Asst. Commissioner of Income tax, Panaji V. Shri Hirachand Bafna, Margao

ITA 388/PAN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1483 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 06-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NISHANT K LD
• Assessee Lawyers: P DINESH
• Keywords: Unexplained investment; Peak credit
• Section: 133A; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI, HON'BLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 388/PNJ/2013 : (A.Y 2010 - 11) ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, PANAJI, GOA. (APPELLANT) VS. SHRI HIRACHAND BAFNA G/21, VIKRANT BLDG., NEAR CRUNET, MALBHAT, MARGAO, GOA . PAN : AEEPB2630M (RESPONDENT) ASSESSEE BY : P. DINESH, ADV. REVENUE BY : NISHANT K. , LD. DR DATE OF HEARING : 1 1 /08/2015 DATE OF PRONOUNCEMENT : 1 1 /08/2015 O R D E R PER GEORGE MATHAN : 1. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - VI, BANGALORE IN ITA NO. 150/DCIT/CC PANAJI/CIT(A) - VI/BLORE/2011 - 2012 DT. 12.9.2013 FOR THE A.Y 2010 - 11. SHRI P. DINESH, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI NISHANT K., LD. DR REPRESENTED ON BEHALF OF THE REVENUE. 2. IT WAS SUBMITTED BY THE LD. DR THAT THE ASSESSEE IS A DEALER IN PLASTIC ITEMS. IT WAS THE SUBMISSION THAT THERE WAS A SEARCH O N ONE SHRI N. SURYANARAYANA ON 9.10.2009 AND A SURVEY U/S 133A WAS CARRIED OUT ON THE ASSESSEE ON 20.1.2010. IT WAS THE SUBMISSION THAT IN THE COURSE OF THE SURVEY 2 ITA NO. 388/PNJ/2013 (A.Y : 2010 - 11) CERTAIN DOCUMENTS WERE FOUND IN THE PREMISES OF THE ASSESSEE. IT WAS ALSO THE SUBMISSION T HAT THERE WAS A SEARCH ON ONE KOCHU KOSHY ALSO WHICH SHOWED THAT THE ASSESSEE WAS INVOLVED IN THE ACTIVITY OF ADVANCING FUNDS FOR COMMISSION. IT WAS THE SUBMISSION THAT THE DOCUMENTS FOUND SHOWED COMMISSION RECEIPT OF RS.24,89,250/ - . ON THE BASIS OF THE DOCUMENTS FOUND IN THE COURSE OF THE SEARCH OF SHRI KOCHU KOSHY, AS ALSO IN RESPECT OF THE SURVEY CONDUCTED ON THE ASSESSEE, THE AO HAD MADE AN ADDITION OF RS. 28,64,190/ - REPRESENTING THE UNEXPLAINED INCOME OF THE ASSESSEE EARNED BY WAY OF COMMISSION. IT WAS THE SUBMISSION THAT THE AO HAD ALSO TAKEN THE PRESUMPTION THAT THE ASSESSEE WAS IN THE BUSINESS OF ADVANCING FUNDS ON COMMISSION AND CONSEQUENTLY WORKED OUT THE PEAK CREDIT OF RS. 2,82,09,050/ - AS THE UNEXPLAINED INCOME OF THE ASSESSEE IN THE FORM OF ADVANCES. THE AO HAD ALSO BROUGHT TO TAX SUM OF RS. 11 LACS REPRESENTING AN INVESTMENT IN PROPERTY WHICH HAD BEEN AGREED BY THE ASSESSEE IN THE COURSE OF THE ASSESSMENT. IT WAS THE SUBMISSION THAT ON APPEAL, THE LD. CIT(A) HAD TELESCOPED THE UNEXPLAINED INVESTMENT OF RS. 11 LACS INTO THE ADDITION REPRESENTING THE COMMISSION INCOME OF RS. 28,64,190/ - . IT WAS THE SUBMISSION THAT THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE SAID TELESCOPING. IT WAS THE SUBMISSION THAT THE LD. CIT(A) HAD DELETED THE ADD ITION OF RS. 2,82,09,050/ - BY HOLDING THAT THE FACT THAT THE ASSESSEE WAS EARNING COMMISSION SHOWED THAT THE SAID INVESTMENT DID NOT BELONG TO THE ASSESSEE. IT WAS THE SUBMISSION THAT THE ORDER OF THE LD. CIT(A) WAS LIABLE TO BE REVERSED. 3. IN REPLY, TH E LD. AR SUBMITTED THAT THE ASSESSEE RIGHT FROM THE TIME OF SURVEY HAD BEEN CLAIMING THAT THE DOCUMENTS FOUND DID NOT BELONG TO THE ASSESSEE. IT WAS THE SUBMISSION THAT THE ASSESSEE HAS NOT FILED AN APPEAL AGAINST THE CONFIRMATION OF THE ADDITION OF RS. 2 8,64,190/ - TREATING IT AS COMMISSION INCOME OF THE ASSESSEE. IT WAS THE SUBMISSION THAT THE ASSESSEE WAS ALSO DOING REAL ESTATE BROKERAGE BUSINESS. IT WAS THE SUBMISSION 3 ITA NO. 388/PNJ/2013 (A.Y : 2010 - 11) THAT THE ASSESSEE HAD NEVER ADVANCED ANY FUNDS OF RS. 2,82,09,050/ - . IT WAS THE SU BMISSION THAT THE ORDER OF THE LD. CIT(A) WAS LIABLE TO BE UPHELD INSOFAR AS THERE WAS NO EVIDENCE TO SHOW THAT THE ASSESSEE HAD ADVANCED OR HAD THE CAPACITY TO ADVANCE SUCH A HUGE AMOUNT OF RS. 2,82,09,050/ - . IT WAS THE SUBMISSION THAT THE LD. AR VEHEMEN TLY SUPPORTED THE ORDER OF THE LD. CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY, THE ASSESSEE HAS BEEN ASSESSED TO AN AMOUNT OF RS. 28,64,190/ - REPRESENTING THE COMMISSION INCOME EARNED IN RESPECT OF THE ARRANGEMENT OF FINANCE. NO PER SON WOULD BE ABLE TO EARN COMMISSION FOR ARRANGING FINANCE AND ARRANGED SUCH FINANCE FROM HIS OWN FUNDS. IT IS CLEAR THAT NO ADDITION HAS BEEN MADE BY THE AO NOR IS THERE AN Y ALLEGATION THAT THE ASSESSEE HAS RECEIVED INTEREST INCOME ON ACCOUNT OF SUCH FIN ANCING. IN THESE CIRCUMSTANCES, AS IT IS NOTICED THAT THE REVENUE HAS NOT BEEN ABLE T O DISLODGE THE FINDINGS OF THE LD. CIT(A) NOR PRODUCE ANY EVIDENCE TO SUBSTANTIATE THE ADDITION OF RS. 2,82,09,050/ - IN THE HANDS OF THE ASSESSEE, WE ARE OF THE VIEW THAT THE DELETION AS MADE BY THE LD. CIT(A) IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/08/2015. S D / - (N.S. SAINI) ACCOUNTANT MEMBER S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 1 1 /08/ 201 5 *SSL* 4 ITA NO. 388/PNJ/2013 (A.Y : 2010 - 11) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , 5 ITA NO. 388/PNJ/2013 (A.Y : 2010 - 11) DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 11/08/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 11/08/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 1 2 /08/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 1 2 /08/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1 2 /08/2015 SR.PS 6. DATE OF PRONOUNCEMENT 11/08/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 1 2 /08/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER