KALPESH M. SHAH, MUMBAI V. DCIT CEN CIR (2), MUMBAI

ITA 5459/MUM/2010

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6184 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 06-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATBIR SINGH
• Assessee Lawyers: V H JARIWALA
• Keywords: Search and seizure
• Section: 143(3); 132

Judgement Text

1 ITA 5459/M/10, SHRI KALPESH M. SHAH IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER ITA NO. 5459/MUM/2010 ASSESSMENT YEAR 2007-08 SHRI KALPESH M. SHAH, C/O V.H. JARIWALA & CO., 183, KIKA STREET, 3 RD FLOOR, MUMBAI 400 004. PAN AF2PS3347G VS. DY. CIT, CENTRAL CIR. 2, ROOM NO. 904, OLD CGO BUILDING, M.K. ROAD, MUMBAI 20. APPELLANT RESPONDENT APPELLANT BY SHRI V.H. JARIWALA RESPONDENT BY SHRI SATBIR SINGH ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A) 36, MUMBAI DATED 30.03.10 AND THE SOLITARY ISSUE ARISIN G OUT OF THE SAME RELATES TO THE ADDITION OF ` 3,60,200/- MADE BY THE A.O. AND CONFIRMED BY THE L D. CIT(A) ON ACCOUNT OF UNDISCLOSED INCOME OF THE ASSESSEE ON THE BASIS OF LOOSE PAPER FOUND DURING THE COURSE OF SEARCH. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO WAS EMPLOYED WITH M/S DELUXE KAARAN IMPORTS PVT. LTD., A COMPANY BELONGIN G TO DELUXE KAARAN GROUP. A SEARCH AND SEIZURE ACTION U/S 132 WAS CONDUCTED IN THE CASES BELONGING TO THE SAID GROUP AND THE ASSESSEES RESIDENCE WERE ALSO COVERED IN T HE SAID ACTION. DURING THE COURSE OF SEARCH, A LOOSE PAPER IDENTIFIED AS PAGE 1 OF ANNEX URE A/1 WAS FOUND FROM THE RESIDENCE OF THE ASSESSEE. IN THE STATEMENT RECORDED DURING THE COURSE OF SEARCH, THE ASSESSEE TRIED TO EXPLAIN THE NOTINGS FOUND TO BE MADE IN THE SAID DOCUMENT AS THE TRANSACTIONS RELATING TO PURCHASE OF PROPERTY BELONGING TO HIS FATHER. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE, HOWEVER, CHANGED HIS STA ND AND STATED THAT THE SEIZED 2 ITA 5459/M/10, SHRI KALPESH M. SHAH DOCUMENT AS WELL AS NOTINGS APPEARING THEREIN WERE PERTAINING TO HIS EMPLOYER COMPANY. IN HIS STATEMENT RECORDED BY THE A.O., SHRI MINISH SHAH, DIRECTOR OF THE SAID COMPANY DENIED ANY RELATION TO THE DOCUMENT FOUND AND SEIZE D FROM THE RESIDENCE OF THE ASSESSEE COMPANY. THE A.O., THEREFORE, INVOKED THE PROVISION S OF SECTION 292-C AND PRESUMED THAT THE DOCUMENT FOUND AND SEIZED FROM THE RESIDEN CE OF THE ASSESSEE WAS BELONGING TO HIM AND THE TRANSACTIONS REFLECTED THEREIN WERE ALS O RELATED TO THE ASSESSEE. IN THE ABSENCE OF ANY SATISFACTORY EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF THE SAID TRANSACTION, HE TREATED THE ENTIRE AMOUNT OF ` 3,60,200/- TO THE UNDISCLOSED INCOME OF THE ASSESSEE AND THE SAME WAS ADDED BY HIM TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED U/S 143(3) BY AN ORDER DATED 3 0.12.2008. AGAINST THE ORDER PASSED BY THE A.O. U/S 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) WHO DISMISSED THE SAID APPEAL AND CONFIRMED THE ADD ITION OF ` 3,60,200/- MADE BY THE A.O. TO THE TOTAL INCOME OF THE ASSESSEE BY INVOKIN G THE PROVISIONS OF SECTION 292-C HOLDING THAT THERE WAS FAILURE ON THE PART OF THE A SSESSEE TO SATISFACTORILY REBUT THE PRESUMPTION AVAILABLE TO BE DRAWN AGAINST HIM AS PE R THE SAID PROVISION THAT THE DOCUMENT FOUND AND SEIZED FROM HIS RESIDENCE BELONG TO HIM AND THE NOTINGS FOUND TO BE MADE THEREIN WERE PERTAINING TO HIS TRANSACTIONS. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFO RE THE TRIBUNAL. 3. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. I HAVE ALSO PERUSED THE RELEVANT SEIZED DOCUMENT ON THE BASIS OF WHICH THE IMPUGNED ADDITION HAS BEEN MADE IN THE HANDS OF THE ASSESSEE. THE CONTENTS OF THE SAID DOCUMENT ARE REPRODUCED HEREUNDER:- 100*500 = 50,000 100*500 = 50,000 100*500 = 50,000 45*100 = 45,000 100*1000 = 1,00,000 40*1000 = 40,000 + 200 40,200 3,60,200 25,000 POSTED 23.4.2006 3,35,200 3 ITA 5459/M/10, SHRI KALPESH M. SHAH A PERUSAL OF THE NOTINGS FOUND TO BE MADE IN THE RE LEVANT SEIZED DOCUMENT AS EXTRACTED ABOVE SHOWS THAT IT IS NOT POSSIBLE TO DRAW ANY DEF INITE CONCLUSION ABOUT THE NATURE OF ENTRIES/TRANSACTIONS REFLECTED IN THE SAID NOTINGS. AT THE MOST, THE SAID NOTINGS SUGGEST THAT IT IS THE SUMMARY OF CASH COUNTED/VERIFIED PHY SICALLY ON A PARTICULAR DATE. THERE IS, HOWEVER, NOTHING IN THE SAID NOTINGS TO SUGGEST OR INDICATE THAT THE SAID REPRESENT ANY TRANSACTIONS RELATING TO ANY INCOME MUCH LESS ANY U NDISCLOSED INCOME AND THAT TOO BELONGING TO THE ASSESSEE. NEITHER THE A.O. NOR TH E LD. CIT(A) HAS ALSO MADE ANY ATTEMPT TO INTERPRET THE SAID NOTINGS IN ORDER TO ASCERTAIN THE NATURE OF TRANSACTIONS REFLECTED THEREIN AND THE TOTAL OF THE SAID NOTINGS HAS BEEN TREATED BY THEM AS UNDISCLOSED INCOME OF THE ASSESSEE WITHOUT GIVING ANY BASIS WHATSOEVER FOR THE SAME. IN MY OPINION, THE ADDITION MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) ON THE BASIS OF THE DOCUMENT FOUND AND SEIZED FROM THE RESIDENCE OF THE ASSESSEE WITHOUT ASSIGNING ANY MEANING TO THE NOTINGS MADE THEREIN AND WITHOUT GIVING ANY BASIS T O COME TO THE CONCLUSION THAT THE SAME REPRESENTED UNDISCLOSED INCOME OF THE ASSESSEE THUS IS NOT SUSTAINABLE AND DELETING THE SAID ADDITION, I ALLOW THIS APPEAL OF THE ASSES SEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 30 TH NOVEMBER, 2010. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER MUMBAI, DATED 30 TH NOVEMBER , 2010. RK 4 ITA 5459/M/10, SHRI KALPESH M. SHAH COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) - 36 - MUMBAI 4. THE CIT (CENTRAL) 1, MUMBAI 5. THE DR BENCH, SMC 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 5 ITA 5459/M/10, SHRI KALPESH M. SHAH DATE INITIALS 1. DRAFT DICTATED 29.11.10 SR.P.S./P.S. 2. DRAFT PLACED BEFORE AUTHOR 30.11.10 SR.P.S./P.S. 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER. - J.M./A.M. 4.DRAFT DISCUSSED/ APPROVED BY SECOND MEMBER. J.M./A.M. 5. APPROVED DRAFT COMES TO THE SR.P.S./P.S. SR.P.S./P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S. 8. DATE OF WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER.