VARSHA C BATRA, MUMBAI V. ACIT CEN CIR 18 & 19, MUMBAI

ITA 3627/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3854 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 21-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHARSHAN GANDHI
• Assessee Lawyers: SUMIT KUMAR
• Keywords: Document seized; Period of limitation; Time period of passing order; Documents seized
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI JASON P. BOAZ (AM) AND SHRI SANDEEP GOS AIN (JM) ITA NO. 3627 /MUM/2014 ASSESSMENT YEAR: 2007-08 VARSHA C BATRA . 302, PINNACLE TOWER, 3 RD FLOOR, 9 TH FLOOR, TPS III, KHAR(WEST), MUMBAI- 400052. PAN : AFTPB8541Q VS. THE ACIT. CENTRAL CIRCLE 18 & 19, AAYKAR BHAVAN, MUMBAI- 400020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. SUMIT KUMAR RESPONDENT BY : SHRI. DHARSHAN GANDHI DATE OF HEARING: 04/02/2016 DATE OF PRONOUNCEMENT: 17/02/2016 O R D E R PER JASON P. BOAZ, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER OF THE CIT(APPEALS)-39, MUMBAI DT. 14/02/2014 FOR ASST. YE AR 2007-08. 2. THE FACTS OF THE CASE BRIEFLY ARE AS UNDER:- 2.1 THE ASSESSEE IS A MEMBER OF THE BATRA GROUP OF BUILDERS AND REAL ESTATE BROKERS. A SEARCH U/S 132 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WAS CONDUCTED AT THE BUSINESS AND RESIDE NTIAL PREMISES OF THIS GROUP ON 18/01/2007. IN THE CASE OF THE ASSESSEE IN THE CASE ON HAND, CASH AMOUNTING TO RS. 3,00,000/- AND JEWELLERY VALU ED AT RS. 4,17,405/- WAS SEIZED. FOR ASST YEAR 2007-08, THE ASSESSEE FIL ED HER RETURN OF INCOME 2 ITA NO. 3627 /MUM/2014 ASSESSMENT YEAR: 2007-08 ON 20/02/2008 DECLARING INCOME OF RS. 2,19,324/-. T HE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED U /S 143(3) OF THE ACT WHEREIN THE ASSESSEES INCOME WAS DETERMINED AT RS . 42,66,010/- IN VIEW OF THE FOLLOWING ADDITIONS/DISALLOWANCES TO TH E RETURNED INCOME :- (I) CASH COMPONENT OF BROKERAGE RS. 4,80,000/- (II) UNDISCLOSED INVESTMENT IN DIAMOND JEWELLERY RS. 9,37,010/- (III) UNDISCLOSED INVESTMENT IN GOLD JEWELLERY RS. 3,67,878/- (IV) TRANSACTION WITH M/S. VINITA ESTATES RS. 12,34,640/- (V) EXCESS BANK CREDITS RS. 9,37,788/- PENALTY PROCEEDINGS U/S 271(1)(C) WERE ALSO INITIAT ED FOR FILING INACCURATE PARTICULARS OF INCOME. 2.2 ON APPEAL, THE LD. CIT(A) ALLOWED THE ASSESSEE PARTIAL RELIEF WHEREBY THE ADDITIONS WERE RESTRICTED TO RS. 17,14,640/-. 2.3 IN THE COURSE OF PENALTY PROCEEDINGS BEFORE THE ASSESSING OFFICER, THE ASSESSEE FILED HERE OBJECTIONS TO LEVY OF THE SAME AND PLACED RELIANCE ON CERTAIN JUDICIAL PRONOUNCEMENTS. THERE SUBMISSIONS BY THE ASSESSEE DID NOT FIND FAVOUR WITH THE ASSESSING OFFICER WHO HELD THAT BOTH IN ASSESSMENT AS WELL AS PENALTY PROCEEDINGS, THE ASSE SSEE WAS NOT ABLE TO PLACE ON RECORD ANY MATERIAL EVIDENCE TO CORROBORAT IVE HER CLAIM/CONTENTIONS. IN THAT VIEW OF THE MATTER, THE ASSESSING OFFICER PROCEEDED TO LEVY PENALTY OF RS. 5,56,765/- U/S 27 1(1)(C) OF THE ACT VIDE ORDER DT. 29/03/2012 ON THE ADDITIONS CONFIRMED BY THE LD. CIT(A) IN QUANTUM APPEAL PROCEEDINGS IN RESPECT OF UNDISCLOSE D TRANSACTIONS WITH M/S. VINITA ESTATES AGGREGATING RS. 12,34,640/- AND IN RESPECT OF THE CASH COMPONENT OF BROKERAGE AMOUNTING TO RS. 4,80,0 00/- TOTALLY AMOUNTING TO RS. 17,14,640/-. 3 ITA NO. 3627 /MUM/2014 ASSESSMENT YEAR: 2007-08 2.4 ON APPEAL, THE CIT(APPEALS)-39, MUMBAI DISMISSE D THE ASSESSEES APPEAL FOR A.Y. 2007-08 VIDE THE IMPUGNED ORDER DT. 14/02/2014 AND UPHELD THE LEVY OF PENALTY OF RS. 5,56,765/- U/S 27 1(1)(C) OF THE ACT. 3.1 AGGRIEVED BY THE ORDER OF THE CIT(APPEALS)-39, DT. 14/02/2014 CONFIRMING THE LEVY OF PENALTY OF RS. 5,56,765/- U/ S 271(1)(C) OF THE ACT FOR ASST. YEAR 2007-08, THE ASSESSEE HAS PREFERRED THIS APPEAL RAISING THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPR ECIATE THAT CROSS APPEALS ARE PENDING BEFORE THE HONBLE ITAT, AND THEREFORE THE LIMITATION PERIOD FOR IMPOSITION OF PENALTY NOT YET EXPIRED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) ERRED IN CONFIRMING THE A.O. ACTION IN IMPOS ING PENALTY OF RS. 5,56,765/- BY INVOKING THE PROVISIONS OF SECTIO N 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) FAILED TO APPRECIATE THAT ADDITIONS MADE BY THE A.O. & CONFIRMED BY THE LD. CIT(A) ARE BASED ON ESTIMATES & PRESUMPTION ONLY AND THEREFORE, NO PENALTY WAS LEVI ABLE. 4. THE APPELLANT CRAVES TO ALTER, AMEND, WITHDRAW O R SUBSTITUTE ANY GROUND OR GROUNDS OR TO ADD ANY NEW GROUND OR G ROUNDS OF APPEAL ON OR BEFORE THE HEARING. 3.2 AT THE OUTSET, THE LD. AR FOR THE ASSESSEE SUB MITTED THAT THE ADDITIONS OF RS. 17,14,640/- MADE BY THE ASSESSING OFFICER, COMPRISING OF CASH COMPONENTS OF BROKERAGE OF RS. 4,80,000/- AND RS. 12,34,640/- IN RESPECT OF UNDISCLOSED TRANSACTIONS WITH M/S. VINIT A ESTATES WAS THE BASIS FOR LEVY OF PENALTY OF RS. 5,56,765/- U/S. 27 1(1)(C) OF THE ACT VIDE ORDER DT. 29/03/2012. IT WAS SUBMITTED THAT IN THE ASSESSEES QUANTUM 4 ITA NO. 3627 /MUM/2014 ASSESSMENT YEAR: 2007-08 APPEAL BEFORE THE CO-ORDINATE BENCH OF ITAT MUMBAI, THE BENCH IN ITS ORDER IN ITA NO. 7770 & 8130/MUM/2010 DT. 06/01/201 6 HAS CONSIDERED BOTH THESE ISSUES AND DELETED THE SAID A DDITIONS. THE LD. AR CONTENDS THAT SINCE THE AFORESAID ADDITIONS TOTALIN G RS. 17,14,640/-, MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) WHICH FORMED THE BASIS FOR LEVY OF PENALTY U/S 271 (1) (C ) HAVING BEEN DELETED BY THE CO-ORDINATE BENCH IN THE AFORESAID ORDER, THE PENALTY OF RS. 5,56,765/- LEVIED IN THIS REGARD WOULD NOT NON SURV IVE AND ITS THEREFORE TO BE CANCELLED. 3.3.1 WE HAVE HEARD BOTH THE LD. AR FOR THE ASSESSE E AND THE LD. DR FOR REVENUE IN THE MATTER AND PERUSED AND CAREFULLY CO NSIDERED THE MATERIAL ON RECORD IN THE MATTER OF THE PENALTY OF RS. 5,56 ,765/- LEVIED U/S 271(1)(C) OF THE ACT FOR ASST. YEAR 2007-08. AS SU BMITTED BY THE LD. AR FOR THE ASSESSEE, WE FIND THAT THE CO-ORDINATE BENC H OF THIS TRIBUNAL IN ITS ORDER IN ITA NOS . 7770 & 8130/-MUM/2010 DT. 06/01/ 2016 HAS CONSIDERED BOTH THE ADDITIONS MADE BY THE ASSESSING OFFICER OF (I) RS. 4,80,000/- ON ACCOUNT OF CASH COMPONENT OF BROKERAG E AND (II) RS. 12,34,640 ON ACCOUNT OF TRANSACTIONS WITH VINITA ES TATES AND DELETED THEM. 3.3.2 IN RESPECT OF THE ADDITIONS ON ACCOUNT CASH COMPONENT OF BROKERAGE AMOUNTING TO RS. 4,80,000/- AFTER LAYING OUT THE DETAILS AT PARA 3, THE CO-ORDINATE BENCH AT PARAS 3TO6 THEREOF (SU PRA) HAS DELETED THIS ADDITION HOLDING AS UNDER:- 3. THE FIRST COMMON ISSUE URGED BY ALL THE ASSESSEE S RELATE TO THE ADDITION MADE TO THE BROKERAGE INCOME BY HOLDING TH AT THESE ASSESSES HAVE RECEIVED PART OF BROKERAGE INCOME IN CASH AND DID 5 ITA NO. 3627 /MUM/2014 ASSESSMENT YEAR: 2007-08 NOT DISCLOSE THE SAME. THE ADDITION MADE BY THE AO UNDER THIS HEAD IS TABULATED BELOW, FOR THE SAKE OF CONVENIENC E:- S.NO NAME OF ASSESSEE AMOUNT IN DISPUTE (FOR QUANTUM APPEAL) IN RS. 1 CHATURBHUJ T BATRA 92,82,233 2 VARSHA BATRA, 4,80,000 3 PREMKUMAR BATRA 66,64,608 4 KARAN BATRA, 3,02,750 5 NISHA P BATRA 4,48,275 THE ASSESSING OFFICER MAINLY PLACED RELIANCE ON CER TAIN DOCUMENTS FOUND DURING THE COURSE OF SEARCH WHEREIN THE ENTRI ES WERE FOUND TO HAVE BEEN MADE IN SHORT FORM. THE ASSESSEE GAVE SOME EXPLANATIONS WITH REGARD TO THOSE ENTRIES, BUT THE ASSESSING OFFICER INTERPRETED THE SAME DIFFERENTLY AND ACCORD INGLY CONCLUDED THAT THE ASSESSEES HAVE BEEN DECLARING BROKERAGE IN COME ONLY @ 50% AND THE BALANCE AMOUNT WAS SUPPRESSED. ACCORDIN GLY HE ADDED THE EQUAL AMOUNT OF BROKERAGE DECLARED BY THE ASSESSEES IN ALL THE YEARS COVERED BY THE SEARCH ASSESSMENTS. 4. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) CON FIRMED THE ADDITION, BUT GRANTED TELESCOPING BENEFIT AGAINST C ERTAIN OTHER ADDITIONS. THE REVENUE IS AGGRIEVED BY THE TELESCOP ING BENEFIT SO GIVEN BY THE LD CIT(A). 5. WE NOTICE THAT THIS ISSUE HAS BEEN CONSIDERED I N THE CASE OF THESE ASSESSEES BY THE CO-ORDINATE BENCH OF TRIBUNA L IN OTHER YEARS. WE NOTICE THAT SMC BENCH OF THE TRIBUNAL HAS CONSIDERED AN IDENTICAL ISSUE IN THE CASE OF SHRI RAJEEV C BAT RA IN ITA NO.7772/MUM/2010 RELATING TO ASSESSMENT YEAR 2003-0 4, WHO IS ONE OF THE MEMBERS OF THIS GROUP. THE TRIBUNAL HAS TAKEN THE VIEW 6 ITA NO. 3627 /MUM/2014 ASSESSMENT YEAR: 2007-08 THAT THERE IS NO EVIDENCE ON RECORD TO SHOW THAT TH E ASSESSEE HAS RECEIVED BROKERAGE INCOME BY WAY OF CASH. THE SAID DECISION WAS FOLLOWED BY THE CO-ORDINATE DIVISION BENCH OF TRIBU NAL IN THE CASE OF KARAN P BATRA (ITA NO.1116/MUM/2011 AY 2007-08 ); SHRI CHATURBHUJ T BATRA (ITA NOS. 7038 TO 7043/MUM/2010 AY 2001-02 TO 2006-07) AND SHRI PREMKUMAR T BATRA (ITA NOS. 8058 TO 8063/MUM/2010 AY 2001-02 TO 2006-07). THE RELE VANT OBSERVATIONS MADE BY THE CO-ORDINATE BENCH IN THE C OMMON ORDER DATED 25.04.2014 PASSED IN THE ABOVE CITED GROUP CA SES ARE EXTRACTED BELOW:- 4. AT THE OUTSET, IT HAS BEEN BROUGHT TO OUR NOTIC E THAT THE CASES IN HAND ARE SQUARELY COVERED BY THE DECISION OF THE TR IBUNAL IN THE CASE OF SHRI RAJEEV C. BATRA IN ITA NO.7772/MUM/2010 FOR THE ASSESSMENT YEAR 2003-04, WHEREIN SIMILAR ADDITION M ADE/CONFIRMED BY THE AO/CIT(A) ON THE BASIS OF THE SAME SEIZED DO CUMENT HAS BEEN DELETED BY THE TRIBUNAL AND THE FINDINGS OF THE TRI BUNAL IN PARA 6 OF THE SAID ORDER IS EXTRACTED HEREUNDER:- I HAVE CONSIDERED THE RIVAL SUBMISSIONS MAD BY BOT H THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I F IND, THE ASSESSING OFFICER RELIED ON THE ORDER IN THE CASE O F SHRI C.B. BATRA AND HELD THAT THE ASSESSEE IS RECEIVING 50% O F THE BROKERAGE IN CASH WHICH IS UNACCOUNTED IN THE BOOKS . I FIND, THE ASSESSING OFFICER HAS TAKEN THIS VIEW ON THE BASIS OF SEIZED DOCUMENTS WITH REGARD TO TWO PROPERTIES NAMELY REGI LAND FLAT IN 5TH' FLOOR AND FLAT AT SOMMERSET BUILDING. NO INDEP ENDENT ENQUIRY FROM THE PURCHASERS HAS BEEN MADE. I FIND, THE CIT(A) HAD MENTIONED IN PARA 11.1 OF HIS ORDER THAT 'AT TH E OUTSET IT IS TO BE MENTIONED THAT THERE IS NO CLEAR CUT EVIDENCE AV AILABLE TO SHOW THAT ANY CASH COMPONENT IS INVOLVED IN THIS TR ANSACTION.' FURTHER THE SUBMISSIONS OF THE ASSESSEE BEFORE THE CIT(A) THAT THE SEIZED DOCUMENT RELATING TO THE RESIDENTIAL FLA T WAS A TRADE ENQUIRY WHICH WAS SOLD TWO YEARS AFTER AND DOES NOT RELATE TO ASSESSMENT YEAR 2003-04 COULD NOT BE CONTROVERTED B Y THE LD.D.R. FURTHER; THE SUBMISSION OF THE ASSESSEE BEF ORE THE CIT(A) 7 ITA NO. 3627 /MUM/2014 ASSESSMENT YEAR: 2007-08 THAT FLAT AT SOMMERSET BUILDING HAS NOT BEEN SOLD A ND THE FINDING OF THE CIT(A) THAT THERE IS NO EVIDENCE TO SHOW THAT THE TRANSACTION TOOK PLACE THROUGH THE ASSESSEE ALSO CO ULD NOT BE CONTROVERTED BY THE LD D.R. I FIND, IN PARA 11.4 OF THE CJT(A)'S ORDER; THE LD.CIT(A) HAS MENTIONED THAT HE WAS CONV INCED THAT THESE SEIZED DOCUMENTS DO NOT INDICATE ANY CASH COM PONENT OF BROKERAGE RECEIVED BY THE ASSESSEE. I FIND DESPITE GIVING THIS FINDINGS, WHICH ARE REPRODUCED ELSEWHERE IN THIS OR DER; THE CIT(A) SUSTAINED THE ADDITION ON THE GROUND THAT THE APPEL LANT WAS NOT ACCOUNTING THE BROKERAGE INCOME CORRECTLY. THIS, IN MY OPINION, IS UNCALLED FOR. IT HAS BEEN HELD BY VARIOUS JUDICIAL PRONOUNCEMENTS THAT PRESUMPTIONS AND SURMISES, HOWEVER, STRONG MAY BE CANNOT BE THE BASIS FOR ANY ADDITION. (DHAKESWARI COTTON M ILLS LTD. VS. CIT 26 ITR 775) IN THE INSTANT CASE, THERE IS NO EV IDENCE ON RECORD TO SHOW THAT THE ASSESSEE HAS RECEIVED BROKE RAGE INCOME ON ACCOUNT OF CASH COMPONENTS. THE CIT(A) HAS ALREA DY SUSTAINED THE UNEXPLAINED DEPOSIT OF RS.98,765/- AN D THE ASSESSEE IS NOT IN APPEAL FOR THE SAME BEFORE THE T RIBUNAL. IT HAS ALSO BEEN HELD BY THE LD. CIT(A) THAT THE ONLY INCO ME OF THE ASSESSEE IS FROM BROKERAGE. THEREFORE, WHEN THE UNE XPLAINED DEPOSITS OF RS.98,765/- HAS BEEN ADDED AND THE ONLY SOURCE OF INCOME OF THE ASSESSEE BEING BROKERAGE AND SINCE TH E ASSESSEE BEING BROKERAGE AND SINCE THE ASSESSEE HAS NOT CHAL LENGED THE SAME, THEREFORE, CONFIRMING THE ADDITION OF RS. 1 L AKH MADE BY THE ASSESSING OFFICER ON ESTIMATE BASIS AND TELESCO PING THE SAME IN MY OPINION IS NOT JUSTIFIED. I THEREFORE, SET AS IDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE, THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED.' 4.1 AFTER CONSIDERING THE FACT THAT SIMILAR ADDITIO NS OF ESTIMATED BROKERAGE MADE ON THE BASIS OF THE SAME DOCUMENT SE IZED, HAS BEEN DELETED BY THE TRIBUNAL, WE ARE OF THE CONSIDE RED OPINION THAT THE IMPUGNED ADDITIONS CONFIRMED BY THE LD.CIT(A), ON ESTIMATE BASIS AND TELESCOPING THE SAME IS NOT JUSTIFIED IN THE CASES OF SHRI RAJEEV C. BATRA AND SHRI KARAN P. BATRA. THEREFORE, WE SET ASIDE THE IMPUGNED ORDERS OF THE LD.CIT(A) IN THE SAID CA SES AND THE ADDITIONS MADE/CONFIRMED ON THIS COUNT STAND DELETE D. 6. IN THE INSTANT YEAR ALSO, THE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITION ON THE BASIS OF VERY SAME DOCUMEN TS. 8 ITA NO. 3627 /MUM/2014 ASSESSMENT YEAR: 2007-08 ACCORDINGLY, CONSISTENT WITH THE VIEW TAKEN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL, WE HOLD THAT THE ASSESSING O FFICER HAS MADE THE IMPUGNED ADDITION WITHOUT BRINGING ANY CREDIBLE MATERIAL ON RECORD. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) IN THE HANDS OF THESE ASSESSEES FOR THE YEARS UNDER CO NSIDERATION AND DIRECT THE AO TO DELETE THE ADDITION MADE TOWAR DS CASH COMPONENT OF BROKERAGE. 3.3.3 IN RESPECT OF THE ADDITION ON ACCOUNT OF TRAN SACTIONS WITH M/S. VINITA ESTATES AMOUNTING TO RS. 12,34,640/- AFTER LAYING O UT THE ISSUE AT PARA 8 OF THE ITS ORDER, THE CO-ORDINATE BENCH HAS PROCEEDED TO D ELETE THIS ADDITION HOLDING AS UNDER AT PARAS 8 TO 12 OF ITS ORDER:- 8. THE NEXT COMMON ISSUE THAT ARISES IN THE CASE OF SHRI CHATURBHUJ T BATRA, SMT. VARSHA BATRA AND SHRI KARAN BATRA RELAT ES TO THE ADDITION MADE ON THE BASIS OF PROFORMA INVOICE RAISED BY THE SES ASSESSEES ON M/S VINITA ESTATES (P) LTD. THE ADDITION MADE BY TH E AO IS GIVEN BELOW:- (A) SHRI CHATURBHUJ T BATRA 25,25,400 (B) SMT. VARSHA BATRA 12,34,64 0 (C) SHRI KARAN BATRA 1,10, 060 THE FACTS RELATING TO THE ABOVE SAID ADDITION ARE S TATED IN BRIEF. DURING THE COURSE OF SEARCH OPERATIONS, THE PROFORMA INVOI CES RAISED BY THE ABOVE SAID THREE PARTIES ON M/S VINITA ESTATES (P) LTD WERE FOUND. THE ASSESSEES SUBMITTED THAT THEY DID NOT RECEIVE THE P AYMENTS AGAINST THE SAID PROFORMA INVOICES, SINCE THE RELEVANT SALES DI D NOT FRUCTIFY. IT WAS SUBMITTED THAT THE BILLS WERE PREPARED AND KEPT IN RECORD FOR MEMORY PURPOSE. IT WAS ALSO SUBMITTED THAT THESE ASSESSEES ARE FOLLOWING CASH SYSTEM OF ACCOUNTING AND HENCE THE INCOME, IF ANY, WILL BE ACCOUNTED ONLY UPON RECEIPT OF CASH. 9 ITA NO. 3627 /MUM/2014 ASSESSMENT YEAR: 2007-08 9. THE AO EXAMINED THE DIRECTOR OF M/S VINITA ESTAT ES (P) LTD, WHO SUBMITTED THAT HIS COMPANY HAS NOT MADE ANY PAYMENT AGAINST THE INVOICES FOUND DURING THE COURSE OF SEARCH. HOWEVER , THE DIRECTOR SAID THAT THE BILLS ARE GENERALLY PREPARED ONLY AFTER RE NDERING THE SERVICES. DESPITE THE DENIAL OF TRANSACTIONS BY BOTH THE CONC ERNED PARTIES, THE AO TOOK THE VIEW THAT BOTH THE ASSESSEES AND M/S VINIT A ESTATES (P) LTD ARE NOT COMING OUT WITH TRUTH. DURING THE COURSE OF SEARCH SUCH KIND OF PROFORMA INVOICES PREPARED BY THE ASSESSEES WERE FO UND AND THE EXPLANATIONS FURNISHED BY THE ASSESSEE WERE NOT FOU ND TO BE SATISFACTORY. ACCORDINGLY, THE AO HELD THAT THE INC OME SHOWN IN THE PROFORMA INVOICES HAS BEEN SUPPRESSED BY THE ASSESS EES AND ACCORDINGLY ASSESSED THE SAME. 10. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) CONFIRMED THE ADDITION MAINLY ON THE REAS ONING THAT THE ASSESSEES HAVE SUPPRESSED THE BROKERAGE INCOME RECE IVED BY WAY OF CASH. 11. WE HEARD THE PARTIES ON THIS ISSUE AND CAREFULL Y PERUSED THE RECORD. THE ADMITTED FACT IS THAT BOTH THE ASSESSEES AS WEL L AS M/S VINITA ESTATES (P) LTD, IN WHOSE NAME THE PROFORMA INVOICE S HAVE BEEN PREPARED, HAVE DENIED THE TRANSACTIONS. EXCEPT THE INVOICES, NO OTHER MATERIAL WAS FOUND DURING THE COURSE OF SEARCH TO D EMONSTRATE THAT THE SERVICES STATED IN THE INVOICES WERE ACTUALLY RENDE RED BY THE ASSESSEES. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS ALSO, THE ASSESSING OFFICER HAS FAILED TO BRING ANY MATERIAL ON RECORD TO SHOW THAT THE SERVICES MENTIONED IN THE INVOICES HAVE BEEN AC TUALLY RENDERED OR THE MONEY HAS ACTUALLY PASSED THE HANDS. AT THE TIM E OF HEARING, THE LD A.R SUBMITTED THAT THE RELEVANT INVOICES ARE UND ATED, UNSIGNED AND DID NOT BEAR THE ACKNOWLEDGEMENT OF M/S VINITA ESTA TES (P) LTD. HE FURTHER SUBMITTED THAT THE DIRECTOR OF THE ABOVE SA ID COMPANY AS WELL AS THE ACCOUNTANT OF THE ABOVE SAID COMPANY HAS DEN IED THE 10 ITA NO. 3627 /MUM/2014 ASSESSMENT YEAR: 2007-08 TRANSACTIONS. HE FURTHER SUBMITTED THAT THE STATEME NT OF ACTUAL BROKERAGE GIVEN BY M/S VINITA ESTATES (P) LTD TO TH E ASSESSEES HEREIN WAS FURNISHED TO THE AO AND THE ASSESSING OFFICER H AS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THESE ASSESSEES HAV E RECEIVED ANY MONEY OVER AND ABOVE THAT MENTIONED IN THE STATEMEN T. BY PLACING RELIANCE ON THE DECISION RENDERED BY HONBLE SUPREM E COURT IN THE CASE OF GODHRA ELECTRICITY COMPANY (225 ITR 746)(SC), TH E LD A.R CONTENDED THAT THE ASSESSING OFFICER COULD ASSESS ONLY THE RE AL INCOME HAS ACCRUED OR RECEIVED OR DEEMED TO HAVE BEEN ACCRUED OR RECEIVED. HE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT BROUGH T ANY MATERIAL TO SHOW THAT THE INCOME STATED IN THE PROFORMA INVOICE S HAS ACCRUED TO THE ASSESSEES HEREIN. 12. THUS, WE NOTICE THAT THE ASSESSING OFFICER HAS MADE THE ADDITION BY DISBELIEVING THE STATEMENTS GIVEN BY THE ASSESSEES AND M/S VINITA ESTATES (P) LTD AND ALSO WITHOUT BRINGING ANY MATER IAL ON RECORD TO SHOW THAT THE SAID STATEMENTS ARE AGAINST THE FACTS . THERE SHOULD NOT BE ANY DOUBT THAT IT WOULD BE DIFFICULT FOR ANYONE TO PROVE A NEGATIVE FACT. AS ALREADY NOTICED THAT THE LD CIT(A) HAS CON FIRMED THIS ADDITION ONLY ON THE REASONING THAT THE ASSESSEES HAVE SUPPR ESSED RECEIPTS BY RECEIVING THEM BY WAY OF CASH. IN THE EARLIER PARAG RAPHS, WE HAVE HELD THAT THE ADDITION MADE TOWARDS SUPPRESSED FEE RECEI PTS ARE LIABLE TO BE DELETED, SINCE THE SAID VIEW TAKEN BY THE TAX AUTHO RITIES ARE NOT SUPPORTED BY ANY CREDIBLE MATERIAL. THUS, THE VERY REASONING ON THE BASIS OF WHICH THIS ADDITION WAS SUSTAINED BY LD CI T(A) FAILS. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THIS ADDITION IN THE HANDS OF THE THREE ASSESSEES MENTIONED ABOVE. ACCORDINGLY, WE SET ASIDE THE ORDE R OF LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE ADDITION MADE ON THIS ISSUE IN THE HANDS OF THE THREE ASSESSEES MENTIONED ABOVE. 11 ITA NO. 3627 /MUM/2014 ASSESSMENT YEAR: 2007-08 3.3.4 IN VIEW OF THE AFORESAID FINDINGS RENDERED BY CO-ORDINATE BENCH IN ITS AFORESAID ORDER (SUPRA), DELETING BOTH THE ADDITION S OF (I) RS. 4,80,000/- ON ACCOUNT OF CASH COMPONENT OF BROKERAGE AND (II) RS. 12,34,640/- ON ACCOUNT OF TRANSACTIONS WITH M/S. VINITA ESTATES, THE CONSEQUE NTIAL PENALTY OF RS. 5,56,765/- LEVIED U/S 271(1)(C) OF THE ACT WOULD N OT NOW SURVIVE FOR CONSIDERATION. IN THIS VIEW OF THE MATTER, WE DELET E THE PENALTY OF RS. 5,65,765/- LEVIED U/S 271 (1)(C) OF THE ACT FOR THE ASST. YEA R 2007-08 IN THE CASE ON HAND. 4. IN THE RESULT, THE ASSESSEES APPEAL FOR ASST. YEAR 2007-08 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH FEBRUARY, 2016 SD/- SD/- ( SANDEEP GOSAIN ) (JASON P.BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 17/02/2016 / 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, MUMBAI PRAMILA