The ITO, Ward-1, Anand V. Shri Vinodbhai A.Patel, Anand

ITA 646/AHD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0303 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 03-10-2016
• Assessment Year: 1996-1997
• Appeal Filed On: 01-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 646/AHD/2011 / ASSESSMENT YEAR : 1996-97 INCOME TAX OFFICER, WARD-1, ANAND VS SHRI VINOD A. PATEL, PROP: SHAKTI CONSTRUCTION & KAILASH PETROHEM, 23, SHIV COMPLEX, NR. LAXMI CINEMA, SUBHASH ROAD, ANAND PAN : AESPP 6788 E / (APPELLANT) / (RESPONDENT) REVENUE BY : SMT. SONIA KUMAR, SR DR ASSESSEE BY : SMT ARTI N. SHAH, AR / DATE OF HEARING : 03/10/2016 / DATE OF PRONOUNCEMENT: 05/10/2016 / O R D E R THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-IV, BA RODA DATED 16.12.2010 FOR ASSESSMENT YEAR 1996-97. 2. THE SOLE GROUND RAISED IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS.37,79,7 13/- MADE ON ACCOUNT OF ON MONEY WITHOUT CONSIDERING THE VALUATION REPORT RECEIVED FROM THE VALUATION OFFICER VALUING THE PROPERTY AT RS.2,37,1 4,700/-. 3. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. 4. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, CONTENDS THAT THIS IS THE SECOND ROUND OF PROCEEDINGS. THE ORIGINAL A DDITION WAS SET ASIDE BY THE ITAT VIDE ITS ORDER DATED 04.01.2008. THEREAFT ER, THE PROCEEDINGS WERE TAKEN UP AGAIN. THE ADDITION WAS MADE BY THE AO ME RELY REPEATING WHAT WAS DONE IN THE ORIGINAL PROCEEDINGS. THE LD. CIT( A) DELETED THE ADDITION BY FOLLOWING OBSERVATIONS:- SMC-ITA NO. 646/AHD/2011 ITO VS. VINOD A PATEL AY : 1996-97 2 3.2 I HAVE CAREFULLY CONSIDERED FACTS OF THE CASE AND APPELLANTS SUBMISSIONS. ADDITION OF RS.37,79,713/- IN RESPECT OF ON MONEY WAS MADE IN THE ASSESSMENT UNDER APPEAL, SOLELY BY FOLLOWING THE ORIGINAL ASSESSMENT. ONUS OF PROVING RECEIPT OF ON MONEY WAS OF THE AS SESSING OFFICER AND NOT OF THE APPELLANT. HOWEVER, ASSESSING OFFICER HAS N OT BEEN ABLE TO BRING EVIDENCE TO JUSTIFY ADDITION ON ACCOUNT OF 'ON MONE Y' EITHER DURING SET ASIDE ASSESSMENT OR THE ORIGINAL ASSESSMENT. DURING ORIGI NAL ASSESSMENT PROCEEDINGS, CONCLUSION OF ASSESSING OFFICE R REGARDING RECEIPT OF 'ON MONEY' WAS BASED SOLELY ON THE FACT THAT FOUR CUSTO MERS, WHOSE STATEMENTS WERE RECORDED, COULD NOT EXPLAIN CERTAIN WITHDRAWAL S FROM THEIR BANK ACCOUNTS. THESE CUSTOMERS IN THEIR STATEMENTS DENIE D TO HAVE PAID ANY ON MONEY' TO THE APPELLANT FOR THE PREMISES PURCHASE D. DURING SET ASIDE PROCEEDINGS, APPELLANT FILED AFFIDAVITS OF S IX MORE CUSTOMERS CONFIRMING PAYMENT OF CONSIDERATION AS DECLARED BY APPELLANT I N THE BOOKS OF ACCOUNTS AND THE RETURN OF INCOME. LD. CIT(A)-I, BARODA HAD DELETED THE ADDITION OF RS.37,79,713/- IN RESPECT OF 'ON MONEY' IN THE ORDE R DATED 31.3.2000. I AM IN AGREEMENT WITH LD. CIT(A)-I, BARODA ON THE LEGAL POSITION THAT EVEN IF NO EXPLANATION COULD BE FILED BY THE CUSTOMERS FOR CA SH WITHDRAWN FROM THEIR BANK ACCOUNTS, IT COULD NOT BECOME BASIS FOR PRES UMPTION THAT THE AMOUNT WAS UTILIZED FOR PAYMENT OF 'ON MONEY'. AS NOTED BY LD. CIT(A)-I, BARODA, ALL CUSTOMERS EXAMINED .BY THE ASSESSING OFFICER DU RING ORIGINAL ASSESSMENT PROCEEDINGS DENIED TO HAVE PAID ANY 'ON MONEY' AND IN ANY CASE ON THE BASIS OF FIVE CUSTOMERS, EVEN IF PAYMENT OF 'ON MON EY' WAS PROVED IN THEIR CASES, IT COULD NOT BE THE BASIS OF ESTIMATING 'ON MONEY' FOR THE ENTIRE SALES MADE DURING THE YEAR. IT WAS RIGHTLY HELD THAT SUSP ICION CAN BE BASIS FOR FURTHER INVESTIGATION BUT IT CANNOT ASSUME CHARACTE R OF EVIDENCE. AS SUCH, THERE IS NO BASIS, EITHER IN ORIGINAL ASSESSMENT OR DER OR IN THE ORDER UNDER APPEAL TO JUSTIFY ADDITION OF RS.37,79,713/- ON ACC OUNT OF 'ON MONEY'. SEPARATE PROCEEDINGS WERE INITIATED U/S.147 BY THE ASSESSING OFFICER FOR THE COST OF CONSTRUCTION ESTIMATED IN DVO'S REPORT REC EIVED AFTER COMPLETION OF ASSESSMENT UNDER APPEAL. AS FAR AS ASSESSMENT UNDER APPEAL AND THE ADDITION IN RESPECT OF 'ON MONEY' THEREIN IS CONCERNED, THE SAME IS NOT SUSTAINABLE ON FACTS OF THE CASE AND IN LAW. ADDITION OF RS.37,79, 713/- IS DELETED. 4.1 IT IS CONTENDED THAT WHEN THE CUSTOMERS THEMSEL VES HAVING DENIED THAT NO ON MONEY WAS PAID TO ASSESSEE; MERELY BEC AUSE THERE WERE SOME ENTRIES IN THE BANK ACCOUNT OF THE CUSTOMERS WHICH THEY COULD NOT EXPLAIN THEIR OWN ACCOUNT, NO ADVERSE PRESUMPTION CAN BE DR AWN AGAINST THE ASSESSEE THAT THESE ENTRIES WERE ON MONEY RECEIVE D BY IT. ORDER OF THE LD. CIT(A) IS RELIED ON. SMC-ITA NO. 646/AHD/2011 ITO VS. VINOD A PATEL AY : 1996-97 3 5. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. LD. CIT(A) HAS GIVEN DETAILED FINDINGS OF FACTS AND CATEGORICA LLY HELD THAT CUSTOMERS DENIED HAVING MADE ANY ON MONEY PAYMENT. THESE W ERE THE CUSTOMERS WHO COULD NOT EXPLAIN THEIR BANK ENTRIES BUT THIS D OES NOT LEAD TO ANY ADVERSE ASSUMPTION THAT THIS WAS ON MONEY PAID TO THE ASSESSEE. IN VIEW THEREOF, I FIND NO INFIRMITY IN THE ORDER OF THE LD . CIT(A) DELETING THE ADDITION WHICH IS UPHELD. ACCORDINGLY, REVENUES A PPEAL IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 5 TH OCTOBER, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 05/10/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD