Matches Goa Pvt. Ltd., Margao V. Dy.Comm. Of Income Tax,Cent . Circle, Panaji

ITA 9/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93619 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-07-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 13-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S NATARAJ LD
• Assessee Lawyers: ASHOK A KULKARNI
• Keywords: Opportunity of being heard; Principle of natural justice; Procedural lapse; Assessment record; Documents seized
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI, HON'BLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NOS. 8 TO 11/PNJ/2014 : (A.YS 2002 - 03 TO 2005 - 06) MATCHES GOA PRIVATE LIMITED ANAND BHAVAN, OLD STATION ROAD, MARGAO, GOA (APPELLANT) PAN : AABCM1094J VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, PANAJI, GOA. (RESPONDENT) ASSESSEE BY : ASHOK A. KULKARNI, ADV. REVENUE BY : S. NATARAJ, LD. DR DATE OF HEARING : 27/07/2015 DATE OF PRONOUNCEMENT : 27/07/2015 O R D E R PER GEORGE MATHAN : 1. THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) VI, BANGALORE IN ITA NOS. 157, 158, 159, 160/DCIT,CC,PANAJI/ CIT(A) - VI/BLORE/2011 - 2012 DT. 21.10.2013 FOR A.YS 2002 - 03 TO 2005 - 06. SHRI ASHOK A. KULKARNI, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI S. NATARAJ, LD. DR REPRESENTED ON BEHALF OF THE REVENUE. 2. IT WAS SUBMITTED BY THE LD. AR THAT THE ASSESSEE IS IN THE BUSINESS OF DEVELOPMENT AND SALE OF PLOTS. THERE WAS A SEARCH IN THE ASSESSEES PREMISE S ON 18.10.2005. IN THE COURSE OF THE SEARCH, A NOTE BOOK BELONGING TO A FORMER EMPLOYEE VIZ. SHRI SURYAKANT PARMEKAR WAS FOUND. IN THE SAID NOTE BOOK, DE TAILS OF SOME OF THE PURCHASERS AND SOME VALUES WERE RECORDED. ON THE BASIS 2 ITA NOS. 8 TO 11/PNJ/2014 (A.YS : 2002 - 03 TO 2005 - 06) OF THIS NOTE BOOK FOUND, THE AO HAD CALLED AND EXAMINED VARIOUS PURCHASERS OF PLOTS FROM THE ASSESSEE. MORE THAN 20 PURCHASERS HAD BEEN EXAMINED. OUT OF THE PURCHASERS EXAMINED, 3 OF THE PURCHASERS VIZ. SMT. POONAM RAIKAR, SMT. SUNITHI MARATHE AND SMT. SHEELA DILIP KERKAR DEPOSED IN THE STATEMENTS RECORDED THAT THEY HAVE PAID ON - MONEY EQUAL TO THE SALE CONSIDERATION RECORDED IN THE SALE DEEDS. ON THE BASIS OF THESE STATEMENTS, T HE AO ADOPTED THE SALE VALUES IN RESPECT OF ALL THE PLOTS SOLD BY THE ASSESSEE AT DOUBLE THE SALE CONSIDERATION RECORDED IN THE SALE DEEDS. IT WAS THE SUBMISSION THAT AS THE STATEMENTS RECORDED FROM THE SAID PURCHASERS WERE NOT PUT TO THE ASSESSEE, THE TR IBUNAL VIDE ORDER DT. 30.1.2011 RESTORED THE ISSUE TO THE FILE OF THE AO FOR RE - ADJUDICATION AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY OF CROSS - EXAMINATION. WHEN RESTORING THE ISSUE, THE TRIBUNAL HAD DIRECTED AS FOLLOWS : WE HAVE HEARD PARTIES WI TH REFERENCE, TO MATERIAL ON RECORD. F ROM THE DOCUMENTS SEIZED AND STATEMENT OF SHRI SURYAKANT PARMEKAR EMPLOYEE OF THE APPELLANT, THE ASSESSING OFFICER WAS OF THE OPINION THAT APPELLANT HAS RECEIVED MORE THAN WHAT WAS STATED IN THE SALE AGREEME NTS. THEREAFTER, HE MADE ENQUIRIES FROM THE CUSTOMERS OF THE APPELLANT. OUT SEVERAL CUSTOMERS, ONLY THREE LADY CUSTOMERS NAMELY S/ SMT. SUNIT MARATHE, POONAM RAIKAR AND SHEELA DILIP KERKAR MADE ADMISSION THAT THE Y HAVE PAID 50% AMOUNT IN CASH OVER AND ABOVE W HAT IS STATED IN THE SALE AGREEMENTS. THE OPPORTUNITY TO CROSS - EXAMINE THESE LADIES WAS NOT PROVIDED, EVEN THOUGH IT WAS THE DUTY OF THE ASSESSING OFFICER TO ALLOW CROSS EXAMINATION EVEN IF ASSESSEE HAD NOT ASKED FOR IT. THERE IS THUS VIOLATION OF PRINCIP LE OF NATURAL JUSTICE. EVEN THE STATEMENT OF SHRI PARMEKAR MADE ON 22.12.2005 HAS NOT BEEN READ AS A WHOLE WITH REFERENCE TO DOCUMENTS FOUND AND SEIZED. IT IS A SETTLED PRINCIPLE THAT IN THE FACE OF DOCUMENTARY EVIDENCE, THE ORAL EVIDENCE MAY NOT BE ENTITL ED TO ANY WEIGHT. UNLESS THERE IS EVIDENCE THAT MORE THAN WHAT WAS STATED IN THE AGREEMENTS, NO HIGHER PRICE CAN BE TAKEN IN MAKING ASSESSMENT OF INCOME FROM BUSINESS AS HAS ALSO BEEN APPROVED BY APEX COURT IN THE CASE OF CIT VS. SHIVAKAMI CO. (P) LTD. (19 86) 159 ITR 71(SC). SINCE THE IMPUGNED ORDER SUFFERS FROM PROCEDURAL LAPSES WE SET ASIDE THE ORDERS ON THESE ISSUES AND REMIT THE SAME TO THE FILE OF THE ASSESSING OFFICER SO THAT INCOME FROM BUSINESS IS COMPUTED AFRESH AFTER REMOVING THE PROCEDURAL LAPSE S AS POINTED HEREINABOVE AND BY OBSERVING PRINCIPLES OF LAW SO SUMMARIZED. NEEDLESS TO ADD REASONABLE AND EFFECTIVE OPPORTUNITY OF BEING HEARD SHALL BE PROVIDED TO THE ASSESSEE BEFORE TAKING DECISION IN ACCORDANCE WITH LAW. 3 ITA NOS. 8 TO 11/PNJ/2014 (A.YS : 2002 - 03 TO 2005 - 06) IT WAS THE SUBMISSION THAT IN THE CROSS - EXAMINATION ONLY TWO OF THE LADIES HAD APPEARED BEING SMT. POONAM RAIKAR AND SMT. SUNITHI MARATHE. SMT. SHEELA DILIP KERKAR DID NOT APPEAR. IT WAS THE SUBMISSION THAT IN THE COURSE OF THE CROSS - EXAMINATION, BOTH THE SAID PERSONS WERE UNABLE TO IDENTIFY AS TO WHOM THE MONEY HAD BEEN PAID. IT WAS THE SUBMISSION THAT THESE TWO PERSONS WERE NOT THE DIRECT CUSTOMERS OF THE ASSESSEE BUT HAD COME THROUGH BROKERS. IT WAS THE SUBMISSION THAT EVEN SHRI SURYAKANT PARMEKAR WAS BROUGHT BEFORE THE SAID TWO PERSONS AND THEY HAD ALSO CONFIRMED THAT THEY HAD NOT PAID THE MONEY TO THE SAID SHRI SURYAKANT PARMEKAR ALSO. IT WAS THE SUBMISSION THAT EVEN IN THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS SPECIFICALLY NOTED BY THE AO THAT THESE TWO PERSONS HAD DEALT WITH THE ASSESSEE THROUGH THEIR BROKERS. IT WAS THE SUBMISSION THAT AS THE ASSESSEE HAD NOT RECEIVED ANY ON - MONEY, NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE. THE LD. AR DREW OUR ATTENTION TO PAGES 27 TO 41 OF THE PAPER BOOK WHICH IS THE COP Y OF THE ORDER SHEET WHEREIN IT HAS BEEN RECORDED THAT THE STATEMENTS FROM MORE THAN 20 PERSONS HAVE BEEN RECORDED. THE CROSS - EXAMINATION OF SMT. POONAM RAIKAR WAS SHOWN AT PAGE 24 OF THE PAPER BOOK AND THAT OF SMT. SUNITHI MARATHE AT PAGE 26 OF THE PAPER BOOK. IT WAS THE SUBMISSION THAT NO ADDITION WAS LIABLE TO BE MADE IN THE HANDS OF THE ASSESSEE AS THERE WAS NO EVIDENCE TO SHOW THAT THE ASSESSEE HAD RECEIVED THE SAID ON - MONEY ALLEGED TO HAVE BEEN PAID BY THE SAID TWO PURCHASERS THROUGH THEIR BROKERS. 3. IN REPLY, THE LD. DR SUBMITTED THAT THE NOTE BOOK OF THE FORMER EMPLOYEE, SHRI SURYAKANT PARMEKAR RECORDED VARIOUS ON - MONEY TRANSACTIONS. IT WAS THE SUBMISSION THAT THE SAID THREE LADIES HAD ALSO CONFIRMED THAT THEY HAVE PAID ON - MONEY AT THE OFFICE OF THE ASSESSEE - COMPANY. IT WAS THE SUBMISSION THAT THE ADDITION AS MADE BY THE AO, AND AS CONFIRMED BY THE LD. CIT(A), WAS LIABLE TO BE UPHELD. 4 ITA NOS. 8 TO 11/PNJ/2014 (A.YS : 2002 - 03 TO 2005 - 06) 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE NOTE BOOK OF SHRI SURYAKANT PARMEKAR, WHICH IS BEING RELIED UPON BY THE REVENUE FOR MAKING THE ADDITION, HAS NOT BEEN PRODUCED BEFORE US EVEN THOUGH IT WAS SPECIFICALLY DIRECTED THAT THE ASSESSMENT RECORDS WERE TO BE PRODUCED. A PERUSAL OF THE ORDER SHEET EVIDENCE FOUND AT PAGE 27 TO 41 OF THE PAPER BOOK CLEARLY SHOWS THAT THE AO HAD CALLED VARIOUS PURCHASERS OF THE PLOTS FROM THE ASSESSEE AND HAS EXAMINED THEM. ADMITTEDLY, ONLY THREE OF THE PURCHASERS HAVE CONFIRMED TO HAVE PAID ON - MONEY. THE SAID PERSONS HAVE ALSO DEALT WITH THE ASSESSEE THROUGH THEIR BROKERS. EVEN IN THE CROSS - EXAMINATION, ONE OF THE PERSON DID NOT APPEAR AND THE OTHER TWO WHO APPEARED HAVE SPECIFICALLY CONFIRMED AND RE - CONFIRMED THAT THEY HAVE PAID ON - MONEY AT THE OFFICE OF THE ASSESSEE AT PONDA. OBVIOUSLY, NOBODY WOULD PERMIT FINANCIAL TRA NSACTIONS TO BE DONE IN THEIR OFFICE WITHOUT THEIR KNOWLEDGE. THE ASSESSEE IS ALSO NOT ABLE TO DISPROVE THE CLAIM OF THE SAID LADIES THAT ON - MONEY HAS BEEN PAID IN RESPECT OF THE SAID PLOTS PURCHASED BY THEM. IN THE CIRCUMSTANCES, THE STATEMENTS OF THE S AID THREE LADIES WOULD HAVE TO BE CONSIDERED AS SUBSTANTIAL EVIDENCE AND THE ADDITION MADE BY THE AO, AND AS CONFIRMED BY THE LD. CIT(A), IN RESPECT OF THE SAID THREE LADIES WHO HAVE CONFIRMED PAYING ON - MONEY IN RESPECT OF THE PLOTS PURCHASED BY THEM FROM THE ASSESSEE STANDS UPHELD. IT IS FURTHER NOTICED THAT THE AO HAS ADOPTED THE SAME PRINCIPLE AND HAS BROUGHT TO TAX THE UNDER - VALUATION OF THE PLOTS IN RESPECT OF THE OTHER CUSTOMERS OF THE ASSESSEE ALSO. THIS ADDITION CANNOT BE SUSTAINED INSOFAR AS NO O THER PURCHASER HAS EVEN MADE A WHISPER OF HAVING PAID ON - MONEY IN RESPECT OF THE PLOTS PURCHASED BY THEM FROM THE ASSESSEE. IN THE CIRCUMSTANCES, THE ADDITION AS MADE BY THE AO, AND AS CONFIRMED BY THE LD. CIT(A), STANDS RESTRICTED TO THE THREE LADIES WHO HAVE CONFIRMED THE PAYMENT OF ON - MONEY. THE ADDITION IS TO BE MADE IN THE YEAR IN WHICH THE SALE DEEDS IN RESPECT OF EACH OF THE SAID THREE LADIES ARE REGISTERED. 5 ITA NOS. 8 TO 11/PNJ/2014 (A.YS : 2002 - 03 TO 2005 - 06) 5. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN TH E OPEN COURT ON 27/07/2015. S D / - (N.S. SAINI) ACCOUNTANT MEMBER S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 27/07/ 201 5 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , 6 ITA NOS. 8 TO 11/PNJ/2014 (A.YS : 2002 - 03 TO 2005 - 06) DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 27/07/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 27/07/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 2 8 /07/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 2 8 /07/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 2 8 /07/2015 SR.PS 6. DATE OF PRONOUNCEMENT 27/07/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 2 8 /07/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER