Dilip Kumar Bhutoria, Kolkata V. ITO, WD-34(3), KOLKATA, Kolkata

ITA 940/KOL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8578 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 24-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIKASH SURANA
• Keywords: Value adopted by valuation officer; Income from undisclosed sources; Search and seizure; Document seized; Retraction; Documents seized
• Section: 131

Judgement Text

1 ITA NO. 940/KOL/2015 DILIP KR. BHUTORIA, AY. 2008-09 , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 940/KOL/2015 ASSESSMENT YEAR: 2008-09 DILIP KUMAR BHUTORIA (PAN: ADYPB3563C) VS. INCOME-TAX OFFICER, WD-34(3), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 22.01.2019 DATE OF PRONOUNCEMENT 11.04.2019 FOR THE APPELLANT SHRI VIKASH SURANA, AR FOR THE ASSESSEE SHRI A. K. SINGH, CIT, DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF LD. CIT(A)-10, KOLKATA DATED 07.04.2015 FOR AY 2008-09. 2. THE SOLE GROUND OF APPEAL RAISED BY THE ASSESSE E IS AGAINST THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.1,36,45,000 /- MADE BY THE AO TOWARDS INCOME FROM UNDISCLOSED SOURCES. 3. BRIEFLY STATED FACTS ARE AS NOTED BY THE AO A RE THAT FOR AY 2008-09, THE ASSESSEE HAD FILED RETURN OF INCOME ON TOTAL INCOME OF RS.8 ,06,630/- ON 31.08.2009 AND LATER THE CASE WAS SELECTED FOR SCRUTINY AND AN ORDER U/S. 14 3(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS PASSED O N 22.12.2010 DETERMINING THE INCOME OF THE ASSESSEE AT RS.9,64,269/-. LATER THE AO RECEIV ED AN INFORMATION ON 24.02.2012 FROM DC/CC-VI, KOLKATA ALONG WITH COPY OF PAGE NUMBERS 9 AND 11 OF RM/5 (BOOKS OF ACCOUNT SEIZED DURING THE COURSE OF SEARCH AND SEIZURE OPER ATION CONDUCTED IN THE CASE OF SRI VIVEK 2 ITA NO. 940/KOL/2015 DILIP KR. BHUTORIA, AY. 2008-09 KR. KATHOTIA). AS PER INFORMATION WHEN A SEARCH WA S CONDUCTED AT SHRI VIVEK KR. KATHOTIA, BOOKS OF ACCOUNT MARKED AS RM/1 TO RM/5 W AS SEIZED. AND THE SEIZED DOCUMENT RM/5 CONTAINED DETAILS OF OWN MONEY RECEIVED BY S HRI VIVEK KR. KATHOTIA (BUILDER AND DEVELOPER OF A FLAT PURCHASED BY ASSESSEE) AND CASH FOR SALE OF DIFFERENT FLATS AT ADDRESS 20, LEE ROAD, HINDUSTHAN PARK, KOLKATA. ACCORDING TO A O, PAGE NOS. 1 TO 10 CONTAINED DETAILS OF PURCHASE OF FLATS ALONG WITH FLAT NO., FLAT AREA , NAME OF THE PROJECT AND MOUNT RECEIVABLE IN CASH ETC. PAGE 11 CONTAINS SUMMARY OF CASH RECE IPTS BY SHRI VIVEK KR. KATHOTIA. IT WAS ALSO NOTED BY THE AO THAT IN THE COURSE OF SEARCH A ND SEIZURE OPERATION, SHRI VIVEK KR. KATHOTIA ADMITTED HAVING RECEIVED THE OWN MONEY F ROM THE PURCHASE OF FLATS AND MADE A VOLUNTARY DISCLOSURE OF THE AMOUNT. THE AO OBSERVE D THAT IT APPEARS FROM PAGE 9 OF THE SEIZED DOCUMENTS MARKED AS RM/5 SHRI DILIP KUMAR BH UTORIA HAS BEEN WRONGLY MENTIONED AS D. DUGAR AND HAS PAID RS.136.45 LACS IN CASH IN THE RELEVAN T ASSESSMENT YEAR. THE AO ASKED THE ASSESSEE TO PROVE THE SOURCE OF CASH (RS. 136.45 LAKHS CASH PAID TO SHRI VIVEK KATHOTIA) AND FOR THAT REOPENED THE ASSESSMENT AND SIMULTANEOUSLY AO ALSO CALLED FOR THE DVO REPORT WHO VALUED THE PROPERTY AS ON 13.12.200 7 AT RS.1,55,02,000/-. THE ASSESSEE CONTESTED THE REOPENING OF THE ASSESSMENT, AS WELL AS IT WAS BROUGHT TO THE NOTICE OF THE AO THAT THE RM/5 DOES NOT HAVE THE NAME OF ASSESSEE AND THE NAME WRITTEN IN RM/5 SHRI D. DUGAR HAS NO RESEMBLANCE WITH THE NAME OF ASSESS EE SHRI DILIP KR. BHUTORIA SO, ACCORDING TO ASSESSEE, ANY AMOUNT WRITTEN AGAINST I T (D. DUGAR) CANNOT BE INFERRED AS THAT GIVEN BY THE ASSESSEE. IT WAS ALSO BROUGHT TO THE NOTICE OF THE AO THAT ASSESSEE HAD PURCHASED THE FLAT FOR RS. L,55,09,500/- BY A SALE DEED EXECUTED ON 01.04.2010. IT WAS POINTED OUT THAT THE DVOS VALUATION OF THE ASSESSE ES FLAT IS LESS THAN THE SALE CONSIDERATION GIVEN BY THE ASSESSEE TO THE VENDOR O F THE PROPERTY. THEREFORE, IT WAS CONTENDED BY THE ASSESSEE THAT NO INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE THAT ANY CASH HAS BEEN PAID OTHER THAN THE AMOUNT PAID BY ACCOUNT PAYEE CHEQUE OF RS.1,55,09,500/- TO THE VENDOR OF THE FLAT. MOREOVER, THE ASSESSEE ALSO PRAYED FOR CROSS EXAMINATION OF SHRI VIVEK KR. KATHOTIA. IT WAS ALSO BROUGHT TO THE NOT ICE OF THE AO THAT MR. VIVEK KR. KATHOTIA HAS ALREADY RETRACTED THAT ANY FLAT BUYERS HAVE GIVEN OWN MONEY/CASH OTHER THAN THE SALE CONSIDERATION GIVEN BY CHEQUE. THESE FACT S WERE BROUGHT TO THE NOTICE OF THE AO 3 ITA NO. 940/KOL/2015 DILIP KR. BHUTORIA, AY. 2008-09 AND THE LD. CIT(A), WHO BRUSHED ASIDE THE SAME AND HAS CONFIRMED THE ADDITION. AGGRIEVED, THE ASSESSEE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROU GH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THIS APPEAL HAS BEEN FIXED EARLIER TWENTY TIMES FOR HEARING AND VIDE SEVERAL ORDERS FROM 09.03.2018 ONWARDS, SPECIFIC DI RECTIONS WERE GIVEN TO THE DEPARTMENT TO PRODUCE COPY OF THE STATEMENT OF SHRI KATHOTIA AS WELL AS ANY OTHER DOCUMENTS WHICH THE REVENUE WOULD LIKE TO RELY UPON TO DRAW ADVERSE INFERENCE AGAINST THE ASSESSEE. HOWEVER, WE FIND FROM 09.03.2018 TILL WE HEARD THIS APPEAL ON 22.01.2019 NO DOCUMENTS INCRIMINATING THE ASSESSEE WERE PRODUCED BEFORE US. WE NOTE THAT DESPITE ASKING FOR SEVERAL TIMES THE DEPARTMENT DID NOT PRODUCE THE C OPY OF THE STATEMENT OF SHRI KATHOTIA RECORDED DURING THE SEARCH AS WELL AS THE OUTCOME O F THE ENQUIRY MADE BY THE AO AS STATED BY HIM AT THE OFFICE OF DC/CC-VI WHICH AO HAS RECOR DED IN THE ASSESSMENT ORDER AT PAGE 3 TOP PARA WHEREIN THE AO RECORDS THAT DURING THE COURSE OF ENQUIRY AT THE OFFICE OF DC/CC - VI, IT WAS ESTABLISHED THAT SHRI D. DUGAR IS ACTUAL LY SRI DILIP KUMAR BHUTORIA. HENCE IT HAS BEEN ESTABLISHED THAT AS PER INFORMATION CONTAI NED IN PAGE 9 OF RM/5 YOU HAVE PAID RS.136.45 LACS IN CASH TO SHRI VIVEK KUMAR KATHOTIA OF FORT PROJECT PVT. LTD. FAILED TO PRODUCE BEFORE US. THIS IMPORTANT QUERY WAS RAISED ON 04.07.2018 AND THE DIRECTION BY US TO PRODUCE THIS ENQUIRY REPORT HAS NOT BEEN FULFIL LED BY THE DEPARTMENT TILL DATE AND THOUGH WE HAD GIVEN SUFFICIENT OPPORTUNITY TO THE DEPARTME NT TO PRODUCE THE SAME AND CAUTIONED THEM THAT IN CASE THE DEPARTMENT FAILED TO PRODUCE THE SAME, WE WILL BE CONSTRAINED TO DRAW ADVERSE INFERENCE AGAINST THE REVENUE HAS NOT EVOKE D ANY ACTION ON THE PART OF REVENUE TO PLACE ON RECORD ANY SUCH ENQUIRY REPORT AS NOTED BY THE AO. DESPITE OUR CAUTION/WARNING/NOTICES/DIRECTIONS, NO MATERIAL OR ENQUIRY REPORT WERE PRODUCED BEFORE US AS OBSERVED BY AO. WE NOTE THAT THE ASSESSMENT REC ORDS WERE IN THE POSSESSION OF THE LD. DR ON 12.11.2018, HOWEVER, THE QUERY RAISED BY US C OULD NOT BE ANSWERED BY PRODUCTION OF ANY DOCUMENTS TO BUTTRESS THE VIEW OF THE AO THAT I N THE COURSE OF ENQUIRY AT THE OFFICE OF DC/CC-VI IT WAS ESTABLISHED THAT SHRI D. DUGAR IS A CTUALLY SHRI DILIP KR. BHATURA. ON THE AFORESAID FACTUAL BACK-DROP, WE ARE ADJUDICATING TH E ADDITION MADE BY THE AO WHICH HAS 4 ITA NO. 940/KOL/2015 DILIP KR. BHUTORIA, AY. 2008-09 BEEN SUSTAINED BY THE LD. CIT(A). WE HAVE GONE THR OUGH THE RM/5 A COPY OF WHICH IS PLACED AT PAGE 27 OF THE PAPER BOOK WHICH ONLY SPEA KS ABOUT ONE D. DUGAR AND A SUM OF RS.136.45 CR. IS WRITTEN ALONG WITH THE NAME OF OTH ER NINE NAMES AND THE TOTAL AMOUNT COMES TO RS.902.24 LACS. HOWEVER, ON THE SAID PAGE 27 HEADING STATES THAT IT IS THE SUMMARY OF CASH RECEIVED ON SALE OF FLAT DURING THE PERIOD FROM 01.04.2007 TO 27.02.2008 . WE NOTE THAT THE SEARCH HAPPENED ON 28.02.2008, THE REFORE, IT IS SURPRISING THAT THE ASSESSEE HAD HIMSELF MADE THIS HANDWRITING NOTING OF ONE PAG E IN WHICH HE HAS WRITTEN DOWN THE OWN MONEY RECEIVED BY HIM FROM NINE PERSONS OF RS.9 .02 CR. WHICH HE COLLECTED FROM 01.04.2007 TO 27.02.2008 I.E. A DAY BEFORE THE SEAR CH ON 28.02.2008 CASTS DOUBT ABOUT THE VERACITY OF THE DOCUMENT. NOT ONLY THAT THE ASSESS EE HAD PLEADED THAT MR. KATHOTIA HAS PLEADED LATER ON THAT THE SEIZED DOCUMENTS RM/5 WAS FORCIBLY GOT MANUFACTURED BY SEARCH PARTY OF THE DEPARTMENT AND MR. KATHOTIA WAS FORCED TO WRITE THE ENTRIES AND MADE TO DISCLOSE THE EXORBITANT AMOUNT OF RS.9.02 CR. AS OW N MONEY RECEIPTS FROM NINE PARTIES [WHICH FACT TRIBUNAL RECORDED WHILE HEARING APPEAL OF MR KATHOTIA]. WE NOTE THAT LATER MR. KATHOTIA IN THE STATEMENT RECORDED U/S. 131 OF THE ACT ON 13.03.2014 WHICH IS FOUND PLACED AT PAGE 33 OF THE PAPER BOOK AND PAGE 38 OF PAPER B OOK HAS CATEGORICALLY STATED BEFORE THE INCOME TAX DEPARTMENT THAT HE HAS NOT RECEIVED ANY CASH (OWN MONEY) FROM THE BUYERS OF THE FLAT. HE REITERATED THAT HE HAS NOT RECEIVED A NY UNACCOUNTED CASH FROM ANY BUYERS OF THE FLATS. WE NOTE THAT IN THE DOCUMENT REFERRED T O AS RM/5 THE NAME IS NOT THAT OF THE ASSESSEE WHEREAS THE NAME IS OF D. DUGAR AND IT IS NOT UNDERSTOOD HOW AO HAS FORMED THE OPINION THAT IT IS OF SHRI DILIP KUMAR BHUTORIA, TH E ASSESSEE. WE NOTE THAT THE SALE CONSIDERATION OF RS.1,55,09,500/- WAS PAID BY ASSES SEE TO THE VENDOR BY ACCOUNT PAYEE CHEQUE AND HAS BEEN GIVEN BY THE ASSESSEE ON 02.05. 2008, RS.23,26,425/- AND ON 31.07.2008 RS.13,83,075/- THUS TOTAL AMOUNT OF RS.1 ,55,09,500/-. IT WAS BROUGHT TO OUR NOTICE THAT RS.1,31,83,075/- WAS FINANCED OUT OF BA NK HOUSING LOAN AND THE MARKET VALUE ASSESSED BY THE ASSISTANT DISTRICT SUB-REGISTRAR OF ALIPORE, SOUTH 24 PARGANAS WAS RS.1,55,09,500/AS ON 31.03.2010. FURTHER, WE NOTE THAT AFTER RECEIPT OF THE INFORMATION FROM THE DC/CC-VI, KOLKATA ON 24.02.2012, THE AO HA S SOUGHT THE DVO REPORT OF THE DEPARTMENT WHO HAS VALUED THE FLAT VALUE IN QUESTIO N AS ON 13.012.2007 AT RS.1,55,02,000/- 5 ITA NO. 940/KOL/2015 DILIP KR. BHUTORIA, AY. 2008-09 WE NOTE THAT THE PLEA OF THE ASSESSEE TO CROSS EXAM INE MR. KATHOTIA COULD NOT MATERIALIZE. AND THAT SHRI KATHOTIA HAS RETRACTED THE STATEMENT. IN THE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT WHERE IN A STATEMENT U/S. 1 32(4A) IS MADE DURING SEARCH AND IF THAT THIRD PARTY STATED THAT CERTAIN AMOUNT MENTIONED ON A SEIZED PAPER WAS PAID BY THE ASSESSEE OUTSIDE THE BOOKS FOR PURCHASE OF PROPERTY AND THE SEIZED PAPER WAS NOT RECOVERED DURING THE COURSE OF SEARCH FROM THE POSSESSION OF ASSESSE E, THEN PRESUMPTION U/S. 132(4A) COULD NOT BE INVOKED AGAINST THE ASSESSEE AND ADDITION BA SED ON SUCH STATEMENT U/S. 132(4A) WAS NOT JUSTIFIED IN THE LIGHT OF THE RETRACTION AS WEL L AS THE FACT THAT SEIZED PAPERS FROM SHRI KATHOTIA DOES NOT WHISPER ABOUT THE NAME OF THE ASS ESSEE SHRI DILIP KR. BHUTORIA. WE ALSO NOTE THAT DESPITE GIVING SEVERAL OPPORTUNITIES TO T HE DEPARTMENT, THE LD. DR COULD NOT PLACE ON RECORD THE FINDING MADE BY THE AO IN THE ASSESSM ENT ORDER BASED ON AN ENQUIRY OF THE DC/CC-VI WHICH REVEALED THAT D. DUGAR IS DILIP KR. BHUTORIA. THIS FAILURE ON THE PART OF THE DEPARTMENT AND THE DVO VALUATION OF THE FLAT WH ICH WAS LESS THAN THE SALE CONSIDERATION PAID BY THE ASSESSEE TO THE VENDOR OF THE PROPERTY AND THE NAME OF ASSESSEE NOT FIGURING IN RM/5 MAKES THE ACTION OF AUTHORITIES BELOW BAD. IN THE LIGHT OF THE AFORESAID FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT SINCE NO DOC UMENTS CONTAINING SIGNATURE OF THE ASSESSEE OR HANDWRITING OF THE ASSESSEE HAVE BEEN F OUND TO HAVE BEEN UNEARTHED DURING SEARCH OR TO CORROBORATE ABOUT THE MAKING OF OWN MO NEY PAYMENT BY ASSESSEE TO MR. KATHOTIA, THE STATEMENT OF MR. KATHOTIA OR THE WRIT TEN PAPER OF SOME NAME CALLED D. DUGAR CANNOT BE SAID TO BE THAT OF THE ASSESSEE AND THAT CANNOT BE TREATED AS A MATERIAL ON WHICH ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE . THEREFORE, WE FIND FORCE IN THE GROUNDS RAISED BY THE APPEAL OF THE ASSESSEE AND DI RECT DELETION OF THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A). THUS, THE APPEA L OF ASSESSEE IS ALLOWED. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 11.04.2018 SD/- SD/- (DR. A. L. SAINI) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11TH APRIL, 2019 JD.(SR.P.S.) 6 ITA NO. 940/KOL/2015 DILIP KR. BHUTORIA, AY. 2008-09 COPY OF THE ORDER FORWARDED TO: 1 APPELLANT SHRI DILIP KUMAR BHUTORIA, C/O SANJAY E LECTRICALS, 17, EZRA STREET, 2 ND FLOOR, KOLKATA-700 001. 2 RESPONDENT ITO, WARD-34(3), KOLKATA . 3 4 5 CIT (A)- 10, KOLKATA. CIT , KOLKATA. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR