The ACIT, 1(2), Bhopal V. SHRI DR. SUBODH VARSHNEY, Bhopal

ITSSA 261/IND/2014

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2357 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-09-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 29-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Unexplained investment; Search and seizure; Opportunity of being heard

Judgement Text

ACIT VS. DR. SUBODH VARSHNEY IT(SS)A NO. 261/IND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JM & SHRI O.P. MEENA, AM IT(SS)A NO. 261/IND/2014 A.Y.2008-09 ACIT 1(2) BHOPAL ::: APPELLANT VS DR. SUBODH VARSHNEY BHOPAL PAN ABTPV 7503M ::: RESPONDENT APPELLANT BY SHRI MOHD. JAVED RESPONDENT BY SHRI AMIT JAIN DATE OF HEARING 22.8.2016 DATE OF PRONOUNCEMENT 2 9 . 9 .2016 O R D E R THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A)-I, BHOPAL, DATED 1.7.2014 . 2. THE ONLY ISSUE RAISED BY THE REVENUE IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDIT ION OF ACIT VS. DR. SUBODH VARSHNEY IT(SS)A NO. 261/IND/2014 2 RS.51,50,000/- MADE BY THE ASSESSING OFFICER ON ACCO UNT OF UNEXPLAINED INVESTMENT IN SHARE APPLICATION MONEY WI TH M/S LILASONS INFRASTRUCTURE PVT. LTD. 3. BRIEFLY STATED, THE ASSESSEE IS AN INDIVIDUAL DERIV ING INCOME FROM MEDICAL PROFESSION. DURING THE COURSE OF SEARCH AND SEIZURE ACTION AT THE PREMISES OF M/S LILASON S INFRASTRUCTURE PVT. LTD. LPS A-10 WAS FOUND AND SEIZED . AS PER THIS THE ASSESSEE HAS INVESTED AN AMOUNT OF RS.51,50,000/- IN M/S LILASONS INFRASTRUCTURE PVT. LT D. AS SHARE APPLICATION MONEY IN ASSESSMENT YEAR B2008-09. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF THIS SHAR E APPLICATION MONEY AND SHOW CAUSE AS TO WHY THE SAME NOT BE ADDED TO THE TOTAL INCOME. IN RESPONSE, THE ASSESSE E SUBMITTED THAT THE ASSESSEE HAS INVESTED RS.5,00,000/- AS SHARE APPLICATION MONEY IN THE F.Y. 2007-08 AND RS.50,00,000/- IN THE F.Y. 2008-09. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF TH E ACIT VS. DR. SUBODH VARSHNEY IT(SS)A NO. 261/IND/2014 3 ASSESSEE AND ADDED AN AMOUNT OF RS. 51,50,000/- IN THE ASSESSMENT YEAR UNDER CONSIDERATION. 4. BEING AGGRIEVED WITH THE ADDITION MADE BY THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFOR E THE LEARNED CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT OF THE ASSESSING OFFICE R, THE LEARNED CIT(A) DELETED THE ADDITION. THE RELEVANT FINDINGS OF THE LEARNED CIT(A) ARE AS UNDER :- 4.7 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT, REMAND REPORT FROM THE A.O. AND REJOINDER OF THE APPELLANT. AS MENTIONED IN THE ASSESSMENT ORDER, THE A.O. MADE ADDITION OF RS.51,50,000/- ON THE BASIS THAT THE ASSESSEE HAS INVESTED AN AMOUNT OF RS.51,50,000/- IN THE M/S LILASONS INFRASTRUCTURE PVT. LTD. AS SHARE APPLICATION MONEY IN A.Y. 2008- 09 AND THAT THE APPELLANT FAILED TO EXPLAIN THE ACIT VS. DR. SUBODH VARSHNEY IT(SS)A NO. 261/IND/2014 4 SOURCE OF SUCH AMOUNT INVESTED. THE A.O. DID NOT ACCEPT THE SUBMISSION OF THE APPELLANT OBSERVING THAT I AM AFRAID THAT THE SAME IS NOT ACCEPTABLE THAT THE ASSESSEE HAS NOT GIVEN ANY MATERIAL EVIDENCE FOR THE SOURCE OF SUCH AMOUNT INVESTED. HOWEVER, ON VERIFICATION OF THE FACTS, IT IS NOTIC ED THAT THE APPELLANT HAD INVESTED RS.5,00,000/- ONLY IN SHARE APPLICATION MONEY IN M/S LILASONS INFRASTRUCTURE PVT. LTD. IN F.Y. 2007-08 RELEVANT T O A.Y. 2008-09. THIS FACT IS EMERGING FROM THE BALANCE SHEET OF M/S LILASONS INFRASTRUCTURE PVT. LTD. AS ON 31.03.2008 AND LEDGER ACCOUNT OF SHARE APPLICATION MONEY IN THE BOOKS OF M/S LILASONS INFRASTRUCTURE PVT. LTD. THIS FACT IS ALSO NOT CONTROVERTED BY THE A.O. IN HIS REMAND REPORT. THE APPELLANT HAD FURTHER INVESTED RS. 50,00,000/- IN SHARE APPLICATION MONEY IN M/S LILASONS ACIT VS. DR. SUBODH VARSHNEY IT(SS)A NO. 261/IND/2014 5 INFRASTRUCTURE PVT. LTD. IN SUBSEQUENT F.Y. 2008-09 RELEVANT TO A.Y. 2009-10. THE APPELLANT HAD INVESTED RS.5,00,000/- IN A.Y. 2008-09 OUT OF HIS DECLARED INCOME. THE APPELLANT HAD SHOWN TOTAL INCOME OF RS.17,30,869/-. THUS, IT IS AN ADMITTED FACT THAT THE APPELLANT HAD NOT MADE ANY INVESTMENT OF RS. 51,50,000/- IN SHARE APPLICATION MONEY WITH M/S LILASONS INFRASTRUCTURE PVT. LTD. DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2008-09 UNDER CONSIDERATION AND HENCE THERE WAS NO QUESTION OF ANY UNEXPLAINED INVESTMENT IN A.Y. 2008-09. FURTHER, ON PERUSAL OF PAGE NOS. 1,2,3 & 11 OF LPS A-10 REFERRED TO BY THE A.O. IT IS NOTICE D THAT THE ENTRIES OF RS.51,50,000/- (RS.50,00,000/- + RS.1,50,000) DO NOT SUGGEST THAT THESE PERTAINED TO A.Y. 2008-09. IT MAY NOT BE OUT OF PLACE TO MENTION HERE THAT THE A.O. HAD MADE ADDITION OF ACIT VS. DR. SUBODH VARSHNEY IT(SS)A NO. 261/IND/2014 6 RS.51,50,000/- IN THE HANDS OF M/S LILASONS INFRASTRUCTURE PVT. LTD. IN A.Y. 2011-12 ON ACCOUNT OF UNACCOUNTED PAYMENT MADE TO THE APPELLANT IN LIEU OF SHARE APPLICATION MONEY OF RS.50,00,000/- ON THE BASIS OF THESE SEIZED PAPERS. THUS, THERE WAS NO REASON FOR MAKING ADDITION OF RS.51,50,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARE APPLICATION MONEY WITH M/S LILASONS INFRASTRUCTURE PVT. LTD. IN THE HAND OF APPELLANT FOR A.Y. 2008-09 UNDER CONSIDERATION. IT MAY FURTHER BE NOTED THAT THE APPELLANT HAD MADE INVESTMENT OF RS. 50,00,000/- IN SUBSEQUENT A.Y. 2009-10 IN THE SHARE APPLICATION MONEY WITH M/S LILASONS INFRASTRUCTURE PVT. LTD. OUT OF LOAN OF RS.2,30,15,000/- CLAIMED TO BE TAKEN FROM MR. JUNED QUAZI AND THE A.O. HAD MADE ADDITION OF THE AMOUNT OF LOAN TAKEN FROM MR. JUNED QUAZI IN ACIT VS. DR. SUBODH VARSHNEY IT(SS)A NO. 261/IND/2014 7 THE HANDS OF THE APPELLANT TREATING THE SAME AS UNEXPLAINED IN SUBSEQUENT A.Y. 2009-10. THUS, NO ADDITION OF RS. 51,50,000/- COULD BE MADE IN A.Y. 2008-09. HENCE, THE ADDITION OF RS.51,40,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARE APPLICATION MONEY WITH M/S LILASONS INFRASTRUCTURE PVT. LTD. FOR A.Y. 2008-09 IS DELETED. AGAINST THE ABOVE FINDINGS OF THE LEARNED CIT(A), TH E REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. BEFORE US, THE LEARNED DR SUBMITTED THAT IN SEARCH AND SEIZURE ACTION A DOCUMENT WAS FOUND AND THE ASSESSEE HAS MADE INVESTMENT OF RS. 51,50,000/- IN M/S LILASONS INFRASTRUCTURE PVT. LTD. AS SHARE APPLICATION MONEY IN T HE ASSESSMENT YEAR 2008-09. THE ASSESSEE DID NOT PROVE ANYTHING BEFORE THE ASSESSING OFFICER. IN M/S LILASO NS INFRASTRUCTURE PVT. LTD. THE ASSESSEE IS NON-EXECUTIV E ACIT VS. DR. SUBODH VARSHNEY IT(SS)A NO. 261/IND/2014 8 DIRECTOR, THEREFORE, THE ASSESSEE HAS FAILED TO PROVE THE SOURCE OF THE DEPOSIT. THE LEARNED DR ALSO SUBMITTED THAT WHAT HAPPENED IN THE CASE OF LOAN TAKEN FROM SHRI JUNED QAZI IS NOT EXPLAINED BY THE ASSESSEE. THEREFORE, THE ADDITION MAY BE SUSTAINED AND THE MATTER MAY BE RESTORE D TO THE ASSESSING OFFICER FOR VERIFICATION. 6. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE THE ASSESSEE HAS EXPLAINED THE SOURCE OF THE AMOUNT INVESTED AND THE ACTUAL AMOUNT INVESTED ALSO, THE LEARNED CIT(A) HAS RIGHTLY DELETED THE ADDITION. 7. WE HAVE HEARD BOTH THE SIDES. AFTER CONSIDERING TH E ARGUMENTS OF THE PARTIES, IN THE WAKE OF THE FACTS OF T HE CASE, IN OUR OPINION, IT WOULD BE JUST AND PROPER TO SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE MATTER TO THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH. WE, THEREFORE, RESTORE THE ISSUE TO THE FILE OF THE ACIT VS. DR. SUBODH VARSHNEY IT(SS)A NO. 261/IND/2014 9 ASSESSING OFFICER FOR DECIDING THE SAME AFTER PROVIDI NG THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 29 SEPTEMBER , 2016 SD/- SD/- (O.P. MEENA) (D.T. G ARASIA) ACCOUNTANTMEMBER JUDICIAL MEMB ER 29 SEPTEMBER, 2016 DN/- ACIT VS. DR. SUBODH VARSHNEY IT(SS)A NO. 261/IND/2014 10