Shri Mukesh Choudhary, Jodhpur V. ITO, Ward-2(1), Jodhpur

ITA 573/JODH/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2204 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 24-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMAN Y U SINGH YADAV J
• Keywords: Reopening of assessment; Unexplained investment; Search and seizure; Principle of natural justice; Opportunity of cross examination; Question of law; Corroborative evidences
• Section: 143(3); 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH (SMC), JODHPUR BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 573/JODH/2018 (ASSESSMENT YEAR-2009-10 MUKESH CHOUDHARY, C/O- SURENDRA CHOPRA, 67, MANAK, SEC. 7, EXTN., NEW POWER HOUSE ROAD, JODHPUR. VS INCOME TAX OFFICER, WARD-2(1), JODHPUR. (APPELLANT) (RESPONDENT) PAN: ADBPC 8539 J ASSESSEE BY SHRI SURENDRA CHOPRA (CA) REVENUE BY SHRI ABHIMANYU SINGH YADAV JCIT-DR DATE OF HEARING 16/03/2020 DATE OF PRONOUNCEMENT 19/03/2020 O R D E R PER: R.C. SHARMA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-1, JODHPUR DATED 28/09/2018 FOR THE A .Y. 2009- 10 IN THE MATTER OF ORDER PASSED U/S 143(3)/147 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS T HE ACT, FOR SHORT]. 2 ITA 573/JODH/2018 MUKESH CHOUDHARY VS. ITO 2. IN THIS APPEAL THE ASSESSEE IS AGGRIEVED BY CONF IRMING THE ADDITION OF RS. 5,83,320/- MADE BY THE A.O. ON ACCOUNT OF ON MONEY PAYMENT FOR PURCHASE OF PLOT. 3. AT THE OUTSET, THE LD. AR OF THE ASSESSEE PLACED ON RECORD VARIOUS DECISIONS OF THE COORDINATE BENCH WHEREIN EXACTLY SI MILAR ISSUE WAS DECIDED BY THE TRIBUNAL IN ASSESSEES FAVOUR. 4. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CARE FULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM T HE RECORD THAT THE ASSESSEE IS A SALARIED EMPLOYEE. THE AO RECEIVED IN FORMATION WHICH INDICATED THAT THE DURING THE YEAR UNDER CONSIDERAT ION, THE ASSESSEE HAD PURCHASED A PLOT MEASURING 291.66 SQ. FEET IN THE R ESIDENTIAL PROJECT 'REVENUE RESIDENCY' (NIZI KHATEDAR RESIDENTIAL SCHE ME) AT VILLAGE BHARATSINGH, JAISHINGHPUR- MUHANA ROAD, BHANKROTA, TEH. SANGANER, JAIPUR. THIS RESIDENTIAL SCHEME WAS DEVELOPED AND SO LD BY ONE SHRI MADAN MOHAN GUPTA IN FY 2008-09 RELEVANT TO AY 2009 -10 IN WHOSE CASE SEARCH AND SEIZURE OPERATION WERE CARRIED OUT O N 23-05-2013. DURING THE COURSE OF SEARCH AND SEIZURE, STATEMENT OF SH. MADAN MOHAN GUPTA WERE RECORDED WHEREIN HE HAD ACCEPTED AND HONOU RED ON-MONEY RECEIPT ON SALE OF PLOTS IN REVENUE RESIDENCY SCHEM E WHICH WAS RS. 3 ITA 573/JODH/2018 MUKESH CHOUDHARY VS. ITO 3150/- PER SQ. FEET AS PER THE SEIZED PAPERS. AS PE R THE ASSESSMENT ORDER, THE NAME OF THE ASSESSEE WAS ALSO APPEARING I N THE LIST OF SUCH PURCHASERS FOR AFORESAID PLOTS, WHO ALLEGEDLY HAD GI VEN RS. 3150/- PER SQ. FEET AS ON-MONEY I.E. RS.9,44,429/- (291.66 SQ . FEET X RS. 3150/- + 25,700/- FOR BOUNDARY WALL) TO SHRI MADAN MOHAN GUPT A FOR PURCHASE OF THE SAID PLOT. THE ASSESSEE DID NOT DISCLOSE SUCH A LLEGED INVESTMENT OF ON-MONEY PAID BY HIM, THEREFORE, THE AO ISSUED NOTI CE U/S. 148 OF THE ACT ON 30.03.2016. THE ASSESSEE STATED THAT HE HAD NOT PAID EXTRA AMOUNT (ON-MONEY) TOWARDS PURCHASE OF PLOT. HOWEVER, THE AO WAS NOT CONVINCED WITH THE ASSESSEE'S REPLY AND VARIOUS ASSE RTIONS MADE IN THE REPLY FILED IN RESPONSE TO NOTICE ISSUED. BY THE IM PUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 5. THE LD. AR PLACED ON RECORD A DECISION OF THE CO ORDINATE BENCH IN THE CASE OF SHRI DEVA RAM SUTHAR VS ITO IN ITA NO. 342/JODH/2018 ORDER DATED 27/12/2018 WHEREIN UNDER SIMILAR FACTS AND CIRCUMSTANCES, THE ADDITION MADE ON ACCOUNT OF ALLEGED ON-MONEY PA ID ON PURCHASE OF PLOT WAS DELETED BY THE TRIBUNAL AFTER HAVING THE FO LLOWING OBSERVATION: 8. IN THE ASSESSMENT ORDER, THE AO ALLEGED THAT TH E ASSESSEE HAS PAID TO THE SELLER SHRI MADAN MOHAN GUPTA ON MONEY OF RS. 4 ,66,660/- FOR THE PURCHASE OF PLOT NO. 84 HAVING TOTAL AREA OF 233.33 SQ. YARDS. 4 ITA 573/JODH/2018 MUKESH CHOUDHARY VS. ITO 9. IN REPLY TO THE SAME, ASSESSEE SUBMITTED AS UNDE R: A. THAT THE ALLEGATION OF LD. AO IS BASELESS AND I MAGINARY AND NOT MAINTAINABLE. B. THE LD. AO HAS RELIED UPON THE STATEMENT OF SHR I MADAN MOHAN GUPTA RECORDED BY THE I.T. AUTHORITIES ON 23/05/201 3 DURING THE COURSE OF SEARCH. BUT FROM READING THE REPLY GI VEN BY SHRI MADAN MOHAN GUPTA IN THE STATEMENT, IT IS CLEARLY C ONVEYED THAT SHRI MADAN MOHAN GUPTA SOLD THE LAND FOR RS. 1 150/- PER SQ. YARD AND THE APPELLANT PAID AS PURCHASE CONSIDE RATION TO THE SELLER MADAN MOHAN GUPTA A SUM OF RS. 2,71,000/ -. C. THAT THE ENTIRE FABRIC BEING WOVEN AGAINST THE APPELLANT FOR TREATING THE ALLEGED PAYMENT OF ON MONEY GO AROUND THE STATEMENT OF SHRI MADAN MOHAN GUPTA. IT IS SUBMITTE D THAT AFTER THOUGHT STATEMENT CARRY NO WEIGHT UNDER THE L AW AND THEY ARE AGAINST THE SPIRIT OF NATURAL JUSTICE BECA USE THEY HAVE NO EVIDENCE VALUE. D. THAT EXCEPT THE ABOVE STATEMENT OF SHRI MADAN MO HAN GUPTA THERE WAS NO SUPPORTING EVIDENCE AVAILABLE WITH THE LD. AO WHICH COULD CORROBORATE THAT ON MONEY OF RS. 4,66,6 60/- WAS PAID BY THE APPELLANT TO SHRI MADAN MOHAN GUPTA. E. THAT WHILE MAKING THE ALLEGATION THAT LD. AO HA S RELIED UPON THE STATEMENT OF SHRI MADAN MOHAN GUPTA COURSE OF S EARCH PROCEEDINGS. 10. ASSESSEE ALSO ASKED BEFORE THE AO TO PROVIDE OP PORTUNITY FOR THE CROSS EXAMINATION OF THE PERSON ON WHOSE STATEMENT ADDITI ON WAS MADE. HOWEVER, NO SUCH OPPORTUNITY WAS PROVIDED NEITHER B Y THE AO NOR BY THE CIT(A). THUS, WITHOUT AFFORDING CROSS EXAMINATI ON, THE AO HAS MADE ADDITION ON THE BASIS OF STATEMENT OF SHRI MADAN MO HAN GUPTA U/S 69 BEING UNEXPLAINED INVESTMENT AND ADDED THE SAME IN ASSESSEES INCOME. HOWEVER, THERE WAS NO CORROBORATIVE MATERIA L AVAILABLE WITH 5 ITA 573/JODH/2018 MUKESH CHOUDHARY VS. ITO THE AO FOR MAKING ADDITION. AS PER OUR CONSIDERED V IEW, NOT PROVIDING OPPORTUNITY OF CROSS EXAMINATION AMOUNT TO VIOLATIO N OF PRINCIPLE OF NATURAL JUSTICE, A SERIOUS FLAW WHICH MAKES THE ORD ER NULL AND VOID. 11. FOR THIS PURPOSE, RELIANCE CAN BE PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTR IES 281 CTR 241 WHEREIN IT WAS HELD THAT NOT ALLOWING ASSESSEE TO C ROSS EXAMINE WITNESSES BY ADJUDICATING AUTHORITY THOUGH STATEMEN TS OF THOSE WITNESSES WERE MADE AS BASIS OF IMPUGNED ORDER, AMO UNTED IN SERIOUS FLAW WHICH MADE IMPUGNED ORDER NULLITY AS IT AMOUNT ED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THE PRECISE OBSERVAT ION OF THE HONBLE SUPREME COURT WAS AS UNDER:- NOT ALLOWING THE APPELLANT TO CROSS-EXAMINE THE WI TNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT A MOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEM ENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSES SEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CRO SS-EXAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT THIS OPPOR TUNITY TO THE APPELLANT. IT WOULD BE PERTINENT TO NOTE THAT IN TH E IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS S PECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY TH E APPELLANT. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AF ORESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUT HORITY. APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STA TEMENTS OF THESE TWO WITNESSES AND WANTED TO DISCREDIT THEIR T ESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNITY OF CROSS- EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPON THE PRICE LIST AS MAINTAINED AT THE DEPOT TO D ETERMINE THE PRICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETH ER THE GOODS 6 ITA 573/JODH/2018 MUKESH CHOUDHARY VS. ITO WERE, IN FACT, SOLD TO THE SAID DEALERS/WITNESSES A T THE PRICE WHICH IS MENTIONED IN THE PRICE LIST ITSELF COULD BE THE SUBJECT MATTER OF CROSS-EXAMINATION. THEREFORE, IT WAS NOT FOR THE AD JUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COULD BE THE SUB JECT MATTER OF THE CROSS-EXAMINATION AND MAKE THE REMARKS AS MENTI ONED ABOVE. 12. RELIANCE CAN ALSO BE PLACED ON THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF ASHISH INTERNATIONAL IN ITA NO. 4299/MUM/20 09 DATED 22/02/2011, WHEREIN COURT HELD AS UNDER: THE QUESTION RAISED IN THIS APPEAL IS, WHETHER THE TRIBUNAL WAS JUSTIFIED IN DELETING THE ADDITION ON ACCOUNT OF BO GUS PURCHASES ALLEGEDLY MADE BY THE ASSESSEE FROM M/S. THAKKAR AG RO INDUSTRIAL CHEM SUPPLIES P. LTD. ACCORDING TO THE R EVENUE, THE DIRECTOR OF M/S. THAKKAR AGRO INDUSTRIAL CHEM SUPPL IES P. LTD. IN HIS STATEMENT HAD STATED THAT THERE WERE NO SALES / PURCHASES BUT THE TRANSACTIONS WERE ONLY ACCOMMODATION BILLS NOT INVOLVING ANY TRANSACTIONS. THE TRIBUNAL HAS RECORDED A FINDING O F FACT THAT THE ASSESSEE HAD DISPUTED THE CORRECTNESS OF THE ABOVE STATEMENT AND ADMITTEDLY THE ASSESSEE WAS NOT GIVEN OPPORTUNI TY TO CROSS EXAMINE THE CONCERNED DIRECTOR OF M/S. THAKKAR AGRO INDUSTRIAL CHEM SUPPLIES P. LTD. WHO HAD MADE THE ABOVE STATEM ENT. THE APPELLATE AUTHORITY HAD SOUGHT REMAND REPORT AND EV EN AT THAT STAGE THE GENUINENESS OF THE STATEMENT HAS NOT BEEN ESTABLISHED BY ALLOWING CROSS EXAMINATION OF THE PERSON WHOSE S TATEMENT WAS RELIED UPON BY THE REVENUE. IN THESE CIRCUMSTAN CES, THE DECISION OF THE TRIBUNAL BEING BASED ON THE FACT, N O SUBSTANTIAL QUESTION OF LAW CAN BE SAID TO ARISE FROM THE ORDER OF THE TRIBUNAL. THE APPEAL IS DISMISSED WITH NO ORDER AS TO COSTS. 13. RELIANCE IS ALSO PLACED ON THE DECISION OF BOMB AY HIGH COURT IN THE CASE OF H.R. MEHTA IN ITS ORDER DATED 07/07/2017. THE HO NBLE HIGH COURT HELD AS UNDER:- 7 ITA 573/JODH/2018 MUKESH CHOUDHARY VS. ITO THE ASSESSEE IS BOUND TO BE PROVIDED WITH THE MATE RIAL USED AGAINST HIM APART FROM BEING PERMITTED TO CROSS EXA MINE THE DEPONENTS. THE DENIAL OF SUCH OPPORTUNITY GOES TO R OOT OF THE MATTER AND STRIKES AT THE VERY FOUNDATION OF THE AS SESSMENT ORDER AND RENDERS IT VULNERABLE. 14. APPLYING PROPOSITION OF LAW LAID DOWN BY HONBL E SUPREME COURT AND HIGH COURT AS DISCUSSED ABOVE, I DO NOT FIND ANY ME RIT FOR THE ADDITION MADE BY AO MERELY ON THE BASIS OF STATEMENT, WHEN T HERE IS NO CORROBORATIVE MATERIAL WITH AO SUGGESTING THE ALLEG ED ADDITION, WITHOUT ALLOWING ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE T HE PERSON ON WHOSE STATEMENT ADDITION WAS MADE. ACCORDINGLY, AO IS DIR ECTED TO DELETE THE ADDITION SO MADE. 15. BEFORE PARTING WITH THE MATTER, I OBSERVE THAT LD. AR HAD PLACED ON RECORD ORDER OF ITAT JAIPUR BENCH IN THE CASE OF NA VRATTAN KOTHARI VS ACIT IN ITA NO. 425/JP/2017 IN WHICH PROCEEDINGS IN ITIATED U/S 148 WAS QUASHED. HOWEVER, THE FACTS OF THIS CASE ARE ENTIRE LY DISTINGUISHABLE FROM THE FACTS OF INSTANT CASE, IN SO FAR AS IN THE CASE OF NAVRATAN KOTHARI (SUPRA) REOPENING OF ASSESSMENT AFTER FOUR YEARS OF ASSESSMENT FRAMED U/S 143(3)/153 WAS QUASHED, WHEREAS IN THE I NSTANT CASE, NO ASSESSMENT WAS FRAMED U/S 143(3) AND ONLY RETURN WA S PROCESSED U/S 143(1). ACCORDINGLY, IT IS NOT GOING TO HELP THE AS SESSEE IN ANY MANNER. 16. IN THE RESULT APPEAL OF ASSESSEE IS ALLOWED IN TERMS INDICATED HEREINABOVE. 6. I HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIE S BELOW AS WELL AS ORDER OF THE TRIBUNAL IN THE CASE OF SHR I DEVA RAM SUTHAR VS ITO (SUPRA) WHEREIN UNDER SIMILAR FACTS A ND 8 ITA 573/JODH/2018 MUKESH CHOUDHARY VS. ITO CIRCUMSTANCES, THE TRIBUNAL HAVE DELETED THE ADDITI ON MADE ON ACCOUNT OF ALLEGED PAYMENT OF ON-MONEY. SIMILAR VIEW HAS BEEN TAKEN BY THE VARIOUS BENCHES OF THE TRIBUNAL A S PLACED ON RECORD. THE LD DR ALSO FAIRLY CONCEDED THAT THE ISSUE IS COVERED BY THE VARIOUS ORDERS OF THE TRIBUNAL IN FA VOUR OF THE ASSESSEE. NO ORDER OF THE TRIBUNAL OR THE HONBLE H IGH COURT ON THIS ISSUE WHICH IS AGAINST THE ASSESSEE WAS PLA CED BEFORE US SO AS TO PERSUADE US TO DEVIATE FROM THE FINDING S RECORDED BY THE TRIBUNAL CONSISTENTLY IN VARIOUS ORDERS AS P LACED ON RECORD BY THE LD. AR. RESPECTFULLY FOLLOWING THE SA ME, I DO NOT FIND ANY MERIT IN THE ADDITION SO MADE BY THE A.O.. HENCE, I DIRECT THE A.O. TO DELETE THE SAME. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MARCH, 2020. SD/- [R.C. SHARMA] ACCOUNTANT MEMBER DATED : 19/03/2020 *RANJAN COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 9 ITA 573/JODH/2018 MUKESH CHOUDHARY VS. ITO 3. THE CIT 4. THE CIT(A) 5. THE DR 6. GUARD FILE (ITA NO. 573/JODH/2018) ASSISTANT REGISTRAR JODHPUR BENCH