The ACIT, Circe-2(4), Ahmedabad V. Shri Sameer Surendra Sinha, Ahmedabad

ITSSA 33/AHD/2010

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8564 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 05-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 13-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D C PATWARI
• Keywords: Loose papers; Document seized; Opportunity of being heard; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.(SS)A. NO.32 & 33 / AHD/2010 (ASSESSMENT YEAR 2001-02 & 2007-08) ACIT, CC-2(4), AHMEDABAD VS. SAMEER SURENDRA SINHA, 14, VAISHALI SOCIETY OP. ASHISH SCHOOL, BODAKDEV, AHMEDABAD C.O. NO.67 & 68/AHD/2010 (ASSESSMENT YEAR 2001-02 & 2007-08) SAMEER SURENDRA SINHA, VS. ACIT, CC-2(4), 14, VAISHALI SOCIETY AHMEDABAD OP. ASHISH SCHOOL, BODAKDEV, AHMEDABAD PAN/GIR NO. : AGSPS5270L (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI D C PATWARI, CIT DR RESPONDENT BY: NONE DATE OF HEARING: 05.12.2012 DATE OF PRONOUNCEMENT: 14.12.2012 O R D E R PER SHRI A. K. GARODIA, AM:- BOTH THESE APPEALS ARE FILED BY THE REVENUE WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT(A) I, AHMEDA BAD BOTH DATED 12.11.2009 FOR THE ASSESSMENT YEARS 2001-02 AND 200 7-08 AND BOTH THE CROSS OBJECTIONS ARE FILED BY THE ASSESSEE AGAINST THESE TWO ORDERS OF LD. CIT(A) FOR ABOVE TWO ASSESSMENT YEARS. ON THE EARL IER OCCASIONS, LD. I.T.(SS).NO.32,33 /AHD/2010 C.O. NOS. 67 & 68/AHD/2010 2 A.R. APPEARED BEFORE THE TRIBUNAL AND ASKED FOR ADJ OURNMENT I.E. ON 12.12.2011, 27.02.2012 AND 02.05.2012. THEREAFTER, HEARING WAS FIXED ON 05.12.2012 AND THE NOTICE OF HEARING WAS SENT TO THE ASSESSEE BY RPAD ON 06.11.2012. THIS NOTICE HAS COME BACK UNSE RVED. THE NOTICE WAS SENT ON THE ADDRESS PROVIDED BY THE ASSESSEE IN THESE TWO CROSS OBJECTIONS FILED BY THE ASSESSEE AND NO NEW ADDRESS HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE AND HENCE, THERE IS NO OTHER MANNER IN WHICH THE TRIBUNAL CAN SERVE THE NOTICE ON THE ASSESSEE. FRO M THIS FACTUAL POSITION REGARDING THE TWO CROSS OBJECTIONS FILED BY THE ASS ESSEE, WE DRAW INFERENCE THAT THE ASSESSEE IS NOT INTERESTED IN PR OSECUTING THESE TWO CROSS OBJECTIONS AND HENCE, THE SAME ARE DISMISSED BY FOL LOWING THE DECISION OF HONBLE M.P. HIGH COURT RENDERED IN THE CASE OF CIT VS B.N. BHATTACHARGEE AND ANOTHER, REPORTED IN 118 ITR 461 (RELEVANT PAGES 477 AND 478) WHEREIN THEIR LORDSHIPS HAVE HELD THAT TH E APPEAL DOES NOT MEAN MERELY FILING OF THE APPEAL BUT EFFECTIVELY PU RSUING IT. 2. IN ANOTHER CASE OF ESTATE OF LATE TUKOJIRAO HOLK AR VS CIT 223 ITR 480 (M.P.) ALSO, WHILE DISMISSING THE REFERENCE MAD E AT THE INSTANCE OF THE ASSESSEE IN DEFAULT MADE FOLLOWING OBSERVATION IN THEIR ORDER:- IF THE PARTY, AT WHOSE INSTANCE THE REFERENCE IS M ADE, FAILS TO APPEAR AT THE HEARING, OR FAILS IN TAKING STEPS FOR PREPARATION OF THE PAPER BOOKS SO AS TO ENABLE HEARING OF THE REFERENC E, THE COURT IS NOT BOUND TO ANSWER THE REFERENCE. 3. IN THE CASE OF CIT VS MULTIPLAN INDIA LIMITED; 38 ITD 320 (DEL), THE APPEAL WAS FILED BY THE REVENUE BEFORE THE TRIB UNAL, WHICH WAS FIXED FOR HEARING. BUT ON THE DATE OF HEARING, NOBODY RE PRESENTED THE REVENUE/APPELLANT NOR ANY COMMUNICATION FOR ADJOURN MENT WAS RECEIVED. THERE WAS NO COMMUNICATION OR INFORMATION AS TO WHY THE REVENUE CHOSE TO REMAIN ABSENT ON DATE. THE TRIBUNAL ON THE BASI S OF INHERENT POWERS, I.T.(SS).NO.32,33 /AHD/2010 C.O. NOS. 67 & 68/AHD/2010 3 TREATED THE APPEAL FILED BY THE REVENUE AS UNADMITT ED IN VIEW OF THE PROVISIONS OF RULE 19 OF THE APPELLATE TRIBUNAL RUL ES, 1963. 4. IN THE RESULT, BOTH THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. 5. NOW, WE TAKE UP THE APPEAL OF THE REVENUE WHICH WOULD BE DECIDED AFTER HEARING THE LD. D.R. AND ON THE BASIS OF MATE RIAL AVAILABLE ON RECORD. 6. THE GROUNDS RAISED BY THE REVENUE IN ASSESSMENT YEAR 2001-02 IN I.T.A.NO. 32.AHD/2010 ARE AS UNDER: (I) THE ID. CIT(A) HAS ERRED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICTING THE ADDITION OF RS 24.76 .318/- TO THE EXTENT OF RS. 2,46,200/-GRANTING RELIEF OF RS. 22,3 0,118/- ON ACCOUNT OF INCOME UTILIZED FOR PURCHASE OF PLOT BEA RING NO. 15, NEW VAISHALI SOC., BODAKDEV, AHMEDABAD ADMEASURING 482.58 SQ. YARDS (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. (III) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE ID. C.I.T.(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED TO THE ABOVE EXTENT. 7. THE GROUNDS RAISED BY THE REVENUE IN ASSESSMENT YEAR 2007-08 I.E. IN I.T.A.NO. 33/AHD/2010 ARE AS UNDER: THE ID. CIT(A) HAS ERRED IN LAW AND FACTS AND CIRC UMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS. 28,00,000/ - ON ACCOUNT OF UNEXPLAINED CASH FOUND DURING THE COURSE OF SEARCH. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE ID. C.I.T.(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED TO THE ABOVE EXTENT. 8. REGARDING ASSESSMENT YEAR 2007-08, IT WAS SUBMIT TED BY THE LD. D.R. THAT THE DETAILS OF DISCLOSURE OF RS.2 CRORES AS NOTED BY LD. CIT(A) ON PAGE 4 OF HIS ORDER INCLUDES SEIZURE OF CASH OFR S.26 LACS. HE ALSO I.T.(SS).NO.32,33 /AHD/2010 C.O. NOS. 67 & 68/AHD/2010 4 POINTED OUT THAT AS PER PAGE 2 OF THE ASSESSMENT OR DER ALSO, THE CASH FOUND WAS AROUND RS.29.50 LACS AND CASH SEIZED WAS RS.26 LACS. HE SUBMITTED THAT UNDER THESE FACTS, THE A.O. MADE ADDITION OF R S.28 LACS BY HOLDING THAT OUT OF THE TOTAL CASH FOUND OF RS.29.50 LACS A PPROXIMATELY, THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF CASH OF RS .28 LACS. HE FURTHER SUBMITTED THAT EVEN IF IT IS HELD BY LD. CIT(A) THA T TO THE EXTENT OF RS.26 LACS OF INCOME INCLUDED IN THE INCOME DISCLOSED BY THE ASSESSEE OF RS.2 CRORES IS IN RESPECT OF THE SAME CASH, THEN ALSO AD DITION OF RS.2 LACS SHOULD HAVE BEEN UPHELD. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. D. R. AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND T HAT DISCLOSURE OFRS.2 CRORES INCLUDES AMOUNT OF RS.26 LACS ON ACCOUNT OF ADVANCE TAX BEING CASH SEIZED. AS PER PAGE 2 OF THE ASSESSMENT ORDER ALSO, OUT OF TOTAL CASH FOUND AT THE RESIDENCE OF THE ASSESSEE AND IN THE B ANK LOCKER BEING RS.29.50 LACS APPROXIMATELY, THE CASH SEIZED WAS OF RS.26 LACS. OUT OF THE TOTAL CASH FOUND OF RS.29.50 LACS, THE A.O. HEL D THAT ASSESSEE COULD NOT EXPLAIN THE SOURCE OF CASH TO THE EXTENT OF RS. 28 LACS AND HE MADE ADDITION TO THAT EXTENT. SINCE AN INCOME OF RS.26 LACS WAS ALREADY INCLUDED IN THE DISCLOSURE OF RS.2 CORES MADE BY TH E GROUP COMPANY, ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSE E AGAIN TO THIS EXTENT. HENCE, IN OUR CONSIDERED OPINION, LD. CIT(A) WAS JU STIFIED IN DELETING THE ADDITION MADE BY THE A.O. TO THE EXTENT OF RS.2 6 LACS. FOR THE REMAINING AMOUNT OF RS.2 LACS, WE FIND FORCE IN THE SUBMISSION OF THE LD. D.R. THAT ADDITION SHOULD HAVE BEEN UPHELD BY LD. C IT(A) TO THIS EXTENT WE, THEREFORE, UPHOLD THE ADDITION OF RS.2 LACS IN THE HANDS OF THE ASSESSEE. THIS GROUND OF THE REVENUE IS PARTLY ALL OWED. 10. IN THE RESULT, THIS APPEAL OF THE REVENUE IS PA RTLY ALLOWED. I.T.(SS).NO.32,33 /AHD/2010 C.O. NOS. 67 & 68/AHD/2010 5 11. NOW, WE TAKE UP THE APPEAL OF THE REVENUE FOR T HE ASSESSMENT YEAR 2001-02. IT WAS SUBMITTED BY THE LD. D.R. THAT THE FINDING OF LD. CIT(A) IS IN PARA 12 ON PAGE 7 OF HIS ORDER BUT THERE IS N O BASIS INDICATED BY LD. CIT(A) THAT RS.14.50 IS ACCOUNTED FOR AND THERE IS NO OTHER PAYMENT. HE SUBMITTED THAT THE ORDER OF LD. CIT(A) SHOULD BE RE VERSED AND THAT OF THE A.O. SHOULD BE RESTORED. 12. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. D.R., PERUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. FOR THE SAKE OF READY REFERENCE, WE REPRODUCE PARA 12 FROM THE ORDER OF LD. CIT(A) AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPE LLANT. THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS.24,76 ,318 BASED ON THE LOOSE PAPERS FOUND FROM THE RESIDENCE OF THE AP PELLANT. ACCORDING TO HIM, AS PER THE WORKING ON THE BACKSID E OF PAGE 10 OF THE DOCUMENT BEING UNSIGNED DOCUMENT, THE TOTAL VAL UE WAS ARRIVED AT RS.34.26 LACS AND AGAINST THAT AMOUNT IN THE SAI D LOOSE PAPERS PAYMENT BY CHEQUE OF RS.9.5 LACS WAS CONSIDERED. HE NCE, THE BALANCE AMOUNT IS CONSIDERED BY HIM AS PAID IN CASH . ON THE OTHER HAND, THE APPELLANT HAS EXPLAINED THAT FROM THE VER Y BEGINNING, IT WAS THE CLAIM OF THE APPELLANT THAT HE HAD PAID RS. 9.5 LACS BY CHEQUE AND RS.5 LACS IN CASH FOR CLEARING THE ENCRO ACHMENT WHICH WAS EXISTING ON THE LAND. IT WAS ALSO EXPLAINED IN THE STATEMENT OF THE APPELLANT THAT NO OTHER AMOUNT OVER AND ABOVE T HE ABOVE TWO PAYMENTS OF THE AGGREGATE RS.14.5 LACS WAS MADE. TH E ASSESSING OFFICER COULD NOT FIND ANY OTHER EVIDENCE EXCEPT TH ESE LOOSE PAPERS WHICH WOULD SUGGEST THAT THE APPELLANT HAS MADE ANY PAYMENT OVER AND ABOVE THE ABOVE AMOUNT OF RS. 14.5 LACS. THE AP PELLANT HAS ALSO EXPLAINED THAT EVEN ON TODAY, THE LAND HOLDS S UCH ENCUMBRANCE THAT NO CONSTRUCTION COULD BE CARRIED O UT. THIS EXPLANATION OF THE APPELLANT IS NOT DENIED BY THE A SSESSING OFFICER. EVEN IN THE POST SEARCH INQUIRY WHEN THE APPELLANT HAD DENIED HAVING MADE PAYMENT OVER AND ABOVE RS. 1'4,5-IJIRCS , NO FURTHER INQUIRY APPEARS TO HAVE BEEN CARRIED OUT OR NO EVID ENCE REGARDING OTHER PAYMENT IS FOUND. I ALSO FIND THAT THE AMOUNT OF RS.9.5 LACS AND RS. 5 LACS PAID, AS ABOVE, HAS BEEN REFLECTED I N THE ACCOUNTS OF THE APPELLANT. IN THE CIRCUMSTANCES I APPRECIATE TH E CONTENTION OF THE APPELLANT THAT IN THE ABSENCE OF ANY EVIDENCE R EGARDING I.T.(SS).NO.32,33 /AHD/2010 C.O. NOS. 67 & 68/AHD/2010 6 PAYMENT OVER AND ABOVE THE AMOUNT OF RS. 14.5 LACS, ADDITION FOR FURTHER AMOUNT COULD NOT BE MADE ON PRESUMPTION BAS IS. (II) HOWEVER, AT THE SAME TIME, IT IS NOTICED THAT THE APPELLANT HAS PAID ADDITIONAL STAMP DUTY AS PER THE STAMP DUTY VA LUATION OF RS. 1,10,438 OVER AND ABOVE THE STAMP DUTY OF RS. 1,40, 600 AS PER THE VALUE OF RS.9.5 LACS OF THE DOCUMENT. THEREFORE, TH E STAMP DUTY AUTHORITY HAS CONSIDERED THE MARKET VALUE OF THE PR OPERTY AT RS. 16,96,200. IN THE CIRCUMSTANCES I FEEL THAT THE INV ESTMENT MADE BY THE APPELLANT IS TO BE CONSIDERED ON THE BASIS OF S TAMP DUTY VALUATION WHICH IS RS. 16,96,200. AS AGAINST THIS, THE APPELLANT HAS ALREADY SHOWN THE PAYMENT OF RS. 14.5 LACS IN THE A CCOUNTS. THEREFORE, THE DIFFERENCE OF RS.2,46,200 IS REQUIRE D TO BE CONSIDERED FOR THE PURPOSE OF ADDITION IN THE HANDS OF THE APPELLANT. ACCORDINGLY, THE ASSESSING OFFICER IS DI RECTED TO REDUCE THE ADDITION OF RS,24,76,318 TO RS. 2,46,200. THIS GROUND OF APPEAL IS THUS PARTLY ALLOWED. 13. FROM THE ABOVE PARA OF THE ORDER OF LD. CIT(A), WE FIND THAT LD. CIT(A) HAD DECIDED THIS ISSUE ON THE BASIS THAT PAY MENT TO THE EXTENT OF RS.14.50 LACS WAS DULY ACCOUNTED FOR BY THE ASSESSE E. WE ALSO FIND THAT AS PER THE SEIZED DOCUMENTS, RS.9.50 LACS WAS PAID BY WAY OF CHEQUE AND RS.5 LACS WAS PAID BY WAY OF CASH. NO BASIS IS IND ICATED BY LD. CIT(A) TO GIVE A FINDING AS TO HOW THE CASH PAYMENT OF RS. 5 LACS WAS ACCOUNTED FOR IN THE BOOKS OF THE ASSESSEE. WE ALSO FIND TH AT AS PER THE SEIZED PAPERS, VALUE OF PROPERTY WAS OF RS.34,26,318/-. T HE SALE DEED WAS REGISTERED ON 04.01.2001 WHEREAS THE SEARCH WAS CAR RIED OUT ON 14.02.2007. HENCE, IT CANNOT BE SAID THAT THE BALA NCE AMOUNT OF RS.19,76,318/- WAS NOT PAID BY THE ASSESSEE ON 04.0 1.2001. IN THE SEIZED PAPERS ALSO, AFTER TAKING THE PAYMENT OF CASH OF RS .5 LACS BEFORE THE DATE OF SEARCH, BALANCE IS DRAWN OF RS.19,76,318/- AND B ELOW THAT THERE IS AN AMOUNT MENTIONED OF RS.5 LACS AGAINST WHICH THE COM MENT GIVEN IS PENDING AND THEN FURTHER BALANCE OF RS.14,76,318/- WAS DRAWN. IN OUR CONSIDERED OPINION, EVEN AS PER THE SEIZED PAPERS, EXCEPT THE PENDING I.T.(SS).NO.32,33 /AHD/2010 C.O. NOS. 67 & 68/AHD/2010 7 AMOUNT OF R.5 LACS, ALL OTHER AMOUNTS SHOULD BE TAK EN AS PAID AND EVEN THIS PENDING AMOUNT OF RS.5 LACS CAN BE PENDING ON THE DATE OF ITS NOTING ON SEIZED PAPER BUT THE SALE DEED WAS REGISTERED ON 04.01.2001 AND HENCE, IT IS VERY DIFFICULT TO ACCEPT THAT IT WAS N OT PAID BY THAT DATE. ON ALL THESE POINTS, LD. CIT(A) HAS NOT GIVEN HIS FIND ING AND HENCE, IN OUR CONSIDERED OPINION, THIS MATTER SHOULD GO BACK TO H IS FILE FOR A FRESH DECISION FOR HIS REASONED AND SPEAKING ORDER AND, T HEREFORE, WE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RESTORE T HE MATTER BACK TO HIS FILE FOR A FRESH DECISION. HE SHOULD CONSIDER ALL RELEVANT ASPECTS AS PER ABOVE DISCUSSION AND THEN DECIDE THE ISSUE AS PER L AW AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. THIS GROUND OF THE REVENUE IS ALLOWED FOR STATISTICAL PU RPOSE. 14. IN THE RESULT, THIS APPEAL OF THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. 15. IN THE COMBINED RESULT, THE APPEAL OF THE REVEN UE FOR THE ASSESSMENT YEAR 2001-02 IS ALLOWED FOR STATISTICAL PURPOSE WHE REAS THE APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 2007-08 IS PARTLY A LLOWED. 16. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP 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 BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.(SS).NO.32,33 /AHD/2010 C.O. NOS. 67 & 68/AHD/2010 8 1. DATE OF DICTATION 10/12/12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 11/12/12.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 14/12/12 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.14/12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 14/12/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .