DIXANT SHARMA, MUMBAI V. DCIT (OSD) II CEN RG 7, MUMBAI

ITA 6333/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84089 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 30-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 14-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIMATI ABHA KALA CHANDRA
• Assessee Lawyers: NAGIN PAREKH
• Keywords: Search and seizure; Salary income; Source of fund; Documents seized
• Section: 153A; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND AMIT SHUKLA, (JM) . . , , ./I.T.A. NO.2319/MUM/2010 ( / ASSESSMENT YEAR :2007-08) PRASHANT G SHARMA, C-104, PRASHANT APARTMENTS, OPP. IIT MAIN GATE, POWAI, MUMBAI-400076 / VS. ASSISTANT COMMISSIONER OF INCOME TAX, (OSD-II), CENTRAL RANGE-7, OLD CGO BUILDING, M K ROAD, MUMBAI-400020 ( !' / APPELLANT) .. ( #$!' / RESPONDENT) ! ./ % ./PAN/GIR NO. :AAZPS9066P ./I.T.A. NO.2288/MUM/2010 ( / ASSESSMENT YEAR :2007-08) DIXANT G SHARMA, C-104, PRASHANT APARTMENTS, OPP. IIT MAIN GATE, POWAI, MUMBAI-400076 / VS. ASSISTANT COMMISSIONER OF INCOME TAX, (OSD-II), CENTRAL RANGE-7, OLD CGO BUILDING, M K ROAD, MUMBAI-400020 ( !' / APPELLANT) .. ( #$!' / RESPONDENT) ./I.T.A. NO.6333/MUM/2011 ( / ASSESSMENT YEAR :2006-07) DIXANT SHARMA, C-104, PRASHANT APARTMENTS, OPP. IIT MAIN GATE, POWAI, MUMBAI-400076 / VS. DY. COMMISSIONER OF INCOME TAX, (OSD-II), CENTRAL RANGE-7, OLD CGO BUILDING, M K ROAD, MUMBAI-400020 ( !' / APPELLANT) .. ( #$!' / RESPONDENT) ! ./ % ./PAN/GIR NO. :AAZPS9335D I.T.A. NO.2319,2288/MUM/2010 AND 6333/M/2011 2 !' & / ASSESSEES BY S/SHRI RAJIV KHANDELWAL, NEELKANTH KHANDELWAL AND NAGIN PAREKH #$!' ' & /REVENUE BY SHRIMATI ABHA KALA CHANDRA ( ' ) / DATE OF HEARING : 14.10.2014 *+ ' ) /DATE OF PRONOUNCEMENT : 7.11.2014 / O R D E R PER BENCH ALL THESE APPEALS FILED BY THE RESPECTIVE ASSESSEES ARE DIRECTED AGAINST THE ORDERS PASSED BY LD CIT(A)-40, MUMBAI. ALL THE SE APPEALS WERE HEARD TOGETHER SINCE ONE OF THE ISSUES URGED THEREIN ARE IDENTICAL IN NATURE. ACCORDINGLY, THESE APPEALS ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. THE FACTS RELATING TO THESE CASES ARE DISCUSSED IN BRIEF. BOTH THE ASSESSEES ARE PARTNERS OF M/S GHP CORPORATION, A PA RTNERSHIP FIRM, ENGAGED IN THE BUSINESS AS BUILDERS AND DEVELOPERS. BESIDES TH E ABOVE, THEY ARE ALSO DIRECTORS IN CERTAIN PRIVATE LIMITED COMPANIES ALSO . THE DEPARTMENT CARRIED OUT SEARCH AND SEIZURE OPERATIONS U/S 132 OF THE ACT ON 18-01-2007 IN THE HANDS OF GHP /DAVE GROUP OF CASES. SURVEY OPERATIONS U/S 13 3A OF THE ACT WERE ALSO CARRIED AT BUSINESS PLACES OF THE PARTNERSHIP FIRM AS WELL AS PRIVATE LIMITED COMPANIES. FROM THE ASSESSMENT ORDER OF SHRI DIXAN T G SHARMA, WE NOTICE THAT THE BUSINESS CONCERNS AT WHICH SURVEY / SEARCH OPER ATIONS CONDUCTED ARE M/S BUILDERS ALLIANCE PVT LTD, M/S GHP ENTERPRISES, M/S PRINTER ALLIANCE PVT LTD, M/S BUILDER ALLIANCE, M/S DICKY REAL ESTATE AND INVESTM ENTS, M/S SHARMA STONE CRUSHING CO., M/S GHP CORPORATION. PURSUANT TO SEA RCH/SURVEY OPERATIONS, THE PRESENT ASSESSMENTS HAVE BEEN FRAMED. 3. WE SHALL NOW TAKE UP THE APPEAL FILED BY SHRI D IXANT G SHARMA FOR ASSESSMENT YEAR 2006-07. THIS APPEAL IS BARRED BY LIMITATION BY 491 DAYS. THE ASSESSEE HAS FILED A PETITION REQUESTING THE BENCH TO CONDONE THE DELAY. WE HEARD THE PARTIES ON THIS PRELIMINARY ISSUE. HAVIN G REGARD TO THE SUBMISSIONS MADE IN THE AFFIDAVIT, WE ARE OF THE VIEW THAT THER E WAS SUFFICIENT CAUSE FOR THE I.T.A. NO.2319,2288/MUM/2010 AND 6333/M/2011 3 ASSESSEE IN FILING THIS APPEAL BELATEDLY. ACCORDIN GLY, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. THE LD COUNSEL APPEA RING FOR THE ASSESSEE DID NOT PRESS GROUND NO.1 RELATING TO THE VALIDITY OF INITI ATION OF PROCEEDINGS U/S 153A OF THE ACT. ACCORDINGLY THE SAME IS DISMISSED AS NOT PRESSED. THE GROUND NO.3 IS GENERAL IN NATURE. THE REMAINING GROUND RELATES TO THE VALIDITY OF ADDITION OF RS.1,02,50,000/- MADE U/S 69B OF THE ACT. THE FACT S RELATING THERETO ARE SET OUT IN BRIEF. THE ASSESSEES MAIN SOURCES OF INCOME AR E INCOME PARTNERSHIP FIRMS, SALARY INCOME AND INCOME FROM OTHER SOURCES. DURIN G THE COURSE OF SURVEY OPERATIONS CONDUCTED AT THE BUSINESS PREMISES OF TH E VARIOUS CONCERNS, CERTAIN DOCUMENTS WERE IMPOUNDED. A PAPER FOUND AT PAGE 12 OF ANNEXURE 17 OF THE BUNCH IMPOUNDED DURING THE COURSE OF SURVEY OPERATI ON REVEALED DETAILS OF PAYMENT MADE FOR PURCHASE OF LAND AT JAIPUR. THE S AID LAND WAS PURCHASED BY A SISTER CONCERN NAMED M/S BUILDERS ALLIANCE P LTD. THE SAID PAYMENT WAS REFLECTED AS UNDER:- 7.4.2005 RS. 12,00,000 CASH 9.4.2005 RS. 10,00,000 CASH 14.4.2005 RS. 10,00,000 CASH 15.4.2005 RS. 20,00,000 CASH AGREEMENT RS. 50,50,000 CASH ---------------------- RS.1,02,50,000 + RS. 47,5 0,000 RS.1,50,00,000 THE AMOUNT OF RS.47,50,000/- WAS STATED TO BE ACCOU NTED FOR. IT WAS NOTICED THAT THE ABOVE SAID TRANSACTION PERTAINED TO THE PU RCHASE OF 20 BIGHA LAND AT A PLACE CALLED RAJAWAS @ RS.3,50,000/- PER BIGHA. TH E TRANSACTIONS RECORDED ABOVE WERE QUESTIONED TO SHRI DIXANT G SHARMA IN TH E SWORN STATEMENT RECORDED U/S 132(4) OF THE ACT DURING THE COURSE OF SEARCH ACTION AT HIS RESIDENCE AT JAIPUR ON 18.1.2007, WHEREIN HE REPLIED THAT THE CASH TRANSACTION OF RS.1,02,50,000/- WAS NOT RECORDED IN THE BOOKS OF A CCOUNTS AND OFFERED THE SAID AMOUNT OF RS.1,02,50,000/- FOR TAXATION IN HIS HAND S. HOWEVER, THE ASSESSEE DID NOT OFFER THE SAME IN THE RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE ISSUED U/S 153A OF THE ACT. HOWEVER, THE ASSESSEE FILED A REVISED COMPUTATION OF INCOME IN WHICH HE OFFERED THE ABOVE SAID AMOUNT AN D ALSO ANOTHER AMOUNT OF RS.50.00 LAKHS, WHICH THE ASSESSEE HAD AGREED TO OF FER IN THE SWORN STATEMENT. HENCE THE ASSESSING OFFICER HELD THAT THE ABOVE SAI D DISCLOSURE CANNOT BE CONSIDERED AS DISCLOSURE MADE U/S 132(4) OF THE ACT . ACCORDINGLY THE AO I.T.A. NO.2319,2288/MUM/2010 AND 6333/M/2011 4 ASSESSED THE ABOVE SUM OF RS.1,02,50,000/- IN THE H ANDS OF THE ASSESSEE U/S 69B OF THE ACT AND ALSO ASSESSED THE AMOUNT OF RS.5 0.00 LAKHS AS UNACCOUNTED RECEIPTS ON PROTECTIVE BASIS. 4. THE FACTS RELATING TO THE AMOUNT OF RS.50.00 L AKHS, ASSESSED ON PROTECTIVE BASIS, ARE DISCUSSED IN BRIEF. THE ASSESSEE AND HI S BROTHER SHRI PRASHANT SHARMA ARE PARTNERS OF A PARTNERSHIP FIRM NAMED M/S GHP CORPORATION. THE ABOVE SAID PARTNERSHIP FIRM HAD OWNED A LAND NEAR J AIPUPR AND THE SAID LAND WAS AGREED TO BE DEVELOPED JOINTLY BY THE PARTNERSH IP FIRM AND M/S ALOKIK TOWNSHIP CORPORATION. PURSUANT THERETO, M/S GHP CO RPORATION RECEIVED A SUM OF RS.3.00 CRORES AS REFUNDABLE ADVANCE FROM M/S AL OKIK TOWNSHIP CORPORATION, OF WHICH RS.2.00 CRORES WAS RECEIVED BY WAY OF CHEQ UE AND THE REMAINING RS.1.00 CRORE WAS RECEIVED BY WAY OF CASH. THE AMO UNT OF RS.2.00 CRORE WAS ACCOUNTED IN THE BOOKS BY DIRECTLY CREDITING THE SA ME TO THE CAPITAL ACCOUNT OF BOTH THE PARTNERS. THE CASH RECEIPT OF RS.1.00 CRO RE WAS NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. IN THE SWORN STATEMENT TAKEN DUR ING THE COURSE OF SEARCH, BOTH SHRI DIXANT SHARMA AND SHRI PRASHANT SHARMA A GREED TO OFFER RS.50.00 LAKHS EACH AS INCOME IN THEIR RESPECTIVE HANDS. SI NCE THE ASSESSEE DID NOT OFFER THE AMOUNT OF RS.50.00 LAKHS ALSO IN THE RETURN FIL ED U/S 153A, THE AO ASSESSED THE SAME AS UNACCOUNTED CASH RECEIPT ON PROTECTIVE BASIS, SINCE THE SAME AMOUNT WAS ALSO ASSESSED IN THE HANDS OF M/S GHP CO RPORATION ON SUBSTANTIVE BASIS. 5. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) DELE TED THE ADDITION OF RS.50.00 LAKHS MADE ON PROTECTIVE BASIS, SINCE HE H AD CONFIRMED THE ADDITION MADE IN THE HANDS OF THE PARTNERSHIP FIRM ON SUBSTA NTIVE BASIS. WITH REGARD TO THE ADDITION OF RS.1,02,50,000/- PERTAINING TO THE LAND PURCHASED BY M/S BUILDERS ALLIANCE P LTD, THE ASSESSEE SUBMITTED BEFORE LD CI T(A) THAT HE HAD MADE ADMISSION IN THE SWORN STATEMENT IN A CONFUSED STAT E OF MIND UNDER PRESSURE AND HENCE IT WAS NOT A VOLUNTARY ADMISSION. HE PLA CED RELIANCE ON THE CIRCULAR ISSUED BY CBDT, IN WHICH THE CBDT HAD ADVISED ITS O FFICERS NOT TO OBTAIN CONFESSION AS UNDISCLOSED INCOME AND FURTHER IGNORA NCE OF THE ASSESSEE SHOULD NOT BE CAPITALIZED. HE FURTHER SUBMITTED THAT THE DETAILS OF PAYMENTS WERE FOUND IN A LOOSE PAPER AND HENCE THE SAME CANNOT BE CONSI DERED AS AUTHENTIC, RELIABLE AND VERIFIABLE. HE FURTHER SUBMITTED THAT THE LAND WAS PURCHASED BY M/S BUILDERS I.T.A. NO.2319,2288/MUM/2010 AND 6333/M/2011 5 ALLIANCE P LTD AND HENCE IT IS NOT CORRECT TO ASSES S THE AMOUNT PAID BY WAY OF CASH IN HIS HANDS. HE ALSO ARGUED THAT THE IMPUGNE D ADDITION WAS MADE U/S 69B OF THE ACT, BUT THE CONDITIONS PRESCRIBED THEREIN A RE NOT SATISFIED IN THE HANDS OF THE ASSESSEE, SINCE THE INVESTMENT WAS MADE M/S BUI LDERS ALLIANCE (P) LTD. THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION RENDE RED BY THE TRIBUNAL IN THE CASE OF M/S HALDIRAM FOODS LTD VS. ACIT (79 ITD 425 )(DEL), WHEREIN THE TRIBUNAL HAD HELD THAT A COMPANY IS SEPARATE AND DI STINCT FROM ITS SHARE HOLDERS AND FURTHER THE DIRECTORS CANNOT BE CONSTRUED TO BE THE LEGAL OWNERS. IT WAS FURTHER HELD THAT THE AO WAS CORRECT IN HOLDING THA T THE INVESTMENT MADE FOR ACQUIRING THE ASSET OF THE COMPANY WAS TO BE EXAMIN ED IN THE HANDS OF THE COMPANY AND NOT IN THE HANDS OF THE DIRECTOR OF THE COMPANY, WHO WAS SIMPLY AN AGENT AND NOT THE OWNER OF THE ASSET. 6. THE LD CIT(A) HELD THAT THE IMPOUNDED DOCUMENT , VIZ., PAGE 12 OF ANNEXURE A-17 CONTAINED EXHAUSTIVE DETAILS RELATING TO THE PROPERTY TRANSACTION. FURTHER, THE ASSESSEE HAS ACCEPTED THE CONTENTS OF THE SAID DOCUMENT IN THE STATEMENT TAKEN AT THE TIME OF SEARCH. ACCORDINGLY , HE REJECTED THE CLAIM OF THE ASSESSEE THAT IT WAS DUMB DOCUMENT. THE LD CIT(A) FURTHER HELD THAT THE DISCLOSURE MADE BY THE ASSESSEE CANNOT BE CONSIDERE D AS A CONFESSION, SINCE THE SAME WAS VOLUNTARILY MADE AND FURTHER IT WAS MA DE ON SHOWING THE IMPOUNDED DOCUMENT. FURTHER THE ASSESSEE HIMSELF H AS OFFERED THE SAME AS HIS INCOME IN THE REVISED COMPUTATION OF INCOME. ACCORD INGLY, THE LD CIT(A) HELD THAT THE ASSESSEE CANNOT CHANGE HIS STAND. THE LD CIT(A) FURTHER HELD THAT THE CLAIM OF THE ASSESSEE THAT THE LAND WAS PURCHASED B Y A PRIVATE LIMITED COMPANY VIZ., M/S BUILDERS ALLIANCE P LTD WAS LIABLE TO BE REJECTED, SINCE THE ABOVE SAID PRIVATE LIMITED COMPANY WAS ONLY A FACADE CREATED B Y THE ASSESSEE. THE LD CIT(A) EXPRESSED THE VIEW THAT THE ASSESSEE IS THE REAL BENEFICIARY OF THE IMPUGNED INVESTMENT, SINCE HE IS THE DIRECTOR OF TH E PRIVATE LIMITED COMPANY IN WHOSE NAME THE LAND WAS PURCHASED. THE LD CIT(A) FURTHER EXPRESSED THE VIEW THAT A COMPANY IS INDEED A JURISTIC PERSON BUT IT I S SEPARATE AND DISTINCT ONLY FOR THE SHARE HOLDERS AND NOT NECESSARILY FROM THE DIRE CTORS, PARTICULARLY IN A COMPANY WHICH IS CONTROLLED BY FAMILY OR FEW MEMBER S. ACCORDINGLY, THE LD CIT(A) HELD THAT THE ASSESSEE COULD NOT TAKE SUPPOR T FROM THE DECISION RENDERED IN THE CASE OF M/S HALDIRAM FOODS LTD (SUPRA). TH E LD CIT(A) FURTHER PLACED RELIANCE ON THE DECISIONS RENDERED BY HONBLE SUPRE ME COURT IN THE CASES OF CIT I.T.A. NO.2319,2288/MUM/2010 AND 6333/M/2011 6 VS. DURGA PRASAD MORE (82 ITR 540) AND SUMATI DAYAL VS. CIT (214 ITR 801) AND HELD THAT THE ASSESSING OFFICER IS ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES AND ACCORDINGLY HELD THAT THE ASSESSE E SHRI DIXANT SHARMA ONLY HAS MADE THE IMPUGNED INVESTMENT. ACCORDINGLY HE C ONFIRMED THE ORDER OF LD CIT(A). 7. BEFORE US, THE LD A.R SUBMITTED THE IMPUGNED L ANDS WERE PURCHASED BY THE COMPANY NAMED M/S BUILDERS ALLIANCE P LTD AND H ENCE THE TRANSACTIONS NOTED DOWN IN THE IMPOUNDED DOCUMENT PERTAIN TO THE ABOVE SAID COMPANY ONLY. HE FURTHER SUBMITTED THAT THE SALE AGREEMENTS WERE EXECUTED IN THE NAME OF THE COMPANY CITED ABOVE AND THE PURCHASE OF LAND HAS AL SO BEEN ACCOUNTED FOR IN THE BOOKS OF ABOVE SAID COMPANY. HE FURTHER SUBMIT TED THAT THE DETAILS RELATING TO CASH PAYMENTS WERE NOTICED FROM A DOCUMENT IMPOU NDED DURING THE COURSE OF SURVEY OPERATION. HOWEVER THEY WERE BROUGHT TO THE PLACE OF SEARCH AND THE QUESTIONS RELATING THERETO WAS ASKED TO THE ASSESSE E IN THE STATEMENT TAKEN FROM HIM AT THE TIME OF SEARCH, SINCE THE ASSESSEE WAS O NE OF THE DIRECTORS. HE SUBMITTED THAT THE REVENUE CARRIED OUT SIMULTANEOUS LY SEARCH OPERATIONS IN THE HANDS OF CERTAIN PERSONS AND SURVEY OPERATIONS IN T HE HANDS OF OTHERS. THE DOCUMENTS SEIZED/IMPOUNDED DURING THE COURSE OF SEA RCH/SURVEY WERE EXAMINED TOGETHER AND THE EXPLANATIONS WERE SOUGHT FROM THE ASSESSEE AT THE TIME OF TAKING STATEMENT. HE SUBMITTED THAT THE LEGAL EFFE CT OF SEARCH OPERATIONS AND SURVEY OPERATIONS ARE DIFFERENT AND HENCE IT WAS NO T CORRECT ON THE PART OF THE DEPARTMENT TO MIX THE DOCUMENTS SEIZED DURING THE C OURSE OF SEARCH AND THE DOCUMENTS IMPOUNDED DURING THE COURSE OF SEARCH TO INTERROGATE THE ASSESSEE DURING THE COURSE OF SEARCH. HE FURTHER SUBMITTED T HAT THE ASSESSEE WAS IN A CONFUSED STATE OF MIND DUE TO INVOLVEMENT OF SEARCH /SURVEY PROCEEDINGS IN VARIOUS PLACES AND HENCE SHRI DIXANT SHARMA WAS IN A CONFUSED STATE OF MIND, SINCE THE DETAILS PERTAINING TO MANY CONCERNS WERE ASKED FROM HIM AT THE TIME OF SEARCH. IN SUCH A CONFUSED STATE, HE ADMITTED THE INVOLVEMENT OF CASH TRANSACTIONS AND ALSO AGREED TO OFFER THE SAME AS H IS INCOME, EVEN-THOUGH THE TRANSACTIONS PERTAINED TO M/S BUILDERS ALLIANCE (P) LTD. HE SUBMITTED THAT M/S BUILDERS ALLIANCE (P) LTD IS A SEPARATE COMPANY AND SEPARATELY ASSESSED TO TAX. A PRIVATE LIMITED COMPANY IS A SEPARATE JURISTIC PE RSON DISTINCT AND SEPARATE FROM THE SHARE HOLDERS/DIRECTORS. HE SUBMITTED THAT THE LD CIT(A) WAS NOT CORRECT IN HOLDING THAT THE DIRECTORS CANNOT BE SEPARATED FROM THE COMPANY, WHICH IS TOTALLY I.T.A. NO.2319,2288/MUM/2010 AND 6333/M/2011 7 AGAINST THE ESTABLISHED PRINCIPLES. ACCORDINGLY, H E SUBMITTED THAT THE LD CIT(A) WAS NOT CORRECT IN OBSERVING THAT THE BENEFICIAL OW NERS OF M/S BUILDERS ALLIANCE (P) LTD ARE ITS DIRECTORS. THE VERY FACT THAT THE ASSESSEE HAD AGREED TO OFFER THE CASH PAYMENTS AS HIS INCOME, WHICH WAS PERTAINING T O THE LAND PURCHASED BY ONE OF THE GROUP COMPANIES CLEARLY SHOW THAT HE COU LD NOT PROPERLY APPLY HIS MIND AT THAT POINT OF TIME. HE FURTHER SUBMITTED TH AT THE ASSESSEE HAD GIVEN THE STATEMENT WITHOUT VERIFYING THE BOOKS OF ACCOUNT AL SO. SINCE THE ASSESSEE WAS ONE OF THE PARTNERS/DIRECTORS IN MANY CONCERNS, IT IS QUITE COMMON TO REFER ALL OF THEM AS HIS OWN CONCERNS AND THE ASSETS BELONGING T O THOSE CONCERNS AS HIS. HOWEVER, UNDER THE EYES OF LAW, EACH CONCERN IS A S EPARATE ENTITY HAVING INDEPENDENT RIGHTS AND LIABILITIES. ACCORDINGLY HE SUBMITTED THAT THE UNDISCLOSED INVESTMENT, IF ANY, INVOLVED IN THE LAND DEAL SHOUL D NOT BE ASSESSED IN THE HANDS OF THE ASSESSEE HEREIN. HE FURTHER SUBMITTED THA T THE ASSESSING OFFICER DID NOT CONDUCT FURTHER ENQUIRIES TO ASCERTAIN THE VERACITY OF THE IMPOUNDED DOCUMENT ALSO. SINCE THE ASSESSEE DID NOT ACTUALLY PAY THE CASH OF RS.1,02,50,000/-, HE DID NOT DISCLOSE THE SAME IN HIS RETURN OF INCOME. ACCORDINGLY HE CONTENDED THAT THE LD CIT(A) WAS NOT CORRECT IN CONFIRMING THE ASS ESSMENT OF THE AMOUNT OF RS.1,02,50,000/- IN THE HANDS OF THE ASSESSEE. 8. ON THE CONTRARY, THE LD D.R PLACED STRONG REL IANCE ON THE ORDER OF LD CIT(A) AND FURTHER SUBMITTED THAT THE ASSESSEE HIMS ELF HAS ADMITTED THE IMPUGNED AMOUNT AS HIS INCOME IN THE SWORN STATEMEN T TAKEN AT THE TIME OF SEARCH. 9. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSU E AND PERUSED THE RECORD. THE FACT THAT THE LAND WAS PURCHASED BY M/S BUILDER S ALLIANCE (P) LTD IS NOT DISPUTED. THE COPY OF CONVEYANCE DEEDS PLACED IN T HE PAPER BOOK FILED BY THE ASSESSEE ALSO SHOW THAT THE LAND WAS PURCHASED BY T HE ABOVE SAID COMPANY. THE FACT THAT THE IMPUGNED LAND WAS PURCHASED FROM FOUR PERSONS IS ALSO NOT DISPUTED. THE AO HIMSELF SAYS THAT THE TRANSACTION RELATES TO PURCHASE OF 20 BIGAH LAND @ RS.3,50,000/- PER BIGAH, MEANING THERE BY THE TOTAL CONSIDERATION SHOULD BE RS.70,00,000/-. THE IMPOUNDED DOCUMENT S HOWS CHEQUE PAYMENTS OF RS.47,50,000/- AND CASH PAYMENT OF RS.1,02,50,00 0/-. THE DETAILS OF CHEQUE PAYMENTS AVAILABLE IN THE IMPOUNDED DOCUMENT ALSO T ALLIES WITH THE PAYMENT DETAILS NOTED DOWN IN THE CONVEYANCE DEEDS. THE SA LE CONSIDERATION SHOWN IN I.T.A. NO.2319,2288/MUM/2010 AND 6333/M/2011 8 THE TWO CONVEYANCE DEEDS AGGREGATE TO RS.67.48 LAKH S. IN THE IMPOUNDED DOCUMENT, IT IS ALSO MENTIONED THAT EACH PERSON RS .17,50,000/-, WHICH APPEAR TO MEAN THAT EACH SELLER SHALL GET THAT AMOUNT. TH US AGGREGATE AMOUNT TO BE PAID SHOULD WORK OUT TO RS.17,50,000 X 4 PERSONS = RS.70.00 LAKHS. IF THE SALE CONSIDERATION IS TAKEN AS RS.1,50,00,000/-, IT IS N OT UNDERSTANDABLE AS TO HOW THE SHARE OF EACH SELLER WAS SHOWN AS RS.17,50,000/- IN STEAD OF RS.37,50,000/-. WE NOTICE THAT NONE HAS TAKEN STEPS TO ANALYZE THE SEIZED DOCUMENT OBJECTIVELY AND TO RESOLVE THE CONTRADICTIONS. 10. WE NOTICE THAT THE ASSESSING OFFICER HAS NOT A T ALL EXAMINED THE ABOVE SAID DETAILS AT THE TIME OF MAKING ASSESSMENT. HE HAS SIMPLY ASSESSED THE CASH PAYMENT OF RS.1,02,50,000/- AS INCOME OF THE ASSESS EE U/S 69B OF THE ACT ON THE STRENGTH OF THE STATEMENT GIVEN BY THE ASSESSEE. T HE PROVISIONS OF SEC. 69B IS APPLICABLE TO THE CASES WHERE THE AMOUNT OF INVESTM ENT IS NOT FULLY DISCLOSED IN THE BOOKS OF ACCOUNT. WE HAVE ALREADY NOTICED THAT THE LAND WAS PURCHASED BY M/S BUILDERS ALLIANCE (P) LTD AND ACCORDING TO LD A .R, THE SAID PURCHASE HAS BEEN DULY ACCOUNTED FOR BY IT. HENCE, THE ASSESSEE IS CONTENDING THAT THE TRANSACTIONS PERTAINING TO THE LAND PURCHASE DO NOT BELONG TO IT. FURTHER, THE AO HAS PRESUMED THAT THE AMOUNT OF RS.47.50 LAKHS WAS ACCOUNTED FOR AND THE AMOUNT OF RS.1,02,50,000/- WAS NOT ACCOUNTED IN THE BOOKS OF ACCOUNT, WHICH APPEARS TO BE NOT CORRECT. WE HAVE SEEN EARLIER TH AT THE SALE CONSIDERATION APPEARS TO BE RS.70.00 LAKHS, WHICH IS EVIDENCED BY THE FACT THAT THE AO HIMSELF RECORDS THE SAME IN THE ASSESSMENT ORDER. FURTHER, THE IMPOUNDED DOCUMENT SAYS THAT RS.17.50 LAKHS (EACH PERSON). FURTHER TH E SALE CONSIDERATION MENTIONED IN THE CONVEYANCE DEED ITSELF WAS RS.67.4 8 LAKHS. HOWEVER, IT IS SEEN THAT THE ASSESSING OFFICER DID NOT POSE ANY QU ESTION TO THE ASSESSEE SEEKING EXPLANATIONS IN THIS REGARD, WHICH ARE APPA RENTLY VISIBLE. THUS IT IS SEEN THAT THE ONLY BASIS ON WHICH THE IMPUGNED AMOUNT O F RS.1,02,50,000/- WAS DECIDED TO BE ASSESSED IN THE HANDS OF THE ASSESSEE WAS THE SWORN STATEMENT GIVEN BY SHRI DIXANT G SHARMA. 11. THE DISCUSSION MADE IN THE PREVIOUS PARAGRAPH WOULD SHOW THAT THERE IS NO CLARITY, BOTH IN THE MIND OF THE ASSESSING OFFIC ER AS WELL AS THE ASSESSEE. EVEN THOUGH THE CONVEYANCE DEEDS WERE AVAILABLE WIT H THE ASSESSING OFFICER, YET HE HAS CHOSEN TO PRESUME THAT THE ACCOUNTED CONSIDE RATION WAS RS.47.50 LAKHS I.T.A. NO.2319,2288/MUM/2010 AND 6333/M/2011 9 ONLY, WHEREAS IT CAN BE REASONABLY PRESUMED THAT TH E SALE CONSIDERATION WAS RS.70.00 LAKHS. FURTHER WE NOTICE THAT THE ASSESSI NG OFFICER HAS NOT TAKEN ANY STEPS TO CORROBORATE HIS VIEW WITH ANY OTHER DOCUME NT/BOOKS. WE HAVE ALSO NOTICED THAT THE ASSESSEE HAS BEEN POSED QUESTIONS RELATING TO GROUP OF CASES, WHICH CONSISTED OF M/S BUILDERS ALLIANCE PVT LTD, M /S GHP ENTERPRISES, M/S PRINTER ALLIANCE PVT LTD, M/S BUILDER ALLIANCE, M/S DICKY REAL ESTATE AND INVESTMENTS, M/S SHARMA STONE CRUSHING CO., M/S GHP CORPORATION. HENCE, IT IS QUIET POSSIBLE THAT THE ASSESSEE WOULD NOT BE IN A POSITION TO ANSWER THE QUESTIONS PRECISELY WITHOUT MAKING REFERENCE TO ANY OF THE DOCUMENT. THE DISCUSSIONS MADE IN THIS PARAGRAPH AND ALSO IN THE EARLIER PARAGRAPHS SHOW THAT THERE IS MERIT IN THE SUBMISSION THAT THE ASSESSEE HAS MADE THE STATEMENT IN CONFUSED STATE OF MIND. HENCE, IN OUR VIEW, THERE IS MERIT IN THE SUBMISSIONS OF THE ASSESSEE THAT THE TAX AUTHORITIES SHOULD NOT EX CLUSIVELY PLACE RELIANCE ON THE SWORN STATEMENT BY TOTALLY DISREGARDING THE FACTS. 12. IN THE INSTANT CASE, WE NOTICE THAT THERE IS AN INSTANCE WHEREIN THE TAX AUTHORITIES THEMSELVES HAVE IGNORED, I.E., NOT CHOS EN TO ASSESS THE AMOUNT DECLARED BY THE ASSESSEE IN THE SWORN STATEMENT TAK EN FROM HIM. WE HAD EARLIER STATED THAT BOTH SHRI DIXANT SHARMA AND SHRI PRASHA NT SHARMA HAD AGREED TO OFFER RS.50.00 LAKHS EACH IN THE SWORN STATEMENT. HOWEVER, THE AGGREGATE AMOUNT OF RS.1.00 CRORE WAS FINALLY ASSESSED BY THE AO ON SUBSTANTIVE BASIS IN THE HANDS OF M/S GHP CORPORATION AND ON PROTECTIVE BASIS IN THE HANDS OF ABOVE SAID TWO PERSONS. HOWEVER, THE LD CIT(A) HAS CONFI RMED THE ASSESSMENT IN THE HANDS OF M/S GHP CORPORATION ON SUBSTANTIVE BASIS A ND DELETED THE ADDITION MADE IN THE HANDS OF ABOVE SAID TWO PERSONS. THESE SEQUENCE OF EVENTS SHOW THAT THE TAX AUTHORITIES HAVE ALSO DISREGARDED THE ADMISSION MADE IN THE SWORN STATEMENT, BUT PROCEEDED TO ASSESS THE INCOME IN TH E HANDS OF RIGHT PERSON ONLY ON DUE CONSIDERATION OF THE FACTS SURROUNDING THE S AME, MEANING THEREBY THE TAX AUTHORITIES HAVE ACTED IN AN OBJECTIVE MANNER TO CO RROBORATE THE ADMISSIONS MADE IN THE SWORN STATEMENT WITH OTHER MATERIALS AN D HAVE COME TO THE CONCLUSION TO ASSESS THE SAID AMOUNT IN THE HANDS O F RIGHT PERSON. HOWEVER, WITH RESPECT TO THE ASSESSMENT OF RS.1,02,50,000/-, NO SUCH EXERCISE WAS CARRIED OUT AND THE TAX AUTHORITIES HAVE SOLELY RELIED UPO N THE SWORN STATEMENT TO ASSESS THE AMOUNT OF RS.1,02,50,000/-, WITHOUT MAKI NG ANY FURTHER ENQUIRY AND I.T.A. NO.2319,2288/MUM/2010 AND 6333/M/2011 10 ALSO WITHOUT MAKING ANY ATTEMPT TO RESOLVE THE CONT RADICTIONS POINTED OUT BY US EARLIER. 13. IN VIEW OF THE FOREGOING DISCUSSIONS, WE ARE O F THE VIEW THAT THE FACTS PREVAILING IN THE INSTANT CASE AND SURROUNDING CIRC UMSTANCES DO NOT WARRANT ASSESSMENT OF RS.1,02,50,000/- IN THE HANDS OF THE ASSESSEE HEREIN. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE ADDITION OF THE ABOVE SAID AMOUNT MA DE IN THE HANDS OF SHRI DIXANT G SHARMA. 14. WE SHALL NOW TAKE UP THE APPEALS FILED BY BO TH SHRI DIXANT G SHARMA AND SHRI PRASHANT G SHARMA FOR AY 2007-08. BOTH THE AS SESSEES ARE AGGRIEVED BY THE DECISION OF LD CIT(A) IN NOT GIVING SET OFF OF RS.50.00 LAKHS CLAIMED BY BOTH OF THEM IN THEIR RESPECTIVE HANDS. THE FACTS RELAT ING TO THE SAME ARE DISCUSSED IN BRIEF. IN THE STATEMENT TAKEN U/S 132(4) OF THE AC T, SHRI DIXANT G SHARMA DISCLOSED A SUM OF RS.67.50 LAKHS, WHICH INCLUDED U NEXPLAINED CASH OF RS.35.00 LAKHS AND UNEXPLAINED JEWELLERY OF RS.30.00 LAKHS. SIMILARLY SHRI PRASHANT G SHARMA DECLARED A SUM OF RS.123.40 LAKHS, WHICH INC LUDED UNEXPLAINED CASH OF RS.60.00 LAKHS AND UNEXPLAINED JEWELLERY OF RS.50.0 0 LAKHS. 15. WE HAVE ALREADY SEEN THAT M/S GHP CORPORATION, IN WHICH BOTH THE ASSESSEES ARE PARTNERS, HAD RECEIVED A SUM OF RS.3. 00 CRORES AS ADVANCE FROM M/S ALOKIK TOWNSHIP CORPORATION. THE ABOVE SAID AM OUNT WAS RECEIVED BY WAY OF CHEQUE TO THE TUNE OF RS.2.00 CRORES AND THE BAL ANCE AMOUNT OF RS.1.00 CRORE WAS RECEIVED BY WAY OF CASH. THE AMOUNT OF RS.1.00 CRORE RECEIVED IN CASH WAS NOT ACCOUNTED IN THE BOOKS OF M/S GHP CORPORATION. HOWEVER, IN THE STATEMENT TAKEN FROM THEM, BOTH THE ASSESSEES AGREED TO OFFER RS.50.00 LAKHS EACH AS THEIR INCOME AND OFFERED THE SAME IN AY 2006-07. H OWEVER, THE ASSESSING OFFICER ASSESSED THE SAME ON PROTECTIVE BASIS IN TH E HANDS OF THESE ASSESSEES AND ON SUBSTANTIVE BASIS IN THE HANDS OF M/S GHP CO RPORATION. IN THE APPEAL FILED BY THE ASSESSEES, THE LD CIT(A) CONFIRMED THE ASSESSMENT OF RS.1.00 CRORE MADE ON SUBSTANTIVE BASIS IN THE HANDS OF M/S GHP C ORPORATION AND ACCORDINGLY DELETED THE ASSESSMENT OF RS.50.00 LAKHS EACH MADE IN THE HANDS OF THESE ASSESSEES ON PROTECTIVE BASIS. I.T.A. NO.2319,2288/MUM/2010 AND 6333/M/2011 11 16. THE SUBMISSION OF THE ASSESSEES IS THAT THE A MOUNT OF RS.2.00 CRORE RECEIVED BY M/S GHP CORPORATION BY WAY OF CHEQUE WA S DIRECTLY CREDITED TO THE CAPITAL ACCOUNT OF BOTH THE ASSESSEES HERE. IT WAS FURTHER SUBMITTED THAT THE AMOUNT OF RS.1.00 CRORE RECEIVED IN CASH WAS ALSO T AKEN AWAY BY THEM AT RS.50.00 LAKHS EACH. ACCORDINGLY IT WAS CONTENDED BY THEM BEFORE THE ASSESSING OFFICER THAT THE UNEXPLAINED CASH AND UNE XPLAINED JEWELLERY DECLARED BY THEM SHOULD BE REDUCED BY THE AMOUNT OF RS.50.00 LAKHS, SINCE THE SOURCES TO THAT EXTEND NOW STANDS EXPLAINED. HOWEVER, THE AO REJECTED THE SAID CLAIM ON THE GROUND THAT THE AMOUNT OF RS.1.00 CRORE WAS ASSESSED IN THE HANDS OF M/S GHP CORPORATION AND FURTHER THERE IS TIME GAP O F ABOUT ONE AND HALF YEARS. ACCORDINGLY, THE AO DID NOT GIVE SET OFF CLAIMED BY BOTH THE ASSESSEES. THE LD CIT(A) ALSO CONFIRMED THE ASSESSMENT ORDER ON THE R EASONING THAT THE CLAIM PUT FORTH BY THE ASSESSEES IS AN AFTER THOUGHT. 17. WE HEARD THE PARTIES ON THIS ISSUE AND PERUSED THE RECORD. THE LD A.R SUBMITTED THAT THE TIME GAP OF ONE AND HALF YEARS P OINTED OUT BY THE AO IS NOT CORRECT, SINCE THE DATE OF PURCHASE OF JEWELLERY IS NOT AVAILABLE ON RECORD. HE SUBMITTED THAT THE INCOME OF RS.1.00 CRORE WAS ASSE SSED IN THE HANDS OF M/S GHP CORPORATION. HOWEVER THERE IS NO MATERIAL TO D ISPROVE THE CLAIM OF THE ASSESSEES THAT THEY HAD WITHDRAWN THE ABOVE SAID AM OUNT AT RS.50.00 LAKHS EACH. THE LD A.R FURTHER SUBMITTED THAT, ONCE IT I S SHOWN THAT THE CASH WAS AVAILABLE WITH THE ASSESSEES, THE SAME WOULD EXPLAI N THE SOURCES FOR CASH AND JEWELLERY FOUND DURING THE COURSE OF SEARCH. ON TH E CONTRARY, THE LD D.R PLACED RELIANCE ON THE ORDERS OF TAX AUTHORITIES. 18. IT IS AN UNDISPUTED FACT THAT THE CONCERN M/S GHP CORPORATION RECEIVED RS.3.00 CRORES AS ADVANCE IN THE FINANCIAL YEAR 200 5-06 RELEVANT TO THE ASSESSMENT YEAR 2006-07. IT IS ALSO AN UNDISPUTED FACT THAT THE AMOUNT OF RS.2.00 CRORES RECEIVED BY WAY OF CHEQUE WAS CREDIT ED TO THE CAPITAL ACCOUNT OF THE ASSESSEES HEREIN AVAILABLE IN THE BOOKS OF M/S GHP CORPORATION. WHEN THIS FACT IS ACCEPTED, WE DO NOT FIND ANY REASON TO REJE CT THE CLAIM OF THE ASSESSEES THAT THEY HAD TAKEN AWAY THE REMAINING AMOUNT OF RS .1.00 CRORES RECEIVED BY WAY OF CASH. FURTHER, WE NOTICE THE REVENUE DID NO T BRING ANY OTHER MATERIAL ON RECORD TO DISPROVE THE SAID CLAIM. ONCE IT IS SEEN THAT THESE ASSESSEES ARE POSSESSED OF RS.50.00 LAKHS EACH, THEN THERE WOULD MERIT IN THEIR CONTENTION THAT I.T.A. NO.2319,2288/MUM/2010 AND 6333/M/2011 12 SAID AMOUNT WOULD BE AVAILABLE AS SOURCE FOR MAKING INVESTMENTS. IN THE INSTANT CASE, BOTH THE ASSESSEES HAVE SOUGHT SET OFF OF RS. 50.00 LAKHS AGAINST THE UNEXPLAINED CASH AND UNEXPLAINED JEWELLERY FOUND DU RING THE COURSE OF SEARCH. ON PROPER CONSIDERATION OF FACTS AVAILABLE IN THIS CASE, IN OUR VIEW, BOTH THE ASSESSEES ARE JUSTIFIED IN THEIR CLAIM THAT THE SOU RCES TO THE EXTENT OF RS.50.00 LAKHS IN EACH OF THEIR HAND STAND EXPLAINED, PARTIC ULARLY IN VIEW OF THE FACT THAT THE REVENUE DID NOT BRING ANY MATERIAL ON RECORD TO SHO W THAT THE AMOUNT OF RS.1.00 CRORE WAS OTHERWISE SPENT AWAY. ACCORDINGLY WE FI ND MERIT IN THE CLAIM PUT FORTH BY BOTH THE ASSESSEES. ACCORDINGLY, WE SET ASIDE T HE ORDER PASSED BY LD CIT(A) ON THIS ISSUE IN BOTH THE HANDS AND DIRECT THE ASSE SSING OFFICER TO GIVE CREDIT OF RS.50.00 LAKHS EACH IN THE HANDS OF THE ASSESSEES H EREIN. 19. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEES ARE ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 7TH NOV , 2014. *+ , -. 7TH NOV ,2014 + ' /( 0 SD SD ( / AMIT SHUKLA) ( . . / B.R. BASKARAN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ( MUMBAI:7TH NOV,2014. . . ./ SRL , SR. PS !'# $#%! / COPY OF THE ORDER FORWARDED TO : 1. !' / THE APPELLANT 2. #$!' / THE RESPONDENT. 3. ( ) / THE CIT(A)- CONCERNED 4. / CIT CONCERNED 5. 12/ #3 , ) 3 , ( / DR, ITAT, MUMBAI CONCERNED 6. /4 5( / GUARD FILE. / BY ORDER, TRUE COPY 6 (ASSTT. REGISTRAR) ) 3 , ( /ITAT, MUMBAI