The ITO, Ward-8(3), Surat V. Shri Pareshchandra C.Ragdawala, Surat

ITA 785/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85819 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2002-2003
• Appeal Filed On: 11-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Income from undisclosed sources; Retraction
• Section: 131; 148

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , .. ' , #$ # % BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO. 785/AHD/2011 [ASSTT. YEAR: 2002-03 ITO, WARD - 8(3) SURAT. VS SHRI PARESHCHANDRA C. RAGADAWALA C/O. PARESH TEXTILES SHED NO.13, HARIOM MILL COMPOUND VED ROAD, SURAT. PAN : AAXPR 7089 P &' / (APPELLANT) )* &' / (RESPONDENT) REVENUE BY : SHRI B.L. YADAV, SR.DR ASSESSEE BY : SMT. URVASHI SHODHAN / DATE OF HEARING : 24/02/2015 / DATE OF PRONOUNCEMENT: 13/03/2015 #+/ O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A)-V, SURAT DATED 16.11.2010 FOR THE ASSTT.YEAR 2002-03. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE ID. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.15,12,000/- MADE ON ACCOUNT OF ON MONEY PAID ON THE PURCHASES O F TWO PLOTS IN THE NAME OF HIS FAMILY MEMBERS DESPITE-THE FACT THAT THE ADDITION WAS MADE ON THE BASIS OF THE STATEMENT REC ORDED ON OATH U/S. 131 OF THE ACT WHEREIN THE ASSESSEE HAD ADMITT ED TO HAVE PAID ON MONEY OF RS. 15,12,000/- ON THE PURCHASES O F THE PLOTS IN THE NAME OF THE FAMILY MEMBERS. ITA NO.785/AHD/2011 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ID. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.15,12,000/- MADE ON ACCOUNT OF ON MONEY PAID ON THE PURCHASES O F TWO PLOTS IN THE NAME OF HIS FAMILY MEMBERS IGNORING THE FACT THAT AFFIDAVIT FILED BY THE ASSESSEE DURING THE ASSESSMENT PROCEED INGS ON 24.12.2009 I.E. AFTER A LAPSE OF 3 YRS OF RECORDING OF STATEMENT U/S. 131 WAS MERELY AN AFTER-THOUGHT AS THE ASSESSE E HAD CATEGORICALLY ADMITTED ON OATH THAT THE ON MONEY PA YMENT FOR PURCHASE OF PLOTS BY FAMILY MEMBERS WAS MADE OUT OF HIS UNACCOUNTED INCOME. 3. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE I D. CIT(A) BE SET ASIDE AND THE ASSESSING OFFICER'S ORDER BE RESTORED . 3. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON REC ORD. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF GREY CLOTH UNDER THE N AME AND STYLE OF PRAKASH TEXTILE. THE ASSESSEE FILED RETURN OF IN COME FOR THE ASSTT.YEAR 2002-03 ON 4.2.2003 SHOWING INCOME OF RS .92,250/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ACCEP TING THE RETURN OF INCOME. THEREAFTER, NOTICE UNDER SECTION 148 OF TH E ACT WAS ISSUED ON 30.3.2009. 5. STATEMENT OF THE ASSESSEE WAS RECORDED UNDER SEC TION 131 OF THE ACT ON 21.9.2006 WHEREIN HE DISCLOSED AN AMOUNT OF RS.15.12 LAKHS PAID AS ON-MONEY FOR PURCHASE OF TWO PLOTS (30/1 & 31/1 AT SR.NO.35, TPS-5, MOJE UMRA, SURAT). HE DISCLOSED THE PAYMENT OF ON-MONEY FOR PURCHASE OF TWO PLOTS FOR THE FINANCIAL YEAR 2001-0 2 RELEVANT TO THE ASSTT.YEAR 2002-03. 6. HOWEVER, ON VERIFICATION OF THE RETURN FILED BY THE ASSESSEE, THE AO HAS FOUND THAT THE SAID DISCLOSURE OF RS.15.12 L AKHS FOR THE ACCOUNTING YEAR 2001-02 RELEVANT TO THE ASSTT.YEAR 2002-03 WAS NOT REFLECTED IN HIS RETURN OF INCOME FOR THE YEAR UNDE R CONSIDERATION. THEREFORE, ON 22.12.2009, A SHOW CAUSE NOTICE WAS I SSUED TO THE ITA NO.785/AHD/2011 3 ASSESSEE. IN RESPONSE TO THE SAME, THE ASSESSEE FI LED AN AFFIDAVIT RETRACTING THE STATEMENT RECORDED ON OATH UNDER SEC TION 131 OF THE ACT ON 21.9.2006. FROM THIS, THE AO INFERRED THAT THE AFFIDAVIT DATED 24.12.2009 WAS AFTER AFTER-THOUGHT AND WAS MADE TO COVER UP THE RETRACTION OF UNACCOUNTED INCOME DISCLOSED AT THE T IME OF RECORDING THE STATEMENT U/S.131 OF THE ACT. THE AO FURTHER OBSE RVED THAT THE FIGURE OF DISCLOSURE OF UNACCOUNTED INCOME WAS A SPECIFIC FIGURE AND WAS DISCLOSED BY APPLICATION OF MIND AND KNOWLEDGE, WHI CH WAS IN THE PERSONAL DOMAIN OF THE ASSESSEE. WHEN ASSESSEE MAK ES A DISCLOSURE BEFORE THE INCOME-TAX AUTHORITIES IN RESPECT OF WHO M HE WAS THE BEST JUDGE, HE CANNOT GO BACK ON THE SAME. THE AO ALSO OBSERVED THAT THE DISCLOSURE MADE IN THE STATEMENT RECORDED U/S.131 O F THE ACT CANNOT BE SWEPT AWAY LIGHTLY. HE, THEREFORE, HELD THAT THE RE TRACTION MADE BY THE ASSESSEE OF RS.15.12 LAKHS OUT OF THE UNDISCLOSED I NCOME DURING THE COURSE OF STATEMENT RECORDED UNDER SECTION 131 OF T HE ACT ON 21.9.2006 IS ADDED BACK TO THE INCOME OF THE ASSESSEE. 6. ON APPEAL, THE CIT(A) DELETED THE ADDITION FOR T HE FOLLOWING REASONS: 6. I HAVE CONSIDERED THE RIVAL CONTENTIONS. BEFORE COMING TO ANY CONCLUSION FOLLOWING FACTS WILL HAVE TO BE TAKE N INTO ACCOUNT: I) THE A.O. HAS NOWHERE MENTIONED IN THE ASSESSMENT ORDER AS TO WHY AND IN WHAT CONTEXT THE STATEMENT OF THE APPELL ANT WAS RECORDED U/S.131 OF THE ACT. IT HAS ALSO NOT BEEN M ENTIONED ABOUT THE PAPER/EVIDENCE ON THE BASIS ON WHICH THE APPELL ANT AGREED TO OFFER THE SAID UNACCOUNTED INCOME FOR TAXATION. II) THERE IS NO EVIDENCE BROUGHT OUT BY THE A.O. IN THE ASSESSMENT ORDER WHICH INDICATES THAT PAYMENT OF ON MONEY HAS BEEN MADE IN THE PURCHASE TRANSACTION OF THE SAID PROPERTIES. III) THE A,O. HAS FAILED TO APPRECIATE THE FACTS GI VEN IN THE AFFIDAVIT FILED BY THE APPELLANT AND BY THE REAL PU RCHASERS OF THE PROPERTIES. THE A.O. SHOULD HAVE MADE INQUIRIES IN THIS REGARD TO FIND OUT THE FACTUAL POSITION BEFORE COMING TO THE CONCLUSION THAT ON MONEY HAS BEEN PAID IN THIS TRANSACTION BY THE A PPELLANT. ITA NO.785/AHD/2011 4 IV) IT IS VERY MUCH EVIDENT FROM THE COPY OF PURCHA SE AGREEMENT THAT THE PURCHASERS OF THE SAID PROPERTY ARE NAMELY SHRI CHANDRAKANT M. RAGDAWALA, SMT. TARUNABEN C. RAGDAWA LA AND SHRI ALKESH C. RAGDAWALA. IN THE AFFIDAVIT FILED BE FORE THE A.O. ALL OF THEM HAVE CONFIRMED THAT 'THEY HAVE PURCHASED TH E SAID PLOT AND SHRI PARESH C. RAGDAWALA, THE APPELLANT, HAS NO RIGHT, TITLE AND POSSESSION IN THE PROPERTY AND HIS STATEMENT RE GARDING ANY PAYMENT TOWARDS THIS PROPERTY ARE NOT BINDING TO US .' IN VIEW OF THE ABOVE FACTS, I AM OF THE OPINION THA T THE APPELLANT HAS NO CONCERN WITH PURCHASE TRANSACTION OF THE PROPERTIES IN QUESTION AND THE A.O. HAS NOT TAKEN T HE RIGHT DECISION IN ADDING THE SO CALLED ON MONEY TO THE TOTAL INCOME OF THE APPELLANT. ACCORDINGLY, THE ADDITION MADE IS HE REBY DELETED AND THE GROUND OF APPEAL IS ALLOWED. 7. BEFORE US, THE AR OF THE ASSESSEE SUBMITTED THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO HAS NOT FOUND ANY IN VESTMENT IN IMMOVABLE PROPERTIES, AND ALSO NOT FOUND ANY UNACCO UNTED INCOME EARNED BY HIM DURING THE YEAR OR PRIOR TO THAT PERI OD. HE SUBMITTED THAT THE AO HAS STATED IN PARA 4.1 WHICH ARE PRODUC ED HERE UNDER: ' IN THIS CASE, A STATEMENT U/S. 131 OF THE INCOME TA X ACT RECORDED FROM THE ASSESSEE ON 21.09.2006, WHEREIN H E HAS CATEGORICALLY DISCLOSED AN AMOUNTS OF RS.15 -12 LAC S PAID AS ON MONEY FOR PURCHASE OF TWO PLOTS (30/1 & 31/1 AT SR. NO. 35,TPS - 5 , MOJE UMRA, SURAT). IN HIS STATEMENT, HE HAS DIS CLOSED THIS AMOUNT AS HIS ON - MONEY PAYMENT FOR PURCHASE OF TH E SAID PLOTS FOR THE F. Y. 2001- 2002 RELEVANT TO A. Y. 2002 -03 . THE RELEVANT PORTION OF THE SAID STATEMENT ON OATH RECORDED U/S. 131 OF THE INCOME TAX ACT IS REPRODUCED AS UNDER ........' IF WE CAN READ AND INTERPRET THE WORDINGS OF ABOVE REFERRED PARA, IT REVEALS THAT STATEMENT U/S. 131 OF THE INCOME TA X ACT WAS RECORDED ON 21-09-2006 BY THE ASSESSING OFFICER. THE STATEME NT RECORDED IN THIS CASE MEANS ASSESSMENT OF A.Y. 2002-2003 OF SHRI PAR ESHCHANDRA C. RAGDAWALA. THERE IS NO STATEMENT RECORDED BY THE ASSESSING OFF ICER I.E. INCOME TAX OFFICER, WARD 8(3), SURAT ON 21-09-2006 AND ON THEREAFTER. THE INCOME TAX OFFICER, WARD 8(3), SURAT HAS REOPEN ED THE CASE AND ITA NO.785/AHD/2011 5 ISSUED THE NOTICE U/S.148 ON 30/03/2009 WHICH PROVE S THAT NO INQUIRY OR SUMMONS ISSUED BY THE ASSESSING OFFICER ON 21-09 -2006. THE LEARNED ASSESSING OFFICER HAS FAILED TO DISCLOSE THE TRUE A ND PROPER FACTS AND ON THE BASIS OF WRONG FOOTING AND FOUNDATION, BUILT AN IMAGE ON THAT AND MADE HIGH PEACH ASSESSMENT. IN FACT, THE INCOME TAX OFFICER (INV.) HAS CALLED T HE ASSESSEE AND INQUIRED ABOUT TRANSACTION MADE FOR SPECIFIC PROPER TIES AND SOUGHT THE DETAILS OF RATE, WHO ARE THE SELLER ETC. AND RECORD ED THE STATEMENT WITHOUT HAVING SUCH AUTHORITY U/S,131 OF THE ACT TO HIM. WITHOUT PREJUDICE TO ABOVE BASIC AND LEGAL ISSUE OF RECORDING THE STATEMENT BY THE INCOME TAX OFFICER (INV.) , WE FUR THER STATE THAT THE ASSESSING OFFICER HAS STATED IN PARA 4.1 OF THE ASS ESSMENT ORDER THAT ASSESSEE HAS PURCHASED TWO PLOTS (30/1 31/1). IN FA CT NO SUCH PLOTS WERE PURCHASED BY THE ASSESSEE AND QUESTION OF PAYI NG ON-MONEY ON THE SAID PLOTS DOES NOT ARISE AT ALL. WE ENCLOSE HE REWITH COPY OF SALE DEEDS MARKED AS ANNEX-B AND ON PERUSAL THERETO, YOU CAN EASILY ASCERTAIN WHO ARE THE PURCHASERS & SELLER OF THE PR OPERTIES. THE ASSESSEE HAS CATEGORICALLY DENIED FOR PURCHASING AN Y SUCH PROPERTY AND PAYMENT OF ANY SUCH ON-MONEY. THIS FACT IS DISCLOSE D VIDE LETTER 16.12.2009 IN RESPONSE TO SCN ISSUED BY THE ASSESSI NG OFFICER. (COPY ANNEXED HEREWITH MARKED ANNX.-C). THE LEARNED ASSES SING OFFICER INTENTIONALLY SKIPPED THE FACTS ABOUT SCN & REPLY O F THE ASSESSEE DATED 16.12.2009 AND NO REFERENCE HAS BEEN MADE IN THE AS SESSMENT ORDER. SIMILARLY, THE ASSESSING OFFICER HAS AGAIN FAILED TO DISCLOSE THE FACTS MENTIONED IN THE AFFIDAVIT FILED BY THE ASSES SEE IN RESPONSE TO SCN DATED: 22.12.2009 AND ALSO THE AFFIDAVIT OF PURCHAS ERS SUBMITTED TO THE ASSESSING OFFICER IN SUPPORT OF WHO ARE THE REAL & LEGAL PURCHASERS OF THE PLOTS. COPY OF BOTH THE AFFIDAVIT ANNEXED HERETO MA RKED AS ANNX.-D FOR YOUR KIND PERUSAL AND RECORD. THE CONTENTS OF THE A FFIDAVIT ITSELF DISCLOSED ALL THE FACTS REGARDING INQUIRY, ASSURANC E OF INVESTIGATING ITA NO.785/AHD/2011 6 OFFICER, STATEMENT RECORDED WITHOUT ANY WITNESS, ST ATEMENT PROCEEDINGS PROLONG FROM 07.09.2006 TO 21.09.2006, SUBMISSIONS OF RECORDS ETC. ON PLAIN READING OF AFFIDAVIT, ANY PRUDENT PERSON CAN FEEL & REALIZE THE INTENTION OF PERSON WHO HAS RECORDED THE STATEMENT. THE ASSESSEE HAS NO KNOWLEDGE ABOUT USING THE STATEMENT AGAINST HIM TILL THE SHOW CAUSE NOTICE WAS RECEIVED FROM THE ASSESSING OFFICE R AND HENCE AFFIDAVIT WHICH SEEMS BY THE ASSESSING OFFICER IS A S A RETRACTION OF STATEMENT IS NOT THE AFTERTHOUGHT. THE ASSESSEE HAS FILED AFFIDAVIT IMMEDIATELY WHEN HE KNEW THE FACTS. THERE WAS NO JU ST AND FAIR DISCLOSURE BY THE ASSESSEE. HE WAS FORCED TO STATE ONLY SO THAT THE DEPARTMENT AND OR SO CALLED INVESTIGATING OFFICER C AN USE IT & TAKE ACTION AGAINST THE SELLER OF THE PROPERTIES UNDER S UCH TYPE OF FALSELY CONFESSION. 8. BEFORE US, DR SIMPLY RELIED ON THE ORDER OF THE AO AND COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ORDER OF THE CI T(A). THE DR EVEN BEFORE US COULD NOT EXPLAIN WHY AND IN WHAT CIRCUMS TANCES STATEMENT UNDER SECTION 131 OF THE ASSESSEE WAS RECORDED BY T HE AO. THEREFORE, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH TH E ORDER OF THE CIT(A), WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY THE 13 TH MARCH, 2015 AT AHMEDABAD. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 13 /03/2015