The ACIT, Circle-4, Surat V. M/s. Sweta Organizers Pvt.Ltd., Surat

ITA 2319/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9804 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-09-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 18-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KETAN H SHAH
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABA D (BEFORE HON'BLE SHRI G.D. AGRAWAL, V.P. (AZ) & HON BLE SHRI T.K. SHARMA, J.M.) I.T.A. NO. 2319/AHD./2008 ASSESSMENT YEAR : 2005-2006 ASSISTANT COMMISSIONER OF INCOME TAX, -VS.- M/S . SWETA ORGANIZERS PVT. LTD., SURAT CIRCLE-4, SURAT (PAN : AAGCS 8770 B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. MADHUSUDAN, S R. D.R. RESPONDENT BY : SHRI KETAN H. SHAH O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER DATED 04.04.2008 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-III, SURAT DEL ETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ON-MONEY RECEIPTS BY THE ASSE SSEE-COMPANY AMOUNTING TO RS.8,66,750/- FOR THE ASSESSMENT YEAR 2005-06. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S A COMPANY ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION WORK. FOR THE ASSESSMENT YEAR UNDER AP PEAL, IT FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.21,73,323/-. THIS RETURN OF INCO ME WAS ACCOMPANIED BY THE AUDITORS REPORT IN FORM NO. 3CD ALONGWITH AUDITED ACCOUNTS. 3. THE ASSESSEE-COMPANY HAS CONSTRUCTED A COMMERCIA L COMPLEX. THE PROFIT OF THE ASSESSEE-COMPANY IS IN THE NAME AND STYLE OF GOLDE N POINT AT FALSAWADI, BEGUMPURA, VAKHARIA SILK MILLS COMPOUND, SURAT. THERE WAS A SU RVEY ACTION UNDER SECTION 133A OF THE ACT AT THE BUSINESS PREMISES OF THE ASSESSEE-COMPANY ON 09.03.2005. DURING THE COURSE OF SURVEY, STATEMENT OF SHRI VIPUL MADHAVBHAI JAGANI OF VIPUL TOURS AND TRAVELS WAS RECORDED ON OATH, WHO WAS PURCHASED A SHOP NO. 140 AT THE GROUND FLOO R OF THE GOLDEN POINT ADMEASURING 830 SQ.FT. FROM M/S. SWETA ORGANIZERS PVT. LTD. IN REPL Y TO QUESTION NO. 2, HE STATED THAT HE HAD PURCHASED THE SHOP @ RS.1,135/- PER SQ.FT. FROM SHR I VASUBHAI SAVLANI, THE DIRECTOR OF THE COMPANY, OUT OF WHICH THE PAYMENT OF RS.700/- PER S Q.FT. MADE BY CHEQUE AND THE BALANCE AMOUNT HAS BEEN PAID IN CASH. HE FURTHER STATED THA T THE TOTAL PRICE OF THE SHOP HAS BEEN 2 ITA NO. 2319/AHD/2008 DETERMINED AT RS.9,37,000/- INSTEAD OF RS.9,42,050/ - I.E. 830 SQ.FT. @ RS.1,135/- PER SQ.FT. THEREFORE, THE AMOUNT OF RS.9,94,500/- WAS PAID BY CHEQUE @ RS.700/- PER SQ.FT. AND THE PAYMENT OF BALANCE AMOUNT OF RS.3,56,000/- WAS PAID IN CASH. 3.1. SIMILARLY, THE STATEMENT OF SHRI KOZZAIN ABDEA LI MOTIWALA WAS ALSO RECORDED, WHO WAS PRESENT AT THE TIME OF SURVEY PROCEEDINGS AND ADMIT TED THAT ON-MONEY PAYMENT OF RS.4.5 LACS TO 5 LACS PAID IN CASH WAS FROM THE UNRECORDED BUSINES S OF GREY CLOTH CARRIED OUT BY HIM IN HIS PERSONAL CAPACITY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE STATED THAT HE HAD NOT RECEIVED ANY ON MONEY AND THE SALE CONSIDERATIO N WAS CORRECTLY SHOWN IN THE BOOKS OF ACCOUNTS. THE ASSESSEE ALSO MADE A REQUEST FOR CROS S EXAMINATION OF TWO PARTIES, WHICH WAS ALLOWED BY THE ASSESSING OFFICER ON 24.12.2007. BOT H THE PARTIES DENIED HAVING PAID ANY ON- MONEY TO THE ASSESSEE. IN REPLY TO THE QUESTION AS TO WHY THEY HAD STATED TO HAVE PAID ON-MONEY DURING THE COURSE OF SURVEY, SHRI VIPUL JAGANI STAT ED THAT DURING THE COURSE OF SURVEY HE WAS IN DEPRESSION AND WAS NOT AWARE AS TO WHAT WAS WRITTEN IN THE STATEMENT AND HAD SIMPLY SIGNED IT. HOWEVER, ON THE VERY NEXT DAY, HE HAD MADE A NOTARI ZED AFFIDAVIT DENYING SUCH A PAYMENT. THE SAME STAND WAS TAKEN BY SHRI MOTIWALA ALSO. THE ASS ESSING OFFICER RE-EXAMINED THE TWO PERSONS, WHEN THEY PRODUCED THE AFFIDAVIT AND STATE D THAT WHAT THEY SAID EARLIER DURING SURVEY PROCEEDINGS WAS NOT CORRECT. THE ASSESSING OFFICER REJECTED THE STATEMENTS AND STATED THAT THE ORIGINAL STATEMENT WAS GIVEN BY THESE TWO PARTIES O N OATH AND, THEREFORE, BOTH THESE PARTIES WERE HOSTILE WITNESSES. HE ACCORDINGLY TREATED THE TOTAL ON-MONEY RECEIPT OF RS.8,66,750/- AS INCOME OF THE ASSESSEE. 4. ON APPEAL, BEFORE THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS), THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT DURING THE CROSS-EXAMINATION BY THE ASSESSEE, BOTH THE PARTIES DENIED HAVING MADE ANY S UCH PAYMENT AS MENTIONED BY THE ASSESSING OFFICER AND EVEN DURING THE RE-EXAMINATION THE POSI TION WAS THE SAME. BOTH THE PARTIES ALSO NOTARIZED AFFIDAVITS TO THIS EFFECT ON THE VERY NEX T DAY AND ONCE THE WITNESSES DENIED HAVING PAID ON-MONEY DURING CROSS EXAMINATION OR RE-EXAMINATION , THE DEPARTMENT HAD NO CASE FOR MAKING ANY ADDITION IN THIS REGARD. 5. AFTER CONSIDERING THE AFORESAID SUBMISSIONS, IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE ADD ITION OBSERVING AS UNDER :- 3 ITA NO. 2319/AHD/2008 I HAVE CONSIDERED THE SUBMISSIONS AND HAVE GONE TH ROUGH THE CROSS- EXAMINATION AND THE RE-EXAMINATION STATEMENT OF THE TWO PARTIES. IT IS SEEN THAT IN REPLY TO QUESTION NO. 3 OF THE CROSS E XAMINATION AND QUESTION NO. 2 OF THE RE-EXAMINATION, BOTH THE PERSONS HAVE CATEGORICALLY DENIED HAVING PAID ANY SUCH AMOUNT AND HAVE ALSO FILED COP IES OF THE SWORN AFFIDAVIT TO THIS EFFECT. THE A.O. HAD MADE HIS CAS E ON THE BASIS OF THE STATEMENT OF THE TWO PERSONS, WHO HAVE NOW CATEGORI CALLY STATED TO HAVE PAID ONLY SUCH AMOUNT WHICH WAS RECORDED IN THE BOO KS OF ACCOUNTS AND NO CASH IN THE FORM OF ON MONEY. HOWEVER, SINCE THE ORIGINAL STATEMENT WAS RETRACTED DURING CROSS-EXAMINATION, THERE IS NO EVIDENCE TO PROVE THAT THE APPELLANT RECEIVED ANY SUCH IN MONEY AND N O ADDITION ON THIS ACCOUNT CAN BE MADE. THE SAME IS DIRECTED TO BE DEL ETED. 6. WE HAVE HEARD BOTH THE SIDES. THE ONLY CONTENTIO N OF THE LD. D.R. IS THAT THE STATEMENT RECORDED DURING THE COURSE OF SURVEY WAS CORRECT. T HEREAFTER BOTH THE WITNESSES TURN HOSTILE, THEREFORE, THE ASSESSING OFFICER RIGHTLY MADE THE A DDITION OF RS.8,66,750/- OF ON-MONEY RECEIVED BY THE ASSESSEE-COMPANY FROM THESE TWO PERSONS. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 6.1. WE HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT DURING THE COURSE OF CROSS EXAMINATION, BOTH THE AFORESAID PARTIES HAVE DENIED HAVING PAID ANY ON-MONEY TO THE ASSESSEE-COMPANY. THE STATEMENT RECORDED DURING THE CROSS EXAMINATION, IN OUR OPINION, IS HA VING MORE EVIDENTIARY VALUE PARTICULARLY WHEN STATEMENT MADE AT THE TIME OF SURVEY WAS RETRACTED BY BOTH THE PARTIES THE VERY NEXT DAY BY FILING AFFIDAVITS. IN THESE CIRCUMSTANCES, WE ARE OF THE V IEW THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS LEGALLY AND FACTUALLY CORRECT IN DELET ING THE ADDITION OF RS.8,66,750/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED ON-MONEY RE CEIPTS. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 24.09.201 0 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 24 / 09 / 2010 4 ITA NO. 2319/AHD/2008 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT CONCERNED (4) CIT(A.) CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGIS TRAR, ITAT, AHMEDABAD LAHA/SR.P.S.