KALURAM RAMLAL GEHLOT, PUNE V. PRINCIPAL COMMISSIONER OF INCOME TAX(PCIT)-(CENTRAL), PUNE, PUNE

ITSSA 32/PUN/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5856 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-06-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 07-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHOWING THROUGH PUNJAB NATIONAL BANK. IF
• Keywords: Unexplained investment; Business income; Revision of order; Corroborative evidences; Set aside
• Section: 69; 263; 132; 142(1); 153A; 192; 13; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS ASTHA CHANDRA, JUDICIAL MEMBER IT(SS)A No.32/PUN/2024 Assessment Year : 2018-19 Kaluram Ramlal Gehlot Shop No.8, Mantri Apts, 585 Lodha Corner, Pune – 411037 Vs. PCIT – Central, Pune PAN: AEHPG9682F (Appellant) (Respondent) Assessee by : Shri Suhas P Bora Department by : Shri Pankaj Kumar Date of hearing : 19-06-2024 Date of pronouncement : 10-07-2024 O R D E R PER R.K. PANDA, VP : This appeal filed by the assessee is directed against the order dated 13.03.2024 of the PCIT(Central), Pune relating to assessment year 2018-19. 2. The assessee in the various grounds raised has specifically challenged the order of the PCIT in invoking the jurisdiction u/s.263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) and thereby setting aside the order passed by the Assessing Officer for examination of the issue of payment of on-money of Rs.25 lacs after making proper examination and enquiry. 3. Facts of the case in brief, are that the assessee is an individual and had filed his return of income on 14.09.2018 declaring total income of Rs.19,68,480/-. A search and seizure action u/s 132 of the Act was carried out in the Yuvaraj 2 IT(SS)A No.32/PUN/2024 Dhamale group of cases on 26.09.2017, during which it was found from the documents seized that the assessee Shri Kaluram Ramlal Gehlot had booked two flats A-1702 & A-1802 in the project Rajgruhi Residency. It was further seen that the assessee has made payment partly through cheque and partly in cash for the purchase of the said flats. As per the seized documents, the assessee had made total cash payment of Rs.67,25,000/- for the purchase of flat A-1702 and cash payment of Rs.67,25,000/- for the purchase of flat No.1802. The above fact of taking on-money in cash from the assessee was duly admitted by Shri Yuvraj Dhamale, the main person of Dhamale group and MD of the company in his statement. Accordingly, the DCIT, Central Circle 2(3), Pune who was having the possession of the seized material in capacity of the Assessing Officer of Shri Yuvraj S Dhamale and M/s.Wellbuild Merchants Pvt. Ltd., recorded the satisfaction as per provisions of section 153A of the Act that the information contained on page 12 of Bundle 55 seized from the residential premises of Shri Pravin Gawali relates to Shri Kaluram Ramlal Gehlot. Accordingly, notice u/s 153C of the Act was issued to the assessee, in response to which, the assessee filed his return of income u/s.153C of the Act on 06.05.2021 disclosing total income at Rs.6,79,960/-. The Assessing Officer in the order passed u/s.143(3) r.w.s 153C of the Act on 31.12.2021 determined the total income of the assessee at Rs.1,22,13,480/- wherein he made addition of Rs.1 crore u/s.69B of the Act (on protective basis) and Rs.2,45,000/- on account of unaccounted business receipts. 3 IT(SS)A No.32/PUN/2024 4. Subsequently, the Ld. PCIT examined the records and noted that the assessee has made investments in shop Nos.11 and 12 of Rajgruhi Business HUB, the details of which are as under: Sr. No. Amount (in Rs.) Transaction date Nature 1 50,00,000/- 11/04/2017 On-money for shop 11 & 12 2 25,00,000/- 18/04/2017 On-money for shop 11 & 12 3 25,00,000/- 21/04/2017 On-money for shop 11 & 12 4 25,00,000/- 19/04/2017 On-money for shop 12 5 2,00,000/- 01/06/2017 Business receipt 6 45,000/- 23/04/2017 Business receipt 5. Thus, the total transactions to the tune of Rs.1,27,45,000/- comprises of Rs.1,25,00,000/- being on-money payment made for the purchase of shop Nos.11 and 12 and Rs.2,45,000/- being the unaccounted business receipts earned by doing the catering work. On perusal of the assessment order, he noted that with respect to the issue of unexplained investment made for purchase of shop Nos.11 and 12, the Assessing Officer had made addition of Rs.1 crore only and did not consider the on-money payment of Rs.25 lacs as mentioned in serial No.4 above. Therefore, the said payment of Rs.25 lacs, which was required to be added to the total income of the assessee for the year under consideration, has not been added. From the examination of the details filed by the assessee during the course of assessment proceedings, he noted that no such examination / verification was carried out by the Assessing Officer during the course of assessment proceedings. He, therefore, issued a show cause notice asking the assessee to explain as to why the order passed by the Assessing Officer should not be set aside being erroneous and prejudicial to the interest of the Revenue. 4 IT(SS)A No.32/PUN/2024 5.1 The assessee filed detailed submissions before the PCIT challenging the invocation of jurisdiction u/s.263 of the Act. It was submitted that the Assessing Officer passed the order after making proper enquiry and examination of relevant facts and material available on record to the extent he was supposed to make as per law and has taken a possible view. It was submitted that during the course of scrutiny proceedings u/s.153C r.w.s.143(3) of the Act, whatever documents, evidences and explanations were called for, were duly submitted by the assessee. Further, the assessment was not made in haste and was made after making necessary enquiries for assessing the income and thereby making addition to the tune of Rs.1,02,45,000/-. The Assessing Officer had made detailed enquiries seeking clarification on each aspect in the case of the assessee. It was further submitted that the Assessing Officer had made addition of Rs.1 crore u/s.69B of the Act as unexplained investment on protective basis against purchase of shop Nos. 11 and 12 at Rajgruhi Business HUB, Pune. The said protective addition was made only on presumptions and surmises and only on the basis of details of documents, evidence found and seized from various premises covered under the search action. 5.2 Without prejudice to the above, it was further submitted that no addition can be made in the hands of the assessee on protective basis also since the seized papers do not mention the name of the assessee and the assessee has not purchased the said shop Nos.11 and 12 which the Assessing Officer has also admitted at para 10.3 on page 25 of the assessment order. 5 IT(SS)A No.32/PUN/2024 6. However, the Ld. PCIT was not satisfied with the arguments advanced by the assessee. He noted that with respect to the issue of unexplained investments made by the assessee for the purchase of shop Nos.11 and 12 of Rs.1,25,00,000/-, the Assessing Officer had made addition of Rs.1 crore only and did not consider the on-money payment of Rs.25 lacs made on 19.07.2017. Since the amount of Rs.25 lacs was not added by the Assessing Officer despite the existence of details, he held that the order passed by the Assessing Officer has become erroneous and prejudicial to the interest of the Revenue. Relying on various decisions, the PCIT set aside the order passed by the Assessing Officer to his file for examination of the above issue in detail while framing fresh assessment order. He directed the Assessing Officer to make necessary examination, verification and enquiry in respect of the above issue of Rs.25 lacs after giving adequate opportunity of being heard to the assessee. 7. Aggrieved with such order of the PCIT, the assessee is in appeal before the Tribunal. 8. The Ld. Counsel for the assessee, at the outset, submitted that the Assessing Officer has passed a speaking order after due verification and after examining the material available on record and after seeking explanation from the assessee. Referring to the copy of the order passed by the Assessing Officer in the case of Smt. Soram Kaluram Gehlot, the Ld. Counsel for the assessee drew the attention of the Bench to para 14 of the order and submitted that the Assessing Officer has made addition on the basis of some seized documents in respect of purchase of 6 IT(SS)A No.32/PUN/2024 shop Nos.11, 12 and 13 in Rajgruhi Business Hub, a project developed by M/s. Dhamale Buildcon in the hands of the spouse of the assessee. Therefore, the PCIT is wrong in holding that the assessee has paid the on-money in respect of purchase of shop Nos.11 and 12. Referring to the following decisions, he submitted that no revision u/s.263 of the Act can be made where the assessment orders are passed after due verification and after examining the material available as well as after seeking explanation from the assessee: i. CIT vs Max India Ltd. 295 ITR 282 ii. Malabar Industrial Co. Ltd. vs. CIT 243 ITR 83 iii. CIT vs. Gabriel India Ltd. 203 ITR 108 iv. Grasim Industries Ltd. Vs CIT, Central-I 321 ITR 92 v. Meerut Roller Flour Mills (P.) Ltd. Vs CIT 420 ITR 216 vi. Ashoke Kumar Parasramka Vs. ACIT [1998] 65 ITD 1 vii. CIT Vs. Hastings Properties 253 ITR 124 viii. CIT vs. Smt. Nirmal Anand 245 ITR 836 9. In his another plank of argument, the Ld. Counsel for the assessee submitted that since the assessment order was passed u/s.143(3) r.w.s.153C of the Act, therefore, it cannot be revised without revising the approval given by the Addl.CIT. In this regard, he placed reliance on the following decisions: i. CIT Vs. Dr. Ashok Kumar ITA 192 of 2000 ii. Surendra L Hiranandani Vs Pr.CIT Cenl ITA No.3226/M/2017 iii. Trinity Infra Ventures LTD. Vs DCIT ITA No.584/H/2015 iv. Dhariwal Industries Vs CIT Central ITA Nos.1108 to 1113/PUN/2014 10. He accordingly submitted that the order of the PCIT invoking jurisdiction u/s.263 of the Act being not in accordance with law should be set aside and the grounds raised by the assessee be allowed. 11. The Ld. DR on the other hand heavily relied on the order of the PCIT. 7 IT(SS)A No.32/PUN/2024 12. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. PCIT and the paper book filed by both the sides. We have also considered the various decisions cited before us. We find the Ld. PCIT in the instant case assumed jurisdiction u/s.263 of the Act on the ground that the assessee has made cash payment of Rs.25 lacs on 19.04.2017 for the purchase of shop No.12 at Rajgruhi Business HUB and the Assessing Officer has failed to consider the on-money payment of Rs.25 lacs although he had made the addition of Rs.1 crore u/s.69B of the Income Tax Act, 1961. Thus, the order of Assessing Officer has become erroneous and prejudicial to the interest of the Revenue since the Assessing Officer had not examined and verified the above issue having tax implications. It is the submission of the Ld. Counsel for the assessee that the shop No.12 at Rajgruhi Business HUB was purchased by Smt. Soram Kaluram Gehlot and not by the assessee. We find the Assessing Officer in the case Smt. Soram Kaluram Gehlot at para 5 and 6 of the order has observed as under: “05. In response to notice u/s 142(1) of the IT Act, the assessee filed a letter dated 06.12.2021 wherein assessee has tried to rebut the contention of on money paid and elaborately discussed in satisfaction note. In its support reliance on various judicial decisions and it is forcefully claimed that assessee has not made any payment as on money to Mr. Yuvraj Dhamale or his group concern and accordingly it is requested not to draw any adverse inference on the basis of seized paper, notice of the same are not at all related to assessee. The submission made by the assessee clearly indicates that she is aware of the facts that she has done the transaction with Mr. Yuvraj Dhamale and his group. Since, there is denial of the fact that she is not aware of Mr. Yuvraj Dhamale. In fact, the details of seized material in the premises of Dhamale Group clearly indicate that the assessee through Mr. Kaluram Gehlot has purchased Shop no.11, 12, 13 and paid Rs.5,00,000/- against these shops. The investment made by the assessee is evidenced from the fact that purchase of these shops no.12 & 13 are appearing in the books of account of the assessee by showing through Punjab National Bank. If this aspect is consider, it is clear that the statement submitted before the Settlement Commission clearly indicates that as against following entries: 8 IT(SS)A No.32/PUN/2024 23 11 499.12 Kaluram Ghelot 5,00,000 50,00,000 24 12 499.12 Kaluram Ghelot 5,00,000 25,00,000 25 13 379.22 Kaluram Ghelot 5,00,000 25,00,000 06. The above details clearly shows that the amount of Rs.5,00,000/- has been paid by way of cheque and Rs.50,00,000/-, Rs.25,00,000/- and Rs.25,00,000/- are separately paid against each shop. This information is also contained from the details filed before the Settlement Commission. The complete list of Shop sold has also been filed before the Settlement Commission and the above information is part and parcel of the total details.” 13. We find the Assessing Officer thereafter at para 14 of the order in the case of Smt. Soram Kaluram Gehlot i.e. the wife of assessee has made addition of Rs.1 crore by observing as under: “14. In view of above facts, evidences seized above clearly establishes beyond doubt that the payment of on-money by the assessee which also gets corroborated by the statement of the key person of Dhamale Group Shri Yuvraj Sitaram Dhamale. These corroborative evidences clearly led us to confirm that the alleged documents have materialized into transactions and htat the assessee had paid on money against the purchase of Shop No.11, 12 & 13 in Rajgruhi Business Hub, a project developed by M/s Dhamale Buildcon. The onus to prove that the said documents are not authentic and the cash consideration mentioned on it was not actually paid, was on the assessee. Further, the assessee has failed to produce any other cogent material to rebut the presumption that the On-money component as appearing on the seized document was never paid to the builder. Thus, the assessee has failed miserably to discharge the onus cast upon it. In the light of above stated facts, I have no hesitation to conclude that the assessee has paid On Money for the purchase of shop as mentioned above from his unaccounted sources of income. 15. From the above it can be seen that the assessee has invested unaccounted cash in the form of on money paid to the builder of Rs.1,00,00,000/- by way of cash and hence, the entered amount of Rs.1,00,00,000/- which is unexplained and treated as undisclosed income for the year under consideration. Accordingly, the amount of Rs.1,00,00,000/- is added u/s 69 of the Act to the total income of the assessee as unexplained investment. This attracts the provisions of Section 271AAC of the Act. Accordingly, a penalty proceedings u/s 271AAC of the Act is initiated herein for income determined u/s 69 of the Act. 14. Since it is clear from the assessment order passed by the Assessing Officer in the case of Smt. Soram Kaluram Gehlot that shop Nos.11 and 12 are purchased 9 IT(SS)A No.32/PUN/2024 by the wife of assessee and the Assessing Officer has made addition u/s 69 of the Act in the case of Smt. Soram Kaluram Gehlot, therefore, there was due verification of the facts by the Assessing Officer in the body of the assessment order. In the case of the assessee also, the Assessing Officer has called for various details and after examining details, the Assessing Officer has passed the order. 14.1 It has been held in various decisions that no revision u/s 263 of the Act can be made where the assessment orders are passed after due verification and after examining the material available as well as after seeking the explanation from the assessee. Since the Assessing Officer in the instant case has made detailed enquiry in the case of the assessee and in the case of spouse of the assessee. Further, the so-called shop Nos.11 and 12 were not purchased by the assessee and in fact were purchased by the wife of the assessee, therefore addition, if any, on account of payment of such on-money can be made only in the hands of the spouse of the assessed and not in the hands of the assessee. Therefore, we do not find any error in the order of the Assessing Officer so far as the payment of on-money in respect of shop No.12 at Rajgruhi Business HUB is concerned. It is the settled proposition of law that for invoking jurisdiction u/s.263 of the Act, the twin conditions, i.e. the order must be erroneous and it must be prejudicial to the interest of the Revenue must be satisfied. Since we have held above that the order is not erroneous, therefore, even if it is prejudicial to the interest of the Revenue, the twin conditions are not satisfied. Therefore, we are of the considered opinion that the PCIT was not justified in invoking the jurisdiction u/s.263 of the Act in the instant 10 IT(SS)A No.32/PUN/2024 case. We, therefore, set aside the order of the PCIT and allow the grounds raised by the assessee. 15. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 10 th July, 2024. Sd/- Sd/- S SSd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT प ु णे Pune; दिन ांक Dated : 10 th July, 2024 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. DR, ITAT, ‘A’ Bench, Pune गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune 11 IT(SS)A No.32/PUN/2024 S.No. Details Date Initials Designation 1 Draft dictated on 04.07.2024 Sr. PS/PS 2 Draft placed before author 09.07.2024 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order