Hotel Sunrise Pvt.Ltd., Vapi V. The Income tax Officer,Vapi Ward-3, Vapi

ITA 3032/AHD/2008

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76820 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 26-05-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 27-08-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS SRDR
• Assessee Lawyers: M K PATEL
• Keywords: Retraction
• Section: 133A

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD .., ! '# '# '# '# $ %&, ! BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER #./ I.T.A. NO.3032/AHD/2008 ( ( ')( ( ')( ( ')( ( ')( / / / / ASSESSMENT YEAR : 2005-06) HOTEL SUNRISE PRIVATE LIMITED 106, AMIDHARA COMPELX OPP.HOTEL PRITAM 4 RASTA GIDC, VAPI / VS. THE INCOME TAX OFFICER VAPI WARD-3 VAPI !* #./+, #./ PAN/GIR NO. : AAACH 9274 N ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : SHRI M.K. PATEL ./*- 1 0 / RESPONDENT BY : SHRI K.C. MATHEWS, SR.DR $'2 1 & / / / / DATE OF HEARING : 26/05/2014 34) 1 & / DATE OF PRONOUNCEMENT : 30/05/2014 5 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-VALSAD (CIT(A) FOR SHORT) DATED 30/04/2008 PERTAINING TO ASSESSMENT YEAR (AY) 2005-06. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEA L:- 01. THE ORDER OF ASSESSMENT IS CONTRARY TO THE FACTS OF THE CASE AND PREJUDICIAL TO THE ASSESSEE. 02. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF T HE CASE AND LAW, THE ADDITIONS MADE ARE CONTRARY TO LAW AND BAS ED ON ERRONEOUS UNDERSTANDING OF THE FACTS OF THE CASE. 03. ON APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF T HE CASE AND LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED ITA NO.3032/AHD /2008 HOTEL SUNRISE PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 2 - IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING O FFICER TREATING OF RS.32,70,000/- ALLEGED TO HAVE BEEN RECEIVED IN CASH FROM SALE OF SHOPS AS UNDISCLOSED INCOME EARNED BY THE APPELL ANT COMPANY. THE ACTION OF THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) IS CONTRARY TO THE FACTS AND LAW AND DESERVES TO BE DELETED. 04. THE APPELLANT CRAVES TO ADD, AMEND, MODIFY OR ALTER THE ABOVE GROUNDS OF APPEAL AT ANY STAGE OF APPELLATE PROCEED INGS. 05. THE APPELLANT HUMBLY PRAYS THAT THE APPEAL BE ALLOW ED IN TOTO. 2. BRIEFLY STATED FACTS ARE THAT A SURVEY ACTION U /S.133A OF THE ACT WAS CARRIED OUT ON 09/03/2005 AT THE BUSINESS PREMI SES OF THE ASSESSEE. DURING THE COURSE OF SURVEY PROCEEDINGS, THE AUTHOR IZED OFFICER RECORDED A STATEMENT ON OATH OF SHRI RASHMIN MAHENDRA ABHOTI , WHO HAD PURCHASED A SHOP IN THE NAME OF HIS WIFE SMT.RANJAN BEN R.ABHOTI. IN THE STATEMENT RECORDED, SHRI RASHMIN ADMITTED THAT HE HAS PAID AN AMOUNT OF RS.4,75,000/- TO THE ASSESSEE FOR PURCHAS E OF SHOP NO.77 OF AMIDHARA COMPLEX. AS AGAINST THIS PAYMENT, THE REC EIPT OF RS.1,80,000/- ONLY IS ISSUED BY THE ASSESSEE-COMPAN Y. A STATEMENT ON OATH WAS ALSO RECORDED OF SHRI JAY CHANDRAKANT PATE L, ONE OF THE DIRECTORS OF HE COMPANY IN WHICH HE ADMITTED THAT T HE SALE CONSIDERATION OF THE SHOPS IS RECORDED IN THE BOOKS TO THE EXTENT OF 50% ONLY, I.E. IN RESPECT OF PAYMENTS RECEIVED THROUGH CHEQUE/DD AND PAYMENTS RECEIVED IN CASH ARE NOT RECORDED IN HE BOOKS OF ACCOUNT. S UBSEQUENTLY, THE ASSESSEE FILED RETURN OF INCOME ON 31/3/2006, DECLA RING TOTAL LOSS AT RS.27,807/-. THE CASE OF THE ASSESSEE WAS PICKED U P FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143(3) OF THE INC OME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED V IDE ORDER DATED 28/12/2007, WHEREBY THE ASSESSING OFFICER(AO) MADE ADDITION OF RS.32,70,000/- AND RS.3,29,64,000/-. THE ASSESSEE PREFERRED AN APPEAL ITA NO.3032/AHD /2008 HOTEL SUNRISE PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 3 - BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE, PARTLY ALLOWED THE APPEAL THEREBY THE ADD ITION OF RS.3,29,64,000/- WAS DELETED AND ADDITION OF RS.32, 70,000/- WAS SUSTAINED. AGAINST THE CONFIRMATION OF ADDITION OF RS.32,70,000/- BY THE LD.CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEA L BEFORE US. 3. GROUND NOS.1 & 2 ARE GENERAL IN NATURE, THEREFOR E NEED NO SEPARATE ADJUDICATION. THE ONLY EFFECTIVE GROUND IS GROUND NO.3 WHICH IS AGAINST THE CONFIRMATION OF ADDITION OF RS.32,70,000/-. 3.1. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION HAS BEEN MADE ON HE BASIS OF THE STATEMENT RECORDED DUR ING THE COURSE OF SURVEY. HE SUBMITTED THAT THE STATEMENT MADE BY ON E OF THE DIRECTORS OF THE ASSESSEE-COMPANY WAS RETRACTED VIDE LETTER DATE D 07/01/2006. HE SUBMITTED THAT IT IS SETTLED PRINCIPLE OF LAW THAT THE STATEMENT RECORDED U/S.133A OF THE ACT DURING THE COURSE OF SURVEY HAS NO EVIDENTIARY VALUE. IN SUPPORT OF THIS CONTENTION, THE LD.COUNSEL FOR T HE ASSESSEE RELIED ON THE JUDGEMENT OF HONBLE SUPREME COURT RENDERED IN THE CASE OF CIT VS. KHADER KHAN SON IN CIVIL APPEAL NOS.13224 OF 2008 & 6747 OF 2012; WHEREBY THE HONBLE APEX COURT HAS DISMISSED THE AP PEAL FILED BY THE REVENUE. THE LD.COUNSEL FOR THE ASSESSEE HAS ALSO RELIED ON THE DECISION OF CO-ORDINATE BENCH (ITAT D BENCH AHMEDABAD) REN DERED IN THE CASE OF SHRI ABBAS NABI SHAIKH VS. ASST.CIT IN ITA NO.366/AHD/2009 FOR AY 2005-06. HE SUBMITTED THAT THE AO HAS NOT P LACED ANY INDEPENDENT MATERIAL ON RECORD IN SUPPORT OF HIS CO NTENTION. HE SUBMITTED THAT IN THE ABSENCE OF INDEPENDENT EVIDEN CE, THE ADDITION MADE ITA NO.3032/AHD /2008 HOTEL SUNRISE PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 4 - BY THE AO CANNOT BE SUSTAINED. HE FURTHER SUBMITTE D THAT THE AO HAS TAKEN THE STATEMENT RECORDED DURING THE COURSE OF S URVEY OF ONE SHRI RASHMIN MAHENDRA ABHOTI AND APPLIED IT TO ALL THE P URCHASERS. HE STATED THAT THERE IS NOTHING ON RECORD THAT THE OTHER PURC HASERS HAVE MADE SUCH STATEMENT. HE SUBMITTED THAT SO FAR AS THE STATEME NT OF THE DIRECTOR IS CONCERNED, THE SAME WAS DULY RETRACTED BY THE DIREC TOR, THEREFORE SUCH STATEMENT CANNOT BE TAKEN AS A MATERIAL EVIDENCE. 4. ON THE CONTRARY, LD.SR.DR SHRI K.C.MATHEWS VEHEM ENTLY ARGUED THAT IT IS NOT THE CASE WHERE A RETRACTION HAS BEEN MADE, BUT IN THIS CASE, ADMITTEDLY THE AO HAS RECORDED A STATEMENT OF ONE O F THE PURCHASERS WHO HAS CATEGORICALLY STATED THAT OUT OF RS.4,75,000/-, ONLY RECEIPT OF RS.1,80,000/- HAS BEEN ISSUED, MEANING THEREBY THAT THE ASSESSEE- COMPANY AHS CONCEALED THE RECEIPT OF BALANCE AMOUNT . HE SUBMITTED THAT THE STATEMENTS OF SHRI RASHMIN MAHENDRA ABHOTI AND SHRI JAY CHANDRAKANT PATEL HAVE TO BE READ TOGETHER. HE S TRONGLY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE SUBMISSION OF THE LD.COUNSEL FOR THE ASSESSEE I S OF TWO FOLDS. FIRSTLY, THAT THE STATEMENT MADE DURING THE COURSE OF SURVEY U/S.133A OF THE ACT HAS NO EVIDENTIARY VALUE. SECONDLY, THE REVENUE HA S NOT PLACED ANY INDEPENDENT MATERIAL ON RECORD TO SUBSTANTIATE THE ADDITION. THE LD.COUNSEL FOR THE ASSESSEE HAS RELIED ON THE DECIS ION OF THE COORDINATE BENCH RENDERED IN ITA NO.366/AHD/2009 FOR AY 2005-0 6 IN THE CASE OF ITA NO.3032/AHD /2008 HOTEL SUNRISE PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 5 - SHRI ABBAS NABI SHAIKH VS. ACIT. WE FIND THAT THE COORDINATE BENCH IN PARAGRAPH NOS.11 & 12 HAS OBSERVED AS UNDER:- 11. IN THE CASE OF CIT VS. KHADER KHAN SON (SUPRA ) THE HONBLE HIGH COURT HAS HELD THAT SEC. 133A DOES NOT EMPOWER ANY I.T. AUTHORITY TO EXAMINE ANY PERSON ON OATH, HENCE, AY SUCH STATEMENT HAS NO EVIDENTIARY VALUE AND ANY ADMISSION MADE DUR ING SUCH STATEMENT CANNOT BY ITSELF BE MADE THE BASIS FOR AD DITION. FURTHER THE HONBLE HIGH COURT HAS HELD AS UNDER:- 7. IN THE DECISION OF PULLANGODE RUBBER PRODUCTS CO.LTD. VS. STATE OF KERALA (1973) 91 ITR 18, THE APEX COURT HE LD THAT AN ADMISSION IS EXTREMELY AN IMPORTANT PIECE OF EVIDEN CE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT . 12. CONSIDERING THE TOTALITY OF THE FACTS AND RESP ECTFULLY FOLLOWING THE DECISIONS OF HIGH COURT STATED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT IN THE PRESENT CASE, THE ADDITIONS ARE BASED O N THE STATEMENT RECORDED AT THE TIME OF SURVEY U/S.133A WHICH HAVE BEEN LATER ON RETRACTED BY THE ASSESSEE. THE A.O. HAS NOT BROUGH T ANY CORROBORATIVE EVIDENCE AND MATERIAL ON RECORD TO JUSTIFY THE ADDI TION. THE A.O. HAS NOT BROUGHT ANY INDEPENDENT EVIDENCE OR GIVEN ANY F INDING TO SUBSTANTIATE THE DECLARATION MADE AT THE TIME OF SU RVEY. IN VIEW OF THESE FACTS WE ARE OF THE VIEW THAT NO ADDITION CAN BE MA DE ONLY ON THE BASIS OF ADMISSION DURING THE COURSE OF SURVEY. WE THUS DIRECT THE DELETION OF THE ADDITION MADE. THUS THIS GROUND OF THE ASSESSE E IS ALLOWED. 5.1. THE LD.COUNSEL FOR THE ASSESSEE HAS ALSO RELIE D ON THE DECISION OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT V S. S.KHADER KHAN SON IN CIVIL APPEAL NOS.13224 OF 2008 & 6747 O F 2012, DATED 20 TH SEPTEMBER-2012, WHEREBY THE APPEAL FILED BY THE REVENUE WAS DISMISSED. THE LD.SR.DR HAS RELIED ON THE ORDER OF THE AUTHORITIES BELOW. THE AO MADE THE ADDITION ON TH E BASIS OF A STATEMENT ITA NO.3032/AHD /2008 HOTEL SUNRISE PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 6 - GIVEN DURING THE COURSE OF SURVEY. THE LD.CIT(A) H AS UPHELD THE ACTION OF THE ASSESSING OFFICER BY OBSERVING AS UNDER:- 7.1. I HAVE PERUSED THE FACTUAL MATRIX OF THE CASE . ADMITTEDLY THE ADDITION IN RESPECT OF VARIOUS PURCHASERS OF SHOPS HAS BEEN MADE BY THE ASSESSING OFFICER BASED ON THE STATEMENT RECORDED O N OATH OF A THIRD PARTY OF HIS WIFES AFFAIR AND ONE OF THE DIRECTORS OF THE APPELLANT COMPANY. THE ASSESSING OFFICER HAS NOT CONFRONTED THE APPELLANT REGARDING RECEIPT OF MONEY IN CASH AND MERELY ASSUM ED THAT THE APPELLANT HAS RECEIVED CASH FROM EACH AND EVERY PUR CHASER. THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY AGAINST ANY OF THE PURCHASES THAT GAVE RISE TO AN INFERENCE THAT THE ADDITION HA S BEEN MADE ON THE BASIS OF PRESUMPTION. ON THE OTHER HAND THE APPELL ANT HAS ALSO NOT PROVED TO THE SATISFACTION OF THE ASSESSING OFFICER THAT PART OF THE CONSIDERATION HAS NOT BEEN OBTAINED IN CASH AS ADMI TTED IN THE STATEMENT RECORDED DURING THE TIME OF SURVEY. I AM OF THE CONSIDERED OPINION WITH THE ASSESSING OFFICER THAT THE RETRACT ION LETTER FILED BY THE APPELLANT IS NOT VALID. I AM CONSTRAINED TO AGREE WITH THE ASSESSING OFFICER AND THE ADDITION MADE BY THE ASSESSING OFFI CER IS UPHELD. THIS GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 5.2. IT IS EVIDENT FROM THE ABOVE OBSERVATION OF TH E LD.CIT(A) THAT THE AO HAD NOT CONFRONTED THE ASSESSEE REGARDING RECEIP T OF MONEY IN CASH AND MERELY ASSUMED THAT THE ASSESSEE HAS RECEIVED C ASH FROM EACH AND EVERY PURCHASER. UNDISPUTEDLY, THE AO HAS NOT MADE ENQUIRY FROM THE OTHER PURCHASERS AND NO MATERIAL AHS BEEN PLACED ON RECORD THAT MONEY WAS RECEIVED IN CASH EXCEPT THAT STATEMENT WAS MADE BY ONE OF THE DIRECTORS OF THE COMPANY DURING THE COURSE OF SURVE Y. THE LD.CIT(A) HAS HELD THAT THE RETRACTION LETTER OF THE ASSESSEE IS NOT VALID WITHOUT GIVING ANY REASON. WE ALSO FIND THAT THE LD.CIT(A) HAS NOT TAKEN INTO ACCOUNT THE DECISION OF THE HONBLE MADRAS HIGH COU RT RENDERED IN THE CASE OF CIT VS. KHADER KHAN SON REPORTED AT (2008) 214 CTR 589 (MAD.) AND THE APPEAL FILED BY THE REVENUE BEFORE T HE HONBLE APEX COURT. THEREFORE, LD.CIT(A) WAS NOT JUSTIFIED IN C ONFIRMING THE ACTION OF ITA NO.3032/AHD /2008 HOTEL SUNRISE PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 7 - THE AO AND MOREOVER THE REVENUE HAS NOT PLACED ANY INDEPENDENT MATERIAL ON RECORD TO SUBSTANTIATE THE ADDITION. U NDER THESE FACTS, THE ADDITION TO THE EXTENT OF RS.2,95,000/- ONLY (RS.4, 75,000 RS.1,80,000) IS HEREBY SUSTAINED AND THE AO IS DIRECTED TO DELET E THE BALANCE AMOUNT OF RS.29,75,000/-. THUS, THIS GROUND OF ASSESSEE S APPEAL IS PARTLY ALLOWED. 6. REMAINING GROUNDS ARE GENERAL IN NATURE REQUIRE NO INDEPENDENT ADJUDICATION. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) ($ %&) ! ! ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30/ 05 /2014 8.., '.../ T.C. NAIR, SR. PS 5 1 .&9 :9)& 5 1 .&9 :9)& 5 1 .&9 :9)& 5 1 .&9 :9)&/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. ## & $; / CONCERNED CIT 4. $;() / THE CIT(A)-VALSAD 5. 9'%< .& , , / DR, ITAT, AHMEDABAD 6. <( =2 / GUARD FILE. 5$ 5$ 5$ 5$ / BY ORDER, /9& .& //TRUE COPY// > >> >/ // / #+ #+ #+ #+ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD