VIJAY ANANT NIWATE, RAIGAD V. ITO WD 4, RAIGAD

ITA 370/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3208 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 25-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B S BISTDR
• Assessee Lawyers: S S PHADKAR
• Keywords: Business income; Salary income
• Section: 143(3); 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH MUMBAI BEFORE SHRI B.R.BASKARAN, AM & SHRI PAWAN SIN GH, JM ITA NO.370/MUM/2 016 (ASSESSMENT YEAR : 2009-10) SHRI VIJAY ANANT NIWATE, G-03, VINAYAK APARTMENT, SUYOG NAGAR, DAHIWALI, TAL-KARJAT, DISTRICT-RAIGAD, PANVEL. VS. ITO, WARD-4, PANVEL, DIST-RAIGAD. PAN/GIR NO.: ACDPN1078Q ( APPELLANT ) .. ( RESPONDENT ) ITA NO.371/MUM/2016 (ASSESSMENT YEAR : 2010-11) SHRI VIJAY ANANT NIWATE, G-03, VINAYAK APARTMENT, SUYOG NAGAR, DAHIWALI, TAL-KARJAT, DISTRICT-RAIGAD, PANVEL. VS. ITO, WARD-4, PANVEL, DIST-RAIGAD. PAN/GIR NO.: ACDPN1078Q ( APPELLANT ) .. ( RESPONDENT ) ITA NO.372/MUM/2016 (ASSESSMENT YEAR : 2011-12) SHRI VIJAY ANANT NIWATE, G-03, VINAYAK APARTMENT, SUYOG NAGAR, DAHIWALI, TAL-KARJAT, DISTRICT-RAIGAD, PANVEL. VS. ITO, WARD-4, PANVEL, DIST-RAIGAD. PAN/GIR NO.: ACDPN1078Q ( APPELLANT ) .. ( RESPONDENT ) ITA NO.374/MUM/2016 (ASSESSMENT YEAR : 2006-07) SHRI VIJAY ANANT NIWATE, G-03, VINAYAK APARTMENT, SUYOG NAGAR, DAHIWALI, TAL-KARJAT, DISTRICT-RAIGAD, PANVEL. VS. ITO, WARD-4, PANVEL, DIST-RAIGAD. PAN/GIR NO.: ACDPN1078Q ( APPELLANT ) .. ( RESPONDENT ) ITA NO.375/MUM/2016 (ASSESSMENT YEAR : 2007-08) SHRI VIJAY ANANT NIWATE, G-03, VINAYAK APARTMENT, SUYOG NAGAR, DAHIWALI, TAL-KARJAT, DISTRICT-RAIGAD, PANVEL. VS. ITO, WARD-4, PANVEL, DIST-RAIGAD. PAN/GIR NO.: ACDPN1078Q ( APPELLANT ) .. ( RESPONDENT ) ITA NO.376/MUM/2016 (ASSESSMENT YEAR : 2008-09) SHRI VIJAY ANANT NIWATE, ITO, WARD-4, ITA NOS.370 TO 372 & 374 TO 376/M/16 SHRI VIJAY ANA NT NIWATE 2 G-03, VINAYAK APARTMENT, SUYOG NAGAR, DAHIWALI, TAL-KARJAT, DISTRICT-RAIGAD, PANVEL. VS. PANVEL, DIST-RAIGAD. PAN/GIR NO.: ACDPN1078Q ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.S.PHADKAR (AR) REVENUE BY : SHRI B.S. BIST(DR) DATE OF HEARING : 27/07/2016 DATE OF PRONOUNCEMENT: 24/08/2016 O R D E R PER PAWAN SINGH, JM: 1. THESE BUNCH OF SIX APPEALS OF ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A)- 2,THANE DATED 20.11.2015 FOR ASSESSMENT YEARS (AYS) -2006-07 TO 2011-12. IN ALL APPEALS, THE ASSESSEE HAS RAISED IDENTICAL GROUNDS OF APPEAL, THUS ALL APPEAL WERE HEARD TOGETHER AND ARE BEING DECIDED BY A COMMON OR DER. THE FOLLOWING GROUNDS OF APPEAL ARE RAISED BY THE ASSESSEE IN ALL APPEALS ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS. 2,64 ,000/- AS SALARY INCOME ON THE ALLEGED STATEMENT MADE BY THE APPELLANT BEFORE THE CBI IN THE CASE OF SHRI LILADHAR BANGERA ITO AND THEREFORE, ERRED IN CONFIR MING THE ADDITION OF RS. 2,64,000/- AS SALARY INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) OUGHT TO HAVE HELD THAT THE STATEMENT IN THE CASE OF SHRI LILADHAR BANGERA BEFORE THE CBI. THE STATEMENT OF BEFORE THE CBI BEING NOT CONFIRMED BEFORE THE ASSESSING OFFICER, THE LEARNED CIT(A) OU GHT TO HAVE HELD THAT THE SAID STATEMENT CANNOT BE ACTED UPON FOR SUSTAINING THE ADDITION OF RS. 2,64,000/- TO THE TOTAL INCOME IN THE HANDS OF APPE LLANT. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUND(S) OF APPEAL EITHER BEFORE OR DURING THE COURSE OF HEA RING OF THE APPEAL. 2. AS FACTS OF ALL THE APPEALS ARE IDENTICAL, WE ARE R EFERRING THE FACTS OF ITA NO. 370/MUM/2016 FOR AY-2009-10. THE FACTS IN BRIEF AS EMANATING FROM THE RECORD OF THESE APPEALS ARE THAT ASSESSEE FILED RETURN OF INCOME FOR RELEVANT AY ON 22.03.2011 DECLARING TOTAL INCOME OF RS.1,97,950/-. SUBSEQUENTLY, THE ASSESSMENT WAS RE-OPENED U/S 147 OF THE INCOME-TAX ACT, FOR TH E REASONS THAT ASSESSEE MADE STATEMENT ON 03.05.2010 BEFORE INSPECTOR CBI, ANTE CORRUPTION BUREAU (ACB)CBI, MUMBAI WHEREIN THE ASSESSEE HAS ADMITTED TO HAVE RECEIVED A SALARY @ 22,000/- PER MONTH IN CASH, WHICH HAS NOT BEEN OF FERED FOR TAX. ACCORDINGLY, AFTER RECORDING THE NECESSARY REASONS FOR RE-OPENIN G A NOTICE U/S 148 WAS ISSUED ON 18.03.2013. THE ASSESSEE FILED REPLY TO THIS RE-OPE NING VIDE REPLY DATED 01.08.2013. AFTER TAKING INTO CONSIDERATION THE REP LY OF ASSESSEE, THE AO ISSUED ITA NOS.370 TO 372 & 374 TO 376/M/16 SHRI VIJAY ANA NT NIWATE 3 NOTICE U/S 142(1) AND 143(3) ON 27.06.2013 TO FURNI SH THE DETAILS REGARDING THE STATEMENT OF ASSESSEE DATED 03.05.2010 RECORDED U/ S 161 OF CR.P.C., BY INSPECTOR, CBI. WHEREIN, THE ASSESSEE DISCLOSED SALARY OF RS . 22,000/- PER MONTH, BUT THE SAME IS NOT OFFERED /DECLARED IN INCOME-TAX RETURN . THE ASSESSEE FILED HIS REPLY DATED 23.08.2013 WHEREIN THE ASSESSEE ADMITTED HIS STATEMENT THAT HE IS WORKING WITH PROPRIETARY FIRM OF MR. ANIL MEHRA FROM NOVEMB ER 2005 TILL THE DATE OF RECORDING HIS STATEMENT. THE ASSESSEE FURTHER ADMI TTED THAT HE GOT MONTHLY SALARY OF RS. 22,000/- FROM THE FIRM BUT PERIOD IS NOT MEN TIONED IN HIS STATEMENT. THE ASSESSEE FURTHER CONTENDED THAT IN NOVEMBER 2005, H E WAS GETTING RS. 7,500/- FROM M/S ANCONS & TIRUPATI CONSTRUCTIONS OF ANIL ME HRA FROM 2005 TILL DATE THERE WERE SO MANY VARIATION IN THE SAME DURING THE YEAR 2006-07 TO 2011-12 IN SAME YEAR IS AVERAGE INCOME IS MORE THAN RS. 22,000 /- P.M. AS ADDITIONAL INCOME FROM OTHER CLIENT WHICH HE HAS MENTIONED IN THE RET URN OF INCOME FILED. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO. THE AO HELD THAT FROM THE VERIFICATION OF RETURN OF INCOME FOR AY 2009-10, IT IS REVEALED THAT ASSESSEE HAS DECLARED INCOME FROM PROVISION OF PROPRIETARY CONCE RN NAMELY VASUNDHARA TAX CONSULTANCY AND AS AN EMPLOYEE OF SHRI ANIL MEHRA S INCE 2005 AND RECEIVED SALARY INCOME OF RS. 22,000/- PER MONTH. AS INCOME FROM SALARY IS NOT DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME FILED. THU S, THE RECEIPT OF SALARY OF @ RS. 22,000/- PER MONTH WHICH COMES TO RS. 2,64,000/- AS ANNUAL INCOME WAS INCLUDED IN THE TOTAL INCOME AS UNDISCLOSED INCOME FROM SALARY OF THE ASSESSEE FOR AY 209-10. SIMILAR ADDITION @ RS. 2,64,000/- WA S MADE IN AY 2006-07 TO 2008-09 & 2010-11 TO 2011-12. AGGRIEVED BY THE ORDE R OF AO, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) WHEREIN IN ALL THE APPEALS , THE ADDITION WERE SUSTAINED BY THE CIT(A) IN THE IMPUGNED ORDER DATED 2011.2015 . FURTHER, AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED APPEALS BEF ORE US. 3. WE HAVE HEARD AUTHORIZED REPRESENTATIVE (AR) FOR AS SESSEE AND DEPARTMENTAL REPRESENTATIVE (DR) OF REVENUE AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. THE AR OF THE ASSESSEE ARGUED THAT ASSESSEE IS A TAX CO NSULTANT AND JOINED TIRUPATI CONSTRUCTIONS IN NOVEMBER 2005, FOR THE JOB OF TAX CONSULTANT AND ACCOUNTS WRITING WORK . THE SAID CONCERN IS PROPRIETARY FI RM OF ANIL MEHRA AND BY PASSAGE OF TIME ANIL MEHRA BECOME HIS CLIENT. THE ASSESSEE ALSO MAINTAINS THE BOOKS OF ACCOUNT OF OTHER CLIENTS, THE ASSESSEE FROM THE AY 2006-07 ONWARD SHOWN HIS INCOME AS A BUSINESS RECEIPT IN HIS BOOKS OF ACCOUN T. IN MAY 2010 IN A INVESTIGATION AGAINST THE ITO, SHRI BANGERA BY CB I OFFICER, HIS STATEMENT WAS ITA NOS.370 TO 372 & 374 TO 376/M/16 SHRI VIJAY ANA NT NIWATE 4 RECORDED ON 03.05.2010. THE ASSESSEE HAS GIVEN STA TEMENT THAT HE IS GETTING SALARY OF RS. 22,000/- PER MONTH FROM TIRUPATI CONSTRUCTIO N WHICH IS IN FACT RECEIVED FROM TIRUPATI CONSTRUCTION AS PROFESSIONAL INCOME W HICH IS SHOWN IN HIS RETURN OF INCOME. THE AO RELIED UPON THE STATEMENT RECORDED B Y INSPECTOR CBI, AND RE- OPENED THE ASSESSMENT FROM 2006-07 TO 2011-12 AND M ADE ADDITIONS OF RS. 2,64,000/- IN EACH AYS. AR OF THE ASSESSEE FURTHER ARGUED THAT THERE WAS NO MATERIAL BEFORE THE AO TO ASSESS THE INCOME OF ASSE SSEE EXCEPT THE STATEMENT BEFORE 3 RD PARTY. LD AR FOR ASSESSEE FINALLY SUBMITS THAT AT THE MOST THE ADDITION COULD BE MADE IN RESPECT OF CURRENT ASSESSMENT YEAR . DR FOR REVENUE STRONGLY RELIED UPON THE ORDER OF AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND GONE THROUGH THE ORDER OF AUTHORITIES BELOW. THE ASSESSEE HAS NOT CHALLENG ED THE RE-OPENING OF ASSESSMENT PROCEEDING. WE HAVE SEEN THE STATEMENT OF ASSESSEE RECORDED U/S 161 OF CR.P. C. BY INSPECTOR CBI IN RC-10(A)/2010, CBI & ACB, MUMB AI. THE STATEMENT OF THE ASSESSEE RUNS INTO 18 PAGES (PAGE NOS. 25 TO 43 OF PB). THE SAID STATEMENT WAS RECORDED BY SHRI N.K. DAYAVAN, INSPECTOR CBI ACB, M UMBAI. THE SAID STATEMENT WAS RECORDED U/S 161 CR.P.C. DURING THE INVESTIGATI ON OF R.C. NO. 10A OF 2010 AGAINST SHRI L.A. BANGERA, ITO, MUMBAI. WE ARE REF ERRING SOME EXTRACT OF THE STATEMENT OF ASSESSEE. THE ASSESSEE STATED THAT HE HAS COMPLETED B.CO M. FROM NASIK UNIVERSITY IN THE YEAR 1991. THEREAFTER HE JOINED COLOUR CHEM, ROHA UNIT AS A PLANT INVERTER FOR THE PERIOD OF JUN E 1991 TO AUGUST 2004. FROM AUGUST 2004 STARTED CONSULTANCY FROM HIS RESIDENCE. HE ALSO JOINED M/S ANCONS IN THE MONTH OF NOVEMBER 2005 TILL DATE FOR MAINTAI NING ACCOUNTS. HE IS GETTING MONTHLY SALARY FOR AN AMOUNT OF APPROX RS. 22,000/- , THE SAID FIRM IS ENGAGED IN THE BUSINESS OF CIVIL AND ROAD CONSTRUCTIONS. THE OTHER PART OF STATEMENT IS NOT RELEVANT FOR THE PURPOSE OF PRESENT PROCEEDING. ONL Y FIRST PARAGRAPH OF THE STATEMENT OF ASSESSEE DISCLOSED THAT HE IS GETTING MONTHLY SALARY OF RS. 22,000/- PER MONTH APPROXIMATELY FROM THE FIRM OF ANIL MEHRA . NEITHER THE DATE OF JOINING IS MENTIONED IN HIS STATEMENT NOR THE PERIOD FROM W HICH THE ASSESSEE STARTED GETTING SALARY OF RS. 22,000/-. THE AO HAS NOT ENQU IRED FROM WHICH PERIOD OF SALARY OF RS. 22,000/- IS BEING RECEIVED BY THE ASS ESSEE. NO INVESTIGATION WAS CONDUCTED BY AO FROM THE PROPRIETOR OF THE FIRM WHE RE THE ASSESSEE WAS ALLEGEDLY EMPLOYED. THE STATEMENT WAS RECORDED ON 03.05.2010 . AT THE MOST, THE ADDITION OF INCOME ON ACCOUNT OF SALARY CAN BE ADDED ONLY FO R THE RELEVANT AY, DURING WHICH THE ASSESSEE MADE STATEMENT DISCLOSING HIS I NCOME FROM SALARY. THE AO ITA NOS.370 TO 372 & 374 TO 376/M/16 SHRI VIJAY ANA NT NIWATE 5 HAS NOT EXAMINED THE BOOKS OF ACCOUNT OF SHRI ANIL MEHRA OR HIS FIRM. THUS, WE ARE OF THE VIEW THAT THE ADDITION ON ACCOUNT OF SAL ARY CAN BE ADDED ONLY IN THE AY 2010-11 IN ABSENCE OF ANY OTHER COGENT EVIDENCE, T HUS, THE ADDITION MADE ON ACCOUNT OF INCOME FROM SALARY IS DELETED FROM ALL OTHER ASSESSMENT YEARS. THUS WE SUSTAIN THE ADDITION FOR AY 2010-11ON ACCOUNT OF SALARY. AND THE ADDITION ON ACCOUNT OF INCOME FROM SALARY ALL OTHER AYS ARE DEL ETED. 5. IN THE RESULT, THE APPEALS ARE BEING ITA NO. 370, 3 72 , 374 TO 376/M/2016 ALLOWED. THE APPEAL ITA NO. 371/MUM/2016 FOR AY 201 0-11 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24/08 /2016. SD/- SD/- (B.R.BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED : 24/08/2016 SK, PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY/