Shri Dilipsinh Laxmansinh Rathod, Ahmedabad V. The Income tax Officer,Ward-2, Dahod

ITA 2768/AHD/2008

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9665 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-02-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 04-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: M J SHAH
• Keywords: Unexplained investment; Search and seizure; Salary income
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE S/SHRI RAJPAL YADAV, JM, & MANISH BORAD, AM. ITA NOS. 2768 2772/AHD/2008 ASST. YEARS: 2001-02 TO 2005-06 DILIPSINH LAXMANSINH RATHOD, C/O MAHIPALSINH D. RATHOD, 12/92, F-COLONY, SHAHLAM TOL NAKA, AHMEDABAD. VS INCOME-TAX OFFICER, WARD-2,, DAHOD. APPELLANT RESPONDENT PAN ACEPR 2785D ITA NO.2687/AHD/2008 ASST. YEAR 2003-04 INCOME-TAX OFFICER, WARD-2,, DAHOD. VS DILIPSINH LAXMANSINH RATHOD, C/O MAHIPALSINH D. RATHOD, 12/92, F-COLONY, SHAHLAM TOL NAKA, AHMEDABAD. APPELLANT RESPONDENT ASSESSE BY SHRI M. J. SHAH, AR REVENUE BY SHRI V. K. SINGH, SR.DR DATE OF HEARING: 04/02/2016 DATE OF PRONOUNCEMENT: 8/02/2016 O R D E R PER BENCH OUT OF THIS BUNCH OF SIX APPEALS REVENUE IS IN APP EAL FOR ASST. YEAR 2003-04, WHEREAS ASSESSEE IS CHALLENGING THE O RDERS OF CIT(A) PASSED IN ASST. YEARS 2001-02 TO 2005-06. SINCE COM MON ISSUES ITA NOS. 2768 2770 & 2687, 2771 & 2772/AHD/2008 ASST. YEARS 2001-02 2003-04, 2004-05 & 2005-06 2 INVOLVED IN ALL THESE APPEALS, WE DEEM IT APPROPRIA TE TO DISPOSE OF THESE APPEALS BY THIS COMMON ORDER. THE FACTS ON VI TAL POINTS IN ALL APPEALS ARE COMMON, THEREFORE, FOR THE FACILITY OF REFERENCE WE ARE TAKING THE FACTS FROM ASST. YEARS 2001-02 AND 2005- 06 MAINLY. 2. BRIEF FACTS OF THE CASES ARE THAT THE ASSESSEE I S AN EMPLOYEE WITH GUJARAT POLICE DEPARTMENT AND POSTED AS SUB-IN SPECTOR OF POLICE AT RAJGADH POLICE STATION, TAL. GHOGHAMBA, D IST. PANCHMAHAL. A SEARCH BY ANTI CORRUPTION BUREAU (IN SHORT A.C.B. ) OF THE STATE GOVERNMENT WAS CARRIED OUT UPON THE ASSESSEE ON 28. 03.2005. IN CONSEQUENCE OF OF THE SEARCH, CASH OF RS.30,43,400/ - WAS FOUND FROM THE RESIDENCE OF THE ASSESSEE. BESIDES CASH OTHER D OCUMENTS RELATED TO CASH, F.D.R., KVP, NSC , INVESTMENT IN IMMOVABLE PROPERTIES, ETC. WERE FOUND. THESE INVESTMENTS WERE ALLEGED TO BE IN THE NAMES OF ASSESSEE ALONG WITH HIS FAMILY MEMBERS. ON THE STRE NGTH OF THE INFORMATION RECEIVED FROM ACB, LD. ASSESSING OFFICE R HAS FRAMED ASSESSMENT U/S 143(3) R.W.S. 147 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) FOR ASST. YEARS 2001-02 TO 2004-05. IN ASST. YEAR 2005-06, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 143(2) & 142(1). IN RESPONSE TO THE NOTICE SHRI GAURANG SHET HWALA, C.A. HAD ITA NOS. 2768 2770 & 2687, 2771 & 2772/AHD/2008 ASST. YEARS 2001-02 2003-04, 2004-05 & 2005-06 3 APPEARED BEFORE THE ASSESSING OFFICER FROM TIME TO TIME. WHILE SCRUTINIZING THE DETAILS FOR ASST. YEAR 2001-02 LD. ASSESSING OFFICER HAS WORKED THE INVESTMENTS IN FDR, KVP, NSC ETC. FO UND DURING THE COURSE OF RAID IN FINANCIAL YEARS 2000-01 TO 2003-0 4. ALL THESE DETAILS ARE MENTIONED ON PAGE 2 & 3 OF ASSESSMENT ORDER. TH ESE DETAILS READ AS UNDER :- F.Y. FDR KVP SLIP OF CASH TIME DEPOSIT IMMOV. PROPERTY TOTAL 2000-01 - 1,30,000 - 5000 - 1,35,000 2001-02 - 62,000 - - 1,60,000 2,22,000 2002-03 4,00,000 35,000 3,00,000 - 7,83,756 15,18,756 2003-04 25,000 - - - - 25,000 3. ACCORDING TO THE ASSESSING OFFICER, INVESTMENT O F RS.1,35,000/- WAS MADE BY THE ASSESSEE IN ASST. YEAR 2001-02. THE LD. ASSESSING OFFICER AFTER HEARING THE ASSESSEE MADE AN ADDITION OF RS.1,35,000/- TO THE TOTAL INCOME OF THE ASSESSEE AND DETERMINED THE TAXABLE INCOME AT RS.2,27,100/-. THE COMPUTATION MADE BY LD . ASSESSING OFFICER THE READS AS UNDER :- 8. SUBJECT TO THE ABOVE REMARKS AND DATA AVAILABLE ON RECORDS, THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER : ITA NOS. 2768 2770 & 2687, 2771 & 2772/AHD/2008 ASST. YEARS 2001-02 2003-04, 2004-05 & 2005-06 4 RS. RS. INCOME FROM SALARIES AS PER STATEMENT OF INCOME 92,101 INCOME FROM OTHER SOURCES 1) INVESTMENT IN KISAN VIKAS PATRAS AS DISCUSSED IN PARA-3 1,30,000 2) INVESTMENT IN TIME DEPOSIT AS DISCUSSED IN PARA 5 5,000 1,35,000 TOTAL INCOME DETERMINED AT 2, 27,101/ - ROUNDED OFF 2,27,101 AT THIS STAGE IT IS PERTINENT TO NOTE THE OBSERVATI ONS OF LD. ASSESSING OFFICER IN PARAGRAPH NO.4 TO 7 OF THE ASSESSMENT OR DER WHICH READ AS UNDER :- 4. ON THE BASIS OF THIS EXERCISE, NOTICE U/S 148 OF THE IT ACT ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE FILED RE TURN OF INCOME SALARY INCOME ONLY. FROM THE INFORMATION GATHERED F ROM THE OFFICE OF THE ACB IT IS LEARNT THAT THE ASSESSEE HAS MADE HUG E INVESTMENTS IN CASH, FDR, KVP AND OTHER IMMOVABLE PROPERTY. 5. DURING THE YEAR UNDER CONSIDERATION, THE INVESTM ENT OF RS.1,30,000 AND RS.5000/- IS MADE IN KISAN VIKAS PA TRA AND FOR THE TIME DEPOSITS RESPECTIVELY BY THE ASSESSEE AS PER T HE REPORT/STATEMENT OF THE ACB. A QUERY LETTER DATED 5 /10/2006 WAS ISSUED TO THE ASSESSEE AND AS PER QUERY NO.5 SOURCE OF INVESTMENT WITH DOCUMENTARY EVIDENCE WERE CALLED FOR. IN THE R EPLY DATED 24//11/2006, THE ASSESSEE HAS STATED AS UNDER : ALL THE INVESTMENTS REPUTED MADE IN MY NAME ARE A CTUALLY MADE IN THE HUFS ACCOUNT WHICH IS IN THE NAME OF DI LIPSINH L. RATHOD. THIS WAS ALSO CONVEYED TO ACB. HENCE THIS MATTER DOES NOT RELATE TO ME. WE HAVE ALSO SHOWN ABOVE ALL INVE STMENTS IN NR HUFS STATEMENT OF ACCOUNTS WHICH CAN BE VERIFIE D FROM THE YOUR RECORDS. ITA NOS. 2768 2770 & 2687, 2771 & 2772/AHD/2008 ASST. YEARS 2001-02 2003-04, 2004-05 & 2005-06 5 6. THE AFORESAID REPLY OF THE ASSESSEE IS NOT ACCOM PANIED BY ENCLOSURES OF DOCUMENTARY EVIDENCE. EVEN THE SUBMIS SIONS MADE BY THE ASSESSEE TO THE ACB ARE ALSO NOT MADE AVAILABLE TO THIS OFFICE. WITHOUT PREJUDICE TO WHAT IS STATED ABOVE THE REPLY SPEAKS OF OWNERSHIP OF KVP WITH SHRI D. L. RATHOD HUF. ON GOI NG THROUGH THE RECORDS NO RETURN OF INCOME IN THE NAME OF SHRI D. L. RATHOD HUF IS FOUND. THE ASSESSEE HAS ALSO NOT SUBSTANTIATED SUCH CLAIM BY ANY CONTEMPORARY EVIDENCE. IT IS PERTINENT TO NOTE THAT THE ASSESSEE STATES OF HAVING FILED RETURN OF INCOME AYS 2004-05 AND 20 05-06 WHEREAS THE INVESTMENT PERTAINS TO AY 2001-02. THE EXPLANATION OFFERED BY THE ASSESSEE HAS NO MERIT THEREFORE THE INVESTMENT IN K VPS IS CONSIDERED AS UNEXPLAINED U/S 69B OF THE IT ACT. THE ASSESSEE DID NOT DECLARE THE INVESTMENT OF KVPS IN HIS RETURN OF INCOME FOR AY 2 001-02 AND THUS WILLFULLY CONCEALED HIS INCOME WITHIN THE MEANING O F EXPLANATION 1 TO SECTION 271(1)(C) R.W.S. 274 OF THE IT ACT, 1961. 7. THE STATEMENT OF THE ASSESSEE IS NOT ACCEPTABLE AS THE INVESTMENT WAS TO CONFIRMED WITH DOCUMENTARY EVIDEN CE WHICH ARE NOT FURNISHED BY HIM AND THE DOCUMENTS UNDER WHICH THE MATTER IS CONVEYED BY HIM TO THE ACB IS ALSO NOT PRODUCED. TH E ASSESSEE HAS FILED THE RETURN OF INCOME IN THE NAME AND STATUS O F HUF FOR AYS 2004- 05 AND 2005-06 AND NOT FOR AY 2001-02 RELEVANT TO T HE ASSESSMENT YEAR UNDER CONSIDERATION ONLY ON 29/03/2006 I.E. AF TER THE SEARCH ON 28/03/2005 OF THE ACB. THE SO CALLED HUF AS STATED IS CONCOCTED HUF STORY TO COVER UP THE TAX LIABILITY AGAINST HIM. IN THE STATEMENT OF ACB IT IS CLEAR INVESTMENT OF THE ASSESSEE FROM WHICH T HE DOCUMENTS ARE FOUND AND SEIZED BY THE ACB DEPARTMENT FROM HIS RES IDENTIAL PREMISES. THE CLAIM OF THE ASSESSEE IS FAR AWAY FRO M THE TRUTH FOUND FROM THE DOCUMENTARY EVIDENCES. THEREFORE, THE INVE STMENT MADE IN KVP OF RS.1,30,000 AND TIME DEPOSIT OF RS.5000/- I. E. TOTAL OF RS.1,35,000/- IS ADDED TO THE TOTAL INCOME OF THE A SSESSEE. ALSO I AM SATISFIED THAT THIS IS A CASE OF CONCEALED THE PART ICULARS OF INCOME BY THE ASSESSEE AND CREATED A DEFAULT OF PENALTY U/S 2 71(1)(C) OF THE IT ACT, 1961. THE PENALTY U/S 271(1)(C) OF THE IT ACT IS THEREFORE INITIATED FOR THIS ADDITION. 4. IN AY 2005-06 LD. ASSESSING OFFICER HAS NOTICED THAT THE BANK ACCOUNTS MAINTAINED BY THE ASSESSEE AND HIS FAMILY MEMBERS ON PAGE 9 OF THE ASSESSMENT ORDER. THE LD. ASSESSING O FFICER ALSO TOOK COGNIZANCE OF THE FACT THAT SUM OF RS.30 LACS WERE RECOVERED BY ITA NOS. 2768 2770 & 2687, 2771 & 2772/AHD/2008 ASST. YEARS 2001-02 2003-04, 2004-05 & 2005-06 6 ACB. THE DETAILS OF THE RECOVERY ARE MENTIONED IN P ARAGRAPH 4.4, WHICH READS AS UNDER :- 4.4 IN THE EVENING OF 22 ND MARCH, 2005, RS.28 LACS WERE GIVEN TO SHRI RATHOD. NEXT DAY MORNING ACB RAIDED RESIDEN CE OF SHRI RATHOD. FROM THE PANCHNAMA OF ACB IT IS NOTICED THA T CASH WERE FOUND FROM FOUR DIFFERENT PLACES OF RESIDENCE OF SHRI RATHOD WHICH IS AS UNDER :- RS.10,00,000/- IN A COTTON BAG RS.2,86,000/- IN A PLASTIC KEPT IN BRIEF CASE RS.13,57,400/- IN A DRUM KEPT IN THE KITCHEN RS.4,00,000/- IN THE MALIYA OF KITCHEN RS.30,43,400/- ON THE STRENGTH OF THE ABOVE DETAILS THE LD. ASSESS ING OFFICER DETERMINED TAXABLE INCOME AT RS.39,78,720/-. 5. DISSATISFIED WITH THE ASSESSMENT ORDER, ASSESSEE WENT IN APPEALS BEFORE CIT(A) BUT THE APPEALS BEFORE LD. FI RST APPELLATE AUTHORITY DID NOT BRING ANY RELIEF TO THE ASSESSEE. 6. NOW THE ASSESSEE IS IN APPEAL BEFORE US. BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE COURT O F SPECIAL JUDGE (A.C.B), PANCHMAHALS, AT GODHRA HAS ACQUITTED THE ASSESSEE FROM ALL THE CHARGES WHICH WERE LEVELED AGAINST HIM AS P ER SECTION ITA NOS. 2768 2770 & 2687, 2771 & 2772/AHD/2008 ASST. YEARS 2001-02 2003-04, 2004-05 & 2005-06 7 13(1)(E) AND 13(2) OF THE PREVENTION OF CORRUPTION ACT. IN OTHER WORDS ASSESSEE WAS ABLE TO EXPLAIN HIS POSITION WITH REGA RD TO THE UNEXPLAINED ASSETS FOUND AND SEIZED DURING THE RAID . HE PLACED ON RECORD THE TRIAL COURT JUDGMENT DATED 02/03/2015. A CCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, THE EVIDENCE SUBMITTED BY THE ASSESSEE DURING THE TRIAL PROCEEDINGS WAS OF SUCH A NATURE W HICH CAN ABSOLVE THE ASSESSEE REGARDING THE SOURCE OF ACQUISITION OF THESE ASSETS. HE, THEREFORE, PRAYED THAT ALL THESE ISSUES BE SET ASID E TO THE FILE OF ASSESSING OFFICER FOR RE-ADJUDICATION, IN THE LIGHT OF SUBSEQUENT DEVELOPMENT. 7. ON THE OTHER HAND, THE LD. DR CONTENDED THAT THE JUDGMENT OF THE SPECIAL JUDGE, A.C.B. WAS NOT THERE WHEN ASSESS MENT ORDER WAS PASSED. THE LD. ASSESSING OFFICER CONFRONTED THE AS SESSEE FOR EACH SEIZED MATERIAL AND THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF INVESTMENT IN BANK ACCOUNT, FDR, KVP, NSC ETC. OR C ASH OF RS.30,43,400/- FOUND AT THE TIME OF SEARCH. THEREFO RE, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. ASSESSING OFFICER IN ALL THESE YEARS. 8. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT PROCEEDINGS ITA NOS. 2768 2770 & 2687, 2771 & 2772/AHD/2008 ASST. YEARS 2001-02 2003-04, 2004-05 & 2005-06 8 UNDER THE PREVENTION OF CORRUPT ACT, 1988 WERE INIT IATED AGAINST THE ASSESSEE FOR HAVING DISPROPORTIONATE ASSETS WORTH R S.50,49,590/- IN HIS POSSESSION. IT WAS THE CASE OF THE PROSECUTING AGENCY THAT DURING THE COURSE OF INVESTIGATION, IT CAME TO THE NOTICE OF THE DEPARTMENT THAT ASSESSEE HAS MADE INVESTMENTS IN HIS NAME AS W ELL AS IN THE NAMES OF HIS DEPENDENTS AND THE EVIDENCES DEMONSTRA TING THE DISPROPORTIONATE ASSETS HAD COME TO THE LIGHT. THE LD. SPECIAL JUDGE HAS CONSIDERED THESE ALLEGATIONS AND ACQUITTED THE ASSESSEE. ON DUE CONSIDERATION OF THE JUDGMENT OF SPECIAL JUDGE, ACB, PARTICULARLY PARAGRAPH, 57 & 74, WE ARE OF THE VIEW THAT BEFORE THE COURT OF SPECIAL JUDGE, ACB, ASSESSEE HAS PRODUCED EVIDENCES DEMONSTRATING HIS POSITION ABOUT ALLEGED UNACCOUN TED ASSETS. IN ALL ASSESSMENT YEARS, THE INCOME HAS BEEN COMPUTED ON T HE BASIS OF PANCHNAMA AND OTHER DETAILS COLLECTED FROM THE A.C. B. CONSIDERING THE JUDGMENT OF SPECIAL COURT OF A.C.B. WHICH HAS A NALYZED THE EVIDENCES, WE DEEM IT APPROPRIATE THAT ALL THESE AD DITIONS DESERVE TO BE SET ASIDE TO THE FILE OF ASSESSING OFFICER FOR R E-ADJUDICATION BECAUSE AT THE TIME OF ASSESSMENT PROCEEDINGS NEITH ER THE ASSESSING OFFICER WAS POSSESSING THE CLINCHING EVID ENCES WHICH COULD EXHIBIT THE UNEXPLAINED INVESTMENTS EXCLUSIVE LY IN THE HANDS OF ITA NOS. 2768 2770 & 2687, 2771 & 2772/AHD/2008 ASST. YEARS 2001-02 2003-04, 2004-05 & 2005-06 9 ASSESSEE NOR THE ASSESSEE COULD FILE HIS EXPLANATIO N WITH REGARD TO THE ALLEGATIONS POSED BEFORE HIM ON THE STRENGTH OF PANCHNAMA OF ACB. IT IS PERTINENT TO OBSERVE THAT PROSECUTION IN THE CRIMINAL CASE FAILED TO ESTABLISH THE POSSESSION OF DISPROPORTION ATE ASSETS BY THE ASSESSEE, MEANING THEREBY THE EVIDENCE COLLECTED BY THE PROSECUTION WAS NOT OF THAT NATURE WHICH COULD SATISFY THE COUR T ABOUT UNEXPLAINED INVESTMENT BY THE ACCUSED. BEARING THIS FACT IN MIN D, WHEN WE PERUSED THE ASSESSMENT ORDERS THEN IT REVEALED THAT AO HAS RELIED UPON THE PANCHNAMA/CHARGE SHEET PREPARED BY PROSECU TION. ON DUE CONSIDERATION OF THESE FACTS WE ARE OF THE VIEW THA T IT IS FOR THE LD. AO TO FIRST LAY HIS HANDS ON AN EVIDENCE WHICH SHOWS U NEXPLAINED INVESTMENT BY THE ASSESSEE. THE LD. AO THEREAFTER S UPPOSED TO CALL UPON THE EXPLANATION OF THE ASSESSEE QUA THAT INVES TMENT OR ANY ASSETS POSSESSED BY HIM. IF THE AO IS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE THEN ADDITION IN THE HA NDS OF ASSESSEE CAN BE MADE. THE LD. ASSESSING OFFICER SHALL DECIDE THE ISSUES IN ACCORDANCE WITH LAW KEEPING IN VIEW THE DECISION OF THE SPECIAL JUDGE, ACB. ITA NOS. 2768 2770 & 2687, 2771 & 2772/AHD/2008 ASST. YEARS 2001-02 2003-04, 2004-05 & 2005-06 10 9. THE OBSERVATION MADE BY US WILL NOT IMPAIR OR I NJURE THE CASE OF REVENUE AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENCE/ EXPLANATION OF THE ASSESSEE. THESE ARE SPECIFICALLY TO BE CONFINED FOR BRINGING THE POINTS TO SET ASIDE THE ISSUES TO THE FILE OF ASSESSING OFFICER. THE LD. ASSESSING OFFICER SHALL PROVIDE DU E OPPORTUNITY OF HEARING TO THE ASSESSEE. 10. THE APPEALS OF ASSESSEE AND THE APPEAL OF REVEN UE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH FEBRUARY, 2016. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER DATED 08/02/2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD ITA NOS. 2768 2770 & 2687, 2771 & 2772/AHD/2008 ASST. YEARS 2001-02 2003-04, 2004-05 & 2005-06 11 1. DATE OF DICTATION: 04/02/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 05/02/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 08/02/16 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: