The DCIT, Central Circle-2(2), Ahmedabad V. Shri Narendra J.Patel, Ahmedabad

ITA 2135/AHD/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6438 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 06-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KARTAR SINGHDR
• Assessee Lawyers: GAURAV NAHATA
• Keywords: Unexplained investment; Loose papers
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' BEFORE SHRI T K SHARMA,JM & SHRI A N PAHUJA,AM ITA NO.2135/AHD/2009 (ASSESSMENT YEAR:-2006-07) DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 2(2),ROOM NO. 309,3 RD FLOOR, AAYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD V/S SHRI NARENDRA J PATEL, 103, SETU KRUPA APARTMENT, B/H SWAMI NARAYAN TEMPLE, SHAHIBAUG, AHMEDABAD PAN: ABCPP 1729 Q [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI KARTAR SINGH,DR ASSESSEE BY:- SHRI GAURAV NAHATA, AR O R D E R A N PAHUJA: THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 30- 03-2009 OF THE LD. CIT(APPEALS)-III, AHMEDABAD, FOR THE ASSESSMENT YEAR 2006-07, RAISES THE FOLLOWING GROUNDS:- [1] CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING ADDIT ION OF RS.8,25,000/- ON ACCOUNT OF UNACCOUNTED INVESTMENT MADE BY ASSESSEE FOR ALLOTMENT OF BUNGLOW NO.15 IN DEVSHRUS HTI-1 SCHEME OF M/S SOHAM CONSTRUCTION. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. [3] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE E XTENT . 2 ADVERTING FIRST TO GROUND NO.1 IN THE APPEAL, FAC TS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT A SEARCH U/S 132 OF TH E INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT] WAS CON DUCTED ON 10-05- 2006 IN THE SOHAM GROUP OF CASES, INCLUDING THE AS SESSEE. CONSEQUENTLY, A NOTICE U/S 153A OF THE ACT WAS ISSU ED SERVED UPON THE ASSESSEE ON 28-09-2006. IN RESPONSE, RETURN DEC LARING INCOME OF RS.10,30,420/- WAS FILED ON 31-07-2008.DURING TH E SEARCH, SEIZED LOOSE PAPERS AT PAGE NO. 18 OF THE FILE MARKED A/1 REVEALED AN 2 ITA NO.2135/AHD/2009 2 ALLOTMENT LETTER DATED 5/5/2005 IN THE NAME OF THE ASSESSEE. AS PER THIS ALLOTMENT LETTER, BUNGLOW NO. 15 IN DEV SHRUSH TI-I SCHEME OF SOHAM CONSTRUCTION WAS ALLOTTED TO THE ASSESSEE AT A PRICE OF RS.8,25,000/-.TO A QUERY BY THE ASSESSING OFFICER[A O IN SHORT],THE ASSESSEE CONTENTED THAT HE HAD TAKEN ALLOTMENT LETT ER ONLY FOR ADDRESS PURPOSE FOR TAKING DELIVERY OF NEW INOVA CA R AND NO INVESTMENT HAD ACTUALLY BEEN MADE BY HIM WHILE THE BUNGLOW HAD BEEN ALLOTTED TO SOME OTHER PERSON. HOWEVER, THE AO DID NOT ACCEPT THESE CONTENTIONS OF THE ASSESSEE ON THE GROUND THA T THE ALLOTMENT LETTER HAD BEEN ISSUED ON A LETTER HEAD OF THE CO. OP. HOUSING SOCIETY ,WHEREIN THE AMOUNT OF RS.8,25,000/- WAS CL EARLY MENTIONED. SINCE THE ASSESSEE DID NOT ACCOUNT FOR THIS PAYMENT IN HIS BOOKS OF ACCOUNT , THE AMOUNT OF RS.8,25,000/-WAS ADDED U/S6 9B OF THE ACT. 4 ON APPEAL, THE LEARNED CIT(A) DELETED THE ADDITIO N IN THE FOLLOWING TERMS:- 5. BEFORE ME, IT WAS SUBMITTED THAT THE ALLOTMENT L ETTER DATED 5/5/2005 IN NAME OF THE APPELLANT, WAS ONLY A MAKE-BELIEVE S TRATEGY TO PROVIDE AN ADDRESS FOR ENABLING THE PURCHASE OF INNOVA VEHICLE FROM GANDHINAGAR. THIS ADDRESS WAS ADOPTED, IN FACT TO AVOID PAYMENT OF ADDITIONAL OCTROI DUTY, WHICH WOULD HAVE BEEN LEVIED IN CASE OF THE P URCHASE/ADDRESS FROM/OF AHMEDABAD. THE BUNGALOW NO. 15, DEV SHRUSHT I-I, OF 151 SQ. MTRS. MENTIONED AS MAKE-BELIEVE IN THIS ALLOTMENT L ETTER HAD ACTUALLY BEEN SOLD TO ONE SHRI SHRAVANKUMAR GANGARAM SHARMA, AS P ER THE ACTUAL ALLOTMENT LETTER DATED 9/5/2001 AND THE POSSESSION LETTER DATED 2/4/2006. SHRI SHRAVANKUMAR HAD PAID THE ADVANCE OF RS.75,000 /- VIDE CHEQUE NO. 094810 ON 24/5/2004 AND RS.4 LAKHS VIDE CHEQUE NO. 198110 ON 18/2/2005. FURTHER AMOUNT OF RS.3.5 LAKHS WAS PAID BY CHEQUE NO. 407931 DATED 11/3/2006. THESE DETAILS HAD BEEN FILE D BEFORE THE A.O. ALSO. SHRI SHRAVANKUMAR HAD, IN FACT, RAISED A LOAN FROM ICICI HOME FINANCE (BY CHEQUE NO.407931 OF RS.3.5 LAKHS) AND T HE TELEPHONE BILL AND ELECTRICITY BILL WERE ALSO IN HIS NAME. IT WAS ALSO POINTED OUT THAT THE APPELLANT DID, IN FACT, PURCHASED A INNOVA CAR IN H IS NAME ON 3/6/2005 AND THE INVOICE BEARS HIS ADDRESS OF THE MAKE BELIEVE A LLOTMENT LETTER. A COPY OF THE INVOICE OF TOYOTA CAR DEALER, A COPY OF THE CERTIFICATE OF REGISTRATION OF THE VEHICLE IN NAME OF THE APPELLANT WAS ENCLOSE D AND IS STATED TO HAVE BEEN FILED BEFORE THE A.O. ALSO. 6. THE CONTENTIONS WERE CAREFULLY CONSIDERED. IT IS SEEN THAT THE EXPLANATION FURNISHED BEFORE THE A.O. WAS NOT DISPR OVED. THE EXPLANATION GIVEN HAS BEEN SUBSTANTIATED WITH THE COPIES OF THE INVOICE OF THE VEHICLE, 3 ITA NO.2135/AHD/2009 3 THE TELEPHONE BILL/ELECTRICITY BILL AND OTHER AFORE MENTIONED DETAILS. THE DETAILS FILED REVEALED THAT THE HOUSE WAS, IN FACT, ALLOTTED TO ONE SHRI SHRAVANKIIMAR G. SHARMA, WHO HAD ALSO RAISED A HOUS ING LOAN ON THE IMPUGNED BUNGALOW NO. 15 AND WAS APPARENTLY RESIDIN G IN IT, AS SEEN FROM THE TELEPHONE AND ELECTRICITY BILL. THE INVOICE OF THE VEHICLE DOES INDICATE THAT THE ALLOTMENT LETTER HAD BEEN MADE USE FOR FUR NISHING PROOF OF ADDRESS AND, WHILE THIS ACTIVITY IN ITSELF CANNOT BE CONDON ED, IT DOES NOT HAVE ANY TAX IMPLICATION IN THE PRESENT CASE. THUS ON A HOLI STIC CONSIDERATION THE ADDITION OF RS.8.25 LAKHS IN THE HANDS OF THE APPEL LANT CANNOT BE UPHELD. 5 THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR SUPP ORTED THE ORDER OF THE AO WHILE THE LEARNED AR ON BEHALF OF THE SU BMITTED THAT A SIMILAR ADDITION MADE IN THE CASE OF M/S SOHAM CON STRUCTION HAS BEEN RESTORED TO THE FILE OF THE AO BY THE ITAT VID E THEIR ORDER DATED 18-09-2009 IN ITA NO.2136/AHD/2006. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE AS ALSO THE AFORESAID DECISION DATED 18-09 -2009 OF THE ITAT IN THE CASE OF M/S SOHAM CONSTRUCTION. WE FIND THAT THE ITAT WHILE ADJUDICATING A SIMILAR ISSUE IN RESPECT OF T HE AFORESAID ADDITION OF RS. 8,25,000/- IN THE CASE OF THE FIRM CONCLUDED VIDE THEIR ORDER DATED 18.9.2009 IN ITA NO.2136/AHD/2009 AS UNDER: 15 THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GROUND IN ITS APPEAL:- THE CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING ADDITION OF RS.8,25,000/- ON ACCOUNT OF UNACCOUNTED RECEIPT FOR ALLOTMENT OF BUNGLOW NO.15 IN DEVSHRUSHTI-I SCHEME OF THE ASSESS EE-FIRM. 16. THE FACTS OF THE CASE ARE REPORTED BY THE ASSES SING OFFICER IN THE ASSESSMENT ORDER ARE AS UNDER:- 16.1 DURING THE COURSE OF SEARCH AT THE RESIDENCE O F SHRI NARENDRA J. PATEL, PARTNER OF ASSESSEE FIRM, ON 10/5/2006, SOME LOOSE PAPERS WERE FOUND AND SEIZED. PAGE NO. 18 OF THE FILE MARKED A/ 1 IS ALLOTMENT LETTER DATED 5/5/2005 IN THE NAME OF SHR NARENDRA J. PATEL . AS PER THIS ALLOTMENT LETTER, BUNGALOW NO. 15 IN DEV SHRUSHTI-I SCHEME OF THE ASSESSEE FIRM HAS BEEN ALLOTTED TO SHRI NAYENDRA J. PATEL. AT A PRICE OF RS.8,25,000/-. THE ASSESSEE HAS NOT ACCOUNTED FOR THIS RECEIPT IN ITS BOOKS OF ACCOUNT. IT HAS BEEN CONTENDED ON BEHALF OF THE ASSESSEE THAT ALLOT MENT LETTER HAS BEEN ISSUED TO SHRI NARENDRA J. PATEL, PARTNER, ONLY FOR ADDRESS PURPOSES FOR 4 ITA NO.2135/AHD/2009 4 TAKING DELIVERY OF HIS NEW CAR, AND NO PAYMENT HAS BEEN ACTUALLY RECEIVED FROM HIM. IN FACT, BUNGALOW HAS BEEN ALLOTTED TO S OME OTHER PERSON. ASSESSEE'S CONTENTION WAS ACCEPTED FOR THE REASON T HAT THE ALLOTMENT LETTER HAS BEEN ISSUED ON THE LETTER HEAD OF THE CO .OP. HOUSING SOCIETY. THE AMOUNT OF RS.8,25,000/- IS CLEARLY MENTIONED IN THE ALLOTMENT LETTER. THUS, ON THE FACE OF THIS DOCUMENTARY EVIDENCE, ASS ESSEE'S STATEMENT WAS REJECTED. 16.2. THE ASSESSING OFFICER ACCORDINGLY ADDED A SUM OF RS.82,5000/- IN THE TOTAL INCOME. 17. THE LEARNED CIT(APPEALS) DELETED THE ADDITION O N THE GROUND THAT NO PAYMENT HAS ACTUALLY BEEN RECEIVED FROM SHRI NAR ENDRA J. PATEL AND THIS BUNGALOW HAS BEEN ALLOTTED TO SOME OTHER PERSO N. THE ASSESSING OFFICER HAS ALSO MADE ADDITION ON SIMILAR AMOUNT IN THE CASE OF SHRI NARENDRA PATEL FOR ASSESSMENT YEAR 2006-07 IN THE O RDER PASSED U/S 153A OF THE I.T. ACT, 1961. THE LEARNED CIT(APPEALS ) HAS HELD THAT ALLOTMENT LETTER WAS ISSUED BY THE SOCIETY WAS FOR THE PURPOSE OF PROVIDING THE ADDRESS TO SHRI NARENDRA PATEL FOR ENABLING HIM TO TAKE DELIVERY OF A NEW CAR. 18. THE DR, ON THE OTHER HAND, SUBMITTED THAT NO EV IDENCE HAS BEEN PROVIDED AS TO WHOM THIS BUNGALOW NO. 15 IN DEV SHR USHTI-I SCHEME HAS BEEN ALLOTTED ACTUALLY AND WHETHER MONEY FROM TLRAT PERSON HAVE BEEN RECEIVED SO AS TO PROVE THAT SUBSEQUENT ISSUANCE OF ALLOTMENT LETTER TO SHRI NARENDRA J. PATEL, THE PARTNER OF THE FIRM WAS ONLY ON PRETENCE. 19 WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. WE RESTORE THIS MATTER TO THE FILE OF ASSESSING OFFICER TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO SHOW AS TO WHOM BUNGALOW NO. 15 IN DEV SHRUSHTI-I SCHEME WAS ACTUALLY ALLOTTED AND WHEN AND HOW THE PAYMENTS WERE RECEIVED FROM THAT ALLOTTEE AND WHETHER THE BUNGALOW CONTINUED TO BE IN THE NAME OF THAT ALLOTTEE ONLY EVEN AT THE TIME WHEN PRETENDING LETT ER WAS ISSUED IN THE NAME OF SHRI NARENDRA J PATEL AND, IN FACT, THERE W AS NO CHANGE IN OWNERSHIP DURING THIS PERIOD. 6.1 FOLLOWING THE AFORESAID VIEW TAKEN BY A CO-ORDI NATE BENCH ON THE AFORESAID ADDITION IN THE CASE OF THE FIRM, WE HAVE NO ALTERNATIVE BUT TO VACATE THE FINDINGS OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO WITH SIMILAR DIRECTIONS TO A LLOW SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO SHOW AS TO WHOM BUNG ALOW NO. 15 IN DEV SHRUSHTI-I SCHEME WAS ACTUALLY ALLOTTED AND WHE N AND HOW THE PAYMENTS WERE RECEIVED FROM THAT ALLOTTEE AND WHETH ER THE BUNGALOW CONTINUED TO BE IN THE NAME OF THAT ALLOTTEE ONLY E VEN AT THE TIME 5 ITA NO.2135/AHD/2009 5 WHEN THE AFORESAID ALLOTMENT LETTER DATED 5.5.2005 WAS ISSUED IN THE NAME OF THE ASSESSEE AND IN FACT, THERE WAS NO CHANGE IN OWNERSHIP DURING THIS PERIOD. WITH THESE DIRECTIONS , GROUND NO.1 IN THE APPEAL IS DISPOSED OF. 7. GROUND NOS.2 AND 3 BEING MERE PRAYER NOR ANY SUB MISSIONS HAVING BEEN MADE ON THESE GROUNDS, DO NOT REQUIRE A NY SEPARATE ADJUDICATION AND ARE, THEREFORE, DISMISSED. 8. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 9. IN THE RESULT, APPEAL IS ALLOWED BUT FOR STATI STICAL PURPOSES. ORDER PRONOUNCED IN THE COURT TODAY ON 31-05-2011 SD/- SD/- (T K SHARMA) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 31-05-2011 COPY OF THE ORDER FORWARDED TO: 1. SHRI NARENDRA J PATEL, 103, SETU KRUPA APARTMENT , B/H SWAMI NARAYAN TEMPLE, SHAHIBAUG, AHMEDABAD 2. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCL E 2(2), AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-III, AHMEDABAD 5. DR, ITAT, AHMEDABAD BENCH-A, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD