PRIYA HAPPYKUMAR SURYA, Mumbai V. ACIT 29 (2), Mumbai

ITA 5784/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7727 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 09-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH MUMBAI BEFORE : SHRI MAHAVIR SINGH, VICE PRESIDENT & SHRI M.BALAGANESH, A CCOUNTANT MEMBER ITA NO. 5784 /MUM/ 20 19 ( ASSESSMENT YEAR : 2015 - 16 ) MS. PRIYA HAPPYKUMAR SURYA 1503, RICHMOND TRA VELS HIRANANDANI GARDENS MUMBAI 400 706 VS. ACIT 29(2), MUMBAI KAUTILYA BHAVAN BANDRA KURLA COMPLEX BANDRA (E) MUMBAI 400 051 PAN/GIR NO. AAZPR5809D (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI JAYANT BHAT REVENUE BY MS. SHREEKALA PARDESHI DATE OF HEARING 14/06 /2021 DATE OF PRONOUNCEMENT 24 / 08 /202 1 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 5784/MUM/2019 FOR A.Y. 2015 - 16 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 40, MUMBAI IN APPEAL NO. CIT(A) - 40/IT - 10146/17 - 18 DATED 23/07/2019 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 27/12/2017 BY THE LD. DDIT (INV), UNIT NO.2(4), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO . 5784/MUM/2019 MS. PRIYA HAPPYKUMAR SURYA 2 2. THE GROUND NO.1 RAISED BY THE ASSESSEE WAS STATED TO BE NOT PRESSED AND THE SAME IS RECKONED AS A STATEMENT MADE FROM THE BAR AND ACCORDINGLY DISMISSED AS NOT PRESSED. 3. THE ONLY ISSUE TO BE DECIDED IN THIS APPEA L IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION MADE U/S.69 OF THE ACT AS UNEXPLAINED INVESTMENT IN THE SUM OF RS.1,10,71,250/ - IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CA SE. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ASSESSEE IS AN INDIVIDUAL AND HAD FILED HER RETURN OF INCOME FOR THE A.Y.2015 - 16 ON 28/08/2015 DECLARING TOTAL INCOME OF RS.26,56,810/ - . THE RETURN WAS PROC ESSED U/S.143(1) OF THE ACT AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY. THE LD. AO IN THE SCRUTINY PROCEEDINGS OBSERVED THAT AN INFORMATION WAS RECEIVED FROM DDIT(INVESTIGATION)UNIT - IV (1) MUMBAI REGARDING ON - MONEY PAID BY THE ASSESSEE TO THE BUIL DER (RUNWAL GROUP) FOR BOOKING SHOP NO.35. AS PER THE STATEMENT RECORDED FROM SHRI SUBHODH RUNWAL DURING THE SEARCH PROCEEDINGS IN THE CASE OF RUNWAL GROUP, EVIDENCES RELATED TO PAYMENT OF MONEY IN CASH BY FLAT PURCHASERS WERE FOUND. THOSE EVIDENCES WERE C ONFRONTED TO SHRI SUBHODH RUNWAL, DIRECTOR OF RUNWAL GROUP BY THE SEARCH TEAM AND THAT IT WAS ALLEGED THAT SHRI SUBHODH RUNWAL HAD ACCEPTED THE FACT THAT MONEY WAS RECEIVED ON SALE OF VARIOUS FLATS WHICH WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS AND THUS HE HAD OFFERED ADDITIONAL INCOME OVER AND ABOVE DECLARED INCOME IN M/S. RUNWAL HOMES PVT. LTD. ASSESSEE HAD BOOKED SHOP G - 35 ON 24/04/2014 HAVING BUILT UP AREA OF 1106 SQ.FT AND CARPET AREA OF 691 SQ.FT ON THE GROUND FLOOR OF R GALLERIA , RUNWAL GARDENS, NEXT TO FORTIS HOSPITAL, MULUND GOREGOAN LINK ITA NO . 5784/MUM/2019 MS. PRIYA HAPPYKUMAR SURYA 3 ROAD, MULUND (W), MUMBAI 400 078. THE TOTAL COST OF SHOP PREMISES WAS RS.1,94,32,087/ - AS PER THE AGREEMENT VALUE, WHICH INCLUDES STAMP DUTY , REGISTRATION CHARGES, VAT, SERVICE TAX ETC., THE POSSESSION OF TH E SAID SHOP WAS IN JUNE 2014 AS PER THE AGREEMENT BUT ACTUAL POSSESSION WAS RECEIVED BY THE ASSESSEE IN APRIL 2016. THE LD. AO ALLEGED THAT ASSESSEE HAD MADE ON - MONEY PAYMENT IN CASH OF RS.1,10,71,250/ - DURING THE F.Y.2014 - 15 FOR PURCHASE OF SHOP TO M/S. R UNWAL HOMES PVT. LTD. ACCORDINGLY, THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY AN AMOUNT OF RS.1,10,71,250/ - SHOULD NOT BE TREATED AS UNDISCLOSED INVESTMENT MADE BY THE ASSESSE. I N RESPONSE THERETO, THE ASSESSEE SUBMITTED THAT NO PAYMENT IN CASH WAS EVER M ADE TO SAID RUNWAL GROUP AND THAT THE FINDINGS IN THE CASE OF RUNWAL GROUP IS AT BEST BE APPLICABLE TO THEM AND PRESUMPTION CANNOT BE APPLIED IN THE CASE OF THE ASSESSEE. THE ASSESSEE VIDE LETTER DATED 26/12/2017 EXPLAINED BEFORE THE LD. AO THAT THE SHOP N O.G - 35 WAS PURCHASED VIDE AGREEMENT DATED 24/04/2014 FROM RUNWAL GROUP FOR TOTAL CONSIDERATION OF RS.1,76,84,750/ - AND IN ADDITION TO THE ABOVE AMOUNT, THE ASSESSEE PAID STAMP DUTY, REGISTRATION CHARGES, SERVICE TAX, VAT ETC., OF RS.17,47,337/ - FROM TIME T O TIME AND THEREFORE AGGREGAT ED COST WAS RS.1,94,32,087/ - . THE ASSESSEE HAS ALSO FURNISHED A COPY OF PURCHASE AGREEMENT OF SHOP G - 35 ENTERED WITH RUNWAL HOMES PVT. LTD. THE ASSESSEE ACKNOWLEDGED THE RECEIPT OF STATEMENT OF SHRI SUBHODH RUNWAL OF M/S. RUNWA L HOMES PVT. LTD AND REBUTTED THE SAME THAT NO CASH PAYMENT HAS BEEN MADE BY IT TO M/S. RUNWAL HOMES PVT. LTD. ALL THE PAYMENTS MADE TO THE BUILDER WERE ONLY THROUGH CHEQUES / NEFT / RTGS. IT WAS ALSO SPECIFICALLY STATED THAT THE BUILDER I.E. M/S. RUNWAL H OMES PVT. LTD., HAD MADE FAL SE ACCUSATIONS AND NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE HEREIN ON THE BASIS OF RUNWAL S SUBMISSION WITHOUT ANY EVIDENCE. ITA NO . 5784/MUM/2019 MS. PRIYA HAPPYKUMAR SURYA 4 4.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SUMMONS WERE ISSUED U/S.131 OF THE AC T TO THE ASSESSEE AND ASSESSEE WAS PHYSICALLY PRESENT ON THE APPOINTED DATE AND STATEMENT ON OATH WAS TAKEN FROM HER. IN THE SAID STATEMENT, SPECIFICALLY IN RESPONSE TO QUESTION NO.5, ASSESSEE HAD CATEGORICALLY STATED THAT NO PAYMENT IN CASH HAS BEEN MADE BY HER TO RUNWAL HOMES PVT. LTD., OR TO ITS DIRECTOR SHRI SUBHODH RUNWAL. ACCORDINGLY, SHE STATED IN REPLY TO QUESTION NO.4 THAT THE AMOUNT OF RS.1 , 10,71,250/ - MENTIONED AS ON - MONEY AS COMPLETELY ERRONEOUS, WRONG AND NO SAID PAYMENT HAS BEEN MADE BY H ER . THE LD. AO HOWEVER, IGNORED THE ENTIRE CONTENTIONS OF THE ASSESSEE AND PROCEEDED TO MAKE AN ADDITION OF RS.1 , 10,71,250/ - IN THE HANDS OF THE ASSESSEE AS UNEXPLAINED INVESTMENT MADE BY WAY OF ON - MONEY PAYMENT FOR PURCHASE OF SHOP. THIS ACTION OF THE LD. AO WAS UPHELD BY THE LD. CIT(A). 4.2. AT THE OUTSET, WE FIND THAT THE ASSESSEE HAD SPECIFICALLY DENIED HAVING MADE ANY CASH PAYMENT OF RS.1 , 10,71,250/ - FOR PURCHASE OF SHOP IN HER STATEMENT RECORDED ON OATH U/S.131 OF THE ACT DURING THE COURSE OF ASSESSME NT PROCEEDINGS. THIS REBUTTAL HAS BEEN MADE IN RESPONSE TO QUESTION NO.5 POSED BY THE LD. AO AT THE TIME OF RECORDING STATEMENT, WHICH IS ALSO REPRODUCED IN THE ASSESSMENT ORDER ITSELF. WE ALSO FIND THAT IN PARA 4.3 OF THE ASSESSMENT ORDER, THE LD. AO HAD REPRODUCED THE STATEMENT TAKEN U/S.132(4) OF THE ACT FROM SHRI SUBHODH RUNWAL ON 21/11/2014. IN THE SAID STATEMENT, IN QUESTION NO.15 THEREON, THE LD. AO HAD TABULATED THE VARIOUS FLATS / SHOPS WHEREIN THE DETAILS OF ON - MONEY PAYMENTS REC E IVED BY SHRI SUBH ODH RUNWAL FOR VARIOUS FLATS AND SHOPS HAD BEEN RECORDED. THE SAID STATEMENT U/S.132(4) OF THE ACT OF SHRI SUBHODH RUNWAL IN QUESTION NO.17 DIRECTED SHRI SUBHODH RUNWAL TO PROVIDE DETAILS AS TO OTHER FLATS WHERE SIMILAR PRACTICE WAS FOLLOWED I.E. SIMILAR P RACTICE IN RESPECT OF ON - MONEY FOR SALE OF FLATS / SHOPS. IN ITA NO . 5784/MUM/2019 MS. PRIYA HAPPYKUMAR SURYA 5 RESPONSE TO THIS QUESTION NO.17, SHRI SUBHODH RUNWAL HAD CATEGORICALLY STATED THAT CASH / ON - MONEY HAVE NOT BEEN ACCEPTED BY HIM IN ALL THE CASES OVER AND ABOVE THE AGREEMENT VALUE. IT IS PERTINE NT TO NOTE THAT IN THE TABLE GIVEN IN THE SAID STATEMENT OF SHRI SUBHODH RUNWAL AS TABULATED BY THE LD. AO IN HIS ASSESSMENT ORDER, FLAT NO.G - 35 (WHICH WAS PURCHASED BY THE ASSESSEE) DOES NOT FIGURE AT ALL. THIS FACT COUPLED WITH REPLY GIVEN BY SHRI SUBHOD H RUNWAL IN QUESTION NO.17 IN THE STATEMENT RECORDED U/S.132(4) OF THE ACT ON 21/11/2014 AND ALSO COUPLED WITH THE FACT OF STATEMENT RECORDED FROM THE ASSESSEE U/S.131 OF THE ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS , GOES TO PROVE THAT SHRI SUBHODH RUNWAL HAD NOT RECEIVED ON - MONEY FOR ALL THE FLATS OR SHOPS WHICH HAS BEEN SOLD BY M/S. RUNWAL HOMES PVT. LTD. THIS PROVES THE FACT THAT ASSESSEE HAD NOT MADE ANY CASH PAYMENTS / ON - MONEY OVER AND ABOVE THE AGREEMENT VALUE TO SHRI SUBHODH RUNWAL OR M/S. RU NWAL HOMES PVT. LTD. THE LD. AO ALSO RECORDED THE FACT THAT THE SUM OF RS. 63,39,52,372/ - W AS OFFERED BY M/S. RUNWAL HOMES PVT. LTD., AS THEIR UNDISCLOSED INCOME FOR THE A.Y.2015 - 16 TOWARDS ON - MONEY RECEIPTS IN CASH FOR SALE OF FLATS / SHOPS. A T THE COST OF REPETITION , WE WOULD LIKE TO STATE THAT SHRI SUBHODH RUNWAL HAD CATEGORICALLY STATED THAT HE HAD NOT RECEIVED ON MONEY FROM ALL THE UNIT BUYERS AND IT WAS ONLY IN SOME CASES HE HAD ACCEPTED THE CASH. THE LIST OF UNIT HOLDERS FROM WHOM THE CASH WAS ACCE PTED HAS BEEN REPRODUCED IN THE ASSESSMENT ORDER AS WELL AS IN THE TRIBUNAL ORDER OF M/S. RUNWAL HOMES PVT. LTD., IN ITA NO.5621/MUM/2017 FOR A.Y.2015 - 16 DATED 20/12/2017 . W E FIND THAT THE LD. AO HAD ARRIVED AT THE FIGURE OF RS.1,10,71,250/ - ON THE BASIS O F ESTIMATING THE ON - MONEY PAYMENT AT RS 26,000 FOR SQ. FT PER SHOP AS WAS DONE IN SOME CASES AS TABULATED IN THE STATEMENT OF SHRI SUBHODH RUNWAL. IN OTHER WORDS, SHRI SUBHODH RUNWAL HAD AGREED TO THE FACT THAT FOR SOME CASES, HE HAD RECEIVED ON - MONEY PAYM ENTS WHILE SELLING ITS SHOP AND FLATS. THE LD. AO IN THE CASE OF M/S. ITA NO . 5784/MUM/2019 MS. PRIYA HAPPYKUMAR SURYA 6 RUNWAL HOMES PT. LTD., HAD APPLIED THE SAME RATE FOR ALL THE SHOPS AND FLATS SOLD AND ARRIVED AT THE ADDITION FIGURE OF RS.63.39 CRORES TO BE ADDED AS UNDISCLOSED INCOME IN THE HANDS OF M/S. RUNWAL HOMES PVT. LTD. WE FIND THAT THIS TRIBUNAL IN THE CASE OF M/S. RUNWAL HOMES PVT. LTD. IN ITA NO.5621/MUM/2017 FOR A.Y.2015 - 16 DATED 20/12/2017 HAD RESTRICTED THE SAID ADDITION ONLY TO THE EXTENT OF INCRIMINATING MATERIAL AVAILABLE DURING THE CO URSE OF SEARCH AND DELETED THE ESTIMATION MADE ON ACCOUNT OF EXTRAPOLATION OF RATE PER SQ. FT. WE FIND THAT THE ENTIRE ADDITION IN THE ASSESSEES CASE HAS BEEN MADE ON THE BASIS OF MERE STATEMENT OF SHRI SUBHODH RUNWAL AND THERE IS ABSOLUTELY NO MATERIAL I NVOLVED WHICH IS NOT LINKED WITH THE ON MONEY PAYMENT MADE BY THE ASSESSEE FOR PURCHASE OF SHOP. FURTHER, EVEN IN THE SAME STATEMENT OF SHRI SUBHODH RUNWAL, HE HAD CATEGORICALLY STATED THAT HE EVEN DISAGREED WITH THE DEPARTMENT THAT HE HAD RECEIVED CASH FR OM ALL SALE OF SHOPS AND FLATS MADE BY M/S. RUNW AL HOMES PVT. LTD. 4.3. WITH REGARD TO THE ESTIMATED ADDITION ON ACCOUNT OF EXTRAPOLATION OF RATE PER SQU A RE FEET UNIFORMLY FOR ALL SALE OF FLATS / SHOPS , WE FIND THAT THE SAME HAS BEEN ALREADY DELETED BY TH IS TRIBUNAL IN THE CASE OF M/S. RUNWAL HOMES PVT. LTD., VIDE ITS ORDER DATED 20/12/2017 REFERRED SUPRA . THERE IS ABSOLUTELY NO CASE FOR SUST ENANCE OF THE VERY SAME ESTIMATED ADDITION IN THE HANDS OF THE ASSESSEE IN THE SUM OF RS.1 , 10,71,250/ - TOWARDS UNEX PLAINED INVESTMENT MADE FOR PURCHASE OF SHOP. IN ANY CASE , IT IS FOR THE REVENUE TO BRING ON RECORD EVIDENCES THAT ASSESSEE HAD INDEED MADE ON - MONEY PAYMENTS OVER AND ABOVE THE AGREEMENT VALUE. RELIANCE IN THIS REGARD IS PLACED ON THE CELEBRATED DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF K.P. VARGHESE VS ITO REPORTED IN 131 ITR 597. IN VIEW OF THE AFORESAID OBSERVATIONS AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT REFERRED TO SUPRA AND THE CO - ITA NO . 5784/MUM/2019 MS. PRIYA HAPPYKUMAR SURYA 7 ORDINATE BENCH DECISION OF THI S TRIBUNAL IN THE CASE OF M/S. RUNWAL HOMES PVT. LTD., REFERRED TO SUPRA, WE HAVE NO HESITATION IN DIRECTING THE LD. AO TO DELETE THE ADDITION MADE IN THE SUM OF RS.1 , 10,71,250/ - U/S.69 OF THE ACT IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, THE GROUND NOS.2 - 6 RAISED BY THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 24 / 08 /202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( MAHAVIR SINGH ) SD/ - (M.BALAGANE SH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI ; DATED 24 / 08 / 2021 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . //TRUE COPY//