ALLIANCE HOTELS, MUMBAI V. ACIT 12(1), MUMBAI

ITA 4076/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9195 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 20-11-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 18-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURINDER JIT SINGH
• Keywords: Source of fund; Onus to prove
• Section: 143(3); 133A; 68; 69; 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO. 4076/MUM/2011 ASSESSMENT YEAR 2006-07 ALLIANCE HOTELS, 121, CITY TERRACE, W.H. MARG, FORT, MUMBAI 400 001. PAN: AAFFA 7075 E VS. ACIT 12(1), AAYAKAR BHAVAN, MUMBAI 400 020. ITA NO. 4738/MUM/2011 ASSESSMENT YEAR 2006-07 ACIT 12(1), AAYAKAR BHAVAN, MUMBAI 400 020. VS. ALLIANCE HOTELS, 121, CITY TERRACE, W.H. MARG, FORT, MUMBAI 400 001. PAN: AAFFA 7075 E (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SURINDERJIT SINGH (DR) ASSESSEE BY : SHRI VIJAY MEHTA DATE OF HEARING : 04-12-2012 DATE OF PRONOUNCEMENT : 26-12-2012 O R D E R PER SANJAY ARORA, A.M. THIS IS A SET OF CROSS-APPEALS BY THE ASSESSE E AND THE REVENUE, ARISING OUT OF ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2 3, MUMBAI (CIT(A) FOR SHORT) DATED 31-03-2011, PARTLY ALLOWING THE ASSESS EES APPEAL CONTESTING ITS ITA NO. 4076/MUM/2011 ITA NO. 4738/MUM/2011 ALLIANCE HOTELS, MUMBAI (AY 2006-07) 2 ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) DATED 30- 12-2008 FOR THE ASSESSMENT YEAR (AY) 2006-07. 2.1 THE BACKGROUND FACTS OF THE CASE ARE THAT T HE ASSESSEE, A PARTNERSHIP FIRM IN THE BUSINESS OF PROVIDING BOARDING AND LODGING FACILITI ES, WAS SUBJECT TO SURVEY ACTION U/S. 133A OF THE ACT ON MAY 11 & 12, 2007. INCRIMIN ATING DOCUMENTS WERE RECOVERED FROM ITS PREMISES. THE ASSESSEE HAVING FI LED ITS RETURN FOR THE YEAR ON 31- 10-2006 AT A LOSS OF RS. 27.22 LAKHS, THE SAME WAS SUBJECT TO THE VERIFICATION PROCEDURE UNDER THE ACT BY THE ISSUE OF NOTICE U/S. 143(2), AND THE IMPUGNED ASSESSMENT FRAMED. THE FIRST APPELLATE AUTHORITY HA VING ALLOWED THE ASSESSEE PARTIAL RELIEF, BOTH THE ASSESSEE AND THE REVENUE ARE IN AP PEAL. 2.2 THE TWO ADDITIONS FOR THE CURRENT YEAR ARE O N THE BASIS OF THE MATERIAL IN THE FORM OF PRINT-OUTS OF COMPUTER BACK UP FILES FOUND ON THE SYSTEM AT THE ASSESSEES PREMISES, AND ADDITION/S BASED ON WHICH FORM THE SU BJECT MATTER OF THE RESPECTIVE APPEALS, WHICH WE SHALL TAKE UP IN SERIATIM. ASSESSEES APPEAL (ITA NO. 4076/MUM/2011) 3.1 THE DOCUMENT UNDER REFERENCE READS AS: FUNDS RECEIVED FROM DATE AMOUNT FUNDS USED FOR ALLIANCE HOTEL PARVEZ SIR WHITE HOUSE NAWAB MASJID ADI ENTERP RISES PARVEZ SIR 10.10.05 100000.00 100000.00 21.10.05 25000.00 25000.00 27.10.05 20000.00 20000.00 29.10.05 10000.00 10000.00 9.11.05 150000.00 119000.00 31000.00 11.11.05 289000.00 21000.00 11.11.05 150000.00 5000.00 12.11.05 100000.00 13000.00 500000.00 16.11.05 60000.00 60000.00 ITA NO. 4076/MUM/2011 ITA NO. 4738/MUM/2011 ALLIANCE HOTELS, MUMBAI (AY 2006-07) 3 17.11.05 20000.00 20000.00 18.11.05 100000.00 39000.00 36000.00 25000.00 19.11.05 15000.00 15000.00 21.11.05 25000.00 25000.00 22.11.05 100000.00 33000.00 37000.00 30000.00 23.11.05 20000.00 20000.00 24.11.05 12000.00 12000.00 25.11.05 50000.00 50000.00 25.11.05 20000.00 20000.00 26.11.05 20000.00 20000.00 30.11.05 10000.00 10000.00 06.12.05 6000.00 6000.00 07.12.04 6000.00 6000.00 07.12.05 52000.00 52000.00 10.12.05 6000.00 6000.00 TOTAL 1366000.00 398000.00 166000.00 115000.00 62000.00 625000.00 PAGE: 2 FUNDS RECEIVED FROM DATE AMOUNT FUNDS USED FOR ALLIANCE HOTEL PARVEZ SIR WHITE HOUSE NAWAB MASJID ADI ENTERPRISES 14.12.05 14000.00 14000.00 16.12.05 10000.00 10000.00 21.12.05 10000.00 10000.00 24.12.05 135000.00 135000.00 24.12.05 165000.00 165000.00 26.12.05 10000.00 10000.00 27.12.05 4500.00 4500.00 ITA NO. 4076/MUM/2011 ITA NO. 4738/MUM/2011 ALLIANCE HOTELS, MUMBAI (AY 2006-07) 4 30.12.05 49000.00 49000.00 01.02.06 80000.00 80000.00 TOTAL 477500.00 163000.00 14500.00 300000.00 OPENING THE ARGUMENTS FOR AND ON BEHALF OF THE ASSE SSEE, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), ITS COUNSEL, THAT T HOUGH THE ASSESSEE HAD ALL ALONG DENIED ANY KNOWLEDGE OR THE OWNERSHIP OF THE DOCUME NT, IT NOW WISHES TO TAKE UP A LEGAL GROUND, THAT IS, WHETHER ASSUMING THE DOCUMEN T TO BE TRUE, COULD ANY ADDITION BE AT ALL MADE ON ITS BASIS. THIS IS AS ALL IT SAYS OR SPEAKS, IN SIMPLISTIC TERMS, IS OF A GIVING LOAN TO B. IF THAT BE SO, NO ADDITION IN THE HANDS OF B, THE RECIPIENT, COULD BE MADE; THE DOCUMENT ITSELF EXPLAINING THE S OURCE OF THE FUNDS AS A. THE REVENUE COULD NOT TAKE OR ADOPT A SEGMENTED OR DISJ OINTED APPROACH, CONSIDERING THE DOCUMENT AS TRUE IN-SO-FAR AS THE DESTINATION OF FU NDS IS CONCERNED, I.E., THE ASSESSEE, AND NOT TRUE WITH REGARD TO THEIR SOURCE, SHRI PARV EZ GHASWALA (P, SAY), SPECIFIED IN THE SAME DOCUMENT. SECTION 68 OF THE ACT WOULD NOT, THUS HOLD, FOR WHICH RELIANCE WAS PLACED BY HIM ON THE FOLLOWING DECISIONS: (I) T.S. KUMARASAMY V. ACIT (1998) 65 ITD 188 (MAD) (II) ACIT V. VATIKA GREENFIELD LTD. (2009)121 TTJ 208 (DEL.) (III) CIT V. INDEO AIRWAYS PVT. LTD. (2012)349 ITR 85 (DEL)[ITA NOS. 1620, 22/2010] EVEN SECTION 69 WOULD NOT APPLY IN-AS-MUC H AS NO INVESTMENT HAS BEEN FOUND BY THE REVENUE, THE NATURE AND SOURCE OF WHICH IS T O BE, OR REMAINS TO BE, EXPLAINED. ON BEING ENQUIRED AS TO WHO WAS MR. PARVEZ, THE A IN THE ASSESSEES EXAMPLE, AND WHETHER HE ADMITS TO HAVING LENT MONIES TO, AMONG O THERS, THE ASSESSEE B (IN THE EXAMPLE), IT WAS SUBMITTED BY THE LD. AR, THAT MR. PARVEZ IS A PARTNER IN THE ASSESSEE-FIRM, AGAINST WHOM THOUGH, TO THE BEST OF HIS KNOWLEDGE, THE REVENUE HAS NOT PROCEEDED. THERE WAS THUS NO OCCASION FOR HIM T O STATE HIS CASE IN THE MATTER. HOWEVER, THE INCOME HAS NECESSARILY TO BE ASSESSEED IN THE HANDS OF THE RIGHT PERSON, AND MERELY BECAUSE THE REVENUE HAS NOT OR NOT CONSI DERED IT PROPER TO ASSESS THE RIGHT PERSON, WOULD NOT ENTITLE IT TO ASSESS THE SA ID INCOME IN THE HANDS OF ANOTHER ITA NO. 4076/MUM/2011 ITA NO. 4738/MUM/2011 ALLIANCE HOTELS, MUMBAI (AY 2006-07) 5 THE ASSESSEE IN THE INSTANT CASE. TOWARD THIS, HE RELIED ON THE DECISIONS IN THE FOLLOWING CASES OF: (I) ITO VS. CH. ATCHAIAH (1996) 218 ITR 239 (SC) (II) PRADEEP AGENCIES V. ITO, DELHI (2007) 18 SOT 12 (DEL.) (SB) FURTHER ON, THE ADDITION, IN ANY CASE, COULD N OT BE MADE FOR THE FULL AMOUNT, AS DONE BY THE REVENUE; THE DOCUMENT ITSELF SHOWING TH AT FUNDS ONLY TO THE EXTENT OF RS. 5.61 LAKHS WERE ADVANCED FOR USE OF THE ASSESSE E. ON BEING FURTHER QUERIED THAT THE DOCUMENT CANNOT BE INTERPRETED IN TERMS OF A GIVING LOAN TO B, AS NOBODY WOULD GIVE LOAN TO HIMSELF, WHILE THE DOCUMENT CONT AINS THE NAME OF PERVEZ ON BOTH THE SIDES, IT WAS EXPLAINED BY HIM THAT THAT W AS THE DOCUMENT PROJECTED IN ESSENCE. IT HAD ADMITTEDLY BEEN PREPARED BY A THIRD PERSON C, WHO HAD BEEN ENTRUSTED WITH THE FUNDS BY A (MR. PERVEZ), FOR B EING UTILIZED, FOR THE PURPOSE OF OTHERS, INCLUDING A HIMSELF. 3.2 THE LD. DEPARTMENTAL REPRESENTATIVE (DR) W OULD, ON THE OTHER HAND, SUBMIT THAT THE PRESUMPTION OF SECTION 292C (AND WHICH WAS EARLIER SOUGHT TO BE PRESSED INTO SERVICE BY RESORTING TO SECTION 132 (4A)), WOU LD NOT OPERATE TO DISCHARGE THE BURDEN OF PROOF U/S. 68 ON THE ASSESSEE, PLACING RE LIANCE ON THE DECISIONS IN THE CASE OF DAYA CHAND VS. CIT (2001) 250 ITR 327 (DELHI) AND PUSHKAR NARAIN SARRAF VS. CIT (1990) 183 ITR 388 (ALL). THAT IS, THE ASSESSEE WO ULD YET HAVE TO SATISFY THE MANDATE OF THOSE SECTIONS I.E., SS. 68, 69A, ETC. T HE NATURE AND SOURCE OF THE FUNDS BEING UN-EXPLAINED, THE SAME COULD BE APPLIED. ON B EING QUESTIONED AS TO WHETHER THE DOCUMENT COULD BE CONSTRUED TO BE THE ASSESSEE S BOOKS OF ACCOUNT, FOR SECTION 68 TO APPLY, HE WOULD SUBMIT THAT THE ASSESSEE ITSE LF EXPLAINS MR. PARVEZ TO BE THE SOURCE OF FUNDS, IMPLYING OF HIM AS BEING THE PERSO N WHO OUGHT TO HAVE BEEN PROCEEDED AGAINST. THE DEEMING OF SECTION 68 WOULD THUS APPLY. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD, AS WELL AS THE CASE LAWS CITED. ITA NO. 4076/MUM/2011 ITA NO. 4738/MUM/2011 ALLIANCE HOTELS, MUMBAI (AY 2006-07) 6 4.1 THE LAW IN THE MATTER IS EXQUISITELY CLEAR , EVEN AS BOTH THE SIDES HAVE RELIED ON CASE LAWS. WHAT ALL SECTION 292C PROVIDES FOR IS A PRESUMPTION AS TO THE TRUTH OF ANY DOCUMENT, ETC., FOUND DURING SEARCH OR SURVEY; OF THE MONEYS ETC., RECOVERED FROM HIM AS BELONGING TO THE ASSESSEE. THE SAME DOE S NOT CONTRADICT; RATHER, COMPLIMENTS AND SUPPORTS THE RULE OF EVIDENCE AS EN SHRINED IN SECTIONS 68, 69, ET. AL. WHERE IS THE QUESTION OF DEEMING ANY MONEY, BULLION , JEWELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND WITH THE ASSESSEE AS HIS UN- EXPLAINED INCOME, UNLESS THERE IS A ANTECEDENT PRESUMPTION AS TO THE SAME BELONGING TO HIM ? THE TWO THEREFORE HAVE TO BE READ IN CONJUNCTION AND AS COMPLIMENTARY, AND NO T AS DISJUNCTIVE OR DE HORS EACH OTHER. THE PRINCIPLE INVOLVED, AS EXPLAINED BY THE APEX COURT IN THE CASE OF CHUHARMAL VS. CIT (1988) 172 ITR 250 (SC), REFERRING TO SECTION 110 OF THE INDIAN EVIDENCE ACT, 1872, IS OF COMMON LAW JURISPRUDENCE. ALL WHAT IT MEANS, IT GOES ON TO EXPLAIN, WHEN IT IS SAID THAT THE EVIDENCE ACT D ID NOT APPLY TO THE PROCEEDINGS UNDER THE ACT, WAS THAT THE RIGOUR OF RULES OF EVID ENCE CONTAINED IN THE EVIDENCE ACT WERE NOT APPLICABLE, BUT THAT IT DID NOT MEAN THAT WHEN THE INCOME TAX AUTHORITIES DESIRED TO INVOKE THE PRINCIPLES OF THE EVIDENCE AC T IN THE PROCEEDINGS BEFORE THEM, THEY WERE PRECLUDED FROM DOING SO. IN OUR VIEW, SEC TION 292C FURTHER SETS AT REST ANY CONTROVERSY IN THIS REGARD BY INCORPORATING A SPECI FIC PROVISION IN THE ACT, EXTENDING THE PRESUMPTION IN RESPECT OF ANY DOCUMENTS, VALUAB LES, ETC. FOUND WITH OR RECOVERED FROM THE ASSESSEE DURING A SEARCH OR SURVEY FOR THE PURPOSE OF ANY PROCEEDINGS UNDER THE ACT. THE PRESUMPTION, THOUGH, IS REBUTTABLE, AN D THE ONUS FOR THE SAME IS ON ONE WHO CONTENDS OTHERWISE, I.E., WHO CHALLENGES THE SA ID PRESUMPTION, WHICH IS ONLY TOWARD CONSIDERING THE APPARENT AS REAL. 4.2 COMING TO THE FACTS OF THE CASE, THE CONT ENTS OF THE DOCUMENT SET OUT AT PARA 3.1 ABOVE HAVE NECESSARILY TO BE REGARDED AS TRUE, I.E., UNLESS PROVEN OTHERWISE. FURTHER, THE DOCUMENT HAS TO BE READ AS A WHOLE AND IN CONSISTENCE WITH WHAT IT WOULD ORDINARILY BE READ AND UNDERSTOOD AS, BY AN U NINTERESTED PERSON OF NORMAL PRUDENCE. FROM THIS STAND POINT, WE FIND THAT IT CL EARLY STATES OF MONEY HAVING BEEN RECEIVED FROM PARVEZ (P), A PARTNER IN THE ASSESSEE -FIRM, FOR THE USE OF, AMONG OTHERS, THE ASSESSEE, SPECIFYING THE AMOUNTS AND THE CORRES PONDING DATES ON WHICH THE ITA NO. 4076/MUM/2011 ITA NO. 4738/MUM/2011 ALLIANCE HOTELS, MUMBAI (AY 2006-07) 7 MONIES WERE PROVIDED. IN THIS VIEW OF THE MATTER, T HE ASSESSEES FIRST ARGUMENT IS THAT THE SOURCE OF THE MONEYS/FUNDS BEING P, THE SAME CANNOT BE CONSIDERED AS UN- EXPLAINED, IRRESPECTIVE OF WHETHER P ADMITS TO HA VING PAID THE SAME OR NOT. IN OUR VIEW, SECTION 292C IMPARTS A STATUTORY PRESUMPTION AS TO THE DOCUMENT BEING TRUE AND, THUS, EFFECTIVELY PLACES THE BURDEN OF PROVING OTHERWISE, OR TO THE CONTRARY TO WHAT IS STATED THEREIN, ON THE ASSESSEE. ACCORDINGL Y, THE ONUS TO LEAD DENIAL BY P, AND TO PROVE THAT NO FUNDS IN FACT EMANATED FROM HI M, ITS PARTNER, IS ON THE ASSESSEE. THAT HAVING NOT BEEN DONE, THE STATUTORY PRESUMPTIO N SHALL HOLD. THE NEXT QUESTION IS THAT, EVEN SO, COULD ANY ADDITION BE MADE IN THE HA NDS OF THE ASSESSEE, THE RECIPIENT OR THE BENEFICIARY OF THESE FUNDS; THE SOURCE HAVIN G BEEN APPARENTLY EXPLAINED ? SECTIONS 68, 69 AND 69A OBLIGE THE ASSESSEE TO EXPL AIN THE NATURE AND SOURCE OF CREDIT (RECORDED) AND MONEY, BULLION, JEWELLERY, ET C., (NOT RECORDED) BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, TO THE SATISFACTION OF THE ASSESSING OFFICER (AO), LEST IT MAY BE DEEMED AS ITS INCOME FOR THE RELEVANT YEAR. NOW, THE TRANSACTIONS OF AVAILIN G MONIES FROM P HAVING NOT BEEN RECORDED IN THE ASSESSEES BOOKS OF ACCOUNT, SECTIO N 68 OF THE ACT COULD NOT BE SAID TO BE APPLICABLE. HOWEVER, THAT WOULD BE TO NO CON SEQUENCE, AS THE ADMISSION OF THE TRANSACTION/S ITSELF IMPLIES OF THE CORRESPONDING A MOUNT/S IN THE ASSESSEES HANDS IN THE FORM OF CASH ON THE RELEVANT DATE/S. SECTION 68 , ON ONE HAND, AND SECTIONS 69, 69A, ETC., ON THE OTHER, ARE IN THAT SENSE COMPLIME NTARY, EVEN AS EXPLAINED BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. JAUHARIMAL GOEL (2005 ) 147 TAXMAN 148 (ALL.) WHERE A SUM IS RECORDED IN THE BO OKS OF ACCOUNT, SECTION 68 IS ATTRACTED, AND THE ASSESSEE IS OBLIGED TO EXPLAIN T HE SAME AS TO ITS NATURE AND SOURCE. ALTERNATIVELY, WHERE IT IS NOT SO RECORDED, THAT IS , KEPT OFF THE BOOKS OF ACCOUNT, IT IS THE CORRESPONDING AMOUNT, IN THE FORM OF ANY ASSET, TO EXPLAIN WHICH, AS TO THE NATURE AND THE SOURCE OF ITS ACQUISITION, THAT THE ASSESSE ES OBLIGATION IN LAW EXTENDS TO. THE PRESENT CASE WOULD BE COVERED BY THE LATTER SECTION S. THE LD. CIT(A) HAS TOWARD THIS RELIED ON THE DECISIONS IN THE CASE OF SUNIL K. MALHOTRA V. CIT (1995) 215 ITR 586 (ALL.) AND LAXMI NARAIN GUPTA V. CIT (1980) 124 ITR 94 (PAT.). A QUESTION, HOWEVER, MAY ARISE AS TO WHETHER, NO VA LUABLE/ASSET HAVING BEEN ACTUALLY FOUND, COULD THE SECTIONS APPLY ? WE THINK IT WOULD, CIRCUMSTANCES ITA NO. 4076/MUM/2011 ITA NO. 4738/MUM/2011 ALLIANCE HOTELS, MUMBAI (AY 2006-07) 8 ADMITTING, FOR MORE THAN ONE REASON. THE DOCUMENT, WHICH IS TO BE, AND IS BEING CONSIDERED AS TRUE, ADMITTEDLY REFLECTS THE TRANSAC TION/S OF MONEY BEING PROVIDED BY P FOR THEIR USE BY, AMONG OTHERS, THE ASSESSEE. THAT IS, IT SHOWS AN EFFECTIVE OR CONSTRUCTIVE RECEIPT OF MONEY BY OR ON ASSESSEES B EHALF . WHERE IT WAS USED CAN ONLY BE EXPLAINED BY THE ASSESSEE, AND WHICH IT HAS CHOS EN NOT TO. THOUGH THE LD. DR WOULD POINT OUT THAT AN EXTENSIVE RENOVATION OF THE ASSESSEES HOTEL PREMISES WAS ON AT THE RELEVANT TIME, SUGGESTING OF THE MONIES BEIN G USED THEREFOR, THAT, TO OUR MIND, WOULD BE SECONDARY TO THE TRANSACTION/S. NO DOUBT S UPPORTIVE, THE IMPLICATION/S OF THE USER OF THE MONIES, WHICH IS IMPLICIT, AND MAY BE RELEVANT, WOULD COME INTO PLAY ONLY ONCE ASSESSEE EXPLAINS ITS AVENUE, I.E., AS TO WHERE AND FOR WHAT PURPOSE THE SAME WAS USED, THE ONUS FOR WHICH IS ON IT. IN OTHE R WORDS, THE RECEIPT OF MONEY BY THE ASSESSEE IS MANIFEST PER THE DOCUMENT, WHICH IS , RATHER, NOT DENIED BY THE ASSESSEE. THE ACQUISITION OF MONEY BY THE ASSESSEE AS AT THE RELEVANT DATE/S, THUS, CANNOT BE AND, IN ANY CASE, IS NOT IN QUESTION . THE SAME (MONEY, IN THE FORM OF CASH), WHICH IS COVERED BY SECTION 69A, BEING NOT R ECORDED IN THE ASSESSEES BOOKS OF ACCOUNT, THE SAID PROVISION WOULD APPLY TO THE T RANSACTION. CONSIDER THIS: A BANK PASS BOOK OF THE ASSESSEE, WHICH DEFINITELY DOES NO T FORM PART OF THE ASSESSEE-BANK ACCOUNT HOLDERS BOOKS OF ACCOUNT, IS FOUND DURING SEARCH/SURVEY, REFLECTING DEPOSIT/S AND/OR CREDIT/S THEREIN. THE AMOUNT/S MAY HAVE BEEN WITHDRAWN SUBSEQUENTLY, SO THAT IT CANNOT BE SAID THAT A DEPO SIT/S IS FOUND AS ON THE DATE OF SEARCH, YET IT IS SO FOUND ON THE RELEVANT DATE/S ( OF DEPOSIT/S), SO THAT THE ASSESSEE IS OBLIGED TO EXPLAIN THE SAME AS TO ITS NATURE AND SO URCE, WHERE NOT REFLECTED IN ITS REGULAR BOOKS OF ACCOUNT AND THE DATE/S FALL IN THE YEAR/S OF ASSESSMENT. IN OTHER WORDS, THE WORD FOUND OCCURRING IN THE RELEVANT S ECTIONS IS TO BE READ MEANINGFULLY AND PURPOSIVELY, IN HARMONY WITH THE SCHEME, AS WEL L AS INTENT AND PURPOSES OF THE ACT. THE ONLY DIFFERENCE WOULD BE, AS AFORESAID, TH AT THE DEPOSIT/S COULD ONLY BE, WHERE SO, DEEMED AS INCOME OF THE YEAR OF DEPOSIT/S . WE, THUS, FIND NO LEGAL HINDRANCE OR BARRIER TO THE INVOCATION OF THE SAID SECTIONS, OR S. 69A IN THE INSTANT CASE. ITA NO. 4076/MUM/2011 ITA NO. 4738/MUM/2011 ALLIANCE HOTELS, MUMBAI (AY 2006-07) 9 4.3 WE, NEXT, CONSIDER THE ASSESSEES ARGUME NT THAT THE DOCUMENT ITSELF EXPLAINS THE SOURCE OF THE MONEY WITH IT (AS ON THE RELEVANT DATES), SO THAT THE MANDATE OF THE SECTION IS SATISFIED, AND NO ADDITION COULD BE MADE . THAT IS, THE DEPARTMENT CANNOT TAKE A CONTRARY STAND, ACCEPTING THE DOCUMENT AS TR UE, YET OVERLOOKING THE FACT THAT THE SAME ITSELF CLEARLY SPELLS OUT THE SOURCE OF TH E MONEY. THE ARGUMENT IS VALID, FOR THE PRESUMPTION AS TO THE TRUTH OF THE DOCUMENT, WH ICH WOULD APPLY UNIFORMLY OVER THE ENTIRE DOCUMENT, CAN BE IMPUGNED IN WHOLE OR IN PART ONLY ON THE BASIS OF SOME MATERIALS. SO, HOWEVER, THE OBLIGATION CAST ON THE ASSESSEE IS TO EXPLAIN BOTH THE NATURE AND SOURCE OF THE MONEY, AND NOT ITS SOU RCE ALONE. THE ASSESSEES EXPLANATION IS COMPLETELY SILENT ON THE FIRST PART . IN FACT, EVEN THE FACT THAT P IS A PARTNER STOOD REVEALED ONLY IN RESPONSE TO A QUERY BY THE BENCH; THE LD. AR INITIALLY DENYING ANY CONNECTION OF THE ASSESSEE WITH P. BE THAT AS IT MAY, THE QUESTION THAT WOULD ARISE IS WHY, AND ON WHAT BASIS, DID P PROV IDE MONEY TO ASSESSEE ? WHAT WAS THE CONSIDERATION ? IS THE MONEY OUTSTANDING FOR RE-PAYMENT, WITH OR WI THOUT INTEREST OR ACCRETION THERETO IN ANY OTHER MANNER, AS AT THE YEAR-END, OR THE LIABILITY STANDS DISCHARGED ? IF SO, HOW, AND IF NOT, IS IT STILL OUTSTANDING FOR PAYMENT ? DOES IT IN FACT REPRESENT A LIABILITY ? IN FACT, ONE OF THE EXPLANATIONS, I.E., QUA FACTS, RENDERED BEFORE THE AUTHORITIES BELOW IS OF IT BEING THE ASS ESSEES OWN MONEY, GIVEN TO P FOR BEING UTILIZED AS AND WHEN REQUIRED FOR ITS PURPOSE S. AS SUCH, ALL THESE QUESTIONS, AND PERHAPS MORE, WHICH ARE ONLY TOWARD THE TRUTH OF TH E TRANSACTION/S, ARISE OR ARE IMMINENT FROM THE ASSESSEES EXPLANATION OF P BEIN G THE SOURCE OF MONEY, I.E., AS THE DOCUMENT CLEARLY INDICATES, AND TO REBUT WHICH NO EVIDENCE HAS BEEN LEAD BY THE ASSESSEE. IT IS ONLY WHEN BOTH THE NATURE AND SOURCE OF THE M ONEY HAS BEEN SATISFACTORILY EXPLAINED, THAT THE ASSESSEES OBLIG ATION UNDER THE DEEMING PROVISION STANDS DISCHARGED . AND WHICH, THUS, CANNOT BE SAID TO BE IN THE FACT S AND CIRCUMSTANCES OF THE PRESENT CASE. THE SATISFACTI ON U/S. 69A, OR ANY OTHER DEEMING PROVISION OF CHAPTER VI, IS ESSENTIALLY A QUESTION OF FACT, TO BE JUDICIALLY DETERMINED. WHEN THE BASIC FACTS HAVE BEEN WITH-HELD BY THE ASS ESSEE, HOW, WE WONDER, COULD THE REVENUE BE FAULTED WITH IN BEING NOT SATISFIED WITH THE ASSESSEES EXPLANATION, WHICH, AS AFORE-STATED, IS CONSPICIOUSLY SILENT AS TO THE NATURE, AND WHICH WOULD INCLUDE PURPOSE, OF THE ACQUISITION. THE DEEMING OF SECTION 69A WOULD, THUS, BE ITA NO. 4076/MUM/2011 ITA NO. 4738/MUM/2011 ALLIANCE HOTELS, MUMBAI (AY 2006-07) 10 CLEARLY APPLICABLE, AND STAND VALIDLY APPLIED BY TH E REVENUE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. AGAIN, HOWEVER, THE SAME SHALL ONLY EXTE ND TO THE MONEY WITH THE ASSESSEE, AND CANNOT, BY ANY ACCOUNT, EXTEND TO THE MONEY PRO VIDED BY P FOR PERSONS OTHER THAN THE ASSESSEE. WHETHER THE ASSESSEE HAS ANY CON NECTION WITH THEM; IT CLEARLY WITH-HOLDING FACTS, IS IRRELEVANT, AS IN ANY CASE T HEY ARE SEPARATE PERSONS, AND THEIR INCOME, IF SO, CANNOT BE ASSESSED IN THE ASSESSEES HANDS MERELY BECAUSE A DOCUMENT IS RECOVERED FROM ITS PREMISES. THE REVENUE SEEMS T O HAVE SO DONE AS THE PRESUMPTION OF SECTION 292C IS AVAILABLE ONLY IN RE SPECT OF THE ASSESSEE. BE THAT AS IT MAY, THE SAME BY ITSELF CANNOT BE A GROUND OR JUSTI FICATION FOR EXTENDING THE DEEMING, OR THE RULE OF EVIDENCE AS PROVIDED THEREI N, TO PERSONS NOT COVERED THEREBY. WE HAVE ALREADY HELD THAT THE PROVISION OF SECTION 292C AND THE DEEMING OF PROVISIONS OF CHAPTER VI ARE TO BE READ IN UNISON, BEING ONLY IN CODIFICATION OF THE PRINCIPLES OF COMMON LAW JURISPRUDENCE. ACCORDINGLY , THE ASSESSEES INCOME STANDS VALIDLY ASSESSEED TO THE EXTENT OF RS. 5,61,000/-, AND THE BALANCE RS. 12.83 LACS STANDS TO BE DELETED. WE DIRECT ACCORDINGLY. 4.4 THE ISSUE HAVING BEEN DECIDED BY US, THUS, ON THE BASIS OF A FINDING OF FACT, I.E., UPHOLDING THE REVENUES NON-SATISFACTION WITH THE ASSESSEES EXPLANATION AS TO THE NATURE AND SOURCE - QUA WHICH THE AO IS TO BE SATISFIED, OF THE MONIES WIT H IT, WE ARE UNABLE TO SEE; THE LAW IN THE MATTER BEING TRIT E, AS TO HOW THE CASE LAW RELIED UPON BY EITHER PARTY IS RELEVANT. REVENUES APPEAL (ITA NO. 4738/MUM/2011) 5. THE CONTENTS OF THE DOCUMENTS FIND MENTIONED AT PARA 6, PAGE 3 OF THE ASSESSMENT ORDER, ARE AS UNDER: PARTICULARS AMOUNT RS. (A) THE SHEET BOTAWALA CONTAINS CERTAIN CASH ENTR IES, PARTICULARLY IN LINES 224, 229, 237 AND 240. THEY INDICATE AGGREGATE CASH PAYMENTS OF RS. 33 LAKHS MA DE IN MAY, 2005 33,00,000 ITA NO. 4076/MUM/2011 ITA NO. 4738/MUM/2011 ALLIANCE HOTELS, MUMBAI (AY 2006-07) 11 (B) THE SHEET UPADASTRA GENERAL GIVES CASH PAYMEN T DETAILS AGGREGATING TO RS. 82.25 LAKHS IN LINES 17, 33, 45, 46, 53 AND IN THE SAME SHEET, CASH RECEIPT OF R S. 31.85 LAKHS IS ALSO NOTED IN LINE 58. 82,25,000 31,85,000 (C) IN SHEET4 VARIOUS CASH RECEIPTS ARE GIVEN IN DETAIL . THE TOTAL CASH EXPENSES EXCEED RS. 1 CRORE. 1,00,00,000 (D) IN SHEET TOTAL EXPENSES, LINE 96, 97 CONTAIN CASH EXPENSE DETAILS AGGREGATING TO RS. 23 LAKHS 23,00,000 (E) IN THE SHEET RECEIVED AC LINES 2 TO 39 CONTAI N VARIOUS CASH ENTRIES NIL THE SAME RELATES TO AY 2007-08 (F) IN THE SHEET PARTY AC LINES 201 TO 276 CONTAI NS SEVERAL CASH ENTRIES. IN PARTICULAR, LINE 201 HAS CASH ENTRY OF RS. 25 LAKHS, LINE 211, 212 CONTAIN CASH E NTRY OF RS. 8 LAKHS, LINE 256 CONTAINS CASH ENTRY OF RS. 45 LAKHS AND LINE 275, 276 CONTAINS CASH ENTRY OF RS. 20 LAKHS. 25,00,000 8,00,000 45,00,000 20,00,000 TOTAL 36810000 THE REVENUES GROUND IS IN RESPECT OF DE LETION OF ADDITION OF RS. 368.10 LAKHS U/S. 69 C OF THE ACT, EFFECTED ON THE BASIS OF PRIN T-OUTS OF COMPUTER BACK UP FILE RELIABLE EXPENSES. THE SAME REFLECTS PAYMENTS MA DE IN RESPECT OF TWO ENTITIES, I.E., MARIA DEVELOPERS AND RELIABLE INVESTMENT & DEVEL OPERS TOWARD TWO PROPERTIES, BEING UPADASTRA PROPERY AND STAMP HOUSE (BOTAWALA). THE DOCUMENT FURTHER STATES TO HAVE BEEN PREPARED ON THE BASIS OF INFORMATION G IVEN BY JAVED SIR; MR. JAVED GHASWALA (J) AND HIS FAMILY MEMBERS BEING ASSOCIA TED WITH THE SAID FIRMS. THE ASSESSEES CASE IS THAT ITS NAME BEING REFLECTED N EITHER IN THE PAYMENTS NOR TOWARD RECEIPT OF MONEY, SO THAT THE TRANSACTION/S DOES NO T PERTAIN THERETO, THE SAME CANNOT BE APPLIED TO IT SO AS TO BRING THE AMOUNTS REFLECT ED THEREIN TO TAX IN ITS HANDS. EVEN AS EXPLAINED DURING HEARING ITSELF, THE PRESUMPTION U/S. 292C CAN ONLY RESULT IN THE DOCUMENT BEING READ AS WHAT IT WOULD CONVEY TO A NO RMAL, UN-INTERESTED PERSON OF ORDINARY PRUDENCE. OF COURSE, IN A GIVEN CASE, THE READING MAY YIELD GROTESQUE SITUATIONS, AS WHERE THE PERSON/S STATED IN THE DOC UMENT DOES NOT EXIST, OR (SAY) THE PERSON/S STATED TO BE PROVIDING THE MATERIAL RESOUR CES IS ADMITTEDLY A MAN OF NO MEANS, SO THAT THE DOCUMENT COULD NOT BE CONSIDERED AS A VALID PIECE OF INFORMATION. HOWEVER, IN SUCH A CASE, THE ONUS TO SHOW SO WOULD BE ON THE PERSON SO ALLEGING. ITA NO. 4076/MUM/2011 ITA NO. 4738/MUM/2011 ALLIANCE HOTELS, MUMBAI (AY 2006-07) 12 THE AO HAS DONE NO SUCH EXERCISE. THE REVENUE HAS A LSO NOT BROUGHT ON RECORD ANY INTEREST OF THE ASSESSEE IN THE RELEVANT PROPERTIES . THE DOCUMENT, AS WE SEE IT, HAS NO BEARING ON THE ASSESSEE. THE DOCUMENT MAY BE TRUE, AND THE ASSESSEE MAY WELL BE IN KNOW OF ITS CONTENTS, AS IT WOULD ONLY HAVE BEEN PR EPARED BY OR UNDER ITS SUPERVISION AND KNOWLEDGE, AND ONLY FOR SOME PURPOSE. HOWEVER, IF THE ASSESSEE DOE NOT CHOOSE TO DIVULGE THE SAME, IT CANNOT BE IN CONSEQUENCE AP PLIED TO IT. UNDER THE CIRCUMSTANCES, IN OUR VIEW, THE LD. CIT(A) HAD RIGH TLY DELETED THE IMPUGNED ADDITION. WE DECIDE ACCORDINGLY. 6. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED, AND THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH DECEMBER, 2012 SD/- SD/- (B.R. MITTAL) (SANJAY A RORA) JUDICAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATE: 26 TH DECEMBER, 2012 TNMM COPY TO: 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR A BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER ASST. REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI