MALINI VACHANI AKERKAR, MUMBAI V. DCIT CC 36, MUMBAI

ITA 801/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4100 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2009-2010
• Appeal Filed On: 03-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHA KALA CHANDA
• Assessee Lawyers: SUNIL DESAI
• Keywords: Search and seizure; Salary income
• Section: 69C; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I , MUMBAI BEFORE S HRI SHAMIM YAHYA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 801 /MUM/2017 ASSESSMENT Y EAR: 2009 - 10 MRS. MALINI VACHANI AKERKAR, FLAT 12, RUKIYA MANZIL, SOPHIA COLLEGE LANE, BHULABHAI DE SAI ROAD, MUMBAI - 400026 PAN: ABWPV3904D VS. THE DCIT CC 36, AAYKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SUNIL DESAI (AR) REVENUE BY : ABHA KALA CHANDA ( CIT D R) DATE OF HEARING: 07 /08 /201 8 DATE OF PRONOUNCEMENT: 26 / 10 /201 8 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 31.10.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) (FOR SHORT THE CIT (A)) - 53 , MUMBAI , FOR THE A S S ESSMENT YEAR 2009 - 10 , WHEREBY THE LD. CIT (A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 143 (3) / 153A OF THE INCOME TAX ACT, 1961 (FOR SHORT THE A CT). 2. BRIEF FACTS OF THE CASE A RE THAT THE ASSESSEE AN INDIVIDUAL HAVING INCOME FROM SALARY, HOUSE PROPERTY, BUSINESS OR PROFESSION AND FROM OTHER SOURCES HAD FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS. 50,60,720/ - . SUBSEQUENTLY, A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT U/S 132 OF THE ACT IN THE CASE OF Y.A. MAMAJI GROUP ON 28.01.2011. PURSUANT T O THE SEARCH ACTION , THE AO ISSUED NOTICE U/S 153A AGAINST THE ASSESSEE AND IN RESPONSE THEREOF, THE ASSESSEE FILED HER RETURN DECLA RING THE SAME INCOME AS HA D BEEN IN ORIGINAL RETURN. THEREAFTER THE 2 ITA NO. 801 / MUM/2017 ASSESSMENT YEAR: 2009 - 10 AO ISSUED NOTICE U/S 143 (2) READ WITH SECTION 153A AND 142 (1) OF THE ACT. IN RESPONSE TO THE SAID NOTICES, THE AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND FILED THE DETAILS AND SUBMISSIONS. DURING THE COURSE OF SEARCH DOCUMENTS ANNEXURE - A2 CONTAINING PAGE 1 TO 46 WERE SEIZED FROM THE RESIDENCE OF THE ASSESSEE. THE DOCUMENT CONTAINING AT PAGE 44 OF THE SAID BUNCH CONT AINED THE DETAILS OF EXPENSE AMOUNTING TO RS. 3,20,000/ - . ACCORDINGLY, THE AR WAS ASKED TO EXPLAIN THE CONTENTS OF THE SAID DOCUMENTS. THE AR SUBMITTED THAT THE SAME IS NOT IN THE WRITING OF THE ASSESSEE NOR THE SAME HAD ANY LINK WITH THE BUSINESS OF THE ASSESSEE. REJECTING THE CONTENTION OF THE ASSESSEE THE AO MADE ADDITION OF THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE HOLDING THE SAME AS UNEXPLAINED CASH EXPENSES. IN THE FIRST APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. 3 . AGGRIEVED BY THE ORDER OF LD. CIT (APPEAL S ), THE AS SESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROUND S : - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) ERRED IN CONFIRMING ADDITION OF RS. 3,20,000/ - UNDER SECTION 69C. THE LEARNED CIT (A) FURTHER ERRED IN INVOKING SECTION 69C DISREGARDING THE REPRESENTATION MADE BY THE APPELLANT. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION HAS BEEN MADE MERELY ON THE BASIS OF LOOSE PAP ERS RECOVERED DURING THE SEARCH. TH E ASSESSEE HAD MADE IT CLEAR DURING THE SEARCH PROCEEDINGS THAT THE QUESTIONED ENTRIES ARE IN THE HAND OF SH. ALI MAMAJI AND SHE HAD NO IDEA ABOUT THE SAME. SHE HA D FURTHER STATED THAT THE LETTER PAD CONTAINING THE QUESTIONED ENTRIES HAS NO CONNECTION WITH HER BUSINESS. THE LETTER PAD WAS USED BY HER FOR DRAFTING LETTER S IN ALI MAMAJIS OFFICE AND SHE HAD BROUGHT THE SAME FOR WRITING DRAFT E - MAILS ON BEHALF OF HERSELF AND ALI MAMAJI. THE AO HAS NOT CONDUCTED ANY ENQUIRY TO VERIFY THE FACTS STATED BY THE ASS ESSEE. NO NOTICE WAS ISSUED TO MAMAJI TO CONFRONT THE PLEA OF THE ASSESSEE . SINCE, THE AO HAS 3 ITA NO. 801 / MUM/2017 ASSESSMENT YEAR: 2009 - 10 NOT REBUTTED THE CONTENTION OF THE ASSESSEE, THERE IS NO JUSTIFICATION OF MAKING ADDITION OF THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE. THE LD. COUNSEL RELIED ON THE VARIOUS CASE LAW IN SUPPORT OF HIS ARGUMENTS. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE ORDER PASSED BY THE LD. CIT (A) SUBMITTED THAT SINCE THE INCRIMINATING DOCUMENTS WERE RECOVERED FROM THE POSSESSION OF THE ASSESSEE, THE ONUS WAS UPON HER TO EXPLAIN TO THE SATISFACTION OF THE AO. SINCE, THE EXPLANATION GIVEN BY THE ASSESSEE WAS NOT FOUND PLAUSIBLE, THE LD. CIT (A) HAS RIGHTLY CONFIRMED THE ADDITION MADE BY THE AO. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND A LSO GONE THROUGH THE MATERIAL ON RECORD INCLUDING THE CASES RELIED UPON . ADMITTEDLY, THE DOCUMENT IN QUESTION WAS RECOVERED FROM THE RESIDENCE OF THE ASSESSEE, WHICH CONTAIN THE DETAILS OF EXPENDITURE AMOUNTING TO RS. 3,20,000/ - . HOWEVER, THE RECOVERY OF T HE QUESTIONED DOCUMENT ITSELF IS NOT SUFFICIENT TO MAKE ADDITION OF THE AMOUNT IN QUESTION TO THE INCOME OF THE ASSESSEE PARTICULARLY WHEN THE ASSESSEE HAS GIVEN A PLAUSIBLE EXPLANATION THAT THE PAD CONTAINING THE DETAILS BELONG TO MAMAJI THE MANAGING DIRE CTOR AND OWNER OF YAMFPL HAVING STORE CALLED PALLATE. SHE HAS ALSO STATED IN HER STATEMENT RECORDED U/S 132 (4) OF THE ACT THAT AS A DIRECTOR OF YAMFPL SHE W A S NOT INVOLVED IN PURCHASING PROCESS BUT ONLY INVOLVED IN IDENTIFYING THE PRODUCTS TO BE PURCHASE D FROM THE SHOP FLOOR VIZ. SELECTION OF BRAND. SHE HAS FURTHER STATED THAT THE SAID LETTER PAD BELONG TO YAMFP L, HOWEVER THE DETAILS ARE IN THE WRITING OF MR. ALI MAMAJI . WE FURTHER NOTICE THAT THE LD. CIT (A) HAS CONFIRMED THE ADDITION MADE BY THE AO ON T HE GROUND THAT U/S 292C OF THE ACT , ANY BOOKS OF ACCOUNT OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY ETC. FOUND IN THE POSSESSION OF ANY PERSON DURING TH E COURSE OF SEARCH U/S 132 OR SU RVEY U/S 133A, MAY BE PRESUMED THAT SUCH BOOKS OF ACCOUNT ETC. BELONG TO THAT PERSON. WE HAVE PERUSED THE QUESTIONED DOCUMENT WHICH CONTAIN S SOME ROUGH NOTING HOWEVER, THE SAME DOES NOT INDICATE THE NAME OF THE ASSESSEE OR ANY OTHER PERSON. IT 4 ITA NO. 801 / MUM/2017 ASSESSMENT YEAR: 2009 - 10 ALSO DOES NOT CONTAIN DATE, YEAR. THE HONBLE SUPREME COURT IN THE CASE OF P.R MITRA NI VS. COMMISSIONER OF INCOME TAX, BANGALORE 287 ITR 209 (SC) HAS HELD THAT A PRESUMPTION IS AN INFERENCE OF FACT DRAWN FROM OTHER KNOWN OR PROVE FACTS. IT IS THE RULE OF LAW UNDER WHICH COURTS ARE AUTHORIZED TO DRAW A PARTICULAR INFERENCE FROM PARTICULAR FACTS WHICH ARE OF THREE TYPES I.E. MAY PRESUME, SHALL PRESUME AND CONCLUSIVE PROOF. SINCE, THE WORDS IN SECTION 292C ARE MAY BE PRESUMED , PRESUMPTION IS REBUTTABLE AND THE ASSESSEE HAS EXPLAINED THE CIRCUMSTANCES UNDER WHICH THE DOCUMENTS IN QUESTION CAM E TO HER POSSESSION AND FURTHER POINTED OUT THAT THE DOCUMENT/DETAILS ARE IN THE HAND OF ALI MAMAJI , THE AO SHOULD HAVE CONFRONT ED THE STAND OF THE ASSESSEE. HOWEVER, THERE IS NO EVIDENCE ON RECORD ON THE BASIS OF WHICH IT CAN BE CONCLUDED THAT THE AO HAD MADE EFFORTS TO EXAMINE ALI MAMAJI IN THE LIGHT OF THE STATEMENT OF THE ASSESSEE. 7. FURTHER, THERE IS NO CORROBORATION OF THE FIGURE MENTIONED IN THE QUESTIONED DOCUMENTS FORMING THE BASIS OF ADDITION TO THE INCOME OF THE ASSESSEE . IN A SIMILAR SET OFF C IRCUMSTANCES, THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF PCIT VS. M/S AJANTA FOODCARE LTD. GA NO. 1685 OF 2016 ITA NO. 200 OF 2016 HAS DECLINED TO INTERFERE WITH THE FINDINGS OF THE APPELLATE AUTHORITIES WHICH HAD DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE. THE RELEVANT PORTION OF THE JUDGMENT READS AS UNDER: - 10. IN THE SUBJECT PROCEEDING, TWO STATUTORY APPELLATE AUTHORITIES HAVE EXERCISED THEIR DISCRETION AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. THE REASON FOR EXERCISING SUCH DISCRETION I S THAT NO STOCK DISCREPANCY COULD BE DEMONSTRATED AND THERE WAS NO CORROBORATION OF THE FIGURES FORMING THE BASIS OF ADDITION TO THE INCOME OF THE ASSESSEE AS WELL AS DIRECTED BY THE ASSESSING OFFICER. NO QUESTION ABOUT THE SAID DOCUMENT WAS PUT TO THE DIR ECTOR OF THE ASSESSEE IN COURSE OF SEARCH. THIS FACTOR WAS ALSO TAKEN INTO CONSIDERATION BY THE AFORESAID APPELLATE BODIES. THE TWO STATUTORY APPELLATE AUTHORITIES DOUBTED THE INHERENT PROBATIVE VALUE OR QUALITY OF THE ABOVE REFERRED DOCUMENT UPON APPLYING THEIR MIND ON IT. IN SUBSTANCE, THE SAID AUTHORITIES FOUND NO REASON TO DRAW PRESUMPTION AGAINST THE ASSESSEE ON THE BASIS OF SCRIBBLED FIGURES APPEARING ON THE DOCUMENT IN QUESTION. THIS IS HOW TWO FACT FINDING BODIES CHOSE TO DEAL 5 ITA NO. 801 / MUM/2017 ASSESSMENT YEAR: 2009 - 10 WITH THE DOCUMENT. I N OUR VIEW, EVEN WITHOUT PROPER EXPLANATION FROM THE ASSESSEE, WHEN THE MANDATE OF LAW IS THAT AUTHORITIES MAY PRESUME CERTAIN FACTS UNDER SECTION 292C OF THE ACT TO COME TO A CONCLUSION IN FAVOUR OF THE REVENUE, THE NATURE OF INFORMATION CONTAINED IN OR REVEALED BY SUCH DOCUMENT WOULD HAVE TO BE EXAMINED TO LINK SUCH DOCUMENT TO UNDISCLOSED INCOME OF THE ASSESSEE. BOTH THE COMMISSIONER AND THE TRIBUNAL FOUND NO LINKING FACTOR. BOTH THESE AUTHORITIES REJECTED THE REASONING OF THE ASSESSING OFFICER ON THI S BASIS OF WHICH THE LETTER CAME TO HIS FINDING THAT THE FIGURES APPEARING ON THE SAID DOCUMENT COULD BE COMPUTED TO ARRIVE AT UNDISCLOSED INCOME OF THE ASSESSEE. THE FINDINGS OF THE STATUTORY APPELLATE AUTHORITIES CANNOT BE HELD TO BE PERVERSE OR BASED ON NO EVIDENCE IN THIS CASE. THE STATUTORY APPELLATE AUTHORITIES HAD EXAMINED THE SAID DOCUMENT AND FOUND THAT THE SAME COULD NOT BE CONNECTED WITH ASSESSEES TRANSACTIONS FOR THE RELEVANT ASSESSMENT YEAR. 11. IN SUCH CIRCUMSTANCES, WE ARE UNABLE TO HOLD THE MANNER WHICH DISCRETION HAS BEEN USED BY THE STATUTORY APPELLATE AUTHORITIES BE PERVERSE OR THEIR FINDING TO BE CONTRARY TO EVIDENCE. 8. IN VIEW OF THE PRINCIPLES OF LAW LAID DOWN BY THE HONBLE SUPREME COURT AND THE HONBLE HIGH COURT OF CALCUTTA DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE EVIDENCE ON RECORD IN THE PRESENT CASE IS NOT SUFFICIENT TO MAKE ADDITION OF THE AMOUNT TO THE INCOME OF THE ASSESSEE . HENCE, WE ARE OF THE CONSIDERED OPINION THAT THE FINDINGS OF THE LD. CIT (A) ARE NOT BASED ON EVIDENCE ON RECORD AND IN ACCORDANCE WITH THE SETTLED PRINCIPLES OF LAW . WE THEREFORE SET ASIDE THE FINDINGS OF THE LD. CIT (A) AND ALLOW THE SOLE GROUND OF APPEAL OF THE ASSESSEE AND DIRECT THE AO TO DELETE THE ADDITION. IN THE RESULT, APPE AL FILED BY THE ASSESSEE FOR A SSESSMENT YEAR 2009 - 2010 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH OCTOBER , 2018 . SD/ - SD/ - ( SHAMIM YAHYA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 26 / 10 / 201 8 ALINDRA, PS 6 ITA NO. 801 / MUM/2017 ASSESSMENT YEAR: 2009 - 10 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2 . / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI