Appeal details
Counselvise Citation
[2019] 116 COUNSELVISE.COM (IT) 0502 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
8 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
13-09-2019
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB
Assessment Year
2013-2014
Appeal Filed On
24-12-2018
Judgement Text
RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA (SS)NO 203/IND/2018 ASSESSMENT YEAR 2013-14 PAN : ACUPM9880C SHRI RAJEEV MAJUMDAR, V/S DCIT (CENTRAL)-1, A-44, AAKRITI GARDEN, BHOPAL NEHRU NAGAR, BHOPAL (REVENUE) (RESPONDENT) REVENUE BY : SMT. ASH IMA GUPTA, CIT ASSESSEE BY : SHRI S.S. DESHPANDE, CA DATE OF HEARING : 18.07.2019 DATE OF PRONOUNCEMENT : 13.09.2019 O R D E R PER SHRI MANISH BORAD, A.M. THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF ASSESSEES PERTAINING TO ASSESSMENT YEARS 2013-14 IS DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)- 3 (IN SHORT LD.CIT(A)], BHOPAL DATED 26.11.2018 WHICH IS ARIS ING OUT OF THE RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 2 ORDER U/S 143(3) DATED 30.11.2016 FRAMED BY DCIT(CE NTRAL)-I, BHOPAL. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL; 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE OF THE ASSESSEE THE LEARNED CIT(A) WAS NOT JUSTIFIED IN HOLDING THA T THE AO WAS JUSTIFIED IN MAKING THE ADDITION OF RS.87,60,000/- TOWARDS ALLEG ED UNACCOUNTED INVESTMENT. 2. THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, DE LETE OR MODIFY ANY GROUND(S) OF APPEAL DURING OR BEFORE THE HEARING OF THE APPEAL. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND EARNS INCOME AS CIVIL CONTRACTOR AND SHARE OF PROFITS FROM PARTNERSHIP FIRMS. ASSESSEE IS A MEMBER OF REGAL HOME GROUPS AND IS PARTNER IN SOME OF THE GR OUPS CONCERNS WHICH ALSO INCLUDES REGAL SAMARTH CONSTRUCTION COMP ANY AND REGAL SAMARTH KRISHNA BUILDERS. SEARCH U/S 132 OF THE AC T WAS CARRIED OUT ON 12.8.2014 AT THE REGAL HOMES GROUPS AND ASSO CIATED CONCERNS/ BUSINESS ASSOCIATES. ASSESSEE WAS ALSO SUBJECT TO SEARCH. IN THE SEARCH VARIOUS INCRIMINATING MATERIALS WERE FOUND AND SEIZED. ONE OF THE SEIZED DOCUMENT NAMELY LPS-1 PAGE 1 TO 8 CONTAINED SOME INFORMATION ABOUT THE ASSESSEE. IN COMPLIANCE TO NOTICE U/S 153A OF THE ACT ASSESSEE FILED RETURN OF INCOME FOR ASSESSMENT YEAR RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 3 2009-10 TO 2015-16. INSTANT APPEAL RELATES TO ASSE SSMENT YEAR 2013-14 FOR WHICH THE ASSESSEE DECLARED INCOME OF R S.4,06,160/-. IN THE SEIZED DOCUMENT THERE WAS AN ACCOUNT IN THE NAME OF MR. MAZUMDAR I.E. THE ASSESSEE IN WHICH CERTAIN TRANSAC TIONS WERE APPEARING ON THE LEFT HAND/ DEBIT SIDE AND RIGHT H AND/CREDIT SIDE. WHEN THE ASSESSEE WAS CONFRONTED BY THE LD. A.O IT WAS SUBMITTED THAT THE AMOUNT OF RS.62,60,000/- APPEARING IN THE LEFT SIDE IS TOWARDS CAPITAL INTRODUCED AT RS.30,00,000/- EACH IN TWO PARTNERSHIP FIRMS NAMELY REGAL SAMARTH CONSTRUCTION COMPANY AND REGAL SAMARTH KRISHNA BUILDERS. AN AMOUNT OF RS.2, 60,000/- APPEARING IN THESE SEIZED DOCUMENT IS A CHEQUE GIVE N TOWARDS BOUNDARY WALL. THE TOTAL AMOUNT OF RS.62,60,000/- IS DULY ACCOUNTED IN THE BOOKS AND THUS IS EXPLAINED. AS RE GARDS RS.85,00,000/- APPEARING IN THE RIGHT/CREDIT SIDE, ASSESSEE STATED THAT IT IS THE LIABILITY SHOWN AGAINST THE ASSESSEE THEREFORE IT CANNOT BE TREATED AS INCOME. HOWEVER LD. A.O WAS NOT CONV INCED WITH THE REPLY OF THE ASSESSEE AND MADE ADDITION FOR UNACCOU NTED INVESTMENT OF RS.87,60,000/- BIFURCATED INTO TWO PARTS. FIRST LY ADDITION OF RS.32,60,000/- BEING DIFFERENCE OF AMOUNT STANDING ON LEFT SIDE AT RS.62,60,000/- LESS THE AMOUNT OF CAPITAL INVESTMEN T IN THE FIRM RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 4 REGAL SAMARTH KRISHNA BUILDERS AT RS.30,00,000/-. THE OTHER PART OF THE ADDITION WAS RS.55,00,000/- WHICH WAS THE DI FFERENCE BETWEEN THE AMOUNT APPEARING ON THE RIGHT SIDE AT RS.85,00, 000/- LESS RS.30,00,000/- DISCLOSED AS INVESTMENT IN FIRM. IN COME ASSESSED AT RS.91,66,160/-. 4. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. C IT(A) BUT FAILED TO GET RELIEF ON THIS ISSUE AND THE ADDITION WAS CO NFIRMED BY LD. CIT(A) OBSERVING AS BELOW; 4.2 GROUND NO 2 FOR AY 2013-14 :- THROUGH THIS GROUND OF APPEAL APPELLANT HAS CHALLENGED ADDITION OF RS. 87,60,000/ - ON ACCOUNT OF UNACCOUNTED INVESTMENT. DURING THE COURSE OF SURVEY AT OFFICE PREMISES OF M/S ENVO PROMOTERS DEVELOPERS PVT LTD AT 6/4 CHITTOR COMPLEX. MP NAGAR, BHOPAL PAGE NO 1 TO 8 OF LPIL WAS IMPOUNDED. THESE PAGES CONTAIN DETAILED WORKING OF PROJECT TRIVENI HEIGHTS OF M/S REGAL SAM ARTH KRISHAN BUILDERS. THE SEIZED PAPER CONTAINS DETAILS OF LAND PURCHASED AND PAYMENTS MADE TO VARIOUS INDIVIDUALS. ON PAGE 4 OF LPI-L IT HAS BEEN MENTIONED UNDER MAIN HEADING' SHRI RAJEEV MAJUMDAR' AND RS, 85,00,000/- IS TO BE TAKEN FROM CHITRAKOOT, IT IS IMPORTANT TO NOTE THAT PROJECT CH ITRAKOOT IS RUN BY M/S REGAL SAMARTH CONSTRUCTION COMPANY AND THE APPELLANT IS O NE OF THE PARTNER OF M/S REGAL SAMARTH CONSTRUCTION COMPANY. APPELLANT DURING APPELLATE PROCEEDINGS, SUBMITTED T HAT LOOSE PAPER SEIZED LPI-4 SHOWS THAT SOMEONE IS SUPPOSE TO RECEIVE RS. 85,00,000/- FROM CHITRAKOOT AND NOT BY THE ASSESSEE. SINCE THE ASSES SEE IS ONE OF THE WORKING PARTNER IN M/S REGAL SAMARTH CONSTRUCTION COMPANY, THEREFORE, HE CANNOT RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 5 DENY THE FACT THAT THERE EXISTS A NEXUS BETWEEN THE AMOUNT MENTIONED ON THE LOOSE PAPER AND PROJECT CHITRAKCOT. FURTHER, AP PELLANT FAILED TO PRODUCE ANY MATERIAL EVIDENCE IN SUPPORT OF HIS CLAIM NEITH ER DURING ASSESSMENT PROCEEDINGS NOR AT THE TIME OF APPELLATE PROCEEDING S. THE WORKING IN THE LOOSE PAPER CONTAINS TOTAL LAND COST ALONG WITH PER CENTAGE AND SHARE OF EACH PARTNER AND THE AMOUNT RECEIVED FROM EACH PART NER THROUGH CASH AND CHEQUE HAS BEEN MENTIONED. THE LOOSE PAPER HAS BEEN FOUND FROM THE PREMISES OF SHRI KL SHSRMA WHO IS ONE OF THE PARTNER IN THE SAID PROJEC T. THE SIMULTANEOUS SEARCHES HAVE BEEN CARRIED OUT AT THE PREMISES OF THE APPELLANT AND SHRI KL SHARMA ON THE GROUND THAT BOTH ARE COMMON PARTNERS IN THE FIRMS AND THERE IS EVERY LIKELY HOOD THAT PA PER BELONGING TO ONE PERSON MIGHT BE FOUND AT PREMISES OF OTHER PERSON. THE ENTRIES IN THESE PAPERS ARE RELATED TO LAND PURCHASED WHERE THE APPE LLANT IS ONE OF THE PARTNER. THE PAGE 4 OF LOOSE PAPER IS LEDGER ACCOUNT OF APPE LLANT WHEREAS IT HAS BEEN WRITTEN AS '85,00,000/- TO BE TAKEN FROM CHITRAKOET ', CHITRAKOOT IS THE NAME OF THE PROJECT, RUN BY THE FIRM M/S REGAL SAMARTH C ONSTRUCTION COMPANY IN WHICH APPELLANT IS A PARTNER, THE DETAILS OF PROJEC T TRIVENI HEIGHTS AND PROJECT CHITRAKOOT CANNOT BE CONSIDERED AS ROUGH WO RKING BECAUSE IN THE FIRMS APPELLANT IS ONE OF THE PARTNER. THEREFORE, T HE AO CORRECTLY HELD IN PARA 9.6 OF THE ASSESSMENT ORDER THAT THE LOOSE PAPER CANNOT BE SAID TO BE A ROUGH WORKING PAPER BECAUSE LN BOTH THE PROJECTS LE . TRIVENI HEIGHTS AND CHITRAKOOT APPELLANT IS A WORKING PARTNER. THUS IN ABSENCE OF ANY CONCLUSIVE DOCUMENTARY PROOF: THE ADDITION MADE BY THE AO AMOUNTING TO RS, 87,60,000/. IS CONFIRMED. THEREFORE, THE APPEAL ON THIS GROUND IS DISMISSED. RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 6 5. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THE T RIBUNAL RAISING SOLE GROUND CHALLENGING THE FINDING OF LD. CIT(A) C ONFIRMING THE ADDITION FOR UNACCOUNTED INVESTMENT AT RS.85,60,000 /-. 6. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED REFERRING TO THE FOLLOWING WRITTEN SUBMISSIONS; THE ASSESSEE ENTERED INTO A PARTNERSHIP ON 02.06.20 11 IN THE NAME OF M/S REGAL SAMARTH CONSTRUCTION CO. ALONG WITH SHRI KL SHARMA AND OTHERS. THIS FIRM WAS EXECUTING A PROJECT OF CONSTRUCTION O F FLATS IN THE NAME OF CHITRAKUT. THE ASSESSEE MADE THE INVESTMENT OF RS.30,00,000/- IN THIS FIRM WHICH WAS DISCLOSED IN THE BOOKS OF ACCOUNTS. WITH EFFECT FROM 22.02.2012 SHRI SURENDRA SINGH YADAV ENTERED IN THE SAME PARTNERSHIP FIRM. THE ASSESSEE ALSO ENTERED INTO THE PARTNERSHI P FIRM IN THE NAME OF M/S REGAL SAMARTH KRISHNA BUILDERS ON 20.10.2011 WITH S HRI KL SHARMA AND SHRI SURENDRA SINGH YADAV . IN THIS FIRM THE PR OJECT WAS TO BE EXECUTED IN THE NAME OF TRIVENI HEIGHTS. THE ASSESS EE INVESTED RS.30,00,000/-- IN THIS FIRM. BECAUSE OF SOME DISPUTES THE ASSESSEE WITHDREW FROM THIS FIRM FROM 01.04.2012. SIMULTANEO USLY SHRI SURENDRA SINGH YADAV WITHDREW FROM THE FIRM M/S REGAL SAMARTH CONSTRUCTION CO. AS FROM 01.04.2012. A SEARCH WAS CONDUCTED IN THE GROUP CASES ON 12.08. 2014. A SURVEY WAS ALSO CONDUCTED AT ASSOCIATED BUSINESS PREMISES. CER TAIN LOOSE PAPERS WERE FOUND FROM THE PREMISES OF ENVO PROMOTERS DEVELOPER S PRIVATE LIMITED. ASSESSEE HAS NO CONNECTION WITH THE SAID FIRM. HOWE VER, THE ASSESSEE'S PARTNERS WERE CONNECTED WITH THIS COMPANY. IN RESPONSE TO NOTICE ULS 153A THE RETURN WAS FILED DECLARING THE SAME RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 7 INCOME AS DECLARED IN THE ORIGINAL RETURN. DURING T HE COURSE OF THE ASSESSMENT PROCEEDINGS THE LD. AO WANTED THE EXPLAN ATION IN RESPECT OF THE LOOSE PAPERS SEIZED FROM THE PREMISES OF ENVO P ROMOTERS. IT WAS EXPLAINED BY THE ASSESSEE THAT THESE LOOSE PAPERS H AVE BEEN FOUND AT THE PREMISES OF THE THIRD PARTY AND AS SUCH THEY ARE NO T RELATED TO THE ASSESSEE. UNDER THESE CIRCUMSTANCES THE ASSESSEE IS UNABLE TO EXPLAIN THE SAME. THE COPIES OF THE LOOSE PAPERS HAVE BEEN REPR ODUCED IN THE ASSESSMENT ORDER FROM PAGE 4 TO 6. AT PAGE 5 THE AC COUNT OF S.S YADAV HAS BEEN MENTIONED IN WHICH THE FOLLOWING AMOUNTS H AVE BEEN MENTIONED WITH THE REMARK MUJUMDARJI-VALE RS. 60,00,QOOI- AND RS. 2,60,000/-- AT PAGE 6 OF THE ASSESSMENT ORDER THE FOLLOWING AMO UNTS HAVE BEEN MENTIONED: RS. 60,00,000/-- CASH + CH RS. 85,00,000/-- CHITRAKUT SE LENA RS. 2,60,000/-- CH BOUNDARY W ---------------- RS. 62,60,000/-- RS. 85,00,000/-- RS. 22,40,000/- BALANCE TO BE TAKEN ON THE BASIS OF THESE LOOSE PAPERS WHICH CONTAIN TH E NAME OF THE ASSESSEE THE ADDITIONS HAVE BEEN MADE IN PARA 9.7 OF RS. 87,60,000/- ON THE FOLLOWING BASIS. RS.32,60,000/- UNACCOUNTED INVESTMENT ( RS. 62,60,000/- MINUS RS. 30,00,000/- WHICH IS PAID BY CHEQUE) RS 55,00,000/-- INVESTMENT IN THE FIRM M/S REGAL SAMARTH KRISHNA BUILDERS RS 85,00,000/- AS PER SEIZED DOCUMENTS MINUS RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 8 RS 30,00,000/-- WHICH IS ACCOUNTED INVESTMENT. IN APPEAL THE LD. CIT(A) DISMISSED THE SAME ON THE GROUND THAT THE ASSESSE IS THE PARTNER IN REGAL SAMARTH CONSTRUCTIO N CO. AND THEREFORE CANNOT DENY THE FACT THAT THERE IS AN EXISTENCE OF THE NEXUS BETWEEN THE AMOUNT MENTIONED ON THE LOOSE PAPER AND THE PROJECT CHITRAKUT. HE FURTHER OBSERVED THAT THE ASSESSEE HAS FAILED TO PR ODUCE ANY MATERIAL EVIDENCE TO SUPPORT HIS CLAIM DURING THE COURSE OF THE ASSESSMENT PROCEEDING AND ALSO AT THE APPELLATE PROCEEDINGS. A T PAGE 4 THE LEDGER ACCOUNT OF THE APPELLANT SHOWS THAT AN AMOUNT OF RS . 85,00,000/- TO BE TAKEN FROM CHITRAKUT IN WHICH THE APPELLANT IS A WO RKING PARTNER. IN THE ABSENCE OF ANY CONCLUSIVE DOCUMENTARY PROOF THE ADD ITION OF RS. 87,60,000/- IS CONFIRMED. SUBMISSIONS IT IS HUMBLY SUBMITTED THAT THE ADDITIONS HAVE BEEN MADE PURELY ON THE HYPOTHETICAL GROUND BASED ON SURMISES AND CONJECTUR ES. THE PAPER FOUND IS AT THE PREMISES WHERE THE ASSESSEE HAS NO CONNEC TIONS. THE LD. AO HIMSELF HAS ADMITTED THAT SUM OF RS. 60,00,000/-- HAS BEEN INVESTED BY THE ASSESSEE. HE HAS HOWEVER TAKEN THE FIGURE OF RS . 62,60,000/- AS THE INVESTMENT ONLY IN ONE FIRM. ALL PAYMENTS HAVE BEEN MADE THROUGH THE BANKING CHANNEL AND HAVE BEEN RECORDED IN THE BOOKS OF THE ASSESSEE AND ALSO RECORDED IN THE FIRMS. THERE IS NO UNACCOUNTED INVESTMENT WHICH IS SHOWN ON THIS PAPER. THE TOTAL AMOUNT OF BOTH THE F IRMS HAVE BEEN DEPICTED ON THIS PAPER. THE LD. AO HAS READ THE ACC OUNT OF THE ASSESSEE WRONGLY WHERE IT HAS BEEN MENTIONED AS CHITRAKUT SE LENA. THERE IS NO TRANSACTION OF THIS AMOUNT BY THE ASSESSEE. IN THIS ACCOUNT IT IS FURTHER STATED 22,40,0001- AS BAKI LENA. THUS THIS PAPER SUGGEST THAT THERE IS A DEBIT MADE IN THE NAME OF THE ASSESSEE OF RS. 85,00,000/- I.E. IT'S A LIABILITY SHOWN AGAINST THE ASSESSEE. THE PAPER WILL HAVE TO BE READ AS A WHOLE AND NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSES SEE. THE PAPER IS RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 9 FOUND AT THE PREMISES OF THE THIRD PARTY. IT IS NOT IN THE HANDWRITING OF THE ASSESSEE NOR THERE IS ANY SIGNATURE OF THE ASSESSEE . UNDER THESE CIRCUMSTANCES THE ADDITIONS CANNOT BE MADE ON ASSUM PTIONS AND PRESUMPTIONS AND ON HYPOTHETICAL GROUNDS. UNDER NO CIRCUMSTANCES IT CAN BE PRESUMED THAT THE ASSESSES HAS RECEIVED OR H AS MADE THE PAYMENTS OF RS. 85,00,000/-. THUS IT IS SUBMITTED THAT THE ADDITIONS MADE DESERVES TO BE DELETED. 7. IN SUPPORT OF THE CONTENTION THAT NO ADDITION IS CALLED SINCE INCRIMINATING MATERIAL DOES NOT BELONG TO ASSESSEE, LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE JUDGMENT OF JU RISDICTIONAL HIGH COURT IN THE CASE OF PRINCIPAL CIT-1 V/S SHRI PUKHR AJ SONI ITA NO.53 OF 2017 DATED 6.2.2019. 8. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEM ENTLY ARGUED SUPPORTING THE FINDINGS OF BOTH THE LOWER AUTHORITI ES AND ALSO SUBMITTED THAT THE ALLEGED SEIZED MATERIAL CANNOT B E CLAIMED BY THE ASSESSEE AS NOT RELATED TO HIM SINCE SOME PART OF T HE SEIZED DOCUMENT PERTAINING TO ASSESSEE CONTAINS THE TRANSA CTIONS WHICH WERE DULY ACCOUNTED IN THE REGULAR BOOKS OF ACCOUN TS MAINTAINED BY THE ASSESSEE. SHE FURTHER CONTENDED THAT THE JUDGME NT OF JURISDICTIONAL HIGH COURT IN THE CASE OF PRINCIPAL CIT-1 V/S SHRI RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 10 PUKHRAJ SONI (SUPRA) IS NOT BE APPLICABLE ON THE FA CTS OF THE INSTANT CASE. 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE ASSESSEES SOLE GRIEVANCE IS ON ACC OUNT OF ADDITION FOR UNACCOUNTED INVESTMENT AT RS.86,60,000/- MADE BY TH E LD. A.O AND DULY CONFIRMED BY THE LD. CIT(A). THE ASSESSEE IS A PART OF REGAL HOMES GROUP WHICH WAS SUBJECT TO SEARCH U/S 132 OF THE ACT ON 12.8.14. VARIOUS DOCUMENTS WERE SEIZED FROM THE BU SINESS CONCERNS SUBJECT TO SEARCH. IN ONE OF SUCH DOCUMENTS FOUND IN THE OFFICE OF ENVO PROMOTERS DEVELOPMENT PVT. LTD APPEARING BEAR ING NO. LPS-1 PAGE 1 TO 8 CONTAINED THE ACCOUNTS OF VARIOUS GROUP CONCERNS AND PARTNERS ASSOCIATED THEREWITH. SOME OF SUCH ACCOUN TS ARE UNDER THE DIFFERENT HEAD NAMELY TRIVENI, K.L. SHARMAJI, S.S. YADAVJI, MAZUMDARJI, TRIVENI KISAN ACCOUNT ETC. THE ISSUE R AISED IN THE INSTANT APPEAL IS CONFINED TO THE TRANSACTION APPEA RING UNDER THE NAME MAZUMDAR WHO IS THE ASSESSEE I.E. RAJEEV MAZUM DAR. IN THIS ACCOUNT APPEARING UNDER THE HEAD MAZUMDARJI, FOLLOW ING MATTER (CONVERTED TO ENGLISH VERSION) WAS APPEARING; RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 11 RS. 60,00,000/-- CASH + CH RS. 85,00,000/-- TO BE TAKEN FROM RS. 2,60,000/-- CH BOUNDARY W ---------------- RS. 62,60,000/-- R S. 85,00,000/-- RS. 22,40,000/- BALANCE TO BE TAKEN 10. DURING THE COURSE OF HEARING LD. COUNSEL FOR TH E ASSESSEE RELYING ON THE JUDGMENT OF HON'BLE JURISDICTIONAL H IGH COURT IN THE CASE OF PRINCIPAL CIT-1 V/S SHRI PUKHRAJ SONI (SUPR A) SUBMITTED THAT THE ALLEGED INCRIMINATING MATERIAL WAS FOUND AT THE PLACE OF THIRD PERSON AND IT IS NOT CONNECTED TO THE ASSESSEE AND THE ADDITIONS HAVE BEEN MADE PURELY ON HYPOTHETICAL GROUND BASED ON SU RMISES AND CONJECTURES. WE HOWEVER FIND NO MERIT IN THIS CONTE NTION OF THE LD. COUNSEL FOR THE ASSESSEE SINCE DURING THE COURSE OF HEARING BEFORE LD. A.O ITSELF ASSESSEE VIDE ITS SUBMISSION DATED 7 .10.16 HAS ADMITTED THAT THE ENTRY APPEARING IN THE SEIZED DOC UMENT FOR RS.60,00,000/-WAS TOWARDS CAPITAL INTRODUCED IN THE TWO PARTNERSHIP FIRMS PARTLY BY CHEQUE AND PARTLY IN CA SH. THIS SUBMISSION ITSELF PROVES THAT THE ALLEGED SEIZED DO CUMENT IS VERY MUCH RELATED TO THE ASSESSEE AND HE CANNOT WALK AWA Y MERELY BY RELYING OF THE JUDGMENT OF HON'BLE JURISDICTIONAL H IGH COURT IN THE CASE OF PRINCIPAL CIT-1 V/S SHRI PUKHRAJ SONI (SU PRA). RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 12 11. NOW WE WILL TAKE UP THE MERITS OF THE CASE AND THE ADJUDICATION WILL BE CENTERED ON THE ALLEGED SEIZED DOCUMENT HAV ING FEW TRANSACTIONS ONDEBIT/LEFT HAND SIDE AND CREDIT ON R IGHT HAND SIDE AS REPRODUCED IN THE ENGLISH VERSION ABOVE. 12. AS FAR AS THE FIGURES OF RS.60,00,000/- AND RS. 2,60,000/- WHICH IS ON THE LEFT HAND/DEBIT SIDE WE OBSERVE THA T THE ASSESSEE ENTERED INTO PARTNERSHIP IN REGAL SAMARTH KRISHNA C ONSTRUCTION COMPANY WHICH WAS EXECUTING THE PROJECT OF CONSTRUC TION OF FLATS IN THE NAME OF CHITRAKOOT. THE ASSESSEE ALSO ENTERE D INTO PARTNERSHIP WITH OTHER CONCERN REGAL SAMARTH KRISHNA BUILDERS O N 20.10.11 WHICH WAS RUNNING ANOTHER PROJECT NAMED TRIVENI HE IGHTS. AT PAGE NO. 13 TO 21 OF PAPER BOOK FILED ON 13.3.2019, COPI ES OF CAPITAL ACCOUNT OF THE ASSESSEE IN THE ABOVE STATED PARTNER SHIP FIRMS ARE PLACED. ON PERUSAL OF THE SAME WE FIND THAT IN THE FIRM REGAL SAMARTH CONSTRUCTION COMPANY THE ASSESSEE HAS INTRO DUCED CAPITAL OF RS.30,00,000/- THROUGH CHEQUE DURING FINANCIAL Y EAR 2012-13 AND SIMILARLY IN REGAL SAMARTH CONSTRUCTION COMPANY ALS O ASSESSEE BEING 30% PARTNER HAS INTRODUCED CAPITAL BY CHEQUE/ CASH OF RS.30,00,000/-. SO THERE REMAINS NO DISPUTE THAT TH E AMOUNT OF RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 13 RS.60,00,000/- WHICH IS APPEARING IN THE SEIZED MAT ERIAL, STANDS DULY EXPLAINED WITH THE CAPITAL ACCOUNTS OF THE PAR TNERSHIP FIRMS AND SUPPORTS THE CONTENTION OF LD. COUNSEL FOR THE ASSE SSEE THAT RS.60,00,000/- IS DULY ACCOUNTED FOR IN THE BOOKS O F ACCOUNTS. REMAINING AMOUNT OF RS.2,60,000/- HAVE ALSO BEEN PA ID BY CHEQUE AS APPEARING IN THE SEIZED DOCUMENT, THUS THE FIGUR E OF RS.2,60,000/- ALSO STANDS DULY EXPLAINED BY THE ASS ESSEE. 13. NOW AS FAR AS AMOUNT OF RS.85,00,000/- APPEARIN G ON THE RIGHT HAND SIDE OF THE ACCOUNT APPEARING IN SEIZED DOCUME NT WITH THE PARTICULAR TO BE TAKEN FROM CHITRAKOOT, WE OBSERVE THAT CHITRAKOOT IS THE PROJECT OF CONSTRUCTION OF FLATS EXECUTED BY PARTNERSHIP FIRM REGAL SAMARTH CONSTRUCTION COMPANY IN WHICH ASSESSE E WAS A PARTNER ALONG WITH MR. K.L. SHARMA AND OTHERS. IN THIS PARTNERSHIP FIRM ASSESSEE INTRODUCED CAPITAL OF RS.30,00,000/- DURING FINANCIAL YEAR 2012-13. SO THE WORD CHITRAKOOT IS HAVING A DIRECT NEXUS WITH THE CHITRAKOOT PROJECT WHICH WAS CARRIED ON BY THE PARTNERSHIP FIRM REGAL SAMARTH CONSTRUCTION COMPANY. FOR THE PHRASE TO BE TAKEN FROM CHITAKOOT OUT OF AN AMOUNT OF RS.85,00,000/-, CONTENTIONS MADE ON BEHALF OF THE ASSESSEE ARE THAT THIS PARTIC ULAR ENTRY RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 14 CANNOTES LIABILITY ON THE PART OF CHITRAKOOT PRO JECT FROM WHICH THE ASSESSEE IS ENTITLED TO RECEIVE BACK AND SO IT CAN BE TREATED AS INCOME. HOWEVER, IN OUR VIEW THE PHRASE TO BE TAKEN FROM CHITRAKOOT CAN BE LOOKED FROM ANOTHER PERSPECTIVE ALSO. IN THE ALLEGED ACCOUNT ITEMS APPEARING ON THE LEFT HAND SI DE IS THE CAPITAL INTRODUCED BY THE ASSESSEE WHICH MEANS IT WAS THE F UND BROUGHT IN BY THE ASSESSEE IN THE PROJECT AND ON THE RIGHT HAN D SIDE THE FIGURE OF THE AMOUNT TO BE TAKEN BY THE ASSESSEE FROM CHITRAKOOT PROJECT. SO THERE IS A FAIR POSSIBILITY THAT AGAINST THE INVEST MENT OF RS.62,60,000/- THE ASSESSEE IS ENTITLED TO RECEIVE RS.85,00,000/- FROM THE PROJECT. THIS SUM OF RS.85,00,000/- MAY C OMPRISE OF THE CAPITAL INTRODUCED BY THE ASSESSEE AND PROFITS OR I T CAN PURELY BE THE INCOME. 14. SINCE THE ASSESSEE IS ONE OF THE WORKING PARTNE R IN REGAL SAMARTH CONSTRUCTION COMPANY AND THE ALLEGED TRANSA CTION HAVE DIRECT NEXUS WITH THE ASSESSEE BUT DURING THE COURS E OF PROCEEDINGS BEFORE BOTH THE LOWER AUTHORITIES AND BEFORE US ASS ESSEE FAILED TO PRODUCE ANY MATERIAL EVIDENCE IN SUPPORT OF HIS CL AIM THAT THE ALLEGED AMOUNT OF RS.85,00,000/-IS NOT HAVING ANY I NGREDIENT OF RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 15 UNDISCLOSED/UN RECORDED INCOME. SO WE ARE OF THE V IEW THAT RS.85,00,000/- IS THE AMOUNT TO BE RECEIVED BY THE ASSESSEE AND IT CAN BE PURELY UNACCOUNTED INCOME OR IT CAN BE AN AM OUNT WHICH COMPRISES OF INCOME AND CAPITAL INTRODUCED BY THE ASSESSEE. SINCE THE REVENUE HAS NOT BROUGHT ANY OTHER MATERIAL EVID ENCE TO PROVE THAT THE ALLEGED AMOUNT IS PURELY AN INCOME THE AS SESSEE CERTAINLY DESERVES BENEFIT OF DOUBT AND FURTHER SINCE BELOW THE ALLEGED ACCOUNT ITSELF THE SUM OF RS.22,40,000/- IS MENTION ED AS AN AMOUNT REFERRED AS BALANCE TO BE FOR PAYMENT. THIS AMOUNT OF RS.22,40,000/- IS THE DIFFERENCE BETWEEN RS.85,00,0 00/- (I.E. AMOUNT TO BE TAKEN LESS RS.62,60,000/- THE AMOUNT INVESTED BY THE ASSESSEE), THEREFORE THE ADDITION FOR UNACCOUNTED I NVESTMENT IN OUR VIEW CANNOT BE MORE THAN RS.22,40,000/-. WE THEREFO RE IN THE GIVEN FACTS AND IN VIEW OF OUR DISCUSSIONS HEREIN ABOVE A RE OF THE CONSIDERED VIEW THAT THE ALLEGED ADDITION OF UNACCO UNTED INVESTMENT NEEDS TO BE SUSTAINED ONLY TO THE EXTENT OF RS.22,4 0,000/- AND THUS THE FINDING OF LD. CIT(A) IS SET ASIDE AND THE ASSE SSEE GETS RELIEF OF RSD.65,20,000/-. GROUND NO.1 OF THE ASSESSEE IS PA RTLY ALLOWED. RAJEEV MAJUMDAR IT(SS)NO 203/IND/2018 16 15. GROUND NO.2 IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 16. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 13.09.20 19. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 13 SEPTEMBER, 2019 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT. REGISTRAR, ITAT
