Sri. Murugesh Nirani (Indl), Bangalore V. The Asst. Comm. Of Income-Tax. Central Circle, Panaji

ITA 191/PAN/2014

• Counselvise Citation: 19124114 RSA 2014
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-03-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 13-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJUNATH I PUJAR
• Assessee Lawyers: ASHOK A KULKARNI
• Keywords: Unexplained investment
• Section: 153A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 191 /PNJ/201 4 (ASST. YEAR : 200 4 - 0 5 ) SRI MURUGESH R NIRANI , A - 916 , BASAVA NAGAR, MUDHOL, BAGALKOT . VS. A CIT, CENTRAL CIRCLE, PANAJI. PAN NO. AALPN 3890 L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHOK A. KULKARNI. DEPARTMENT BY : SHRI MANJUNATH I. PUJAR D . R . DATE OF HEARING : 16 / 0 3 /2015 . DATE OF PRONOUNCEMENT : 24 / 0 3 /201 5 . O R D E R PER D.T. GARASIA , J .M THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (A) - VI , BANGALORE DATED 2 8 /0 3 /201 4 FOR THE A.Y. 200 4 - 0 5 . 2. THE ASSESSEE HAS RAISED AS MANY AS 05 GROUNDS AND GROUNDS NO. 1 TO 3 ARE NOT PRESSED , SO THESE GROUNDS ARE DISMISSED AS NOT PRESSED. GROUNDS NO. 4 & 5 READS AS UNDER: - 2 4 . THE LEARNED COMMISSIONER OUGHT TO HAVE APPRECIATED THAT AS EVIDENCED BY THE ABOVE REMAND REPORT THE PAYMENTS FOR THE PURCHASE OF THE CEMENT FACTORY BY M/S. NIRANI CEMENTS PVT. LTD. FROM KSIDC WAS MADE IN A SUM OF RS. 75,00,000/ - FROM OUT OF DEMAND DRAFT PURCHASED FROM A BANK THROUGH THE ACCOUNT OF SHRI SANAGAMESH NIRANI WITH BASAVESHWAR SAHAKARI BANK, MUDHOL. 5 . THERE WAS NO GROUND WHATSOEVER TO TAX THE SAID SUM OF RS. 75,00,000/ - OR ANY PART OF IT IN THE HANDS OF THE APPELLANT AS UNEXPLAINED INVESTMENT. 3. SHORT FACTS OF THE CASE ARE THAT A SEARCH WAS CONDUCTED IN THE GROUP OF M/S. NIRANI SUGAL MILLS LTD. , IN WHICH ASSESSEE IS THE CHAIRMAN . DURING THE COURSE OF SEARCH, IT IS ADMITTED THAT RS. 75 LAC PAYMENT WAS MADE FOR ACQUIRING VISUPUJYA CEMENT . THE ASSESSEE HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE REGARDING THE SOURCE OF INVESTMENT OF PURCHASE OF THE SAID COMPANY. THE ASSESSING OFFICER TREATED THE SAME AS UNEXPLAINED INVESTMENT AND ADDED THE SAME TO HIS INCOME. 4 . THE MATTER WAS CARRIED TO THE LD. CIT(A) AND THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. NOW ASSESSEE IS IN APPEAL. 5. LEARNED AR REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW WHILE LEARNED DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 6. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIN D THAT ASSESSEE HAS 3 ADDUCED THE EVIDENCE BEFORE THE LD. CIT(A) THAT HE HAS TAKEN THIS AMOUNT BY DD ON BASAVESHWAR COOPERATIVE BANK LTD. IN FAVOUR OF THE CEMENT COMPANY FOR PURCHASING IT . DURING THE REMAND PROCEEDINGS, THE ASSESSEE HAS EXPLAINED THE SOURCE OF THIS INVESTMENT BEFORE ASSESSING OFFICER , W E REPRODUCE THE SAME HEREINUNDER: - ON THE BASIS OF SEIZED MATERIAL MARKED AS A/MRN, THE INVESTMENT MADE IN PURCHASE OF DD IS WORKED OUT T O RS. 74 LAKH. AS PER ASSESSEES EXPLANATION LAND BUILDING AND MACHINERIES WERE BOUGHT IN AUCTION ORGANIZED BY KSIDC FOR RS. 75 LAKHS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ALSO DURING THE SEARCH AND POST SEARCH PROCEEDINGS NO COMPLETE DETAILS ARE FURNISHED AND THEREFORE, ADDITION OF RS. 75 LAKH WAS MADE. IN THE SUBMISSIONS MADE BEFORE THE HONBLE LD. CIT(A) ASSESSEE HAS STATED THAT MR. SANGAMESH NIRANI HAD SAVINGS BANK ACCOUNT WITH BASVESHWAR SAHKARI BANK MUDHOL AND PAYMENTS WERE MADE FROM THE SAID BANK ACCOUNTS . MONEY WAS COLLECTED FOR THE PURPOSE OF ISSUE OF SHARES AND SINCE THE COMPANY M/S. NIRANI CEMENTS LTD. WAS IN THE FORMATION STAGE, THE MAT COLLECTED WAS DEPOSI TED IN SANGAMESH NIRANIS ACCOUNT. ASSESSEE HAS FURNISHED THE ACCOUNT EXTRACT OF SHRI SANGAMESH NIRANI, ACCORDING TO WHICH CASH WAS DEPOSITED FROM TIME TO TIME IN LAKHS AND THE SAME IS WITHDRAWN ON 09/05/2003 AND 10/05/2003. THE ASSESSEE HAS ALSO FILED C OPY OF IT RETUNR FOR AY 2005 - 06 IN THE CASE OF NIRANI CEMENTS PVT LTD. AND DETAILS OF SHARE CAPITAL AND UNSECURED LOANS WHICH WORKS OUT TO RS. 75 LAKHS. THE RETURN OF INCOME IS FILED ON 31/03/2006 , THE VERIFICATION OF THE RETURN IS DONE BY SHRI MURGESH NI RANI ON 28/02/2006. THE ASSESSMENT U/S. 153A WAS CONCLUDED ON 21/03/2006 , IN THAT CASE IT IS NOT KNOW WHY THE RELEVANT DETAILS READILY AVAILABLE WITH THE ASSESSEE, COULD NOT BE PLACED BEFORE THE AO. THEREFORE, THE AOS ACTION IN TREATING THE UNEXPLAINED I NVESTMENT OF RS. 75 LAKH IN THE HANDS OF THE ASSESSEE IN THE ABSENCE OF DETAILS APPEARS TO BE PROPER. HOWEVER, THE ISSUE MAY BE DECIDED ON FACTS AND ON MERITS OF THE CASE. 7. FROM THE ABOVE REPORT, IT CAN BE SEEN THAT THE ASSESSING OFFICER DURING THE REMAND PROCEEDINGS HAS VERIFIED THE INVESTMENT MADE IN 4 PURCHASE OF CEMENT FACTORY. LAND, BUILDING & MACHINERY WAS AUCTIONED BY KSIDC AND THE ASSESSEE HAS MADE RS. 75 LAC. WHICH HA S BEEN DEPOSITED FROM TIME TO TIME BY WITHDRAW ING FROM BASVESHWAR SAHKARI BANK. ASSESSEE HAS ALSO FILED COPY OF INCOME TAX RETURN OF NIRANI CEMENTS PVT. LTD. FOR A.Y. 2005 - 06 AND ON VERIFICATION OF THE RETURN, THE ASSESSING OFFICER WAS OF THE VIEW THAT TH IS AMOUNT HAD WITHDRAWN FROM THE BANK. THEREFORE , WE DELETE THE SAME. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH MARCH , 201 5 ). SD/ - SD/ - (P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 24 TH MARCH , 201 5 . VR/ - COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE LD. CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI