JAYANT PATEL, MUMBAI V. ITO WD 23(2)(3), MUMBAI

ITA 5574/MUM/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9508 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2000-2001
• Appeal Filed On: 04-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOPAK KUMAR
• Section: 143(3); 147; 68

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R.K.GUPTA , J M ITA NO. 5574 / MUM/ 20 1 2 ( ASSESSMENT YEA R : 200 0 - 20 0 1 ) JAYANT PATEL, B - 502, VISHWAMITRA, SAPTARISHI PARK, OFF LBS MARG, NEAR SWAPNA NAGARI, MULUND (W) , MUMBAI - 400 080. VS. ITO, WARD 23(2)(3), MUMBAI PAN/GIR NO. : AABPP 7908 B ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. NITESH JOSHI /REVENUE BY : MR. ROOPAK KUMAR DATE OF HEARING : 2 2 ND NOV. , 2012 DATE OF PRONOUNCEMENT : 27 TH NOV. ,2012 O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 13 - 6 - 2012 OF LEANED CIT(A) - 11 , MUMBAI RELATING TO THE ASSESSMENT YEAR 200 0 - 0 1 . 2. TH E RE ARE TWO ISSUES INVOLVED IN THE APPEAL OF THE ASSESSEE, ONE IS AGAINST REOPENING OF THE ASSESSMENT UNDER SECTI O N 147/148 OF THE ACT AND ANOTHER IS AGAINST CONFIRMING THE ADDITION OF RS.1,00,000/ - UNDER SECTION 68 OF THE ACT. ITA NO . 5574 /20 1 2 2 3. THE BRIEF FACTS GIVING RISE TO THE PRESENT CASE ARE THAT THE ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTION 143(3) REA D WITH SECTION 147 OF THE ACT AT RS. 4,30,660/ - , WHICH INCLUDES ADDITION OF RS.1,00,000/ - MADE UNDER SECTION 68 OF THE ACT. IN FACT, THE ASSESSEE FILED RETURN DECLARING INCOME OF RS. 3,30,660/ - . THEREAFTER DURING THE COURSE OF SEARCH, IN CASE OF M/S RAMRAO A DIK EDUCATION SOCIETY, THE INVESTIGATION WING, PUNE, GATHERED INFORMATION REGARDING DONATION/CAPITATION FEES PAID BY STUDENTS/THEIR PARENTS . I T WAS FOUND THAT AN AMOUNT OF RS.1,00,000/ - WAS PAID FOR ADMISSION OF MISS PARITA JAYANTIBHAI PATEL . ACCORDINGLY, THE ASSESSMENT WAS REOPENED OF THE ASSESSEE, WHO IS FATHER OF JAYANTIBHAI PATEL TO EXAMINE THE SOURCE OF PAYMENT OF RS.1,00,000/ - . A NOTICE UNDER SECTION WAS ALSO ISSUED AFTER RECORDING THE REASONS. THE ASSESSEE RAISED OBJECTIONS TO THE INIT I A T ION OF PROCE EDINGS UNDER SECTION 147 VIDE LETTER DATED 14 - 12 - 2007. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE H O N BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MANIBEN VALJI SHAH (2006) 283 ITR 453 (BOM.) , WHEREIN IT WAS HELD THAT THE ASSESSMENT CANNOT BE REOPENED MERELY ON SUSPICION FOR MAKING INVESTIGATION. RELIANCE WAS ALSO PLACED IN CASE OF GERMAN REMEDIES LTD. VS. DCIT, 285 ITR 26 (BOM) . HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE REPLY AS IN HIS VIEW THERE WAS A MATERIAL SHOWING THAT THE ASSESSE E HAS PAID RS. 1,00,000/ - AS DONATION TO THE DR. D.Y.PATIL DENTAL COLLEGE AND HOSPITAL . ACCORDINGLY, HE MADE ADDITION OF RS. 1,00,000/ - UNDER SECTION 68 OF THE ACT. ITA NO . 5574 /20 1 2 3 4 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A) , WHERE ALSO THE REOPENING OF TH E ASSESSMENT AS WELL AS ADDITION MADE, WERE CHALLENGED. THE DETAIL WRITTEN SUBMISSIONS WERE FILED BEFORE THE CIT(A) . IT WAS EXPLAINED THAT IN DIARY A FIGURE OF 100 IS MENTIONED AGAINST THE NAME OF ONE PATEL. NO NAME OF THE ASSESSEE IS MENTIONED, NEITHER TH E NAME OF STUDENT IS MENTIONED, THEREFORE, ON SUSPICION, THE REOPENING OF THE ASSESSMENT AS WELL AS ADDITION MADE, WAS NOT JUSTIFIED. AGAIN RELIANCE WAS PLACED IN THE DECISION OF HONBLE BOMBAY HIGH COURT AS MENTIONED ABOVE. THE LEARNED CIT( A) AFTER CONSID ERING THE SUBMISSIONS, FOUND THAT THERE WAS A SPECIFIC INFORMATION BY THE INVESTIGATION WING THAT THE ASSESSEE HAD PAID DONATION OF RS .1 LAKH TO THE EDUCATION SOCIETY AS THE FIGURE OF RS. 100/ - , WHICH WAS IN THE CODED WORDS , WAS MENTIONED AGAINST THE NAME O F PATEL. LEARNED CIT(A) ALSO OBSERVED THAT THE STATEMENTS OF OFFICIALS OF THE MEDICAL COLLEGE WERE RECORDED BY WHICH THEY HAVE ACCEPTED THAT THEY HAVE RECEIVED DONATIONS AND THEY HAVE ALSO DECLARED THE CASH DONATIONS BEFORE SETTLEMENT. ACCORDINGLY, HE RE JECTED THE LEGAL GROUND AS WELL AS GROUND ON MERIT. NOW, THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 5 . THE CONTENTION RAISED BEFORE THE LOWER AUTHORITIES WERE REITERATED BY THE LEARNED AR OF THE ASSESSEE. THE ATTENTION OF THE BENCH WAS DRAWN ON T HE COPY OF DIARY FOUND DURING THE COURSE OF SEARCH AT THE PREMISES OF THE RAMRAO ADIK EDUCATION SOCIETY. IT WAS FURTHER EXPLAINED HERE THAT THE FIGURE OF RS. 100/ - MENTIONED AGAINST THE NAME OF PATEL WAS FOUND RECORDED ON 19 - 5 - 1999 IN THE DIARY, WHEREAS THE ITA NO . 5574 /20 1 2 4 RESULT OF THE DAUGHTER OF THE ASSESSEE WAS DECLARED ON 28 - 6 - 1999 AND THE SELECTION OF THE DAUGHTER OF THE ASSESSEE NAMELY MISS JAYANTIBHAI PATEL AS A CANDIDATE FOR 1 ST YEAR , WAS MADE ON 15 - 7 - 1999 AND PAYMENT OF FEES WAS MADE ON 18 - 7 - 1999. THEREAFTER THE S ELECTION OF MISS JAYANTIBHAI PATEL , AS A CANDIDATE FOR 1 ST YEAR OF HEALTH SCIENCE COURSE IN FREE QUOTA, WAS MADE ON 28 - 8 - 1999 AND SHE MADE AN APPLICATION ON 31 - 8 - 1999 FOR INTIMATING THE SELECTION IN FREE QUOTA. THEN HOW IT CAN BE SAID THAT ANY CAPITATION W AS PAID IN ADVANCE TO THE SOCIETY I.E. ON 19 - 5 - 1999. SECONDLY , THERE IS NO NAME OF THE ASSESSEE OR THE DAUGHTER OF THE ASSESSEE MENTIONED IN THE DIARY AS ONE PATEL IS MENTIONED. IT WAS FURTHER STATED THAT THE ASSESSEE REQUESTED VIDE LETTER DATED 10 - 12 - 2007 AND 14 - 12 - 2007 AND ALSO ON 26 - 12 - 2007 FOR PROVIDING THE COPY OF THE SEIZED DIARY AND COPY OF THE STATEMENT RECORDED OF THE PERSONS ON THE BASIS OF THAT DIARY, WHICH HAS NOT BEEN PROVIDED TILL DATE. IT WAS FURTHER SUBMITTED THAT THE AO PASSED AN ORDER ON 2 5 - 12 - 2007 EVEN WITHOUT CONSIDERING THE SUBMISSION MADE BY THE ASSESSEE ON 27 - 12 - 2007. THE ATTENTION OF THE BENCH WAS DRAWN ON THE RELEVANT DOCUMENTS PLACED IN THE PAPER BOOK. IT WAS FURTHER SUBMITTED THAT DURING THE APPELLATE PROCEEDINGS BEFORE THE CIT(A) , THE ASSESSEE AGAIN REQUESTED FOR RECORDS AND STATEMENT AND IN REMAND REPORT IT WAS STATED THAT THE RECORDS ARE NOT AVAILABLE IN THIS CASE. ACCORDINGLY, IT WAS SUBMITTED THAT WITHOUT PROVIDING ANY MATERIAL TO THE ASSESSEE AND WITHOUT CONTROVERTING THE STAT EMENT, NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE. THERE IS NO EVIDENCE ON RECORD THAT THE ITA NO . 5574 /20 1 2 5 ASSESSEE HAD PAID ANY CAPITATION FEE. THERE MAY BE SO MANY REASONS AT THE END OF THE SOCIETY IN ACCEPTING THE CASH FOR DISCLOSING THE SAME BEFORE THE SET TLEMENT COMMISSION BUT WITHOUT ANY MATERIAL OR EVIDENCE, THE ADDITION MADE IN THE HANDS OF THE ASSESSEE WAS WITHOUT ANY BASIS. R EOPENING OF THE ASSESSMENT WAS ALSO BAD IN LAW. RELIANCE HAS BEEN PLACED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN 321 ITR 586 , WHEREIN IT WAS HELD THAT WITHOUT PROVIDING MATERIAL, REOPENING OF THE ASSESSMENT WAS BAD IN LAW. 6 . ON THE OTHER HAND , LEARNED DR STRONGLY PLACED RELIANCE ON THE ORDER OF THE AUTHORITY BELOW. IT WAS FURTHER SUBMITTED THAT DURING THE COURSE OF SE ARCH AT PUNE AT THE PREMISES OF M/S RAMRAO ADIK EDUCATION SOCIETY , MATERIAL WAS FOUND AND STATEMENTS OF THE CONCERNED PERSONS WERE RECORDED, WHERE THEY HAVE CATEGORICALLY ADMITTED THAT THEY HAVE ACCEPTED DONATION OF RS.1 LAKH FROM THE ASSESSEE ON ACCOUNT O F ADMISSION OF HIS DAUGHTER, THEREFORE, NO DOUBT REMAINS IN RESPECT TO PAYMENT OF RS. 1 LAKH FOR GETTING ADMISSION, WHICH WAS NOT DISCLOSED BY THE ASSESSEE. ACCORDINGLY, THE REOPENING AS WELL AS ADDITION MADE, WAS JUSTIFIED. 7 . I HAVE HEARD RIVAL SUBMISSI ONS AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, I AM OF THE VIEW THAT THE ADDITION MADE OF RS. 1 LAKH UNDER SECTION 68 WAS NOT JUSTIFIED FOR THE SIMPLE REASON THAT NEITHER THE NAME OF THE ASSESSEE OR THE NAME OF THE DAUGHTER OF THE ASSESSEE WAS MENTIONED ITA NO . 5574 /20 1 2 6 IN THE DIARY AS SIMPLY PATEL IS MENTIONED. SECONDLY , NO COPY OF STATEMENT OF THIRD PARTY WHERE THE SEARCH WAS CONDUCTED WAS SUPPLIED TO THE ASSESSEE. WITHOUT SUPPLYING THE MATERIAL OR WITHOUT SUPPLYI NG COPY OF ENTIRE MATERIAL FOUND DURING THE COURSE OF THE SEARCH AT THAT PLACE, ANY ADVERSE INFERENCE DRAWN AGAINST ANY PERSON WHERE NO MATERIAL SHOWING ANY PAYMENT WAS FOUND, ADDITION MADE IS NOT JUSTIFIED. THE DEPARTMENTS CASE IS THAT THEY HAVE RECORDED THE STATEMENT OF THE CONCERNED PERSONS, WHO HAVE ADMITTED THAT THEY HAVE RECEIVED DONATION OF RS. 1 LAKH FOR ADMISSION OF ASSESSEES DAUGHTER, BUT THIS FACT HAS TO BE CONTRO VERTED TO THE ASSESSEE BY SUPPLYING COPY OF THE STATEMENT AND THEREAFTER CROSS - EXAM INATION, IF THE ASSESSEE ASKED FOR. IT HAS BEEN CATEGORICALLY MENTIONED IN THE LETTER BEFORE THE ASSESSING OFFICER BY WHICH THEY REQUESTED THE COPY OF DIARY AND COPY OF STATEMENT BUT THE ASSESSING OFFICER HAS NOT PROVIDED THE SAME . THEREAFTER THEY MADE REQ UEST BEFORE THE LEARNED CIT(A) . LEARNED CIT(A) SOUGHT REMAND REPORT ALONG WITH THE RECORD BUT IT WAS STATED THAT RECORD IS NOT AVAILABLE, HOWEVER, IT WAS FURTHER STATED THAT ADDITION MADE, WAS MADE ON THE BASIS OF THE MATERIAL AND INFORMATION GATHERED BY T HE ASSESSI NG OFFICER. IN ABSENCE OF ANY MATERIAL AVAILABLE WITH THE DEPARTMENT, ADDITION SUSTAINED BY THE LEARNED CIT(A) , IN MY CONSIDERED VIEW, WAS ALSO NOT JUSTIFIED. THE HONBLE DELHI HIGH COURT IN VARIOUS CASES HAD CATEGORICALLY HELD THAT WITHOUT PRO VIDING ANY MATERIAL ON WHICH BASIS THE ASSESSMENT WAS REOPENED, THE REOPENING OF THE ASSESSMENT WAS BAD IN LAW. THEREFORE, ANY ADDITION MADE WAS ALSO ITA NO . 5574 /20 1 2 7 NOT JUSTIFIED. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I HOLD THAT THE ADDITION OF RS .1 LAKH M ADE UNDER SECTION 68 IN THE HANDS OF THE ASSESSEE WAS NOT JUSTIFIED. ACCORDINGLY, I DELETE THE SAME. 8 . SINCE, I HAVE DELETED THE ADDITION ON MERIT, THEREFORE, I AM NOT INCLINED TO DISPOSE OF THE LEGAL GROUND AT THIS STAGE. 9 . IN THE RESULT, APPEAL OF T HE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH D AY OF NOV. 2012. 2012 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI ; DATED : 27 / 11 / 2012 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) - X, MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI