B.B. Enterprises, Valsad V. The ACIT.,C.C.2, Surat

ITA 782/AHD/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8627 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 24-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: S D CHEDA
• Keywords: Unexplained expenditure; Income from undisclosed sources; Loose papers; Document seized; Corroborative evidences; Documents seized
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL CHATURVEDI , A.M.) I. T. A. NO. 782 / AHD/ 20 1 2 (A SSESSMENT YEAR: 2009 - 10) M/S. B.B. ENTERPRISES 402, AMAR CHAMBERS, VALSAD V/S A.C.I.T., C.C - 2, SURAT (APPELLANT) (RESPONDENT) PAN: ABAPM 1579K APPELLANT BY : SHRI S.D. CHEDA, A.R. RESPONDENT BY : SHRI B.L. YADAV, SR. D.R. ( )/ ORDER DATE OF HEARING : 24 - 12 - 2014 DATE OF PRONOUNCEMENT : 02 - 02 - 2015 PER SHRI ANIL CHATURV EDI,A.M. 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) - II, AHMEDABAD DATED 13.02.2012 FOR A.Y. 2009 - 10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. IN THE PRESENT CASE ALONG WITH THE SEARCH IN THE CASE OF ASSESSEE , A SEARCH WAS ALSO CONDUCTED IN THE CASE OF NARENDRA V. SHAH. IN THE PREMISES OF NARENDRA V. SHAH CERTAIN LOOSE PAPERS AND DOCUMENTS WERE SEIZED WHICH SHOWED TRANSACTION CARRIED OUT BY SHRI NARENDRA V. SHAH AND ASSESSEE. SHRI ITA NO 782/AHD/2012 . A.Y. 2009 - 10 2 SHAH WAS EXAMINE U/S 132(4) OF THE ACT WHEREIN HE ADMITTED THAT RS. 86 LACS WAS GIVEN BY HIM IN CASH TO SHRI BHARAT MALDE THE ASSESSEE FOR ACQUISITION OF PIECE OF PROPERTY AT SHANTINAGAR, V ALSAD WHICH WAS TO BE DEVELOPED BY THE ASSESSEE SHRI BHARAT MALDE. SHRI NARENDRA SHA H WITH RESPECT TO PAGE NO. 5 OF THE SEIZED MATERIAL SUBMITTED THAT IT REPRESENTS THE DETAILS OF AMOUNT REALIZED AGAINST THE INVESTMENT MADE WITH SHRI BHARAT MALDE FOR THE PLOT AT SHANTINAGAR AND THE DETAILS AT PAGE 6 OF THE SEIZED MATERIAL REPRESENTS THE D ETAILS OF RECEIPT OF RS. 1,03,00,000/ - INCLUSIVE OF INTEREST OF RS. 10,58,000/ - . SHRI NARENDRA SHAH FURTHER ADMITTED THAT DUE TO TECHNICAL REASONS THE DEAL COULD NOT MATERIALIZE AND FINALLY MR. MALDE WAS REFUNDED RS. 86 LAC ALONG WITH INTEREST OF RS. 10,58 ,000/ - . A.O ALSO NOTED THAT NARENDRA SHAH MADE A DISCLOSURE OF RS. 1,03,00,000/ - AND HAD PAID TAXES ON THAT AMOUNT. ASSESSEE WAS THEREFORE ASKED TO EXPLAIN THE SOURCE OF PAYMENT OF INTEREST OF RS. 10,58,000/ - AND TO SHOW CAUS E AS TO WHY NO ADDITION BE MADE U/S. 69. BEFORE A.O, ASSESSEE DENIED TO HAVE RECEIVE D ANY MONEY FROM NARENDRA SHAH. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O F OR THE REASON THAT IN THE SEIZED RECORD , THE NAME OF THE ASSESSEE APPEARED AND NARENDRA SHAH HAD ADMITT ED TO HAVE ADVANCED MONEY AND WHICH WAS RECEIVED BACK BY ASSESSEE ALONG WITH INTEREST. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O. HE ACCORDINGLY CONSIDERED RS. 10,58,000/ - TO BE EXPENDITURE U/S. 69C OF THE ACT AND ADDED TO THE INCO ME. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO UPHELD THE ORDER OF CIT(A) BY HOLDING AS UNDER: - 4. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE LEARNED A.R. AND ALSO PERUSED THE JUDGEMENTS RELIED UPON BY THE A.R. IT IS FI RST OBSERVED THAT THE JUDGEMENTS RELIED UPON BY THE LEARNED A.R. ARE NOT AT ALL RELEVANT BECAUSE NO ADMISSION HAS BEEN OBTAINED IN THE STATEMENT RECORDED FROM THE APPELLANT DURING THE SEARCH U/S. 132(4) OF THE I.T. ACT. THE ONLY RELEVANT JUDGMENT IS IN THE CASE OF PANKAJ PATEL HUF VS ACIT 63 TTJ 790 AND IN WHICH IT WAS HELD THAT THE ADDITION MADE, BY THE ASSESSING OFFICER BY RELYING ON A PAPER, ITA NO 782/AHD/2012 . A.Y. 2009 - 10 3 NOT IN THE ASSESSEE'S HAND WRITING, FOUND AT THE THIRD PARTY'S RESIDENCE, IS NOT JUSTIFIED. ON PERUSAL OF THE JUDG EMENT, IT IS FOUND THAT THE DOCUMENT SEIZED WAS A DUMB DOCUMENT BECAUSE IT WAS NOT SIGNED BY ANYBODY, DID NOT BEAR ANY DATE, THERE IS NO MENTION OF THE LOCATION OF THE PROPERTY AND THE EXPLANATION WITH REGARD TO THIS PAPER GIVEN BY H WAS THAT IT MIGHT PERT AINED TO SOME LAND TRANSACTION WHICH WAS BROUGHT TO HIM BY SOME REAL ESTATE BROKER SO, THE PAPER DID NOT SPECIFY ANY SPECIFIC LAND TRANSACTION AND WAS NOT TALLYING WITH ANY SPECIFIC TRANSACTION. IN THAT PAPER, APART FROM NOTING ON THE SAID PAPER, NO OTHER INDEPENDENT MATERIAL OR EVIDENCE HAS BEEN BROUGHT ON RECORD. WHEREAS, IN THE PRESENT CASE OF THE APPELLANT, THE SEIZED PAGES 5 & 6 IN ANNEXURE BS - 1 WERE SPECIFIC DOCUMENTS CONTAINING DETAILS OF CASH GIVEN TO THE APPELLANT FROM SHRI NARENDRA V.SHAH. THE CAL CULAT ION OF INTEREST ON RS.86,00,000/ - FOR ONE YEAR @ 12 % IS WORKED OUT AT RS.10,32,000/ - AND ADDITIONAL AMOUNT OF RS.26,000 / - RECIVED FROM SHRI BHARAT P.MALDE IS ALSO MENTIONED. IT WAS CLEARLY ADMITTED BY SHRI NARENDRA V.SHAH THAT THE AMOUNT WAS ADVANCED T O SHRI BHARAT P. MALDE FOR THE PLOT AT SHANTINAGAR, VALSAD AND DUE TO TECHNICAL REASONS, THE SAID DEAL OF DEVELOPMENT COULD NOT BE MATERIALIZED AND - FINALLY SHRI MALDE REFUNDED THE SAID AMOUNT ALONGWITH INTEREST OF RS.10,58,000 / - . THE ENTIRE, AMOUNT WAS DI SCLOSED AND OFFERED FOR TAXATION BY SHRI NARENDRA V.SHAH. THE PAPERS SEIZED FROM THE POSSESSION OF SHRI NARENDRA V.SHAH, UNDER ANY CIRCUMSTANCES, CANNOT BE SAID AS DUMB DOCUMENTS. IN THE SEIZED PAPERS, NAME OF SHRI BHARAT MALDE, THE APPELLANT WAS CLEARLY M ENTIONED. ALONGWITH THE WRITTEN SUBMISSIONS DATED 05.08.2011, THE LEARNED A.R. SUBMITTED COPIES OF TWO DOCUMENTS NO.23265 DTD. 29.12.2006 AND 23266 DTD. 29.12.2006 FOR PLOT NO. 11 & 12, HAVING AREA OF 505.65 SQ. MTS. (PLOT NO.12) AND 502.30 SQ. MTS. (PLOT NO.11) IN REVENUE SURVEY NO. 751 & 755 WHICH WERE PURCHASED BY SHRI BHARAT MALDE ON BEHALF OF KUMASH CONSTRUCTION P.LTD. THE TWO PLOTS WERE PURCHASED ON 29.12.2006 FROM SHRI JITENDRA CHOKHALIA AND SHRI GIRISH KUMAR DAYABHAI VAISHNAVI AND BOTH THE PLOTS WER E SOLD THROUGH REGISTERED DOCUMENTS NO.33923 DTD. 11.03.2008 TO SMT. ANITA NILESH MO DI AND KUM. PALAK NILESH MODI. I N THE WRITTEN SUBMISSIONS DTD. 09.02.2012, IT IS CLAIMED THAT BOTH THE DOCUMENTS, AS STATED BY SHRI NARENDRA V.SHAH, PERTAIN TO KUMASH CONST RUCTION P.LTD. SO THE UNEXPLAINED INTEREST CANNOT BE ADDED IN THE HANDS OF THE APPELLANT BUT IT WOULD HAVE BEEN ADDED IN THE HANDS OF KUMASH CONSTRUCTION P. LTD. THE ASSESSMENT OF KUMASH CONSTRUCTION P.LTD. HAS BEEN DONE BY THE SAME ASSESSING OFFICER AND N O ADVERSE FINDING HAS BEEN RECORDED SO THERE IS NO QUESTION OF ADDITION IN THE HANDS OF THE APPELLANT ON THE BASIS OF SUSPICION AND PRESUMPTIONS. 4.1FROM THE ABOVE FACTS, IT IS CLEAR THAT TWO PLOTS WERE PURCHASED IN SHANTINAGAR, VALSAD BY THE APPELLANT IN THE NAME OF KUMASH CONSTRUCTION P.LTD. AND WERE SUPPOSED TO BE DEVELOPED BY HIM. SINCE BOTH THE PLOTS WERE SOLD IN MARCH,2008, THE AMOUNT WAS REFUNDED TO SHRI NARENDRA V.SHA H. THE INTEREST ON RS.86,00,000/ - FOR ONE YEAR @ 12% IS WORKED OUT AT RS. 10,32,00 0 / - AND ADDITIONAL INTEREST OF RS.26,000 / - .IS ALSO RECEIVED FROM THE APPELLANT BY SHRI NARENDRA V.SHAH IS ALSO NOTED ON THE SAME DOCUMENT SEIZED ON PAGE 5 & 6 OF ANNEXURE BS - 1 FROM THE POSSESSION OF SHRI NARENDRA V.SHAH. THESE REGISTERED DOCUMENTS OF PURCH ASE OF PROPERTY AT SHANTINAGAR, VALSAD, ARE CORROBORATIVE EVIDENCES. THE AMOUNT WAS ADVANCED BY SHRI NARENDRA V.SHAH IN CASH TO THE APPELLANT FOR DEVELOPMENT OF THE PROPERTY AT SHANTINAGAR, VALSAD BUT BECAUSE THE PLOTS WERE SOLD, THE APPELLANT HAS RETURNED THE MONEY ALO NGWITH INTEREST OF RS.10,58,000/ - FOR WHICH SOURCE OF PAYMENT HAS NOT BEEN EXPLAINED BY THE. APPELLANT AT ALL TO THE ASSESSING OFFICER. HE HAS SIMPLY DENIED HAVING ANY TRANSACTION WITH SHRI NARENDRA V.SHAH. SIMPLE ITA NO 782/AHD/2012 . A.Y. 2009 - 10 4 DENIAL CANNOT HELP THE APPEL LANT BECAUSE THE DOCUMENT CONTAINING COMPLETE DETAILS OF AMOUNT ADVANCED AND PAYMENT OF INTEREST WAS SEIZED FROM THE POSSESSION OF SHRI NARENDRA V.SHAH DURING THE SEARCH U/S.132 CONDUCTED SIMULTANEOUSLY WITH THE SEARCH AT THE PREMISES OF THE APPELLANT. THE STATEMENT WAS RECORDED U/S. 132(4) IN WHICH ON THE BASIS OF THE DOCUMENTS FOUND AND SEIZED, SHRI NARENDRA V.SHAH, MADE DISCLOSURE OF UNACCOUNTED INCOME INCLUDING INTEREST OF RS. 10,58,000/ - AND PAID THE TAXES. HE CONFIRMED THE - SAME TRANSACTION AND RECEIPT OF INTEREST OF RS.10,58,000/ - IN CASH FROM SHRI BHARAT MALDE ALONGWITH REFUND OF PRINCIPAL AMOUNT. IN THE STATEMENT RECORDED DURING THE CROSS EXAMINATION PROCEEDINGS, IT IS ALSO NOTEWORTHY THAT THE APPELLANT HAS NOT ASKED ANY CONTRA QUESTION DENYING THE R ECEIPT OR RETURN OF MONEY ALONGWITH INTEREST FROM SHRI NARENDRA V.SHAH. THE PURCHASE OF TWO PLOTS WERE MADE BY THE APPELLANT SHRI BHARAT MALDE ON BEHALF OF KUMASH CONSTRUCTION P.LTD,, ALSO CORROBORATES THAT HE HAS RECEIVED MONEY FROM SHRI NARENDRA V.SHAH F OR THE DEVELOPMENT OF THE PLOTS BUT WHEN THE COMPANY SOLD THE PLOTS WITHOUT DEVELOPMENT, HE HAD REFUNDED CASH ALONGWITH INTEREST OF RS.10,58,000/ - . ON THESE SEQUENCES OF TRANSACTION OF PURCHASE OF PLOTS, THE BORROWING OF MONEY IN CASH, SALES OF PLOTS AND R EPAYMENT OF LOAN WITH INTEREST SUPPORTED BY SEIZED DOCUMENTS FROM THE POSSESSION OF SHRI NARENDRA V.SHAH WHICH CONTAINS COMPLETE DETAILS OF THE TRANSACTIONS, CLEARLY PROVE THE TRANSACTIONS AND DETAILS CONTAINED IN THE SEIZED DOCUMENTS AND THE FINANCIAL TRA NSACTION WITH SHRI NARENDRA V.SHAH. THE ASSESSING OFFICER, BY ISSUING SHOW CAUSE NOTICE TO GIVE DETAILS OF SOURCES OF PAYMENT OF INTEREST OF RS.10,58,000/ - PROVIDED OPPORTUNITY TO THE APPELLANT TO EXPLAIN THE SOURCE OF EXPENDITURE BUT THE APPELLANT FAILED TO FURNISH ANY DETAILS OF SOURCE .OF UNEXPLAINED EXPENDITURE OF INTEREST PAYMENT SO, THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ADDITION OF RS.10,58,000/ - U/S.69C OF THE I.T. ACT BEING UNEXPLAINED EXPENDITURE OF INTEREST PAYMENT. IN VIEW OF THE ABOV E FACTS AND CIRCUMSTANCES OF THE CASE NARRATED IN DETAIL AS ABOVE, IT IS HELD THAT THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ADDITION OF RS.10,58,000/ - U/S.69C OF THE I.T. ACT BEING UNEXPLAINED INTEREST SO, THE ADDITION IS CONFIRMED AND THE RELATED GROUND OF APPEAL IS DISMISSED. 4. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSES IS NOW IN APPEAL BEFORE US. 5. BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE A.O AND CIT(A). HE FURTHER SUBMITTED THAT THERE WAS NO MENTION OF ASSESSEE S NAME IN THE S EIZED PAPER AND FURTHER THE DATE ON SEIZED PAPER 02.01.2007 BUT THE ADDITION HAS BEEN MADE IN 2009 - 10. HE FURTHER POINTED TO THE QUESTION AND ANSWERS REPRODUCED BY THE A.O IN THE ASSESSMENT ORDER AND POINTED TO ANSWER TO QUESTION NO. 8 WHERE IT WAS STATED THAT THE AMOUNT WAS PAID TO THE PERSON OF BHARAT MALDE. HE THEREFORE SUBMITTED THAT EVEN IN THE STATEMENT THERE IS NO ITA NO 782/AHD/2012 . A.Y. 2009 - 10 5 MENTION OF ASSESSEE S NAME. HE FURTHER SUBMITTED THAT THE ADDITION HAS BEEN MADE ONLY ON THE BASIS OF STATEMENT OF NARENDRA SHAH AND WITHO UT ANY CORROBORATIVE EVIDENCE. HE FURTHER SUBMITTED THAT THE SEIZED PAPER IS A DUMB DOCUMENT WITHOUT ANY NAME, NATURE, DATE ETC AND THEREFORE THE SAME CANNOT BE CONSIDERED FOR MAKING AN ADDITION. HE THEREFORE SUBMITTED THAT THE ADDITION BE DELETED. 6. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O AND CIT(A). HE FURTHER SUBMITTED THAT THE DOCUMENTS SEIZED ARE N OT DUMB DOCUMENT AND MR. SHAH HAD ADMITTED AND THE ASSESSEE WAS ALSO ALLOW ED THE CROSS - EXAMINATIO N OF MR. SHAH BUT IN THE CROSS - EXAMINATI ON NO QUESTION WITH RESPECT TO INTEREST WAS PUT BY THE ASSESSEE. HE THUS SUPPORTED THE ORDER OF A.O AND CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE IT IS SEEN THAT THE ADDITION HAS BEEN MADE BY THE A.O ON THE BASIS OF STATEMENT OF SHRI NARENDRA V. SHAH. WE FIND THAT APART FROM THE STATEMENT OF SHRI NARENDRA V. SHAH, NO CORROBORATIVE MATERIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO SUPPORT THE ADDITION OF INCOME. FURTHER IN REPLY TO QUESTION NO. 8 WHICH HAS BEEN REPRODUCED BY A.O IN HIS ORDER AT PAGE 6, IN REPLY TO QUESTION AS TO WHETHER THE AMOUNT I N CASH WAS GIVEN TO ASSESSEE, IT HAS BEEN REPLIED THAT THE AMOUNT WAS GIVEN TO THE PERSON OF SHRI BHARAT MALDE (AND NOT TO BHARAT MALDE). FURTHER, FR OM THE COPY OF SEIZED PAPER PLACED ON RECORD , THE DATE OF SEIZED PAPER IS STATED TO BE 1 ST JANUARY 2007 BUT THE ADDITION IN THE PRESENT CASE HAS BEEN MADE FOR THE FINANCIAL PERIOD 1 ST APRIL 2008 TO 31 ST MARCH, 2009 I.E. A.Y. 2009 - 10 AND THEREFORE DOES NOT F ALL IN THE PERIOD IN WHICH THE DOCUMENT WAS SEIZED. CONSIDERING THE TOTALITY OF AF ORESAID FACTS, AND IN THE ABSENCE OF ANY CORROBORATIVE ITA NO 782/AHD/2012 . A.Y. 2009 - 10 6 MATERIAL FOR MAKING ADDITION , WE ARE OF THE VIEW THAT NO ADDITION CAN BE MADE IN THE PRESENT CASE. WE THUS DIRECT THE DELETION OF ADDITION MADE BY A.O. THUS THIS GROUND OF ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 02 - 02 - 201 5 . SD/ - SD/ - (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5 . THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD