SUNDER MANIK PATIL, Raigad V. Income-tax Officer, Ward - 1, Panvel

ITA 2648/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5517 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 12-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Search and seizure; Document seized; Difference of opinion; Reason to believe; Documents seized; Change of opinion
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI R.S. SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO. 2648/MUM /2017 / ASSESSMENT YEAR : 2009-10 SHRI SUNDER MANIK PATIL, HOUSE NO.129, AT POST DHUTUM, POST : JASAI, TALUKA : URAN DIST. RAIGAD PAN : AWIPP2747H .... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD-1, PANVEL. / RESPONDENT ASSESSEE BY : SHRI PRAKASH PANDIT REVENUE BY : SHRI PANKAJ GARG / DATE OF HEARING : 24.01.2019 / DATE OF PRONOUNCEMENT : 28.01.2019 / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF LD. CIT(APPEALS)-1, AURANGABAD DATED 02.02.2017 FOR THE ASSE SSMENT YEAR 2009-10 AS PER FOLLOWING GROUNDS OF APPEAL ON RECORD: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION MADE BY THE A.O . OF RS.83,69,500/- BEING UNACCOUNTED CASH ALLEGED TO BE RECEIVED BY TH E ASSESSEE FROM M/S. MADAN ASSOCIATES AND OTHERS. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION TAKEN BY THE A.O. OF REOPENING THE ASSESSMENT U/S.147 R.W.S.148 OF THE INCOME TAX ACT, 1961. 2 ITA NO. 2648/MUM/2017 A.Y.2009-10 3. THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, ALTER M ODIFY OR OMIT ANY OF THE AFORESAID GROUNDS OF APPEAL AS OCCASION MAY ARISE O R DEMAND. 2. THE SUBMISSION OF THE LD. AR OF THE ASSESSEE BEFORE US ON THESE TWO GROUNDS AND THE ADDITION OF RS.83,69,500/- ON ACCOUNT OF U NACCOUNTED CASH ALLEGED TO HAVE BEEN RECEIVED BY ASSESSEE ARE AS FOLLOWS: (1) THE A.O. AFTER REOPENING OF ASSESSMENT, ISSUED NOTICE U/S.143(2) DATED 26/3/2015 AND PASSED ASSESSMENT ORDER ON 27/3/2015 ADDING SUM OF RS.83,69,500/- ONLY ON THE BASIS OF INFORMATION REC EIVED FROM DCIT CENTRAL CIRCLE 39 WHICH HE HAS REPRODUCED IN PARA 3 OF HIS ASSESSMENT ORDER IT IS SUBMITTED THAT THERE IS NO IOTA OF EVIDENCE WITH TH E A.O. TO MAKE THE SAID ADDITION. IT IS FURTHER SUBMITTED THAT ENTIRE ADDIT ION IN THE HANDS OF THE ASSESSEE IS ONLY ON THE BASIS OF THE SO CALLED CONC LUSION DRAWN BY DCIT CENTRAL CIRCLE 39 THAT THE ASSESSEE APPEARS TO HAVE RECEIVED UNACCOUNTED CASH IN OTHER WORDS THERE IS NO EVIDENCE TO SUPPORT THAT THE ASSESSEE HAS ACTUALLY RECEIVED THE SAID CASH OF RS.83,69,500/-. THEREFORE ADDITION MADE ONLY ON THE BASIS OF SUSPICION WITHOUT CORROBORATIN G EVIDENCE, REQUIRES TO BE DELETED. (2) IT IS FURTHER SUBMITTED THAT THE A.O. HAS NOT B ROUGHT ANY CORROBORATIVE EVIDENCE ON RECORD TO SUBSTANTIATE THE CLAIM OF THE A.O. THAT CASH HAS ACTUALLY CHANGED HANDS. (3) IT IS SUBMITTED THAT THE ENTIRE ADDITION MADE B Y THE A.O. IS ON THE BASIS OF CONCLUSION DRAWN BY DCIT CENTRAL CIRCLE 39 WHO W AS ASSESSING JAI GROUP OF ENTITIES WHILE ASSESSING GROUP OF COMPANIE S DCIT CENTRAL CIRCLE 39 HAS COME TO CONCLUSION THAT JAI GROUP OF ACQUIRI NG AGRICULTURAL LAND IN NAVI MUMBAI HAS PAID CASH AND CHEQUE TO THE SELLERS AND OR MIDDLEMEN. ITAT MUMBAI 69 APPEALS IN CASE OF JAI GROUP ENTITIE S HAS COME TO CONCLUSION THAT THERE IS NO EVIDENCE TO SUPPORT THA T CASH HAS CHANGED THE HANDS BETWEEN THE PARTIES. THE SAID ORDER OF ITAT W AS CONFIRMED BY THE HON'BLE BOMBAY HIGH COURT IN 397 ITR 246. (4) THE ASSESSEE RELIES ON THE FOLLOWING DECISIONS WHEREIN IT HAS BEEN HELD THAT ADDITION CANNOT BE MADE ON DUMP ENTRIES/DOCUME NTS WITHOUT ANY CORROBORATIVE EVIDENCE. AMERJEET BAKSHI VS. ACIT 263 ITR 75 CIT VS. ANIL BHALLA 322 ITR 191 ANILKUMAR JAM VS. CIT, 87 TTJ 151 RAKESHKUMAR JAIN VS. DCIT 89 TTJ 203 N.R. MALHAN VS. DCIT 91 TTJ 908 PANKAJ DAYABHAI PATEL VS. ACIT 63 TTJ 790 RADHE DEVELOPER VS. DCIT 329 ITR 1 IN VIEW ABOVE SUBMISSIONS ADDITION MADE OF RS.83,69 ,500/- REQUIRES TO BE DELETED. 3 ITA NO. 2648/MUM/2017 A.Y.2009-10 2.1. THE LD. AR OF THE ASSESSEE FURTHER APPRAISED THE BEN CH TO PARA 2 OF THE ASSESSING OFFICERS ORDER WHEREIN REASONS FOR RE-OPENING H AS BEEN REPRODUCED AND REGARDING THOSE REASONS IT WAS VEHEMENTLY ARGUED BY THE LD. AR OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS ABSOLUTELY BROUG HT OUT NO EVIDENCE THAT ASSESSEE HAD RECEIVED THE ALLEGED UNACCOUNTED CASH. THE EMPHASIS WAS PLACED BY THE LD. AR SPECIFICALLY TOWARDS THE LATER PART OF THE R EASONS RECORDED WHEREIN THE ASSESSING OFFICER MENTIONED THAT IN RESPECT OF ABOVE PLOT DEAL MR. SUNDER MANIK PATIL APPEARS TO HAVE RECEIVED THE UNACCOUNTED CA SH OF RS.83,69,500/- IN ASSESSMENT YEAR 2009-10. IT IS ONLY A MATTER OF ASS UMPTION BY THE LD. ASSESSING OFFICER AND NOTHING ELSE. 2.2. THE LD. AR OF THE ASSESSEE FURTHER CONTENDED THAT THEY HAD REPEATEDLY REQUESTED THE REVENUE AUTHORITIES TO FURNISH RELEVANT D OCUMENTARY EVIDENCES AND DETAILS BASED ON WHICH THE REVENUE IS STATING THAT T HE ASSESSEE HAS RECEIVED SUCH UNACCOUNTED CASH. HOWEVER, THERE WAS NO RESPONSE FROM THE REVENUE AUTHORITIES. THEREAFTER, RTI APPLICATION WAS MOVED BY THE ASSESSEE. FROM THE INFORMATION RECEIVED FROM RTI WHICH IS ALSO ANNEX ED IN THE PAPER BOOK FILED BEFORE US AT PAGE 30 WHEREIN THE RTI SUGGEST THAT THE AMOUNT OF RS.83,69,500/- WAS RECEIVED BY ONE MR. NARAYAN RATHNAWAT ALONG WITH THE NAMES OF OTHER VARIOUS PERSONS APPEARING IN THE SAME LIST. THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED THAT THEY HAVE NO IDEA AS T O HOW THOSE NAMES WERE APPEARING IN THE LIST AND ON WHAT BASIS THE NAME OF MR. N ARAYAN RATHNAWAT IS THERE. BUT ONE THING COMES OUT FROM RTI INFORMATION THAT THERE IS NO NAME OF ASSESSEE SO TO HAVE RECEIVED SUCH UNACCOUNTED CASH AS ALLEGED B Y THE ASSESSING OFFICER. THE AMOUNT OF RS.83,69,500/- WAS SHOWN AGAINST MR. N ARAYAN RATHNAWAT AND NOT IN RESPECT OF THE ASSESSEE. 4 ITA NO. 2648/MUM/2017 A.Y.2009-10 3. THE LD. CIT(APPEALS) AS PER REASONS APPEARING IN HIS OR DER UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. 4. WE HAVE PERUSED THE CASE RECORD AND ANALYSED THE FACTS AND CIRCUMSTANCES IN THIS CASE. IT IS AN ASSUMPTION BY THE L D. CIT(APPEALS) THAT THE ASSESSEE MUST HAVE TAKEN CASH SINCE ANY PRUDENT BUSIN ESSMEN WOULD ASSIGN LEASEHOLD RIGHTS ON REIMBURSEMENT OF THE LEASE PREMIUM PAI D. HE WAS PRUDENT ENOUGH TO TAKE CASH OF RS.83,69,500/- AS EVIDENT FROM THE ENTRIES IN THE SEIZED DOCUMENTS. THAT ON PERUSAL OF THE REASONS RECORDED BY THE ASSESSING OFFICER FOR RE-OPENING OF ASSESSMENT, THERE IS ABSENCE OF SPECIFIC E NQUIRY AND FINDINGS SINCE THE ASSESSING OFFICER HAS MENTIONED AS IT APPEARS T HE ASSESSEE HAS RECEIVED UNACCOUNTED CASH. FURTHER, ON PERUSAL OF THE REASONS RECORDED BY THE AS SESSING OFFICER FOR REOPENING OF ASSESSMENT, THERE IS NO SPECIFIC EVIDENCE ON R ECORD AND NEITHER THE LD. DR WAS ABLE TO BRING OUT FRESH MATERIAL DURING SCRUTIN Y ASSESSMENT PROCEEDINGS TO DEMONSTRATE THAT ON WHAT BASIS ASSESSM ENT WAS REOPENED. IN ABSENCE OF SUCH NEW EVIDENCE AND MATERIAL ON RECORD, ISSU ANCE OF NOTICE U/S.148 OF THE ACT AND RE-ASSESSMENT U/S. 147 OF THE AC T IS NOT WARRANTED WITHIN THE TAXING STATUTES. IN THE CASE OF CIT VS. KELVINATOR INDIA LTD.(320 ITR 561 ) THE SUPREME COURT OBSERVED AS UNDER (PAGE 564) : 'HOWEVER, ONE NEED S TO GIVE A SCHEMATIC INTERPRETATION TO THE WORDS 'REASON TO BELIEVE' FAILING WHIC H, WE ARE AFRAID, SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE AS SESSING OFFICER TO REOPEN ASSESSMENTS ON THE BASIS OF 'MERE CHANGE OF OPIN ION', WHICH CANNOT BE PER SE REASON TO REOPEN. WE MUST ALSO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND POWER TO REASSESS. THE AS SESSING OFFICER HAS NO POWER TO REVIEW; HE HAS THE POWER TO REASSESS. BUT REA SSESSMENT HAS TO BE BASED ON FULFILLMENT OF CERTAIN PRECONDITIONS AND IF THE CONCE PT OF 'CHANGE OF 5 ITA NO. 2648/MUM/2017 A.Y.2009-10 OPINION' IS REMOVED, AS CONTENDED ON BEHALF OF THE DEPART MENT, THEN, IN THE GARB OF REOPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE . ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' AS AN IN- BUILT TEST TO CHE CK ABUSE OF POWER BY THE ASSESSING OFFICER.' WE HAVE ALREADY EXAMINED THAT IN THE REASONS RECORDE D, THE ASSESSING OFFICER IS NOT SURE WITH HIS STAND AND HE HAS NOT DEMONST RATED IN HIS ORDER THE REASON TO BELIEVE. 5. IN VIEW OF THE MATTER, THE REOPENING OF THE ASSE SSMENT BY THE AO IS ARBITRARY, UNJUSTIFIED AND BAD IN LAW AND THEREFORE , LIABLE TO BE QUASHED. WE ORDER ACCORDINGLY. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON 28TH DAY OF JANUARY, 2019. SD/- SD/- R.S.SYAL PAR THA SARATHI CHAUDHURY VICE PRSIDENT JUDICIAL MEMBER / PUNE; / DATED : 28 TH JANUARY, 2019. SB !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-1, AURANGABAD. 4. THE PR. CIT-2, THANE. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 6 ITA NO. 2648/MUM/2017 A.Y.2009-10 DATE 1 DRAFT DICTATED ON 24 .01.2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 25 .01 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER