VIJAY D. DAGHA, THANE V. ITO WD 3(3), KALYAN

ITA 3718/MUM/2011

• Counselvise Citation: 371819914 RSA 2011
• Duration Of Justice: 3 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 16-06-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 09-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJNEESH K ARVIND
• Assessee Lawyers: VIJAY MEHTA
• Keywords: Unexplained expenditure
• Section: 148; 69C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./I.T.A. NO. 3718/MUM/2011 ( / ASSESSMENT YEAR :2001-02) VIJAY D DAGHA. 10, GANGESHWAR ASHISH, MANPADA ROAD, DOMBIVALI (E), DIST. THANE-421201 / VS. INCOME TAX OFFICER, WARD 3(3), RANI MANSION, MURBAD ROAD, KALYAN (W) ( ! / APPELLANT) .. ( '# ! / RESPONDENT) ./ $% ./PAN/GIR NO. : AAQPD6457J ! & / APPELLANT BY : SHRI VIJAY MEHTA '# ! ' & /RESPONDENT BY : SHRI RAJNEESH K ARVIND ( ) ' * + / DATE OF HEARING : 26.8.2014 ,- ' * + /DATE OF PRONOUNCEMENT : 27.8.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 15/02/2011 PASSED BY LD CIT(A)-I, THANE AND IT RELA TES TO THE ASSESSMENT YEAR 2001-02. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION MADE U/S 69C OF THE ACT. 2. THE FACTS RELATING TO THE ABOVE SAID ISSUE ARE S TATED IN BRIEF. THE ASSESSING OFFICER RECEIVED INFORMATION FROM DIRECTO R OF INCOME TAX (INV)-I, MUMBAI TO THE EFFECT THAT THE ASSESSEE HAS PAID DON ATION / CAPITATION FEE OF RS.5,50,000/- TO D.Y. PATIL GROUP FOR GETTING ADMIS SION FOR HIS SON SHRI DARPAN I.T.A. NO. 3718/MUM/2011 2 DAGHA IN BDS COURSE. HENCE, THE AO ISSUED NOTICE U /S 148 OF THE ACT ON 28-03- 2008 AND REOPENED THE ASSESSMENT. BEFORE THE AO, T HE ASSESSEE QUESTIONED THE RE-OPENING AND DID NOT RESPOND TO THE QUERIES RELAT ING TO THE PAYMENT OF DONATION. HENCE, THE AO ASSESSED THE ABOVE SAID AM OUNT OF RS.5,50,000/- AS THE INCOME OF THE ASSESSEE REPRESENTING UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT. THE ASSESSEE CHALLENGED THE RE-OPENING OF ASS ESSMENT AS WELL AS THE ADDITION MADE U/S 69C OF THE ACT BY FILING APPEAL B EFORE LD CIT(A), BUT COULD NOT SUCCEED. HENCE, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 3. THE LD A.R SUBMITTED THAT THE SIMILAR KIND OF ADDITIONS WERE MADE IN THE HANDS OF PARENTS OF OTHER STUDENTS ALSO AND THE MAT TER TRAVELLED UPTO TRIBUNAL. HE FURTHER SUBMITTED THAT THE TRIBUNAL, IN THE FOLL OWING CASES, HAS DELETED THE IDENTICAL ASSESSMENTS MADE U/S 69C OF THE ACT:- (A) AARTI S KHETWANI VS. ITO (ITA NO.5882/MUM/201 1 DATED 30-04-14) (B) VINAY KUMAR VS. ITO (ITA NO.2181/MUM/2011 DAT ED 21.02.14) (C) ITO VS. DR. HASTIMAL MOHANLAL JAIN (ITA NO.13 0/MUM/11 DT. 11.10.13 (D) JAYANT PATEL VS. ITO (ITA NO.5574/MUM/2012 DAT ED 27.11.2012) ON THE OTHER HAND, THE LD D.R STRONGLY RELIED UPON THE ORDER PASSED BY THE TAX AUTHORITIES. 4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSING OFFICER RECEIVED INFORMATION ABOUT THE PAYMENT OF C APITATION FEE/DONATION FROM THE INVESTIGATION DEPARTMENT. THE INFORMATION RELA TING TO THE SAME WAS OBTAINED BY THE INVESTIGATION DEPARTMENT DURING THE COURSE OF SEARCH OPERATION CONDUCTED IN THE CASE OF D.Y PATIL GROUP OF EDUCATI ONAL INSTITUTIONS. THE ASSESSEE DENIED THE SAID PAYMENT AND CONTENDED BEFO RE THE LD CIT(A) THAT THE I.T.A. NO. 3718/MUM/2011 3 ASSESSING OFFICER HAS MADE THE ADDITION WITHOUT BRI NGING ON RECORD ANY CORROBORATIVE MATERIAL. THE ASSESSEE ALSO PLACED R ELIANCE ON THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF KI SHANCHAND VS. CIT (1980), WHEREIN THE HONBLE APEX COURT HAD HELD THAT THE EV IDENCE USED AGAINST THE ASSESSEE, IF NOT SHOWN TO THE ASSESSEE, SHALL NOT B E ADMISSIBLE. HE ALSO PLACED RELIANCE ON THE DECISION RENDERED BY THE MUMBAI BEN CH OF TRIBUNAL IN THE CASE OF HARAKHCHAND JAIN VS. ACIT (61 TTJ 223). HOWEVER, T HE ABOVE SAID CONTENTIONS DID NOT FIND FAVOUR WITH LD CIT(A). 5. WE HAVE GONE THROUGH THE CASE LAW RELIED UPO N BY LD A.R. IN THE CASE OF AARTI S KHETWANI (SUPRA), THE TRIBUNAL HAS EXPRESSE D THE VIEW THAT THE BURDEN TO ESTABLISH THAT THE ASSESSEE HAS INCURRED CERTAIN EX PENDITURE WARRANTING AN EXPLANATION FROM THE ASSESSEE U/S 69C OF THE ACT LI ES UPON THE REVENUE. ACCORDINGLY, THE TRIBUNAL HAS HELD THAT THE INFORMA TION OBTAINED FROM THE INVESTIGATION DEPARTMENT IS NOT SUFFICIENT TO MAKE THE ADDITION. IN THE CASE OF SHRI VINAY KUMAR (SUPRA), THE TRIBUNAL HAS EXPRESSE D THE VIEW THAT THE ADDITION U/S 69C HAS BEEN MADE ON PREPONDERANCE OF PROBABILI TIES WITHOUT BRINGING COGENT EVIDENCE ON RECORD AND ALSO WITHOUT ASCERTAI NING THE RESULT OF SEARCH CONDUCTED IN THE HANDS OF D.Y. PATIL GROUP. IN THE CASE OF DR. HASTIMAL MOHANLAL JAIN (SUPRA), THE BENCH HAS EXPRESSED THE VIEW THAT THE ADDITION MADE PURELY ON THE BASIS OF ENTRIES MADE IN A DIARY OF THIRD PARTY IS NOT SUSTAINABLE. 6. THUS, IT IS NOTICED THAT CO-ORDINATE BENCHES H AVE TAKEN UNIFORM VIEW THAT THE ADDITION U/S 69C CANNOT BE MADE ON THE BASIS OF ENTRIES FOUND IN THE RECORD OF A THIRD PARTY WITHOUT BRINGING CORROBORATIVE MAT ERIAL ON RECORD AND ALSO WITHOUT ASCERTAINING THE RESULT OF SEARCH IN THE HA NDS OF THE THIRD PARTY. IN THE I.T.A. NO. 3718/MUM/2011 4 INSTANT CASE ALSO, THE TAX AUTHORITIES HAVE MADE TH E IMPUGNED ADDITION ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATIO N WING. NO OTHER MATERIAL WAS BROUGHT ON RECORD TO SHOW THAT THE ASSESSEE DID IN DEED PAY THE IMPUGNED CAPITATION FEE/DONATION. HENCE, CONSISTENT WITH TH E VIEW TAKEN BY THE CO- ORDINATE BENCHES IN THE ABOVE CITED CASES, WE SET A SIDE THE ORDER OF LD CIT(A) AND DIRECT THE AO TO DELETE THE IMPUGNED ADDITION. 7. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS ALS O CHALLENGED THE VALIDITY OF REASSESSMENT PROCEEDING. SINCE WE HAVE DELETED THE ADDITION ON MERITS, WE DO NOT FIND IT NECESSARY TO ADJUDICATE THE LEGAL ISSUE CITED ABOVE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 27TH AUGUST, 2014 . ,- ( . /0 1 2 27TH AUGUST, 2014 - ' 3) 4 SD SD ( . . / H.L. KARWA) ( . . , / B.R. BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER / ( ) MUMBAI: 27TH AUGUST,2014. . . ./ SRL , SR. PS ! ' / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. ( 6* ( ) / THE CIT(A)- CONCERNED 4. ( 6* / CIT CONCERNED 5. 78 3 '*9 , + 9 , / ( ) / DR, ITAT, MUMBAI CONCERNED 6. 3 : ) / GUARD FILE. ; ( / BY ORDER, TRUE COPY < $ (ASSTT. REGISTRAR) + 9 , / ( ) /ITAT, MUMBAI