CHANDRAKANT KANU KARKARE, MUMBAI V. DY CIT, CC-1(2), MUMBAI

ITA 85/MUM/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 4167 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 31-01-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Salary income; Set aside
• Section: 131; 143(3); 142(1); 133A; 153A; 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No. 85/Mum/2021 (A.Y: 2015-16) Mr. Chandrakant Kanu Karkare, EMP-48/501, Evershine Valley, Thakur Village, Shyam Narayan Thakur Road, Kandivali (E), Mumbai – 400101. Vs. The DCIT, CC-1(2) Room No. 909, 9 th Floor, Pratishtha Bhavan, MK Road, Mumbai - 400020 सं./ज आइआर सं./PAN/GIR No. : ADAPK8405A Appellant .. Respondent Appellant by : Mr.Vishnu Agarwal.AR Respondent by : Ms.Kavita Kaushik.DR Date of Hearing 08.06.2022 Date of Pronouncement 17.06.2022 आद श / O R D E R PER PAVAN KUMAR GADALE JM: The assessee has filed the appeal against the order of the Commissioner of Income Tax (Appeals)-47, Mumbai passed u/s 143(3) r.w.s 153A and 250 of the Act. The revenue has raised the following grounds of appeal: 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in making the addition to the salary income to the tune of Rs. 18,44,966/- which is not reflected in ITA No. 85/Mum/2021 Mr. Chandrakant Kanu Karkare, Mumbai - 2 - the Form 16 issued by the company nor received by the appellant in his Bank statement. 2. The Appellant craves, leave to add, alter, amends or deletes any grounds of appeal at the time of hearing. 2. The brief facts of the case are that the assessee is a CFO and is engaged in the business. The assessee has filed the return of income for the A.Y 2015-16 on 31.08.2015 disclosing a total income of Rs.28,29,240/-.There was a search action conducted u/s 132 of the Act on 20.02.2018 in the case of M/s. Hyderabad Gems SEZ Ltd and others. The assessee is a Chief Financial Officer (CFO) of M/s. Gitanjali Gems Ltd. was also covered u/s 132 of the Act, therefore notice u/s 153A of the Act was issued. In compliance to the notice, the assessee has filed the return of income electronically on 20.12.2019 disclosing a total income of Rs.28,29,240/-. Subsequently, the notice u/s 143(2) and 142(1) of the Act along with questionnaire was issued. The A.O dealt on the facts and search back ground in respect of Shri Muhel C. Choksi Group and a statement was recorded in respect of the assessee’s salary. The A.O. found that as per the statement he is drawing gross annual ITA No. 85/Mum/2021 Mr. Chandrakant Kanu Karkare, Mumbai - 3 - salary of Rs.50 lakhs per annum, whereas the assessee has declared the salary of Rs. 31,86,040/- in the return of income filed in response to the notice u/s 153A of the Act. The assessee was issued notice u/s 142(1) of the Act to provide bank statement in respect of credits of salary received from M/s. Gitanjali Gems Ltd. 3. In response to the notice, the assessee has filed return on 21.12.2019 explaining that he has receiving salary of Rs. 4.5 lakh per month and submitted the ITR based on the form. No 16 issued by the company. The assessee has submitted the details and the promotion letters issued by the M/s. Gitanjali Gems Ltd. The AO referred to the details and was not satisfied with the explanations and made an addition of salary of Rs.18,44,966/- and assessed the total income of Rs.46,74,210/- and passed the order u/s 143(3) r.w.s 153A of the Act dated 30.12.2019. 4. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) considered the grounds of appeal, submissions of the assessee and findings of the A.O. and upheld the ITA No. 85/Mum/2021 Mr. Chandrakant Kanu Karkare, Mumbai - 4 - action of the A.O. and has dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon’ble Tribunal. 5. At the time of hearing, the Ld. AR submitted that the CIT(A) erred in not considering the facts of salary receipt and further the Ld. AR substantiated that on the similar issue the Hon’ble Tribunal in the assessee own case has granted the relief and relied on the order of the ITAT. Contra, the ld. DR supported the order of the CIT(A). 6. We heard the rival submissions and perused the material on record. The Ld.AR submitted that the CIT(A) has erred in not considering the factual aspects of salary income of the assessee . We find the Hon’ble Tribunal in ITA No. 378 & 379/Mum/2021 for the A.Y 2018-19 & 2017-2018 dated 26.04.2022 has observed at Page 3 Para5 of the order read as under: 5. Under these issues the assessee has challenged the addition of the salary income to the tune of Rs. 21,22,060/-. The Ld. Representative of the assessee has argued that the statement of assessee was recorded u/s 131 which was retracted subsequently. The document i,e promotion letter was found with the employer M/s. Gitanjali Gems Ltd. which was never acted upon but the ITA No. 85/Mum/2021 Mr. Chandrakant Kanu Karkare, Mumbai - 5 - AO has wrongly raised the addition, therefore, the finding of the AO as well as CIT(A) is not justifiable, hence, is liable to be set aside. However, on the other hand, the Ld. Representative of the revenue has strongly relied upon the order passed by the CIT(A) in question. On appraisal of the order of the AO, we noticed that the AO raised the addition on the basis of the statement recorded on 15.01.2017. during the survey conducted u/s 133A on Gitanjali Group. The statement was recorded u/s 131 of the Act. However, the statement was retracted while filing the return u/s 153A of the Act. The promotion letter dated 01.06.2014 was found in which the assessee was promoted the Chief Financial Officer and his salary was revised @ 4.50% which works out of 54 lakh. In brief, the statement of the assessee as well as the letter dated 01.06.2014 found during search, was the basis of assessing the income to the tune of Rs.50,25,000/-. The assessee has retracted from his ITA Nos. 379 & 378/M/2021 A.Ys.2017-18 & 2018-19 4 statement and the assessee has also contended that he was never promoted to the post of Chief Financial Officer in the pay of Rs.4,50,000/- per month. No doubt, the statement was made and the letter was found during search but the assessee denied this fact and produced the evidence in support of his claim which was not taken into consideration. The assessee filed the Form-16 for the A.Y.2017-18 lies at page no. 4 to 7 of the paper book which speak about this facts that the assessee was getting his salary income to the tune of Rs.33,15,390/- per annum. The assessee was paying the quarterly tax as mentioned in Form-16. The bank statement of the assessee for the A.Y. 1.04.2016 to 31.03.2017 was also produced which lies at page no. 8 to 18 of the paper book. The said bank statement speaks about the credit of salary to the tune of Rs.2,15,220/- and so on till at the ITA No. 85/Mum/2021 Mr. Chandrakant Kanu Karkare, Mumbai - 6 - end of the year. All these documents with the AO as well as before the CIT(A). The statement of the assessee nowhere supported by any incriminating evidence on record even the promotion letter for the promotion of Chief Financial Officer w.e.f. 30.05.2014 lies at page no. 30 of the paper book never acted upon. Anyhow, addition merely on the basis of the statement as well as on the basis of the letter recovered during survey which was never acted upon nowhere seems justifiable to raise the addition, therefore, we set aside the finding of the CIT(A) on this issue and delete the addition. In the result, the appeal filed by the assessee is hereby allowed. 7. The Ld. DR fairly accepted the issues are covered as per Hon’ble ITAT order and we fallow the judicial precedence. Accordingly we do not find merits in the order of the CIT(A) and is set aside and direct the Assessing officer to delete the addition and the grounds of appeal are allowed in favour of the assesse. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 17.06.2022. Sd/- Sd/- (PRASHANT MAHARISHI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 17.06.2022 ITA No. 85/Mum/2021 Mr. Chandrakant Kanu Karkare, Mumbai - 7 - KRK, PS /Copy of the Order forwarded to : 1. / The Appellant 2. / The Respondent. 3. सं ं आ र आ / The CIT(A) 4. आ र आ ( ) / Concerned CIT 5. "#$ % & &' , आ र ) र*, Mumbai / DR, ITAT, Mumbai 6. % +, - . / Guard file. ान ु सार/ BY ORDER, स " & //True Copy// 1. ( Asst. Registrar) ITAT, Mumbai