Jay Prakash Didwania, Bhubaneswar V. ACIT, Central Circle-2, Bhubaneswar

ITSSA 123/CTK/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5575 (ITAT-CUTTACK)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 15-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D K SHETH
• Keywords: Search and seizure; Salary income; Document seized; Documents seized
• Section: 142(1); 153A; 132; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH , CUTTACK , . . , BEFORE SHRI CHANDRA MOHAN GARG, J M AND SHRI L .P. SAHU, A M ( ) ./ IT (SS) A NO S . 110 /CTK/2018 ( / ASSESSMENT YEAR :20 13 - 201 4 ) OM PRAKASH DIDWANIA, PLOT NO.1, LAXMI SAGAR, CUTTACK ROAD, BHUBANESWAR - 751006 VS. THE ACIT, CENTRAL CIRCLE - 2, BHUBANESWAR ./ ./ PAN/GIR NO. : A A TPD 6374 R ( / APPELLANT ) .. ( / RESPONDENT ) AND ( ) ./ IT(SS)A NO. 115 /CTK/2018 ( / ASSESSMENT YEAR : 201 3 - 201 4 ) BINA DIDWANIA, PLOT NO.1, LAXMI SAGAR, CUTTACK R OAD, BHUBANESWAR - 751006 VS. THE ACIT, CENTRAL CIRCLE - 2, BHUBANESWAR ./ ./ PAN/GIR NO. : A A J PD 5727 A ( / APPELLANT ) .. ( / RESPONDENT ) AND ( ) ./ IT(SS)A NO. 123 /CTK/2018 ( / ASSESSMENT YEAR : 2013 - 2014 ) JAY PRAKASH DIDWANIA, PLOT NO.1, LAXMI SAGAR, CUTTACK ROAD, BHUBANESWAR - 751006 VS. THE ACIT, CENTRAL CIRCLE - 2, BHUBANESWAR ./ ./ PAN/GIR NO. : A EIPD 9999 P ( / APPELLANT ) .. ( / RESPONDENT ) ITA NO S . 110, 11 5, 123 & 128 /CTK/201 8 2 AND ( ) ./ IT(SS)A NO. 128 /CTK/2018 ( / ASSESSMENT YEAR : 2013 - 2014 ) AMITA DIDWANIA, PLOT NO.1, LAXMI SAGAR, CUTTACK ROAD, BHUBANESWAR - 751006 VS. THE ACIT, CENTRAL CIRCLE - 2, BHUBANESWAR ./ ./ PAN/GIR NO. : A AJPD 5726 B ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI D.K.SHETH, AR /REVENUE BY : SHRI ASIT MOHAPATRA , CITDR / DATE OF HEARING : 31 /0 7 /2019 / DATE OF PRONOUNCEMENT : 07 /0 8 /2019 / O R D E R PER BENCH : THESE FOUR APPEALS HAVE BEEN FILED BY THE FOUR DIFFERENT ASSESSEE S AGAINST THE ORDER OF CIT(A) - 2, BHUBANESWAR, ALL DATED 29.08.2018 FOR THE ASSESSMENT YEARS 2013 - 2 014. 2. THE ASSESSEE IN ITA NO.110/CTK/2018 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ADDITION OF RS.2,95,097/ - AS MADE UNDER HEAD INTEREST IS WHOLLY ARBITRARY , UNCALLE D FOR AND OTHERW ISE UNJUSTIFIED . 2. FOR THAT THE LEARNED COMMISSIONER SHOULD HAVE ACCEPTED AND APPRECIATED T HE CONTENTIONS OF THE APPELLANT . 3. FOR THAT LEARNED COMMISSIONER IS NOT JUSTIFIED TO CONFIRM THE ADDITION AND DISMISS THE APPEAL 3. THE ASSESSEE IN ITA N O. 115 /CTK/201 8 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ADDITION OF RS. 1,37,712/ - AS MADE UNDER HEAD INTEREST IS WHOLLY ARBITRARY , UNCALLED FOR AND OTHERWISE UNJUSTIFIED . ITA NO S . 110, 11 5, 123 & 128 /CTK/201 8 3 2. F OR THAT THE LEARNED COMMISSIONER SHOULD HAVE ACCEPTED AND APPRECIATED THE CONTENTIONS OF THE APPELLANT. 3. FOR THAT LEARNED COMMISSIONER IS NOT JUSTIFIED TO CONFIRM THE ADDITION AND DISMISS THE APPEAL 4 . THE ASSESSEE IN ITA NO. 123 /CTK/2018 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ADDITION OF RS. 14,95,159/ - AS MADE UNDER HEAD INTEREST IS WHOLLY ARBITRARY, UNCALLE D FOR AND OTHERWISE UNJUSTIFIED . 2. FOR THAT THE LEARNED COMMISSIONER SH OULD HAVE ACCEPTED AND APPRECIATED THE CONTENTIONS OF THE APPELLANT. 3. FOR THAT LEARNED COMMISSIONER IS NOT JUSTIFIED TO CONFIRM THE ADDITION AND DISMISS THE APPEAL. 5 . THE ASSESSEE IN ITA NO.128/CTK/2018 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ADDITION OF RS. 39,346/ - AS MADE UNDER HEAD INTEREST IS WHOLLY ARBITRARY, UNCALLE D FOR AND OTHERWISE UNJUSTIFIED . 2. FOR THAT THE LEARNED COMMISSIONER SHOULD HAVE ACCEPTED AND APPRECIATED THE CONTENTIONS OF THE APPELLANT. 3. FOR THAT LEARNED COMMISSIONER IS NOT JUSTIFIED TO CONFIRM THE ADDITION AND DISMISS THE APPEAL . 6 . SINCE THE ISSUES INVOLVED IN ALL THE APPEALS ARE COMMON ARISING OUT OF IDENTICAL SET OF FACTS, THEREFORE, THE SAME ARE HEARD AL TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. FOR THE SAKE OF BREVITY, WE DECIDE FIRST APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2013 - 2014 IN ITA NO.110/CTK/2018 IN THE CASE OF OMPRAKASH DIDWANIA . 7 . BRIEF FACTS OF THE CASE A RE THAT THE A SSESSEE IS AN INDIVIDUAL SHOWING INCOME FROM SALARY, BUSINESS & HOUSE PROPERTY. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED U/S. 132 OF THE I. T. ACT, 1961 ON 06.05.2015 IN THE CASE OF THE GROUP NAMED ' M/S. BHARAT MOTORS LIMITED ITA NO S . 110, 11 5, 123 & 128 /CTK/201 8 4 & GROUP OF CASES' TO WHICH THE A SSESSEE BELONGS. THEREAFTER THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT U/S.153A/143(3) OF THE I. T. ACT, 1961. A NOTICED U/S. 153A OF THE I.T. ACT, 1961 DATED 31.08.2016 WAS ISSUED TO THE ASSESSEE FOR FILING THE RETURN OF INCOME FO R THE RELEVANT PREVIOUS YEAR , IN RESPONSE TO WHICH THE ASSESSEE FILED RETURN OF INCOME ON 20.03.2017 FOR THE A.Y. 2013 - 14 SHOWING T OTAL INCOME OF RS.23,58,270/ - . THE TOTAL INCOME SHOWN IN THE RETURN OF INCOME U/S. 139(1) DATED 29.07.2013 IS ALSO SAME AT RS .23,58,270/ - . SUBSEQUENTLY, THE AO ISSUED N OTICES U/S. 143(2) & U/S. 142(1) OF THE ACT , WHICH WAS SERVED ON THE ASSESSEE . THE ASSESSEE SUBMITTED REPLY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD MADE CASH PAYMENTS TO M/ S UTKAL REALTOR PVT. LTD. FOR PURCHASE OF FLATS , DETAILS OF WHICH ARE AS UNDER : - DATE OF CASH PAYMENT A.Y. AMOUNT PAID(IN RS.) 05.03.2010 2010 - 11 15,00,000/ - TOTAL: - 15,00,000/ - 27.05.2010 2011 - 12 5,00,000/ - 16.07.2010 2011 - 12 10,00,000/ - 17.08.2010 2011 - 12 10,00,000/ - 12.10.2010 2011 - 12 5,00,000/ - 09.11.2010 2011 - 12 5,00,000/ - 16.02.2011 2011 - 12 10,00,000/ - TOTAL: - 45,00,000/ - 23.07.2011 2012 - 13 11,00,000/ - TOTAL: - 11,00,000/ - 8 . FROM THE ABOVE, IT WAS NOTICED BY THE AO THAT NO INVESTMENT W AS MADE BY THE ASSESSEE IN PURCHASE OF FLAT FOR THE A.Y.2013 - 14. DURING THE SEARCH PROCEEDINGS, A DOCUMENT WAS FOUND WHICH WAS MARKED AS BMLO - 52 (PAGE - 08) IN WHICH IT WAS NOTICED THAT THE ASSESSEE HAS SHOWN DETAILS OF CASH PAYMENTS AND CALCULATED THE INTER EST THEREON @12% WHICH COMES ITA NO S . 110, 11 5, 123 & 128 /CTK/201 8 5 TO RS.19,67,314/ - . ON THE BASIS OF DOCUMENTS IT WAS NOTICED THAT THE ASSESSEE AND HIS FAMILY MEMBERS HAD PAID A TOTAL SUM OF RS.29,50,000/ - BY WAY OF CHEQUES, THE DETAILS OF PAYMENTS MADE IN CODING FORMS, WHICH READ AS UNDER : - SL NO SHORT FORM OF NAME ACTUAL NAME AMOUNT OF CHEQUE PAYMENT ( RS. IN LAKHS) % OF PAYMENT IN CHEQUE 1 JPD SRI JAY PRAKASH DIDWANIA 22.5 76 2 OPD SRI OM PRAKASH DIDWANIA 4.5 15 3 BD SMT BINA DIDWANIA 2 7 4 AD SRNT ANITA DIDWANIA 0.5 2 TOTAL - 29.5 100 9 . IT WAS FURTHER NOTICED BY THE AO THAT THERE WAS A CANCELLATION OF PURCHASE OF FLATS AND MONEY WAS REFUNDED TO THE ASSESSEE AND TO HIS FAMILY MEMBERS AND THE TOTAL INTEREST WHICH WAS CALCULATED EARLIER AS PER THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH PROCEEDING WAS ALSO DISTRIBUTED IN THE RATIO OF CHEQUE PAYMENTS GIVEN TO THE M/S UTKAL REALTORS (P) LTD, DETAILS OF WHICH ARE AS UNDER : - SI. NO NAME % OF APPORTIO NMENT AMOUNT OF INTEREST IN RESPECT OF EACH INDIVIDUAL 1 SRI JAY PRAKASH DIDWANIA 76 14,95,159/ - 2 SRI OM PRAKASH DIDWANIA 15 2,95,097/ - 3 SMT BINA DIDWANIA .7 1,37,712/ - 4 SMT ANITA DIDWANIA 2 39,346/ - TOTAL 100 19,67,314/ - 10 . FROM THE ABOVE TABLE, IT WAS NOTICED THAT IN THE HANDS OF OMPRAKASH DIDWANIA WHICH COMES TO RS.2,95,097/ - , THE INTEREST AMOUNT HAS NOT BEEN OFFERED AS TAX IN HIS RETURN OF INCOME. IN THIS REGARD, THE AO CALLED FOR EXPLANATION FROM THE ASSESSEE. FROM THE EXPLANATION SUBMITTED BY THE ASSESSEE, THE AO WAS NOT SATISFIED AND ADDED TO THE TOTAL INCOME ITA NO S . 110, 11 5, 123 & 128 /CTK/201 8 6 OF THE ASSESSEE. AGAINST WHICH THE ASSESSEE APPEALED TO THE CIT(A) AND THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND FINDINGS OF THE AO , DISMISSED THE APPEAL OF THE ASSESSEE. 11 . NOW, TH E ASSESSEE IS IN FURTHER APPEAL AGAINST THE ORDER OF CIT(A) BEFORE THE INCOME TAX APPELLATE TRIBUNAL. 12 . LD. AR SUBMITTED THAT THE AO MADE ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST INCOME WITHOUT CONSIDERING THE DETAILS PROVIDED DURING THE COURSE OF ASS ESSMENT. EVEN THE CIT(A) HAS NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE. LD. AR FURTHER SUBMITTED THAT THE ASSESSEE HAS ALREADY EXPLAINED BEFORE BOTH THE AUTHORITIES BELOW THAT NO INTEREST WAS RECEIVED FROM ANY PERSON AT ANY TIME. ON CANCELLATION OF D EAL ON ACCOUNT OF PURCHASE OF FLATS, ALL THE MONEY WERE RETURNED BACK ON DIFFERENT DATES. THIS INCLUDED PAYMENTS MADE BY CHEQUE AS WELL AS BY CASH. LD. AR FURTHER SUBMITTED THAT WHEN THE ASSESSEE HAS RECEIVED NOTHING ON REFUND OF MONEY, THEREFORE, CHARGE O F INTEREST ON THE ASSESSEE MAY KINDLY BE DELETED. 13 . ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS OF AUTHORITIES BELOW AND REFERRED TO THE PROVISIONS OF SECTION 292C OF THE ACT STRONGLY CONTENDED THAT THE DOCUMENTS WERE FOUND DURING THE COURSE OF SEAR CH PROCEEDINGS U/S.132 OF THE ACT WHICH CANNOT BE DENIED THAT THE ASSESSEE HAS NOT RECEIVED ANY INTEREST. THEREFORE, THE APPEAL OF THE ASSESSEE HAS NO MERIT AND DESERVES TO BE DISMISSED. IN SUPPORT OF HIS CONTENTION, LD. DR RELIED ON THE DECISION OF HONBL E KERALA HIGH COURT IN THE CASE OF ITA NO S . 110, 11 5, 123 & 128 /CTK/201 8 7 BHAGHEERATHA ENGINEERING LTD. VS. ACIT, [2017] 79 TAXMANN.COM 325 (KERALA) . 14 . AFTER HEARING BOTH THE PARTIES AND PERUSING THE ENTIRE MATERIALS AVAILABLE ON RECORD, WE FIND THAT IT IS NOT IN DISPUTE THAT THE DOCUMENT IDE NTIFIED AS BMLO - 52 WAS FOUND DURING THE COURSE OF SEARCH, WHICH REVEALS THAT , THE FOUR INDIVIDUALS , NAME OF WHICH HAS BEEN MENTIONED IN ABOVE TABLE , HAVE MADE PAYMENTS TO M/S UTKAL REALTORS PVT. LTD. FOR PURCHASE OF FLATS. FROM THE ORDERS OF BOTH THE AUTHO RITIES BELOW, WE FIND THAT THE ASSESSEE HAS REPEATEDLY EXPLAINED THAT NO INTEREST WAS RECEIVED FROM ANY PERSON. WE HAVE ALSO GONE THROUGH THE SEIZED DOCUMENTS IN WHICH IT WAS NOTICED THAT THE TOTAL INTEREST HAS BEEN CALCULATED AT RS.19,67,314/ - . FURTHER WE NOTICE THAT THE PRINCIPAL AND INTEREST HAS BEEN SHOWN OF RS. 90,67,314/ - (RS.71,00,000 + 19,67,314/ - ) OUT OF WHICH THE ASSESSEE HAS RECEIVED BACK OF RS.60,00,000/ - (RS.30,00,000 + RS.30,00,000) IN TWO OCCASIONS AND BALANCE IS RECEIVABLE OF RS.30,67,314/ - . IN THE SEIZED DOCUMENT NOWHERE MENTIONED THAT THE BALANCE AMOUNT OF RS.30,67,314/ - HAS BEEN RECEIVED. THEREFORE, MERELY ON CASH RE - PAYMENT ON WHICH NOTHING WAS RECEIVED ON REPAYMENTS ALSO, NO INTEREST COULD BE CHARGED. THE AO SHOULD HAVE CALLED FOR CONFIRM ATION FROM M/S . UTKAL REALTORS PVT. LTD. AS TO WHETHER ACTUALLY INTEREST HAS BEEN PAID BY THEM OR NOT AND THE REVENUE IS ALSO UNABLE TO BRING ANY COGENT MATERIAL ON RECORD TO SUBSTANTIATE THAT THE ACTUAL INTEREST HAS BEEN PAID BY M/S. UTKAL REALTORS PVT. LTD . ACCORDINGLY, THE ADDITION MADE BY THE AO ON ACCOUNT OF RECEIPT OF INTEREST PAYMENT IS DELETED. ITA NO S . 110, 11 5, 123 & 128 /CTK/201 8 8 15. T HE GROUNDS RAISED IN IT(SS)A NOS.115, 123 & 128/CTK/2018 BY THE OTHER ASSESSEES ARE IDENTICAL TO THE GROUNDS DECIDED BY US IN ONE OF THE ASSESSEE - OM PRAKASH DIDWANIA FOR THE ASSESSMENT YEAR 201 3 - 201 4 IN IT (SS) A NO. 110 /CTK/201 8 , WHEREIN WE HAVE DELETED THE ADDITION MADE BY THE AO AND CONFIRMED BY THE CIT(A) UNDER THE HEAD INTEREST . SINCE, THE PRESENT APPEAL S BEING IDENTICAL TO IT(SS)A NO. 110/CTK/2018 , T HEREFORE, OUR OBSERVATIONS MADE IN THE ABOVE APPEAL SHALL APPLY MUTATIS MUTANDIS TO THE GROUNDS RAISED IN APPEAL S I.E. IT(SS)A NOS.115, 123 & 128/CTK/2018 FOR THE ASSESSMENT YEAR 201 3 - 201 4 . ACCORDINGLY, THE ADDITIONS MADE BY THE AO ON ACCOUNT OF RECEIPT OF INTEREST PAYMENT IN IT(SS)A NOS.115, 123 & 128/CTK/2018 ARE DELETED . 16 . IN THE RESULT, APPEALS OF ALL THE FOUR ASSESSEES ARE ALLOWED O RDER PRONOUNCED IN THE OPEN COURT ON 07/08 / 201 9 . SD/ - ( C.M.GARG ) SD/ - ( L.P.SAHU ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 07/08 /201 9 . . / PKM , S R.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - . 2. / THE RESPO NDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//