The ACIT, Central Circle-2(2), Ahmedabad V. Shri Sanket Champaklal Shah, Ahmedabad

ITSSA 246/AHD/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 3061 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-11-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 15-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Document seized; Documents seized
• Section: 133A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBE R I.T.(SS)A. NO.246/AHD/2010 A.Y. 2006-07 THE A.C.I.T., CENTRAL CIRCLE2(2), AHMEDABAD APPELLANT VS. SHRI SANKET CHAMPAKLAL SHAH, 102,PRERANATHIRATH-2, NR. BIDIWALA PARK, SATELLITE, AHMEDABAD PAN-AEAPS0415H RESPONDENT DEPARTMENT BY : SHRI VIVEK ANAND OJHA, SR. D.R. ASSESSEE BY : SHRI S.N. DIVATIA, A.R. DATE OF HEARING : 05.11.2012 DATE OF PRONOUNCEMENT : 23.11.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THIS IS REVENUES APPEAL AGAINST THE ORDER OF LD. C IT(A)-III, AHMEDABAD, DATED 14.12.2009. 2. REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AN D CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.16,50,000/- ON ACCOUNT OF UNACCOUNTED CASH PAYME NT FOR PURCHASE OF FLAT. 2. IT IS, THEREFORE, PRAYED THAT THE ORDER OF LD. C IT(A) MAY BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE, A PAR TNER IN M/S PLANET EDUCATIONAL CONSULTANTS, FILED ITS RETURN SHOWING T OTAL INCOME OF RS.1,58,53,840/- WHICH WAS REVISED AT THE TOTAL INC OME OF RS.1,58,84,640/-. I.T. (SS) A. NO.246/AHD/2010 A.Y. 2006-07 2 THIS UPWARD REVISION WAS ASCRIBED TO INCOME FROM PR OPERTY. THE A.O. NOTED THAT A SEARCH U/S 132 HAD BEEN CONDUCTED IN THE PLA NET GROUP. A SURVEY U/S 133A ON THE ASSESSEES PREMISES RESULTED IN IMPOUND ING OF DOCUMENTS, INCLUDING A NOTE BOOK AS PER ANNEXURE A/2. THE PA GE MARKED AS 37 OF THE NOTE BOOK REVEALED ENTRIES, DONATION TRANSACTIONS B Y DRAFT/CASH. THE BOOK/DIARY WAS DISOWNED BY THE ASSESSEE IN HIS STAT EMENT RECORDED ON 24.10.2008 AND EXPLAINED AS PERTAINING TO AN EX-PAR T TIME ACCOUNTANT, NAMELY, BHARAT SHAH. THE AO HOWEVER, FELT THAT THE NOTE BOOK IMPOUNDED FROM THE BUSINESS PREMISES OF THE ASSESSEES FIRM, CANNOT BE DISOWNED SO EASILY. THE A.O. POINTED OUT THAT THE ASSESSEE HAD PURCHASED A FLAT NO.A/302, PALM BEACH, ANDHERI-VARSOVA ROAD, MUMBAI, VIDE SALE DEED DATED 22.2.2006 IN WHICH THE STATED CONSIDERATION WAS OF RS.53 LAKHS AND STAMP DUTY OF RS.2,48,750/- PAID TO ICICI BANK. THESE AM OUNTS WERE MOST APPROXIMATE AND RELATED TO THE AMOUNTS OF RS.51,00 ,000 DRAFT AND 238750 ICICI BANK A/C STAMP DUTY MENTIONED IN THE IMPUGNE D DIARY. BESIDES, THESE ENTRIES, THE PAGE 37 OF THE DIARY ALSO CONTAINED EN TRIES 16,50,000 CASH AND 25000 SOCIETY. THUS THE ENTRIES IN THE DIARY DIFF ERED SLIGHTLY FROM THE DETAILS OF TRANSACTIONS RELATED TO THE PURCHASED PROPERTY I N PALM BEACH SOCIETY. THIS DIFFERENCE (I.E. RS.2 LAKH IN AMOUNT OF DRAFT AND R S.10000/- IN STAMP DUTY ACCOUNT) WAS ONLY A SLIGHT VARIATION WHICH TOO WAS DELIBERATELY CONTRIVED AS THE ENTRIES IN THE IMPUGNED DOCUMENT HAD COME TO BE KNOWN TO THE DEPARTMENT ON 10/2/2006. IN THIS CONTEXT AND BACKG ROUND, THE ENTRY 16,50,000/- CASH IN THE IMPUGNED DOCUMENT WAS N ATURALLY RELATED TO THE PROPERTY PURCHASED. AS SUCH THE PAYMENT OF RS.16,5 0,000/- IN UNACCOUNTED I.T. (SS) A. NO.246/AHD/2010 A.Y. 2006-07 3 CASH WAS MADE FOR ACQUIRING THE AFOREMENTIONED PROP ERTY IN PALM BEACH SOCIETY AND HAS NOT BEEN DISCLOSED IN THE RELEVANT RETURN OF INCOME. 4. BEFORE LD. CIT(A) IT WAS SUBMITTED THAT THE A.O. HAD PROCEEDED ON SURMISES AND PRESUMPTION. THE ASSESSEE IN HIS STAT EMENT, SPECIFIED THAT THE IMPUGNED STATEMENT WAS IN THE HANDWRITING OF ONE BH ARAT SHAH AND THE ENTRIES THEREIN WERE NOT RELATED TO HIM/HIS BUSINES S/HIS FAMILY MEMBERS. THE SAID BHARAT SHAH, HAD LEFT HIS JOB WITH THE ASSESSE E AND HAD MIGRATED TO CANADA AND SO WAS NOT IN TOUCH WITH THE ASSESSEE. EVEN IN THE STATEMENT RECORDED EARLIER, IN REPLY TO Q.NO.28 IT WAS EXPLAI NED BY THE APPELLANT THAT THE ENTRIES IN IMPUGNED DOCUMENT WAS IN RESPECT OF A P URCHASE PRICE GIVEN BY A PROPERTY DEALER FOR LOKHANDWALA COMPLEX IN MUMBAI. HOWEVER, THAT PROPERTY IS NOT PURCHASED AND THE IDEA WAS DROPPED. FURTHE R, IN REPLY GIVEN TO THE A.O. IT WAS EXPLAINED THAT THESE WERE JOTTINGS BY B HARAT SHAH, EX-ACCOUNTANT, ON BASIS OF PRICE QUOTED BY THE PROPERTY DEALER, BU T THE SAID PROPERTY WAS NOT TRANSACTED AND HENCE IT WAS A DUMB DOCUMENT. A C OPY OF THE AGREEMENT FOR ACQUIRING FLAT NO.302, PALM BEACH APARTMENT, MENTIO NING THE CONSIDERATION AT RS.53 LAKHS WAS FILED. THUS IT WAS ARGUED THAT THE ENTRIES IN THE IMPUGNED DOCUMENT HAD NOTHING TO DO WITH THE ASSESSEE AND DI D NOT TALLY. MOREOVER, THE A.O. HAS NOT ESTABLISHED THE STATED UNACCOUNTED PAYMENT OF RS.16.50 LAKHS IN CASH, BY THE ASSESSEE BY CROSS VERIFYING I T FROM THE SELLER SHRI KULDIP SINGH AND BHARAT SHAH. AFTER TAKING INTO CONSIDERAT ION THESE SUBMISSIONS OF THE ASSESSEE LD. CIT(A) DELETED THE ADDITION OF RS. 16.50 LAKHS MADE BY THE A.O. 5. BEFORE US, LD. D.R. RELIED ON THE ORDER OF THE A .O. WHILE LD. COUNSEL OF THE ASSESSEE RELIED ON THE ORDER OF LD. CIT(A). I.T. (SS) A. NO.246/AHD/2010 A.Y. 2006-07 4 6. AFTER HEARING BOTH THE PARTIES AND GOING THROUGH THE SEIZED DOCUMENTS I.E. PAGENO.37 OF ANNEXURE A/12, WE FIND THAT ENTRIES IN THE DOCUMENTS ARE THE AMOUNTS OF RS.51 LAKHS,- DRAFT, R S.2,38,750/- - ICICI ACCOUNT, RS.25,000/- - SOCIETY AND RS.16,50,000/- - CASH. IN THESE DOCUMENTS, THERE IS NO ENTRY ABOUT THE NATURE OF TR ANSACTION AND OF THE LOCATION, IF THE SAME WAS RELATED TO ANOTHER PROPER TY. WE FURTHER FIND THAT A STATEMENT U/S 132(4) OF THE ASSESSEE WAS RECORDED O N 13.2.2006 AND 16.3.2006 WHEREIN IN REPLY TO QUESTION NO.28 THE AS SESSEE HAD EXPLAINED THAT THE DOCUMENT NO.37 WAS THE PROPOSED PRICE GIVEN BY A DEALER FOR A PROPERTY IN LOKHANDWALA COMPLEX BUT THE IDEA OF ITS PURCHASE WAS DROPPED. WE FURTHER FIND THAT THE PURCHASE WAS EVENTUALLY MADE OF A FLAT IN PALM BEACH APARTMENT, VARSOVA ROAD, MUMBAI VIDE AGREEMENT DATE D 22.2.2006 I.E. AFTER THE DATE OF SEARCH FOR THE CONSIDERATION OF RS.53 L AKHS. THE A.O. WAS OF THE VIEW THAT THE ENTRIES IN THE IMPUGNED SEIZED DOCUME NT NO.37 PERTAINED TO THE PURCHASE OF A FLAT IN PALM BEACH APARTMENT. THE A. O., THEREFORE, IMPLIED THAT RS.16.50 LAKHS MUST HAVE BEEN PAID IN CASH FOR THIS PROPERTY. THIS ACTION OF THE A.O. DOES NOT APPEAR TO BE JUSTIFIED AS IT IS N OT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. AS ALREADY MENTIONED IN THE SEIZED DOCUMENTS, NAME/DATE OF TRANSACTION, THE PURPOSE ETC. IS NOT M ENTIONED. THE ACTION OF THE A.O. TO LINK THE STATED CASH COMPONENT MENTIONE D IN THE SEIZED DOCUMENT TO THE PURCHASE OF PROPERTY IN PALM BEACH APARTMENT SUBSEQUENT TO THE SEARCH WAS THEREFORE NOT JUSTIFIED IN ABSENCE OF AN Y CORROBORATING EVIDENCE. WE FURTHER FIND THAT THE A.O. HAS NOT MADE ANY OTHE R ENQUIRIES IN THIS CONNECTION TO BRING ANY MATERIAL ON RECORD TO SUGGE ST THAT ASSESSEE MADE ANY CASH PAYMENT IN THE PROPERTY PURCHASED BY HIM AFTER THE DATE OF SEARCH. I.T. (SS) A. NO.246/AHD/2010 A.Y. 2006-07 5 7. IN VIEW OF THIS FACTUAL MATRIX OF THIS CASE, LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE A.O. OF RS.16.50 L AKHS FOLLOWING THE RATIO OF DECISION IN THE CASE OF K.P. VARGHESE ETC. AND THE ORDER PASSED BY HIM IS HEREBY UPHELD. 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 23.11.2012 SD/- SD/- (A.K. GARODIA) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE BY ORDER AR,ITAT,AHMEDABAD