DR PRAKASH KHER, MUMBAI V. ITO 11(3)(2), MUMBAI

ITA 306/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101014 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2001-2002
• Appeal Filed On: 10-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: JEETENDRA SINGH
• Keywords: Unexplained expenditure
• Section: 69C; 143(3); 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 306 /MUM/2014 (ASSESSMENT YEAR : 2001-02) DR.PRAKASH KHER, 4 TH ,AHRIHANT VILLA, 15 TH ROAD, CHEMBUR, MUMBAI 400 071 PAN: AAAFC 0791N ... APPELLANT VS. THE ITO-11(3)(2), MUMBAI .... RESPOND ENT APPELLANT BY : SHRI JEETENDRA SINGH RESPONDENT BY : SHRI PREMANAND J. DATE OF HEARING : 17/06/2015 DATE OF PRONOUNCEMENT : 11/09/2015 ORDER PER G.S. PANNU,AM: THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRE CTED AGAINST THE ORDER OF THE CIT(A)-2, MUMBAI DATED 30.08.2013 P ERTAINING TO THE ASSESSMENT YEAR 2001-02 WHICH IN-TURN, HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER DATED 12.12.2008 UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 2 ITA NO. 306 /MUM/2014 (ASSESSMENT YEAR : 2001-02) 2. IN THIS APPEAL THE ONLY DISPUTE RELATES TO AN A DDITION OF RS.18,15,000/- MADE BY THE ASSESSING OFFICER BY INV OKING THE PROVISIONS OF SECTION 69C OF THE ACT ON ACCOUNT OF UNEXPLAINE D EXPENDITURE. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE I S AN INDIVIDUAL, WHO IS A PRACTICING PHYSICIAN AND FOR THE YEAR UNDER CO NSIDERATION HE FILED THE RETURN OF INCOME DECLARING A TOTAL INCOME OF RS .2,75,101/-. A NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSE SSEE ON 25/3/2008 RE-OPENING THE ASSESSMENT ON THE GROUND THAT AS PER INFORMATION RECEIVED FROM THE OFFICE OF COMMISSIONER OF INCOME TAX, CENTRAL-1, MUMBAI, THE DAUGHTER OF THE ASSESSEE MS. SWATI KHER HAD PAID DONATION/ CAPITATION FEE OF RS.18,15,000/- TO D.Y.P ATIL MEDICAL COLLEGE (RAMRAO ADIK EDUCATION TRUST) FOR ADMISSION TO M BBS COURSE. IN A DEPOSITION UNDER SECTION 131 OF THE ACT BEFORE THE INVESTIGATION WING ON 5/3/2008 AS WELL AS IN THE COURSE OF THE ENSUING ASSESSMENT, ASSESSEE, BEING FATHER OF MS. SWATI KHER, DENIED H AVING GIVEN DONATION OF RS.18,15,000/- TO D.Y.PATIL MEDICAL COLLEGE. IN STEAD, ASSESSEE SUBMITTED THAT HE HAS PAID RS.5,85,000/- IN CASH F OR HIS DAUGHTERS THE MBBS COURSE TO D.Y.PATIL MEDICAL COLLEGE. IT WAS E XPLAINED THAT THE AFORESAID AMOUNT WAS PAID AS FEE FOR HIS DAUGHTER U NDERGOING MBBS COURSE AND THAT THE SAME WAS CONTRIBUTED BY HIS FAM ILY MEMBERS NAMELY (I) MR. SHIVRAM SHANKAR KHER (FATHER) RS.1, 00,000/- (II) MR. GOVIND ANAND KARMARKAR (FATHER-IN-LAW) RS.1,00,000, (III) MRS. SUDHA SHIVRAM KHER (MOTHER) RS.1,50,000/-, (IV) MISS. SWA TI PRAKASH KHER (DAUGHTER) RS.50,000/- AND (V) THE ASSESSEE AND HIS WIFE RS.1,85,000/- IN ALL AMOUNTING TO RS.5,85,000/- . 3 ITA NO. 306 /MUM/2014 (ASSESSMENT YEAR : 2001-02) 2.1 HOWEVER, AS PER ASSESSING OFFICER, THE PAYMENT MADE BY THE ASSESSEE TO D.Y.PATIL MEDICAL COLLEGE WAS DETECTED DURING THE COURSE OF SEARCH ACTION CONDUCTED AT THE PREMISES OF RAMRAO ADIK EDUCATION TRUST AND THAT THE SAME SHOWED THAT ASSESSEE HAD MA DE PAYMENT OF RS.18,15,000/- FOR THE ADMISSION OF HIS DAUGHTER TO THE MEDICAL COLLEGE. ACCORDINGLY, THE ASSESSING OFFICER ADDED A SUM OF R S.18,15,500/- TO THE RETURNED INCOME AS UNEXPLAINED EXPENDITURE. THE SA ID ADDITION HAS SINCE BEEN AFFIRMED BY CIT(A) ALSO AND, THEREFORE, ASSESSEE IS IN FURTHER APPEAL. 3. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE VEHEMENTLY POINTED OUT THAT THE IMPUGNED ADDITION WAS UNTENABL E BECAUSE SIMILAR ADDITIONS MADE IN THE HANDS OF CERTAIN OTHER INDIVI DUALS, BASED ON THE INFORMATION FOUND IN THE COURSE OF SEARCH ACTION CO NDUCTED ON THE D.Y.PATIL GROUP, HAS BEEN DELETED BY THE TRIBUNAL. IN THIS CONTEXT, HE HAS RELIED UPON THE FOLLOWING DECISIONS OF OUR CO-O RDINATE BENCH:- 1. MR. BABANRAO V. MANDE,ITA NO.3441/MUM/2009, A.Y. 2000-01 DATED 20/08/2010 2. MR. VIJAY D. DAGHA, ITA NO.3718/M/2011, A.Y.2001 -02 DATED 27/08/2014 3. MR. VILAS SHANKAR DALVI, ITA NO.1807/MUM/2013 D ATED 12/06/2013 4. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE APPEARING FOR THE REVENUE HAS REITERATED THE STAND OF THE ASS ESSING OFFICER WHICH IS TO THEEFFECT THAT THE INFORMATION FOUND IN THE C OURSE OF SEARCH ON THE D.Y.PATIL GROUP REVEALS THAT AN AMOUNT OF RS.18,15, 000/- WAS PAID WITH RESPECT TO THE ADMISSION OF ASSESSEES DAUGHTER IN THE MBBS COURSE. 4 ITA NO. 306 /MUM/2014 (ASSESSMENT YEAR : 2001-02) 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE RELEVANT DISCUSSION IN THE ORDERS OF THE AUTHORITIES BELOW R EVEAL THAT THE ENTIRE BASIS FOR MAKING THE ADDITION OF RS.18,15,000/- AS UNEXPLAINED EXPENDITURE TOWARDS PAYMENT FOR DONATION/CAPITATION FEE IS BASED ON INFORMATION REACHING TO THE ASSESSING OFFICER FROM THE OFFICE OF COMMISSIONER OF INCOME TAX, CENTRAL-1, MUMBAI. IN TERMS OF THE SAID INFORMATION, THE ASSESSING OFFICER WAS INFORMED THA T A SEARCH ON D.Y.PATIL GROUP REVEALED THAT ASSESSEE HAD PAID RS. 18,15,000/- TO D.Y.PATIL MEDICAL COLLEGE AS DONATION/CAPITATION FE E FOR THE ADMISSION OF HIS DAUGHTER IN THE MBBS COURSE. OSTENSIBLY, TH E ASSESSEE WAS ALSO EXAMINED BY THE ITO(INV), UNIT-2 ON 5/3/2008, WHERE IN HE DENIED HAVING GIVEN DONATION/CAPITATION FEE OF RS.18,15,00 0/- TO THE D.Y.PATIL GROUP. SIMILARLY, IN THE COURSE OF THE IMPUGNED AS SESSMENT PROCEEDINGS ALSO, ASSESSEE VIDE WRITTEN COMMUNICATI ON DATED 16/9/2008 DENIED HAVING PAID RS.18,15,000/- AND IN STEAD ASSESSEE SUBMITTED THAT HE HAD PAID RS.5,85,000/- TO D.Y.PAT IL GROUP AS FEES OF HIS DAUGHTER FOR THE MBBS COURSE. HAVING PERUSED T HE ENTIRE ASSESSMENT ORDER, WE FIND THAT AFTER THE DENIAL BY THE ASSESSEE NO EVIDENCE OR ANY OTHER CREDIBLE MATERIAL HAS BEEN PU T TO THE ASSESSEE WHICH WOULD SHOW THAT THE IMPUGNED AMOUNT HAS ACTUA LLY BEEN PAID BY THE ASSESSEE AS DONATION/CAPITATION FEE. IN THIS C ONTEXT, WE HAVE ALSO NOTICE THE DECISION OF THE MUMBAI TRIBUNAL IN THE CASE OF MR. BABANRAO V. MANDE (SUPRA), WHEREIN ALSO SIMILAR AD DITION WAS MADE, BASED ON THE SEARCH ON THE D.Y.PATIL GROUP. THE DI SCUSSION IN THE ORDER OF THE TRIBUNAL REVEALS THAT THE REVENUE THEREIN HA D PLACED RELIANCE ON THE STATEMENT OF ONE SHRI SHASHIKANT MANDAVKAR OF T HE D.Y.PATIL GROUP, 5 ITA NO. 306 /MUM/2014 (ASSESSMENT YEAR : 2001-02) WHICH WAS RECORDED AT THE TIME OF SEARCH. BY REFER RING TO THE STATEMENT OF THE SAID DEPONENT, THE TRIBUNAL NOTED THAT THERE WAS NO EVIDENCE TO LINK TO THE ASSESSEE OR HIS DAUGHTER THE ENTRIES IN THE DIARY FOUND IN THE COURSE OF SEARCH ON THE D.Y.PATIL GROU P. ACCORDINGLY, THE TRIBUNAL DELETED THE ADDITION. IN THE PRESENT CASE TOO, THERE IS NO MATERIAL BROUGHT OUT EITHER BY THE ASSESSING OFFICE R IN THE ASSESSMENT ORDER OR EVEN BEFORE US, WHICH CAN ESTABLISH CLINCH INGLY THE PAYMENT OF RS.18,15,000/-BY THE ASSESSEE TO D.Y.PATIL GROUP AS DONATION/CAPITATION FEE. SIMILARLY, IN THE CASE OF MR. VILAS SHANKAR D ALVI(SUPRA), THE TRIBUNAL NOTICED THAT THE ASSESSEE WAS NOT EVEN PROVIDED WIT H THE MATERIAL IN WHICH THE NAME OF THE ASSESSEE FIGURED FOR HAVING PAID ANY AMOUNT TO THE D.Y.PATIL GROUP. WE FIND THAT SIMILAR IS THE S ITUATION IN THE PRESENT CASE ALSO, AS THE ASSESSMENT ORDER DOES NOT SHOW AN Y SUCH MATERIAL AGAINST THE ASSESSEE. BE THAT AS IT MAY, WHAT IS O F IMPORTANCE IS THAT AFTER THE DENIAL OF THE ASSESSEE, THE BURDEN WAS ON THE ASSESSING OFFICER TO ESTABLISH THAT ASSESSEE HAD INDEED PAID DONATION/CAPITATION FEE IN CASH TO D.Y.PATIL GROUP OF A SUM OF RS.18,15 ,000/-. THE ADDITION HAS BEEN MADE MERELY ON AN INFORMATION RECEIVED FRO M THIRD PARTY, THE CONTENTS AND THE CREDIBILITY OF WHICH HAS NOT BEEN ESTABLISHED TO BE BASED ON TRUE FACTS. CONSIDERING THE ENTIRETY OF C IRCUMSTANCES AND ALSO THE PRECEDENTS REFERRED ABOVE, WHICH HAVE BEEN REN DERED IN IDENTICAL CIRCUMSTANCES, WE FIND NO REASON TO UPHOLD THE ADDI TION OF RS.18,15,000/- MADE BY THE ASSESSING OFFICER BY INV OKING SECTION 69C OF THE ACT. IN CONCLUSION, WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.18,15,000/- MADE UNDER SE CTION 69C OF THE ACT, MERELY ON THE BASIS OF ENTRIES FOUND IN THE RE CORD OF A THIRD PARTY 6 ITA NO. 306 /MUM/2014 (ASSESSMENT YEAR : 2001-02) WITHOUT BRINGING ANY CORROBORATIVE MATERIAL ON RECO RD AND ALSO WITHOUT ASCERTAINING THE RESULT OF THE SEARCH ACTION IN THE HANDS OF SUCH THIRD PARTY. 6. BEFORE PARTING, WE MAY ALSO MAKE A REFERENCE TO THE PLEA OF THE ASSESSEE THAT HE HAD PAID AN AMOUNT OF RS.5,85,000/ - AS FEE OF HIS DAUGHTER WHICH WAS CONTRIBUTED BY HIS FAMILY MEMBER S, THE DETAILS OF SUCH CONTRIBUTION BY THE FAMILY HAVE ALREADY BEEN N OTED BY US IN THE EARLIER PART OF THIS ORDER. THE EXPLANATIONS REGAR DING THE SOURCE OF PAYMENT OF RS.5,85,000/- WAS NOT ACCEPTED BY THE AS SESSING OFFICER AS WELL AS BY THE CIT(A). IN THIS CONTEXT, WE FIND T HAT ASSESSEE EXPLAINED THAT THE FEE WAS CONTRIBUTED IN CASH BY SOME OF TH E FAMILY MEMBERS. THE SAID EXPLANATION HAS BEEN MERELY DISBELIEVED BY THE ASSESSING OFFICER AND THERE IS NO MATERIAL TO ESTABLISH ANY F ALSITY IN THE EXPLANATION RENDERED BY THE ASSESSEE. IN OUR CONSI DERED OPINION, THE SAID APPROACH OF THE ASSESSING OFFICER IS QUITE UNT ENABLE AND IS LIABLE TO BE SET ASIDE. IN THE RESULT, THE ORDER OF THE CIT( A) IS SET ASIDE AND ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITIO N MADE TO THE RETURNED INCOME. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/09/2015 . SD/- SD/- (AMIT SHUKLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMB ER MUMBAI,DATED 11/09/2015 7 ITA NO. 306 /MUM/2014 (ASSESSMENT YEAR : 2001-02) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBA I VM , SR. PS