The ADIT(Intl.Taxn.), Ahmedabad V. Smt. Jignaben Bipin Shah, Ahmedabad

ITSSA 397/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0766 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 10-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Keywords: Loose papers; Document seized; Onus to prove
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI SHAILENDRA KR. YADAV, J.M. & SHRI ANIL CHATURVEDI, A.M.) I.T.(SS) A. NOS. 391 TO 397 /AHD/2011 (ASSESSMENT YEARS: 1999 -2000 TO 2005-06) THE ADIT, (INTL. TAXN.) AHMEDABAD 4 TH FLOOR, NAUTRE VIEW BUILDING, ASHRAM ROAD, AHMEDABAD V/S SMT. JIGNABEN BIPIN SHAH 10, PRABHAT SOCIETY, 206, ASHRAY APARTMENT, NR. SUVIDHA SHOPPING CENTRE, PALDI, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: BWFPS8832L APPELLANT BY : SHRI O.P. VAISHNAV, CIT/DR RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 02-06-2015 DATE OF PRONOUNCEMENT : 10-06-2015 PER BENCH. 1. THESE 7 APPEALS FILED BY THE REVENUE ARE AGAINST TH E ORDER OF CIT(A)-, GANDHINAGAR, AHMEDABAD DATED 30.03.2011 FOR A.YS. 1 999-2000 TO 2005- 06. 2. BEFORE US, AT THE OUTSET THE LD. D.R. SUBMITTED THA T THOUGH THE APPEALS OF ASSESSEE RELATE TO 7 ASSESSMENT YEARS BUT THE FACTS AND CIRCUMSTANCES OF ALL THE CASES ARE SIMILAR EXCEPT FOR THE ASSESSMENT YEA RS AND AMOUNTS AND THE IT(SS)A NOS. 391 TO 397/AHD/2011 . A.YS. 1999- 2000 TO 2005-06 2 SUBMISSIONS ARE ALSO COMMON FOR ALL THE APPEALS AND THEREFORE ALL THE APPEALS CAN BE HEARD TOGETHER. WE THEREFORE PROCEED TO DISPOSE OF ALL THE APPEALS TOGETHER FOR THE SAKE OF CONVENIENCE AND TH US PROCEED WITH THE FACTS IN A.Y. 1999-2000. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 4. ASSESSEE IS A NON-RESIDENT INDIVIDUAL. A SEARCH WAS CONDUCTED U/S. 132 OF THE ACT AT THE SITE OFFICE OF J.P. CONSTRUCTION WHE RE CERTAIN LOOSE PAPERS WERE SEIZED. ANNEXURE-A1 PAGE 52 OF THE SEIZED PAPER SHO WED DETAILS OF SARAFI TRANSACTION CARRIED OUT DURING THE PERIOD FROM FEBR UARY 1996 TO OCTOBER 2003 AND IT WAS STATED THAT THE TRANSACTION RELATED TO MS. JIGNA P. SHAH, THE ASSESSEE. NOTICE U/S. 153C WAS ISSUED ON 04.03.2008 AND IN RESPONSE TO WHICH ASSESSEE FILED RETURN OF INCOME SHOWING NIL I NCOME. THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143C R.W.S. 153C ON 24.1 2.2008 AND THE TOTAL INCOME WAS DETERMINED AT RS. 5,79,000/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO V IDE ORDER DATED 30.03.2011GRANTED SUBSTANTIAL RELIEF TO THE ASSESSE E. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), REVENUE IS NOW IN AP PEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LD, CIT (A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION MADE ON ACCOUNT OF ACCRUED INTEREST AMOUNTING TO RS. 5,79,0 00/- THOUGH THE SEIZED PAPER CLEARLY INDICATES COMPUTATION OF ACCRUED INTEREST A T PER 12% AT PREVAILING MARKET RATE ON OUTSTANDING BALANCE AS ON THAT PARTICULAR D ATE ON INVESTMENT MADE BY THE ASSESSEE. 5. DURING THE COURSE OF SEARCH OPERATION CARRIED OUT A T THE SITE OFFICE OF J.P. CONSTRUCTION, DETAILS OF SARAFI TRANSACTION CARRIED OUT WERE FOUND. FROM THE DETAILS IT WAS NOTICED THAT JIGNA SHAH HAD ADVANCE D RS. 50 LAC TO JIGEN SHAH IT(SS)A NOS. 391 TO 397/AHD/2011 . A.YS. 1999- 2000 TO 2005-06 3 BEFORE FEBRUARY 1996 AND IT WAS ALSO MENTIONED THAT INTEREST AT 12% HAS BEEN CHARGED BY JIGNA SHAH ON SUCH LOAN. A.O DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON THE BASIS OF SEIZED D OCUMENT CONCLUDED THAT JIGNA HAD ADVANCED RS. 50 LACS TO JIGEN SHAH IN CAS H BEFORE FEBRUARY 1996 WHICH RELATED TO HER INVESTMENT IN REAL ESTATE. HE ALSO NOTICED THAT ALL THE TRANSACTIONS WAS DONE IN CASH AND INTEREST WAS WORK ED OUT AT 12%. A.O NOTED THAT THAT IN REPLY TO THE QUERY RAISED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED BY THE ASSESSEE THAT NO INTEREST HAS BEEN CHARGED BY HER BUT THE SUBMISSION OF THE ASSESEE WA S NOT FOUND ACCEPTABLE TO THE A.O. HE THEREFORE CALCULATED INTEREST INCOME AT 12% ON THE OUTSTANDING LOAN AMOUNT AND WORKED OUT THE INTEREST INCOME AT RS. 5,79,000/- AND MADE ADDITION OF IT. AGGRIEVED BY TH E ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO DELETED TH E ADDITION BY HOLDING AS UNDER:- GROUND NO.2, WHICH IS ON THE ISSUE OF INTEREST HAVING ACTUALLY A CCRUED OR NOT IS BASED ON THE FOLLOWING DISPUTED INFERENCES MADE BY THE DEPAR TMENT ON THE BASIS OF THE DOCUMENT AND THE STATEMENT AS ABOVE ARE TABULATED BELOW: SI. NO. DISPUTED INFERENCES OF THE DEPARTMENT ASSESSEE'S CONTENTION ON DEPARTMENT'S INFERENCE 1 THE INTEREST AS COMPUTED IN THE DOCUMENT WAS ACTUALLY TO BE PAID AND HAS ACCRUED THE INTEREST WAS CALCULATED JUST TO SHOW HOW MUCH LOSS HAS BEEN INCURRED BY THE ASSESSEE BECAUSE OF DELAY AND NON FULFILLMENT OF THE PROMISES BY SHRI JIGEN SHAH. 2. THE ASSESSMENT ORDER IS SILENT ON WHETHER THE TRANSACTION REPRESENTED BY 40 LACS DEBITED TO HER IN MARCH 2000 WITH NARRATION 'PROPERTY GIVEN' HAD ACTUALLY TAKEN PLACE. THE ASSESSEE INSISTS THAT NO PROPERTY WAS TRANSFERRED ALTHOUGH OFFER WAS GIVEN. THE INTEREST HAS BEEN UNDOUBTEDLY COMPUTED @ 12% IN THE DOCUMENT SEIZED FROM THE THIRD PARTY. THE ASSESSEE SAYS THAT IT WAS COMP UTED TO SHOW THE LOSS WHICH HAS BEEN IT(SS)A NOS. 391 TO 397/AHD/2011 . A.YS. 1999- 2000 TO 2005-06 4 INCURRED BY HER ON THE INSTANCE OF THE MEDIATOR. TH E STATEMENT AND THE LETTER OF SHRI JIGEN SHAH ALSO CLEARLY INDICATES THE SAME, ALTHOUGH THE AO HAS READ SOMETHING ELSE INTO IT. THE RELEVANT PART OF THE LETTER AND STATEMENTS ARE REPRODUCED BELOW: 'Q.5: IN THE PAPER PREPARED BY YOU, YOU HAVE CALCUL ATED THE INTEREST AT THE RATE OF 12%. WHAT IS THE BASIS FOR TAKING THIS INTEREST RATE. ANS: I HAVE CALCULATED INTEREST RATE ON THE BASIS O F PREVAILING MARKET RATE I.E. 12% AND THIS WAS DONE ON THE REQUEST OF OUR MEDIATOR SHRI P RAVIN B KOTAK TO ARRIVE AT A FIGURE FOR TOTAL LOSS INCURRED BY HER.'- PG. 4, PARA.5 OF ASSTT. ORDER RELEVANT EXCERPTS FROM LETTER DATED 22/12/2006 (PAG E NO.2, PARA.4 OF OF ASSTT. ORDER) 'COLUMN NO.3- INTEREST IS ESTIMATED INTEREST WORKIN G @ 12% ON CAPITAL/INVESTMENT, WHICH IS COMPUTED BY HER TO SAY THAT SHE HAS LOOSED RS.24.23 LACS AS INTEREST.' THE ABOVE CLEARLY SHOW THAT INTEREST WAS CLAIMED T O BE CALCULATED ON THE REQUEST OF MEDIATOR. THEREFORE, IT COULD NOT HAVE BEEN DECI DED TO HAVE BEEN PAID WHEN THE AMOUNT WAS ORIGINALLY GIVEN. FURTHER, WHEN SHRI JIG EN SHAH SAYS THAT IT IS COMPUTED TO SHOW THAT SHE HAS LOST 24.23 LACS AS INTEREST, IT S HOWS NOTIONAL LOSS ONLY BECAUSE ACCORDING TO DOCUMENT SOME PART OF INTEREST HAS ALS O BEEN PAID (IF THE PROPERTY OF RS.40 LACS SHOWN GIVEN HAS ACTUALLY BEEN GIVEN). THIS DOC UMENT IS A THIRD PARTY DOCUMENT WHICH IS NEITHER IN THE HANDWRITING OF THE ASSESSEE NOR BEARS HER SIGNATURE. ITS INFERENCE HAS TO BE TAKEN AS STATED BY THE PERSON WHO POSSESS ED THE DOCUMENT. IF ANYTHING IS TO BE INFERRED CONTRARY TO IT, IT IS THE DEPARTMENT'S ONUS TO PROVE WHAT IT ALLEGE S. THE BEST WAY IN THIS CASE WAS TO PROVE THAT THE PROPERTY SHOWN T O BE GIVEN IN MARCH, 2000 HAS INDEED BEEN GIVEN. IN THAT CASE BECAUSE PART INTEREST WOUL D HAVE BEEN PAID THEREFORE, IT WAS THE CLINCHING EVIDENCE OF THE ACCRUAL OF INTEREST. THE ASSESSEE IN HER SUBMISSIONS REFUTES THAT ANY PROPERTY HAS BEEN TRANSFERRED. THE UNDATED LETT ER SEIZED SHOWS THAT TILL THE DATE OF WRITING OF THE LETTER NO PROPERTY HAS BEEN TRANSFER RED. SHRI JIGEN SHAH IN HIS STATEMENT HAS STATED THE FOLLOWING: '0.6: IN COLUMN 4 YOU HAVE SHOWN 40 LAC AS PROPERTY GIVEN. PI EXPLAIN THIS ENTRY? ANS: PROPERTY MENTIONED IS ALSO TODAY IN THE NAME O F MY COMPANY ANJDIP INVESTMENT P LTD. AS JIGNABEN B SHAH MENTIONED IN LETTER THAT HE R LOSSES WERE DUE TO ME, I OFFERED HER LIST OF MY PROPERTY IN RETURN FOR HER MONEY. SO THE Y CHOOSE THIS PARTICULAR PROPERTY BUT AS ON TODAY PROPERTY IS IN MV NAME.' IF THE PROPERTY HAS NOT BEEN TRANSFERRED THE CASE OF THE DEPARTMENT IS NOT PROVED. THE DEPARTMENT HAS NOT REFUTED THE CLAIM OF SHRI JI GEN SHAH. IT HAS NOT BEEN PROVED OR EVEN INDICATED THAT THIS OR SOME OTHER PROPERTY WAS INDEED TRANSFERRED. IT IS WORTHWHILE TO MENTION THAT SEARCH HAD TAKEN PLACE AND SHRI JIG EN SHAH COULD HAVE BEEN NAILED IF HE WAS THOUGHT TO BE MAKING A FALSE STATEMENT. FURTHER , IT APPEARS THAT THE AO HAS ACCEPTED THE STATEMENT AS IT HAS NEITHER BROUGHT HOUSE PROPE RTY INCOME TO TAX NOR CONSISTENT WITH THE ADDITION OF CASH PAYMENTS U/S.69A HE HAS MADE A NY ADDITION OF THIS PAYMENT IN KIND. FURTHER INTEREST ACCRUED HAS BEEN COMPUTED BY THE A O AS IF THE HOUSE WAS NOT TRANSFERRED (GIVEN). IN THESE CIRCUMSTANCES, THE IN FERENCE ON THE DOCUMENT AS GIVEN BY THE ASSESSEE AND THE PERSON FROM WHOM IT HAS BEEN RECOV ERED HAS TO BE TAKEN TO BE TRUE. THEREFORE, IT IS HELD THAT THE INTEREST WAS CALCULA TED TO INDICATE THE LOSS AND TO PRESS SETTLEMENT AND IS NOT PROVED TO BE ACTUALLY ACCRUED . THE ADDITIONS OF ACCRUED INTEREST ARE THEREFORE, DIRECTED TO BE DELETED. IT(SS)A NOS. 391 TO 397/AHD/2011 . A.YS. 1999- 2000 TO 2005-06 5 6. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), REV ENUE IS NOW IN APPEAL BEFORE US. 7. BEFORE US LD. D.R. RELIED ON THE ORDER OF A.O. 8. WE HAVE HEARD THE LD. D.R AND PERUSED THE MATERIAL ON RECORD. LD. CIT(A) WHILE DELETING THE ADDITION HAS GIVEN A FINDING THA T THE DOCUMENT FOUND AT THE TIME OF SEARCH IS A THIRD PARTY DOCUMENT WHICH IS NEITHER IN THE HANDWRITING OF THE ASSESSEE NOR BEARS HER SIGNATURE AND ITS INFERENCE HAS TO BE TAKEN AS STATED BY THE PERSON WHO POSSESSED THE DOCUMENT. HE HAS FURTHER OBSERVED THAT IF ANYTHING IS TO BE INFERRED CONTRAR Y TO WHAT IS STATED IN THE DOCUMENT IT IS DEPARTMENTS ONUS TO PROVE WHAT IT A LLEGES. BEFORE US, REVENUE HAS NOT BROUGHT ANY MATERIAL TO CONTROVERT THE FINDINGS OF LD. CIT(A) OR POINTED TO ANY FALLACY IN HIS OBSERVATION S. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDE R OF LD.CIT(A) AND THIS GROUND OF REVENUE IS DISMISSED. NOW WE TAKE UP IT(SS)A NOS. 392 TO 397/AHD/2011 FOR A.YS. 2000-01 TO 2005-06) 9. IN THE PRESENT CASES, IN VIEW OF THE LD. D.RS SUBM ISSION THAT THE FACTS AND CIRCUMSTANCES OF THE CASES ARE IDENTICAL TO THAT IN A.Y. 1999-2000, WE THEREFORE FOR THE REASONS STATED HEREINABOVE WHILE DECIDING THE APPEAL FOR A.Y. 1999-2000 IN IT(SS)A NO. 391/AHD/2011 (SUPRA) AND FOR SIMILAR REASONS DISMISS THE GROUND OF REVENUE IN ALL THE PR ESENT APPEALS. IT(SS)A NOS. 391 TO 397/AHD/2011 . A.YS. 1999- 2000 TO 2005-06 6 10. IN THE RESULT, ALL THE APPEALS OF REVENUE ARE DISMI SSED. ORDER PRONOUNCED IN OPEN COURT ON 10 - 06 - 2015. SD/- SD/- (SHAILENDRA KR. YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, AHMEDABAD