Jt. CIT,Cent. Cir., Aurangabad V. Shri Lalit Ramgopal Rathi, Aurangabad

ITA 635/PUN/2011

• Counselvise Citation: 63524514 RSA 2011
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-12-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 16-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Keywords: Unexplained investment; Document seized; Bogus loan; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.635/PN/2011 A.Y. 2006-07 ACIT, CENTRAL CIRCLE, AURANGABAD APPELLANT VS. SHRI LALIT RAMGOPAL RATHI, RATHI TOWERS, DASHMESH NAGAR, AURANGABAD PAN: AAVPR1230N RESPONDENT APPELLANT BY : SHRI P.L. P ATHADE RESPONDENT BY : SHRI NIK HIL PATHAK DATE OF HEARING: 12.12.2013 DATE OF ORDER : 27.12.2013 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL), [SHORT CIT( A)] AURANGABAD, DATED 28.02.2011 FOR A.Y. 2006-07 ON TH E FOLLOWING GROUNDS. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT (A) WAS CORRECT IN HOLDING TH AT THE SEIZED MATERIAL ANN. A 33 DOES NOT REFLECT ANY TRAN SACTION OF THE ASSESSEE WITH R.C.C. EVEN DATED 03/11/2005 & 04/11/2005 CLEARLY SHOWS THE TRANSACTION UNDER THE NARRATION 'RATHI CON. INT.' 2. WHETHER ON THE FACTS IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) WAS CORRECT IN HOLDING THAT IN T HE STATEMENT U/S. 132(4) OF SHRI KSHIRSAGAR, ACTUALLY THERE IS NO CLARIFICATION REGARDING ANY TRANSACTION OF THE A SSESSEE WITH RCC HAS BEEN OFFERED BY SHRI KSHIRSAGAR, AS TH E SAME 2 WAS NOT ASKED BY THE AUTHORIZED OFFICER. EVEN THEN, THE CIT (A) HAS OBSERVED THAT THERE IS NO TRANSACTION OF TH E ASSESSEE WITH RCC. 3. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 2. ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINES S OF CONSTRUCTION AND DEVELOPMENT AND OPERATES THE BUSIN ESS IN THE NAME AND STYLE OF 'RATHI CONSTRUCTIONS' AND 'RATHI PLANETS'. THE ASSESSEE HAD FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.17,94,167/- ON 31/10/2006. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT. A SEARCH AND SEIZ URE ACTION WAS CONDUCTED ON THE RUDRANEE GROUP OF AURANGABAD O N 06/02/2006. THE ASSESSING OFFICER HAS MADE ADDITION IN THE CASE OF THE ASSESSEE ON THE BASIS OF NOTINGS IN THE MATERIAL SEIZED AND STATEMENT RECORDED OF SHRI VINAYAK KSHIRSAGAR, FINANCE MANAGER OF M/S. RUDRANEE CONSTRUCTION COMPANY U/S.1 32(4) DURING THE COURSE OF SEARCH ACTION CONDUCTED ON THE RUDRANEE GROUP OF AURANGABAD. THE ASSESSING OFFICER HAS MADE ADDITION U/S.69 OF THE ACT, BY TREATING THE NOTINGS IN THE S EIZED MATERIAL AS TRANSACTIONS OF UNACCOUNTED LOANS ADVANCED IN CA SH BY THE ASSESSEE TO THE RUDRANEE CONSTRUCTION COMPANY. THE ASSESSING OFFICER WORKED OUT THE PEAK AMOUNT OF LOANS ADVANCE D AT RS.55,98,132/- AND HE COMPLETED THE ASSESSMENT DETE RMINING TOTAL INCOME AT RS.73,60,232/- BY MAKING ADDITION O F RS.55,98,132/- U/S.69 OF THE I.T.ACT, 1961 TOWARDS UNEXPLAINED INVESTMENT OF LOANS ADVANCED TO RUDRANEE CONSTRUCTI ON COMPANY. MATTER WAS CARRIED BEFORE THE FIRST APPEL LATE AUTHORITY, WHEREIN, CIT(A) HAVING CONSIDERED THE SUBMISSION ON BEHALF OF ASSESSEE GRANTED RELIEF TO THE ASSESSEE. 3. SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REV ENUE, INTER ALIA STATED THAT CIT(A) WAS NOT JUSTIFIED IN GRANTING RELIEF TO THE ASSESSEE AND TO SET ASIDE THE ORDER OF CIT(A) A ND RESTORED TO 3 THAT OF ASSESSING OFFICER. ON THE OTHER HAND, LEAR NED AUTHORIZED REPRESENTATIVE SUPPORTED THE ORDER OF CIT(A), INTER ALIA STATED THAT THE ASSESSING OFFICER ERRED IN ADDING RS.55,98 ,132/- ON ACCOUNT OF UNEXPLAINED INVESTMENT AND CIT(A) WAS JU STIFIED IN UPHOLDING THE SAME. 4. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD, WE FIND THAT ASSESSING OFFICER HAS MADE ADD ITION OF RS.55,98,132/- ON THE BASIS OF SEIZED MATERIAL RAIS ED AS ANNEXURE-33 AND STATEMENT RECORDED U/S.132(4) OF SH RI VINAYAK KSHIRSAGAR, FINANCE MANAGER OF RUDRANEE CONSTRUCTIO N COMPANY. THE ASSESSING OFFICER HAD SPECIFIED THAT T HE SEIZED MATERIAL INVENTORISED AS ANNEXURE-33 CONTAINED MENT ION OF THE NAME OF BUSINESS CONCERN OF THE ASSESSEE 'RATHI CON STRUCTIONS' AGAINST CERTAIN ENTRIES AND THAT SHRI VINAYAK KSHIR SAGAR HAD ACCEPTED IN THE STATEMENT RECORDED U/S 132(4) THAT THE ENTRIES IN THE SEIZED MATERIAL INVENTORISED AS ANNEXURE-33 ARE UNACCOUNTED TRANSACTIONS OF LOAN TAKEN AND REPAID BY RUDRANEE C ONSTRUCTION COMPANY. ON PERUSAL OF THE STATEMENT RECORDED U/S 132(4) OF SHRI VINAYAK KSHIRSAGAR, IT WAS FOUND THAT QUESTION NOS.6 TO 11 ARE WITH RESPECT TO SEIZED MATERIAL INVENTORISED AS ANNEXURE-33. THERE IS NO MENTION OF THE NAME OF ASSESSEE OR HIS BUSINESS CONCERN IN THE ANSWERS GIVEN BY SHRI VINAYAK KSHIRS AGAR IN RESPONSE TO QUESTION NOS.6 TO 11. IT WAS FOUND THA T SHRI VINAYAK KSHIRSAGAR IN HIS STATEMENT RECORDED U/S.132(4) OF IT ACT HAD NOT STATED THAT NOTINGS APPEARING AS 'LAHOTI HL' ARE PE RTAINING TO ASSESSEE SHRI LALIT RAMGOPAL RATHI. CONSIDERING TH E ABOVE FACT, IT WAS CONCLUDED THAT THE FINDING OF THE ASSESSING OFFICER THAT THE STATEMENT RECORDED ON OATH OF SHRI VINAYAK KSHIRSAG AR DOES NOT ESTABLISHED THAT THE ENTRIES APPEARING AS RATHI H.L . ARE PERTAINING TO ASSESSEE. ON PERUSAL OF THE SEIZED MA TERIAL INVENTORISED AS ANNEXURE-33, IT WAS FOUND THAT THE NOTING APPEARS AS 'HL RATHI' IN THE SEIZED MATERIAL AND NO WHERE IN THE 4 ANNEXURE-33, THERE APPEARS THE NAME 'RATHI CONSTRUC TIONS'. SO IT WAS CONCLUDED BY CIT(A) THAT FINDINGS OF ASSESSI NG OFFICER THAT NOTINGS ARE APPEARING IN ANNEXURE-33 AS 'RATHI CONS TRUCTIONS' WAS NOT FOUND CORRECT. THE CONTENTS OF THE SEIZED DOCUMENTS ARE TO BE PRESUMED TO BE TRUE AS APPLICABLE IN THE CASE OF PERSON SEARCHED AND NOT IN THE CASE OF ANY OTHER PERSON. IN VIEW OF THE ABOVE FACTS AND IN ABSENCE OF ANY CORROBORATIVE EVI DENCE TO ESTABLISH THE CONTENTION TO SUPPORT OF THE CONTENTI ONS OF ASSESSING OFFICER, CIT(A) RIGHTLY DELETED THE ADDIT ION MADE OF RS.55,98,132/- U/S 69 OF THE INCOME TAX. THIS REAS ONED FACTUAL FINDING OF CIT(A) NEED NO INTERFERENCE FROM OUR SID E. WE UPHOLD THE SAME. 5. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMIS SED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 27 TH OF DECEMBER, 2013. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 27 TH DECEMBER 2013 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A), AURANGABAD 4) THE CIT, AURANGABAD 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE