SUSHMA A SANGAHVI, MUMBAI V. DCIT CC-36, MUMBAI

ITA 5762/MUM/2010

• Counselvise Citation: 576219914 RSA 2010
• Duration Of Justice: 1 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 17-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 16-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALEXANDER CHANDY
• Keywords: Search and seizure; Salary income; Document seized; Opportunity of being heard; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H,MUMBAI BEFORE SHRI D.K. AGARWAL (JM) & SHRI R.K. PANDA (A M) I.T.A. NO.5762/MUM/2010 (A.Y. 2007-08) SMT. SUSHMA A. SANGHAVI, 502, CRYSTAL CLASSIC, S.V. ROAD, VILE PARLE (W), MUMBAI-400 056. PAN:ABGPS4692B VS. DY.COMMR. OF INCOME-TAX, CENTRAL CIRCLE -36, AAYKAR BHAVAN, M.K. ROAD, MUMBAI-400 020. APPELLANT RESPONDENT APPELLANT BY SHRI VIJAY MEHTA. RESPONDENT BY SHRI A LEXANDER CHANDY. DATE OF HEARING 17-11-2011 DATE OF PRONOUNCEMENT 25 - 11 - 2011 O R D E R PER D.K. AGARWAL, JM : THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 05-05-2010 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 20 07-08. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE, AN INDIVIDUAL, DERIVES INCOME FROM SALARY AND INTEREST. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT U/S.132 OF THE INCOME-TAX ACT, 1961 (THE ACT), IN AKRUTI GROUP OF CASES INCLU DING THE ASSESSEE ON 10-08-2006. THE ASSESSEE FILED RETURN DECLARING TOTAL INCOME OF RS.1,99,774/ -. DURING THE COURSE OF ASSESSMENT, THE AO FROM THE SEIZED DOCUMENTS OBSERVED THAT THE ASSESSE E HAD BOOKED A FLAT AT AKRUTI ORION ON 19- 11-2005 FOR WHICH THE PAYMENTS MADE IN CASH AMOUNT TO RS.18,25,000/- AND RS.41,10,000/- IN CHEQUE. DURING THE COURSE OF HEARING IN THE CASE OF AKRUTI CITY LTD., IT WAS OBSERVED THAT FLAT NO. 402 WAS FINALLY SOLD TO THE ASSESSEE FOR A CHEQUE C ONSIDERATION OF RS.42,33,118/- INCLUDING ITA NO.5762/M/2010 SMT. SUSHMA A. SANGHAVI 2 SOCIETY CHARGES AND OTHER EXPENSES AND THE AGREEMEN T WAS FINALLY MADE IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY AN AMOUNT OF RS.18,25,000/- PAID BUT NOT RECORDED IN THE BOOKS SHOULD NOT BE TREATED AS UNDISCLOSED INVESTMENT IN THE PROPERTY. IN RESPONSE, THE ASSESSEE, INTER ALIA, SUBMITTED TH AT THE ASSESSEE HAS NOT MADE THE ALLEGED PAYMENT OF RS.18,15,816/-, THEREFORE, NO ADVERSE IN FERENCE BE DRAWN AND NO ADDITION BE MADE IN THIS REGARD. HOWEVER, THE AO DID NOT ACCEPT THE ASS ESSEES EXPLANATION AND TREATED THE AMOUNT OF RS.18,15,000/- AS UNDISCLOSED INVESTMENT OF THE ASS ESSEE FOR THE PURCHASE OF FLAT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. ON APPEAL, THE LD. CIT(A) OBSERVED THAT THE AO HAS POINTED OUT THAT THE CIT(A) IN THE CASE OF AKRUTI CITY LTD. FOR ASSESSMENT YEAR 2007-08 HAS UPHELD THE ADDITION ON ACCOUNT OF RECEIPT OF RS.18,15,000/- VI DE ORDER DATED 23-06-2009. THEREFORE, THE LD. CIT(A), FOR THE SAME REASONS, CONFIRMED THE ADDITIO N MADE BY THE AO IN THE HANDS OF THE ASSESSEE. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE SUSTENANCE OF AD DITION OF RS.18,15,000/- U/S.69B AND LEVY OF INTEREST U/S.234B. 4. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITS THAT THE TRIBUNAL IN THE CASE OF AKRUTI CITY LTD. VS. DCIT A ND VICE VERSA IN ITA NOS.4875 & 4813/MUM/2009 FOR ASSESSMENT YEAR 2007-08 HAS SET A SIDE THE ISSUE TO THE FILE OF THE AO VIDE PARAS 20 TO 27 OF THE ORDER AND , THEREFORE, IN THE INTEREST OF JUSTICE, THE PRESENT ISSUE IN THE CASE OF THE ASSESSEE BE SET ASIDE TO THE FILE OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO PLACED ON RECORD THE COPY OF THE SAID ORDER OF THE TRIBUNA L. 5. ON THE OTHER HAND, THE LD. D.R., WHILE RELYING O N THE ORDERS OF AO AND LD. CIT(A), SUBMITS THAT HE HAS NO OBJECTION IF THE ISSUE IS SET ASIDE TO THE FILE OF THE AO. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FACT S ARE NOT IN DISPUTE. WE FURTHER FIND THAT IT IS ITA NO.5762/M/2010 SMT. SUSHMA A. SANGHAVI 3 ALSO NOT IN DISPUTE THAT THE LD. CIT(A) HAS CONFIRM ED THE ADDITION ON THE GROUND THAT THE SAME ADDITION HAS BEEN CONFIRMED IN THE FIRST APPEAL IN THE CASE OF AKRUTI CITY LTD. WE FURTHER FIND THAT THE TRIBUNAL IN THE CASE OF AKRUTI CITY LTD. (SUPR A) IN ASSESSEES APPEAL, WHILE CONSIDERING SIMILAR ISSUE IN PARA 20 OF THE ORDER DATED 21-10-2011, HAS OBSERVED AND HELD IN PARA 26 OF THE ORDER THAT THE AO OUGHT TO HAVE CONFRONTED THE ASSESSEE A S WELL AS THE PURCHASER WITH THESE DOCUMENTS, HE SHOULD HAVE EXAMINED THE PURCHASER OF THE PROPERTY AND DRAWN INFERENCES ONLY THEREAFTER AND HENCE SET ASIDE THE ISSUE TO THE FIL E OF THE AO FOR FRESH ADJUDICATION AFTER EXAMINING THE PURCHASERS OF THE PROPERTIES AND OTHE R ENQUIRIES ETC. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT O RECORD BY THE REVE NUE, WE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA) AND IN THE INTEREST OF JUSTICE , SET ASIDE THE ORDERS PASSED BY THE REVENUE AUTHORITIES AND SEND BACK THE MATTER INCLUDING THE LEVY OF INTEREST TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH IN THE LIGHT OF THE OBSERVATIONS HE REINABOVE AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE ASSESSEES APPEAL STANDS PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 25TH DAY OF NOVEMBER, 2011. SD/- SD/- (R.K. PANDA) (D.K. AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEM BER MUMBAI: 25TH NOVEMBER , 2011. NG: COPY TO : 1. ASSESSEE. 2. DEPARTMENT. 3 CIT(A)-41,MUMBAI. 4 CIT,CENTRAL-III,MUMBAI. 5.DR,H BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) ITA NO.5762/M/2010 SMT. SUSHMA A. SANGHAVI 4 BY ORDER, ASST.REGISTR AR, ITAT, MUMBAI. ITA NO.5762/M/2010 SMT. SUSHMA A. SANGHAVI 5 DETAILS DATE INITIALS DESIGNATI ON 1. DRAFT DICTATED ON 17-11-2011 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 21-11-2011 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER