JYOTI V. SHAH, MUMBAI V. ITO 20(1)(3), MUMBAI

ITA 599/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2157 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 05-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH P YADA V
• Assessee Lawyers: Y P TRIVEDI
• Keywords: Unexplained investment; Search and seizure; Document seized; Documents seized
• Section: 147; 131; 132; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J, MUMBAI BEORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 599/MUM/2012 (ASSESSMENT YEAR : 2008-09) JYOTI V SHAH, G-501, SERENITY COMPLEX, OFF.LINK ROAD, ANDHERI (W), MUMBAI 400 102 PAN: ABBPS 2827H ... APPELLANT VS. THE INCOME TAX OFFICER -20(1)(3), MUMBAI. .... RESPONDEN T APPELLANT BY : SHRI Y.P.TRIVEDI RESPONDENT BY : SHRI AKHILESH P. YADA V DATE OF HEARING : 06/08/2015 DATE OF PRONOUNCEMENT : 30/11/2015 ORDER PER G.S. PANNU,AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE I S DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) -31, MUMBAI DATED 18/11/2011 PERTAINING TO THE ASSESSMENT YEAR 2008-09, WHICH IN TURN HAS ARISEN FROM ORDER PASSED BY THE ASSESSING OFFICER DA TED 24/12/2010 UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2 ITA NO. 599/MUM/2012 (ASSESSMENT YEAR : 2008-09) 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER: 1. ON FACTS OF THE CASE AND IN LAW LEARNED CIT(A) ERRED IN CONFIRMING AN ADDITION OF RS.54,OO,OOO / - U/ S 69 AS UNEXPLAINED INVESTMENTS . 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION WHICH IS MADE ON PRESUMPTION AND ASSUMPTION. THE PIECE OF PAPER FOUN D AT THE TIME OF SEARCH OF PREMISES OF GAYATRI HOMES FROM WHOM THE ASSESSEE HA S PURCHASED SHOP CANNOT BE THE BASIS OF ADDITION. THE PIECE OF PAPER IMPOUNDED AT THE TIME OF SEARCH COULD NOT BE CONSIDERED TO BE A BOOK AND HENCE NO ADDITION CA N BE MADE IN THE HANDS OF ASSESSEE. THE ASSESSEE HAS NO CONTROL OVER THE BOOK S OF ACCOUNTS OR RECORDS OF THE GAYATRI HOMES. THE ADDITION CANNOT BE MADE ON ACCOU NT OF SUSPICION, SURMISES AND CONJECTURES. 3. THE LEARNED CIT (A) HAS ERRED IN NOT APPRECIATI NG THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE FOR PURCHASES OF SHOP MENT IONING THE TOTAL PURCHASE PRICE AND AREA OF THE SHOP. SO THE ORAL STATEMENT AND PIE CE OF PAPER FOUND AT THE PREMISES OF GAYATRI HOMES THE DEVELOPER CANNOT BE T HE BASIS FOR MAKING ADDITION IN THE HANDS OF THE ASSESSEE. 4. THE LEARNED CIT (A) OUGHT NOT TO HAVE CONFIRM T HE ADDITION UNDER SECTION 69 OF THE INCOME TAX ACT, 1961 AS UNEXPLAINED INVESTMENTS AS NO DOCUMENT CONTAINING SIGNATURE OF THE ASSESSEE OR HANDWRITING OF THE ASS ESSEE TO CORROBORATE THE PAYMENT OVER AND ABOVE PURCHASE PRICE WAS FOUND DUR ING THE COURSE OF THE SEARCH AT THE PREMISES OF DEVELOPER. 3. ALTHOUGH THE ASSESSEE HAS RAISED MULTIPLE GROUND S OF APPEAL BUT THE SOLITARY DISPUTE INVOLVED IS AN ADDITION OF R S.54,00,000/- UNDER SECTION 69 OF THE ACT MADE BY THE INCOME-TAX AUTHOR ITIES ON THE GROUND THAT ASSESSEE HAS MADE UNEXPLAINED INVESTMENT IN PU RCHASE OF A SHOP FROM M/S. GAYATRI HOMES. 4. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE H AD PURCHASED A SHOP IN THE LITTLE WORLD MALL, DEVELOPED BY M/S. GAYATRI HOMES OF SIDDHI GROUP FOR A CONSIDERATION OF RS.26,00,000/ - VIDE AN AGREEMENT DATED 5/3/2008. THE AFORESAID AMOUNT WAS PAID BY C HEQUES ON VARIOUS DATES. THERE WAS A SEARCH ACTION UNDER SECTION 132 (1) OF THE ACT IN THE CASE OF M/S. GAYATRI HOMES OF SIDDHI GROUP ON 19/02 /2009. AS PER CERTAIN INCRIMINATING DOCUMENTS SEIZED IN THE CASE OF GAYATRI HOMES, IT 3 ITA NO. 599/MUM/2012 (ASSESSMENT YEAR : 2008-09) WAS NOTICED THAT ASSESSEE HAD PAID ON-MONEY IN CA SH OF RS.54,00,000/- OVER AND ABOVE THE STATED CONSIDERAT ION OF RS.26,00,000/- PAID BY CHEQUE. THE SEIZED DOCUMENT CONTAINED DETAILS REGARDING SHOP NUMBER, AREA IN SQ. FEET, TOTAL SALE CONSIDERATION, AMOUNT RECEIVED IN CHEQUE AND IN CASH, ETC. WRITTEN IN CODE WORDS. A STATEMENT OF SHRI KANTILAL PATEL, THE MAIN PROMOTE R OF M/S. GAYATRI HOMES, WAS ALSO RECORDED UNDER SECTION 131 OF THE A CT ON 02/04/2009. IN THE SAID STATEMENT RECORDED ON THE BASIS OF THE SEIZED DOCUMENT, SHRI KANTILAL PATEL STATED THAT THE SEIZED DOCUMEN T CONTAINED A SUMMARY OF SALE OF SHOPS OF LITTLE WORLD MALL, IN CLUDING DETAILS SUCH AS SHOP NO., NAME OF PURCHASER, CHARGEABLE AREA, TOTAL DEAL VALUE INCLUDING CHEQUE AND CASH COMPONENT, TOTAL CHARGED VALUE APPEARING IN THE SALE AGREEMENT OF THE RESPECTIVE SHOP, AMOUN T OF CHEQUE RECEIVED, BALANCE CHEQUE PAYMENT RECEIVABLE, TOTAL CASH VALUE, AMOUNT OF CASH RECEIVED AND BALANCE CASH RECEIVABLE. HE A DMITTED THAT THE CASH WAS RECEIVED ON SALE OF SHOPS OVER AND ABOVE T HE AGREEMENT VALUE, WHICH WAS NOT ACCOUNTED FOR IN THE REGULAR B OOKS OF ACCOUNT, AND ACCORDINGLY THE SAME WAS OFFERED AS UNDISCLOSED INC OME IN THE HANDS OF M/S. GAYATRI HOMES. BASED ON THE ABOVE INFORMATION , THE ASSESSING OFFICER REOPENED THE ASSESSMENT OF THE ASSESSEE BY ISSUING NOTICE UNDER SECTION148 OF THE ACT ON 30/10/2009. IN THE ENSUING ASSESSMENT, THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAD P URCHASED SHOP NO.110 IN LITTLE WORLD MALL,KHARGAR FOR A SUM OF RS.80,00,000/-, OUT OF WHICH A SUM OF RS.26,00,000/- WAS PAID IN CHEQUE AN D THE BALANCE PAYMENT MADE IN CASH OF RS.54,00,000/- WAS NOT DISC LOSED BY THE ASSESSEE. ACCORDINGLY, THE SUM OF RS.54,00,000/- W AS ADDED TO THE 4 ITA NO. 599/MUM/2012 (ASSESSMENT YEAR : 2008-09) RETURNED INCOME AS UNEXPLAINED INVESTMENT UNDER SE CTION 69 OF THE ACT. THE CIT(A) HAS ALSO SUSTAINED THE ACTION OF T HE ASSESSING OFFICER, AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE MADE A PERTINENT POINT THAT THE IMPUGNED ADDITION IS UNSUS TAINABLE BECAUSE SIMILAR ADDITION MADE IN THE CASE OF M/S. SYNTHETIC HYDROCARBON, WHO HAD ALSO PURCHASED SHOP IN THE LITTLE WORLD MALL, HAS BEEN DELETED BY THE TRIBUNAL VIDE ORDER DATED 12/09/2012 IN ITA NO. 5188/MUM/2011 FOR ASSESSMENT YEAR 2008-09. IT WAS POINTED OUT TH AT IN THE CASE OF SYNTHETIC HYDROCARBON(SUPRA) ADDITION WAS MADE ON T HE BASIS OF SIMILAR MATERIAL, NAMELY, THE DOCUMENT SEIZED IN TH E COURSE OF SEARCH IN THE CASE OF M/S. GAYATRI HOMES AND THE STATEMENT OF SHRI KANTILAL PATEL, ETC. THE TRIBUNAL IN ITS ORDER DATED 12/09/2012 (S UPRA) UPHELD THE ORDER OF THE CIT(A) DELETING THE ADDITION IN THE FO LLOWING WORDS:- 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND C AREFULLY PERUSED THE ORDERS OF LOWER AUTHORITIES. THE WHOLE DISPUTE REVO LVES AROUND THE ENTRIES IN THE DOCUMENT FOUND DURING SEARCH AND SEIZURE OPERAT ION CARRIED ON AT THE PREMISES OF THE BUILDER M/S. GAYATRI HOMES. THE ENT IRE ASSESSMENT HAS BEEN MADE ONLY ON THE BASIS OF ALL THE ENTRIES FOUND IN THE SEIZED DOCUMENT AND THE STATEMET OF SHRI KANTILAL M. PATEL OF GAYATRI H OMES. IT WOULD BE PERTINENT TO NOTE THAT IN THE SEIZED DOCUMENT, THE TOTAL AREA OF SHOP MENTIONED IS 909 SQ. FT., HOWEVER, THE ACTUAL AREA PURCHASED BY THE ASSESSEE IS 454.50 SQ. FT ONLY THIS FACT IS ALSO NOT DISPUTED BY THE ASSESSIN G OFFICER. IT APPEARS THAT THE AO HAS ACCEPTED PARTLY THE GENUINENESS OF THE SEIZE D DOCUMENT IN SO FAR AS IT RELATES TO THE CASH PAYMENT IS CONCERNED I.E. RS. 5 2,26,000/- AND IGNORED THE AREA OF SHOP AS NOTED IN THE SEIZED MATERIAL AS 909 SQ. FT. ON GOING THROUGH THE CROSS EXAMINATION, STATEMENT OF SHRI KANTILAL M . PATEL RECORDED ON 20.12.2010 AND EXHIBITED AT PAGES 17 TO 19 OF THE P APER BOOK FILED BY THE ASSESSEE, WE FIND THAT THE SAID SHRI KANTILAL M. PA TEL HAS NOT GIVEN 5 ITA NO. 5188/M/2011 ANY SPECIFIC ANSWER WHICH COULD POINT O UT THAT THE ASSESSEE HAS ACTUALLY PAID RS. 52,26,000/- OVER AND ABOVE TH E PURCHASE CONSIDERATION PAID BY CHEQUE. ON THE CONTRARY, WE FIND THAT SHRI KANTILAL M. PATEL HAS STATED THAT THE SEIZED DOCUMENT IS A COMPUTER GENER ATED PAPER AND HE IS NOT 5 ITA NO. 599/MUM/2012 (ASSESSMENT YEAR : 2008-09) AWARE OF WHO HAS PREPARED IT. HE HAS OFFERED THE CA SH RECEIPT AMOUNT AS HIS ADDITIONAL INCOME TO PURCHASE PEACE OF MIND AND TO AVOID LITIGATION. 10. BE THAT AS IT MAY, WE DO NOT FIND ANY MATERIAL BROUGHT ON RECORD BY THE AO TO SUBSTANTIATE HIS CLAIM THAT ASSESSEE HAS ACTU ALLY PAID RS. 52,26,000/- OVER AND ABOVE THE CHEQUE AMOUNT FOR THE PURCHASE O F SHOP NO. 119 AT LITTLE WORLD. THE ENTIRE ASSESSMENT HAS BEEN MADE ONLY ON THE BASIS OF SURMISE, ASSUMPTIONS AND CONJECTURES. IN OUR HUMBLE OPINION, SUCH ADDITIONS CANNOT BE SUSTAINED , MORE SO IN THE LIGHT OF THE RATIO LA ID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CBI VS V.C. SHUKLA & O RS (SUPRA). WE DO NOT FIND ANY REASON TO TINKER WITH THE FINDINGS OF LD. CIT(A ) WHICH WE CONFIRM. 6. THE LD. DEPARTMENTAL REPRESENTATIVE APPEARING F OR THE REVENUE HAS DEFENDED THE ADDITION ON THE GROUND THAT THE DO CUMENT SEIZED DURING THE SEARCH ON GAYATRI HOMES AND THE STATEMEN T OF SHRI KANTILAL PATEL CLEARLY SUGGESTED THAT ASSESSEE HAD PAID ON- MONEY OF RS.54,00,000/- FOR PURCHASE OF A SHOP IN LITTLE WO RLD MALL, WHICH WAS NOT RECORDED IN THE REGULAR ACCOUNTS. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE IMPUGNED ADDITION IS ENTIRELY BASED ON THE MATERIAL FOUND DURING THE SEARCH ON TH E BUILDER, M/S. GAYATRI HOMES AND THE STATEMENT OF SHRI KANTILAL PA TEL OF GAYATRI HOMES. IN THE CASE OF M/S.SYNTHETIC HYDRO CARBON(S UPRA), SIMILAR MATERIAL AND EVIDENCE HAS BEEN CONSIDERED BY THE TR IBUNAL AND FOUND TO BE INSUFFICIENT TO HOLD THAT ANY ON-MONEY WAS PAID BY THE PURCHASER OF SHOP IN LITTLE WORLD MALL TO GAYATRI HOMES. THE MATERIAL AND EVIDENCE RELIED UPON BY THE REVENUE IN THE INSTANT CASE IS ALSO SIMILAR AND, THEREFORE, FOLLOWING THE PRECEDENT IN THE CASE OF M/S.SYNTHETIC HYDROCARBON(SUPRA), THE IMPUGNED ADDITION IS UNSUST AINABLE. PERTINENTLY, THE DECISION OF THE TRIBUNAL IN M/S. S YNTHETIC HYDROCARBON 6 ITA NO. 599/MUM/2012 (ASSESSMENT YEAR : 2008-09) (SUPRA) HAS ALSO BEEN AFFIRMED BY THE HONBLE BOMBA Y HIGH COURT VIDE ITS ORDER DATED 18/03/2015 IN INCOME TAX APPEAL NO. 1085 OF 2013. 7.1 APART FROM THE AFORESAID, THE IMPUGNED ADDITION IS OTHERWISE ALSO UNSUSTAINABLE, ALSO AS THE FOLLOWING DISCUS SION WOULD SHOW. AS PER THE DOCUMENT SEIZED IN THE COURSE OF SEARCH, TH E AREA OF SHOP PURCHASED BY THE ASSESSEE WAS NOTED AT 888 SQ.FT., WHEREAS AS PER THE SALE AGREEMENT THE AREA OF THE SHOP WAS SHOWN AT 44 4 SQ.FT. IT TRANSPIRES FROM THE RECORD THAT THE ASSESSING OFFIC ER HAD ISSUED SUMMONS UNDER SECTION131 OF THE ACT TO GAYATRI HOME S, THE BUILDER, IN ORDER TO CONFIRM THE AREA OF SHOP SOLD TO THE ASSES SEE. GAYATRI HOMES STATED IN THEIR REPLY DATED 13/10/2010 THAT THE SHO P SOLD TO THE ASSESSEE WAS OF 444 SQ.FT. ONLY. THE ASSESSEES ST ATEMENT WAS ALSO RECORDED BY THE ASSESSING OFFICER, WHEREIN ASSESSEE DENIED OF HAVING PAID CASH OF RS.26,00,000/- AND FURTHER CONFIRMED T HE PURCHASED AREA OF SHOP AT 444 SQ.FT., AS STATED IN THE SALE AGREE MENT. OSTENSIBLY, THERE IS A CONTRADICTION IN THE AREA STATED IN THE SEIZED DOCUMENT AND IN THE SALE AGREEMENT. THERE IS NO MATERIAL ON RECORD TO ESTABLISH THAT THE AREA OF SHOP PURCHASED BY THE ASSESSEE WAS 888 SQ.F T. AND NOT 444 SQ.FT., AS CLAIMED BY THE ASSESSEE BASED ON THE SAL E AGREEMENT. FURTHER, THERE IS A CONTRADICTION BETWEEN THE SEIZE D DOCUMENT AND THE REPLY GIVEN BY GAYATRI HOMES IN RESPONSE TO SUMMONS BY THE ASSESSING OFFICER REGARDING THE AREA OF SHOP SOLD TO ASSESS EE. THE ASSESSING OFFICER HAS MERELY DISBELIEVED THE VERSION OF THE A SSESSEE WITHOUT ANY CORROBORATIVE EVIDENCE. FOR THE AFORESAID REASON, T HE MATERIAL AND EVIDENCE FOUND IN THE COURSE OF SEARCH ON GAYATRI H OMES CANNOT BE RELIED UPON TO CONCLUSIVELY ESTABLISH THAT ASSESSEE PAID ON-MONEY OF 7 ITA NO. 599/MUM/2012 (ASSESSMENT YEAR : 2008-09) RS.54,00,000/- IN ORDER TO PURCHASE THE SHOP IN LI TTLE WORLD MALL. THEREFORE, THE IMPUGNED ADDITION IS LIABLE TO BE DE LETED. WE HOLD SO. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/11/2015. SD/- SD/- (SANJAY GARG) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 30/11/2015 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI VM , SR. PS