PRABHAKAR M SETHI, NAVI MUMBAI V. ITO 22(3)(3), NAVI MUMBAI

ITA 5091/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0043 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-06-2017
• Assessment Year: 2000-2001
• Appeal Filed On: 06-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Assessee Lawyers: RAVI K MULCHANDANI
• Keywords: Unexplained expenditure; Search and seizure
• Section: 69C; 143(3); 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH , JM AND SHRI RAJESH KUMAR, AM ITA NO. 5091 / MUM/ 20 1 4 ( / ASSESSMENT YEAR: 20 00 - 01 ) S HRI PRABHAKAR M SETHI, PLU S CUBE, PLOT NO.140, 02 ND RADIAL SECTOR - 21, NERUL, NAVI MUMBAI - 400706 / VS. INCOME TAX OFFICER, 22 (3)(3), ROOM NO.30 8, 3RD FLOOR, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI - 400703 ( / APPELLANT) : ( / RESPONDENT ) ./ PAN : AFMPS1986G ( / APPELLANT) : ( / RESPONDENT ) / APPELLANT BY : SHRI RAVI K MULCHANDANI /R E SPONDENT BY : SHRI RAJAT MITTAL / DATE OF HEARING : 21.6 .2017 / DATE OF PRONOUNCEMENT : 21. 6 . 201 7 / O R D E R PER RAJESH KUMAR, A. M: THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 19 , MUMBAI , DATED 25.10.2012 , PERTAINING TO THE ASSESSMENT YEAR S 20 01 - 01 WHICH I N TURN HA VE ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 14.12.2007 UNDER SECTION 143(3) O F THE INCOME TAX ACT, 1961(IN SHORT THE ACT). 2 ITA NO. 5091 /MUM/201 4 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINST THE CONFIRMATION OF ADDITION OF RS.4,65,000/ - BY T HE LD.CIT(A) AS MADE BY THE AO U/S 69C OF THE ACT ON ACCOUNT OF UNEXPLAINED EXPENDITURE BY HOLDING THAT THE ASSESSEE HAS PAID RS.4,65,000/ - AS CAPITATION FEES FOR SECURING THE ADMISSION FOR HIS SON IN RAMRAO ADIK INSTITUTE OF TECHNOLOGY, NERUL. 3. FAC TS IN BRIEF ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 27.6.2000 DECLARING TOTAL INCOME OF RS.16,58,342/ - . THE AO RECEIVED INFORMATION THAT THE ASSESSEE HAS PAID CAPITAL FEE OF RS.50,000 / - ON 25.6.1999 AND RS.4,15,000/ - ON 29.6.1999. THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 148 OF THE ACT AND ACCORDINGLY NOTICE DATED 28.3.2007 WAS ISSUED TO THE ASSESSEE WHICH WAS COMPILED BY THE ASSESSEE VIDE LETTER DATED 27.10.2007 FILED ON 29.10.2007 STATING THAT THE RETURN FILED U/S 139(1) OF THE AC T SHOULD BE TREATED AS RETURN FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT AND ALSO FILED DETAILS AS CALLED FOR BY THE ASSESSING OFFICE FROM TIME TO TIME INCLUDING THE DETAILS OF ADMISSION FEES PAID. THE AO VIDE LETTER DATED 7.11.2007 ASKED THE AS SESSEE TO PRODUCE RECEIPT NO.3600 DATED 29.6.1999 FROM RAMRAO ADIK INSTITUTE OF TECHNOLOGY, NERUL AND ALSO SOUGHT DETAILS OF CAPITATION FEE FEES PAID OF RS.4,65,000/ - . THE ASSESSEE DENIED TO HAVE MADE ANY PAYMENT OF RS.4,65,000 / - TO THE SAID INSTITUTE. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO CONFRONTED THE ASSESSEE WITH THE LETTER DATED 22.11.2007 FORMING PAGES 14 AND 15, WHERE THE NAME OF HIS SON TARANG 3 ITA NO. 5091 /MUM/201 4 SHETTY APPEAR ED AGAINST HIS NAME AS PA ID IN TWO INSTALLMENTS OF RS.50,000/ - ON 25.6.19 99 AND RS.4,15,000/ - ON 29.6.1999 WHICH THE ASSESSEE DENIED . THE AO NOT SATISFIED WITH THE REPLY OF THE ASSESSEE ADDED THE SUM OF RS.4,65,000/ - TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT BY ASSESSING THE TOTAL INC OME OF THE ASSESSEE AT RS.21,15,730/ - VIDE ORDER DATED 14.12.2007 PASSED UNDER SECTION 143(3) R.W.S.147 OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY WHO ALSO DISMISSED THE APP EAL OF THE ASSESSEE ON THE GROUND THAT SUCH TYPE OF PAYMENTS WE RE VERY COMMON IN THE EDUCATIONAL INSTITUTIONS AND WERE NOT RECORDED IN THE NORMAL BOOKS OF ACCOUNT. THE LD. CIT(A) ALSO RECORDED THE OBSERVATIONS FOR UPHOLDING THE ADDITION ON THE GROUND THA T THE EVIDENCE GATHERED IN THE SEARCH AND SEIZURE OPERATION AND ALSO DURING THE COURSE OF ASSESSMENT PROCEEDINGS , PROVED BEYOND DOUBT THAT THE CAPITATION FEE WAS PAID BY THE ASSESSEE. 5 . WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL PLACED BEFORE US INCLUDING THE IMPUGNED ORDER. THE LD.AR TOOK UP THROUGH THE CERTIFICATE ISSUED BY THE RAMRAO ADIK INSTITUTE OF TECHNOLOGY, NERUL, WHEREIN IT IS STATED THAT DURING FOUR YEARS THE ASSESSEE HAS PAID TOTAL FEES OF RS.1,60,000/ - V IDE R ECEIPT N O.3600 DATED 29.6.1999 WHICH WAS TOTAL FEES FOR FOUR YEARS AND HAS BEEN ADJUSTED BY THE INSTITUTE ACCORDINGLY. THE ASSESSEE ALSO PRODUCED INDIVIDUAL RECEIPT AS FILED AT PAGE 4 ITA NO. 5091 /MUM/201 4 NO.2 4,25,26 AND 27 OF THE PAPER BOOK AND A COPY OF DEMAND DRAFT OF RS.1,60,000/ - DATED 28.6.1999 IN FAV O UR OF THE RAMRAO ADIK EDUCATION SOCIETY, MUMBAI , STATEMENT OF INDUSIND BANK LIMITED SHOWING PAYAMENT OF RS.1,60,000/ - ON 30.6.1999 TO THE ABOVE INSTITUTE . THE AR OF THE ASSESSEE ALSO DENIED THAT PAGE NO 14 AND 15 AS HAS BEEN STATED BY THE AO TO BE SHOWN TO THE ASSESSEE WERE NEVER SHOWN AND THE ADDITION WAS MADE WITHOUT ANY BASIS. THE REVENUE WAS SPECIALLY ASKED TO PRODUCE THE SAID PAGES BEFORE THE BENCH AND WAS ALLOW ED OPPORTUNITY TO PROVE THAT THE PAYMENT HAS BE EN MADE BY THE ASSESSEE TOWARDS CAPITATION FEE OF RS.4,65,000 / - TO THE SAID INSTITUTE BY FIX ING DATE OF HEARING ON HEARING OF THE APPEAL ON 21.6.2017 . B UT DESPITE ALLOWING TIME , T HE REVENUE FAILED TO PRODUCE CORROBORATIVE EVIDENCE IN SUPPORT OF PAYME NT OF RS.4,65,000/ - . IN OUR OPINION, THE REVENUE CANNOT BE ALLOWED TO MAKE ADDITIONS ON THE PREMISES, SURMISES AND CONJECTURE WHEN THERE BEING NO MATERIAL TO MAKE SUCH ADDITIONS , WHEREAS THE ASSESSEE HAS PRODUCED ALL THE RECORDS EVIDENCING THE FEES PAYME NT OF RS.1,60,000/ - RELEVANT TO FOUR YEARS DURING WHICH THE ASSESSEES SON UNDERWENT COURSE IN THE SAID INSTITUTE. UNDER THESE FACTS AND CIRCUM STANCES OF THE CASE, WE ARE OF THE OPINION THAT THE ORDER PASSED BY THE AO AND CONFIRMED BY THE LD.CIT(A) IS N OT CORRECT AND DESERVED TO BE REVERSED. ACCORDINGLY, WE SET ASIDE HE ORDER OF LD.CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION. 5 ITA NO. 5091 /MUM/201 4 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21TH JUNE , 2017. SD SD ( MAHAVIR SINGH ) (RAJESH KUMAR) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 21. 6 .2017 SRL,SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APP ELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, TRUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI