PARVINDER SINGH N. BHATIA, MUMBAI V. DCIT CEN CIR 45, MUMBAI

ITA 5581/MUM/2011

• Counselvise Citation: 558119914 RSA 2011
• Duration Of Justice: 2 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-11-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 29-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A C TEJPAL
• Assessee Lawyers: BHUMIKA VORA
• Keywords: Gift; Deemed dividend; Retraction
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI . .. . . . . . , ,, , ! '# ! '# ! '# ! '# $ $ $ $ %$$ $& %$$ $& %$$ $& %$$ $&, ,, , ' '# ' '# ' '# ' '# ( ( ( ( BEFORE SHRI P.M. JAGTAP, AM AND SHRI VIVEK VARMA , JM ./ I.T.A. NO. 5581/MUM/2011 ( '* & $+& '* & $+& '* & $+& '* & $+& / / / / ASSESSMENT YEAR:2008-09) PARVINDER SINGH N. BHATIA, 211, ANANT BHUVAN, WATERFIELD ROAD, BANDRA(W), MUMBAI-400050 * * * * / VS. DCIT, CENTRAL CIRCLE-45, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 #, ! ./ PAN : AAFPB6569E ( '* &- / // / ASSESSEE ) .. ( ./,0 / RESPONDENT ) '* &- 1 2 / ASSESSEE BY : SHRI RAJIV KHANDELWAL & BHUMIKA VORA ./,0 1 2 / RESPONDENT BY : SHRI A.C.TEJPAL *$ 1 ! / // / DATE OF HEARING : 28/11/2013 34+ 1 ! / DATE OF PRONOUNCEMENT :03/01/2014 ' 5 / O R D E R PER P.M. JAGTAP, A.M . .. , ! '# : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-38, MUMBAI, DATED 29.03.2011 AND THE SOL ITARY ISSUE RAISED THEREIN RELATES TO THE ADDITION OF RS.53,63,354/- M ADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF INCOME DE CLARED BY THE ASSESSEE IN THE STATEMENT RECORDED U/S 132(4) OF THE INCOME- TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO DERIVES INCOME FROM HOUSE PROPERTY, BUSINESS, CAPITAL GAIN AND OTH ER SOURCES. HE BELONGS TO A CHOKSEY GROUP AND IN THE SEARCH CONDUCTED U/S 132(1) ON 05.10.2007 IN THE CASES BELONGING TO THE SAID GROUP , THE RESIDENTIAL 2 ITA NO.5581/MUM/2011 PARVINDER SINGH N. BHATIA PREMISES OF THE ASSESSEE WERE ALSO SEARCHED. DURIN G THE COURSE OF SEARCH, STATEMENT OF THE ASSESSEE WAS RECORDED WHEREIN HE S URRENDERED INCOME OF RS.1.50 CRORES TO COVER UP POSSIBLE DISCREPANCIES I N THE BOOKS OF ACCOUNT SUCH AS GIFTS, EXPENSES, INVESTMENT, JEWELRY, ETC A S WELL AS ANY OTHER DISCREPANCIES IN SEIZED MATERIAL. SUBSEQUENTLY, TH E ASSESSEE FILED HIS RETURNS OF INCOME FOR A.Y. 2002-03 TO 2008-09 DECLA RING HIS UNDISCLOSED INCOME ON THE BASIS OF MATERIAL FOUND DURING THE CO URSE OF SEARCH AGGREGATING TO RS.96,36,646/- AS UNDER:- A.Y. PARTICULARS ADDITION AMOUNT 2002-03 DEEMED DIVIDEND 2(22)(E) 4,23,884/- HOUSE HOLD EXPENSES 1,81,913/- 2003-04 DEEMED DIVIDEND 2(22)(E) 1,61,236/- GIFT (REEMA BHATIA) 10,65,158/- GIFT (TANISHA BHATIA) 8,43,110/- GIFT (ANGAD VEER BHATIA) 8,43,110/- 2005-06 GIFT (REEMA BHATIA) 12,80,000/- GIFT (TANISHA BHATIA) 10,00,000/- GIFT (ANGAD VEER BHATIA) 10,00,000/- INCOME U/S 153A 4,01,063/- 2006-07 GIFT (REEMA BHATIA) 1,00,000/- GIFT (TANISHA BHATIA) 1,00,000/- INCOME U/S 153A 5,18,973/- 2007-08 INCOME U/S 153A 7,25,266/- 2008-09 INCOME U/S 153A 9,92,933/- 3. SINCE HIS UNDISCLOSED INCOME ON THE BASIS OF MAT ERIAL FOUND DURING THE COURSE OF SEARCH WAS DECLARED BY THE ASSESSEE I N THE RETURNS OF INCOME ONLY TO THE EXTENT OF RS.96,36,646/- AS AGAINST THE INCOME OF RS.1.50 CRORES SURRENDERED IN THE STATEMENT RECORDED U/S 13 2(4) OF THE ACT, THE DIFFERENCE OF RS.53,63,354/-WAS TREATED BY THE AO A S HIS UNDISCLOSED INCOME FOR THE YEAR UNDER CONSIDERATION I.E. A.Y. 2 008-09 AND THE SAME WAS INCLUDED BY HIM IN THE TOTAL INCOME OF THE ASS ESSEE VIDE HIS ORDER PASSED U/S 143(3) DATED 30.12.2009. 3 ITA NO.5581/MUM/2011 PARVINDER SINGH N. BHATIA 4. AGAINST THE ORDER PASSED BY AO U/S 143(3), APPEA L WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) DISPUTING THE AD DITION OF RS.53,63,354/- MADE BY THE AO MERELY ON THE BASIS OF STATEMENT REC ORDED U/S 132(4) WITHOUT THERE BEING ANY INCRIMINATING MATERIAL FOUN D DURING THE COURSE OF SEARCH TO CORROBORATE THE SAME. IT WAS SUBMITTED O N BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(A) THAT THE INCOME OF R S.1.50 CRORES WAS SURRENDERED ON AD HOC BASIS TO COVER UP THE DISCREPANCIES IN THE BOOKS O F ACCOUNT AND OTHER INCRIMINATING MATERIAL FOUND DURI NG THE COURSE OF SEARCH AND SINCE THE UNDISCLOSED INCOME DECLARED IN THE RETURNS OF INCOME FOR THE RELEVANT YEARS AGGREGATING TO RS.96,36,646/ - WAS SUFFICIENT TO COVER UP THE UNDISCLOSED INCOME AS WORKED OUT ON THE BASI S OF INCRIMINATING MATERIAL AND DISCREPANCIES IN THE BOOKS OF ACCOUNT FOUND DURING THE COURSE OF SEARCH, THERE WAS NO JUSTIFICATION IN THE ACTION OF THE AO IN ADDING THE BALANCE OF AMOUNT OF RS.53,63,354/-TO TH E INCOME OF THE ASSESSEE AS HIS UNDISCLOSED INCOME MERELY ON THE BA SIS OF STATEMENT RECORDED U/S 132(4) WHEN THERE WAS NOTHING FOUND DU RING THE COURSE OF SEARCH TO CORROBORATE THE SAME. THE LD. CIT(A) DID NOT FIND MERIT IN THIS STAND OF THE ASSESSEE AND CONFIRMED THE ADDITION MA DE BY THE AO HOLDING THAT THE SURRENDER OF RS.1.50 CRORE WAS MADE VOLUNT ARILY BY THE ASSESSEE AND THE DISCLOSURE SO MADE WAS NOT SUCCESSFULLY RET RACTED BY THE ASSESSEE. HE OBSERVED THAT THE CONDUCT OF THE ASSESSEE CLEARL Y INDICATED THAT HE DELIBERATELY DELAYED IN SUBMITTING THE RETRACTION S O AS TO PREVENT TIMELY ENQUIRY AND INVESTIGATION BY THE ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), ASSESSEE HAS PREFERRED THIS APPE AL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE MATERIAL ON RECORD. THE LD. COUNSEL FOR THE ASSESS EE HAS REITERATED BEFORE US THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELO W THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COUR SE OF SEARCH, THE ADDITION OF RS.53,63,354/- MADE TO THE TOTAL INCOME OF THE ASSESSEE MERELY ON THE BASIS OF STATEMENT RECORDED U/S 132(4) IS NO T SUSTAINABLE. THE LD. DR ON THE OTHER HAND HAS STRONGLY RELIED ON THE ORD ERS OF THE AUTHORITIES BELOW IN SUPPORT OF THE REVENUES CASE THAT THE STA TEMENT MADE BY THE ASSESSEE U/S 132(4) WAS BINDING ON HIM AND IN THE A BSENCE OF ANYTHING 4 ITA NO.5581/MUM/2011 PARVINDER SINGH N. BHATIA BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THE SAME WAS RECORDED UNDER ANY THREAT OR COERCION, THE REVENUE AUTHORITI ES WERE FULLY JUSTIFIED IN RELYING ON THE RECITALS/SURRENDER MADE BY THE ASSES SEE IN HIS STATEMENT TO MAKE THE IMPUGNED ADDITION. IN SUPPORT OF THIS CO NTENTION, HE HAS RELIED ON VARIOUS JUDICIAL PRONOUNCEMENTS. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THE IMP UGNED ADDITION MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) MERELY ON TH E BASIS OF STATEMENT MADE BY THE ASSESSEE U/S 132(4) IS NOT SUSTAINABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. IN HIS STATEMENT RECORDE D U/S 132(4) ON 21.11.2007, THE ASSESSEE WAS ASKED JUST BEFORE CONC LUDING THE STATEMENT ABOUT HIS WISH TO SAY ANYTHING ELSE AND IN REPLY, I T WAS STATED BY THE ASSESSEE WHILE ANSWERING QUESTION NO.14 THAT HE WAS READY TO OFFER A SUM OF RS.1.50 CRORE AS ADDITIONAL INCOME TO COVER UP P OSSIBLE DISCREPANCIES IN THE BOOKS OF ACCOUNT SUCH AS GIFTS, EXPENSES, INVES TMENTS, JEWELLERY ETC AND ANY OTHER DISCREPANCIES IN THE SEIZED MATERIALS . IT WAS ALSO STATED BY THE ASSESSEE THAT THE YEAR WISE BIFURCATION OF THE ADDITIONAL INCOME WOULD BE SUBMITTED LATER. SUBSEQUENTLY, THE ASSESSEE FIL ED HIS RETURNS OF INCOME FOR A.Y. 2002-03 TO 2008-09 OFFERING ADDITIONAL INC OME AGGREGATING TO RS.96,36,646/- ON THE BASIS OF MATERIAL FOUND DURIN G THE COURSE OF SEARCH AND THE SAME WAS ACCEPTED BY THE ASSESSING OFFICER. SINCE THE TOTAL ADDITIONAL INCOME SURRENDERED BY THE ASSESSEE IN HI S STATEMENT WAS RS.1.50 CRORES, THE DIFFERENCE AMOUNT OF RS.53,63,3 54/-WAS TREATED BY THE AO AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE YE AR UNDER CONSIDERATION I.E. A.Y. 2008-09 MERELY ON THE BASIS OF STATEMENT MADE BY THE ASSESSEE U/S 132(4) WITHOUT THERE BEING ANY MATERIAL FOUND D URING THE COURSE OF SEARCH TO CORROBORATE THE SAME. AS RIGHTLY CONTENDE D BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE THE AUTHORITIES BELOW AS WE LL AS BEFORE US, THE AMOUNT OF RS.1.50 CRORES WAS OFFERED BY THE ASSESSE E AS HIS ADDITIONAL INCOME ON ACCOUNT OF DISCREPANCIES AND MATERIAL FOU ND DURING THE COURSE OF SEARCH ON AD HOC /ESTIMATED BASIS AND WHEN HIS UNDISCLOSED INCOME ON THE BASIS OF SUCH DISCREPANCIES AND MATERIAL FOUND DURING THE COURSE OF SEARCH WAS ACTUALLY COMPUTED BY THE ASSESSEE AT RS. 96,36,646/- AND THE 5 ITA NO.5581/MUM/2011 PARVINDER SINGH N. BHATIA COMPUTATION SO MADE BY THE ASSESSEE WAS ACCEPTED BY THE AO, WE ARE OF THE VIEW THAT THE BALANCE AMOUNT OF RS.53,63,354/- CANNOT BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE MERELY ON THE BA SIS OF STATEMENT MADE U/S 132(4) ESPECIALLY WHEN IT IS NOT EVEN THE CASE OF AO THAT THERE WAS ANY OTHER MATERIAL FOUND DURING THE COURSE OF SEARCH TO CORROBORATE THIS ADDITION MADE TO THE TOTAL INCOME OF THE ASSESSEE. AS REGARDS THE CONTENTION RAISED BY THE LD. DR RELYING ON THE VARI OUS CASES LAWS THAT IN THE ABSENCE OF ANYTHING TO SHOW ANY COERCION OR THR EAT, STATEMENT GIVEN BY THE ASSESSEE WAS VOLUNTARY, WE FIND THAT IT IS NOT THE CASE OF THE ASSESSEE THAT HIS STATEMENT WAS RECORDED UNDER ANY COERCION OR THREAT. HIS CASE IS THAT THE AMOUNT OF RS.1.50 CRORES WAS SURRENDERED O N ESTIMATED BASIS AND SINCE THE AMOUNT OF RS.96,36,646/- OFFERED BY HIM I N THE RETURN OF INCOME WAS SUFFICIENT TO COVER THE DISCREPANCIES IN THE BO OKS OF ACCOUNT AND OTHER MATERIAL FOUND DURING THE COURSE OF SEARCH, THE BAL ANCE AMOUNT CANNOT BE TREATED AS HIS UNDISCLOSED INCOME IN THE ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH. IN OUR OPINION, THE R ATIO OF THESE CASES LAWS CITED BY THE LD. DR THUS IS NOT APPLICABLE IN THE P RESENT CASE. AS SUCH, CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT THE ADDITION OF RS.53,63,354/- MADE TO THE TOT AL INCOME OF THE ASSESSEE MERELY ON THE BASIS OF HIS STATEMENT RECOR DED U/S 132(4) IS NOT SUSTAINABLE IN THE ABSENCE OF ANY INCRIMINATING MAT ERIAL FOUND DURING THE COURSE OF SEARCH TO CORROBORATE THE SAME AND DELETI NG THE SAID ADDITION, WE ALLOW THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/01/2014. ' 5 1 34+ ! 6'*7 03 /01/2014, 4 1 SD/- SD/- ( VIVEK VARMA ) (P.M. JAGTA P ) ' '# / JUDICIAL MEMBER ! '# / ACCOUNTANT MEMBER MUMBAI ; 6'* DATED 03/01/2014 F{X~{T? P.S./ '*.. 6 ITA NO.5581/MUM/2011 PARVINDER SINGH N. BHATIA ' 5 1 .'8% 9 %+ ' 5 1 .'8% 9 %+ ' 5 1 .'8% 9 %+ ' 5 1 .'8% 9 %+/ COPY OF THE ORDER FORWARDED TO : 1. ,0 / THE APPELLANT 2. ./,0 / THE RESPONDENT. 3. : ( ) / THE CIT (A) - , MUMBAI 4. : /CIT MUMBAI 5. %$= .''* , , / DR, ITAT, MUMBAI BENCH 6. >& ? / GUARD FILE. ' 5* ' 5* ' 5* ' 5* / BY ORDER, /% .' //TRUE COPY// @ @@ @/ // /A A A A ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI,