M/s. Raviraj Bokadia Developers, Pune V. DCIT, Cir.-2, Pune

ITA 350/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56586 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 17-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 08-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained expenditure
• Section: 133A; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO. 350/PN/10 (ASSTT. YEAR 2006-07) RAVIRAJ BOKADIA DEVELOPERS, .. APPELLANT OFFICE NO. 1 TO 5 MILLENIUM STAR DHOLE PATIL ROAD, NEAR RUBY HOSPITAL PUNE- 411 001 PAN AAFFR 7911 J VS. DY. COMMISSIONER OF INCOME-TAX, .. RESPONDENT CIR. 2, PUNE APPELLANT BY: SHRI VIPIN K. GUJARATHI RESPONDENT BY: SHRI S.K. AMBASTHA DATE OF HEARING: 17.11.2011 DATE OF PRONOUNCEMENT: 29.11.2011 ORDER PER G S PANNU, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-II, PUNE DATED 21.1.2010 FOR THE ASSESSMENT YEAR 2006-07 ON THE POINT OF CONFIRM ATION OF ADDITION OF RS. 23,00,000/- MADE UNDER SECTION 69-C OF THE INCOME- TAX ACT, 1961 (IN SHORT THE ACT) ON ACCOUNT OF UN EXPLAINED 2 EXPENDITURE. THE ASSESSEE VIDE APPLICATION DATED 2 6.7.2001 HAS RAISED THE FOLLOWING AMENDED ADDITIONAL GROUND OF A PPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE CIT(A)-II PUNE ERRED IN CONFIRMING THE ADDI TION OF RS. 8,00,000/- FROM AND OUT OF THE ADDITION OF RS. 23,00,000/- AS UNEXPLAINED EXPENDITURE U/S 69-C OF THE ACT WITHOUT APPRECIATIN G THE FACTS OF THE CASE IN PROPER PERSPECTIVE. THE APPELLANT PRAYS THAT THE ADDITION MAY PLEASE BE DELETED. 2. THE RELEVANT FACTS ARE THAT THE ASSESSEE IS A PA RTNERSHIP FIRM ENGAGED IN THE BUSINESS OF BUILDER, PROMOTERS AND D EVELOPERS. DURING THE COURSE OF SURVEY PROCEEDINGS CONDUCTED U NDER SECTION 133A ON 27-9-2006, A DAIRY WAS IMPOUNDED FROM THE C USTODY OF ONE MS. MAYURI MODI, WHO IS THE PERSONAL SECRETARY OF O NE OF THE PARTNERS OF THE FIRM. SHE WAS EXAMINED WITH REFERE NCE TO PAGE 16 OF THE DIARY DATED 31.1.2006. IN REPLY TO QUESTION NO. 8, SHE STATED THAT ASSESSEE PURCHASED LAND AT SURVEY NO. 130 HADA PSAR, PUNE FROM MR. UMASHANKAR PANDEY, MR. SATYANARAYAN PANDEY AND MR. DHANESHPATI PANDEY. SHE MENTIONED THAT THE FIRM PAI D TO MR UMASHANKAR PANDEY RS. 12.5 LAKHS BY CHEQUE AND RS. 7.5 LAKHS IN CASH AND RS. 12.5 LAKHS IN CHEQUE AND RS 7.50 LAKHS IN CASH WAS STATED TO HAVE BEEN PAID TO MR. SATYANARAYAN PANDEY . SHE ALSO STATED THAT RS. 3.50 LAKHS BY CHEQUE WAS PAID TO SH RI DHANESHPATI PANDEY. THERE WAS ALSO ONE MORE ENTRY OF RS 8 LAKHS FOUND IN THE DIARY. ON BEING SHOW-CAUSED DURING ASSESSMENT PROCE EDINGS, THE ASSESSEE DENIED TO HAVE MADE ANY PAYMENT IN CASH FO R THE PURCHASE OF LAND AT HADAPSAR. THE ASSESSING OFFICER REJECTED THE ASSESSEES EXPLANATION AND HELD THAT CASH PAYMENTS HAVE BEEN MADE TO THE PANDEY FAMILY MEMBERS. HE, THEREFORE, H ELD THE AMOUNT OF RS. 23.00 LAKHS AS UNEXPLAINED EXPENDITURE IN TH E HANDS OF THE ASSESSEE AND ADDED THE SAME TO THE INCOME RETURNED BY THE ASSESSEE. THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE 3 COMMISSIONER OF INCOME-TAX (APPEALS), WHO HAS DISMI SSED THE APPEAL OF THE ASSESSEE. 3. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT TO THE AMENDED GROUND OF APPEAL WHEREBY THE ASSESSEE S EEKS TO CHALLENGE THE ADDITION OF RS 8 LAKHS ONLY OUT OF TO TAL ADDITION OF RS 23 LAKHS SUSTAINED BY THE COMMISSIONER OF INCOME-TAX ( APPEALS). IN RELATION TO THE SUM OF RS 8 LAKHS, OUR ATTENTION WA S INVITED TO PAGE 19 OF THE PAPER BOOK, WHEREIN IS PLACED A COPY OF DIAR Y. IT IS SUBMITTED THAT NEITHER IS THERE ANY MATERIAL TO SHOW THAT THE SUM OF RS 8 LAKHS HAS BEEN PAID PANDEY FAMILY FOR THE PURCHASE OF LAN D IN QUESTION AND NOR HAS IT BEEN SO STATED BY MS MAYURI JODI. IN THI S CONTEXT, REFERENCE HAS ALSO BEEN MADE TO THE RELEVANT PORTION OF THE S TATEMENT OF MS MAYURI JODI RECORDED UNDER SECTION 131 OF THE ACT I N THE COURSE OF THE SURVEY ACTION ON 27.9.2006. IN SUM AND SUBSTANCE, T HE ARGUMENT PUT- FORTH BY THE ASSESSEE IS THAT IN SO FAR AS THE SUM OF RS 8 LAKHS IS CONCERNED, THERE IS NO MENTION OF ANY PAYMENT AND E VEN THE PAYEE HAS NOT BEEN RECORDED IN THE DIARY AND, THEREFORE, TO THAT EXTENT THE ADDITION BE DELETED. 4. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE HAS POINTED OUT THAT SIMILAR PLEA WAS RAISED BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS), WHO HAS RIGHTLY DIS-AGREED WI TH THE ASSESSEE ON THE GROUND THAT THE PRESENCE OF THE ENTRY OF RS 8 L AKHS IN THE DIARY ITSELF SHOWS THAT THE AMOUNT HAS BEEN SPENT BY THE ASSESSEE OUT OF UNKNOWN SOURCES. THEREFORE, THE ADDITION IS SOUGHT TO BE DEFENDED. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE SUBJECT- MATTER OF CONTROVERSY ARISES FROM CERTAIN CASH TRAN SACTIONS REFLECTED ON PAGE 16 OF THE DIARY FOUND DURING THE COURSE OF SUR VEY AT THE BUSINESS PREMISES OF THE ASSESSEE ON 27.9.2006. THE STATEMEN T OF ONE MS 4 MAYURI MODI WHO IS THE PERSONAL SECRETARY OF THE PA RTNER AND WHO WAS MAINTAINING THE DIARY WAS ALSO RECORDED AT THE TIME OF THE SURVEY. IN REPLY TO QUESTION NO. 8 RELATING TO THE TRANSACTION S NOTED ON PAGE 16 OF THE DIARY, IT HAS BEEN EXPLAINED BY HER THAT IT ENT AILED PAYMENT FOR PURCHASE OF LAND SITUATED AT SURVEY NO 130, HADAPSA R, PUNE FROM MR. UMASHANKAR PANDEY, MR. SATYANARAYAN PANDEY AND MR. DHANESHPATI PANDEY IT IS ALSO EXPLAINED THAT AMOUNT S OF RS 7.5 LAKHS EACH IN CASH WERE PAID TO MR. UMASHANKAR PAND EY AND MR. SATYANARAYAN PANDEY, APART FROM CHEQUE PAYMENTS TO THE THREE PERSONS. WITH RESPECT TO UNEXPLAINED NATURE OF SUCH AMOUNT OF RS 15 LAKHS PAID IN CASH, ADDITION HAS BEEN SUSTAINED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE ASSESS EE DOES NOT DISPUTE THE SAME. APART THEREFROM, ON THE SAID PAGE OF THE DIARY AN AMOUNT OF RS 8 LAKHS CASH HAS BEEN WRITTEN, WHICH DOES NOT CONTAIN ANY NARRATION. IN FACT AS A SEQUEL TO QUEST ION NO. 8 PUT TO MS MAYURI MODI WITH REGARD TO THE CASH PAYMENT MADE TO PANDEY FAMILY, NO QUESTION REGARDING PAYMENT OF RS 8 LAKHS HAS BEEN PUT BY THE AUTHORISED OFFICER. OF-COURSE IN THE SUBSEQUENT QUESTION NO. 9, SUO MOTU MS MAYURI MODI HAS STATED THAT SHE HAD NO IDEA TO WHOM THE SUM OF RS 8 LAKHS IS GIVEN IN CASH. IN OUR VIEW , THERE IS NO MATERIAL ON RECORD TO SHOW AS TO FOR WHAT PURPOSE O R TO WHOM RS 8 LAKHS CASH RELATES TO. IT IS ALSO NOT CLEAR FROM TH E DIARY OR EVEN FROM THE QUESTIONS PUT-FORTH BY THE REVENUE TO THE DEPON ENT THAT WHAT IS REFLECTED BY RS 8 LAKHS STATED IN THE DIARY. THE NA TURE OF THE ENTRY IS ALSO NOT CLEAR. FOR ALL THE ABOVE REASONS, WE THERE FORE FIND THAT THERE IS NO JUSTIFICATION TO TREAT THE AMOUNT OF RS 8 LAKHS AS HAVING BEEN SPENT BY THE ASSESSEE TOWARDS PURCHASE OF THE IMPUGNED LAND AND, THEREFORE, WE FIND AMPLE FORCE IN THE PLEA OF THE ASSESSEE FOR RELIEF ON THIS ACCOUNT. WE, THEREFORE, SET ASIDE TH E ORDER OF THE 5 COMMISSIONER OF INCOME-TAX (APPEALS) TO THAT EXTENT AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS 8 LA KHS AND RETAIN THE BALANCE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 29 TH THIS DAY OF NOVEMBER, 2011. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G.S. PANNU) JUDICIAL MEMBER ACC OUNTANT MEMBER PUNE: 29 TH NOVEMBER, 2011 B COPY TO:- 1) APPELLANT 2) RESPONDENT 3) THE CIT (A) II, PUNE 4) THE CIT II, PUNE 5) THE D R, A BENCH, PUNE 6) GUARD FILE BY ORDER TRUE COPY SR. PS, I.T.A.T., PUNE