ACIT CEN CIR 32, MUMBAI V. SAMEER N KALE, MUMBAI

ITA 4550/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62371 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-03-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 06-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANDEEP MAHESHWARI; R C JAIN AW MR AJAY DAGA
• Keywords: Unexplained investment; Search and seizure; Additional evidence
• Section: 153A; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER, A ND SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA NO. 4549, 4550, 4551, 4552, 4554/MUM./2011 (A.YS : 2002-03, 2003-04, 2005-06, 2006-07, 2007-0 8 ) ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE32, AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .. APPELLANT V/S MR. SAMEER N. KALE 8, NANDDEEP, KAILASHPURI GOVIND NAGAR, MALAD (EAST) MUMBAI 400 097 PAN AAQPK8908B .... RESPONDENT ITA NO. 3992, 3993, 3994, 3995/MUM./2011 (A.YS : 2004-05, 2005-06, 2006-07, 2008-09 ) MR. SAMEER N. KALE 8, NANDDEEP, KAILASHPURI GOVIND NAGAR, MALAD (EAST) MUMBAI 400 097 PAN AAQPK8908B .. APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE32, AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... RESPONDENT ASSESSEE BY : MR. R.C. JAIN A/W MR. AJAY DAGA & MR. SANDEEP MAHESHWARI REVENUE BY : MR. PRAVIN VERMA DATE OF HEARING 20.03.2012 DATE OF ORDER 09.05.2012 MR. SAMEER N. KALE 2 O R D E R PER BENCH THESE APPEALS PREFERRED BY THE ASSESSEE AS WELL AS THE REVENUE, ARE DIRECTED AGAINST SEPARATE IMPUGNED ORDER OF EVEN DA TE 29 TH MARCH 2011, PASSED BY THE COMMISSIONER (APPEALS)XXXXI, MUMBAI, FOR ASSESSMENT YEARS 2002-03 TO 2008-09 RESPECTIVELY. 2. IN THIS CASE, THE ASSESSEE IS AN INDIVIDUAL HAVING INCOME UNDER THE HEAD INCOME FROM BUSINESS . ON 26 TH NOVEMBER 2007, A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) WAS CONDUCTED IN KALE GROUP OF ENTITIES, WHICH IN CLUDES THE ASSESSEE. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION C ONDUCTED UNDER SECTION 132 OF THE ACT, THE DEPARTMENT SEIZED CERTAIN DOCUM ENTS BELONGING TO THE ASSESSEE AND HIS FAMILY MEMBERS. NOTICES WERE ISSUE D UNDER SECTION 153A OF THE ACT, ON 24 TH NOVEMBER 2008, AND THEREAFTER, REMINDERS WERE SENT ON 29 TH JUNE 2009. THE ASSESSEE FILED RETURN OF INCOME UND ER SECTION 153A, OF THE ACT ON 24 TH DECEMBER 2009. 3. THE ASSESSING OFFICER, FOR THE REASONS RECORDED IN THE ASSESSMENT ORDER, PASSED EX-PARTE ORDER UNDER SECTION 144 R/W SECTION 153A OF THE ACT, ON 31 ST DECEMBER 2009. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE T HE FIRST APPELLATE AUTHORITY, WHEREIN THE COMMISSIONER (APPEALS) GRANT ED PART RELIEF. BEING AGGRIEVED, THE ASSESSEE AS WELL AS THE REVENUE HAVE FILED APPEALS FOR DIFFERENT YEARS WHEREVER THEY WERE AGGRIEVED BY THE DECISION OF THE FIRST APPELLATE AUTHORITY. 5. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON A PERUSAL OF THE P APERS ON RECORD, WE HOLD AS FOLLOWS:- MR. SAMEER N. KALE 3 WE FIRST TAKE UP REVENUES APPEAL IN ITA NO.4549/MU M./2011, FOR ASSESSMENT YEAR 2002-03. 6. GROUND NO.1, IS ON THE ISSUE OF ADMISSION OF ADDITI ONAL EVIDENCE. 7. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE AS SESSING OFFICER HAD PASSED ORDER EX-PARTE WITHOUT CONSIDERING THE MATER IAL ON RECORD. EVEN THE EXPLANATIONS GIVEN BY THE ASSESSEE HAVE NOT BEEN CO NSIDERED. THE SEIZED MATERIAL HAS NOT BEEN EXAMINED. UNDER THESE CIRCUMS TANCES, THE FIRST APPELLATE AUTHORITY HAD ADMITTED ADDITION EVIDENCES AND REMITTED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR REMAND PRO CEEDINGS. THE ASSESSING OFFICER SUBMITTED THE REMAND REPORT. HE DID NOT OBJ ECT AT THAT STAGE. UNDER THESE CIRCUMSTANCES, WE FIND NO INFIRMITY IN THE DE CISION OF THE FIRST APPELLATE AUTHORITY AND DECLINE TO INTERFERE IN THE MATTER AS SUCH. THIS GROUND IS, THUS, DISMISSED. 8. GROUND NO.2, AGAINST DELETION OF AN ADDITION OF ` 2,00,106, BY THE COMMISSIONER (APPEALS). 9. THE COMMISSIONER (APPEALS) DELETED A SUM ON THE GRO UND THAT THE ASSESSEE HAS CAPITALIZED EXPENDITURE AND NOT CLAIME D A DEDUCTION. DISALLOWING AN AMOUNT WHICH IS NOT CLAIMED AS EXPEN DITURE IS WRONG. THIS GROUND IS, THUS, DISMISSED. 10. GROUND NO.3, IS AGAINST DELETION OF ADDITION OF ` 13,78,772, BEING LIABILITY SHOWN IN M.S. ENTERPRISES. AT PARA-5.3, T HE COMMISSIONER (APPEALS) HELD AS FOLLOWS:- 5.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ORDER OF THE ASSESSING OFFICER AND FACTS OF THE CASE CAREFULLY. ADDITIONAL EVIDENCES WERE SUBMITTED IN THE APPELLATE PROCEEDINGS WHICH W ERE ADMITTED BY MY PREDECESSOR AND REMAND REPORT OF THE ASSESSING O FFICER WAS CALLED FOR. THE A.O. HAS SUBMITTED IN THE REMAND REPORT AS UNDER:- EVEN THOUGH THE ASSESSEE HAS WRITTEN IN HIS SUBMIS SION THAT HE IS FILING CONFIRMED COPY OF ACCOUNT AND BAN K PASS MR. SAMEER N. KALE 4 BOOK SHOWING ALL THE ENTRIES, HE HAS NOT PRODUCED T HE SAME. THEREFORE, THE ISSUE MAY BE DECIDED ON MERITS . FROM THE PERUSAL OF THE REMAND REPORT, IT IS NOTICE D THAT THE A.O. HAS VERIFIED THE ENTRIES WITH THE BANK PASSBOOK FROM TH E CONFIRMATIONS FILED DURING THE ASSESSMENT PROCEEDINGS, THEREFORE, THE ADDITION IS NOT SUSTAINABLE, HENCE, DELETED. GROUND OF APPEAL IS AL LOWED. 11. WE DO NOT FIND ANY INFIRMITY IN THE AFORESAID FINDI NGS OF THE COMMISSIONER (APPEALS) AND DECLINE TO INTERFERE IN THE MATTER AS SUCH. THIS GROUND IS, THUS, DISMISSED. 12. GROUND NO.4, IS AGAINST DELETION OF ADDITION OF ` 8,35,746, ON THE GROUND THAT THE ASSESSEE MADE PURCHASES WHICH ARE N OT ACCOUNTED FOR. 13. IN THE REMAND PROCEEDINGS, THE ASSESSEE HAD DEMONST RATED THAT IT HAS PURCHASED THE MATERIAL DURING THE YEAR AND SOLD THE SAME IN THE SUBSEQUENT YEAR AND THAT ALL THE ENTRIES WERE DULY REFLECTED I N THE BOOKS OF ACCOUNT. THE COMMISSIONER (APPEALS) DELETED THE ADDITION. WE FIN D NO INFIRMITY IN THE FINDINGS OF THE COMMISSIONER (APPEALS) ON THIS ISSU E AND DECLINE TO INTERFERE IN THE MATTER. ACCORDINGLY, GROUND NO.4, IS DISMISS ED. 14. GROUND NO.5, IS AGAINST DELETION OF ADDITION OF ` 1,01,061, BEING UNEXPLAINED DIFFERENCE IN THE ACCOUNT OF M/S. LUCKY DEVELOPERS, WHO IS A DEBTOR. 15. FROM THE REMAND REPORT, THE COMMISSIONER (APPEALS) OBSERVED THAT THE BALANCE SHEET WAS PRODUCED BEFORE THE ASSESSING OFFICER WHEREIN THE ENTRY IN QUESTION WAS REFLECTED. HE HELD THAT WHEN THE ENTRIES ARE REFLECTED IN THE BALANCE, SHEET THE SAME CANNOT BE TREATED AS INCOME. 16. WE AGREE WITH THE FINDINGS OF THE COMMISSIONER (APP EALS) AND DISMISS THE GROUND RAISED BY THE REVENUE. 17. IN THE RESULT, REVENUES APPEAL IS DISMISSED. MR. SAMEER N. KALE 5 WE NOW TAKE UP REVENUES APPEAL IN ITA NO.4550/MUM. /2011, FOR ASSESSMENT YEAR 2003-04. 18. GROUND NO.I, IS ON THE ISSUE OF ADMISSION OF ADDITI ONAL EVIDENCE. 19. THE FACTS OF THIS GROUND BEING IDENTICAL TO THE FAC TS OF THE GROUND NO.1, RAISED IN REVENUES APPEAL IN ITA NO.4549/MUM./2011 , FOR ASSESSMENT YEAR 2002-03, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE DISMISS THIS GROUND ALSO. 20. GROUND NO.II, IS AGAINST DELETION OF ADDITION OF ` 18,04,799, BY THE COMMISSIONER (APPEALS). 21. THE FIRST APPELLATE AUTHORITY, VIDE PARA-4.3 OF HIS ORDER, HELD AS FOLLOWS:- 4.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE 4.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ORDER OF THE ASSE SSING OFFICER AND FACTS OF THE CASE CAREFULLY. ADDITIONAL EVIDENCES W ERE SUBMITTED IN THE APPELLATE PROCEEDINGS WHICH WERE ADMITTED BY MY PRE DECESSOR AND REMAND REPORT OF THE ASSESSING OFFICER WAS CALLED F OR. THE AO HAS SUBMITTED IN THE REMAND REPORT AS UNDER: THE CONTENTION OF THE ASSESSEE IS THAT THE AMOUNT REFERRED IS HIS CLOSING BALANCE SHEET OF F.V. ENDIN G ON 3 1/03/2003 OF RS.18,54,799/- OF M/S. K.K. DEVELOPERS WHICH WAS DULY AUDITED AND FILED WITH THE RETURN. THEREFORE, THE ISSUE MAY BE DECIDED ON MERIT. SINCE THE AO HAS VERIFIED THAT THE ENTRY OF RS.18,5 4,799/- HAS BEEN REFLECTED AS CLOSING BALANCE IN THE YEAR ENDING 31. 03.2003 IN THE BOOKS OF M/S. K.K DEVELOPERS AND DULY AUDITED ACCOU NTS WERE FILED ALONGWITH THE RETURN, 22. SINCE WE ARE IN AGREEMENT WITH THE AFORESAID FINDIN GS OF THE COMMISSIONER (APPEALS), WE DISMISS THE GROUND RAISE D BY THE REVENUE. 23. GROUND NO.III, IS AGAINST THE DELETION OF ADDITION OF ` 1,09,389, BY THE FIRST APPELLATE AUTHORITY. SIMILARLY, GROUND NO.V, IS AGAINST DELETION OF ` 45,000 BY THE FIRST APPELLATE AUTHORITY. MR. SAMEER N. KALE 6 24. THE FIRST FIGURE OF ` 1,09,389, WAS ADDED AS UNEXPLAINED INVESTMENT AND THE SECOND FIGURE OF ` 45,000, WAS ADDED AS ALLEGED BOGUS LIABILITY. 25. THE COMMISSIONER (APPEALS), VIDE PARA-8.5 OF HIS OR DER, HELD AS FOLLOWS:- 8.5 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELL ANT, ORDER OF THE ASSESSING OFFICER AND FACTS OF THE CASE CAREFULLY. ADDITIONAL EVIDENCES WERE SUBMITTED IN THE APPELLATE PROCEEDINGS WHICH W ERE ADMITTED BY MY PREDECESSOR AND REMAND REPORT OF THE ASSESSING O FFICER WAS CALLED FOR. THE A.O. HAS SUBMITTED IN THE REMAND REPORT AS UNDER:- THE ASSESSEE HAS BROUGHT NOTHING ON RECORD FOR GRO UND NO. 7 AND FOR GROUND NO. 8. THE ASSESSEE HAS PRODUC ED LODGER COPY OF SUNDRY CREDITORS. HOWEVER, HE HAS NO T PRODUCED THE CONFIRMATION FOR THE SAME. IN THE REMAND REPORT, THE AO HAS MENTIONED THAT THE ASSESSEE HAS PRODUCED LEDGER COPIES OF SUNDRY CREDITORS BUT CONF IRMATIONS WERE NOT FILED. ON THE OTHER HAND, THE APPELLANT HAS SUBMITT ED THAT LEDGER COPY OF SUNDRY CREDITORS ALONG WITH CONFIRMATION WAS FIL ED WHICH WAS OVERLOOKED BY THE AC, COPY OF THE SAME WAS ALSO FIL ED BEFORE ME WHICH SHOWS THAT ENTRIES ARE REFLECTED IN THE BOOKS OF AC COUNTS AND CONFIRMED, THEREFORE, ADDITION MADE IS NOT SUSTAINA BLE, HENCE DELETED. GROUND OF APPEAL IS ALLOWED. 26. WE FIND NO REASON TO DISTURB THE AFORESAID FINDINGS OF THE COMMISSIONER (APPEALS) AND DISMISS THE GROUND RAISE D BY THE REVENUE. 27. IN THE RESULT, REVENUES APPEAL IS DISMISSED. WE NOW TAKE UP ASSESSEES APPEAL IN ITA NO.3992/MUM ./2011, FOR ASSESSMENT YEAR 2004-05. THE SOLE GROUND RAISED BY THE REVENUE, READS AS FOLLOWS:- THE ASSESSING OFFICER HAS ERRED IN ADDING A SUM OF ` 7,85,000, AS ALLEGED UNPROVED LOAN TAKEN IN CASH AND FURTHER THE LEARNED CIT(A), ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AS SESSING OFFICER. 28. ON A PERUSAL OF THE SEIZED DOCUMENT, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD TAKEN A LOAN OF ` 13,02,500, OUT OF WHICH ` 7,85,000, MR. SAMEER N. KALE 7 IS A CASH LOAN RECEIVED FROM MR. SAMEER N. KALE (HU F). AS THE ASSESSEE HAD NOT SUBMITTED ANY EVIDENCE, AN ADDITION HAS BEEN MA DE. 29. BEFORE THE COMMISSIONER (APPEALS), THE ASSESSEE CON TENDED THAT THE AMOUNT IN QUESTION WAS DRAWN FROM MR. SAMEER N. KAL E (HUF) AND THAT THIS WAS DONE WITH PRIOR PERMISSION OF ALL THE CO-PARCEN ERS. IT WAS POINTED OUT THAT THE BOOKS OF ACCOUNT OF MR. SAMEER N. KALE (HU F), COPY OF CAPITAL ACCOUNT AS WELL AS THE BANK ACCOUNT IS AVAILABLE WI TH THE ASSESSING OFFICER AND THAT THESE ENTRIES CAN BE CROSS VERIFIED. THE C OMMISSIONER (APPEALS) CALLED FOR A REMAND REPORT AND, THEREAFTER, CONFIRM ED THE ADDITION. 30. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT THE F IRST APPELLATE AUTHORITY AS WELL AS THE ASSESSING OFFICER FAILED T O APPRECIATE THE FACT THAT MR. SAMEER N. KALE (HUF) WAS ALSO ASSESSED TO TAX B Y THE VERY SAME ASSESSING OFFICER AND THAT ALL THE MATERIAL AND EVI DENCES WERE AVAILABLE WITH THE ASSESSING OFFICER HIMSELF. MR. SAMEER N. KALE ( HUF) HAD FILED HIS RETURN OF INCOME. PERMANENT ACCOUNT NUMBER, ETC., WERE AVA ILABLE WITH THE ASSESSING OFFICER. THE ASSESSEE HAS NOT TAKEN ANY A DVANCES OR LOANS FROM ANY THIRD PARTY. IT IS AN INTERNAL ADJUSTMENT WITHI N THE FAMILY. IT HAS BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF THE HUF. T HERE IS NO CONTRARY EVIDENCE. ON THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION HAS BEEN WRONGLY SUSTAINED BY THE COMMISSIONER (APP EALS). CONSEQUENTLY, WE DELETE THE ADDITION AND ALLOW THE GROUND RAISED BY THE ASSESSEE. 31. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. WE NOW TAKE UP ASSESSEES APPEAL IN ITA NO.3993/MUM ./2011, FOR ASSESSMENT YEAR 2005-06. THE SOLE GROUND RAISED BY THE ASSESSEE, READS AS FOLLOWS:- THE ASSESSING OFFICER HAS ERRED IN ADDING A SUM OF ` 30,01,000, AS ALLEGED UNEXPLAINED CASH DEPOSITED IN THE BANK AND FURTHER THE COMMISSIONER (APPEALS) ERRED IN CONFIRMING THE DISA LLOWANCE MADE BY THE ASSESSING OFFICER. MR. SAMEER N. KALE 8 32. THE ASSESSING OFFICER PASSED AN EX-PARTE ORDER AND ADDED AN AMOUNT OF ` 30,01,001, BEING DEPOSIT OF CASH IN PUNJAB NATIONA L BANK. BEFORE THE COMMISSIONER (APPEALS), THE ASSESSEE CONTENDED THAT THIS BANK ACCOUNT IS A DISCLOSED BANK ACCOUNT. IT WAS SUBMITTED THAT THE B ANK ACCOUNT APPEARS IN THE BALANCE SHEET. THE DEPOSIT OF CASH WAS EXPLAINE D AS MADE FROM ACCUMULATED CASH IN HAND WHICH WAS REQUIRED TO BE D EPOSITED FOR URGENT PAYMENTS TOWARDS LAND IN VASAI. A CASH BOOK EXPLAIN ING CASH FLOW WAS FILED. IN THE REMAND REPORT, THE ASSESSING OFFICER STATED THAT THE ASSESSEE FAILED TO PROVE THE SOURCE OF CASH DEPOSIT. THE COMMISSIONER (APPEALS) CONFIRMED THE ADDITION. 33. AFTER PERUSING THE SUMMARY OF CASH BOOK FOR THE PER IOD FROM 1 ST APRIL 2003 TO 31 ST MARCH 2004 AND FOR THE PERIOD FROM 1 ST APRIL 2004 TO 31 ST MARCH 2005, WE OBSERVE AS FOLLOWS:- 34. THERE IS A WITHDRAWAL FROM THE BANK TO THE EXTENT O F ` 11,00,000. THERE ARE CASH WITHDRAWALS OF ` 6,19,000, FROM PROPRIETOR CONCERN M/S. K.K. DEVELOPERS. THERE IS FURTHER CASH WITHDRAWAL OF ` 1,00,000, FROM THE PROPRIETOR CONCERN OF THE HUF M/S. K.K. CONSTRUCTIO NS, AGGREGATING TO ` 18,19,000. THE ASSESSEE CLAIMS OPENING CASH BALANCE OF ` 13,94,399. THE ARGUMENT OF THE ASSESSEE IS THAT THE REVENUE HAS NO T DISLODGED THE CASH BALANCE REFLECTED BY THE ASSESSEE IN THE BALANCE SH EET AS ON 31 ST MARCH 2004. IN OUR CONSIDERED OPINION, THE ASSESSEE HAS T O PROVE THE PROXIMITY OF SOURCE IN ALL THESE CASES. WHILE WITHDRAWAL FROM TH E BANK CAN BE CONSIDERED AS A SOURCE FOR RE-DEPOSITING THE SAME AND WHILE TH E AMOUNT RECEIVED FROM M/S. K.K. DEVELOPERS AND M/S. K.K. CONSTRUCTIONS, C AN BE CONSIDERED AS SOURCE, DEPOSITS MADE FROM OPENING BALANCE TO THE E XTENT THEY ARE NOT SUPPORTED BY SOURCE HAVE TO BE CONFIRMED. THE ASSES SEE SHOWS THAT IT RECEIVED AN AMOUNT OF ` 9,45,000 FROM MR. SAMEER N. KALE (HUF) BETWEEN 1 ST APRIL 2003 AND 31 ST MARCH 2004. MR. SAMEER N. KALE (HUF) IS AN ASSESSE E WITH THE SAME ASSESSING OFFICER. IT FILED THE RETUR N OF INCOME. ITS BALANCE SHEET IS AVAILABLE FOR VERIFICATION. THUS, IN OUR C ONSIDERED OPINION, THE MR. SAMEER N. KALE 9 ADDITION SHOULD BE PARTLY SUSTAINED. WE GIVE CREDIT TO THE WITHDRAWALS OF CASH AND AMOUNTS RECEIVED FROM M/S. K.K. DEVELOPERS AND M/S. K.K. CONSTRUCTIONS, DURING THE YEAR AMOUNTING TO ` 18,19,000, AND ALSO THE AMOUNT RECEIVED FROM MR. SAMEER N. KALE (HUF) TO TH E EXTENT OF ` 9,45,000. THE ADDITION, IF ANY, OF THESE AMOUNTS SHOULD BE CO NSIDERED ONLY IN THE HANDS OF MR. SAMEER N. KALE (HUF). WE, THUS, SUSTAI N AN ADDITION OF ` 2,37,000 ONLY. THIS GROUND IS ALLOWED IN PART. 35. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. WE NOW TAKE UP REVENUES APPEAL IN ITA NO.4551/MUM. /2011, FOR ASSESSMENT YEAR 2005-06. 36. GROUND NO.1, IS ON THE ISSUE OF ADMISSION OF ADDITI ONAL EVIDENCE. 37. AS THE FACTS OF THIS GROUND ARE IDENTICAL TO THE FA CTS OF GROUND NO.1, RAISED BY THE REVENUE IN ITA NO.4549/MUM./2011, CON SISTENT WITH THE VIEW TAKEN THEREIN, WE DISMISS THIS GROUND ALSO. 38. GROUND NO.2, IS AGAINST DELETION OF ADDITION OF ` 8,00,000, MADE BY THE FIRST APPELLATE AUTHORITY. 39. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE CO MMISSIONER (APPEALS), VIDE PARA-3.3 OF HIS ORDER, OBSERVED AS FOLLOWS:- I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ORDER OF THE ASSESSING OFFICER AND FACTS OF THE CASE CAREFULLY. ADDITIONAL EVIDENCES WERE SUBMITTED IN THE APPELLATE PROCEEDINGS WHICH W ERE ADMITTED BY MY PREDECESSOR AND REMAND REPORT OF THE ASSESSING O FFICER WAS CALLED FOR. THE A.O. HAS SUBMITTED IN THE REMAND REPORT AS UNDER:- THE CONTENTION OF THE ASSESSEE US THAT HE HAD PAID COMPENSATION TO M/S. SIDDHARTH DEVELOPER ON 05/07/2005 IN RELATION TO CANCELLATION OF THE JOINT VENTURE. THIS TRANSACTION IS NOT PERTAINING TO YEAR UNDER CONSIDERATION, WHICH APPEARS TO THE TRUE (COPY OF B ANK PASS BOOK PLACED ON RECORD). MR. SAMEER N. KALE 10 HOWEVER, THE ASSESSEE HAS FAILED TO PRODUCE THE BAS IS OF CANCELLATION OF THE JOINT VENTURE. THEREFORE, THE I SSUE MAY BE DECIDED ON MERIT. THE A.O. HAS VERIFIED THAT THIS ENTRY IS NOT PERTAI NING TO THE YEAR UNDER CONSIDERATION AND IS DULY REFLECTED IN THE BANK PAS S BOOK PRODUCED DURING THE REMAND PROCEEDINGS, THEREFORE, THE ADDIT ION MADE IS NOT SUSTAINABLE, HENCE, DELETED. GROUND OF APPEAL IS AL LOWED. 40. WE DO NOT FIND ANY INFIRMITY IN THE AFORESAID FINDI NGS OF THE COMMISSIONER (APPEALS) AND DECLINE TO INTERFERE IN THE MATTER AS SUCH. WE, THUS, UPHOLD THE ORDER OF THE COMMISSIONER (APPEALS ) AND DISMISS THE GROUND RAISED BY THE REVENUE. 41. GROUND NO.3, IS ON THE DELETION OF ADDITION OF ` 13,50,000, MADE ON THE GROUND THAT SOURCE FOR PAYMENT OF PURCHASES HAS NOT BEE EXPLAINED. 42. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE FI RST APPELLATE AUTHORITY CONSIDERED THE ISSUE AT PARA-7 OF HIS ORDER. AT PAR A-7.3, THE COMMISSIONER (APPEALS), BASED ON THE REMAND REPORT, CONCLUDED TH AT THE ENTRIES ARE NOT RELATING TO THE YEAR UNDER CONSIDERATION. WE, THUS, DO NOT FIND ANY INFIRMITY IN THIS FINDING OF THE FACT AND UPHOLD THE ORDER PA SSED BY THE COMMISSIONER (APPEALS). THIS GROUND IS DISMISSED. 43. IN THE RESULT, REVENUES APPEAL IS DISMISSED. WE NOW TAKE UP ASSESSEES APPEAL IN ITA NO.3994/MUM ./2011, FOR ASSESSMENT YEAR 2006-07. THE SOLE GROUND RAISED BY THE REVENUE, READS AS FOLLOWS:- THE ASSESSING OFFICER HAS ERRED IN ADDING A SUM OF ` 29,78,500, AS UNDISCLOSED SHORT TERM CAPITAL GAIN AND FURTHER THE COMMISSIONER (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 44. AS THE FACTS OF THIS GROUND ARE IDENTICAL TO THE FA CTS OF THE GROUND NO.1, DECIDED BY US VIDE PARA-29 OF OUR ORDER PASSED IN M RS. SARITA N. KALE, ITA NO.3989/MUM./2011, FOR ASSESSMENT YEAR 2006-07, CON SISTENT WITH THE VIEW MR. SAMEER N. KALE 11 TAKEN THEREIN, WE DELETE THE ADDITION MADE AND ALLO W THE GROUND RAISED BY THE ASSESSEE. 45. AS REGARDS CLAIM FOR DEDUCTION ON COST OF IMPROVEME NT, WHILE COMPUTING CAPITAL GAINS, CONSISTENT WITH THE VIEW T AKEN IN THE CASE OF MRS. SARITA N. KALE, WE SET ASIDE THE MATTER TO THE FILE OF ASSESSING OFFICER. 46. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED IN PART . WE NOW TAKE UP REVENUES APPEAL IN ITA NO.4552/MUM. /2011, FOR ASSESSMENT YEAR 2006-07. 47. GROUND NO.I, IS ON THE ISSUE OF ADMISSION OF ADDITI ONAL EVIDENCE. 48. AS THE FACTS OF THIS GROUND ARE IDENTICAL TO THE FA CTS OF GROUND NO.1, RAISED BY THE REVENUE IN ITA NO.4549/MUM./2011, CON SISTENT WITH THE VIEW TAKEN THEREIN, WE DISMISS THIS GROUND ALSO. 49. GROUND NO.II, IS AGAINST DELETION OF ADDITION OF ` 37,05,000, BY THE COMMISSIONER (APPEALS). 50. THE FIRST APPELLATE AUTHORITY HAS DEALT WITH THIS I SSUE VIDE PARA-6.3 OF HIS ORDER, WHICH READS AS FOLLOWS:- 6.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELL ANT, ORDER OF THE ASSESSING OFFICER AND FACTS OF THE CASE CAREFULLY. ADDITIONAL EVIDENCES WERE SUBMITTED IN THE APPELLATE PROCEEDINGS WHICH W ERE ADMITTED BY MY PREDECESSOR AND REMAND REPORT OF THE ASSESSING O FFICER WAS CALLED FOR. THE AO HAS SUBMITTED IN THE REMAND REPORT AS U NDER: THE ASSESSEE HAS BROUGHT COPY OF ACCOUNT OF SHARES IN M/S. KERPL, HOWEVER, HE WAS NOT ABLE TO SUBSTANTIAT E HIS CLAIM. THEREFORE, THE ISSUE MAY BE DECIDED ON MERIT S. FROM THE PERUSAL OF THE REMAND REPORT, IT IS NOTICE D THAT THE ASSESSEE HAS PRODUCED A COY OF ACCOUNT OF SHARES IN M/S. KER PL BUT THE AO HAS MENTIONED THAT NO FURTHER EVIDENCE WERE SUBMITTED. ON THE OTHER HAND, THE APPELLANT HAS SUBMITTED THAT AN AMOUNT OF RS. 41 LAKHS IS PART CONSIDERATION TO THE LANDLORD AS PER DEED OF C ONVEYANCE DT. 30.04.2004 WHICH WAS PAID BY ACCOUNT PAYEE CHEQUE T O THE LAND ORDER. COPY OF THE CONVEYANCE DEED WAS ALSO SUBMITT ED. AS PER THIS MR. SAMEER N. KALE 12 CONVEYANCE DEED IT IS NOTICED THAT THE ASSESSEE HAS GIVEN THE LAND FOR USE OF KERPL AND UNDER CONSIDERATION RECEIVED SHARE S OF RS. 30 LAKHS AND BALANCE AMOUNT OF RS.11,04,000/-. THE PAYMENT W AS MADE FROM THE PROPRIETORY CONCERN OF THE ASSESSEE EXCEPT RS.3 ,50,000/- WHICH WAS PAID IN CASH. ON VERIFYING THESE FACTS, IT IS N OTICED THAT THE AMOUNT OF RS.41 LAKHS WAS PAID THROUGH ACCOUNT PAYE E CHEQUE AS PER DEED OF CONVEYANCE. THE ASSESSEE HAS RECEIVED THE S HARES OF RS.30 LAKHS FROM M/S. KERPL. THE BALANCE AMOUNT WAS PAID DURING THROUGH THE PROPRIETARY CONCERN OF THE ASSESSEE EXCEPT RS.3 ,50,000/- WHICH HAS REMAINED UNEXPLAINED. SINCE ALL DOCUMENTS WERE PRODUCED BEFORE THE AO DURING THE REMAND PROCEEDINGS AND COPY OF TH E SAME WAS ALSO PRODUCED BEFORE ME. FROM THE PERUSAL OF THE SAME, I T IS HELD THAT ENTRY OF RS.3,50,000/- WHICH WAS SHOWN AS CASH DEPO SIT IS NOT EXPLAINABLE, THEREFORE, ADDITION MADE IS RESTRICTED TO RS.3,50,000/- AND BALANCE ADDITION IS DELETED. GROUND OF APPEAL I S PARTLY ALLOWED. 51. WE DO NOT FIND ANY INFIRMITY IN THE AFORESAID FINDI NGS OF THE COMMISSIONER (APPEALS) AND DECLINE TO INTERFERE IN THE MATTER AS SUCH. THIS GROUND IS, THUS, DISMISSED. 52. GROUND NO.III, IS AGAINST THE DELETION OF ADDITION OF ` 2,50,000, ON THE GROUND THAT THE SOURCE IS NOT EXPLAINED. 53. THE FIRST APPELLATE AUTHORITY HAS DEALT WITH THE IS SUE AT PARA-6.3 OF HIS ORDER, WHICH IS REPRODUCED BELOW:- 7.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELL ANT, ORDER OF THE ASSESSING OFFICER AND FACTS OF THE CASE CAREFULLY. ADDITIONAL EVIDENCES WERE SUBMITTED IN THE APPELLATE PROCEEDINGS WHICH W ERE ADMITTED BY MY PREDECESSOR AND REMAND REPORT OF THE ASSESSING O FFICER WAS CALLED FOR. THE AO HAS SUBMITTED IN THE REMAND REPORT AS U NDER: THE ASSESSEES ARGUMENT IS THAT HE HAS PAID ONLY ` 50,000 NOT ` 2,50,000, WHICH IS APPARENT FROM THE SEIZED PAPER, WHICH APPEARS TO BE TRUE. THEREFORE, THE ISS UE MAY BE DECIDED ON MERITS. FROM THE PERUSAL OF THE REMAND REPORT, IT IS NOTICE D THAT THE A.O. HAS VERIFIED THE ENTRY AND ACCEPTED THE SAME, THEREFORE, NO ADDITION IS CALLED FOR HENCE, DELETED. GROUND OF AP PEAL IS ALLOWED. 54. ON FACTS, WE UPHOLD THE ORDER OF THE FIRST APPELLAT E AUTHORITY AND DISMISS THIS GROUND. MR. SAMEER N. KALE 13 55. GROUND NO.4, IS AGAINST DELETION OF ADDITION OF ` 23,22,737, BY THE COMMISSIONER (APPEALS). 56. THE COMMISSIONER (APPEALS) DEALT WITH THE SAME AT P ARA-9.3 OF THE ORDER WHICH IS EXTRACTED FOR READY REFERENCE. 9.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELL ANT, ORDER OF THE ASSESSING OFFICER AND FACTS OF THE CASE CAREFULLY. ADDITIONAL EVIDENCES WERE SUBMITTED IN THE APPELLATE PROCEEDINGS WHICH W ERE ADMITTED BY MY PREDECESSOR AND REMAND REPORT OF THE ASSESSING O FFICER WAS CALLED FOR. THE AO HAS SUBMITTED IN THE REMAND REPORT AS U NDER: ON PERUSAL OF THE SEIZED MATERIAL, IT IS FOUND THA T NAME OF THE ASSESSEE DOES NOT APPEAR AND ON THE BASIS OF THESE SEIZED DOCUMENT, ADDITION HAS BEEN MADE AND DISCUSS ED IN GROUND NO.5 & 6 OF A.Y. 2004-05. GROUND NO.5 OF A.Y. 2005-06 AND GROUND NO.1 OF A.Y. 2006-07 IN SHRI NANDKUMAR D. KALE. THEREFORE, THE ISSUE MAY BE DECI DED ACCORDINGLY. FROM THE PERUSAL OF THE REMAND REPORT, IT IS NOTICE D THAT THE A.O. HAS OBSERVED THAT THE ADDITION OF ` 17,50,000 HAS ALREADY BEEN MADE IN THE CASE OF SHRI NANDKUMAR KALE FOR A.Y. 2006-07 AN D SAME PAPER HAS ALREADY BEEN DISCUSSED IN THE A.Y. 2004-05 AND 2005 -06. THEREFORE, THE SAME ADDITION CANNOT BE MADE IN THE YEAR UNDER CONSIDERATION. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES, THE AD DITION MADE IS DELETED AND GROUND OF APPEAL IS ALLOWED. 57. AFTER HEARING THE RIVAL CONTENTIONS AND CONSIDERING THE MATERIAL ON RECORD, WE UPHOLD THE AFORESAID FINDINGS OF THE COM MISSIONER (APPEALS) AND DISMISS THE GROUND RAISED BY THE REVENUE. 58. IN THE RESULT, REVENUES APPEAL IS DISMISSED. WE NOW TAKE UP REVENUES APPEAL IN ITA NO.4554/MUM. /2011, FOR ASSESSMENT YEAR 2007-08. 59. GROUND NO.I, IS ON THE ISSUE OF ADMISSION OF ADDITI ONAL EVIDENCE. MR. SAMEER N. KALE 14 60. AS THE FACTS OF THIS GROUND ARE IDENTICAL TO THE FA CTS OF GROUND NO.1, RAISED BY THE REVENUE IN ITA NO.4549/MUM./2011, CON SISTENT WITH THE VIEW TAKEN THEREIN, WE DISMISS THIS GROUND ALSO. 61. GROUND NO.II, IS AGAINST DELETION OF ADDITION OF ` 18,16,000. 62. BOTH THE PARTIES BEFORE US SUBMITTED THAT THE GROUN D IS AGAINST THE DELETION OF AN ADDITION OF ` 58,16,000, AND NOT ` 18,60,000, AS BROUGHT OUT IN THE GROUND OF APPEAL. THE COMMISSIONER (APPEALS) , VIDE PARA-5.3/PAGE-4 OF HIS ORDER, HELD AS FOLLOWS:- 5.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT, ORDER OF THE ASSESSING OFFICER AND FACTS OF THE CASE CAREFULLY. ADDITIONAL EVIDENCES WERE SUBMITTED IN THE APPELLATE PROCEEDINGS WHICH W ERE ADMITTED BY MY PREDECESSOR AND REMAND REPORT OF THE ASSESSING O FFICER WAS CALLED FOR. THE AC HAS SUBMITTED IN THE REMAND REPORT AS U NDER: ON PERUSAL OF THE SEIZED PAPER, IT IS FOUND THAT T HE PAGES DO NOT REFLECT RECEIPT OR PAYMENT. HOWEVER, THE ASSESSEE H AS BROUGHT NOTHING TO PROVE THAT IT DOES NOT BELONG TO IT. THEREFORE, THE ISSUE MAY BE DECIDED ACCORDINGLY. FROM THE PERUSAL OF THE REMAND REPORT, IT IS NOTICE D THAT THE AO HAS ADMITTED THAT THESE ENTRIES ARE NEITHER RECEIPT NOR PAYMENT BUT THE ASSESSEE HAS NOT PROVED WITH ANY FURTHER EVIDENCE. ON THE OTHER HAND, THE APPELLANT HAS SUBMITTED THAT PAGE 82 OF ANNEXUR E A-8 IS PROPOSAL OF SOCIETY BUILDING FOR REDEVELOPMENT GIVEN TO MR. NANDKUMAR KALE FOR ADVISORY MATTER WITH FINANCIAL POSITION OF 31 MEMBE RS. MR. NANDKUMAR KALE WAS MLA AND MEMBER OF RE DEVELOPMENT COMMITTEE OF MHADA AND THIS PAPER HAS NO RELATION WITH THE BUSINESS AC TIVITY THE ASSESSEE. FROM THE PERUSAL OF THE SEIZED PAPER IT IS NOTICED THAT THE INTERPRETATION GIVEN BY THE APPELLANT SEEMS TO BE T RUE AND IT IS ALSO ACCEPTED BY THE A.O. THAT IT IS NEITHER THE PAYMENT NOR RECEIPT RELATING TO THE BUSINESS ACTIVITIES OF THE ASSESSEE, THEREFO RE, THE ADDITION MADE IS NOT SUSTAINABLE, HENCE DELETED. GROUND OF APPEAL IS ALLOWED. 63. WE DO NOT FIND ANY INFIRMITY IN THE AFORESAID FINDI NGS OF THE COMMISSIONER (APPEALS) AND DECLINE TO INTERFERE IN THE MATTER. ACCORDINGLY, WE UPHOLD THE ORDER PASSED BY THE COMMISSIONER (APP EALS) AND DISMISS THE GROUND RAISED BY THE REVENUE. 64. IN THE RESULT, REVENUES APPEAL IS DISMISSED. MR. SAMEER N. KALE 15 WE NOW TAKE UP ASSESSEES APPEAL IN ITA NO.3995/MUM ./2011, FOR ASSESSMENT YEAR 2008-09. THE ASSESSING OFFICER HAS ERRED IN ADDING A SUM OF ` 16,40,000, AS UNEXPLAINED CASH DEPOSITED IN THE BANK AND FURTHER THE COMMISSIONER (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 65. THE ASSESSING OFFICER MADE ADDITION OF ` 22,59,000, ON ACCOUNT OF CASH DEPOSITS MADE BY THE ASSESSEE IN PUNJAB NATION AL BANK, ON THE GROUND THAT THESE ARE UNEXPLAINED. THE FIRST APPELLATE AUT HORITY CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND RESTRICTED THE ADDI TION TO ` 16,40,000. THE ASSESSEE PLEADS THAT HE HAS RECEIVED CASH FROM KALE FARMS TO THE TUNE OF ` 16,40,000. HE FILED A COPY OF THE ACCOUNT OF THE AS SESSEE IN THE BOOKS OF KALE FIRMS AND ACKNOWLEDGEMENT OF RETURN OF INCOME OF KALE FARM, BALANCE SHEET OF THE ASSESSEE AS WELL AS THAT OF KALE FARMS . 66. ON CAREFUL EXAMINATION OF THESE EVIDENCES, WE FIND THAT THE FIRST APPELLATE AUTHORITY HAS CONFIRMED THE ADDITION ONLY ON THE GROUND THAT THE ASSESSEE HAS NOT EXPLAINED THE AMOUNTS RECEIVED FRO M KALE FARMS, WITH NECESSARY DOCUMENTARY EVIDENCE. WE FIND THAT KALE F ARMS IS AN ENTITY ASSESSED TO TAX. IT MAINTAINS BOOKS OF ACCOUNT. KAL E FARMS HAS ACKNOWLEDGED THE FACT THAT IT HAS ADVANCED CERTAIN AMOUNTS TO THE ASSESSEE. THESE TRANSACTIONS ARE RECORDED IN THE BOOKS OF KAL E FARMS. ACCOUNT COPY OF THE ASSESSEE IN THE BOOKS OF KALE FARMS, HAS BEEN F URNISHED. THE ASSESSING OFFICER OF BOTH THE ASSESSEES IS SAME. UNDER THESE CIRCUMSTANCES, IT IS WRONG ON THE PART OF THE COMMISSIONER (APPEALS) TO HAVE R EJECTED THE CLAIMS OF THE ASSESSEE WITHOUT VERIFYING THE FACTS. IN CASE, THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) DOUBTED THE EXPLANATION GIVE N BY THE ASSESSEE, THEY SHOULD HAVE INVESTIGATED THE MATTER BY VERIFYI NG THE RECORDS OF KALE FARMS AND QUESTIONING THE MANAGEMENT OF KALE FARMS. EXPLANATION PROVIDED WITH EVIDENCE CANNOT BE REJECTED WITHOUT ENQUIRY OR OBTAINING CONTRARY EVIDENCE. FOR THESE REASONS, WE ARE OF THE OPINION THAT THE ADDITION CANNOT MR. SAMEER N. KALE 16 BE SUSTAINED. NEVERTHELESS, BEFORE US, IN THE RECON CILIATION STATEMENT SUBMITTED, WE FIND THAT THE AMOUNTS RECEIVED FROM M /S. KALE FARMS, WAS ` 15,40,000 AND NOT ` 16,40,000. THE ASSESSEE EXPLAINS THAT THE BALANCE OF ` 1,00,000, AS CLOSING BALANCE OF CASH IN HAND. THIS EXPLANATION IS NOT ACCEPTABLE. THUS, WE RESTRICT THE ADDITION TO ` 1,00,000, AND THE BALANCE OF ` 15,40,000, IS HEREBY DELETED. THIS GROUND IS, THUS, PARTLY ALLOWED. 67. IN THE RESULT, ASSESSEE APPEAL IS PARTLY ALLOWED. 68. TO SUM UP, ALL THE APPEALS FILED BY THE REVENUE AR E DISMISSED. ASSESSEES APPEALS IN ITAS NO.3992 AND 3994/MUM./20 11, ARE ALLOWED AND ASSESSEES APPEALS IN ITAS NO.3993 AND 3995/MUM./20 11, ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH MAY 2011 SD/- SATBEER SINGH GODARA JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 9 TH MAY 2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, G BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI MR. SAMEER N. KALE 17 DATE INITIAL 1. DRAFT DICTATED ON 17.4.2012 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 18.4.2012- 4.5.2012 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4.5.2012 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 4.5.2012 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 4.5.2012 SR.PS 6. DATE OF PRONOUNCEMENT 9.5.2012 SR.PS 7. FILE SENT TO THE BENCH CLERK 9.5.2012 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER