Shri Farsuram R. Bhamwala, V. The DY. CIT., Cent.Circle-1,

ITSSA 120/AHD/2004

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0283 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 27-08-2014
• Assessment Year: misc
• Appeal Filed On: 26-04-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ANIL R SHAH
• Keywords: Unexplained investment; Block assessment
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL CHATURVEDI , A.M.) I. T. (SS) A. NO. 120 / AHD/ 20 04 (BLOCK PERIOD : 1988 - 89 TO 12/8/97) SHRI F ARSURAM R BHAMWALA VAIKUNTH , OPP: POLYTECHNIC COLLEGE, BHOLAV, BHARUCH V/S THE DCIT, CENTRAL CIRCLE - 1, BARODA (AP PELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIL R. SHAH, A.R. RESPONDENT BY : SHRI SUBHASH BAINS, CIT/DR ( )/ ORDER DATE OF HEARING : 27 - 08 - 2014 DATE OF PRONOUNCEMENT : 12 - 09 - 2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE A SSESSEE AGAINST THE ORDER OF CIT(A) - IV, AHMADABAD DATED 09.03.2004 FOR BLOCK PERIOD 1988 - 89 TO 12 - 08 - 1997. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN IND IVID UAL STATED TO BE ENGAGED IN THE BUSINESS OF CONSTRUCTION AND LAND DEALINGS. THERE WAS A SEARCH OPERATION AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE ON 12.08.1997. DURING THE IT (SS) A NO 120/AHD/2004 . B.P . 1988 - 89 TO 12/8/97 2 COURSE OF SEARCH , DOCUMENTS CONTAINING UNACCOUNTED INVESTMENT IN VARI OUS AGRICULTURE LANDS BY NON AGRICULTURAL INDIVIDUAL WERE DISCOVERED AND SEIZED BY THE DEPARTMENT. ASSESSEE ADMITTED UNDISCLOSED INVESTMENT OF RS. 39.96,695/ - BE F ORE ADIT BUT IN TH E RETURN OF INCOME FILED ON 12.12.1997 FOR THE BLOCK PERIOD HE DECLARED UNDI SCLOSED INCOME OF RS. 14,94,000/ - . THEREAFTER T HE BLOCK ASSESSMENT PROCEEDINGS WAS FINALIZED ON 30.08.1999 AND THE TOTAL UNDISCLOSED INCOME WAS DETERMINED AT RS. 58,55,900/ - . AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A ) WHILE DECIDING THE APPEAL, REMITTED CERTAIN ISSUES TO THE FILE OF A.O FOR VERIFICATION. PURSUANT TO THE DIRECTIONS, ORDER U/S 158BC R.W.S 250 OF THE ACT WAS PASSED ON 28.03.2002 AND THE TOTAL UNDISCLOSED INCOME WAS DETERMINED AT RS. 28,25,180/ - . AG G RIEVE D BY THE ORDER OF A.O ASSESSEE CARRIED THE MATTER BEFORE CIT(A) . CIT(A) VIDE OR D ER DATED 09.03.2004 CONFIRMED THE ADDITION MADE BY A.O . AGGRIEVED BY THE AFORESAID ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS FILED THE FOLLOWING GROUNDS: - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT THAT THE ASSESSING OFFICER HAS NOT FOLLOWED THE CLEAR DIRECTIONS OF THE LEARNED CIT(A) GIVEN AT THE TIME OF SETTING ASIDE THE ADDITION. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN REJECTING THE CONTENTIONS OF THE APPELLANT THAT THE ASSESSING OFFICER HAD MADE THE ADDITION WITHOUT APPRECIATING THE EXPLANATION OF THE APPELLANT ABOUT THE SOURCE OF AVAILABILITY OF CASH ON THE GROUNDS WHICH WERE WHOLLY IRRELEVANT, INCORRECT AND VAGUE AND ALSO ON RELYING ON SURMISES, CONJECTURES AND GUESS WORK, AS AGAINST CONCRETE EVIDENCE SUBMITTED BY THE APPELLANT IN THE FORM OF AFFIDAVITS, BOOKS OF ACCOUNTS AND OTHER PAPERS CON SIDERED RELEVANT. IT (SS) A NO 120/AHD/2004 . B.P . 1988 - 89 TO 12/8/97 3 4. BEFORE US, THE LD. A.R. SUBMITTED THAT T HOUGH THE ASSESSEE HAS RAISED TW O GROUNDS BUT BOTH THE GROUNDS ARE INTER CONNECTED AND THEREFORE CAN BE CONSID ERED TOGETHER. 5. IN THE ORIGINAL ASSESSMENT PROCEEDINGS, ASSESSEE HAD CLAIMED AN AMOUNT OF RS. 6,50,000/ - BEING RECEIVED FROM MAITRI NAGAR ASSOCIATION AND THE SAME WAS STATED TO HAVE BEEN INVESTED IN VARIOUS LANDS. ON EXAMINATION OF BOOKS OF MAITRINAGAR ASSOCIATION . A.O NOTED THAT THERE WAS NO ENTRY FOR CASH FUND TRANSFER TO THE ASSESSEE. THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE GENUINENESS OF THE TRANSACTION WITH THE DOCUMENTARY PROOF IN VIEW OF THE FACT THAT THE ENTRY REGARDING RS. 6.5 LACS DID NOT EXIST IN THE BOOKS OF MAITRINAGAR ASSOCIATION. IN THE ABSENCE OF SATISACTORY EXPLANATION A. O ADDED RS. 6.5 LACS AS THE INCOME OF THE ASSESSEE. 6. BEFORE U S, LD A.R SUBMITTED THAT THE ASSE SSEE HAD PROMOTED SOCIETY AND A SSO CIATI O N IN THE NAME OF MAITRINAGAR O WNERS A SSOCIATION WHICH HAD ABOUT 240 MEMBERS. THE MEMBERS OF THE ASSOCIATION WERE CHARG ED MAINTENANCE CHARGES AND THE LIST OF THE SAME WAS PLACED AT PAGE 10 TO 17 OF THE PAPER BOOK. HE FURTHER SUBMITTED THA T THE TOTAL AMOUNT OF RS. 8,62,700/ - WHICH WAS COLLECTED AS MAINTENANCE CHARGES FROM THE MEMBERS. HE FURTHER SUBMITED THAT A. O ACCEPTED RS. 2,12,700/ - TO BE GENUINE AND BONA FIDE BUT MADE ADDITION OF RS. 6,15,000/ - CONSIDERING IT TO BE NOT GENUINE . BEFORE US, LD A.R. SUBMITTED THAT OUT OF TOTAL 240 OWNERS AND MEMBERS OF THE ASSOCIATION , ON A SAMPLE BASIS , ASSESSEE HAD RECEIVED AFFIDAVITS FROM THE MEMBERS WHO IN THE AFFIDAVIT S HAVE CONFIRMED THE GIVING OF CONTRIBUTION TOWARDS THE COMMON FACILITIES AND THE UTILITIES OF THE SOCIETY. HE ALSO PLACED ON RECORD AT PAGE 41 TO 86 THE COPY OF THE AFFIDAVITS. HE FUR THER SUBMITTED IT (SS) A NO 120/AHD/2004 . B.P . 1988 - 89 TO 12/8/97 4 THAT ASSESSEE COULD NOT OBTAIN AFFIDAVITS FROM OTHER PERSONS IN VIEW OF THE FACT THAT THE NUMBER OF MEMBERS WERE MORE THAT 200 IN NUMBER AND THE AMOUNT RECEIVED FROM EACH OF THEM WAS IN FEW THOUSANDS. HE THEREFORE SUBMITTED THAT CONSIDERING THE FACT THAT THE AMOUNT HAVE BEEN RECEIVED BY ASSESSEE TOWARDS MAINTENANCE CHARGES AND SINCE ASSESSEE HAD PLACED ON SAMPLE BASIS THE CONFIRMATIONS, THE BALANCE ADDITION MADE BY THE A.O BE DELETED. THE LD D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O AND CIT(A). 7. WE HAVE HEARD THE RI VAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD . THE ISSUE IN THE PRESENT CASE IS ABOVE THE RECEIPT OF MONEY AGGREGATING TO RS. 6,50.000/ - STATED TO HAVE BEEN RECEIVED FROM MAITRINAGAR O W N ERS ASSOCIATION WHICH WAS ADDED U/S. 68 OF THE ACT. IT IS ASSESS EE S SUBMISSION THAT OUT OF THE TOTAL 240 OWNERS A ND MEMBERS OF THE ASSOCIATION I T HAD OBTAINED AFFIDAVITS FROM 30 PERSONS WHEREIN THEY HAD CONFIRMED GIVING OF CONTRIBUTION TOWARDS MAINTENANCE CHARGES. THE AGGREGATE AMOUNT RECEIVED FROM THESE 30 PERSONS IS RS. 1,23,000/ - . IT IS ASSESSEE SUBMISSION THAT IT COULD NOT OBTAIN AFFIDAVITS FROM OTHER PERSONS IN VIEW OF THE FACT THAT THERE WAS MORE THAN 200 MEMBERS AND THE AMOUNT INVOLVED FROM EACH OF THEM RANGED BETWEEN RS. 3000 TO RS. 5000. CONSIDERING THE TOT ALITY OF THE FACTS AND MORE SO IN VIEW OF THE FACT THAT THE PRESENT APPEAL IS FOR THE BLOCK PERIOD ENDING ON 12.08.1997 I.E MORE THAN 15 YEARS OLD , W E ARE OF THE VIEW , THAT AS FAR AS THE AGGREGATE AMOUNT OF RS. 1,23, 000/ - IS CONCERNED, WHICH IS ST ATED TO BE COLLECTED FROM 30 PERSONS , THE ADDITION NEEDS TO BE DELETED IN VIEW OF THE FACT THAT THE 30 PERSONS HAVE AFFIRMED THE GIVING OF DEPOSITS AND THE REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO DISPROVE T HE AFFIDAVITS. AS FAR AS THE BALANCE AMOUNT O F RS. 5, 27,000/ - IS CONCERNED, C ONSIDERING THE IT (SS) A NO 120/AHD/2004 . B.P . 1988 - 89 TO 12/8/97 5 FACT THAT THE ASSESSEE HAS N OT BEEN ABLE TO FULLY DISCHARGE THE ONUS AND SINCE THE REVENUE HAS ALSO HAS NOT PLACED ANY MATERIAL ON RECORD IN SUPPORT OF THE ADDITION , W E ARE OF THE VIEW THAT THE ENDS OF JUSTICE SHALL BE MET IF ESTIMATED ADDITION IS MADE. W E ACCORDINGLY ESTIMATE THE ADD ITION OF RS. 3 LACS OUT OF RS. 5,27,000/ - AND DIRECT THE DELETION OF RS. 2,27,000/ - . IN THE RESULT, THIS GROUND OF ASSESSEE IS PARTLY ALLOWED. 8. IN THE RESULT, THE APPEA L OF ASSE SSED IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 12 - 09 - 201 4 . SD/ - SD/ - (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRA R ITAT,AHMEDABAD