23-01-2013, SHRI DEEPAK SAHANI, PARTNER OF M/S SHIV AM CORPORATION CONFIRMED THAT HE HAS GIVEN STATEMENT ON OATH DURIN G SURVEY ACTION BEFORE THE INCOME TAX AUTHORITIES U/S 133A OF THE ACT. HE HAS ALSO CONFIRMED THAT DURING THE COURSE OF SURVEY U/S 133A OF THE ACT AGA INST SHIVAM CORPORATION, ITA 1864/MUM/2014 4 HE HAD DECLARED ADDITIONAL INCOME OF RS.1.98 CRORES . MR. DEEPAK SAHANI, PARTNER OF M/S SHIVAM CORPORATION CONFIRMED THAT HE HAD GIVEN A LIST OF PERSONS FROM WHOM THE MONEY WAS RECEIVED AND THE DI FFERENCE BETWEEN READY RECKONER PRICE AND DECLARED PRICE AND SMT. SUSHMA G . DALAL IS ONE OF THEM. ON BEING CROSS EXAMINED IT WAS CONFIRMED BY SH. DEE PAK SAHANI THAT WHILE STATEMENT ON OATH DURING THE COURSE OF SURVEY U/S 1 33A OF THE ACT IN THE PREMISES OF M/S SHIVAM CORPORATION AND OFFERED INCO ME OF RS. 1.98 CRORES. IT WAS STATED BY DEEPAK SAHANAI THAT THE COPY OF THE S TATEMENT DATED 26.08.2008 CAN BE OBTAINED BY THE ASSESSEE DIRECTL Y FROM INCOME TAX AUTHORITIES AS SUPPORTING PROOF. THUS , ADDITION O F RS. 4,04,024/- WAS MADE BY THE A.O. TOWARDS THE PURCHASE OF FLAT NO. 302 IN THE BUILDING BLOSSOM FOR WHICH ASSESSEE COULD NOT EXPLAIN THE SOURCES OF INC OME AND HENCE THE SAME WAS TREATED AS ASSESSEES UNDISCLOSED SOURCES AND A DDED TO THE INCOME OF THE ASSESSEE. , VIDE ASSESSMENT ORDERS DATED 31.01.201 3 PASSED BY THE AO U/S. 143(3) READ WITH SECTION 147 OF THE ACT. 5.AGGRIEVED BY THE ASSESSMENT ORDERS DATED 31.01.20 13 PASSED BY THE A.O. U/S 143(3) READ WITH SECTION 147 OF THE ACT, THE AS SESSEE FILED FIRST APPEAL WITH THE CIT(A). 6. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAS NO RECOURSE TO THE STATEMENT MADE BY MR. DEEPAK SAHANI , PARTNER OF M/S SHIVAM CORPORATION DURING THE COURSE OF SURVEY OPER ATION CARRIED ON U/S 133A OF THE ACT BY THE REVENUE AGAINST SHIVAM CORPO RATION ON 26-08-2008 AND THE STATEMENT MADE BY MR. DEEPAK SAHANI, PARTNE R OF M/S SHIVAM CORPORATION WAS BASICALLY TO DEFLECT THE RESPONSIBI LITY OF CASH FOUND IN THE PREMISES ON THE FLAT OWNERS WHO HAVE BOOKED THE FLA T. NO EVIDENCE HAS BEEN PRODUCED BY M/S SHIVAM CORPORATION OF HAVING RECEIV ED CASH FROM THE ASSESSEE. THE CIT(A) REJECTED THE CONTENTION OF TH E ASSESSEE AND HELD THAT THE A.O. MADE THE ADDITION ON THE BASIS OF DISCLOSURE M ADE BY M/S SHIVAM ITA 1864/MUM/2014 5 CORPORATION ON ACCOUNT OF UNACCOUNTED INCOME WITH R ESPECT TO THE DIFFERENCE BETWEEN READY RECKONER AND ACTUAL SALE CONSIDERATIO N. THUS, THE PARTY WHICH HAS SOLD THE FLAT NO. 302 IN THE BUILDING BLOSSOM T O THE ASSESSEE HAS CONFIRMED THE RECEIPT OF PAYMENT OF RS. 4,04,024/- FROM THE ASSESSEE AS DIFFERENCE BETWEEN READY RECKONER PRICE AND THE PUR CHASE PRICE VIDE AGREEMENT FOR SALE AND THE ASSESSEE HAS BEEN DULY C ONFRONTED WITH THE SAID EVIDENCE DURING THE ASSESSMENT PROCEEDINGS IN THE C ASE OF THE ASSESSEE WHICH HAS REMAINED UN-CONTROVERTED , THE ADDITION WAS CON FIRMED BY THE CIT(A) VIDE ORDERS DATED 10.12.2013 . 7. AGGRIEVED BY THE ORDERS DATED10.12.2013 OF THE C IT(A), THE ASSESSEE FILED SECOND APPEAL BEFORE THE TRIBUNAL. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFOR E THE TRIBUNAL THAT THE ADDITION OF RS. 4,04,024/- HAS BEEN MADE WHICH IS B ASED UPON THE SURVEY OPERATION CARRIED ON BY THE REVENUE U/S 133A OF THE ACT AT THE PREMISES OF M/S SHIVAM CORPORATION. STATEMENT ON OATH U/S 133A OF THE ACT WAS RECORDED OF MR. DEEPAK SAHANI, PARTNER OF M/S SHIVA M CORPORATION ON 26-08- 2008, WHEREBY HE OFFERED ADDITIONAL INCOME OF RS. 1.98 CRORES. THE CASH OF RS.1.58 CRORES WAS FOUND DURING THE COURSE OF SURVE Y OPERATION FROM SHIVAM CORPORATION AND BASED ON THAT MR. DEEPAK SAHANI, PA RTNER OF SHIVAM CORPORATION HAS MADE DISCLOSURES AND IMPLICATED THE FLAT BUYERS OF THE BUILDING BLOSSOM OF HAVING PAID THE CASH WHICH IS THE DIFFERENCE BETWEEN READY RECKONER AND THE PRICE VIDE AGREEMENT FOR SAL E. THE ASSESSEE IS ONE OF THE FLAT BUYERS WHO HAS BEEN IMPLICATED BY MR. DEEP AK SAHANI, PARTNER OF M/S SHIVAM CORPORATION OF HAVING PAID RS. 4,04,024/ - BEING DIFFERENCE BETWEEN THE READY RECKONER PRICE OF RS. 72,04,024 A ND THE AGREEMENT PRICE OF RS. 68 LACS. THE LD. COUNSEL SUBMITTED THAT THE AS SESSEE IS A OLD LADY OF 82 YEARS HAVING PURCHASED THE FLAT NO. 302 IN THE BUIL DING BLOSSOM FOR RS. 68 LACS WHICH WAS PAID BY THROUGH BANKING CHANNEL AND NO CASH HAS BEEN PAID. ITA 1864/MUM/2014 6 IT IS ONLY TO DEFLECT THE ATTENTION OF THE REVENUE THAT DURING THE COURSE OF SURVEY OPERATION U/S 133A OF THE ACT, THE BUILDER I MPLICATED THE FLAT BUYERS OF THE BUILDING OF HAVING PAID THE CASH. THE LD. COUN SEL SUBMITTED THAT NO EVIDENCE HAS BEEN BROUGHT ON RECORD TO SUBSTANTIATE THE SAME. COPY OF STATEMENT DATED 26.08.2008 OF THE SAID MR DEEPAK SA HANI , PARTNER OF SHIVAM CORPORATION HAS NOT BEEN PROVIDED. THE LD. COUNSEL SUBMITTED THAT THE STATEMENT RECORDED U/S 133A OF THE ACT OF MR DE EPAK SAHANI IS NOT BINDING ON THE ASSESSEE. NO OTHER EVIDENCE WAS AVA ILABLE WITH THE REVENUE TO IMPLICATE THE ASSESSEE. THE LD. COUNSEL RELIED UPO N THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V. S. KHADER KHAN SON [2012] 25 TAXMANN.COM 413 (SC). 9. THE LD. D.R. SUBMITTED THAT THE SURVEY ACTION U/ S 133A OF THE ACT WAS CONDUCTED ON THE BUILDING PREMISES OF M/S SHIVAM C ORPORATION WHEREBY PARTNER OF M/S SHIVAM CORPORATION HAS GIVEN THE STA TEMENT ON OATH U/S. 133A OF THE ACT THAT MONEY IS RECEIVED FROM THE FLA T BUYERS IN CASH AND IT WAS SUBSTANTIATED BY THE CASH FOUND DURING THE COURSE O F SURVEY OPERATIONS ON 26.08.2008 AND HENCE ADDITION WAS RIGHTLY MADE BY T HE A.O. THE LD. DR RELIED UPON THE ORDERS OF AUTHORITIES BELOW. 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE CASE LAWS RELIED UPON B Y THE RIVAL PARTIES. WE HAVE OBSERVED THAT THE SURVEY ACTION WAS CONDUCTED BY THE REVENUE U/S 133A OF THE ACT ON 26 TH SEPTEMBER 2008 IN THE PREMISES OF M/S SHIVAM CORPORATION WHEREBY STATEMENT ON OATH OF THE PARTNE R, MR DEEPAK SAHANI WAS RECORDED U/S 133A OF THE ACT. CASH OF RS. 1.58 CRORES WAS FOUND DURING THE COURSE OF SAID SURVEY OPERATIONS FROM THE PREMI SES OF M/S SHIVAM CORPORATION. MR. DEEPAK SAHANI, PARTNER OF M/S SHI VAM CORPORATION HAS GIVEN THE STATEMENT WHEREBY HE STATED THAT RS. 1.58 CRORES OF CASH WHICH WAS FOUND WAS RECEIVED BY SHIVAM CORPORATION WITH RESPE CT TO THE ON-MONEY ITA 1864/MUM/2014 7 RECEIVED FROM THE FLAT BUYERS ON ACCOUNT OF DIFFERE NCE BETWEEN READY RECKONER PRICE AND AGREEMENT VALUE. WE HAVE OBSERVED THAT T HE REVENUE HAS RELIED UPON THE STATEMENT ON OATH RECORDED U/S 133A OF THE ACT OF THE PARTNER OF SHIVAM CORPORATION, MR. DEEPAK SAHANI ON 26 TH AUGUST, 2008 AND NO OTHER DOCUMENTARY EVIDENCES HAS BEEN BROUGHT ON RECORD TO SUBSTANTIATE THAT THE ASSESSEE HAD PAID CASH OF RS.4,04,024/- AS ON MONEY BEING DIFFERENCE BETWEEN THE READY RECKONER RATE OF RS.72,04,024/- A ND THE PURCHASE PRICE VIDE AGREEMENT FOR SALE OF RS.68,00,000/--. COPY O F STATEMENT ON OATH RECORDED OF MR DEEPAK SAHANI ON 26.08.2008 U/S 133A OF THE ACT HAS NOT BEEN PROVIDED TO THE ASSESSEE AND THE PRINCIPLES OF NATURAL JUSTICE HAS BEEN CLEARLY BREACHED/VIOLATED. IN OUR CONSIDERED VIEW , THE ASSESSEE IS DULY ENTITLED TO GET THE COPY OF THE STATEMENT ON OATH R ECORDED U/S 133A OF THE ACT BY THE REVENUE ON 26.08.2008 OF MR DEEPAK SAHANI, P ARTNER OF SHIVAM CORPORATION TO DEFEND HERSELF. THE A.O. IS DIRECTE D TO GIVE THE COPY OF THE AFORE-STATED STATEMENT ON OATH U/S 133A OF THE ACT DATED 26.08.2008 OF MR. DEEPAK SAHANI , PARTNER OF SHIVAM CORPORATION WHICH WAS RECORDED DURING THE COURSE OF SURVEY OPERATIONS U/S 133A OF THE ACT CONDUCTED BY THE REVENUE ON 26.08.2008 AGAINST M/S SHIVAM CORPORATIO N, TO THE ASSESSEE AND THE ASSESSEE IS ALLOWED TO TAKE ALL THE LEGAL RECOU RSES IN HER DEFENSE AS PROVIDED UNDER THE LAW. HENCE , THE MATTER IS SET A SIDE TO THE FILE OF A.O. FOR DE-NOVO DETERMINATION OF THE MATTER AND THE AO IS DIRECTED TO ACCORDINGLY FRAME FRESH ASSESSMENT ORDER ON MERITS AFTER COMPLY ING WITH OUR DIRECTIONS AS SET OUT ABOVE, IN ACCORDANCE WITH LAW. THE A.O. IS DIRECTED TO PROVIDE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE AND IN ACCORDANCE WIT H LAW. THE ASSESSEE IS ALSO DIRECTED TO CO-OPERATE WITH THE REVENUE IN CONNECTI ON WITH THE SET ASIDE DE- NOVO PROCEEDINGS AS SET OUT ABOVE IN ACCORDANCE WIT H LAW FOR DETERMINATION OF THE ISSUE. WE ORDER ACCORDINGLY. ITA 1864/MUM/2014 8 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA N0. 1864/MUM/2014 FOR THE ASSESSMENT YEAR 2008-09 IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH MAY , 2016. # $% &' 13-05-2016 ( ) SD/- SD/- (SAKTIJIT DEY) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 13-05-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI E BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI