Damodhar Vishwanath Soman, Aurangabad V. Income-tax Officer,

ITA 273/PUN/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9583 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 19-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 24-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMIT BOBDE JT
• Keywords: Loose papers; Document seized; Documents seized
• Section: 143(3); 68; 69; 132

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO.273/PUN/2016 [ [ / ASSESSMENT YEAR : 2009-10 MR. DAMODHAR VISHWANATH SOMAN, 9, BEHIND SANT EKNATH RANGAMANDIR, OSMANPURA, AURANGABAD 431005 . / APPELLANT PAN: ABJPS4653D VS. THE INCOME TAX OFFICER, WARD 2(2), AURANGABAD . / RESPONDENT / APPELLANT BY : SHRI C.H. NANIWADEKAR / RESPONDENT BY : SHRI AMIT BOBDE JT. CIT / DATE OF HEARING : 19.04.2017 / DATE OF PRONOUNCEMENT: 26.04.2017 / ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A)-2, AURANGABAD, DATED 10.12.2015 RELATING TO ASSESSMENT YEAR 2009-10 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 148 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL:- 1) THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEAL II) HAS NOT CONSIDERED THE SUBMISSION ON FACTUAL AND LAWFUL GROUNDS AND ERRED IN MAKING AN ADDITION OF RS.19,84,844/- TO MY INCOME BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. ITA NO.273/PUN/2016 MR. DAMODAHAR VISHWANATH SOMAN 2 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE ADDITION OF RS.19,84,844/-. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS AN ADVOCATE. THE CASE OF THE ASSESSEE WAS TAKEN UP UNDER SECTION 147/148 OF THE ACT. IN RESPONSE TO THE SAME, THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.4,70,560/-. THE ASSESSEE HAD PURCHASED A FLAT, AGAINST WHICH THE ASSESSEE HAD MADE PAYMENT THROUGH DIFFERENT CHEQUES AND BY CASH OF RS.4,99,000/-, TOTALING RS.49,94,000/-. THE SAID FLAT WAS PURCHASED FROM M/S. PINNACLE CONSTRO & ECO HOMES PVT. LTD. SEARCH PROCEEDINGS UNDER SECTION 132 OF THE ACT WERE CARRIED OUT AGAINST THE BUILDER GAJENDRA D PAWAR AND CERTAIN LOOSE PAPERS IN BUNDLE 18 WERE SEIZED. THE SAID DOCUMENTS REFLECTED THE CASH PAYMENTS RECEIVED BY THE CONSTRUCTION COMPANY AGAINST THE SALE OF FLATS. THE ASSESSEE WAS CONFRONTED IN THIS REGARD. THE FIRST CONTENTION OF THE ASSESSEE WAS THAT THE SAID CASH PAYMENT WAS NOT MADE BY THE ASSESSEE. AN ALTERNATE PLEA WAS RAISED EXPLAINING THE SOURCE OF SAID CASH IN HAND. HOWEVER, THE ASSESSING OFFICER TREATED THE EXCESS PAYMENT MADE IN CASH AT RS.19,85,844/- AS ADDITIONAL INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT. 5. THE CIT(A) OBSERVED THAT THE LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH HAD TO BE READ AS A WHOLE AND WHERE THE SELLER OF THE FLAT HAD IN THE STATEMENT ACCEPTED THAT HE HAD RECEIVED PAYMENT THROUGH CHEQUE AND RS.29.50 LAKHS IN CASH FROM THE ASSESSEE TOWARDS SALE OF FLAT NOS.4 AND 5 TO THE ASSESSEE IN THE PROJECT PINNACLE BROOKSIDE. THE ADDITIONAL CASH WAS TO BE ADDED AS UNDISCLOSED INCOME IN THE HANDS OF ASSESSEE. THE ASSESSEE HAD FAILED TO EXPLAIN THE SOURCE OF SAID CASH AND AS PER THE CIT(A), THE ADDITION SHOULD HAVE BEEN MADE UNDER SECTION 69 OF THE ACT AND NOT UNDER SECTION 68 OF THE ACT. ACCORDINGLY, HE UPHELD THE ADDITION UNDER SECTION 69 OF THE ACT. ITA NO.273/PUN/2016 MR. DAMODAHAR VISHWANATH SOMAN 3 6. THE ASSESSEE IS IN APPEAL AGAINST THE AFORESAID ADDITION. 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE SEIZED DOCUMENT PLACED AT PAGE 9 OF THE PAPER BOOK AND POINTED OUT THAT IT WAS ONLY A JOTTING, NO NAME OF THE ASSESSEE WAS MENTIONED. FURTHER, REFERENCE WAS MADE TO THE STATEMENT RECORDED, COPY OF WHICH IS PLACED AT PAGES 7 AND 8 OF THE PAPER BOOK. HE STRESSED THAT NO CROSS-EXAMINATION WAS ALLOWED TO THE ASSESSEE AND THE MATTER MAY BE SENT BACK FOR CROSS-EXAMINATION. FURTHER, RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN CIT VS. SUNIL AGGARWAL (2015) 379 ITR 367 (DEL). 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE STATEMENT RECORDED OF THE PERSONS SEARCHED WERE GIVEN TO THE ASSESSEE, WHICH IMPLIES THAT THE ASSESSING OFFICER WAS READY TO GIVE CROSS- EXAMINATION. HOWEVER, NO CROSS-EXAMINATION WAS ASKED FOR BY THE ASSESSEE AND HENCE, NO BASIS IN THE PLEA OF THE ASSESSEE. 9. ON PERUSAL OF RECORD, THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS AGAINST THE ADDITION OF RS.19,84,844/-. THE ASSESSEE HAD MADE AN INVESTMENT IN PURCHASE OF FLAT IN PINNACLE BROOKSIDE. THE ASSESSEE CLAIMS THAT THE TOTAL INVESTMENT MADE BY HIM WAS RS.49,94,000/-, WHICH MAJORLY CONSTITUTED OF CHEQUE PAYMENTS AND SUM OF RS.4,99,000/- WAS PAID IN CASH. HOWEVER, DURING THE COURSE OF SEARCH ON THE DEVELOPER OF THE SAID PROJECT, CERTAIN DOCUMENTS WERE FOUND WHICH EVIDENCED ON-MONEY PAYMENT IN CASH OVER AND ABOVE THE SLATED SALE CONSIDERATION AS PER REGISTERED DOCUMENT. THE DIRECTOR OF M/S. PINNACLE CONSTRO & ECO HOMES PVT. LTD., MR. GAJENDRA D PAWAR WAS CONFRONTED, SPECIFIC QUERY WAS RAISED IN RESPECT OF CASH RECEIPTS, WHICH WERE MENTIONED IN THE LOOSE DOCUMENTS. AS PER QUESTION NO.18, HE WAS CONFRONTED WITH THE SAID DETAILS, WHICH TRANSACTION IS THE SALE OF FLAT TO THE ASSESSEE BEFORE ITA NO.273/PUN/2016 MR. DAMODAHAR VISHWANATH SOMAN 4 US I.E. FLAT NO.404, WHEREIN THE ENTRIES WERE MADE AT PAGES 4 AND 5 (SEIZED DOCUMENTS). AS PER THE SAID DOCUMENT, THE CHEQUE AMOUNT WAS RS.47 LAKHS AND THE CASH AMOUNT WAS RS.29,50,000/-, TOTALING RS.76,50,000/-, WAS PAID. THE SAID CONCERN HAD MADE DECLARATION OF ON-MONEY RECEIVED AND HAD OFFERED THE SAME AS ITS ADDITIONAL INCOME. THE ASSESSEE ON THE OTHER HAND, DENIED ANY CASH PAYMENTS. HOWEVER, THE AVAILABLE CASH IN HAND WITH THE ASSESSEE WAS RS.5,53,370/- AND WITH HIS WIFE WAS RS.3,64,186/-, CREDIT FOR WHICH WAS ALLOWED TO THE ASSESSEE AS THE PROPERTY WAS JOINTLY PURCHASED AND THE EXCESS PAYMENT IN CASH OF RS.19,84,844/- WAS ADDED UNDER SECTION 69 OF THE ACT. IT MAY BE POINTED OUT THAT THE COPY OF THE LOOSE PAPER AND THE STATEMENT RECORDED IN THE CASE OF BUILDER WERE PROVIDED TO THE ASSESSEE AND THE ASSESSEE WAS CONFRONTED WITH ALL THE DETAILS. THE ASSESSEE DID NOT ASK FOR ANY CROSS-EXAMINATION. THE GRIEVANCE OF THE ASSESSEE IS THAT SINCE NO CROSS- EXAMINATION WAS GIVEN, THEN NO RELIANCE COULD BE PLACED ON SUCH A STATEMENT. THERE IS NO MERIT IN THE PLEA OF THE ASSESSEE AS THE ADDITION IN THE HANDS OF ASSESSEE WAS NOT MADE ONLY ON THE BASIS OF STATEMENT RECORDED BUT ON THE BASIS OF EVIDENCE FOUND IN RESPECT OF VARIOUS FLATS SOLD BY THE BUILDER FOR DIFFERENT PURCHASERS. THE TRANSACTION WITH THE ASSESSEE IS ONE OF THE TRANSACTIONS WHICH HAVE BEEN UNDERTAKEN BY THE BUILDER. THE DIRECTOR OF THE SAID CONCERN HAS ADMITTED TO HAVE RECEIVED CASH CONSIDERATION WHICH WAS ALSO OFFERED AS ADDITIONAL INCOME IN THE HANDS OF THE SAID CONCERN. FURTHER, JOTTINGS ON THE PAPERS REFLECT BOTH THE CHEQUE AND CASH PAYMENTS. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WHERE EVIDENCE OF ON-MONEY PAYMENT IN CASH HAS BEEN FOUND AND ON THE BASIS OF SUCH EVIDENCE, THE ADDITION MERITS TO BE UPHELD IN THE HANDS OF ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAD RELIED ON RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN CIT VS. SUNIL AGGARWAL (SUPRA). HOWEVER, THE FACTS OF THE SAID CASE BEFORE THE HONBLE DELHI HIGH COURT WERE DIFFERENT, WHEREIN THE ADDITION WAS BASED ITA NO.273/PUN/2016 MR. DAMODAHAR VISHWANATH SOMAN 5 SOLELY ON THE BASIS OF STATEMENT, COPY OF WHICH WAS GIVEN TO THE SAID ASSESSEE BUT IN THE ABSENCE OF ANY CROSS-EXAMINATION, THE HONBLE HIGH COURT DELETED THE ADDITION. HOWEVER, IN THE PRESENT SET OF FACTS, IN ADDITION TO THE STATEMENT RECORDED, LOOSE PAPERS WERE FOUND AND ALSO THE RECIPIENT OF THE CASH HAD ADMITTED TO THE SAID TRANSACTION. HENCE, THE COROLLARY TO THE SAME IS THAT THE CASH HAS BEEN PAID BY THE PURCHASER OF THE FLAT AND IN THE ABSENCE OF ANY SOURCE OF THE SAID CASH PAYMENT, THE SAME IS TO BE ADDED IN THE HANDS OF ASSESSEE UNDER SECTION 69 OF THE ACT. ACCORDINGLY, UPHOLDING THE ORDER OF CIT(A), THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 10. IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THIS 26 TH DAY OF APRIL, 2017. SD/- (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 26 TH APRIL, 2017 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. () / THE CIT(A)-2, AURANGABAD; 4. / THE PR.CIT-2, AURANGABAD ; 5. 6. , , , - / DR SMC, ITAT, PUNE; [ / GUARD FILE. / BY ORDER , // TRUE COPY // / ASSISTANT REGISTRAR, , / ITAT, PUNE