CHANDBIBI ZAIDI, MUMBAI V. ACIT CEN CIR 43, MUMBAI

ITA 357/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2501 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 15-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M DAYASAGAR
• Assessee Lawyers: N R AGRAWAL
• Keywords: Gift; Rectification of order; Search and seizure; Salary income; Charitable institution; Deemed to accrue or arise in india; Additional evidence
• Section: 143(3); 142(1); 153A; 133(6); 132; 154

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.357/MUM/2014 ASSESSMENT YEAR: 2004-05 MRS. CHANDBIBI ZAIDI, KENNEDY HOUSE, 2 ND FLOOR, GOREGAONKAR ROAD, NANA CHOWK, MUMBAI / VS. ACIT, CENTRAL CIRCLE-43, R. NO.659, 6 TH FLOOR, AAYAKAR BAHVAN, M.K. ROAD, MUMBAI-400020 ( /ASSESSEE) ( ! / REVENUE) PAN. NO.AAAPZ1431A ITA NO.1392/MUM/2014 ASSESSMENT YEAR: 2004-05 ACIT, CENTRAL CIRCLE-43, R. NO.659, 6 TH FLOOR, AAYAKAR BAHVAN, M.K. ROAD, MUMBAI-400020 / VS. MRS. CHANDBIBI ZAIDI, KENNEDY HOUSE, 2 ND FLOOR, GOREGAONKAR ROAD, NANA CHOWK, MUMBAI ( ! / REVENUE) ( /ASSESSEE) PAN. NO. AAAPZ1431A ! / REVENUE BY SHRI M.DAYASAGAR / ASSESSEE BY SHRI N.R. AGRAWAL ' !# $ % / DATE OF HEA RING : 12/11/2015 $ % / DATE OF ORDER: 05/02/2016 CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE AS WELL AS THE REVENUE IS IN CROSS AP PEALS FOR ASSESSMENT YEAR 2004-05 AGAINST THE IMPUGNED OR DER DATED 20/12/2013 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI. FIRST, WE SHALL TAKE UP APPEAL OF THE ASSES SEE (ITA NO.357/MUM/2014), WHEREIN, FIRST GROUND PERTAINS TO ADDITION OF RS.38,50,000/- ON ACCOUNT OF REPAIRS TO KENNEDY HOUSE BY THE TRUST. 2. THE CRUX OF ARGUMENT ADVANCED BY SHRI N.R. AGRAWAL, LD. COUNSEL FOR THE ASSESSEE, IS THAT THE ASSESSEE IS THE PRESIDENT OF TWO LABOUR UNIONS AND ALSO TRUSTEE IN A CHARITABLE TRUST NAMELY FREE TRADE UNION MULTIPURPO SE TRUST BY CONTENDING THAT THE REPAIR WAS DONE BY THE TRUST OF THE UNION BUILDING AND PAYMENT FOR REPAIRS WAS MADE BY THE TRUST ONLY. THE BUILDING WAS EXPLAINED TO BE OF FO UR FLOORS AND THE CONTRACTOR WHO CARRIED OUT THE REPAIR WAS A LSO SEARCHED, HIS STATEMENT WAS RECORDED, WHEREIN, HE N OWHERE SAYS THAT REPAIR WAS NOT CARRIED OUT BY HIM OR HE R ETURNED THE MONEY TO THE ASSESSEE. IT WAS EXPLAINED THAT TH E FIGURES BROADLY TALLIES. OUR ATTENTION WAS INVITED TO PAGE S 26 & 27 OF THE PAPER BOOK. AGAIN THE STATEMENT WAS RECORDED FOR WHICH OUR ATTENTION WAS INVITED TO PAGES 41 AND 47 OF THE PAPER BOOK. AGAIN, THE STATEMENT WAS RECORDED THIRD TIME FOR WHICH OUR ATTENTION WAS INVITED TO PAGE 29 OF THE P APER BOOK. IT WAS EMPATHETICALLY ASSERTED THAT EVEN IF THE PAY MENTS ARE CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 3 HELD TO BE BOGUS, HOW IT CAN BE THE INCOME OF THE A SSESSEE. IF FOUND OTHERWISE, IT MAY BE OF THE TRUST BUT NOT OF THE ASSESSEE. THE PAYMENTS WERE CLAIMED TO BE MADE BY CHEQUE. MR. AGRAWAL CONTENDED THAT THE ASSESSEE ASKED FOR C ROSS EXAMINATION BUT THE SAME WAS DENIED TO THE ASSESSEE , FOR WHICH OUR ATTENTION WAS INVITED TO PAGE 9 OF THE PA PER BOOK. IT WAS CLAIMED THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER AND AT THAT TIME ALSO CROSS EXAMINATION WAS NOT ALLOWED, H OWEVER, THE STATEMENT WAS CLAIMED TO BE IN FAVOUR OF THE AS SESSEE. IT WAS EXPLAINED THAT PROTECTIVE ADDITION HAS BEEN MAD E IN THE CASE OF THE ASSESSEE. OUR ATTENTION WAS ALSO INVIT ED TO PAGE 38 OF THE ORDER OF THE LD. COMMISSIONER OF INCOME T AX (APPEALS). 2.1. ON THE OTHER HAND, THE LD. DR, SHRI M. DAYASA GAR, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BY DEFENDING THE CONCLUSION ARRIVED AT BY THE LD. FIRS T APPELLATE AUTHORITY. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE O BSERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION M ADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY TH E LD. RESPECTIVE COUNSEL, IF KEPT IN JUXTAPOSITION AND AN ALYZED, WE NOTE THAT THE ASSESSEE IS THE PRESIDENT OF TWO TRAD E UNIONS NAMELY MUMBAI MAJDOOR SABHA (MMS) AND ENGINEERING CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 4 MAJDOOR SABH (EMS). THE ASSESSEE IS ALSO THE MANAGI NG TRUSTEE OF FREE TRADE UNION MULTIPURPOSE TRUST (FTU MPT), A PUBLIC CHARITABLE TRUST, CLOSELY ASSOCIATED WITH TH E AFORESAID TRADE UNIONS. SEARCH AND SEIZURE ACTION U/S 132 (1 ) OF THE ACT WAS CARRIED OUT IN CHANDBIBI ZAIDI GROUP OF CAS ES ON 20/08/2009 AND ON SUBSEQUENT DATES BY THE DDIT(INVESTIGATION UNIT), MUMBAI. SUBSEQUENTLY, NOT ICE U/S 153A OF THE ACT WAS SERVED UPON THE ASSESSEE TO WHI CH THE ASSESSEE DECLARED LOSS OF RS.57,88,980/- ON 09/07/2 010. THEREAFTER, NOTICES U/S 143(2) AND 142(1) WERE ISSU ED ON DIFFERENT DATES ASKING THE ASSESSEE TO FILE CERTAIN DETAILS, CLARIFICATION ETC. THE ASSESSEE ATTENDED THE ASSESS MENT PROCEEDINGS FROM TIME TO TIME AND FURNISHED THE DET AILS AS IS EVIDENT FROM PARA 2 (PAG-1) OF THE ASSESSMENT ORDER ITSELF. THE LD. ASSESSING OFFICER MADE ADDITION OF RS.38,50,000/- WITH RESPECT TO REPAIRS MADE IN THE TRADE UNION BUILDING NAMELY KENEDDY HOUSE AND THE TRUST CLAIMED TO HAVE MADE THE PAYMENTS TO THE CONTRACTOR FOR SUCH REPAIRS. THE LD. ASSESSING OFFICER HELD THE CL AIMED REPAIRS TO BE BOGUS/NON-EXISTENT AND THUS, HE MADE THE ADDITION. THE LD. ASSESSING OFFICER WAS OF THE VIEW THAT NO SUCH REPAIRS WERE CARRIED OUT. THE STATEMENT OF THE CONTRACTOR, MR. SHANKAR GADDAM, WAS RECORDED ON 20/08/2009 (PAGES 23 TO 28 OF THE PAPER BOOK), WHER EIN, IN REPLY TO QUESTION NO.8 OF THE STATEMENT (PAGE 26 OF THE PAPER BOOK) WITH RESPECT TO RECEIPT OF PAYMENTS OF THE CO NTRACT CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 5 AMOUNT FROM THE TRADE UNIONS, HE SPECIFICALLY TENDE RED THAT HE RECEIVED THE FOLLOWING AMOUNTS:- ASSESSMENT YEAR AMOUNT RECEIVED (IN RUPEES) 2003 - 04 16,41,258/ - 2004 - 05 34,51,385/ - 2005 - 06 16,90,545/ - 2006 - 07 15,64,096/ - TOTAL 83,47,284 2.3. WE HAVE PERUSED THE STATEMENT AND AS CANVASSE D BY THE LD. COUNSEL FOR THE ASSESSEE, NOWHERE, THE C ONTRACTOR TENDERED THAT EITHER HE DID NOT CARRY OUT THE CONTR ACT WORK OR HE RETURNED THE MONEY IN CASH TO THE ASSESSEE. MEAN ING THEREBY, CARRYING OUT OF REPAIRING WORK AND PAYMEN T OF THE CONTRACT AMOUNT WAS DULY CONFIRMED BY THE CONTRACTO R. THE STATEMENT OF THE CONTRACTOR WAS AGAIN RECORDED ON 09/12/2011 (PAGE-38 ONWARDS OF THE PAPER BOOK) WHER EIN, IN REPLY TO QUESTION NO. 3, HE CATEGORICALLY STATED TH AT HE CARRIED OUT THE REPAIRING WORK OF THE UNION BHAWAN FROM A.Y . 2002- 03 TO 2005-06. IN REPLY TO QUESTION NO. 4, HE NAME D THE BUILDING AS KENNEDY HOUSE. IN REPLY TO QUESTION NO .6 (PAGE 39 OF THE PAPER BOOK), HE SPECIFICALLY TENDERED THA T HE RECEIVED RS.22 LAKHS THROUGH CHEQUE FOR CARRYING OU T THE REPAIR OF KENEDDY HOUSE. IN REPLY TO QUESTION NO. 5 (PAGE 39 OF THE PAPER BOOK), HE EVEN TOLD THE TOTAL AREA OF THE BUILDING, THE NATURE OF REPAIRING WAS TOLD TO THE MARVEL FLOO RING, TILLING WORK, POP, ELECTRIC WORK, PLUMBING, PAINTING, ETC, THEREFORE, CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 6 THE CONTENTION OF THE LD. DR/ASSESSING OFFICER THAT NO REPAIRING WAS CARRIED OUT BY THE CONTRACTOR IS NOT SUBSTANTIATED. WE FURTHER NOTE THAT AN AGREEMENT WA S ENTERED INTO BETWEEN ENGINEERING MAJDOOR SABHA ON 31/03/2003 AND M/S FREE TRADE UNION MULTIPURPOSE PR OJECT TRUST FOR ESTABLISHING, STARTING, RUNNING AND MAINT AINING PATHOLOGICAL LABORATORIES AND CLINIC FOR EXTENDING FREE MEDICAL BENEFITS TO THE MEMBERS OF THE AFFILIATED TRADE UNI ONS AND OTHER LOWER CLASS PEOPLE IN GENERAL (AT THE SUBSIDI ZED COST TO THE OTHER PEOPLE) (PAGE 43 TO 50 OF THE PAPER BOOK) . IT IS ALSO NOTED THAT WHEN THE SECOND STATEMENT WAS RECORDED O N 09/12/2011, NO OATH WAS ADMINISTERED TO THE CONTRAC TOR (PAGE 38 ONWARDS OF THE PAPER BOOK). HOWEVER, IN R EPLY TO QUESTION NO. 13 (PAGE-41 OF THE PAPER BOOK), HE TEN DERED THAT FOR REPAIRING OF THE GROUND FLOOR OF THE BUILDING A PPROXIMATELY RS. 22 TO 23 LAKHS WAS PAID TO HIM BY THE TRUST, RS .5.5 TO 6 LAKHS FOR THE OFFICE AT THE GROUND FLOOR, RS.50 LAK HS FOR THE PLASTER AND PAINTING OF TERRACE ETC. THEREFORE, THE CONTENTION OF THE LD. DR/ASSESSING OFFICER THAT NO REPAIRING W AS CARRIED OUT BY THE TRUST IS NOT SUBSTANTIATED. IT IS NOTEW ORTHY THAT THIRD TIME, THE STATEMENT OF THE CONTRACTOR WAS REC ORDED ON 07/11/2009 (PAGE 29 ONWARDS OF THE PAPER BOOK), WHE REIN, IN REPLY TO QUESTION NO.3, HE CATEGORICALLY STATED THAT HE RECEIVED THE PAYMENT OF RS.22 LAKHS THROUGH CHEQUE AND THE SAME WERE REFLECTED IN HIS RETURN OF INCOME. IN REP LY TO QUESTION NO.5, HE SPECIFICALLY TENDERED THAT HE REC EIVED THE PAYMENT THROUGH CHEQUE ONLY. THE DEPARTMENT HAS NO T CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 7 BROUGHT ANY EVIDENCE ON RECORD EITHER THE REPAIRS W ERE BOGUS OR THE MONEY WAS RETURNED TO THE ASSESSEE. NO ADDIT ION CAN BE SUSTAINED MERELY ON THE BASIS OF PRESUMPTION. EV EN OTHERWISE, AS CANVASSED BY THE LD. COUNSEL FOR THE ASSESSEE, THAT ADDITION, IF ANY, HAS TO BE MADE THAT CAN POSS IBLY BE MADE, IF ANY EVIDENCE IS FOUND, ONLY IN THE HANDS O F THE TRUST, WHO MADE THE PAYMENTS AND NOT IN THE HANDS OF THE ASSESSEE. IT IS ALSO NOTED, AS ADMITTED BY THE DEPA RTMENT ALSO (PAGE-9 OF THE PAPER BOOK) THAT IN SPITE OF SPECIFI CALLY ASKING BY THE ASSESSEE FOR CROSS EXAMINATION, IT WAS NOT P ROVIDED TO THE ASSESSEE, THUS, THE ASSESSEE WAS PRECLUDED FROM ITS STATUTORY RIGHT TO DEFEND, CONSEQUENTLY, THE STATEM ENT WHICH IS THE SOLE BASIS OF MAKING THE ADDITION CANNOT BE RELIED UPON. WE OBSERVE HERE THAT THE STATEMENT SO TENDER ED RATHER SUPPORTS THE CASE OF THE ASSESSEE AS THE CONTRACTOR HIMSELF DURING INVESTIGATION THAT IN FACT HE CARRIED OUT TH E WORK (QUESTION NO. 3 AND 4) STATEMENT DATED 07/11/2009 ( PAGE 39 TO 41 OF THE PAPER BOOK). IN REPLY TO QUESTION NO.7 (STATEMENT DATED 07/11/2009), THE CONTRACTOR CONSENTED THAT HE RECEIVED MORE PAYMENTS THAN CLAIMED BY THE DEPARTME NT. IT IS IMMATERIAL HOW AND WHY THE CONTRACTOR DEPOSITED IN CASH IN HIS ACCOUNT, SUCH DEPOSITS IN CASH ARE UNRELATED TO THE ASSESSEE AND IF ANY CASH HAS BEEN DEPOSITED HAS TO BE EXPLAINED BY THE CONTRACTOR AND NOT THE ASSESSEE. THE LD. COUNSEL ALSO EXPLAINED BEFORE US THAT THE ASSESSING OFFICER WAS INVITED TO EXAMINE THE WORK CARRIED OUT BY THE CONTRACTOR HIMSELF, SO THAT THE CONTROVERSY MAY BE PUT TO REST BUT THAT CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 8 WAS NOT ACCEPTED BY THE ASSESSING OFFICER FOR THE R EASONS BEST KNOWN TO HIM. TOTALITY OF FACTS, CLEARLY INDI CATES THAT NO EVIDENCE HAS BEEN PRODUCED BY THE REVENUE IN SUPPOR T OF ITS CLAIM. IT IS ALSO NOTEWORTHY THAT THERE ARE OTHER E LEVEN WORKING COMMITTEE MEMBERS IN THE UNION AND THE NUMB ER OF OTHER TRUSTEES, IT IS UNKNOWN AS TO HOW THE ASSESSE E WAS PICKED UP TO MAKE THE ADDITION. EVEN OTHERWISE, NOT HING WAS SEIZED, DURING SEARCH OPERATION, INDICATING THAT AN Y INCOME AROSE TO THE ASSESSEE OUT OF THE REPAIRING WORK DON E BY THE CONTRACTOR ON BEHALF OF THE TRUST. IT IS ALSO NOTE WORTHY, THAT THE CONTRACTOR, SHRI SHANKAR GODDAM, NEVER TENDERED IN THE STATEMENT, RECORDED ON VARIOUS DATES, THAT HE REPAI D THE MONEY IN CASH TO THE ASSESSEE. OUR OBSERVATION FUR THER GETS SUPPORT FROM THE OBSERVATION MADE IN THE IMPUGNED O RDER ITSELF (PAGE-38 OF THE PAPER BOOK INTERNAL PAGE 33 OF THE IMPUGNED ORDER), WHEREIN, IT HAS BEEN OBSERVED THAT IT IS TRUE THAT SHANKAR GODDAM HAS NEVER CONFESSED TO RET URN THE AMOUNT TO CHANDBIBI ZAIDI, THE APPELLANT. IT IS AL SO NOTED THAT IN CONCLUSION TO PARA 5 OF THE IMPUGNED ORDER, THE ADDITION WAS RESTRICTED TO 75% OF THE ADDITIONS MAD E IN EACH OF THE RELEVANT YEARS. IT FORTIFIES THE CASE OF TH E ASSESSEE BECAUSE, IF NO REPAIRING WORK WAS CARRIED OUT IT HA S TO BE DISALLOWED FULLY OR ALLOWED FULLY AS HAS BEEN CLAIM ED UNLESS AND UNTIL CONTRARY MATERIAL IS BROUGHT ON RECORD, T HUS, THIS GROUND OF THE ASSESSEE IS ALLOWED. 3. THE NEXT GROUND RAISED BY THE ASSESSEE PERTA INS TO CONFIRMING THE ADDITION OF RS.1,27,43,940/- ON ACCO UNT OF CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 9 WORKERS AID PAID BY THE UNIONS AS A COMPENSATION DURING STRIKE PERIOD AT DIFFERENT PLACES. THE CRUX OF ARGU MENT ADVANCED ON BEHALF OF THE ASSESSEE IS THAT FINANCIA L AID IS PROVIDED TO THE WORKERS BY THE UNIONS FOR THE STRIK E PERIOD BY EXPLAINING THAT THE WORKERS ARE PART/MEMBERS OF THE UNIONS AND IN SPITE OF DOING THE PEST CONTROL, THE VOUCHER S, KEPT IN THE TERRACE (BEING IN LARGE NUMBER) COULD NOT BE SA VED. IT WAS EMPATHETICALLY ARGUED THAT BOOKS OF ACCOUNTS AR E AUDITED AND THE AUDITOR DULY FILED THE AFFIDAVIT BE FORE ASSESSING OFFICER AS WELL AS LD. COMMISSIONER OF IN COME TAX (APPEALS) CONFIRMING THAT HE VERIFIED THE VOUCHERS AND THEN ONLY HE MADE THE REPORT READY FOR WHICH OUR ATTENT ION WAS INVITED TO THE AFFIDAVIT OF THE AUDITOR (PAGE 67 OF THE PAPER BOOK), AFFIDAVIT OF THE GENERAL SECRETARY OF THE UN ION (PAGE 68 OF THE PAPER BOOK), AFFIDAVIT OF THE CASHIER OF THE UNION (PAGE 69 OF THE PAPER BOOK), OFFICER BEARERS (PAGE 70 OF THE PAPER BOOK), AFFIDAVIT OF THE WORKERS AS A SAMPLE (PAGES 71 TO 73 OF THE PAPER BOOK), RESOLUTION PASSED BY THE MANAGEMEN T COMMITTEE APPROVING THE PAYMENT TO THE WORKERS (PAG E 74 OF THE PAPER BOOK), PROOF OF PAYMENTS (PAGE 75 TO 84 O F THE PAPER BOOK) AND IDENTICAL AFFIDAVITS FROM OTHER UNI ONS (PAGE 85 TO 96 OF THE PAPER BOOK). ALTERNATIVELY, IT WAS ARGUED THAT IF AT ALL ANY ADDITION IS REQUIRED TO BE MADE THAT HAS TO BE MADE IN THE HANDS OF THE INDIVIDUAL MAJDOOR SABHA A ND NOT IN THE CASE OF THE ASSESSEE. THE LD. COUNSEL FURTHE R ASSERTED THAT THERE ARE OTHER TEN COMMITTEE MEMBERS AND NO A DDITION WAS MADE IN THEIR HANDS AND THE ASSESSEE WAS SIMPLY CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 10 SELECTED WITH THE PURPOSE OF HARASSMENT. OUR ATTEN TION WAS INVITED TO PAGE 60 OF THE PAPER BOOK CONTAINING ORD ER U/S 143(3) OF THE ACT FOR A. Y. 2004-05, WHEREIN, ON ID ENTICAL FACT, NO ADDITION WAS MADE BY ASSESSING OFFICER. OUR ATT ENTION WAS FURTHER INVITED TO PAGE 62 OF THE PAPER BOOK IN THE CASE OF ENGINEERING MAJDOOR SABHA, WHEREIN, ON IDENTICAL FACTS, NO DISALLOWANCE WAS MADE IN ORDER FRAMED U/S 143(3) OF THE ACT. IT WAS ALSO PLEADED THAT ADDITION U/S 153A OF THE A CT CAN BE MADE ONLY ON THE BASIS OF SEIZED MATERIALS FOR WHIC H RELIANCE WAS PLACED UPON THE DECISION MURLI AGRO (ITA NO.36 OF 2009) ORDER DATED 29/10/2010 BY CLAIMING THAT NO MATERIAL WAS SEIZED AGAINST THE ASSESSEE DURING THE SEARCH ACTIO N, THUS, NO ADDITION CAN BE MADE. IT WAS CONTENDED THAT ONLY JEWELRY WORTH RS.4,80,150/- WAS SEIZED. OUR ATTENTION WAS INVITED TO THE ORDER OF THE TRIBUNAL, WHEREIN, IN THE CASE OF ENGINEERING MAJDOOR SABHA, THE TRIBUNAL HELD THAT ADDITION CAN BE MADE U/S 153A ONLY WITH RESPECT TO SEIZED MATERIAL (ITA NO.1373 TO 1379/MUM/2013) ORDER DATED 25/02/2015. 3.1. ON THE OTHER HAND, THE LD. DR, DEFENDED THE ADDITION BY PLACING RELIANCE UPON THE FINDING CONTA INED IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL S). 3.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT, CERTAIN PAYMENTS WERE MADE TO THE WORKERS , DURING STRIKE PERIOD, BY THE UNIONS AS AN AID. THE LD. ASS ESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE VOUCHERS. THE CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 11 ASSESSEE/UNIONS CLAIMED THAT DUE TO LARGE VOLUME OF PAPERS, THE SAME WERE KEPT IN TERRACE, WHICH WERE DESTROYED BY ANTS/WHITE ANTS. THE ADDITION WAS MADE BY THE ASSE SSING OFFICER ON THE PREMISE THAT THE ASSESSEE WAS EXPECT ED TO TAKE MORE PRE-CAUTION. WITHOUT GOING INTO MUCH DELIBERA TION, UNDER THE FACTS, NOW QUESTION ARISES WHETHER THE AS SESSEE TOOK REASONABLE PRECAUTION AND FURTHER GENUINENESS OF THE VOUCHERS. THE ASSESSEE CLAIMED THAT PEST CONTROL WA S DONE STILL THE VOUCHERS WOULD NOT BE SAVED. SO FAR AS, R ELIABILITY OF VOUCHERS AND CONSEQUENT PAYMENTS ARE CONCERNED, WE FIND THAT BOOKS OF ACCOUNTS OF THE ASSESSEE ARE AUDITED AND THE AUDITOR FILED THE AFFIDAVIT (PAGE-67 OF THE PAPER B OOK) AFFIRMING THAT HE AUDITED THE ACCOUNTS OF THE TRADE UNIONS AND WHILE AUDITING THE BOOKS ALL VOUCHERS WERE PROD UCED BY THE CONCERN TRADE UNIONS FOR HIS INSPECTION AND VER IFICATION AND MORE PARTICULARLY PAYMENT MADE TO WORKERS AID. HE STATED IN THE AFFIDAVIT THAT SUCH VOUCHERS WERE CHE CKED BY HIM. IT IS ALSO NOTED THAT GENERAL SECRETARY OF T HE UNION (PAGE 68 OF THE PAPER BOOK), WHO IS AUTHORIZED SIGN ATORY ON BEHALF OF THE UNIONS, STATED IN HIS AFFIDAVIT THAT HE IS RESPONSIBLE FOR MAINTAINING THE RECORD AND HE WITHD REW THE AMOUNTS FROM THE ACCOUNTS OF THE UNIONS FOR THE PUR POSES OF DISTRIBUTION AMONG THE WORKMEN. IDENTICALLY, THE A CCOUNTANT OF THE ENGINEERING MAJDOOR SABHA, SHRI BABU POSHANN A TUNNALA (PAGE 69 OF THE PAPER BOOK) STATED THAT HIS WORK WAS TO MAINTAIN ACCOUNTS OF THE UNIONS, TO DRAW AND DEP OSIT CHEQUES, TO RECONCILE ACCOUNTS ETC AND FURTHER STAT ED THAT HE CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 12 WITHDREW THE AMOUNTS FROM THE BANK FOR THE PURPOSES OF DISTRIBUTION AMONGST THE WORKERS AS A WORKERS AID. HE HAS FURTHER STATED THAT VOUCHERS WERE DULY SIGNED BY TH E CONCERNED WORKERS. LIKEWISE, ONE OF THE SECRETARIES , SHRI GURUPRASAD BACHARAM VARMA, TENDERED IDENTICAL AFFID AVIT (PAGE 70 OF THE PAPER BOOK) CONFIRMING DISBURSEMENT OF AID TO THE WORKERS. LIKEWISE, AFFIDAVITS FROM WORKERS (AS A SAMPLE COPY) (PAGES 71 TO 73 OF THE PAPER BOOK) AFFIRMING RECEIPT OF AID HAS BEEN FURNISHED. AT PAGE-47 OF THE PAPER BOO K, THERE IS EXTRACT OF MEETING OF THE GENERAL COUNSEL COMMIT TEE OF THE ENGINEERING MAJDOOR SABHA, HELD ON 03/01/2004 AT KE NNEDY HOUSE RESOLVING THAT THE AMOUNT OF RS.86,60,000/- H AS TO BE GIVEN TO THE WORKERS (PAGE 74 OF THE PAPER BOOK). T HE DETAILS OF WORKERS ALONG WITH THE PAYMENTS MADE TO THEM ARE AVAILABLE FROM PAGES 75 TO 84 OF THE PAPER BOOK. IT IS NOTEWORTHY THAT ALL THESE DOCUMENTS WERE NEITHER ES TABLISHED TO BE BOGUS BY THE REVENUE NOR ANY EVIDENCE WAS BRO UGHT ON RECORD CONTRADICTING THE CLAIM OF THE ASSESSEE. AT PAGE 85 TO 90 OF THE PAPER BOOK, CERTAIN AFFIDAVITS HAVE BEEN FILED SUBSTANTIATING THE WITHDRAWAL OF PAYMENTS FROM THE ACCOUNTS OF THE TRADE UNIONS FOR THE PURPOSES OF DISTRIBUTIO N AMONGST THE WORKMEN FORCE. IN VIEW OF THIS FACT, WE FIND M ERIT/FORCE IN THE CONTENTION OF THE ASSESSEE. WE FURTHER NOTE THAT IDENTICALLY (PAGE 91) THERE IS A RESOLUTION OF THE MUMBAI MAJDOOR SABHA ALSO FOR DISTRIBUTING AID TO THE WORK ERS TO THE TUNE OF RS.24,31,513/- AND FURTHER THE NAMES AND EX ACT AMOUNT DISBURSED TO THE WORKERS FIND PLACE AT PAGES 92 TO 96 CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 13 OF THE PAPER BOOK. THIS FACTUAL MATRIX WAS NOT CON TROVERTED BY THE REVENUE. IT IS ALSO NOTEWORTHY THAT FOR AS SESSMENT YEAR 2004-05 THAT TOO AN ORDER U/S 143(3) OF THE AC T, IDENTICALLY NO DISALLOWANCE WAS MADE. IN THE CASE OF ENGINEERING MAJDOOR SABHA (PAGE 62 TO 66 OF THE PAP ER BOOK) FOR A.Y. 2003-04, NO DISALLOWANCE WAS MADE WHILE FR AMING THE ASSESSMENT U/S 143(3) R.W.S 147 OF THE ACT. IT IS ALSO NOTED THAT ONE NANDKISHORE RASHIKLAL AGRAWAL, (PAGE 67 OF THE PAPER BOOK) HAS SWORN AFFIDAVIT STATING THAT HE AUDITED THE ACCOUNTS OF ENGINEERING MAJDOOR SABHA AND MUMBA I MAJDOOR SABHA AND ALL VOUCHERS/BOOKS OF ACCOUNTS WE RE PRODUCED BY CONCERNED TRADE UNIONS FOR HIS INSPECTI ON AND VERIFICATIONS INCLUDING VOUCHERS RELATING TO WORKER S AND THE SAME WERE CHECKED BY HIM. TOTALITY OF FACTS CLEARLY INDICATES THAT THE VOUCHERS WERE IN EXISTENCE, DULY CHECKED B Y THE AUDITORS AT THE RELEVANT TIME, PAYMENTS WERE MADE T O THE WORKERS AS A AID, THEREFORE, WE FIND MERIT IN THE A RGUMENT OF THE ASSESSEE. WE ALSO OBSERVE THAT UNDER THE FACTS NARRATED HEREINABOVE, NO ADDITION CAN BE SUSTAINED IN THE HA NDS OF THE ASSESSEE, BECAUSE ADDITION, IF ANY, IS TO BE MA DE THAT MAY BE IN THE HANDS OF THE INDIVIDUAL MAJDOOR SABHA. AS TO HOW THE ASSESSEE WAS PICKED UP OUT AND REMAINING MEMBER S OF THE MANAGING COMMITTEE WERE NOT TOUCHED IS NOT KNOW N. EVEN OTHERWISE U/S 153A OF THE ACT, ADDITION CAN BE MADE ON THE BASIS OF SEIZED MATERIAL. FOR THIS PROPOSITION, WE FIND SUPPORT FROM THE DECISION FROM HONBLE JURISDICTION AL HIGH COURT IN THE CASE OF CIT VS M/S MURLI AGRO PRODUCTS LTD. (ITA CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 14 NO.36 OF 2009) ORDER DATED 29/10/2010 AND ITA NO.13 73 TO 1379/MUM/2013 IN THE CASE OF M/S ENGINEERING MAJDOO R SABHA VS ACIT, ORDER DATED 25/02/2015, THUS, IN THE ABSENCE OF ANY CONTRARY MATERIAL, SUBSTANTIATING TH E VERSION OF THE DEPARTMENT, WE ALLOW THIS GROUND OF THE ASSE SSEE. 4. THE NEXT GROUND I.E. GROUND NO.3, RAISED BY THE ASSESSEE PERTAINS TO CONFIRMING ADDITIONS TO THE IN COME OF RELATIVES OF THE ASSESSEE MR. WAIZE ALI, MS. RAVISH ZAIDI, KHIRAD ZAIDI AND NASIR ALI ZAIDI. THE CRUX OF ARGU MENT ADVANCED ON BEHALF OF THE ASSESSEE THAT THE AFOREME NTIONED RELATIVES OF THE ASSESSEE WERE STUDYING ABROAD, MOS TLY IN CANADA, RECEIVED EDUCATION AID FROM THE UNION. THE BANK ACCOUNT WAS OPERATED AS JOINT ACCOUNT WITH THE STUD ENTS, SIMPLY FOR OPERATION OUT OF INDIA AS THE RELATIVES WERE STAYING/STUDYING ABROAD. IT WAS CONTENDED THAT THE ADDITION IN THE HANDS OF THE ASSESSEE IS NOT WARRANTED EVEN OTHERWISE, THE ASSESSEE DISCLOSED RS.72 LAKHS. THE EDUCATION L OAN WAS EXPLAINED TO BE RECEIVED BY THE RELATIVES FROM THE UNION, THE SAME WAS DISCLOSED AND DUE TAXES WERE PAID. IT WAS POINTED OUT THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) CALLED THE REMAND REPORT FROM THE ASSESSING OFFICER, WHO A GREED THAT THESE DEPOSITS CANNOT BE ADDED TO THE INCOME O F THE ASSESSEE AND ONLY INTEREST INCOME CAN BE ADDED. IT WAS POINTED OUT THAT DEPARTMENT FILED APPEAL BEFORE THE TRIBUNAL IN THE CASE OF FOUR RELATIVES, AGAINST THE RELIEF G RANTED BY THE COMMISSIONER OF INCOME TAX (APPEALS), WHEREIN, THE STAND OF CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 15 THE LD. FIRST APPELLATE AUTHORITY WAS CONFIRMED I.E . DECIDED IN FAVOUR OF THE ASSESSEE. 4.1. ON THE OTHER HAND, THE LD. DR, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 4.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE OB SERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION M ADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY TH E LD. RESPECTIVE COUNSEL, IF KEPT IN JUXTAPOSITION AND AN ALYZED, WE NOTE THAT ADDITIONS WERE MADE ON THE BASIS OF AMOUN TS DEPOSITED IN THE BANK ACCOUNTS OF RAVISH ZAIDI, WAI ZE ALI, KHURAD ZAIDI, AND NASIR ALI ZAIDI. MR. WAIZE MUKHT AR ALI WAS CLAIMED TO BE NEPHEW OF THE ASSESSEE. DURING TH E COURSE OF SEARCH, A BANK ACCOUNT WAS FOUND IN THE NAME OF WAIZE MUKHTAR ALI AND THE ASSESSEE MS. CHANDBIBI ZAIDI (JO INT NAME), THE NAME OF THE ASSESSEE APPEARS AS A SECOND NAME. IT IS NOTED THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CALLED FOR A REMAND REPORT FROM THE LD. ASSESSING O FFICER, WHO PRACTICALLY AGREED THAT THESE DEPOSIT CANNOT BE ADD ED IN THE HANDS OF THE ASSESSEE AND ONLY INTEREST INCOME CAN BE ADDED. IT IS NOTED THAT THIS A CASE OF CAPITAL FORMATION B Y WAY OF GIFT AND THE EDUCATION AID/LOAN WERE RECEIVED BEFORE 200 3 AND FURTHER IN REGULAR ASSESSMENT, DUE TAXES WERE PAID, THEREFORE, INTEREST INCOME, IF ANY, CAN ONLY BE ADDED, IN THE HANDS OF THE ASSESSEE. FROM THE BALANCE SHEET OF NASHIR ALI ZAIDI, AS CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 16 ON 31/03/2004 (PAGE 132 OF THE PAPER BOOK) IT IS EV IDENT THAT NOTHING IS AVAILABLE IN THE CAPITAL ACCOUNT AND IN ITS CAPITAL AND LIABILITIES, THE GIFT RECEIVED FROM THE ASSESSE E HAS BEEN DULY DECLARED. THE LD. COUNSEL, DURING HEARING, POI NTED OUT THAT IN THE CASES OF THESE FOUR RELATIVES, DEPARTME NT FILED APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (A PPEALS), WHEREIN, RELIEF WAS GRANTED TO THESE ASSESSES AND T HE TRIBUNAL ON FURTHER APPEAL CONFIRMED IN FAVOUR OF T HE ASSESSEES (ITA NO.1345/MUM/2014). THIS FACTUAL MATR IX WAS NOT CONTROVERTED BY THE REVENUE. IN VIEW OF THIS FA CTUAL MATRIX, THE LD. ASSESSING OFFICER IS DIRECTED TO AD D INTEREST INCOME ONLY AND SUBJECT TO LIMITED VERIFICATION OF THE FRESH CREDITS IN THE ACCOUNTS OF THE SAID PERSONS IN ACCO RDANCE OF THE MANDATE OF THE ACT, THEREFORE, THIS GROUND IS P ARTLY ALLOWED. 5. THE NEXT GROUND I.E. GROUND NO.4, THE ISSUE PER TAINS TO CONFIRMING TREATMENT OF LOSS INCURRED ON SALE OF GRIRAJ FLAT AS A LOSS UNDER THE HEAD CAPITAL LOSS IN SPITE OF THE FACT THAT THE NOTHING WAS SEIZED DURING THE SEARCH. THE CRUX OF ARGUMENT ADVANCED ON BEHALF OF THE ASSESSEE IS THAT IN THE YEAR 2002, THE ASSESSEE RECEIVED FLAT AS A GIFT AT GRIRAJ SOCIETY FROM THE UNION. ASSESSMENT YEAR 2002-03 WAS REOPENE D AND THIS FLAT WAS ADDED AS INCOME U/S 28(IV) AS A PERQU ISITE ETC. IN 2004, THE ASSESSEE SOLD THIS FLAT AND INCURRED L OSS OF RS.1 CRORE. IT WAS EXPLAINED THAT THE ASSESSEE PAID RS.2 CRORE AS A STAMP DUTY ON THE FLAT AND LATER ON THE FLAT WAS SO LD FOR RS.1 CRORE (DUE TO FALL IN PRICES OF THE PROPERTY), THIS LOSS WAS CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 17 CLAIMED AS BUSINESS LOSS. IT WAS EXPLAINED THAT THE LD. ASSESSING OFFICER RECTIFIED THE ORDER AND ALLOWED A S A BUSINESS LOSS AND NOT AS A CAPITAL LOSS. OUR ATTENT ION WAS INVITED TO PAGE 135 OF THE PAPER BOOK (CONTAINING R ECTIFICATION ORDER U/S 154 OF THE ACT) ORDER DATED 27/03/2008. IT WAS EXPLAINED THAT IN A.Y. 2005-06 (PAGE 136 OF THE PAP ER BOOK RECTIFICATION ORDER U/S 154 OF THE ACT DATED 27/03/ 2008 WAS PASSED IN WHICH ALSO, RELIEF WAS GRANTED TO THE ASS ESSEE, THEREFORE, THIS WAS NOT AN ISSUE DURING THE SEARCH AS THE SEARCH WAS CARRIED OUT IN 2009. IT WAS ALSO CONTEND ED THAT NO INCRIMINATING DOCUMENTS/MATERIAL WAS FOUND DURIN G THE SEARCH, THEREFORE, THIS ORDER STANDS. THE LD. DR N EITHER CONTROVERTED THE EXPLANATION OF THE ASSESSEE NOR P ASSING THE RECTIFICATION ORDER PASSED U/S 154 OF THE ACT D ATED 27/03/2008 FOR A.Y. 2004-05 AND 2005-06, THEREFORE, WE FIND MERIT IN THE ARGUMENT OF THE ASSESSEE AS NO AD DITION CAN BE MADE UNDER AFOREMENTIONED CIRCUMSTANCES AS NOTHI NG ADVERSE WAS FOUND BY THE DEPARTMENT DURING SEARCH A ND THE ORIGINAL ASSESSMENTS ARE NOT ABATED AS THE DATE OF SEARCH IS 20/08/2009 AND THE RELEVANT ASSESSMENT YEAR IS 2004 -05 WHEREBY TIME FOR ISSUING NOTICE U/S 143(2) OF THE A CT FOR FRAMING ASSESSMENT U/S 143(3) OF THE ACT HAS ALREAD Y EXPIRED AND NO NEW INCRIMINATING MATERIAL IS STATED TO HAVE BEEN FOUND DURING THE COURSE OF SEARCH, HENCE, IN ACCORD ANCE WITH THE PROVISIONS OF SECTION 153A OF THE ACT AND THE D ECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CO NTINENTAL WAREHOUSING CORPORATION (NHEVA SHEVA) LTD. (2015) 5 8 CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 18 TAXMANN.COM 78(BOM) AND MORE SPECIFICALLY, WHEN THE ASSESSING OFFICER HIMSELF FOUND THE CLAIM OF THE AS SESSEE IN ORDER AND RECOMPUTED THE LOSS ON ACCOUNT OF SALE OF FLAT (BEING HELD AS PROFESSIONAL RECEIPT/PROFESSIONAL AS SET) AS A PROFESSIONAL LOSS. THIS GROUND OF THE ASSESSEE IS, THEREFORE, ALLOWED. 6. THE NEXT GROUND PERTAINS TO CONFIRMING ADDITION OF DEEMED INCOME OF RS.1,59,500/- FROM THE VACANT FLAT . THE CRUX OF ARGUMENT ON BEHALF OF THE ASSESSEE IS THAT THE ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF (ITA NO.234 7 AND 1372/MUM/2013) ORDER DATED 29/07/2015. THIS FACTUAL MATRIX WAS CONSENTED TO BE CORRECT BY THE LD. DR. 6.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND FIND T HAT THE TRIBUNAL VIDE AFORESAID ORDER DATED 29/07/2015 DECI DED THE ISSUE. THE RELEVANT PORTION OF THE SAME IS REPRODUC ED HEREUNDER:- 24. IN GROUND NO. 1, THE ASSESSEE HAS CHALLENGED T HE ADDITION OF RS. 3,87,600/- ON ACCOUNT OF DEEMED INCOME FROM VACANT PLOT AND NOT ALLOWING DEDUCTION OF BROKERAGE OF RS.50,000/-. 25. SO FAR AS THE ISSUE OF BROKERAGE OF RS. 50,000/ - IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE SA ME IS NOT PRESSED AND REQUESTED TO WITHDRAW THE SAID GROUND. ACCORDIN GLY, THE CLAIM FOR DEDUCTION OF BROKERAGE AMOUNT OF RS. 50,000/- I S DISMISSED AS NOT PRESSED. CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 19 26. AS REGARDS THE ADDITION OF RS.3,87,600/- ON ACC OUNT OF DEEMED INCOME FOR HOUSE PROPERTY, THE RELEVANT FACT IS THA T THE ASSESSEE WAS OWNER OF FIVE FLATS IN MUMBAI, OUT OF WHICH TWO FLA TS AT SPENCERS CHS AT BANDRA WERE LET OUT AND RENTAL INCOME WAS OF FERED. FLAT AT CRESCENT HEIGHT WAS CLAIMED AS SELF OCCUPIED. HOWEV ER, FOR THE REMAINING TWO FLATS I.E. GIRIRAJ APARTMENT, OCEANIC APARTMENT, ASSESSEE HAS NOT OFFERED ANY INCOME, WHICH IS THE S UBJECT MATTER OF ADDITION BY THE AO. THE ASSESSING OFFICER ISSUED NO TICE U/S 133(6) TO THE SECRETARIES OF BOTH THE HOUSING SOCIETIES FOR F URNISHING THE DETAILS OF LET OUT VALUE OF THE FLATS IN THEIR RESPECTIVE S OCIETIES, ON IDENTICAL SIZE OF THE FLATS AND THE RENTAL INCOME EARNED DURI NG THE SAME PERIOD. IN RESPONSE, IT WAS SUBMITTED THAT THE RENTAL RATE IN GIRIRAJ APARTMENT WAS RS. 20 PER SQ. FT. AND ACCORDINGLY, T HE ASSESSING OFFICER DETERMINED THE RENTAL VALUE AT RS. 2,32,200 . SO FAR AS OCEANIC CHS, THE ASSESSING OFFICER RECEIVED NO INFO RMATION, THEREFORE, HE ESTIMATED THE FAIR MARKET RENT ON SAM E VALUE, I.E. AT RS. 20 AND ACCORDINGLY, THE ANNUAL LETTING VALUE WAS ES TIMATED AT RS. 1,54,800/-. THE ASSESSEE ON THE OTHER HAND, CONTEND ED THAT THE MUNICIPAL VALUE RATES OF THESE FLATS WERE AT RS. 3, 281/- AND RS. 2,643/- RESPECTIVELY, THEREFORE, THIS VALUE SHOULD BE ADOPTED AS THESE FLATS WERE NOT LET OUT. HOWEVER, THE ASSESSING OFFI CER HELD THAT THE SAID VALUATION CANNOT BE ACCEPTED. 27. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED THAT GIRIRAJ FLAT WAS OCCUPIED BY THE ASSESSEE FOR THE F IRST 9 MONTHS FOR THE SELF OCCUPATION, THEREFORE, ASSESSING OFFICER S HOULD HAVE ALLOWED PROPORTIONATE EXEMPTION. FURTHER, THE ASSESSEE HAD PURCHASED A FLAT AT CRESCENT HEIGHTS CHS IN DECEMBER, 2002 AND SHIFT ED TO THIS NEW FLAT WHICH IS A SELF-OCCUPIED. SHE ALSO FURNISHED P URCHASE AGREEMENT WITH THE CRESCENT HEIGHTS. SINCE THESE WERE NEW FAC TS AND ADDITIONAL EVIDENCES, THE LD. CIT(A) FORWARDED THE SAME TO THE ASSESSING CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 20 OFFICER FOR SUBMISSION OF THE REMAND REPORT. THE RE LEVANT EXTRACT OF WHICH HAVE BEEN INCORPORATED BY CIT(A) IN PARA 9 (P AGE 5 OF THE APPELLATE ORDER). 28. ON PERUSAL OF MATERIAL ON RECORD, THE LD. CIT(A ) HELD THAT IT HAS OPTION OF THE ASSESSEE TO KEEP ONE HOUSE AS SELF-OC CUPIED PROPERTY AND THE BALANCE PROPERTIES HAVE TO BE OFFERED FOR T AXATION UNDER THE HEAD INCOME FROM HOUSE PROPERTY. SINCE ASSESSEE H AS ALREADY EXERCISE THE OPTION AT THE TIME OF FILING OF RETURN OF INCOME, THEREFORE SHE IS BOUND TO ACCEPT THE SAME AS PER THE ASSESSEE S OWN DECLARATION. THE ASSESSEE CANNOT CLAIM THAT NO ALV OF THE PROPERTY CAN BE TAKEN BECAUSE IT WAS DECLARED AS SELF-OCCUPI ED PROPERTY. HE THUS UPHELD THE ALV ESTIMATED BY THE ASSESSING OFFI CER WHICH WAS BASED ON ENQUIRY DONE THROUGH RESPECTIVE CHS. 29. BEFORE US, THE LD. COUNSEL SUBMITTED THAT SINCE THESE PROPERTIES WERE NOT RENTED OUT IN THE ASSESSMENT YEAR IN QUEST ION THEREFORE, THE ALV SHOULD BE TAKEN AS PER THE MUNICIPAL VALUATION, AS HELD IN SEVERAL CASES OF THE MUMBAI TRIBUNAL AS WELL AS BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS TIP TOP TYP OGRAPHY, REPORTED IN 48 TAXMAN.COM 191. THESE PROPERTIES WER E ONLY RENTED OUT IN ASSESSMENT YEAR 2005-06. FURTHER, SO FAR AS CRESCENT HEIGHTS CHS IS CONCERNED, THE SAME WAS PURCHASED IN DECEMBE R, 2002 THEREFORE ONLY THE VALUE OF THE THREE MONTHS SHOULD HAVE BEEN TAKEN. ON THE OTHER HAND, LD. DR RELIED UPON THE FINDING O F THE ASSESSING OFFICER AS WELL AS CIT(A). 30. AFTER HEARING BOTH THE PARTIES, IT IS SEEN THAT OUT OF FIVE FLATS, THE ASSESSEE HAS RENTED OUT TWO FLATS AND ONE HAS BEEN DECLARED AS SELF- OCCUPIED PROPERTY. THE ISSUE IS, WHETHER THE OTHER TWO PROPERTIES I.E. GIRIRAJ APARTMENT AND OCEANIC APARTMENT WHICH HAVE NOT BEEN LET OUT, WHAT SHOULD BE THE ALV. SINCE IT HAS NOT BEEN LET OUT THEN ALV CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 21 CAN BE DETERMINED ON THE BASIS OF MUNICIPAL VALUATI ON, AS HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASES OF TIP TOP T YPOGRAPHY (SUPRA). ACCORDINGLY, THE ASSESSING OFFICER DIRECTE D TO FOLLOW THE DECISION OF THE HONBLE HIGH COURT FOR DETERMINATIO N OF THE ALV OF THE SAID TWO FLATS. GROUND NO.1 AS RAISED BY THE AS SESSEE IS PARTLY ALLOWED. IN VIEW OF THE ABOVE, THE LD. ASSESSING OFFICER I S DIRECTED TO FOLLOW THE AFORESAID ORDER OF THE TRIBUNAL. 7. THE NEXT GROUND I.E. GROUND NO.6 PERTAINS TO TRE ATMENT OF LOSS INSTEAD OF BUSINESS LOSS AND CONFIRMED TAXING OF DEEMED INCOME FROM VACANT FLAT AT OCEANIC APARTMENT, INCOM E ON ACCOUNT OF WORKERS AID ETC. THIS GROUND WAS NOT ARG UED BY THE LD. COUNSEL FOR THE ASSESSEE BEING GENERAL IN N ATURE, THEREFORE, DISMISSED AS NOT PRESSED. 8. THE NEXT GROUND PERTAINS TO SECTION 234B(3) ETC OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE IN VIEW OF TH E DECISION IN SOUTH INDIAN BANK LTD VS CIT (2003) 325 ITR 517 (KE RALA) WITHDREW THIS GROUND, THEREFORE, THIS GROUND IS DIS MISSED AS WITHDRAWN. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED. 9. NOW, WE SHALL TAKE UP APPEAL OF THE REVENUE (IT A NO.1392/MUM/2014), WHEREIN, FIRST GROUND PERTAINS T O DELETING THE DISALLOWANCE MADE ON ACCOUNT OF REMUNE RATION OF RS.3 LAKH STATED TO BE PAID TO WORKERS AND CLAIM ED AS CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 22 EXPENSE FROM THE HONORARIUM/SALARY RECEIVED BY THE ASSESSEE FROM THE UNIONS M/S ENGINEERING MAJDOOR SABHA AND M /S MAJDOOR SABHA WITHOUT APPRECIATING THE FACT THAT AS SESSEE FAILED TO ESTABLISH THAT ANY WORK WAS DONE BY THE W ORKERS. IDENTICAL ARGUMENT WAS ADVANCED BY THE LD. DR BY PL ACING RELIANCE UPON THE ASSESSMENT ORDER. ON THE OTHER H AND, THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE CONCLUSIO N ARRIVED AT IN THE IMPUGNED ORDER BY CONTENDING THAT NOTHING WAS SEIZED DURING SEIZURE OPERATION AND ALLOWED U/S 143 (3) OF THE ACT FOR WHICH OUR ATTENTION WAS INVITED TO PAGES 60 TO 61 OF THE PAPER BOOK CONTAINING ORIGINAL ASSESSMENT ORDER BY FURTHER EXPLAINING THAT THE ASSESSEE PRODUCED THE R ECEIPT BEFORE THE ASSESSING OFFICER OF THE WORKERS, WHO CO MPLETED THE WORK. HOWEVER, THE LD. DR, BROUGHT TO OUR NOTIC E THAT IN THE CASE OF ASSESSEE FOR A.Y. 2003-04 (ITA NO.2437/MUM/2013 AND ITA NO.1372/MUM/2013) ON IDENTICAL ISSUE, THE TRIBUNAL, DECIDED THE ISSUE AG AINST THE ASSESSEE. HE REFERRED TO THE ORDER OF THE TRIBUNAL DATED 29/07/2015. IN REPLY, THE LD. COUNSEL FOR THE ASSES SEE CLAIMED THAT IN THE PRESENT ASSESSMENT YEAR, THE PA YMENT HAS BEEN MADE THROUGH CHEQUE, THEREFORE, THE GENUIN ENESS OF THE PAYMENT IS NOT IN DISPUTE. 9.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION FROM THE AFORESAID ORDER FOR READY REFERENCE:- CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 23 31. AS REGARDS ADDITION OF RS.3 LAKHS FOR REMUNERA TION PAID AS RAISED IN GROUND NO.2, THE ASSESSING OFFICER HAD MA DE THE ADDITION ON THE GROUND THAT THE ASSESSEE HAS CLAIME D TO HAVE PAID HONORARIUM OF RS. 3 LAKHS TO SOME PERSONS AND CLAIMED DEDUCTION THEREOF. AT THE TIME OF SEARCH AND SEIZUR E ACTION THE ASSESSEE FAILED TO GIVE ANY NAME OF THE RECIPIENT. BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAD STATED THAT SHE HAD MADE PAYMENTS TO VARIOUS PERSONS IN CASH, OUT OF WHICH, TWO PERSONS HAD APPEARED BEFORE THE ASSESSING OFFICER AND STATE D THEY WORK FOR THE UNIONS. HOWEVER, THEY COULD NOT EXPLAIN THE NATURE OF WORK DONE FOR THE ASSESSEE. THE ASSESSING OFFICER F URTHER NOTED OUT OF THE PAYMENT OF RS. 3 LAKHS, THE ASSESSEE COU LD FURNISH VOUCHERS FOR RS.25,000/- ONLY, WHICH TOO DOES NOT C ONTAIN ANY NUMBER OR THE DETAIL AS TO WHO IS AUTHORIZED TO PAY AND THE PURPOSE OF PAYMENT. ACCORDINGLY, HE DISALLOWED THE PAYMENT OF RS. 3 LAKHS. 32. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THE D ETAILS OF MONTHLY SALARY, NATURE OF THE WORK DONE BY THE PART IES FOR THE ASSESSEE AND THE CONFIRMATION OF THE SOME OF THE RE CIPIENTS WHO WERE PRODUCED BEFORE THE ASSESSING OFFICER, AND STA TED THAT THE ASSESSING OFFICER HAS NOT CARRIED OUT ANY ENQUIRY. THE LD. CIT(A) CONFIRMED THE ADDITION ON THE GROUND THAT RE MUNERATION PAID TO CERTAIN PERSONS WHO HAVE ASSISTED TO THE AS SESSEE IN RESPECT OF UNION ACTIVITIES CANNOT BE ALLOWED IN CA SE OF THE ASSESSEE BECAUSE SHE HAS EARNED ONLY SALARY INCOME AND HONORARIUM HERSELF AND THERE IS NO PROVISION TO ALL OW SUCH EXPENDITURE FROM SALARY. 33. AFTER HEARING BOTH THE PARTIES, WE FIND THAT NO T ONLY THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE PAYMENT BUT ALSO, HOW SUCH A DEDUCTION IS ALLOWABLE TO HER. THE FINDING OF THE CIT(A) THAT THERE IS NO PROVISION UNDER THE HEAD I NCOME FROM SALARY TO ALLOW SUCH NATURE OF CLAIM TO THE ASSESS EE APPEARS TO BE CORRECT. THUS, SUCH AN EXPENDITURE CLAIMED BY TH E ASSESSEE HAS RIGHTLY BEEN DISALLOWED AND ACCORDINGLY, GROUND NO.2 AS RAISED BY THE ASSESSEE IS DISMISSED. CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 24 HOWEVER, WE FIND FROM PARA 33 OF THE AFORESAID ORDE R OF THE TRIBUNAL, THAT SINCE, THE ASSESSEE COULD NOT PR OVE THE GENUINENESS OF THE PAYMENT, IN THAT SITUATION, THE TRIBUNAL DECIDED THE ISSUE AGAINST THE ASSESSEE. WHEREAS, IN THE APPEAL BEFORE US, THE ASSESSEE HAS CLAIMED THAT THE PAYMENT WAS MADE THROUGH CHEQUE. IN VIEW OF THIS FACTUAL P OSITION, WE DIRECT THE LD. ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE AND DECIDE IN ACCORDANCE WITH LAW, THEREFO RE, THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSE ONLY. 10. THE NEXT GROUNDS I.E. GROUNDS 2 TO 2.2 ARE WIT H RESPECT TO EXPENDITURE DISALLOWED FOR REPAIRS OF KE NNEDY HOUSE IS CONCERNED, WE HAVE ALREADY DELIBERATED THI S ISSUE ON EARLIER PARA OF THIS ORDER, THEREFORE, WE AFFIRM THE CONCLUSION DRAWN IN THE IMPUGNED ORDER AS NEITHER A NY INFIRMITY IS NOTICED BY US NOR ANY ADVERSE MATERIAL WAS PRODUCED BY THE REVENUE TO SUBSTANTIATE THEIR CONTE NTION, THEREFORE, WE AFFIRM THE STAND OF THE LD. COMMISSIO NER OF INCOME TAX (APPEALS). 11. THE NEXT GROUND RAISED BY THE REVENUE PERTAINS TO DELETING THE ADDITION MADE U/S 68 OF TH E ACT ON ACCOUNT OF LOAN FROM M/S GENESIS TRADING PVT. LTD. AMOUNTING TO RS.39,48,050/- WITHOUT APPRECIATING TH E FACT THAT THE ASSESSEE COULD NOT ESTABLISHED THE CREDITW ORTHINESS OF THE M/S GENESIS TRADING PVT. LTD. 11.1. THE CRUX OF ARGUMENT ON BEHALF OF THE REVENUE IS IN SUPPORT TO THE ASSESSMENT ORDER BY INVITING OUR ATT ENTION TO CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 25 PARA 2.7.27 TO 7.65 (PAGES 23 TO 28 OF THE ASSESSME NT ORDER) AND RELEVANT FINDING IN PRA 8.5 AND 8.6 (PAGE 51) O F THE IMPUGNED ORDER. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE EXPLAINED THAT M/S GENESIS TRADING COMPANY IS ASSESSED WITH THE SAME ASSESSING OFFICER. THEY RECE IVED SHARE APPLICATION FROM OUTSIDERS AND THE ASSESSEE R ECEIVED LOAN FROM M/S GENESIS TRADING COMPANY. IT WAS CONT ENDED THAT ANY ADDITION, IF ANY, IS TO BE MADE THAT CAN B E MADE IN THE HANDS OF M/S GENESIS TRADING COMPANY AND NOT TH E ASSESSEE. IT WAS CONTENDED THAT DIRECTORS OF THE CO MPANY WERE PRODUCED, ADDITION WAS MADE IN THE HANDS OF TH E COMPANY ALSO AND IN THE CASE OF THE COMPANY, BOOKS OF ACCOUNTS OF SHARE APPLICANTS WERE PRODUCED, CROSS EXAMINATION WERE DONE, STATEMENTS OF THE DIRECTORS WERE RECORDED AND THEY CONFIRMED THE LOAN. OUR ATTENTION WAS INVITED TO PAGE 295 TO 314 OF THE PAPER BOOK. 11.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF TH E OBSERVATION MADE IN THE ASSESSMENT ORDER, LEADING T O ADDITION MADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSER TIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF KEPT IN JUXT APOSITION AND ANALYZED, THERE IS NO DISPUTE TO THE FACT THAT THE AMOUNTS ADDED IN THE HANDS OF THE ASSESSEE ARE ALSO REFLECTED AS LOANS RECEIVED FROM M/S GENESIS TRADIN G PVT. LTD. AND ALSO IN THE BOOKS OF THE COMPANY. THE LOA NS HAVE CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 26 BEEN ADVANCED BY WAY OF CHEQUE AND THE ADDITION WAS MADE MERELY ON THE GROUND THAT IDENTITY, GENUINENESS AND CREDITWORTHINESS OF M/S GENESIS TRADING PVT. LTD. W AS NOT ESTABLISHED. THE COMPANY WAS CONTROLLED BY THE ASSE SSEE AS A DIRECTOR, THEREFORE, THE IDENTITY CANNOT BE DISPU TED. THE ASSESSEE PRODUCED THE EVIDENCE OF ESTABLISHING ALL THE THREE INGREDIENTS OF SECTION 68, PRODUCED THE DIRECTORS O F THE INVESTING COMPANY, WHO HAVE CONFIRMED THE TRANSACTI ON, THEREFORE, WE FIND MERIT IN THE CONCLUSION OF THE L D. COMMISSIONER OF INCOME TAX (APPEALS) THAT NO ADDITI ON IS WARRANTED. WE HAVE ALSO PERUSED THE STATEMENT OF DI RECTORS OF THE COMPANY, WHO HAVE DULY CONFIRMED THE LOAN. EVEN OTHERWISE, THE CREDIT HAS ALREADY BEEN ASSESSED IN THE HANDS OF THE M/S GENESIS TRADING PVT. LTD, NO DOUBLE ADDI TION IS PERMITTED, THUS, WE AFFIRM THE STAND OF THE LD. COM MISSIONER OF INCOME TAX (APPEALS), RESULTING INTO DISMISSAL O F APPEAL OF THE REVENUE. FINALLY, THE APPEAL OF THE ASSESSEE AS WELL AS OF T HE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 12/11/2015. SD/- SD/- ( RAMIT KOCHAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER ' # MUMBAI; ' DATED : 05/02/2016 CHANDBIBI ZAIDI ITA NO.357 & 1392/MUM/2014 27 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. )*+, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. / / ' 0 ( )* ) / THE CIT, MUMBAI. 4. / / ' 0 / CIT(A)- , MUMBAI 5. 2!3 - , / )*% ) 4 , ' # / DR, ITAT, MUMBAI 6. 5 6# / GUARD FILE. / BY ORDER, .2* - //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ' # / ITAT, MUMBAI