Shri Surendrabhai V.Bhatt, Ahmedabad V. The ACIT.,Circle-7, Ahmedabad

ITSSA 365/AHD/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7573 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-03-2012
• Assessment Year: misc
• Appeal Filed On: 05-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Keywords: Corroborative evidences; Block assessment
• Section: 142(1); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI A K GARODIA ACCOUNTANT MEMBER AND SHRI KUL BHARAT JUDICIAL MEMBER IT(SS)A NO.365/AHD/2011 BLOCK PERIOD:- 01-04-1987 TO 31-03-1997 & 01-04-1997 TO 28-08-1997 SHRI SURENDRABHAI V BHATT, 10/D, PRIYADARSHI TOWER, JUDGES BUNGALOW CROSS ROAD, BODAKDEV, AHMEDABAD V/S THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-7, AHMEDABAD PAN: ABSPB 4405 H [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI SURESH GANDHI, AR REVENUE BY:- SHRI S K GUPTA, CIT - DR DATE OF HEARING:- 13-03-2012 DATE OF PRONOUNCEMENT:- 13-04-2012 O R D E R PER KUL BHARAT (JM) :- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST AN ORDER DATED 08-03-2011 PASSED B Y THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-VI, [HEREINAFT ER REFERRED TO AS THE LEARNED CIT(A)] AHMEDABAD. THE ONLY GRO UND RAISED BY THE ASSESSEE IN THIS APPEAL RELATES TO CONFIRMAT ION OF AN ADDITION OF RS.1,00,000/- ON ACCOUNT OF UNDISCLOSED SOURCE OF PAYMENTS. 2 THE FACTS OF THE CASE AS EMERGED FROM THE RELEVAN T ORDERS ARE THAT THE ORIGINAL ASSESSMENT U/S 158BC IN THIS CASE HAD BEEN MADE ON 16/9/1999. THEREAFTER, THE ORDER WAS MODIFI ED TO GIVE 2 2 EFFECT TO THE ORDER OF THE CIT(APPEALS), PURSUANT T O AN APPEAL FILED BY THE ASSESSEE. ON A SECOND APPEAL, THE HON' BLE ITAT VIDE ORDER DATED IT(SS)A NO.55/AHD/2000 DATED 14/7/2006, SET ASIDE THE ASSESSMENT ON THE ISSUE RELATING TO THE SOURCE OF PAYMENT OF RS.1,00,000/- BY THE ASSESSEE TO HIS SON. THE AO HA S REPRODUCED THE OBSERVATION OF THE HON'BLE ITAT AT PARA 15 TO 1 7 ARE AS UNDER: 'WE HAVE DULY CONSIDERED THE RIVAL SUBMISSIONS, FAC TS AND CIRCUMSTANCES OF THE CASE AS WELL AS ANSWER TO QUES TION NO.(I) OF THE SO CALLED PRELIMINARY STATEMENT AND ANSWER TO QUEST ION NO.(II) OF STATEMENT U/S. 132(4) BOTH RECORDED ON 28/8/1997 AN D ARE OF THE OPINION THAT THE ASSESSEE HAD CLEARLY ADMITTED THE COAST OF FLAT AT RS.4,20,000/- AND HAD CLEARLY STATED THAT PRICE AS PER AGREEMENT WAS RS.3,20,000/- WHEREAS BALANCE RS.1 LAC WAS PAID AS 'ON-MONEY' THE ASSESSEE HAD FURTHER CONFIRMED THAT RS.1 LAC WAS PA ID BY HIM TO HIS SON. FOR THE FINALIZATION OF THE BLOCK ASSESSMENT, A SHO W CAUSE NOTICE DATED 29/11 /2007 WAS ISSUED AND DULY SERVED UPON THE ASS ESSEE CALLING FOR THE EXPLANATION AS ENVISAGED BY THE ITAT. IN RESPON SE TO THE SAID NOTICE SHRI BHAVESHBHAI SHAH, CA FROM DHIREN SHAH & CO, CAS ATTENDED AND SUBMITTED WRITTEN SUBMISSIONS DATED 12 112/2007. IN VIEW OF THE ABOVE FACTS WE ARE OF THE OPINION TH AT IRRESPECTIVE OF THE ACT AS TO WHETHER THE ASSESSEE HAD RETRACTED THE ST ATEMENT OR NOT, NO ADDITION COULD BE MADE IN ASSESSEE'S HANDS ON ACCOU NT OF THE PAYMENT OF ALLEGED 'ON-MONEY' OF RS.1 LAC BUT SINCE THE ASS ESSEE AS WELL AS HIS SON HAS ACCEPTED THE FACTUM OF PAYMENT OF RS.1 LAC BY THE ASSESSEE TO HIS SON, IT IS ASSESSEE'S ONUS TO EXPLAIN THE SOURC E OF THE PAYMENT OF RS.1 LAC TO HIS SON AND THEREFORE THE ADDITION IN A SSESSEE'S HANDS CAN BE MADE ON THIS ACCOUNT ONLY IF THE ASSESSEE FAILS TO EXPLAIN THE SOURCE OF RS.1 LAC PAID TO HIS SON. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE ISSUE RELATING SOURCE OF PAYMENT OF RS.1 LAC BY THE ASSES SEE FO HIS SON IS RESTORED TO THE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION.' 3 3 THE ASSESSEE HAS CONTENDED THAT THE MONEY HAS NOT B EEN PAID BY HIM TO HIS SON. THIS IS IN TOTAL CONTRADICTION TO THE F INDING ENDORSED BY THE HON'BLE ITA T. THE HON'BLE ITATHAS UNAMBIGUOUSLY HE LD THAT THE AMOUNT OF RS.1,00,000/- BEING THE 'ON MONEY' HAS BE EN PAID BY THE ASSESSEE. THE ONLY ISSUE WHICH WARRANTED ADJUDICATI ON WAS THE SOURCE OF THOSE FUNDS. HOWEVER, THE ASSESSEE HAS VERY CONV ENIENTLY CIRCUMVENTED THE ONLY ISSUE AT STAKE AND HAS, THERE FORE, CANDIDLY ADMITTED THAT HE HAS NOTHING MORE TO EXPLAIN. THE A SSESSEE STATED THAT THE JT. CIT HAD NOT BROUGHT OUT ANY COGENT MATERIAL EVIDENCE TO PROVE THE PAYMENT OF MONEY TO HIS SON OR TO THE BUILDER T HIS STANCE OF THE ASSESSEE IS TOTALLY ILLOGICAL BECAUSE THE HON ITAT HAS CATEGORICALLY ADJUDICATED THAT 'IT IS THE ASSESSEE'S ONUS TO EXPL AIN THE SOURCE OF THE PAYMENT OF RS.1 LAC.' THE AO OBSERVED THAT SINCE THE ASSESSEE HAS NOT SUB MITTED ANY EXPLANATION REGARDING THE SOURCE OF RS.1 LAC, THE A SSESSEE IS FOUND TO HAVE NOT DISCHARGED THE ONUS CAST UPON TER N BY THE HON. ITAT. UNDER THE CIRCUMSTANCES, THE AMOUNT OF RS.L,0 0,000/- IS ASSESSED AS PART OF THE UNDISCLOSED INCOME OF THE A SSESSEE FOR THE BLOCK PERIOD.' 3 BEFORE THE LEARNED CIT(A) THE ASSESSEE HAS SUBMIT TED IN ITS WRITTEN SUBMISSION, AS UNDER: 'AS AGAINST THE ABOVE OBSERVATION, THE APPELLANT SU BMITTED THAT THE LEARNED A.O. HAS MADE THE AFORESAID ADDITION MERELY ON THE BASIS OF SURMISES AND CONJECTURES AND ON A PRESUMPTION. THE LEARNED A.O. HAS TREATED AN AMOUNT OF RS.1,00,000/- AS UNDISCLOSED I NCOME OF THE APPELLANT ON THE BASIS OF ABOVE OBSERVATION AND ALL EGATION. 3 THE APPELLANT HAS SUBMITTED THE REPLY DATED 12-12 -1997 TO THE LEARNED A.O WHICH IS NOT CONSIDERED BY THE LEARNED A.O. COPY OF SAID LETTER WITH EXHIBIT IS ATTACHED HEREWITH AS PER EXH IBIT - II (PAGE NO. 7 TO 44). 4 THE APPELLANT SUBMITTED THAT THE HON'BLE ITAT HAS SET-ASIDE THE ISSUE REGARDING PAYMENT OF RS.1,00,000/- TO HIS SON FOR PAYMENT IN THE FLAT OF MANS/ TOWER ON THE BASIS OF STATEMENT RECOR DED DURING THE 4 4 COURSE OF SEARCH PROCEEDINGS. THE STATEMENT RECORDE D DURING THE COURSE OF SEARCH PROCEEDINGS OF THE APPELLANT WAS R ETRACTED WHILE FILING DULY SWORN-IN AFFIDAVIT DATED 4/9/1997. COPY OF SAID AFFIDAVIT HAVE BEEN PROVIDED TO THE LEARNED A.O. VIDE SUBMISS ION DATED 12/12/1997. IT IS TO BE TAKEN NOTE OF THAT THE APPE LLANT WAS NOT PAID NO SUCH ON MONEY AND NO AMOUNT WAS GIVEN TO HIS SON AN D HENCE THE QUESTION OF SOURCE OF PAYMENT DOES NOT ARISE AT ALL . 5 THE APPELLANT FURTHER SUBMITTED THAT THE ORGANIZE R NAMELY M/S. SUNITA CONSTRUCTION HAS GIVEN CONFIRMATION WHEREIN IT HAS ALSO DENIED THE RECEIPT OF ON MONEY. THE APPELLANT, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HAS GIVEN SUBMISSION DATED 12/12/2007, WHEREIN ALL THE DETAILS CALLED FOR BY THE LEARNED A .O. VIDE NOTICE U/S. 142(1) OF THE ACT WAS PROVIDED BY THE APPELLANT IN FORM OF EXHIBITS. HOWEVER, THE LEARNED A.O. HAS NOT PROPERLY VERIFIED AND CONSIDERED THE SAID SUBMISSION. 6 THE APPELLANT HAS TO SUBMIT THAT THE LEARNED A.O. HAS MADE THE ADDITION ON THE GROUND THAT ASSESSEE HAS NOT EXPLAI NED THE SOURCE OF PAYMENT OF RS.1,00,000/- TO HIS SON. IT IS PERTINEN T TO TAKE NOTE OF THAT THE QUESTION OF SOURCE OF PAYMENT IS ARISES ONLY IF THE PAYMENT IS MADE. BUT, IN THIS CASE THE APPELLANT HAS NOT MADE THE PAYMENT TO HIS SON AND HENCE THE QUESTION OF SOURCE OF PAYMENT DOE S NOT ARISE AT ALL. 7 THE PROCEEDINGS U/S. 158BD WAS ALSO INITIATED IN THE CASE OF SON OF APPELLANT NAMELY SHRI MINESH BHATT ON THE BA SIS OF STATEMENT RECORDED DURING THE COURSE OF SEARCH PROCEEDINGS AN D ON THE BASIS OF SAID STATEMENT THE LEARNED A.O. BEING ACIT, CIRCLE- 9, AHMEDABAD WAS MADE THE ADDITION AND THE CIT(A)-XV HAS DELETED THE SAID ADDITION MADE IN THE CASE OF SON OF APPELLANT. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, COPIES OF BOTH THE ORDERS W ERE PROVIDED TO THE A.O. HOWEVER, THE LEARNED A.O. HAS NOT CONSIDER ED THE SAME. 8 THE APPELLANT CONTENDED THAT WHILE PASSING THE OR DER U/S. 158BC OF THE ACT, THE LEARNED A.O. HAS NOT BROUGHT ON RECORD ANY COGENT MATERIAL/EVIDENCES IN SUPPORT OF HIS CLAIM T HAT ON MONEY PAYMENT OF RS.1 LAC PAID BY THE APPELLANT TO HIS SO N OR TO THE BUILDER. 9 DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON 02 /08/1999, THE LEARNED A.O. HAS ALSO RECORDED THE STATEMENT U/S. 1 31 OF THE ACT AND IN THE SAID STATEMENT IT HAS BEEN EXPLAINED BY THE APP ELLANT THAT THE STATEMENT RECORDED DURING THE COURSE OF SEARCH PROC EEDINGS WERE 5 5 UNDER COERCIVE APPROACH AND THE SAME WERE RETRACTED AND THE APPELLANT HAS NOT AGREED TO THE ANSWERS RECORDED DURING THE C OURSE OF SEARCH. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APP ELLANT HAS PLACED ON RECORD OF THE LEARNED A.O. THE LEGAL SUBMISSIONS VIDE LETTER DATED 05/07/1999. HOWEVER, THE LEARNED A.O. HAS NOT EXAMI NED THE ORGANISOR OF MANSI FLAT BEFORE MAKING THE ADDITION OF RS.1,00,000/-. 10 THE APPELLANT VIDE LETTER DATED 12/12/2007 SUBMI TTED THAT THE APPELLANT HAS PROVIDED ALL THE SUPPORTING EVIDENCES FOR THE SOURCE OF INVESTMENT IN FLAT AT MANSI COMPLEX WHICH IS IN THE NAME OF APPELLANT'S SON SHRI MINESH BHAT. THE APPELLANT HAS ALSO PROVIDED THE COPY OF CONFIRMATION FROM BUILDER M/S. SUNITA CONST RUCTION FOR THE AMOUNT RECEIVED BY 'THEM TOWARDS COST OF FLAT. COPY OF THE SAID LETTER ALONGWITH SUPPORTING EVIDENCES AND CONFIRMATION FRO M M/S. SUNITA CONSTRUCTION HAVE ALSO PROVIDED TO THE LEARNED A.O. VIDE LETTER DATED 12/12/2007. HOWEVER, THE LEARNED A.O. HAS NOT PROPE RLY VERIFIED AND CONSIDERED THE SAME AND HAS MADE THE ADDITION OF RS .1,00,000/- WHICH IS BAD IN THE EYES OF LAW. CONSIDERING ALL THE ABOVE FACTS, THE ADDITION MADE BY THE LEARNED A.O. ON ACCOUNT OF UNDISCLOSED INCOME OF RS.1,00,000/- I S REQUIRED TO BE DELETED IN TOTO.' AFTER CONSIDERING THE AFORESAID SUBMISSIONS MADE BY THE ASSESSEE, THE LEARNED CIT(A) CONFIRMED THE ADDITION WITH THE FOLLOWING OBSERVATIONS:- 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSES SMENT ORDER AND APPELLANT'S SUBMISSION. THE ISSUE WAS SET-ASIDE BY ITAT WITH THE DIRECTION THAT SOURCE OF RS ONE LAKH IS TO BE PROVE D BY THE APPELLANT. WHILE SETTING ASIDE THE ISSUE, HONOURABLE ITAT CONF IRMED THE FACT OF PAYMENT OF RS ONE LAKH BY THE APPELLANT THEREFORE T HIS ISSUE IS OPEN ONLY FOR THE LIMITED PURPOSE OF VERIFICATION OF SOU RCE OF PAYMENT. ASSESSING OFFICER ASKED THE APPELLANT TO EXPLAIN TH E SOURCE OF PAYMENT HOWEVER APPELLANT DID NOT SUBMIT ANY INFORMATION OR DETAILS IN RESPECT OF SOURCE OF RS. ONE LAKH. INSTEAD APPELLANT DENIED MAKING ANY PAYMENT. THIS CLEARLY MEANS THAT APPELLANT DID NOT SUBMIT ANY INFORMATION RELATING TO THE SOURCE OF RS ONE LAKH. SINCE THE ISSUE OF PAYMENT OF RS ONE LAKH IS ALREADY DECIDED BY ITAT A ND WHAT WAS SET- ASIDE TO THE AO WAS ONLY VERIFICATION OF SOURCE OF RS ONE LAKH. 6 6 WHETHER PAYMENT WAS MADE OR NOT IS NOT AN OPEN ISSU E AT THIS STAGE. THEREFORE IN ABSENCE OF ANY INFORMATION OR DETAILS WITH REGARD TO THE SOURCE OF RS ONE LAKH, THE ADDITION MADE BY THE ASS ESSING OFFICER IS CONFIRMED. 4 WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED THE IR RIVAL SUBMISSIONS. WE HAVE ALSO PERUSED THE MATERIAL AVAI LABLE ON RECORD. WE FIND THAT THE ISSUE INVOLVED IN THIS APP EAL IS ADDITION ON ACCOUNT OF UNDISCLOSED SOURCE OF PAYMENT OF RS.1 LAKH. THE LEARNED AR HAS VEHEMENTLY ARGUED THAT THE AUTHORITI ES BELOW HAVE FAILED TO APPRECIATE THE FACT THAT THE AMOUNT OF RS.1 LAKH COULD NOT BE ADDED INTO THE INCOME OF THE ASSESSEE. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE RIVAL SUB MISSIONS MADE AT THE BAR. IN THIS CASE, THE CO-ORDINATE BENCH OF THIS TRIBUNAL HAS DIRECTED SPECIFICALLY TO PROVE THE SOURCE OF PA YMENT OF RS.1 LAKH. IT APPEARS THAT THE ASSESSEE COULD NOT PROVE THE SOURCE OF PAYMENT. IN THE ABSENCE OF THE SAME, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A) AND THE SAME IS HEREBY UPHELD. 5 IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE COURT TODAY ON 13-04-2012 SD/- SD/- (A K GARODIA) ACCOUNTANT MEMBER (KUL BHARAT) JUDICIAL MEMBER DATE : 13-04-2012 7 7 COPY OF THE ORDER FORWARDED TO: 1. SHRI SURENDRABHAI V BHATT, 10/D, PRIYADARSHI TOW ER, JUDGES BUNGALOW CROSS ROAD, BODAKDEV, AHMEDABAD 2. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-7, AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-VI, AHMEDABAD 5. DR, ITAT, AHMEDABAD BENCH-C, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD