JAYANTILAL M. SOLANKI, MUMBAI V. DCIT - 20(2), MUMBAI

ITA 5144/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0331 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 12-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Keywords: Reopening of assessment; Unexplained investment
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN , JM ITA NO. 5144 / MUM/20 16 ( ASSESSMENT YEAR : 2007 - 08 ) SHRI JAYANTILAL M. SOLANKI 1504, 15 TH FLOOR, DEEPAK JYOTI TOWER G.D.AMBEDKAR MARG PAREL TANK ROAD MUMBAI 400 033 VS. DY. CIT 20 (2) MUMBAI PAN/GIR NO. AAEPS4188 B APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI SUCHEK ANCHALIYA REVENUE BY SHRI M.C. OMI NINGSHEN DATE OF HEARING 07 / 02 /201 8 DATE OF PRONOUNCEME N T 12 / 02 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 32, MUMBAI DATED 17/06/2016 FOR A.Y 2007 - 08 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S 147 OF THE IT ACT. 2. FOLLO WING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. ASSESSING OFFICER ERRED IN RE - OPENING THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT, 1961. THE APPELLANT PRAYS THAT THE RE - OPENING OF AS SESSMENT U/S 147 OF THE INCOME TAX ACT, 1961 MAY BE DECLARED BAD IN LAW AND REASSESSMENT ORDER MAY PLEASE BE CANC E LLED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESS ING OFFICER BY TREATING THE PAYMENT OF RS.39,25,000/ - MADE TO ITA NO. 5144/MUM/2018 SHRI JAYANTILAL M. SOLANKI 2 DEVELOPER AS UNEXPLAINED INVESTMENT U/S 69 OF THE IT ACT, WITHOUT CONSIDERING THE FACT AND CIRCUMSTANCES OF THE CASE. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR MODIFY ANY OR A LL THE ABOVE GROUNDS OF APPEAL. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT T HE ASSESSEE , AN INDIVIDUAL HAD MADE PAYMENTS TOTALING RS.40,25,000 / - TOWARDS BOOKING A FLAT NO. 404/B, SHANTI DARSHAN, KALACHOWKI, MUMBAI, A RESIDENTIAL BUILDING PROJECT, DEVELOPED BY M/S ESQUE FINMARK PVT. LTD. OUT OF THE SUM OF RS.40,25,000 / - , RS. 39,25,000/ - WAS PAID IN CASH IN PART PAYMENTS DURING THE AY 2005 - 06 AND AY 2006 - 07 AND THE BALANCE RS. 1,00,000 / - WA S PAID BY CHEQUE IN AY 2007 - 08. THE PROOF OF THE DATES OF CASH PAYMENTS WAS PROVIDED IN A DIARY MAINTAINED BY THE ASSESSEE , WHICH WAS COUNTER SIGNED ON EVERY PAYMENT DATE BY THE DIRECTOR OF THE DEVELOPER COMPANY, MR. PARAS PORWAL . AO DID NOT A CCEPT ASSESSEES CONTENTION AND ADDED RS.39,25,000/ - IN ASSESSEES INCOME WHICH WAS CONFIRMED BY CIT(A). ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4 . AT THE OUTSET, LEARNED AR PLACED ON RECORD THE ORDER OF TRIBUNAL IN CASE OF SHRI KANTILAL S SOLANKI BROTH ER OF THE ASSESSEE FOR THE VERY SAME A.Y 2007 - 08 WHEREIN EXACTLY SIMILAR ISSUE WAS DEALT BY THE TRIBUNAL IN ITS ORDER DATED 21/08/2017 AND APPEAL WAS ALLOWED IN FAVOUR OF THE ASSESSEE. 5 . WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND AS WELL AS THE ORDER OF THE TRIBUNAL. THE PRECISE OBSERVATION OF THE TRIBUNAL WAS AS UNDER: - ITA NO. 5144/MUM/2018 SHRI JAYANTILAL M. SOLANKI 3 7. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSING OFFICER HAS MADE ADDITION U/S. 69 OF THE ACT, SINCE THE PAYMENT OF RS.34 LAKHS WAS NOT RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE AND FURTHER THE ASSESSEE ALSO DID NOT SPECIFY SOURCES THEREOF. THOUGH THE ASSESSEE AGREES THAT THE ABOVE SAID PAYMENT HAS BEEN MADE FROM UNDISCLOSED RESOURCES, HIS ONLY CONTENTION IS THAT THE SE PAYMENTS WERE MADE DURING THE FINANCIAL YEAR RE LEVANT TO A.Y. 2006 - 0 7 . SUBMISSIONS OF THE ASSESSEE IS THAT THESE PAYMENTS HAVE BEEN MADE DURING THE FINANCIAL YEAR RELEVANT TO A.Y. 2006 - 07 AND HENCE THE ASSESSING OFFICER WAS NOT RIGHT IN LAW IN MAKING TH E ADDITION IN A.Y. 2007 - 08. IN SUPPORT OF THE SUBMISSIONS SO MADE, THE ASSESSEE HAS FURNISHED COPY OF THE KACCHA CHITTI, WHEREIN DETAILS OF PAYMENT MADE TOWARDS FLAT HAVE BEEN NOTED DOWN. IN THE KACCHA CHITTI THE PAYMENTS MADE BY WAY OF CASH AND ALSO BY W AY OF CHEQUE HAVE BEEN NOTED DOWN. IT IS PERTINENT TO NOTE THAT THE RECIPIENT NAMED MR. PARAS HAS DULY ACKNOWLEDGED THE RECEIPT OF PAYMENTS. I HAVE NOTICED THAT THE LEARNED CIT(A) HAS REJECTED THIS DOCUMENT ONLY ON THE REASONING THAT THE IDENTITY OF MR. PA RAS IS NOT ESTABLISHED AND ALSO DETAILS OF HIS CONNECTION WITH THE BUILDER IS ALSO NOT ESTABLISHED. THE ASSESSEE HAS NOW FILED A COPY OF DIRECTORSHIP DETAILS OF MR. PARAS SHANTILAL PORWAL FROM THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS. PERUSAL OF THE SA ME WOULD SHOW THAT MR. PARAS IS A DIRECTOR OF MANY COMPANIES AND HE HAS BEEN A DIRECTOR OF M/S. ESQUE FINMARK PVT. LTD., TO WHOM THE IMPUGNED PAYMENTS HAVE BEEN MADE, FROM 10.9.2001 TO 2.12.2006. IN MY VIEW THIS DOCUMENT DOWNLOADED FROM THE WEBSITE OF MINI STRY OF CORPORATE AFFAIRS ESTABLISHES THE IDENTITY OF MR. PARAS BUT ALSO HIS CONNECTION WITH THE BUILDER M/S. ESQUE FINMARK PVT. LTD. SINCE THIS DOCUMENT IS A PUBLIC DOCUMENT, I AM OF THE VIEW THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN REJECTING THE SUBM ISSIONS OF THE ASSESSEE. IN THIS VIEW OF THE MATTER, I AM OF THE OPINION THAT THE KACCHA CHITTI FURNISHED BY THE ASSESSEE CANNOT BE REJECTED ALTOGETHER. PERUSAL OF THE ENTRIES MADE IN THE KACCHA CHITTI WOULD SHOW THAT THE ASSESSEE HAS MADE PAYMENTS BY WAY OF CASH DURING THE PERIOD FROM 9.1.2006 TO 28.3.2006 AGGREGATING TO ` 34 LAKHS. HENCE, IN MY VIEW THE SUBMISSIONS OF THE ASSESSEE SHOULD BE ACCEPTED AND HENCE CAUSE OF ACTION, IF ANY, WOULD NOT ARISE IN THE A.Y. 2007 - 08 SINCE THE PAYMENT HAVE NOT BEEN MADE DURING THE YEAR RELEVANT TO A.Y. 2007 - 08. ACCORDINGLY, I SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED ADDITION OF RS. 34 LAKHS. SINCE I HAVE GRANTED RELIEF TO THE ASSESSEE ON MERITS , I DO ITA NO. 5144/MUM/2018 SHRI JAYANTILAL M. SOLANKI 4 NOT FIND IT NECESSARY TO DEAL WITH GROUNDS RELATING TO VALIDITY OF REOPENING OF ASSESSMENT. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED. 6 . F ACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE EXACTLY SAME, WHEREI N EXACTLY SIMILAR ADDITION WAS MADE BY THE AO AS WAS MADE IN THE HANDS OF BROTHER SHRI KANTILAL S SOLANKI WHICH HAS BEEN ALLOWED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL. RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL, WE DO NOT FIND ANY MERIT IN THE O RDER FOR THE ADDITION OF RS.32,25,000 SO MADE BY AO AND CONFIRMED BY CIT(A). 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 12 / 02 /201 8 S D/ - ( SANDEEP GOSAIN ) S D/ - ( R.C.S HARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 12 / 02 /201 8 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//