SHRI GHANSHYAM KESARWANI, ALLAHABAD V. ACIT, CENTRAL CIRCLE, ALLAHABAD

ITA 45/ALLD/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 5021 (ITAT-ALLAHABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 07-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MADHUK
• Keywords: Document seized
• Section: 201; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH, ALLAHABAD BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 45/ALLD/2018 ASSESSMENT YEAR: 2013 - 14 SHRI GHANSHYAM KESARWANI 36B/5-C, CHAK MUNDERA ALLAHABAD V. ACIT CENTRAL CIRCLE ALLAHABAD TAN/PAN: AHWPK9874H (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI PRAVEEN GODBOLE, C.A. RESPONDENT BY: SHRI S. K. MADHUK, CIT (DR) DATE OF HEARING: 21 11 201 9 DATE OF PRONOUNCEMENT: 22 11 201 9 O R D E R PER A. D. JAIN, V.P.: THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-II, LUCKNOW, DATED 27/12/2017 FOR ASSESSMENT YEAR 2013-14, TAKING THE FOLLOWING GROUNDS: 1. THAT IN ANY VIEW OF THE MATTER THE ADDITION OF RS.10,00,0000/- MADE BY THE ASSESSING OFFICER IN THE HANDS OF THE APPELLANT U/S 69 OF THE IT ACT BASED ON A SINGLE LOOSE SHEET ( A-3 PAGE-5) FOUND FROM THIRD PARTY WHEN THERE WAS NO SUCH TRANSACTION AND HIS ACTIONS AS CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEAL) WITHOUT APPRECIATING THE CORRECT FACTS IS BAD BOTH ON THE FACTS AND IN LAW. 2. THAT IN ANY VIEW OF THE MATTER SINCE THE ALLEGED RECIPIENT OF THE AMOUNT DENIED RECEIPT OF PAYMENT OF RS. 10 LAKH FROM THE APPELLANT VIDE HIS CONFIRMATORY LETTER DATED 12.02.2016 NOR ANY EVIDENCE WAS BROUGHT ON RECORD BY THE DEPARTMENT IN SUPPORT OF SUCH ALLEGED PAYMENT BY THE APPELLANT TO THE SAID COMPANY, HENCE THE ADDITION SO MADE AND CONFIRMED BY THE TWO LOWER ITA NO.45/ALLD/2018 PAGE 2 OF 6 AUTHORITIES IS UNCALLED FOR IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT IN ANY VIEW OF THE MATTER THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL MISERABLY FAILED IN CONSIDERING THE CORRECT FACTS AND CITED CASE LAWS AND CONFIRMED THE ADDITION IN HASTE WITHOUT APPRECIATING THE CORRECT FACTS WHICH IS HIGHLY UNJUSTIFIED AND INJUSTICE HENCE THE ADDITION SO MADE AND CONFIRMED ARBITRARILY IS LIABLE TO BE DELETED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THAT IN ANY VIEW OF THE MATTER OBSERVATIONS AND FINDINGS OF THE TWO LOWER AUTHORITIES IN THEIR ORDERS FOR MAKING AND CONFIRMING ADDITION ARE HIGHLY UNJUSTIFIED, INCORRECT AND CONTRARY TO THE ACTUAL FACTS OF THE CASE HENCE THE SAME ARE LIABLE TO BE SPONGED OFF AND THE ADDITION SO MADE AND CONFIRMED BASED ON PRESUMPTION SURMISES AND CONJECTURES IS LIABLE TO BE DELETED IN INTEREST OF JUSTICE. 5. THAT IN ANY VIEW OF THE MATTER THE INTEREST CHARGED UNDER DIFFERENT SECTIONS OF THE I.T ACT IS HIGHLY UNJUSTIFIED AND ILLEGAL IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, HAVING SOURCE OF INCOME MAINLY FROM BROKERAGE BY PURCHASE AND SELLING OF OLD VEHICLES AS WELL AS INTEREST FROM BANK. THE PROCEEDINGS UNDER SECTION 153C OF THE I.T. ACT WERE INITIATED, BY ISSUING NOTICE DATED 05/09/2014. THE REASON FOR INITIATING PROCEEDINGS UNDER SECTION 153C WAS THAT UPON SEARCH & SEIZURE OPERATION UNDER SECTION 132 OF THE ACT CONDUCTED, ON 05/12/2013, AT THE RESIDENTIAL & BUSINESS PREMISES OF SRI HEMANT KUMAR SINDHI, A THIRD PARTY, WHO IS ONE OF THE DIRECTORS IN M/S H. K. INFRAVENTURES PVT. LTD., A LOOSE PAPER MARKED AS ANNEXURE A-3 PAGE 5 WAS FOUND AND SEIZED, WHICH IS A RECEIPT IN THE NAME OF THE ASSESSEE, FOR A SUM OF RS.10 LAKH FOR BOOKING A FLAT. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE ITA NO.45/ALLD/2018 PAGE 3 OF 6 SOURCE OF SUCH RECEIPTS, IN RESPONSE TO WHICH THE ASSESSEE, VIDE HIS REPLY DATED 15/2/2016 STATED THAT THE ALLEGED AMOUNT OF RS.10 LAKHS WAS NOT PAID BY THE ASSESSEE TO THE COMPANY. THE DIRECTOR OF THE COMPANY, SHRI HEMANT KUMAR SINDHI, VIDE HIS LETTER DATED 12/2/2016, CONFIRMED THE FACT THAT THE ASSESSEE HAD NOT PAID SUCH AMOUNT, AS THE RECEIPT FOR RS.10 LAKHS ISSUED TO THE ASSESSEE WAS CANCELLED DUE TO NON-PAYMENT. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION SO FURNISHED BY THE ASSESSEE AND MADE THE ADDITION OF RS.10 LAKHS TO THE INCOME OF THE ASSESSEE, UNDER SECTION 69 OF THE ACT. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE RECEIPT DATED 2/5/2012 FOR RS.10 LAKHS WAS ISSUED BY THE COMPANY, SIMPLY ON THE BASIS OF VERBAL ASSURANCE GIVEN BY THE ASSESSEE/PURCHASER, BUT NO PAYMENT COULD BE MADE BY THE ASSESSEE TO THE COMPANY DUE TO NON-AVAILABILITY OF FUND; THAT SINCE THE ASSESSEE FAILED TO DEPOSIT THE AMOUNT, THE COMPANY CANCELLED THE RECEIPT, WHICH FACT HAS BEEN CONFIRMED BY THE DIRECTOR OF THE COMPANY, SHRI HEMANT KUMAR SINDHI, VIDE HIS LETTER DATED 12/2/2016; THAT NO SUCH TRANSACTION WAS ENTERED INTO BETWEEN THE ASSESSEE AND THE COMPANY; AND THAT THE DOCUMENT SEIZED FROM THE PREMISES OF A THIRD PARTY, WITHOUT ANY EVIDENCE TO SHOW THAT THE ALLEGED AMOUNT HAS BEEN PAID BY THE ASSESSEE, CANNOT BE USED AGAINST THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE DECISION OF THE ITAT, MUMBAI IN THE CASE OF ACIT VS. MS. KATRINA ROSEMARY TURCOTTE, IN ITA NOS.3092 TO 3097/MUM/2015. 5. THE LD. D.R., ON THE OTHER HAND, HAS SUBMITTED THAT THE ANNEXURE IN THE FORM OF RECEIPT DATED 2/5/2012 FOR RS.10 LAKHS CLEARLY SHOWS THAT THE ASSESSEE HAD PAID CASH FOR BOOKING THE ITA NO.45/ALLD/2018 PAGE 4 OF 6 FLAT; THAT THE SO CALLED RECEIPT IS ISSUED BY THE DIRECTOR, SHRI HEMANT KUMAR SINDHI; THAT THERE IS NO EVIDENCE REGARDING CANCELLATION OF THE BOOKING OF FLAT; AND THAT THEREFORE, THE CONTENTION OF THE ASSESSEE THAT NO SUCH ADVANCE WAS GIVEN BY THE ASSESSEE, IS NOT TENABLE IN THE EYES OF LAW. HE PRAYED THAT THEREFORE, THE ADDITION CONFIRMED BY THE LD. CIT(A) REQUIRES NO INTERFERENCE, AS HE HAS RIGHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 6. HEARD. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE BOOKED A FLAT WITH THE COMPANY, M/S H.K. INFRAVENTURE PVT. LTD., WHO ISSUED A RECEIPT DATED 2/5/2012 FOR RS.10 LAKHS. HOWEVER, SINCE NO PAYMENT HAD BEEN MADE BY THE ASSESSEE, THE RECEIPT ISSUED BY THE COMPANY HAD BEEN CANCELLED. THE FACT OF NOT RECEIVING THE AMOUNT OF RS.10 LAKHS FROM THE ASSESSEE HAS ALSO BEEN CONFIRMED BY THE DIRECTOR OF THE COMPANY, SHRI HEMANT KUMAR SIDHI, VIDE LETTER DATED 12/2/2016. 7. IN THE CASE OF ACIT VS. MS. KATRINA ROSEMARY TURCOTTE (SUPRA), THE MUMBAI BENCH OF THE TRIBUNAL HELD THAT THE SEIZED DOCUMENT ON THE BASIS OF WHICH THE ADDITION WAS MADE BY THE AO IS A CONVERSATION BETWEEN S AND ONE OF THE CLIENTS OF M. EXCEPT THE DOCUMENT CONTAINING CONVERSATION BETWEEN TWO THIRD PARTIES, THERE IS NO OTHER EVIDENCE BROUGHT ON RECORD BY THE AO TO INDICATE CASH PAYMENT TO THE ASSESSEE. IN FACT, IN THE COURSE OF ASSESSMENT PROCEEDINGS WHEN THE ASSESSEE WAS CONFRONTED WITH THE SEIZED DOCUMENT, SHE FLATLY DENIED HAVING RECEIVED ANY CASH FROM M. FURTHER, AN AFFIDAVIT WAS ALSO FILED ON BEHALF OF M STATING THAT NO CASH WAS EITHER ACCEPTED ON BEHALF OF THE ASSESSEE OR PAID TO HER. THUS, WHEN NO CORROBORATIVE EVIDENCE HAS BEEN BROUGHT ON RECORD INDICATING CASH PAYMENT, MERELY RELYING UPON SOME CONVERSATION BETWEEN TWO THIRD PARTIES, IT CANNOT BE CONCLUDED THAT THE ASSESSEE HAS RECEIVED CASH PAYMENT OF RS.20,00,000. THEREFORE, ITA NO.45/ALLD/2018 PAGE 5 OF 6 THE ADDITION MADE ON PURE GUESSWORK, CONJECTURE AND SURMISES CANNOT BE SUSTAINED . 8. IN THE CASE UNDER CONSIDERATION, THE DOCUMENT IN THE FORM OF RECEIPT DATED 2/5/2012 FOR RS.10 LAKHS WAS SEIZED FROM A THIRD PARTY AND THE PARTY FROM WHOM THE RECEIPT HAS BEEN SEIZED, CATEGORICALLY STATED, VIDE LETTER DATED 12/2/2016, THAT THE RECEIPT DATED 2/5/2016 WAS CANCELLED, AS NO PAYMENT HAS BEEN MADE BY THE ASSESSEE. NO CORROBORATIVE EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE DEPARTMENT TO INDICATE THAT THE ASSESSEE HAD MADE CASH PAYMENT OF RS.10 LAKHS FOR BOOKING OF THE FLAT. MERELY RELYING ON THE RECEIPT, WHICH WAS SEIZED FROM A THIRD PARTY, AND DESPITE THE UNREBUTTED FACT THAT THE SAID RECEIPT HAD BEEN CANCELLED BY THE COMPANY, AS AFFIRMED BY THE DIRECTOR, IN HIS LETTER DATED 12/2/2016, IT CANNOT BE CONCLUDED THAT THE ASSESSEE HAD MADE PAYMENT OF RS.10 LAKHS FOR BOOKING OF THE FLAT. THEREFORE, THE ADDITION SO MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A), PURELY ON GUESSWORK AND CONJECTURES AND SURMISES, CANNOT BE SUSTAINED. 9. IN VIEW OF THE ABOVE, WE REVERSE THE ORDER UNDER APPEAL AND DELETE THE ADDITION OF RS.10 LAKHS MADE UNDER SECTION 69 OF THE ACT. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/11/2019. SD/ - SD/ - [ T. S. KAPOOR ] [ A. D. JAIN ] ACCOUNTANT MEMBER VICE PRESIDENT DATED:22/11/2019 JJ:2111 ITA NO.45/ALLD/2018 PAGE 6 OF 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSISTANT REGISTRAR