DCIT,Circle-1, Siliguri, Siliguri V. M/s Anand Kumar Agarwal, Siliguri

ITA 244/KOL/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6381 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 09-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MD USMAN
• Keywords: Capital asset; Document seized; Opportunity of cross examination; Third party statement; Documents seized
• Section: 143(3)

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 244 / KOL / 20 17 ASSESSMENT YEAR :2011-12 DCIT CIRCLE-1, AAYAKAR BHAWAN, PARIBAHAN NAGAR, MATIGARA, SILIGURI, PIN 734010 V/S . ANAND KUMAR AGARWAL C/O SKY WHEELS PVT. LTD. PARIBAHAN NAGAR, MATIGAR, SILIGURI-734010 [ PAN NO.ACRPA 8801 A ] /APPELLANT .. / RESPONDENT /BY APPELLANT MD. USMAN, CIT-DR /BY RESPONDENT SHRI RAVI TULSIYAN, FCA /DATE OF HEARING 31-05-2018 /DATE OF PRONOUNCEMENT 08-06-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2011-12 C HALLENGES CORRECTNESS OF THE COMMISSIONER OF INCOME TAX (APPE ALS)-SILIGURIS ORDER DATED 07.12.2016 IN CASE NO.133/CIT(A)/SLG/2015-16, REVERSING THE ASSESSING OFFICERS ACTION MAKING UNDISCLOSED ON-MO NEY ADDITION OF 1,10,00,000/-, INVOLVING PROCEEDINGS U/S 143(3) R.W 153C OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. WE COME TO THE RELEVANT FACTS PERTAINING TO THE ABOVE SOLE ISSUE. THIS ASSESSEE IS ADMITTEDLY THE LEGAL HEIR OF LATE SHRI BHANWARLAL AGARWAL. THE SAID PREDECESSOR IN INTEREST CO-OWNED CAPITAL ASSET IN Q UESTION ALONG WITH S/SH R.K. AGARWAL, HANUMNMAL, MAHENDRA AND PAWAN BANSAL( S). ALL THE SAID JOINT OWNERS SOLD THE RELEVANT ASSET ON 21.01.2011 TO M/S PATRON VINIMAY PVT. LTD. FOR 3,58,25,000/- RECEIVED THROUGH BANKING CHANNEL. THE ASSESSEES ITA NO.244/KOL/2017 A.Y. 2011-12 DCIT CIR-1 SLG. VS. ANAND KR. AGARWAL PAGE 2 DECEASED PREDECESSORS SHARE THEREIN WAS 1,14,00,000/-. THIS FOLLOWED THE IMPUGNED SEARCH ACTION ON 30.11.2011 AND SUBSEQUENT DATES IN CASE OF M/S ANANDLOK GROUP AT MULTIPLE LOCATIONS. THE DEPARTMEN T CAME ACROSS MANY INCRIMINATING DOCUMENTS MARKED AND SEIZED. DR. R.K. AGARWAL (SUPRA) GOT RECORDED HIS SEARCH STATEMENT U/S. 132(4) OF THE AC T ON 21.01.2012 DEPOSING THAT THE ABOVE RELEVANT SALE TRANSACTION INVOLVED O N-MONEY COMPONENT OF 1,27,50,000/- EACH IN FORMER THREE AND 10.25 LAKH IN CASE OF LATTER TWO CO- OWNERS CASES; RESPECTIVELY. HE THEN EXPLAINED THE ACTUAL FIGURES TO BE 1.10 CRORES AND NOT 1,27,50,000/- AS WELL. ALL THESE CULMINATED IN INIT IATION OF SECTION 153C PROCEEDINGS VIDE NOTICE DATED 06.08.20 14. 3. THE ASSESSEE FILED HIS RETURN IN RESPONSE THERET O ON 01.09.2014 STATING TOTAL INCOME OF 1,32,39,760/-. HE COMPUTED HIS LONG TERM CAPITAL GA INS AS PER SAID SALE CONSIDERATIONS RECEIVED THROUGH BANKING C HANNEL OF 1,14,00,000/- (SUPRA). THE ASSESSING OFFICER FRAMED HIS REGULAR A SSESSMENT ON 29.01.2016 ADDING CASH COMPONENT OF 1,10,00,000/- BY PLACING STRONG RELIANCE OF SHRI R.K. AGARWAL SEARCH STATEMENT (SUPRA) SUPPORTED BY CORRESPONDING INCREMENTING MATERIAL SEIZED. HE CONCLUDED THAT SAM E FORMED SUFFICIENT EVIDENCE TO MAKE THE IMPUGNED ADDITION OF 1,10,00,000/- IN ASSESSEES HANDS. 4. THE CIT(A) REVERSES THE ASSESSING OFFICERS ACTI ON MAKING ON-MONEY ADDITION OF 1,10,00,000/- WITH THE FOLLOWING DISCUSSION:- 3.1.2. FINDINGS OF CIT(APPEAL) I HAVE PERUSED THE ASSESSMENT ORDER, APPELLANTS SUBMISSION AND RELEVANT EXTRACT OF SEIZ ED MATERIAL. IT IS NOTED THAT (I) NO BOOKS OF ACCOUNT OR DOCUMENTS BELONGING TO T HE ASSESSEE WERE SEIZED FROM THE PREMISES OF DR. R.K. AGARWAL, (II) THE NAME OF THEE ASSESSEE ANAND KUMAR AGARWAL HAS NOT BEEN MENTIONED ANYWHERE IN THE DOCUMENTS SEIZED (WR.T. C ASH RECEIVED OR RECEIVABLE) (III) IN REPLY TO QUESTION NO. 28 (REPRODUCED IN PA RA 3.1.1.1) SHRI R K AGRAWAL HAS ADMITTED THAT CASH IS BEING HANDLED BY SHRI ANIL AGRAWAL AND NOT BY ANAND AGRAWAL. (IV) THE STATEMENT OF DR. R.K. AGARWAL WAS A STATEM ENT OF THIRD PARTY AND IT HAS NOT YET BEEN PUT UP FOR CROSS EXAMINATIO N BEFORE THE ASSESSEE. ITA NO.244/KOL/2017 A.Y. 2011-12 DCIT CIR-1 SLG. VS. ANAND KR. AGARWAL PAGE 3 (V) THE IMPUGNED DOCUMENT RKA/8A FOUND DURING SEARC H OF DR. R.K.AGARAL WAS A THIRD PARTY DOCUMENT FOUND IN THE POSSESSIONS OF THE THIRD PARTY AND ALSO VERY MUCH BELONGING TO THE THI RD PARTY. HON'BLE MUMBAI H.C. IN THE CASE OF ADDITIONAL COMM ISSIONER OF INCOME-TAX, BOMBAY CITY-IV, MISS LATA MANGESHKAR [1974] 97 ITR 696 (BOM) HAS HELD THAT THIRD PARTY STATEMENTS AND DOCUMENTS WERE NOT PROOF ENOUGH THAT AMOUNTS IN QUESTION WERE UNDISCLOSED INCOME OF THE ASSESSEE. IN THE INSTANT CASE NOT ONLY THE NOTINGS ARE A THIRD PARTY NOTING, BUT THE FACT REMAINS THAT THE NAME OF SHRI ANAND KUMAR AGARWAL IS NOT MENTIONED I N THE DIARY AS RECIPIENT OF CASH NOR HAS IT BEEN MENTIONED IN THE STATEMENT OF SHRI R K AGRAWAL AS A RECIPIENT, IN VIEW OF THE ABOVE THE ADDITION IS DEL ETED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. THE REVENUE VEHEMENTLY CONTENDS DURING THE COURS E OF HEARING BEFORE US THAT CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE IMPUGNED ON-MONEY ADDITION OF 1,10,00,000/- IN THE FORM OF CASH COMPONENT. IT REITERATES THAT ASSESSING OFFICER HAD RIGHTLY ADDED THE SAME IN ASSESSEES HANDS BASED ON SEIZED DOCUMENTS AS WELL AS DR. R.K. AGARWALS SEARCH STATEMENT. MR. USMAN PLACES ON RECORD THE SEARCH ST ATEMENT DATED 21.01.2012. HE HIGHLIGHTS THE FACT THAT THE SAID CO -OWNER HAD ADMITTED TO HAVE RECEIVED ENTIRE CASH PAYMENT OF 3,50,50,000/- AS DISTRIBUTED TO THE RESPECTIVE JOINT-VENDORS IN THEIR RESPECTIVE SHARES AS EVIDENT FROM PAGE 58. WE ARE TAKEN TO THE RELEVANT PORTION OF THE SEARCH STATEMENT. THE CIT-DR SUBMITS THAT PAGE 92 OF THE INCRIMINATING MATERIALS SEIZED, IF CONSIDERED WITH THE ABOVE STATEMENT, MAKES IT CLEAR THAT THE ON-MON EY AS WELL AS THE SEIZED PAPER BELONGED TO THIS TAXPAYERS ONLY. WE ARE REPEA TEDLY REMINDED THAT ASSESSEE HAD DECLARED THE CHEQUE COMPONENT OF 1,14,00,000/- HIMSELF. THE NECESSARY COROLLARY STATED TO BE ALLOWING THEREFROM IS THAT HE HAS ALSO RECEIVED THE IMPUGNED CASH COMPONENT OF 1.10 CRORES AS WELL. 6. THE REVENUES CONTINUES ITS AVERMENTS AGAINST TH E CIT(A)S FINDINGS DELETING THE ON-MONEY ADDITION IN ISSUE. IT CITES S ECTION 292C OF THE STATUTE THAT THE ABOVE INCRIMINATING DOCUMENTS CLEARLY INDI CATE ON-MONEY PAYMENT. THEY ARE TO BE PRESUMED AS CORRECT IN VIEW OF THE A BOVE PROVISION. MR. USMAN LASTLY QUOTES U/S. 250(60 OF THE ACT THAT THE CIT(A )S FINDINGS UNDER CHALLENGE ITA NO.244/KOL/2017 A.Y. 2011-12 DCIT CIR-1 SLG. VS. ANAND KR. AGARWAL PAGE 4 ARE VERY MUCH CRYPTIC ONCE NOT FRAMING EITHER ANY P OINT OF DETERMINATION OR DETAILED ADJUDICATION. 7. LEARNED AUTHORIZED REPRESENTATIVE SUPPORTS THE C IT(A)S ABOVE EXTRACTED FINDINGS DELETING THE IMPUGNED ON-MONEY A DDITION. HE SUBMITS THAT THERE IS NO INCRIMINATING DOCUMENT OR SEIZED DURING THE COURSE OF SEARCH WHICH COULD BE HELD TO BE BELONGING THE INSTANT TAX PAYER. THERE IS NOT EVEN A SINGLE ASSERTION IN THE ABOVE SEARCH STATEMENT SUGG ESTING THIS ASSESSEE TO HAVE RECEIVED THE IMPUGNED ON-MONEY PAYMENT THEREBY TRIGGERING U/S 153C PROCESS INTO MOTION. HE CONTENDS THAT SECTION 292C( 1) IS VERY CLEAR THAT THIS PRESUMPTION STIPULATED APPLIES TO SEARCHED ASSESSEE ONLY AS THE LEGISLATURE HAS VERY CAREFULLY INSERTED THE CRUCIAL EXPRESSION SUCH THEREIN. HE STRONGLY REBUTS REVENUES EMPHASIS SEEKING TO DRAW THE SAID PRESUMPTION THAT THE ASSESSEE MUST HAVE RECEIVED IMPUGNED ON-MONEY WITHO UT ANY EVIDENCE TO THIS EFFECT. LEARNED COUNSEL PLEADS THAT SECTION 29 2C ADDS MORE TEETH TO THE DEPARTMENTS EXERCISE IN CASE OF A SEARCH IN A FISC AL STATUTE WHICH HAS TO BE STRICTLY INTERPRETED WITHOUT LEAVING SCOPE FOR ANY INTENDMENT. 8. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO AB OVE NARRATED RIVAL SUBMISSIONS. THE RELEVANT FACTS ARE RECAPITULATED O NCE AGAIN. THIS ASSESSEES PREDECESSOR IN INTEREST HAD SOLD THE LAND (CAPITAL ASSET) ALONG WITH OTHER CO- OWNERS. THERE IS FURTHER NO ISSUE THAT ASSESSEE HAD DECLARED THE CHEQUE COMPONENT OF 1.14 CRORERS IN HIS RETURN. THE REVENUES ENDEAVOUR IN THE INSTANT CASE IS TO ADD THE ALLEGED CASH PAYMENT OF 1.10 CRORES BY PLACING RELIANCE ON ONE OF THE CO-OWNERS SEARCH STATEMENT AS WELL AS INCRIMINATING EVIDENCE SEIZED THEREIN. ITS CASE IS THAT THE SAID ON-MONEY CAN BE SAFELY PRESUMED TO HAVE COME TO THE ASSESSEE ONLY. WE FIND NO MERIT IN THE INSTANT ARGUMENTS. WE HAVE OURSELVES PERUSED THE RELEVANT I NCRIMINATING DOCUMENTS PAGES 58, 62, 68, 71, 74, 76, 77, 79-81, 83, 92 & 9 3 AS WELL AS DR. R.K. AGARWALS SEARCH STATEMENT. WE FIND THAT THERE IS N OT AN IOTA OF EVIDENCE AGAINST THE INSTANT TAXPAYER WHICH COULD SUGGEST TH AT HE HAD RECEIVED THE IMPUGNED CASH COMPONENT. MR. USMAN SUGGESTS THAT HI S BROTHER ANIL KUMAR ITA NO.244/KOL/2017 A.Y. 2011-12 DCIT CIR-1 SLG. VS. ANAND KR. AGARWAL PAGE 5 AGARWAL HAS COLLECTED THE SAME ON HIS BEHALF WHICH AMOUNTS TO APPROPRIATION OF THE ON-MONEY FORMING PART OF THE SALE PRICE U/S. 48 OF THE ACT. WE OBSERVE THAT THE MERE FACT OF THE ASSESSEE HAVING ADMITTED THE REGISTERED SALE PRICE WOULD NOT BE STRETCHED TO THE EXTENT SO AS TO CONCL UDE THAT THE RELEVANT ON- MONEY RECEIVED BY SHRI ANIL KUMAR AGARWAL BELONGS T O THE INSTANT TAXPAYER. WE ARE OF THE VIEW THAT THE ABOVE SEARCH STATEMENT IS IN ASSESSEES FAVOUR ONLY SINCE HIS NAME HAS NOWHERE BEEN MENTIONED THER EIN. WE MAKE IT CLEAR THAT SECTION 153C AT THE RELEVANT TIME ENVISAGED AN Y SUCH MATERIAL TO BE BELONGING ON ANY PERSON OTHER THAN THE SEIZED ASS ESSEE ONLY AND NOT OTHERWISE. WE ARE IN TOTAL DISAGREEMENT WITH REVENU ES AVERMENT SINCE IN ABSENCE OF ANY DOCUMENT WHICH DOES NOT MENTION ASSE SSEES NAME OR SEARCH STATEMENT CANNOT FORM BASIS OF THE IMPUGNED ON-MONE Y AS THE SAME CANNOT BE TAKEN TO BE BELONGING TO HIM. WE FURTHER OBSERVE THAT THE REVENUES THRUST UPON SECTION 292C IS TOTALLY UNFOUNDED AS THE ASSES SEE DOES NOT FALL IN THE CATEGORY OF SUCH PERSON THEREIN AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL. 10. MR. USMANS LAST TECHNICAL ARGUMENT THAT THE CI T(A)S FINDINGS DO NOT TAKE INTO ACCOUNT U/S 250(6) OF THE ACT (SUPRA) IS ALSO WITHOUT ANY MERIT AS HE HAS VERY PRECISELY CONCLUDED THAT THE ASSESSEES NA ME IS NOWHERE FOUND MENTIONED EITHER IN SEARCH STATEMENT OR IN THE INCR IMINATING EVIDENCE QUA THE IMPUGNED CASH PAYMENT. THE INSTANT TECHNICAL PLEA R AISED AT THE REVENUES BEHEST ALSO FAILS. ITS SOLE SUBSTANTIVE GRIEVANCE I S DECLINED ACCORDINGLY. 11. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 08/ 06/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- / 06 /201 8 ITA NO.244/KOL/2017 A.Y. 2011-12 DCIT CIR-1 SLG. VS. ANAND KR. AGARWAL PAGE 6 / COPY OF ORDER FORWARDED TO:- 1 . /APPELLANT-DCIT CIRCLE-1,AAYAKAR BHAWAN, PARIBAHAN NAGARR, MATIGARA, SILIGURI, PIN-73 4010 2 . /RESPONDENT-ANAND KR. AGARWAL, C/O SKY WHEELS PVT. LTD., PARIBAHAN NAGAR MATIGARA, SILIG URI-734010 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5 . 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,