ITO,Central-II, Nashik V. Shri Chandulal Sadhuram Khemani, Nashik

ITA 325/PUN/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7321 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 25-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K AMBESTHA
• Keywords: Document seized; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI G.S. PANNU (AM) ITA NO. 325/PN/2010 (BLOCK PERIOD 01/04/1996 TO 25/03/2003) INCOME TAX OFFICER , ... APPELLANT CENTRAL -II, NASHIK V. SHRI CHANDULAL SADHURAM KHEMANI RESPONDENT 14, C.K. VILLA, VISA MALA, COLLEGE ROAD, NASHIK APPELLANT BY : SHRI S.K. AMBESTHA RESPONDENT BY : SHRI NIKHIL PATHAK ORDER PER I.C. SUDHIR, JM THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS : 01. WHETHER , ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE LEARNED CIT (A) WAS JUSTIFIED IN THE DELETING THE A DDITION OF RS.31,93,575/- MADE BY THE AO BEING THE AMOUNT OF ON-MONEY RECEIPT IN THE HANDS OF THE ASSESSEE IN THE CAPACITY OF GENERAL POWER OF ATTORN EY AS UNDISCLOSED INCOME U/S. 158BD OF I.T. ACT. 2. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LEARNED CIT(A) WAS JUSTIFIED IN IGNORING THE EVIDEN CE ON RECORDS WHICH SHOW THAT THE RECORD SEIZED FROM THE SEARCHED PREMISES I N THE CASE SHRI Y.P. TRIVEDI AND M/S. RUSHIRAJ BUILDERS & DEVELOPERS, SH OWS THAT THE ASSESSEE HAD RECEIVED ON-MONEY OF RS. 31,93,575/- DURING THE CO URSE OF AN EXECUTION OF A DEVELOPMENT AGREEMENT BETWEEN M/S. RUSHIRAJ BUILDER S & DEVELOPERS AND SHRI PARAJI ABAJI KARANJKAR IN RESPECT OF PIECE OF LAND MARKED PLOT NO.33 OF SURVEY NO. 705/2/1/3 WHICH IN ITSELF CLEARLY INDICA TES THE RECEIPT OF UNDISCLOSED INCOME EARNED BY THE ASSESSEE. ITA . NO 325/PN/2010 SHRI CHANDULAL SADHURAM KHEMANI (BLOCK PERIOD 01/04/96 TO 25/3 /2003 PAGE OF 5 2 2. THE ISSUE INVOLVED IN THE ABOVE GROUNDS IS AS TO WHETHER THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.31,93,575/ - MADE BY THE A.O U/S. 158 BD OF THE ACT BEING THE AMOUNT OF ON-MONEY RECEIPT IN THE HANDS OF THE ASSESSEE. 3. THE RELEVANT FACTS ARE THAT AS PER THE DOCUMENTS SEIZED MARKED AS ENCLOSURE-2, FOUND AT THE RESIDENCE OF SHRI Y.P. T RIVEDI, PARTNER OF M/S. RISHIRAJ BUILDERS & DEVELOPERS, AN AMOUNT OF RS.31,93,575/- WAS SHOWN TO HAVE BEEN PAID TO SOME PERSONS. THE SALE DEED WAS SIGNED BY THE ASSESSEE AS G.P.A HOLDER OF SHRI PARAJI ABAJI KARANJKAR AND SHRI RAJESH H. NA WANI OF M/S. RISHIRAJ BUILDERS & DEVELOPERS. THE A.O. DURING THE ASSESSMENT PROCEED INGS, CAME TO THE CONCLUSION THAT THE ASSESSEE IS THE REAL OWNER OF PLOT NO. 33. A.O. COMPLETED THE ASSESSMENT U/S. 158 BD R.W.S. 144 OF THE ACT TAXING THE AMOUN T OF RS.31,93,575/- AS UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE C ONTENDED THE VALIDITY OF THE ISSUANCE OF NOTICE U/S. 158BD OF THE ACT TO HIM SIN CE THERE WAS NO CONCLUSIVE EVIDENCE THAT HE HAD RECEIVED ANY CONSIDERATION DUR ING THE COURSE OF AGREEMENT/SALE DEED EXECUTED BY VIRTUE OF HE BEING A G.P.A. HOLDER OF SHRI. PARAJI ABAJI KARANJKAR AND SHRI RAJESH NAWANI. THE LD CIT (A) HAS DELETED THE ADDITION BESIDES OTHERS, ON THE BASIS THAT A.O WAS NOT CLEAR ABOUT THE PERSON TO WHOM THE UNDISCLOSED INCOME RELATES TO. THE LD CIT(A) ALSO OBSERVED THAT THE ALLEGED CASH PAYMENTS WERE ALREADY CONSIDERED IN THE HANDS OF SH RI PARAJI ABAJI KARANJKAR AND THE SAME COULD NOT HAVE BEEN CONSIDERED AGAIN IN TH E HANDS OF THE ASSESSEE. THE REVENUE HAS QUESTIONED THIS ACTION OF THE LD CIT(A) . 4. IN SUPPORT OF THE GROUNDS, LD. D.R. HAS BASICAL LY PLACED RELIANCE ON THE ASSESSMENT ORDER ON THE ISSUE. HE SUBMITTED THAT HIS SATISFACTION WAS RECORDED BY THE A.O. ON THE BASIS OF DOCUMENTS SEIZED DURING TH E COURSE OF SEARCH PROCEEDINGS IN THE CASE OF SHRI Y.P. TRIVEDI AND M/S. RISHIRAJ BUILDERS & DEVELOPERS. THOSE SEIZED DOCUMENTS CLEARLY INDICATED UNDISCLOSED INCO ME AS EARNED BY THE ASSESSEE AS HE HAS RECEIVED ON-MONEY OF RS.31,93,575/- DURIN G THE COURSE OF AN EXECUTION OF ITA . NO 325/PN/2010 SHRI CHANDULAL SADHURAM KHEMANI (BLOCK PERIOD 01/04/96 TO 25/3 /2003 PAGE OF 5 3 AN DEVELOPMENT AGREEMENT BETWEEN M/S. RISHIRAJ BUIL DERS & DEVELOPERS AND SHRI PARAJI ABAJI KARANJKAR IN RESPECT OF A PIECE OF LAN D MARKED PLOT NO. 33 OF SURVEY NO. 705/2/1/3. THE ASSESSEE WAS THE GENERAL POWER OF ATTORNEY HOLDER OF SHRI PARAJI ABAJI KARANJKAR AND SHRI RAJESH HARI NAWANI, WHO WERE THE PARTIES TO DEVELOPMENT AGREEMENT IN THE COURSE OF WHICH ON-MON EY WAS PASSED ON. 4. THE LD. A.R, ON THE OTHER HAND, TRIED TO JUSTIFY THE FIRST APPELLATE ORDER ON THE ISSUE. HE ALSO POINTED OUT THAT SEC. 158BD PROCEED INGS WERE INITIATED AGAINST TWO OTHER PERSONS I.E. SHRI JITENDRA M. THAKKAR AND SH RI NARENDRA M. THAKKAR ALONG WITH THE PRESENT ASSESSEE UNDER THE SIMILAR FACTS A ND CIRCUMSTANCES. IN THE CASE OF SHRI JITENDRA M. THAKKAR, THE LD CIT(A) HAD DELETED THE ADDITION OF RS. 29,04,350/- MADE BY A.O U/S. 158 BD OF THE ACT. THE REVENUE HA D PREFERRED APPEAL AGAINST THE SAID FIRST APPELLATE ORDER BEFORE THE TRIBUNAL VID E ITA NO. 962/PN/2008 (BLOCK PERIOD 1.4.1996 TO 25.3.2003) WHICH HAS BEEN DISMIS SED BY THE TRIBUNAL VIDE ITS ORDER DT. 23 RD FEBRUARY 2011. A COPY WHEREOF HAS BEEN PLACED ON RECORD. THE LD. A.R. SUBMITTED THAT UNDISPUTEDLY, THE ASSESSEE HAD ACTED AS GENERAL POWER ATTORNEY HOLDER OF SHRI PARAJI ABAJI KARANJKAR AND SHRI RAJ ESH HARI NAWANI, WHO WERE THE PARTIES TO THE DEVELOPMENT AGREEMENT OF PLOT NO. 33 AND HE WAS NOT PARTY OF SALE TRANSACTION OF PLOT NO. 33 NOR IN THE DEVELOPMENT A GREEMENT, HIS NAME HAS BEEN MENTIONED. HE SUBMITTED THAT HIS NAME HAS NOT BEE N MENTIONED IN THE MATERIAL SEIZED FROM THE RESIDENCE OF SHRI Y.P. TRIVEDI AND THE MONEY IS STATED TO HAVE BEEN PAID TO SOME OTHER PERSONS IN CONNECTION WITH PLOT NO. 33. THERE IS NO MENTION OF PAYMENT OF MONEY TO HIM EITHER IN SALE DEED DT. 10. 11.1998 OR THE DEVELOPMENT AGREEMENT DT. 19.7.1997. EVEN IN THE AFFIDAVITS F ILED BY PARTNERS OF M/S. RISHIRAJ BUILDERS AND DEVELOPERS, IT HAS NOT BEEN MENTIONED THAT THE ASSESSEE IS THE BENEFICIARY OF THE SAID TRANSACTION AND RECEIVED TH E AMOUNT OF RS.31,93,575/-. EVEN OTHERWISE, THE ALLEGED CASH PAYMENTS HAVE ALREADY B EEN CONSIDERED IN THE HANDS OF SHRI PARAJI ABAJI KARANJKAR AND THE SAME SHOULD NOT HAVE BEEN CONSIDERED AGAIN IN THE HANDS OF THE ASSESSEE. THE LD. A.R. SUBMITTED THAT THERE IS NO CORROBORATIVE ITA . NO 325/PN/2010 SHRI CHANDULAL SADHURAM KHEMANI (BLOCK PERIOD 01/04/96 TO 25/3 /2003 PAGE OF 5 4 EVIDENCE TO ESTABLISH THAT THE MONEY UNEXPLAINED WE RE RECEIVED BY THE ASSESSEE OR IT BELONGED TO THE ASSESSEE. THE LD. A.R. REFER RED PAGE NOS. 20 TO 140 AND 153 TO 166 OF THE PAPER BOOK FILED ON BEHALF OF THE ASS ESSEE. THE DOCUMENTS ARE COPIES OF AGREEMENT BETWEEN SMT. KAMAL KHEMANI AND PARAJI ABAJI KARANJKAR, DEVELOPMENT AGREEMENT BETWEEN RISHIRAJ BUILDERS & DEVELOPERS AND MR. PARAJI ABAJI KARANJKAR DT. 17.6.1997, SALE DEED DT. 10.11. 1998, SEIZED PAPERS FOUND WITH M/S. RISHIRAJ BUILDERS & DEVELOPERS, AFFIDAVITS SU BMITTED BY SHRI Y.P. TRIVEDI, PARTNER OF M/S. RISHIRAJI BUILDERS & DEVELOPERS, BL OCK ASSESSMENT ORDER IN THE CASE OF M/S. RISHIRAJI BUILDERS AND DEVELOPERS AND COPY OF GENERAL POWER OF ATTORNEY BETWEEN ASSESSEE AND PARAJI ABAJI KARANJKAR. 5. AFTER HAVING GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW, WE FIND THAT CONTENTIONS OF THE ASSESSEE, SOME OF WHICH, HAVE B EEN REITERATED HEREINABOVE, HAVE NOT BEEN REBUTTED, ESPECIALLY THAT THE ASSESSE E WAS THE GENERAL POWER OF ATTORNEY HOLDER OF SHRI PARAJI ABAJI KARANJKAR AND SHRI RAJESH HARI NAWANI TO EXECUTE CERTAIN DOCUMENTS INVOLVING THE TRANSACTION OF PLOT NO. 33 ON THEIR BEHALF AND HE WAS NOT A PARTY TO THOSE TRANSACTIONS OF PLO T NO. 33 NOR HIS NAME WAS MENTIONED IN THE DEVELOPMENT AGREEMENT OR IN THE MA TERIAL SEIZED FROM THE RESIDENCE OF SHRI Y.P. TRIVEDI. EVEN IN THE SALE D EED DT. 10.11.1998, THERE WAS NO MENTION OF PAYMENT OF THE MONEY TO THE ASSESSEE AND ABOVE ALL, THE ALLEGED ON- MONEY HAS ALREADY BEEN ASSESSED IN THE HANDS OF SHR I KARANJKAR AND SHRI THAKKAR HENCE THE SAME CANNOT BE ASSESSED IN THE HANDS OF T HE ASSESSEE. NOTHING HAS BEEN SHOWN BY THE A.O THAT THERE WAS ANY CORROBORATIVE MATERIAL CORRELATED WITH SEIZED DOCUMENTS TO ESTABLISH THAT MONEY UNEXPLAINED BELO NGED TO THE ASSESSEE. THE A.O DID NOT CONSIDER THE AFFIDAVIT FILED BY SHRI Y.P. TRIVEDI REGARDING THE SAID CASH PAYMENTS MADE TO VARIOUS PERSONS BASED ON THE SEIZE D DOCUMENTS IN THE ASSESSMENT IN THE CASE OF M/S. RISHIRAJI BUILDERS & DEVELOPERS.. HOWEVER, THE CONTENTS OF THE SAME SEIZED DOCUMENTS ALONG WITH TH E SAID AFFIDAVITS OF SHRI Y.P. TRIVEDI HAVE BEEN CONSIDERED FOR ASSUMING JURISDICT ION U/S. 158 BD OF THE ACT AND ITA . NO 325/PN/2010 SHRI CHANDULAL SADHURAM KHEMANI (BLOCK PERIOD 01/04/96 TO 25/3 /2003 PAGE OF 5 5 FOR MAKING AN ADDITION IN THE ASSESSEES CASE WITH OUT BRINGING IN ANY NEW EVIDENCE OR FRESH MATERIAL ON RECORD. UNDER ALMOST SIMILAR FACTS AND CIRCUMSTANCES, ADDITION OF RS. 29,04,350/- MADE IN THE HANDS OF SHRI JITEND RA M.THAKKAR U/S. 158 BD OF THE ACT DELETED BY THE LD CIT(A) HAS BEEN UPHELD BY THE TRIBUNAL VIDE ITS ORDER DT. 23 RD FEBRUARY 2011 IN THE APPEAL ACIT V/S. SHRI JITENDRA M. THAKKAR (SUPRA). UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT LD CIT (A) HAS RIGHTLY DELETED THE ADDITION IN QUESTION. THE FIRST APPELLATE ORDER ON THE ISSUE IS COMPREHENSIVE AND REASONED ONE. THE SAME IS ACCORDINGLY UPHELD. TH E GROUNDS INVOLVING THE ISSUE ARE THUS REJECTED. 6. CONSEQUENTLY, THE APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 3 RD AUGUST 2011. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 3 RD AUGUST, 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (CENTRAL), NAGPUR 4. THE CIT(A)- II, NASHIK 5. THE D.R. A BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE