MAHENDRA M BANTHIA, MUMBAI V. DCIT CEN CIR 39, MUMBAI

ITA 6417/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4083 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 19-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIJAY KOTHARI
• Keywords: Search and seizure
• Section: 40A(3); 142(1); 153A; 132; 139

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.6417/MUM/2011 ASSESSMENT YEAR: 2008-09 MAHENDRA M. BANTHIA, 169/A, MOTI MAHAL, M.G. MARG, PANVEL, MUMBAI-410206 / VS. DCIT, CENTRAL CIRCLE-39, ROOM NO.32(1), GROUND FLOOR AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( ! /ASSESSEE) ( ' / REVENUE) PAN. NO . AIYPB7531M ! / ASSESSEE BY SHRI VIJAY KOTHARI ' / REVENUE BY SHRI N.P.SINGH CIT-DR # '$ % ! & / DATE OF HEARING : 25/04/2016 % ! & / DATE OF ORDER: 25/04/2016 ITA NO.6417/MUM/2011 MAHENDRA M. BANTHIA 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 19/08/2011 OF THE FIRST APPELLATE AUTHORITY, MUMBAI . THE ONLY GROUND RAISED IN THE PRESENT APPEAL IS WITH RE SPECT TO ENHANCING THE INCOME BY RS.23,50,000 U/S 40A(3) AND ADDITION OF RS.24,84,750/- MADE TO THE RETURNED INC OME AND FURTHER CONFIRMING THE DISALLOWANCE OF COMMISSION E XPENSES OF RS.2,61,454/- MADE TO THE RETURNED INCOME. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E, SHRI VIJAY KOTHARI, ADVANCED ARGUMENTS, WHICH ARE I DENTICAL TO THE GROUND RAISED BY INVITING OUR ATTENTION TO T HE RELEVANT FINDING CONTAINED IN THE ASSESSMENT ORDER AS WELL A S IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL). ON THE OTHER HAND, LD. CIT-DR, SHRI N.P. SINGH, THOUGH DEF ENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BUT FAI RLY EXPLAINED THE CONTRADICTIONS CONTAINED IN THE ORDER S I.E. ASSESSMENT ORDER AS WELL AS IN THE IMPUGNED ORDER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF, ARE THAT SHRI MAHENDRA M. BANTHIA, THE PRESENT ASSE SSEE, AT THE RELEVANT TIME WAS A BROKER, DEALING IN LAND AND WAS ALSO ACTING AS A LAND AGGREGATOR TO VARIOUS GROUPS. ONE OF THE MAIN BUSINESS OF THE ASSESSEE WAS TO PURCHASE THE LANDS FROM THE FARMERS, AS PER THE REQUIREMENTS OF THE VARIOUS ITA NO.6417/MUM/2011 MAHENDRA M. BANTHIA 3 GROUPS/CORPORATE AND THEREAFTER TO COMPLETE THE LEG AL FORMALITIES AND THEN TO SELL THE SAME TO THE GROUPS /CORPORATE. A SEARCH AND SEIZURE ACTION U/S 132 OF THE INCOME T AX ACT, 1961 (HEREINAFTER THE ACT) WAS CARRIED OUT AT THE BUSINESS/RESIDENTIAL PREMISES OF THE ASSESSEE ON 05 /03/2009. IT WAS FOUND THAT NONE OF THE FAMILY MEMBERS OF THE ASSESSEE WERE FILING RETURNS OF INCOME. AS PER THE REVENUE, EVEN THE ASSESSEE DID NOT FILE RETURN OF INCOME U/S 139 OF T HE ACT AND ONLY CONSEQUENT TO THE ACTION U/S 132 OF THE ACT, N OTICE U/S 153A WAS SERVED UPON THE ASSESSEE TO WHICH THE ASSE SSEE FILED RETURN DECLARING TOTAL INCOME AT RS.4,13,78,790/-. SUBSEQUENTLY NOTICES U/S 143(2) AND 142(1) OF THE A CT ALONG WITH QUESTIONNAIRE WERE ISSUED AND SERVED UPON THE ASSESSEE. AS PER THE DETAILS FILED BY THE ASSESSEE, IT WAS NO TICED THAT THE ASSESSEE CLAIMED EXPENDITURE IN RESPECT OF PAYMENTS MADE OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE, EXCEEDIN G RS.20,000/-. THE DETAILS OF SUCH PAYMENT ARE AVAILA BLE IN PARA 3.1 OF THE IMPUGNED ORDER. CONSIDERING THE REPLY OF THE ASSESSEE, THE COMMISSION PAYMENT WERE DISALLOWED U/ S 40A(3) AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 2.2. IT WAS FURTHER NOTICED THAT AS PER SALE DEEDS , SUBMITTED BY THE ASSESSEE, IN THE CASE OF ONE SHRI DATTU SHIVRAM KOHLI, THE ASSESSEE HAS RECEIVED RS.23,25,0 00/- FROM M/S SELENE BUILDWELL PVT. LTD. FOR PURCHASE OF 0.93 ACRES LAND IN JASAI VILLAGE FOR WHICH NOTHING WAS PAID TO THE FARMERS AND THE SALE DEED WAS REGISTERED ON 20/06/2007. A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AS TO WHY THE IMP UGNED ITA NO.6417/MUM/2011 MAHENDRA M. BANTHIA 4 AMOUNT SHOULD NOT BE TREATED AS INCOME OF THE ASSES SEE. IN RESPONSE, TO THE SHOW CAUSE NOTICE, THE ASSESSEE CL AIMED THAT THE CONCERNED FARMER REFUSED TO TAKE THE PAYMENT. I N THE ABSENCE OF ANY EVIDENCE OR SATISFACTORY REPLY FROM THE ASSESSEE, THE AMOUNT OF RS.23,25,000/- WAS HELD TO BE INCOME OF THE ASSESSEE U/S 28(IV) OF THE ACT AND THE SAME WAS ADDED AS INCOME OF THE ASSESSEE. 2.3. LIKEWISE, THE ASSESSEE HAS CLAIMED BROKERAGE/COMMISSION OF RS.52,61,984/- DURING ASSES SMENT YEAR 2008-09 ON ACCOUNT OF ONE ADINATH V. PATKAR, W HO ON VERIFICATION CONFIRMED RECEIPT OF RS.50,00,530/- ON LY, THUS, THE REMAINING AMOUNT OF RS.2,61,454/- WAS DISALLOWED AN D ADDED AS INCOME OF THE ASSESSEE. 2.4. ON APPEAL BEFORE THE COMMISSIONER OF INCOME T AX (APPEAL), IN PARA 2.6, THERE IS A FINDING THAT THE IMPUGNED AMOUNTS WERE MADE IN CASH OR THROUGH BEARER CHEQUE. THE ASSESSEE TOOK A STAND BEFORE THE COMMISSIONER OF IN COME TAX (APPEAL) THAT THE PAYMENTS WERE MADE TO THE VILLAG E FARMERS, WHO ARE ILLITERATE. HOWEVER, THIS FACTUAL MATRIX W AS NEITHER CONFRONTED TO THE ASSESSING OFFICER NOR ANY EVIDENC E WAS BROUGHT ON RECORD, THUS, THERE ARE CONTRADICTIONS B ETWEEN THE CLAIM OF THE ASSESSING OFFICER THAT PAYMENTS WERE N OT ACCEPTED BY THE FARMERS AND THE FINDING IN THE IMPU GNED ORDER THAT THE PAYMENTS WERE MADE TO THE FARMERS IS NOT B ORNE OUT FROM THE FACTS, THUS, THE ASSESSEE IS DIRECTED TO F URNISH THE NECESSARY EVIDENCE OF FACTUAL MATRIX BEFORE THE AS SESSING ITA NO.6417/MUM/2011 MAHENDRA M. BANTHIA 5 OFFICER, WHO WILL EXAMINE THE CLAIM OF THE ASSESSEE AND THEN DIRECTED TO DECIDE IN ACCORDANCE WITH LAW. THE ASSE SSEE BE GIVEN OPPORTUNITY TO SUBSTANTIATE HIS CLAIM. IF THE LD. ASSESSING OFFICER, SO DESIRES, HE MAY RECORD THE ST ATEMENT OF THE FARMERS FROM WHOM LANDS WERE PURCHASED. THE ASS ESSEE IS DIRECTED TO PRODUCE SUCH FARMERS BEFORE THE ASSESSI NG OFFICER. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES ONLY. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING ON 25/04/2016. SD/- SD/- ( A SHWANI TANEJA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; ' DATED : 25/04/2016 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. )*+, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. / / # 0! ( )* ) / THE CIT, MUMBAI. 4. / / # 0! / CIT(A)- , MUMBAI 5. 2'3 -! , / )*& ) 4 , # $ / DR, ITAT, MUMBAI ITA NO.6417/MUM/2011 MAHENDRA M. BANTHIA 6 6. 5 6$ / GUARD FILE. / BY ORDER, .2*! -! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI