YOGESH PARIKH, MUMBAI V. ACIT CEN CIR -45, MUMBAI

ITA 5033/MUM/2009

• Counselvise Citation: 503319914 RSA 2009
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 27-01-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 03-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI BEFORE SHRI D.K. AGARWAL (J.M.) & SHRI R.K. PANDA ( A.M.) ITA NO.5033/MUM/2009 ASSESSMENT YEAR : 2001-2002 SHRI YOGESH PARIKH C-36, GUJARATI SOCIETY, NEHRU ROAD, VILEPARLE (E), MUMBAI-400 057 PAN NO. : AACPP6250F THE ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-45, AAYAKAR BHAWAN, MUMBAI (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI ASHOK SHARMA RESPONDENT BY : SHRI PAVAN VED O R D E R PER R.K. PANDA, A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 31.07.2009 OF THE CIT(A)-CENTRAL-III, MUMBAI RELAT ING TO ASSESSMENT YEAR 2001-02. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE SEARCH AND SEIZURE ACTION U/A.132 OF I.T. ACT, WAS CARRIED ON 10.01.2006 IN C ASE OF M/S. UNIMARK REMEDIES LTD. AND ITS GROUP CONCERNS. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTED THAT SHRI YOGESH PAREKH A ND HIS BROTHER PURCHASED A PROPERTY (FLAT) ON 1 ST FLOOR, VILE PARLE GUJARATI MANDAL CO-OP. HSG. SOCI ETY AT THE JUNCTION OF NEHRU ROAD AND GUJARATI SOCIETY ROA D, VILE PARLE (E), MUMBAI ON 6 TH OCTOBER 2000 IN CONSIDERATION OF `. 19 LAKHS. THIS PROPERTY WAS JOINTLY PURCHASED BY SHRI YOGESH PAREKH AND SHRI ANIL PAREK H HAVING CONTRIBUTION OF `. 10.15 LAKHS EACH. THE STAMP DUTY PAID WAS OF ` .1,10,750/-. ON PERUSAL OF THE SEIZED RECORDS ANNEXURE NKP-1 FOUND AND SEIZED AT THE RESIDENCE, IT WAS FOUND ON PAGE 121 THAT THERE IS AN ACCOUNT IN WHICH THERE IS A MENTION OF 2 PAYMENT OF `. 31,20,000/- FOR PURCHASE OF FLAT AND `. 20,440/- FOR TRANSFER, `. 1,10,750/- FOR STAMP DUTY, `. 8,920/- FOR I.T. EXPENSES. THE STAMP DUTY PAYMENT OF `. 1,10,750/- SHOWN ON THIS PAGE IS SAME AS IN REGISTE RED DEED. THIS PAGE IS SIGNED BY SHRI YOGESH PARIKH AND SHRI ANIL PARIKH. ON THIS PAGE THERE IS A MENTION OF CHEQUE OF `. 50,000/-, `. 50,000/-, `. 9,00,000/- ETC WHICH HAS BEEN PAID FOR PURCHASE OF THE PROPERTY BY BOTH THE BROTHERS. THERE IS A MENTION OF `. 7,120/- WHICH HAS BEEN INCURRED ON MISCELLANEOUS EX PENSES BY SHRI YOGESH PAREKH AS SHOWN IN THE RETURN OF INCOME . THE TRANSACTION ON THIS PAGE CLEARLY REVEALS THAT THOUGH THE PROPERTY HAS B EEN SHOWN TO BE PURCHASED FOR `. 19 LAKHS BY CHEQUE BUT IN ACTUAL THERE IS PAYMENT O F `. 31,20,000/- WHICH INCLUDES CASH PAYMENT OF `. 12,20,000/- I.E. `. 31,20,000/- (-) `. 19,00,000/-. 3. THE ABOVE FACTS WERE BROUGHT TO THE NOTICE OF AS SESSEE WHILE RECORDING HIS STATEMENT WHO DENIED TO HAVE PAID ANY CASH FOR THE ABOVE TRANSACTION. ACCORDING TO THE AO THOUGH SHRI YOGESH PAREKH HAS D ENIED BUT THE PAPERS CLEARLY INDICATE THE TRANSACTION ENTERED INTO BY SH RI YOGESH PAREKH AND SHRI ANIL PARIKH THAT THE FLAT HAS BEEN PURCHASED FOR `. 31,20,000/- INSTEAD OF `. 19,00,000/-. THEREFORE, HE WAS OF THE OPINION THAT THE CASH PAYMENT OF `. 12,20,000/- HAS BEEN SHARED BY BOTH THE BROTHERS JO INTLY. HE, ACCORDINGLY, MADE AN ADDITION OF `. 6,10,000/- TO THE INCOME OF THE ASSESSEE. 4. BEFORE THE LEARNED CIT(APPEALS), THE ASSESSEE RE ITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE AO AND SUBMITTED THA T NO SUCH CASH PAYMENT WAS MADE BY THE ASSESSEE TOWARDS PURCHASE O F FLAT. THE FLAT WAS PURCHASED ON CO-OWNERSHIP BASIS AND THE PAPER WAS I N THE HANDWRITING OF THE ASSESSEES FATHER AND, THEREFORE, THE ADDITION MADE BY THE AO WAS BASED ON CONJECTURE AND SURMISES AND HENCE IT SHOULD BE DELE TED. 5. HOWEVER, THE LEARNED CIT(APPEALS) WAS NOT SATISF IED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD THE ACTION OF THE AO BY HOLDING AS UNDER :- 3.6 I HAVE CAREFULLY CONSIDERED THE FACTS AND AM N OT CONVINCED WITH THE ARS CONTENTIONS. ADMITTEDLY, THE PAPER SE IZED DURING THE COURSE OF SEARCH, IS IN THE HANDWRITING OF THE APPE LLANTS FATHER. IT 3 INDICATES THE DETAILS OF PAYMENTS MADE FOR PURCHASE OF FLAT IN THE JOINT NAMES OF THE APPELLANT AND HIS BROTHER, SHRI ANIL PARIKH. ON PERUSAL OF THE DETAILS OF THE PAYMENT, IT IS VERY C LEAR THAT THE FLAT HAS BEEN PURCHASED FOR A SUM OF `. 31,20,000/- SINCE THE PAYMENT BY CHEQUE STOOD AT `. 19,00,000/- ONLY, THE BALANCE PAYMENT MADE IN CASH WAS RIGHTLY TREATED AS UNACCOUNTED PAYMENTS MADE BY THE TWO BROTHERS. THE AR HAS NOT BEEN ABLE TO EXPLAIN T HE SOURCE OF THE AFORESAID UNACCOUNTED CASH PAID FOR PURCHASE OF FLA T. IN THE CIRCUMSTANCES, THE AOS ACTION IN MAKING THE ADDITI ON OF `. 6,10,000/- AS APPELLANTS SHARE OF UNACCOUNTED INVE STMENT FOR PURCHASE OF FLAT WAS FULLY JUSTIFIED AND IS HEREBY CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. 6. AGGRIEVED WITH SUCH ORDER OF THE LEARNED CIT(APP EALS) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE AP PELLANTS CASE AND IN LAW THE LEARNED. CIT(A) ERRED IN CONFIRMING THE ADDITION OF `. 6,10,000/- MADE BY THE AO ON ACCOUNT OF ALLEGED CAS H PAYMENT FOR PURCHASE OF FLAT AT VILEPARLE MUMBAI. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APP ELLANTS CASE AND IN LAW THE LEARNED. CIT(A) ERRED IN NOT APPRECI ATING THE FACT THAT THE NOTINGS ON THE SEIZED MATERIAL PAGE NO.121 OF ANNEXURE NKP-1 WERE NOT IN THE HANDWRITING OF THE APPELLANT AND THE ACTUAL PAYMENTS MADE FOR PURCHASE OF FLAT DO NOT TALLY WIT H THE FIGURES SHOWN ON THE SEIZED PAPER. 3. THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND, ALT ER, MODIFY AND / OR WITHDRAW ANY OR ALL OF THE ABOVE GROUNDS OF APPE AL, EACH OF WHICH ARE WITHOUT PREJUDICE TO EACH OTHER. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT NO PROCEEDING HAS BEEN CARRIED OUT IN CASE OF THE BROTHER OF THE ASSE SSEE WHO IS THE CO-OWNER OF THE PROPERTY. REFERRING TO THE STATEMENT RECORDED B Y THE AO ON 23.10.2007, THE LEARNED COUNSEL FOR THE ASSESSEE DREW THE ATTEN TION OF THE BENCH TO Q.3 & Q.4 PUT BY THE AO AND THE REPLY OF THE ASSESSEE TO SUCH QUERIES. HE SUBMITTED THAT THE ASSESSEE IN HIS REPLY TO Q.3 HAS CATEGORIC ALLY STATED THAT THE PROPERTY HAS BEEN PURCHASED IN JOINT NAME BY HIMSELF AND HIS BROTHER FOR `. 19,00,000/- AND STAMP DUTY WAS OF `. 1,10,750/-. REFERRING TO THE REPLY OF THE ASSESSEE TO Q.4, HE SUBMITTED THAT WHEN THE AO CONFRONTED THE ASSESSEE THAT THERE IS A MENTION OF PAYMENT OF `. 31,20,000/- IN PAGE 121 OF ANNEXURE- NKP-1 AND VARIOUS OTHER DETAILS, THE ASSESSEE HAS C ATEGORICALLY STATED THAT HE 4 DOES NOT KNOW, SINCE THESE PAGES DO NOT BELONG TO H IM. HE HAD ALSO STATED THAT HE HAD PAID `. 9,50,000/- TOWARDS PURCHASE OF FLAT. REFERRING TO T HE COPY OF THE AGREEMENT, HE SUBMITTED THAT THE CONSIDERATI ON OF THE PROPERTY WAS `. 19,00,000/-. HE SUBMITTED THAT FOR THE STAMP DUTY, PURPOSE VALUATION OF THE OLD FLAT WAS `. 13,19,210/-. HE SUBMITTED THAT THE PAPER WAS SEIZED FROM HIS FATHER SINCE THE SAME HAS BEEN IDENTIFIED AS ANNEXU RE NKP-1. HE SUBMITTED THAT THE SAID PAPER IS NOT IN THE HANDWRITING OF TH E ASSESSEE. THE LEARNED COUNSEL FURTHER SUBMITTED THAT NEITHER ASSESSEES F ATHER WAS EXAMINED FROM WHOM THE PAPER WAS SEIZED NOR THE SELLER WHO SOLD T HE PROPERTY WAS EXAMINED. THE ADDITION MADE BY THE AO WAS PURELY ON PRESUMPTION BASIS. REFERRING TO THE FOLLOWING DECISIONS HE SUBMITTED T HAT THE LEARNED CIT(APPEALS) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION MADE B Y THE AO :- 1. HARISH DAULATRAM INNANI V. DY. CIT [2008] 24 SOT 54 1 (MUM). 2. JAWAHARBHAI ATMARAM HATHIWALA V. ITO [2010] 128 TTJ (AHD)(UO) 36 3. S.P. GOYAL V. DY. CIT [2002] 82 ITD 85 (MUM)(TM) 4. ATUL KUMAR JAIN V. DCIT [1999] 64 TTJ (DEL) 786 5. CIT V. S.M. AGGARWAL [2007] 293 ITR 43 (DELHI) 8. THE LEARNED DR ON THE OTHER HAND, DREW THE ATTEN TION OF THE BENCH TO THE LOOSE PAPER AND SUBMITTED THAT IT CLEARLY MENTI ONS THE AMOUNT OF `. 31,20,000/-. THEREFORE, THERE IS ABSOLUTELY NO DOUB T REGARDING THE COST OF FLAT AT `. 31,20,000/-. HE SUBMITTED THAT SINCE THE PAPER WAS FOUND FROM THE ASSESSEE AND NOT FROM HIS FATHER, THEREFORE, THE ST ATEMENT OF THE ASSESSEE WAS RECORDED AND THE ASSESSEE HAS SIMPLY MENTIONED THAT HE DOES NOT KNOW. REFERRING TO THE PROVISIONS OF SECTION 292C OF THE I.T.ACT, HE SUBMITTED THAT WHEN ANY DOCUMENT IS FOUND IN POSSESSION OR CONTROL OF ANY PERSON IN COURSE OF A SEARCH U/S.132 IT MAY BE PRESUMED THAT SUCH DO CUMENT BELONGS TO SUCH PERSON AND THE CONTENTS OF SUCH DOCUMENTS ARE TRUE. HE SUBMITTED THAT IT WAS THE BURDEN ON THE ASSESSEE TO BRING REBUTTAL FROM H IS FATHER THAT COST OF THE FLAT IS NOT `. 31,20,000/- AS MENTIONED IN THE LOOSE PAPER, AND AC TUALLY IT IS `. 19,00,000/-, AS PER THE AGREEMENT. HE SUBMITTED THA T IT IS A NORMAL PRACTISE FOR ON-MONEY ON SALE AND PURCHASE OF LAND AND BUILD ING. SINCE THE MATTER STANDS PROVED, HE SUBMITTED THAT THE BENCH SHOULD T AKE A JUDICIAL VIEW THAT 5 THERE IS ON-MONEY TRANSACTION ON ACCOUNT OF PURCHAS E OF THE FLAT. HE SUBMITTED THAT THE VARIOUS DECISIONS CITED BY THE C OUNSEL FOR THE ASSESSEE ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THE CASE OF HARISH DAULATRAM INNANI (SUPRA), HE SUBMITTED TH AT PROVISIONS OF SECTION 292C WAS NOT DISCUSSED. SIMILARLY, IN THE CASE OF J AWAHARBHAI ATMARAM HATHIWALA (SUPRA), THE PAPER WAS SEIZED FROM THIRD PARTY. IN THE CASE OF S.P. GOYAL (SUPRA), THE FACTS ARE CLEARLY DISTINGUISHABLE AND IN THE CA SE OF ATUL KUMAR JAIN (SUPRA), THE ISSUE WAS DECIPHERING OF DOCUMENTS, WHEREAS IN INSTANT CASE IT IS NOT THE CASE. SIMILARLY, IN THE CASE OF S.M. AGGARWAL (SUPRA), THE FACTS OF THE CASE ARE COMPLETELY DIFFERENT FROM THE FACTS OF THE PRESENT CASE. 9. THE LEARNED COUNSEL FOR THE ASSESSEE IN HIS RE JOINDER SUBMITTED THAT THE PAPER WAS SEIZED FROM THE FATHER OF THE ASSESSE E FOR WHICH IT HAS BEEN MENTIONED NKP. NEITHER THE FATHER WAS EXAMINED FROM WHOM THE PAPER WAS SEIZED NOR THE SELLER WHO SOLD THE PROPERTY WAS EVE R EXAMINED. HE ACCORDINGLY, SUBMITTED THAT THE ADDITION MADE BY THE AO AND SUST AINED BY THE LEARNED CIT(APPEALS) SHOULD BE DELETED. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE B Y BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE LEARNED CIT(AP PEALS) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSI DERED THE VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT TH AT THE SEIZED PAGE 121 IDENTIFIED AS NKP-1 CONTAINS THE NOTING FLAT `. 31,20,000/-. THERE IS ALSO NO DISPUTE TO THE FACT THAT THE FLAT HAS BEEN PURCHASE D JOINTLY BY THE ASSESSEE AND HIS BROTHER AT `. 19,00,000/- AS PER THE SALE DEED. THERE IS ALSO NO DISPUTE TO THE FACT THAT THE PAPER SEIZED DURING THE COURSE OF SEARCH IS IN THE HANDWRITING OF ASSESSEES FATHER, A FACT BROUGHT ON RECORD BY THE LEARNED CIT(APPEALS) IN PARA 3.6 OF HIS ORDER AND NOT DISPU TED BY THE REVENUE. IT IS ALSO A FACT THAT THE FATHER OF THE ASSESSEE WAS NEV ER EXAMINED. IT IS ALSO A FACT THAT THE SELLER OF THE FLAT WAS ALSO NOT EXAMINED T O FIND OUT AS TO WHETHER ANY MONEY, OTHER THAN THE AMOUNT OF `. 19,00,000/- AS MENTIONED IN THE AGREEMENT, HAS BEEN PAID TO HIM. WE FIND FROM THE R EPLY GIVEN BY THE ASSESSEE TO Q.3 IN HIS STATEMENT RECORDED THAT THE ASSESSEE ALONG WITH HIS BROTHER HAS PURCHASED THE FLAT AT `. 19,00,000/-, ON WHICH THE STAMP DUTY OF `. 1,10,000/- 6 HAS BEEN PAID. SIMILARLY IN HIS REPLY TO Q.4 THE AS SESSEE HAS STATED THAT HE DOES NOT KNOW ABOUT THE AMOUNT OF `. 31,20,000/-, SINCE THE PAPER DOESNT BELONG TO HIM. WE, THEREFORE, FIND MERIT IN THE SUB MISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT SINCE THE ASSESSEE H AS DENIED THE PAYMENT OF ANY EXTRA MONEY FOR PURCHASE OF THE FLAT AND SINCE THE PAPER SEIZED IS IN THE HANDWRITING OF THE ASSESSEES FATHER FROM WHOSE POS SESSION THE PAPER WAS SEIZED AND SINCE THE SELLER WAS ALSO NEVER EXAMINED , THEREFORE, THE ADDITION MADE BY THE AO WAS MERELY ON THE BASIS OF PRESUMPTI ON. THEREFORE, THE SAME CANNOT BE SUSTAINED. FURTHER THE SUBMISSION OF THE LEARNED COUNSEL OF THE ASSESSEE THAT NO ADDITION HAS BEEN MADE IN THE HAND S OF THE OTHER CO-OWNER I.E. THE BROTHER OF THE ASSESSEE COULD NOT BE CONTR OVERTED BY THE LEARNED DR. 11. CONSIDERING THE TOTALITY OF THE FACTS OF THE CA SE, AND CONSIDERING THE FACT THAT THE SEIZED PAPER WAS IN THE HANDWRITING OF THE FATHER OF THE ASSESSEE, AND FURTHER CONSIDERING THE FACT THAT NEITHER THE FATHE R OF THE ASSESSEE NOR THE SELLER OF FLAT WAS EVER EXAMINED BY THE AO, AND CON SIDERING THE FACT THAT NO ADDITION HAS BEEN MADE IN THE HANDS OF OTHER CO-OWN ER, THEREFORE, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LEARNED CIT(APP EALS), IN OUR OPINION, IS NOT IN ACCORDANCE WITH LAW. WE, THEREFORE, SET ASID E THE ORDER OF THE LEARNED CIT(APPEALS) AND DIRECT THE AO TO DELETE THE ADDIT ION. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 15 TH DAY OF APRIL, 2011. SD/- (D.K. AGARWAL) JUDICIAL MEMBER SD/- (R.K. PANDA) ACCOUNTANT MEMBER MUMBAI, DATED : 15.04.2011 7 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, G - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI