ITO 25(3)(4), MUMBAI V. SYNTHETIC HYDROCARBON, MUMBAI

ITA 5188/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8911 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 07-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V KRISHNAMOORTHY
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.5188/MUM/2011 ASSESSMENT YEAR-2008-09 THE ITO-25(3)(4), C-10, PRATYAKSH KAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400 051 VS. M/S. SYNTHETIC HYDROCARBON, B-402, VIJAY PARK, MATHURADAS EXTN. ROAD, KANDIVALI(W), MUMBAI-400 067 PAN-AAFPS 4855K (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI V. KRISHNAMOORTHY RESPONDENT BY: SHRI K. GOPAL & SHRI JITENDRA SINGH DATE OF HEARING :5.09.2012 DATE OF PRONOUNCEMENT: 12.9.2012 O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)- 35, MUMBAI DT.26.4.2011 PERTAINING TO ASSESSMENT YE AR 2008-09. 2. THE EFFECTIVE GROUND OF APPEAL TAKEN BY THE REVE NUE IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 52,26,000/- MADE BY THE AO AS THE ASSESSEE HAD MADE PAYMENT OF UNACCOUNTED MONEY OF RS. 52,26,000/- FOR ACQUISITIO N OF SHOP NO. 119 IN LITTLE WORLD, KHHARGHAR, NAVI MUMBAI. \ 3. THE FACTS GIVING RISE TO THE GRIEVANCE OF THE RE VENUE SHOW THAT A SEARCH AND SEIZURE ACTION U/S. 132 WAS CONDUCTED IN THE CASE OF SIDDHI GROUP ON 19.2.2009. DURING THE COURSE OF THE SEARCH, SOM E DOCUMENTS WERE SEIZED ITA NO. 5188/M/2011 2 FROM THE PREMISES OF KEY PERSONS OF THE GROUP IN WH ICH IT WAS FOUND THAT M/S. SYNTHETIC HYDROCARBONS (ASSESSEE) HAD BOOKED A SHO P AT 119, LITTLE WORLD, KHARGHAR, NAVI MUMBAI FOR WHICH THE TOTAL CONSIDERA TION OF THE SHOP WAS RS. 92,26,000/- AS PER THE SEIZED DOCUMENT. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO E XPLAIN THE NATURE OF TRANSACTIONS AND AMOUNTS PAID FOR PURCHASE OF SHOP AND WAS ASKED TO EXPLAIN THE SOURCE OF CASH WHICH WAS PAID FOR THE PURCHASE OF SHOP NO. 119. IN RESPONSE TO WHICH, THE ASSESSEE VIDE LETTER DT.6.8. 2010 EXPLAINED THAT IT HAS PURCHASED SHOP AT LITTLE WORLD FOR RS. 47,11,000/-. THE AO OBSERVED THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION A T SIDDHI GROUP, ONE SHRI KANTILAL M. PATEL, PARTNER OF M/S. GAYATRI HOMES O F SIDDHI GROUP IN HIS STATEMENT HAS EXPLAINED THE CONTENTS OF THE SEIZED DOCUMENTS. THE SAID SEIZED DOCUMENT CONTAINED SUMMARY OF SALE OF SHOPS OF LITTLE WORLD MALL INCLUDING DETAILS SUCH AS SHOP NO., NAME OF PURCHAS ER, CHARGEABLE ARE, TOTAL DEAL VALUE (INCLUDING CHEQUE AND CASH COMPONENT), T OTAL CHEQUE VALUE (WHICH IS THE VALUE APPEARING IN THE SALE AGREEMENT OF THE RESPECTIVE SHOP). THE TOTAL OF THE COLUMN CASH RECEIVED IS RS. 12.05 CR ORES. THE DEPONENT SHRI KANTILAL M. PATEL ADMITTED THAT THE AMOUNT OF RS. 12.05 CRORES WAS RECEIVED IN CASH OVER AND ABOVE THE AGREEMENT VALUE AND OFFE RED THE SAME AS UNDISCLOSED INCOME OF M/S. GAYATRI HOMES. 4. TAKING A LEAF OUT OF THE AFOREMENTIONED STATEMEN T OF SHRI KANTILAL M. PATEL, THE AO CONFRONTED THE DECLARATION MADE BY SH RI KANTILAL M. PATEL AND SOUGHT EXPLANATION FROM THE ASSESSEE IN RESPECT OF CASH AMOUNTING TO RS. 52,26,000/- PAID AGAINST THE PURCHASE OF SHOP NO. 1 19 AT LITTLE WORLD. THE ASSESSEE REQUESTED FOR CROSS EXAMINATION OF THE BUI LDER WHO HAD STATED THAT CASH HAS BEEN RECEIVED FROM SHRI UTPAL B. SHAH (PAR TNER OF M/S. SYNTHETIC HYDROCARBON (ASSESSEE). AN OPPORTUNITY TO CROSS EX AMINE SHRI KANTILAL M. PATEL WAS AFFORDED TO THE ASSESSEE. 5. THE AO CONCLUDED THAT ON ANALYSIS OF THE STATEME NT RECORDED DURING THE CROSS EXAMINATION PROCEEDINGS, IT IS ESTABLISHE D THAT THE SAID BUILDER HAS ITA NO. 5188/M/2011 3 RECEIVED TOTAL CASH AMOUNTING TO RS. 12.05 CRORES FROM THE PARTIES WHO HAD PURCHASED SHOP AT LITTLE WORLD FROM M/S. GAYATRI H OMES AND IN THE SEIZED DOCUMENTS, IT IS MENTIONED AGAINST SHOP NO. 119, TH E NAME OF SHRI UTPAL B. SHAH (PARTNER OF THE ASSESSEE FIRM) AND AMOUNT OF C ASH RECEIVED AS RS. 52,26,000/-. ACCORDING TO THE AO, THIS CASH PAYMEN T AMOUNTING TO RS. 52,26,000/- FOR THE PURCHASE OF SHOP NO. 119 AT LIT TLE WORLD IS NOT RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE AO WEN T ON TO TREAT THE SAID PAYMENT AS UNDISCLOSED INVESTMENT U/S. 69 OF THE AC T AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE FIRM. 6. THE ASSESSEE TOOK THE MATTER BEFORE THE LD. CIT( A). IT WAS CONTENDED BEFORE THE LD. CIT(A) THAT THE SEIZED PAPER WAS ONL Y THE COMPUTER GENERATED PAPER WHICH DID NOT CONTAIN THE SIGNATURE OF THE PA RTNERS OF THE ASSESSEE FIRM THEREFORE THE SAME COULD NOT BE RELIED UPON BY THE AO. IT WAS FURTHER CONTENDED THAT THE ASSESSEE PURCHASED SHOP NO. 119 IN THE LITTLE WORLD BUILDING CONSTRUCTED BY M/S. GAYATRI HOMES FOR A CO NSIDERATION OF RS. 43,60,000/- ONLY WHICH PAYMENT IS MADE BY ACCOUNT P AYEE CHEQUE DULY RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE ASSESSEE RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE C ASE OF CBI VS V.C. SHUKLA & OTHERS REPORTED IN (1998) 3SCC 410 (SC) IN WHICH IT WAS HELD THAT ENTRIES MADE IN THE BOOKS OF A THIRD PERSON CAN BE USED AGA INST THAT THIRD PERSON ONLY AND NOT AGAINST ANY OTHER PERSON. 7. AFTER CONSIDERING THE SUBMISSIONS AND THE CASE L AWS CITED BY THE ASSESSEE, THE LD. CIT(A) WAS CONVINCED THAT THE SEI ZED PAPER CANNOT BE TAKEN AS CORRECT AND RELYING UPON THE DECISION OF T HE HONBLE SUPREME COURT IN THE CASE OF V.C. SHUKLA AND OTHERS (SUPRA), DELE TED THE ADDITION OF RS. 52,26,000/- AND ALLOWED THE APPEAL. 8. REVENUE IS BEFORE US AGAINST THE FINDING OF LD. CIT(A). THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF THE AO AND SUBMITTED THAT ANY INCRIMINATING PAPER FOUND ON A C OMPUTER HARD DISC OF ITA NO. 5188/M/2011 4 WHICH PRINT IS TAKEN, THERE CANNOT BE ANY QUESTION OF HAVING SIGNATURE ON IT. THE LD. DR FURTHER SUBMITTED THAT THE BUILDER SHRI KANTILAL M. PATEL HAS CONFIRMED IN HIS STATEMENT THAT HE HAS RECEIVED CAS H OVER AND ABOVE THE REGISTERED VALUE OF THE SHOP PURCHASED BY THE ASSES SEE. THE SAME CANNOT BE BRUSHED ASIDE LIGHTLY. REBUTTING THE ARGUMENTS AND SUBMISSIONS OF THE LD. DR, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ENTIRE ADDITION HAS BEEN MADE SOLELY ON THE BASIS OF SOME DOCUMENTS FOU ND AT THE PREMISES OF THE BUILDER. THE LD. COUNSEL FOR THE ASSESSEE REFE RRED TO THE CROSS EXAMINATION OF THE BUILDER AND SUBMITTED THAT DUR ING THE CROSS EXAMINATION, SAID BUILDER SPECIFICALLY STATED THAT AS PER HIS BO OKS HE HAS RECEIVED ONLY RS. 43,60,000/- FROM THE ASSESSEE AND THE SAME PAYMENT WAS RECEIVED IN CHEQUE. IN SUPPORT OF WHICH HE HAS SUBMITTED LEDGE R COPIES OF HIS BOOKS. THE LD. COUNSEL CONCLUDED THAT ENTRIES IN THE SEIZE D DOCUMENTS FOUND FROM THE PREMISES OF THE BUILDER CANNOT BE RELIED UPON I N THE LIGHT OF THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CB I VS V.C. SHUKLA & ORS (SUPRA). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY PERUSED THE ORDERS OF LOWER AUTHORITIES. THE WHOLE DISPUTE REV OLVES AROUND THE ENTRIES IN THE DOCUMENT FOUND DURING SEARCH AND SEIZURE OPERAT ION CARRIED ON AT THE PREMISES OF THE BUILDER M/S. GAYATRI HOMES. THE EN TIRE ASSESSMENT HAS BEEN MADE ONLY ON THE BASIS OF ALL THE ENTRIES FOUND IN THE SEIZED DOCUMENT AND THE STATEMET OF SHRI KANTILAL M. PATEL OF GAYATRI H OMES. IT WOULD BE PERTINENT TO NOTE THAT IN THE SEIZED DOCUMENT, THE TOTAL AREA OF SHOP MENTIONED IS 909 SQ. FT., HOWEVER, THE ACTUAL AREA PURCHASED BY THE ASSESSEE IS 454.50 SQ. FT ONLY THIS FACT IS ALSO NOT DISPUTED BY THE ASSESSIN G OFFICER. IT APPEARS THAT THE AO HAS ACCEPTED PARTLY THE GENUINENESS OF THE S EIZED DOCUMENT IN SO FAR AS IT RELATES TO THE CASH PAYMENT IS CONCERNED I.E. RS. 52,26,000/- AND IGNORED THE AREA OF SHOP AS NOTED IN THE SEIZED MA TERIAL AS 909 SQ. FT. ON GOING THROUGH THE CROSS EXAMINATION, STATEMENT OF S HRI KANTILAL M. PATEL RECORDED ON 20.12.2010 AND EXHIBITED AT PAGES 17 TO 19 OF THE PAPER BOOK FILED BY THE ASSESSEE, WE FIND THAT THE SAID SHRI K ANTILAL M. PATEL HAS NOT GIVEN ITA NO. 5188/M/2011 5 ANY SPECIFIC ANSWER WHICH COULD POINT OUT THAT THE ASSESSEE HAS ACTUALLY PAID RS. 52,26,000/- OVER AND ABOVE THE PURCHASE CONSIDE RATION PAID BY CHEQUE. ON THE CONTRARY, WE FIND THAT SHRI KANTILAL M. PATE L HAS STATED THAT THE SEIZED DOCUMENT IS A COMPUTER GENERATED PAPER AND HE IS NO T AWARE OF WHO HAS PREPARED IT. HE HAS OFFERED THE CASH RECEIPT AMOUN T AS HIS ADDITIONAL INCOME TO PURCHASE PEACE OF MIND AND TO AVOID LITIGATION. 10. BE THAT AS IT MAY, WE DO NOT FIND ANY MATERIAL BROUGHT ON RECORD BY THE AO TO SUBSTANTIATE HIS CLAIM THAT ASSESSEE HAS ACTUALLY PAID RS. 52,26,000/- OVER AND ABOVE THE CHEQUE AMOUNT FOR TH E PURCHASE OF SHOP NO. 119 AT LITTLE WORLD. THE ENTIRE ASSESSMENT HAS BEE N MADE ONLY ON THE BASIS OF SURMISE, ASSUMPTIONS AND CONJECTURES. IN OUR HUM BLE OPINION, SUCH ADDITIONS CANNOT BE SUSTAINED , MORE SO IN THE LIG HT OF THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CBI VS V.C . SHUKLA & ORS (SUPRA). WE DO NOT FIND ANY REASON TO TINKER WITH THE FINDIN GS OF LD. CIT(A) WHICH WE CONFIRM. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON THIS 12 TH DAY OF SEPTEMBER, 2012 SD/- SD/- (D.K. AGARWAL) (N.K. BILLAIYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 12 TH SEPTEMBER, 2012 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR E BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI