The ITO, Ward-1(3), Surat V. M/s. Mahavir Lumber Pvt.Ltd., Surat

ITSSA 142/AHD/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 3095 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 23-08-2012
• Assessment Year: misc
• Appeal Filed On: 12-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D P GUPTA
• Assessee Lawyers: J P SHAH
• Keywords: Assessment record; Block assessment
• Section: 143(3)

Judgement Text

IT(SS)A NO 142/AHD/2010 BLOCK PERIO D A.Y.1990-91 TO 99-2000 & PERIOD UP TO 2-12-1999. 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AH MEDABAD (BEFORE SHRI MUKUL KR.SHRAWAT JM & SHRI ANIL CHATUR VEDI A.M.) I.T(SS).A. NO .142 /AHD/2010. (BLOCK PERIOD 1990-91 TO 1999-2000 & PERIOD UPT O 2-12-99) INCOME TAX OFFICER, WARD 1(3), ROOM NO.113, AAYAKAR BHAVAN, MAJURA GATE,SURAT. (APPELLANT) VS. M/S. MAHAVIR LUMBER PVT. LTD., 4 HIRARAM COMPLEX, SUMAN DESAINI WADI, KHATODRA, SURAT. (RESPONDENT) PAN: AABCM 6173A APPELLANT BY : MR. D.P.GUPTA, CIT (D.R.) RESPONDENT BY : MR. J.P. SHAH. ( )/ ORDER DATE OF HEARING : 24-8-2012 DATE OF PRONOUNCEMENT : 5 -10-2012 PER: SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF LD. CIT (A) I, SURAT DATED 10-12-2009 FOR THE BLOCK PERIOD FROM A. Y. 1990-91 TO 1999- 2000 AND PERIOD UPTO 2-12-1999. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IN ITS APPEAL READS AS UNDER: IT(SS)A NO 142/AHD/2010 BLOCK PERIO D A.Y.1990-91 TO 99-2000 & PERIOD UP TO 2-12-1999. 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A)HAS ERRED IN DELETING THE ADDITION OF RS.6,82 ,400/- MADE BY THE A.O. ON ACCOUNT OF UNACCOUNTED AND UNEXPLAINED CASH FOUND DURING THE COURSE OF SEARCH PROCEEDINGS FROM THE PREMISES OF THE ASSESSEE. 3. IN THIS CASE A SEARCH OPERATION HAD TAKEN PLACE AT THE BUSINESS PREMISES ON 2-12-1999. DURING THE SEARCH PROCEEDING S CASH OF RS. 6,82,000/- WAS FOUND OUT OF WHICH RS. 6,65,000/- WA S SEIZED FOR THE REASON THAT THE ASSESSEE COULD NOT EXPLAIN AND PROVE THE A CTUAL SOURCE OF CASH. THE ASSESSEE FILED BLOCK RETURN OF INCOME ON 31-3-2 000 DISCLOSING A TOTAL UNDISCLOSED INCOME OF RS. NIL. DURING THE BLOCK ASS ESSMENT PROCEEDINGS THE ASSESSEE STATED THAT THE CASH BELONGED TO VANI TA PARK PROJECT WHICH BELONGED TO HIS BROTHER BUT COULD NOT SUBSTANTIATE ITS CLAIM AND THEREFORE THE A.O. ADDED RS.6,82,400/- TO THE INCOME OF THE A SSESSEE. CIT (A) CONFIRMED THE FINDINGS OF THE A.O. WHEREUPON THE AS SESSEE PREFERRED APPEAL BEFORE ITAT. ITAT VIDE ORDER (IT (SS) NO.174 /AHD/2002 DATED 28-2- 2007) OBSERVED THAT NEITHER A.O. NOR CIT (A) HAD GI VEN PROPER OPPORTUNITY OF HEARING AND OPPORTUNITY OF CROSS EXAMINING THE W ITNESS. IN VIEW OF THESE FACTS, THE MATTER WAS SET ASIDE TO THE FILE OF A.O. TO DECIDE THE ISSUE DE- NOVO. THEREAFTER THE A.O. ISSUED FRESH NOTICE TO TH E ASSESSEE. BEFORE A.O. THE ASSESSEE SUBMITTED THAT THE ASSESSEE AND MOHAN DEVELOPERS ARE LOCATED AT SAME PREMISES, CASH FOUND AT THE TIME OF SEARCH BELONGED TO VANITA PARK PROJECT OF WHICH SHRI MOHANBHAI PATEL I S THE PROPRIETOR. THE ASSESSEE ALSO FURNISHED CONFIRMATION OF SHRI MOHANB HAI PATEL (PROP. OF MAHAVIR DEVELOPERS) WHICH STATED THAT CASH OF RS.6, 82,000/- BELONGED TO HIM. THE ASSESSEE ALSO SUBMITTED THE COPY OF CASH B OOK OF MAHAVIR DEVELOPERS EVIDENCING THE AVAILABILITY OF CASH BALA NCE OF RS.6,82,400/- OUT IT(SS)A NO 142/AHD/2010 BLOCK PERIO D A.Y.1990-91 TO 99-2000 & PERIOD UP TO 2-12-1999. 3 OF WHICH THE DEPARTMENT HAD SEIZED CASH OF RS.6,65, 000/-.HE ALSO SUBMITTED A COPY OF BALANCE SHEET OF MAHAVIR DEVELO PERS (PROP. MOHAN PATEL) WHEREIN THE CASH SEIZED BY THE INCOME TAX DE PARTMENT WAS SHOWN AS ASSETS. THE A. O. DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE FOR THE REASON THAT IN THE STATEMENT MADE BY SHRI DAMODARBH AI PATEL, AT THE TIME OF SEARCH, HAD ADMITTED AS UNACCOUNTED RECEIPT WHIC H ACCORDING TO THE A.O. PROVES THAT THE CASH FOUND ON THE DATE OF SEAR CH COULD NOT BE EXPLAINED. HE WAS FURTHER OF THE VIEW THAT THE ENTR IES IN THE CASH BOOK OF SHRI MOHANBHAI PATEL (PROP. MAHAVIR DEVELOPERS) WAS CONSIDERED TO BE AFTER THOUGHT AND CREATED FOR THE PURPOSE OF AVOIDI NG TAXATION. HE THUS HELD THAT ASSESSEE COULD NOT ADEQUATELY PROVE THAT THE C ASH SEIZED FROM THE POSSESSION OF SHRI DAMODARBHAI PATEL BELONGED TO SH RI MOHANBHAI PATEL. IN VIEW OF THE AFORESAID FACTS, THE A.O. CONCLUDED THAT RS. 6,82,000/- REPRESENTS UNACCOUNTED CASH OF THE ASSESSEE AND THE REFORE ADDED IT TO THE ASSESSEES INCOME. 4. AGGRIEVED BY THE ACTION OF THE A.O. THE ASSESSEE CARRIED THE MATTER BEFORE CIT (A). BEFORE CIT (A) IT WAS SUBMITTED BY ASSESSEE THAT IN ANSWER TO THE QUESTION NO.14, RECORDED ON 11-1-2000,SHRI D AMODARBHAI PATEL HAD CLEARLY STATED THAT THIS AMOUNT BELONGED TO VANITA PARK PROJECT. VANITA PARK PROJECT HAS BEEN ASSESSED IN THE HANDS OF MAHAVIR D EVELOPERS WHOSE PROPRIETOR IS SHRI MOHANBHAI PATEL. THE ASSESSEE AL SO FURNISHED A COPY OF THE BLOCK ASSESSMENT ORDER OF SHRI MOHANBHAI PATEL . CIT (A) AGREED WITH THE CONTENTIONS OF THE ASSESSEE AND DELETED THE ADD ITION BY HOLDING AS UNDER: IT(SS)A NO 142/AHD/2010 BLOCK PERIO D A.Y.1990-91 TO 99-2000 & PERIOD UP TO 2-12-1999. 4 2.3. I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE OBSERVATION OF THE A.O. IT IS CLEAR FROM THE ST ATEMENT OF SHRI DAMODARBHAI PATEL RELIED ON BY THE A.O. THAT THE AM OUNT WAS STATED TO BE BELONGING TO VANITA PARK PROJECT WHICH HAS BE EN ASSESSED IN THE HANDS OF SHRI MOHANBHAI PATEL AS PROPRIETOR OF M/S. MAHAVIR DEVELOPERS. THE A.O. ALSO RELIED ONLY ON THIS STATE MENT. BY RELYING ON THE STATEMENT THE ADDITION CANNOT BE MADE IN THE HA NDS OF THE APPELLANT AS VANIT PARK PROJECT HAS BEEN ASSESSED B Y THE DEPARTMENT IN THE HANDS OF SHRI MOHANBHAI PATEL, WH O IS THE PROPRIETOR OF M/S. MAHAVIR DEVELOPERS. IN VIEW OF T HIS, THE ADDITION MADE BY THE A.O. IS DELETED AND THIS GROUND OF APPE AL IS ALLOWED. 5. AGGRIEVED BY THE ORDER OF CIT (A), THE REVENUE I S NOW IN APPEAL BEFORE US. 6. BEFORE US, THE LD. D.R. SUBMITTED THAT THE ASSE SSEE COULD NOT EXPLAIN AND PROVE THE SOURCE OF CASH. THE ASSESSEE COULD NOT EXPLAIN AS TO WHO HAD BROUGHT THE CASH IN THE PREMISES OF THE ASS ESSEE, THE PURPOSE OF THE CASH LYING IN ITS PREMISES OR ANY OTHER PROOF T O SUBSTANTIATE HIS CONTENTIONS. IN VIEW OF THESE FACTS THE LD. D.R. SU BMITTED THAT THE A.O. HAS RIGHTLY ADDED THE INCOME IN THE HANDS OF THE ASSESS EE. HE THUS SUPPORTED THE ORDER OF A.O. 7. ON THE OTHER HAND THE LD. A.R. POINTED TO THE AN SWER TO QUESTION NO.14 OF THE STATEMENT OF SHRI DAMODARBHAI PATEL RE CORDED ON 4-1-2000 WHERE HE HAS STATED THAT THE CASH IS OF VANITA PARK PROJECT. HE ALSO PLACED ON RECORD AT PAGE 22-23 OF THE PAPER BOOK THE COPY OF THE ASSESSMENT ORDER DATED 28-12-2006 PASSED U/S. 143(3) OF MAHAVI R DEVELOPERS (PROP SHRI MOHANBHAI PATEL) FOR A.Y. 2004-05 WHEREIN THE A.O. HAS IN PARA-2 IT(SS)A NO 142/AHD/2010 BLOCK PERIO D A.Y.1990-91 TO 99-2000 & PERIOD UP TO 2-12-1999. 5 STATED THE ASSESSEE DERIVED INCOME FROM PROPRIETAR Y CONCERN M/S. MAHAVIR DEVELOPERS. IN MAHAVIR DEVELOPERS, THE ASSE SSEE HAD THE PROJECT OF VANITA PARK APARTMENT, SURAT. HE ALSO PLACED ON RECORD AT PAGE-19 AND 20- THE COPY OF ASSESSMENT ORDER DATED 26-11-2007 F OR A.Y. 2003-04 PASSED U/S.143(3) R.W.S. 147 OF SHRI MOHANBHAI PATE L (PROP. MAHAVIR DEVELOPERS) WHEREIN ASSESSEE HAS BEEN STATED THAT M OHANBHAI PATEL IS THE DEVELOPER OF VANITA PARK PROJECT. HE THUS SUBMI TTED THAT SINCE VANITA PARK PROJECT IS NOT ASSESSED IN THE HANDS OF ASSESS EE NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. HE THUS SUPPORTE D THE ORDER OF CIT (A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE A.O. HAS ONLY RELIED ON TH E STATEMENT OF SHRI DAMODARBHAI PATEL TO MAKE THE ADDITION IN THE HANDS OF THE ASSESSEE. THE A.O. HAS NOT BROUGHT ANY MATERIAL ON RECORD TO PROV E THAT CASH SEIZED BELONGED TO ASSESSEE. SHRI DAMODARBHAI HAS IN THE STATEMENT STATED THAT THE CASH BELONGED TO VANITA PARK PROJECT. ON THE BA SIS OF ASSESSMENT RECORDS PRODUCED BEFORE US, IT IS SEEN THAT VANITA PARK PROJECT IS DEVELOPED BY MAHAVIR DEVELOPERS WHOSE PROPRIETOR IS SHRI MOHA NBHAI PATEL. FURTHER THE INCOME FROM VANITA PARK PROJECT IS ASSESSED IN THE HANDS OF SHRI MOHANBHAI PATEL. THE LD. D.R. COULD NOT CONTROVERT THESE FACTS OR COULD CONTROVERT THE FINDINGS OF CIT (A) BY BRINGING ANY MATERIAL TO THE CONTRARY ON RECORD. IN VIEW OF THESE FACTS WE ARE OF THE CONSI DERED VIEW THAT CIT (A) HAS RIGHTLY DELETED THE ADDITION MADE BY A.O. AND W E ACCORDINGLY CONFIRM THE ORDER OF CIT (A) AND THUS, THIS GROUND OF REVEN UE IS DISMISSED. IT(SS)A NO 142/AHD/2010 BLOCK PERIO D A.Y.1990-91 TO 99-2000 & PERIOD UP TO 2-12-1999. 6 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 5- 10 - 2012. SD/- SD/- (MUKUL KUMAR SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACC OUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-I, SURAT. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. IT(SS)A NO 142/AHD/2010 BLOCK PERIO D A.Y.1990-91 TO 99-2000 & PERIOD UP TO 2-12-1999. 7 1.DATE OF DICTATION 23 - 8 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 1, 4 / 10 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 4 - 10 -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5 - 10 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 5 - 10 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8 -10 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..