Appeal Details
Counselvise Citation
[2016] 122 COUNSELVISE.COM (IT) 2155 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
5 year(s) 4 month(s) 1 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
05-07-2016
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
A
Next Hearing Date
13-04-2016
Assessment Year
2004-2005
Appeal Filed On
04-03-2011
Judgement Text
, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ IT(SS)A NO.246/AHD/2011 / ASSTT. YEAR: 2004-2005 CHAMPAKLAL S. KASAT 156, SUNRISE PARK DRIVE-IN ROAD AHMEDABAD. PAN : AFDPK 6483 P VS DCIT, CENT.CIR.1(3) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI GYAN PIPARA, AR REVENUE BY : SHRI R.I. PATEL, CIT-DR / DATE OF HEARING : 13/04/2016 / DATE OF PRONOUNCEMENT: 05/07/2016 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF THE LD.CIT(A)-III, AHMEDABAD DATED 14.02.2011 PASSED FO R THE ASSTT.YEAR 2004-05. 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH THE RULE 8 OF THE INCOME TAX (APPEL LATE TRIBUNAL) RULES, 1963 - THEY ARE DESCRIPTIVE AND ARGUMENTATIV E IN NATURE. IN BRIEF, THE GRIEVANCE OF THE ASSESSEE REVOLVES AROUN D TWO ISSUES VIZ. (A) THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.75,00,000/- WHICH WAS ADDED BY THE AO ON THE BASIS OF NOTING FO UND IN THE SEIZED PAPER, AND (B) THE LD.CIT(A) HAS ERRED IN CONFIRMIN G THE ADDITION OF IT(SS)A NO.246/AHD/2011 2 RS.2,46,000/- OUT OF TOTAL ADDITION OF RS.3,31,800/ - WHICH WAS ADDED BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHOP . 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE OPERATION WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSE SSEE AT 156, SUNRISE PARK, DRIVE-IN-ROAD, AHMEDABAD 1.11.2006. IN ORDER TO GIVE LOGICAL END TO THE PROCEEDINGS, NOTICE UNDER SECTION 153A O F THE ACT WAS ISSUED TO THE ASSESSEE, WHICH WAS DULY SERVED UPON HIM. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 21.2.2008 DECLARING LOSS AT (-) RS. 14,551/-. THE LD.AO HAS ISSUED NOTICE UNDER SECTION 143(2) ON 10.9.2008 WHICH WAS DULY SERVED U PON THE ASSESSEE. DURING THE COURSE OF SEARCH, LOOSE PAPERS WERE FOUN D WHICH WERE INVENTORISED AS ANNEXURE-A/1. PAGE NO.129 OF ANNEX URE A/1, EXHIBITS THAT ASSESSEE SHRI CHAMPAKLAL S. KASAT AND HIS BROT HER SHRI RAMESH S. KASAT HAD A DIVISION OF FAMILY BUSINESS. AS PER TH IS PAPER A SUM OF RS.1.05 CRORES WAS TO BE PAID BY SHRI RAMESH S. KAS AT TO THE ASSESSEE. DURING THE COURSE OF SEARCH, WHEN THIS DOCUMENT WAS CONFRONTED TO THE SON OF ASSESSEE, SHRI JAGAT CHAMPAKLAL, WHILE RECOR DING HIS STATEMENT UNDER SECTION 132(4) OF THE ACT, HE ADMITTED RS.75 LAKHS AS UNDISCLOSED INCOME. SIMILARLY, THE STATEMENT OF THE ASSESSEE WAS RECORDED UNDER SECTION 131(1A) OF THE INCOME TAX ACT, SUBSEQUENT T O THE SEARCH PROCEEDINGS ON 29.3.2007. HE HAS ALSO DISCLOSED ME THOD AND MANNER OF THE FAMILY PARTITION BETWEEN HIM AND HIS BROTHER . THE AO, THEREAFTER, TOOK INTO CONSIDERATION VARIOUS DETAILS DEMONSTRATING THE NUMBER OF CHEQUES ISSUED BY SHRI RAMESH S. KASAT IN THE NAME OF VARIOUS FAMILY MEMBERS OF THE ASSESSEE AND HOW THES E CHEQUES HAVE BEEN ENCASHED. IT IS PERTINENT TO OBSERVE THAT SHR I RAMESH S. KASAT HAD ISSUED CHEQUE OF RS.56 LAKHS, OUT OF THAT ONE C HEQUE WAS CANCELLED HAVING VALUE OF RS.16 LAKHS AND ONE CHEQUE WAS BOUN CED. THERE HAD BEEN LITIGATION BETWEEN THE FAMILIES AND ULTIMATELY LITIGATION WAS RESOLVED BY WAY OF MUTUAL SETTLEMENT. ON THE BASIS OF THIS EVIDENCE, IT(SS)A NO.246/AHD/2011 3 THE LD.AO ARRIVED AT A CONCLUSION THAT OUT OF THE T OTAL ALLEGED AMOUNT OF RS.1.05 CRORES, PAYABLE BY SHRI RAMESH S. KASAT, RS .56 LAKHS WAS PAID THROUGH ACCOUNT PAYEE CHEQUES. THE CHEQUES TO THE TUNE OF RS.26 LAKHS WERE NOT HONOURED. THEREFORE, THE ASSESSEE HAD RECEIVED RS.30 LAKHS BY CHEQUE AND MUST HAVE RECEIVED THE REMAININ G AMOUNT OF RS.79 LAKHS WHICH REMAINED TO BE DISCLOSED TO THE D EPARTMENT. ACCORDINGLY, HE MADE ADDITION OF RS.79 LAKHS. 4. DISSATISFIED WITH THIS, THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE LD.CIT(A) HAS REPRODUCED THE SUBMISSIONS OF THE ASSESSEE, AND THEREAFTER CONFIRMED THE ADDITION. THE LD.FIRST AP PELLATE AUTHORITY HAS CONFIRMED THE ADDITION OF RS.75 LAKHS INSTEAD OF RS .79 LAKHS. THE RELEVANT FINDING OF THE LD.CIT(A) READS AS UNDER: 6. I HAVE GONE THROUGH THE DETAILS SUBMITTED BY T HE APPELLANT BEFORE ME. OUT OF THE TOTAL CHEQUES OF RS. 56 LACS ISSUED BY- SHRI RAMESH KASAT, CHEQUES WORTH RS.30 LACS WERE HONOURE D BYTHE BANKS. ONE CHEQUE OF RS. 10 LAKH WAS TAKEN BACK BY SHRI RAMESFI KASAT AND ANOTHER CHEQUE OF RS.16 LACS WAS DISHONOU RED BY THE BANK. IN OTHER WORDS, THERE IS NO DISPUTE REGARDING RECEIPT OF RS. 30 LACS BY THE APPELLANT FROM SHRI RAMESH KASAT AS A PART OF SETTLEMENT. DURING THE COURSE OF APPELLATE PROCEEDI NGS SHRI JAGAT CHAMPAKLAL S KASAT WAS ASKED SPECIFICALLY ABOUT THE REMAINING TERMS OF SETTLEMENTS. TO WHICH HE HAS ADMITTED AS U NDER: A. THE SHARES OF JAGAT FOOD AND JAGAT IRON AND JAGAT INDUSTRIES WERE TRANSFERRED DURING OCTOBER 2003. B. MAHESHWARI SALES CORPORATION(MSC) WAS DISSOLVED ON 14/2/2000 AND BECAME THE PROPRIETARY CONCERN OF SHR I RAMESH KASAT. C. THE DHANA, DHANA DAL AND KOTRI STOCK OF VIRAMGAM FACTORY WAS DISTRIBUTED AMONG THE TWO FAMILIES IN THE RATIO OF 50-50 ON 22/3/2000. : D. DUE TO THE DISPUTE BETWEEN SHRI CHAMPAKLAL S KAS AT AND RAMESH KASAT, THE LIABILITIES WAS NOT DISTRIBUTED I N THE RATIO OF 50- 50 BUT THE LIABILITY OF THE RESPECTIVE CONCERNS WAS RETAINED BY THE RESPECTIVE GROUP, E. THE 50% STOCK AT GUNANO WAS NOT RECEIVED BY SHRI CHAMPAKLAL S KASAT BUT THE WHOLE STOCK WAS RETAINED BY SHRI RA MESH KASAT. IT(SS)A NO.246/AHD/2011 4 F. SIMILARLY DUE TO THE DISPUTE, THE INTERES T AND RENT WAS ALSO RIOT DISTRIBUTED 50-50. THE AGREEMENT WAS SIGNED BY SHRI CHAMPAKLAL S KASAT AND SHRI RAMESH . KASAT. AFTER T HE TRANSFER OF SHARES NO FURTHER DISTRIBUTION OR TRANSFER WAS E FFECTED BETWEEN THE TWO GROUPS. THE TRANSFER OF SHARES OF COMPANIES WAS THE LAST SUCH TRANSFER. 7. AS PER THE LOOSE PAPER, TOTAL AMOUNT OF RS. 1.0 5 CRORES WAS TO BE PAID BY SHRI RAMESH KASAT TO SHRI CHAMPAKLAL S K ASAT. OUT OF THIS , CHEQUES OF RS. 56 LACS WAS GIVEN. THE CHEQUE OF RS. 10 LAKH WAS TAKEN BACK BY SHRI RAMESH KASAT AND. THE CHEQUE OF RS.16 LAKH WAS DISHONOURED. IN OTHER WORDS, ONLY RS. 30 L ACS WAS RECEIVED BY SHRI CHAMPAKLAL S KASAT IN THE NAME OF HIS FAMILY MEMBERS IN THE FORM OF GIFT FROM SHRI RAMESH KASAT. THE AO HAS MADE THE ADDITION OF RS. 79 LACS ON THE GROUND THAT OUT OF THE TOTAL CONSIDERATION OF RS. 1.05 CRORES, CHEQUES OF RS. 26 LACS WAS DISHONOURED BY. THE BANKS-, THEREFORE, THE BALANCE AMOUNT OF RS. 79 LACS IS RECEIVED BY THE APPELLANT IN CASH. THIS IS A MISTAKE ON THE PART OF THE AO. THE TOTAL ADDITION, IF ANY, SHO ULD HAVE BEEN MADE OF RS. 75 LACS, THAT IS, RS. 1.05 CRORES MINUS RS. 30 LACS RECEIVED BY THE APPELLANT. THEREFORE, THE AO WAS NO T JUSTIFIED IN MAKING THE ADDITION OF RS. 79 LACS. HE SHOULD HAVE MADE THE ADDITION, IF ANY, OF RS.75 LACS ONLY. 7.1. ON THE MERIT OF THE ADDITION, IT IS TO BE MENTIONED THAT SHRI JAGAT KASAT SON OF SHRI CHAMPAKLAL S KASAT IN HIS STATEMENT RECORDED DURING THE COURSE OF SEARCH ADMITTED HAVIN G RECEIVED 1.05 CRORES. OUT OF THIS, RS.30 LACS WAS RECEIVED I N CHEQUE. THE BALANCE AMOUNT OF RS. 75 LACS WAS INITIALLY DISCLOS ED BY HIM AS HIS UNDISCLOSED INCOME BUT AFTER CONSULTATION WITH HIS FATHER, IN RESPONSE TO QUESTION : NUMBER 14 OF THE SAME STATEM ENT HE DID NOT AGREE FOR THE DISCLOSURE OF THE. AMOUNT OF RS.7 5 LACS. AS CAN BE SEEN FROM THE ABOVE DISCUSSION THAT THERE WAS A FAMILY PARTITION BETWEEN SHRI CHAMPAKLAL S KASAT AND HIS S ON ON THE ONE SIDE AND SHRI RAMESH KASAT ON THE OTHER SIDE. SOME OF THE COMPANIES WERE TAKEN OVER BY SHRI CHAMPAKLAL S KASA T GROUP AND OTHERS WERE TAKEN OVER BY SHRI RARNESH KASAT GR OUP. IN RESPECT OF THE DIVISION OF STOCK IN THE RATIO OF 50 -50, THE AGREEMENT WAS HONOURED AND IN RESPECT OF OTHER STOC K OF OTHER COMPANIES THE DIVISION COULD NOT BE MADE IN THE RAT IO OF 50-50. IN RESPECT OF SUCH CONCERNS, NOT ONLY THE STOCK WAS RE TAINED BY THE RESPECTIVE GROUP BUT ALSO THE LIABILITIES WERE RETA INED IN FULL. THIS MEANS THAT THE CONTENTS OF THE PAPER ARE CORRECT. F URTHER, THE COURT CASE FOR CLAIMING THE AMOUNT OF RS. 1.05 CROR ES AND DISHONOURING OF THE CHEQUE OF RS. 16 LACS WAS AMICA BLY SETTLED BY THE TWO GROUPS ONLY AFTER THE SHARES IN THE RESP ECTIVE IT(SS)A NO.246/AHD/2011 5 COMPANIES WERE TRANSFERRED BY THE OPPOSITE GROUP IN THE YEAR UNDER CONSIDERATION, THEREFORE, THE PREPONDERANCE O F PROBABILITY SHOWS THAT THE AMOUNT OF RS. 1.05 CRORES WAS ALSO E XCHANGED BETWEEN THE TWO GROUPS. OUT OF THIS, RS. 30 LACS HA S BEEN RECEIVED BY THE APPELLANT AT THE TIME OF SIGNING OF THE MOU. THE BALANCE AMOUNT OF RS. 75 LACS WAS THEREFORE RECEIVE D BY THE APPELLANT FROM SHRI RAMESH KASAT IN THE YEAR UNDER CONSIDERATION ONLY AFTER THE SHARES OF THE COMPANIES WERE TRANSFE RRED BY THE OPPOSITE GROUPS. THE CONTENTION OF THE APPELLANT TH AT SINCE THE AO HAS NOT TAXED THE AMOUNT OF RS. 75 LACS IN THE HAND S OF SHRI RANAESH KASAT, THEREFORE, THE SAME AMOUNT CANNOT BE TAXED AS UNDISCLOSED INCOME OF THE APPELLANT, CANNOT BE ACCE PTED BY ME. A MISTAKE BY THE AO IN THE CASE OF SHRI RAMESH KASAT BY NOT TAXING THE INCOME IN HIS HANDS, CANNOT BE A LEGITIMATE GRO UND FOR NOT TAXING THAT AMOUNT IN THE HANDS OF THE RECIPIENT PA RTICULARLY WHEN THERE IS ENOUGH EVIDENCE OF RECEIVING THE AMOUNT BY THE APPELLANT. THE' AO IS FREE TO TAKE NECESSARY STEP T O TAX THE AMOUNT OF RS. 75 LACS IN THE HANDS OF SHRI RAMESH K ASAT. AS CAN BE SEEN FROM THE TERMS OF THE MOU THAT EACH'AND EVE RY TERM OF IT HAS BEEN ACTED UPON BY BOTH THE PARTIES TO THE MOU. THEREFORE, IN VIEW OF THE DECISION OF HONOURABLE SUPREME COURT IN THE CASE OF SUMATI DAYAL REPORTED AT 214 ITR 801, THE PREPON DERANCE OF PROBABILITY CLEARLY SHOWS THAT THE AMOUNT OF RS. 1. 05 CRORES WAS ALSO RECEIVED BY THE APPELLANT WHEN THE FULL AND FI NAL DISTRIBUTION OF THE BUSINESS HAS TAKEN PLACE IN THE YEAR UNDER C ONSIDERATION. THE ADDITION OF RS.75 LACS, IS, CONFIRMED. IN OTHER WORDS, OUT OF THE ADDITION OF RS. 79 LACS MADE BY THE AO, ONLY RS .75 LACS IS CONFIRMED. 5. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE HAS R AISED MULTI-FOLD SUBMISSIONS. IN THE FIRST FOLD OF SUBMISSION, HE C ONTENDED THAT FINDING OF THE REVENUE AUTHORITIES IS BASED UPON THE ADMISS ION MADE BY SON OF THE ASSESSEE SHRI JAGAT CHAMPAKLAL. ACCORDING TO T HE LD.COUNSEL FOR THE ASSESSEE, THE LD.REVENUE AUTHORITIES HAVE PLACED TH EIR RELIANCE UPON QUESTION NO.13 ASKED TO HIM DURING THE COURSE OF SE ARCH. HOWEVER, THEY FAILED TO TAKE NOTE OF MENTION IN ANSWER NO.14 . SHRI JAGAT CHAMPAKLAL REFUSED TO SIGN THE ANSWER ON THE GROUND THAT HE HAS NOT MADE ANY DECLARATION OF UNDISCLOSED INCOME. THUS, THE ALLEGED ADMISSION IS TO BE EXCLUDED FROM THE EVIDENCE. IN HIS NEXT FOLD OF SUBMISSION, HE CONTENDED THAT THE NOTING ON PAGE NO .129 OF ANNEXURE IT(SS)A NO.246/AHD/2011 6 A/1 HAS BEEN SIGNED ON 4.1.2000, I.E. DURING THE AC COUNTING PERIOD RELEVANT TO THE ASSTT.YEAR 2000-01. EVEN IF THAT W E ACCEPT, THEN NO ADDITION CAN BE MADE IN THE ASSTT.YEAR 2004-05. IN HIS NEXT FOLD OF SUBMISSION, HE CONTENDED THAT THE ASSESSEE AS WELL AS HIS SON CATEGORICALLY DEPOSED THAT THEY HAVE NOT RECEIVED A NY AMOUNT OF RS.1.05 CRORES. THE AO HAS NOT BROUGHT ON RECORD A NY MATERIAL OR EVIDENCE TO ESTABLISH THAT RS.79 LAKHS WAS RECEIVED FROM SHRI RAMESH S. KASAT. HE FURTHER CONTENDED THAT IN THE CASE OF SHRI RAMESH S. KASAT NO INQUIRY WAS MADE, NO ADDITION WAS MADE, ME ANING THEREBY, IT IS TO BE CONSTRUED THAT SHRI RAMESH S. KASAT HAS NO T PAID ANY MONEY TO THE ASSESSEE. 6. ON THE OTHER HAND, THE LD.CIT-DR RELIED UPON THE ORDER OF THE LD.CIT(A). HE CONTENDED THAT ALL THESE ASPECTS HAV E BEEN TAKEN INTO CONSIDERATION. THE FINDING OF THE LD.CIT(A) IS NOT BASED ON ANY PIECE OF EVIDENCE IN ISOLATION, RATHER, IT IS THE RESULT OF SETTING OF ALL THE FACTS CUMULATIVELY. 7. WE HAVE CONSIDERED RIVAL CONTENTIONS AND GONE TH ROUGH THE RECORD CAREFULLY. IT IS PERTINENT TO OBSERVE THAT W HEN THE EXPLANATION OR EVIDENCE OF PARTY IS BASED UPON A NUMBER OF FACTS S UPPORTED BY ANY EVIDENCE AND CIRCUMSTANCES REQUIRED CONSIDERATION, WHETHER THE EXPLANATION IS SOUND OR NOT MUST BE DETERMINED NOT BY CONSIDERING THE WEIGHT TO BE ATTACHED TO EACH SINGLE FACT IN ISOLAT ION, BUT BY ASSESSING CUMULATIVE FACTS OF ALL THE FACTS IN THEIR SETTING AS A WHOLE. THRUST OF THE ASSESSEE, IS TO CONSIDER THREE PIECES OF EVIDEN CE IN ISOLATION I.E. THE FIRST PIECE OF EVIDENCE IS A LOOSE PAPER INVENTORIS ED AS PAGE NO.129 OF ANNEXURE A/1. THIS PAPER HAS BEEN REPRODUCED BY TH E LD.CIT(A) ON PAGE NO.9 OF THE IMPUGNED ORDER. THE ENGLISH TRANS LATION OF THIS PAPER IS REPRODUCED BY THE LD.CIT(A) AT PAGE NO.9 OF THE IMPUGNED ORDER. IT READS AS UNDER: IT(SS)A NO.246/AHD/2011 7 ENGLISH TRANSLATION OF STATEMENT DATED 04-02-2000 SIGNED BY SHRI C S KASAT AND SHRI RAMESHBHAI KASA T RS. 1.05 CRORES TO BE PAID JAGAT FOOD AND MSC AND C G ROAD OFFICE TO BE GIVEN TO RAMESHBHAI JAGAT IRON AND JAGAT INDUSTRIES TO BE GIVEN TO CHAM PAKTAL DHANA , DHANA DAL AND KOTRI STOCK TO BE DISTRIBUTED HALF HALF- ' LIABILITIES HALF HALF AND ALT REST HALF HALF ACCOUNTS TO BE FINALIZED BEFORE 10-02-2000 CHANDUBHAI'S STOCK AT GUNANO TO BE DISTRIBUTED HALF HALF CHANDUBHAI'S INTEREST AND RENT TO BE PAID HALF HALF SD/ SD/ (CHAMPAKLAL S KASAT) ( RAMESH KASAT) 8. VERACITY OF THIS ORDER HAS NOT BEEN DOUBTED/DISP UTED BY THE ASSESSEE, BECAUSE BY EXECUTION OF THIS PAGE, THE ASSESSEE AND HIS BROTHER HAS MADE DIVISION OF THEIR FAMILY BUSINESS. THIS FACT IS DI SCERNIBLE FROM THE REPLY OF THE ASSESSEE GIVEN TO QUESTION NO.7 ON 29.3.2007. THE QUESTION AND REPLY READS AS UNDER: Q.7 AS PER YOU ANSWER TO Q.NO. 6, THE NOTINGS OF P AGE NO. 129 OF ANNEXURE A-L ARE IN RESPECT OF YOUR BUSINESS PARTIT ION. SO, PLEASE GIVE EXPLANATION IN RESPECT OF EACH ENTRY NOTED THEREON. A.7 IN THIS REGARD, I WOULD LIKE TO STATE THAT I A LONG WITH MY FAMILY MEMBERS AND SHRI RAMESH KASAT, WHO IS MY YOUNGER BR OTHER, WERE DOING THE BUSINESS. THEREAFTER, IN THE YEAR 2000, S HRI RAMESH KASAT REMOVE US FROM THE BUSINESS AND IN CONSIDERATION FO R THAT HE TOLD ME THAT HE WOULD GIVE RS. ONE CRORE FIVE LACS AND FOR THAT THE BUSINESS OF JAGAT FOODS PVT. LTD. AND THAT OF MAHESHWARI SALES CORPORATION WILL REMAIN WITH RAMESHBHAI KASAT. THE BRAND NAME 'JAGAT ' WILL ALSO REMAIN WITH HIM. IN ADDITION TO THAT, THE OFFICE PR EMISES, CARS/VEHICLES WILL ALSO REMAIN WITH HIM. AS AGAINST THIS, THE COM PANY NAMELY JAGAT IRON INDS. LTD. AND JAGAT INDS. LTD., WHOSE PLOT NO . 1,2 & 3 ARE AT GIDC, VIRAMGAM, WILL REMAIN WITH ME. REMAINING ALL OLD LIABILITIES WILL BE BORN FIFTY FIFTY AND OTHER ASSETS WILL BE D IVED EQUALLY (HALF). SUCH UNDERSTANDING IN WRITING HAS BEEN MADE ON WHICH THE RE IS SIGN OF MYSELF AND THAT OF RAKESH KASAT. IT(SS)A NO.246/AHD/2011 8 9. THIS QUESTION WAS ASKED ALMOST FIVE MONTHS OF TH E SEARCH. SIMILARLY, THE LD.CIT(A) HAS MADE REFERENCE TO THE STATEMENT O F THE ASSESSEE RECORDED DURING THE COURSE OF SEARCH AND IN THE FINDING EXTR ACTED SUPRA, THE LD.CIT(A) HAS HIGHLIGHTED AS TO HOW THE ASSETS HAVE BEEN DIST RIBUTED BETWEEN BOTH THE BROTHERS. IN ORDER TO GIVE EFFECT OF THIS PAGE, SH RI RAMESH S. KASAT HAD ISSUED CHEQUE OF RS.56 LAKHS. THE DETAILS OF CHEQUES HAVE BEEN NOTICED BY THE AO IN THE ASSESSMENT ORDER AS WELL AS IN THE ORDER OF THE LD.CIT(A). CHEQUE ISSUED IN THE NAME OF SMT.SHARDA C. KASAT WAS TAKEN BACK BY SHRI RAMESH S. KASAT AND ANOTHER CHEQUE OF RS.16 LAKHS WAS DISHONO URED BY THE BANK. BUT CHEQUE OF RS.30 LAKHS HAD BEEN CLEARED. MEANING TH EREBY, THIS DOCUMENT WAS GIVEN EFFECT PARTIALLY. THE PARTIES WENT TO CIVIL LITIGATION FOR DISHONOR OF CHEQUE AND ON OTHER ISSUES. ULTIMATELY, DISPUTES H AVE BEEN RESOLVED IN ACCOUNTING YEAR RELEVANT TO THIS ASSESSMENT YEAR. THUS, IF WE VISUALIZE THE CIRCUMSTANCES, THEN, CHAIN OF EVENTS IS COMPLETE. THE EFFORTS AT THE END OF THE ASSESSEE TO CREATE A DENT IN THE STORY OF THE AO TH AT SHRI JAGAT CHAMPAKLAL HAS NOT MADE ANY VOLUNTARY DISCLOSURE DURING THE COURSE OF SEARCH, BECAUSE HE DID NOT SIGN REPLY TO QUESTION NO.13 ASKED FROM HIM WHI LE RECORDING HIS STATEMENT UNDER SECTION 132(4) OF THE INCOME TAX. WE ARE OF THE VIEW THAT EVEN IF THIS PIECE OF EVIDENCE IS EXCLUDED, THEN ALSO, THERE IS OVERWHELMING EVIDENCE ON THE RECORD. THE DOCUMENT WAS FOUND EXHIBITING TRAN SACTIONS IN RESPECT OF DIVISION OF ASSET. THE ONUS WAS UPON THE ASSESSEE TO EXPLAIN THE POSITION OF THIS DOCUMENT. THE ASSESSEE DID NOT DENY THE DOCUM ENT. HIS BALD STATEMENT WAS THAT RS.75 LAKHS WAS NOT RECEIVED BY HIM OR THE FAMILY MEMBERS. NOW THIS STATEMENT IS TO BE TESTED IN THE LIGHT OF OTHE R CIRCUMSTANTIAL EVIDENCES, WHICH SUGGESTED THE EXECUTION OF THIS DOCUMENT, AND FULFILLMENT OF THE OBLIGATIONS FOR THE PURPOSE OF THIS DOCUMENT, THEN, HOW THE WEIGHT CAN BE GIVEN TO A SIMPLE DENIAL OF THE ASSESSEE VIS--VIS THE EVIDENCE SUGGESTING THAT IT(SS)A NO.246/AHD/2011 9 TRANSACTIONS PERFORMED IN COMPLIANCE OF THE DOCUMEN TS. THE NEXT REASON GIVEN BY THE LD.COUNSEL FOR THE ASSESSEE IS THAT NO INQUIRY WAS MADE IN THE CASE OF SHRI RAMESH S. KASAT. THE ASSESSMENT HAS B EEN FRAMED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT. IT IS PERTINENT TO NOTE THAT THERE IS NO NEGATIVE EQUITY IN LAW. IT CANNOT BE THE CASE THAT IF ONE P ERSON COULD NOT BE CAUGHT WHILE INFRINGING THE LAW THEN, OTHER ONE HAS ALSO R IGHT TO INFRINGE OR TO BREAK THE LAW. IN OTHER WORDS, EVEN IF NO INQUIRY WAS MA DE IN THE CASE OF SHRI RAMESH S. KASAT HOW THE ASSESSEE WOULD DISCHARGE HI S ONUS TO PROVE THAT IN COMPLIANCE OF PAGE NO.129, HE HAS NOT RECEIVED THE PAYMENTS. THUS, TAKING INTO CONSIDERATION OF THE FACTS, WE DO NOT SEE ANY REASON TO INTERFERE IN THE CONCURRENT FINDING OF THE LD.REVENUE AUTHORITIES. THIS GROUND OF APPEAL IS REJECTED. ADDITION CONFIRMED BY THE LD.CIT(A) TO T HE EXTENT OF RS.75 LAKHS ARE UPHELD. 10. AS FAR AS NEXT GROUND OF APPEAL IS CONCERNED, T HE BRIEF FACTS OF THE CASE ARE THAT THE ADDITION OF RS.3,31,800/- WAS MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN RESPECT OF A PROPERTY AT PAN MARKET. THIS ADDITION HAS BEEN MADE ON THE STRENGTH OF DVOS REPORT. ON APPEAL, THE LD.CIT(A) HAS DELETED THE ADDITION OF RS.2,46,000/-. SIMILAR ADD ITION WAS MADE IN THE CASE OF DINESH T. KASAT AND SHRI RAJESH T. KASAT. THE L D.CIT(A)HAS RELIED UPON HIS FINDING IN THOSE CASES. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITION IN THE CASE OF SHRI RAMESH S. KASAT HAS BE EN DELETED AND THE ISSUE IN DISPUTE IS COVERED BY THE ORDER OF THE TRIBUNAL. T HE FINDING OF THE LD.CIT(A) ON THIS ISSUE READS AS UNDER: 8.3. SINCE THE FACTS OF THIS CASE ARE IDENTICAL WIT H THE FACTS OF THE CASE OF SHRI DINESH T KASAT AND SHRI RAJESH T KASAT , THE SAME FINDING WOULD ALSO APPLY IN THE CASE OF THE APPELLA NT. AS REGARDS THE MERIT OF THE ADDITION, IT IS UNDISPUTED FACT THAT T HE PROPERTY IN QUESTION WAS A TENANTED PROPERTY WHICH THE APPELLAN T WAS OCCUPYING FOR SO MANY YEARS AND THAT THE PROPERTY WAS SITUATE D IN THE DISTURBED IT(SS)A NO.246/AHD/2011 10 AREA, IN MY OPINION, THE VALUATION DONE BY THE DVO AT RS.3,31,800/- IS ON HIGHER SIDE PARTICULARLY IF THESE TWO FACTORS HAVE CONSIDERED. AT THE SAME TIME, THE TOTAL CONSIDERATION OF RS.46, 000/- SHOWN BY THE APPELLANT IS AT A LOWER SIDE. IT WOULD BE FAIR TO E STIMATE THE VALUATION OF THE. PROPERTY AT RS.2.46 LACS AS AGAI NST RS.3,31,800/- CONSIDERED BY THE DVO. IN SHORT, THE ADDITION OF RS .2 LACS IS SUSTAINED OUT OF THE TOTAL ADDITION OF RS.3,31,800/ - MADE BY THE AO. 11. WE FIND THAT SIMILAR ISSUE WAS CONSIDERED BY TH E TRIBUNAL IN THE CASE OF SHRI DINESH T. KASAT AND OTHERS IN IT(SS)A.NO.115 T O 120/AHD/2011 & 788/AHD/2010 ORDER DATED 22.01.2016, THE TRIBUNAL H AS DELETED THE ADDITION. [THE LD.COUNSEL HAS PLACED ON RECORD A COPY OF THE ORDER OF THE TRIBUNAL]. IN THESE CASES, THERE WERE TWO ISSUES BEFORE THE TRIBU NAL VIZ. ADDITION ON ACCOUNT OF LOW WITHDRAWALS TOWARDS HOUSEHOLD EXPENSES AND A DDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT WHICH WAS WORKED OUT ON THE BASIS OF DVOS REPORT. THE TRIBUNAL WHILE DEALING WITH THIS ISSUE HAS OBSE RVED THAT DURING THE COURSE OF SEARCH NO INCRIMINATING MATERIAL WAS FOUND WHICH CAN HELP THE AO TO MAKE ADDITIONS. THE FINDING RECORDED BY THE TRIBUNAL FR OM PARA-3 TO 5, IN THIS CASE, READ AS UNDER: 3. A WARRANT OF AUTHORIZATION U/S. 132(1) OF THE A CT WAS ISSUED AND EXECUTED AT THE RESIDENCES OF THE ASSESSEES UNDER APPEAL. A CCORDINGLY PROCEEDINGS U/S. 153A WERE INITIATED AND THE ASSESSMENTS HAVE B EEN MADE U/S. 143(3) OF THE ACT READ WITH SECTION 153A OF THE ACT. ADDITION S ON ACCOUNT OF HOUSEHOLD EXPENSES HAVE BEEN MADE ONLY ON THE ASSUMPTION THAT THE ASSESSEE HAS NOT SHOWN SUFFICIENT WITHDRAWALS FOR HOUSEHOLD EXPENSES AND ADDITION FOR UNEXPLAINED INVESTMENT HAVEBEEN MADE ON THE BASIS O F VALUATION MADE BY THE DVO ON THE INSTRUCTIONS OF THE ASSESSING OFFICER. 4. IT WOULD BE PERTINENT TO MENTION HERE THAT BOTH THESE ADDITIONS HAVE BEEN MADE WITHOUT THERE BEING ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH. IT IS NOW WELL SETTLED PROPOSITION OF LAW T HAT NO ADDITION CAN BE MADE IN THE ASSESSMENT MADE U/S. 153A OF THE ACT PURSUAN T TO SEARCH AND SEIZURE OPERATIONS U/S. 132 OF THE ACT UNLESS SOME INCRIMIN ATING MATERIAL IS FOUND AT THE TIME OF SEARCH. THIS PROPOSITION IS WELL SETTLE D BY THE DECISION OF THE HONBLE HIGH COURT OF BOMBAY GIVEN IN THE CASE OF A LL CARGO GLOBAL LOGISTICS IN INCOME TAX APPEAL NO. 1969 OF 2013 AND CONTINENTAL WAREHOUSING CORPORATION IN INCOME TAX APPEAL NO. 52 3 OF 2013 AND ALSO IN IT(SS)A NO.246/AHD/2011 11 THE CASE OF MURLI AGRO PRODUCTS. THE RELEVANT PORTI ON OF THE DECISION IN THE CASE OF CONTINENTAL WAREHOUSING (SUPRA) READS AS UN DER:- 'ONCE IT IS HELD THAT THE ASSESSMENT HAS ATTAINED F INALITY, THEN THE AO WHILE PASSING THE INDEPENDENT ASSESSMENT ORDER U/S. 153A R.W. S 143(3) OF THE I.T. ACT COULD NOT HAVE DISTURBED THE ASSESSMENT/REASSESSMENT ORDER WHICH HAS ATTAINED FI NALITY, UNLESS THE MATERIALS GATHERED IN THE COURSE OF THE PROCEEDINGS U/S. 153A OF THE INCOME TAX ACT ESTABLISH THAT THE RELIEFS GRANTED U NDER THE FINALIZED ASSESSMENT/REASSESSMENT WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153A PROCEEDINGS. IF THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY MATERIAL WAS UNEARTHED DURING THE SEARCH OR DURING THE 153A PROCEEDINGS, THE AO WHILE PASSING ORDER U/ S. 153A R.W.S. 143(3) CANNOT DISTURB THE ASSESSMENT ORDER.' 10.2. THE HON'BLE HIGH COURT HAD AN OCCASION TO CON SIDER THE FOLLOWING QUESTIONS OF LAW: '1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE HON'BLE ITAT IS CORRECT IN NARROWING DOWN THE S COPE OF ASSESSMENT U/S. 153A IN RESPECT OF COMPLETED ASSESS MENTS BY HOLDING THAT ONLY UNDISCLOSED INCOME AND UNDISCLOSE D ASSETS DETECTED DURING SEARCH COULD BE BROUGHT TO TAX? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON'BLE ITAT IS CORRECT IN LAW IN HOLDING THAT THE SCOPE OF SEC. 153A IS LIMITED TO ASSESSING ONLY SEARCH RELAT ED INCOME, THEREBY DENYING REVENUE THE OPPORTUNITY OF TAXING O THER ESCAPED INCOME, THAT COMES TO THE NOTICE OF THE A.O .? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON'BLE ITAT WAS RIGHT IN LIMITING THE SCOPE OF SEC. 153A ONLY TO UNDISCLOSED INCOME WHEN AS PER THE SECTION THE AO HAS TO ASSESS THE TOTAL INCOME OF THE SIX ASSESSMENT YE ARS?'- AND THE HON'BLE HIGH COURT OF BOMBAY FINALLY HELD A S UNDER: ' WE, THEREFORE, DISMISS THE REVENUE'S APPEAL AND ANS WER THE SUBSTANTIAL QUESTION OF LAW AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE'. 10.3. IN THE FACTS OF THE CASE IN HAND ARE CONSIDER ED IN THE LIGHT OF THE AFOREMENTIONED DECISION OF THE HON'BLE JURISDICTION AL HIGH COURT. IT(SS)A NO.246/AHD/2011 12 UNDISPUTEDLY, DURING THE COURSE OF THE SEARCH AND S EIZURE OPERATION, NOT A SINGLE PIECE OF PAPER WAS FOUND. 5. CONSIDERING THE FACTS IN THE LIGHT OF THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF BOMBAY (SUPRA), WE DO NOT FIN D ANY REASON/JUSTIFICATION IN MAKING THE IMPUGNED ADDITIO NS. ACCORDINGLY WE SET ASIDE THE FINDINGS OF LD. CIT(A) AND DIRECT THE A.O TO DELETE THE IMPUGNED ADDITIONS. GRIEVANCE RELATING TO ADDITIONS ON ACCOUNT OF HOUSEHOLD EXPENSES AND ADDITIONS ON ACCOUNT OF UNEX PLAINED INVESTMENTS ARE ACCORDINGLY ALLOWED. THEREFORE, FOLLOWING THE DECISION OF THE TRIBUNAL, IN THE CASE OF DINESH T. KASAT (SUPRA), WE DELETE THE ADDITION OF RS.2,46 ,000/- AND ALLOW THIS GROUND. 12. IN RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 5 TH JULY, 2016 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER
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