THE ACIT, Central CIR.1(2), V. SAVITABEN RAJNIBHAI DESAI,

ITSSA 409/AHD/2003

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9653 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 year(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 19-12-2012
• Assessment Year: misc
• Appeal Filed On: 01-12-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C PATWARI; SHANKARLAL MEENA
• Assessee Lawyers: G C PIPARA
• Keywords: Valuation report; Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER IT(SS)A NO.409/AHD/2003 A.Y.1991-92 TO 2000-01 THE ACIT, CIRCLE CIRCLE 1(2), AHMEDABAD. V/S. SAVITABEN RAJNIBHAI DESAI, 5-ASHOKNAGAR SOCIETY RADHANPUR ROAD, MEHSANA. PAN: AAWPD 8570G (APPELLANT) (RESPONDENT) IT(SS)A NO.410/AHD/2003 A.Y.1991-92 TO 2000-01 THE ACIT, CIRCLE CIRCLE 1(2), AHMEDABAD. V/S. ASHABEN RAJNIBHAI DESAI, 5-ASHOKNAGAR SOCIETY RADHANPUR ROAD, MEHSANA. PAN: AAWPD 3284D (APPELLANT) (RESPONDENT) IT(SS)A NO.411/AHD/2003 A.Y.1991-92 TO 2000-01 THE ACIT, CIRCLE CIRCLE 1(2), AHMEDABAD. V/S. ALKABEN RAMESH DESAI, 5-ASHOKNAGAR SOCIETY RADHANPUR ROAD, MEHSANA. PAN: AAWPD 3283E (APPELLANT) (RESPONDENT) REVENUE BY : SHRI D.C. PATWARI AND SHANKARLAL MEENA, D.R. ASSESSEE(S) BY : SHRI G.C. PIPARA, A.R. / DATE OF HEARING : 19/09/2013 / DATE OF PRONOUNCEMENT: 13/12/2013 IT(SS)A NO.409, 410 & 411/AHD/2003 ACIT CIRCLE AHMEDABAD VS. SAVITABEN, ASHABEN, ALKAB EN R. DESAI - 2 - / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THESE THREE APPEALS HAVE BEEN FILED BY THE REVENUE ARISING FROM THE ORDERS OF LEARNED CIT(A)-I AHMEDABAD IDENT ICAL DATED 26.09.2003. REVENUE HAS RAISED THE SAME GROUND FOR EACH ASSESSEE AS FOLLOWS: THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTI NG TO DELETE THE ADDITION OF RS.4,70,000/- MADE ON ACCOUNT OF THE UN DISCLOSED INCOME OF THE ASSESSEE. 2. FACTS IN BRIEF AS EMERGED FROM THE ORDER PASSED U/S.158 BC R.W.S. 158BD WERE THAT A SEARCH WAS CARRIED OUT U/S .132 ON 20 TH OF OCTOBER, 2000 ON THE GROUP OF MASTER GROUP. THERE WAS A DISCUSSION OF SEIZED DOCUMENT MARKED AS ANNEXURE A- 143 IN WHICH THERE WERE NAMES OF THE FAMILY MEMBERS OF SRI JIVRAJ V. DESAI AS UNDER: SR. NO. NAME PROPERTY DETAILS 1. ALKABEN RAMESHBHAI DESAI A-13 SAVITA PARK, ISANPUR 2. SAVITABEN RAJNIBHAI DESAI B-13 SAVI TA PARK, ISANPUR 3. ASHABEN RAJESHBHAI DESAI A-14 SAVITA PARK, ISANPUR 2.1. THEN THERE IS REFERENCE OF A VALUATION REPORT WHICH WAS IN RESPECT OF PROPERTY NO.B-13 SAVITA PARK. IT WAS MEN TIONED BY THE VALUER THAT THE PROPERTY WAS OF SMT. ASHABEN R. DES AI. LIKEWISE, IN RESPECT OF FLAT NO.A-13 THE VALUER HAS MENTIONED THE PROPERTY OF SMT. ALKABEN R. DESAI. THE VALUATION WAS MADE BY THE SAID VALUER IN RESPECT OF SAVITA PARK PROPERTY FOR WHICH A FEE BILL WAS RAISED BY THE VALUER. IN THIS REGARD, THE CONTENTIO N OF THE ASSESSEE WAS THAT THE IMPUGNED PROPERTY WAS NEVER PURCHASED BY THE ASSESSEE. THE SAID VALUATION WAS OBTAINED ONLY TO A VAIL THE BANK IT(SS)A NO.409, 410 & 411/AHD/2003 ACIT CIRCLE AHMEDABAD VS. SAVITABEN, ASHABEN, ALKAB EN R. DESAI - 3 - LOAN. IN SUPPORT A LETTER FROM THE SAID CO-OPERATIV E HOUSING SOCIETY HAS ALSO BEEN OBTAINED. HOWEVER, THE AO WAS NOT CONVINCED AND OPINED THAT THE SAID SOCIETY BEING MA INTAINED AND CONTROLLED BY JIVRAJ J. DESAI, THEREFORE, THE SAID LETTER WAS OBTAINED FROM THE BANK. IN THE OPINION OF AO, THE PROPERTY W AS PURCHASED BY THE MEMBERS OF THE FAMILY OF JIVRAJ J. DESAI AND THAT PROPERTY WAS SUBSEQUENTLY SOLD TO ONE SRI CHHAGAN KAKA. THE AO HAS REFERRED CERTAIN DOCUMENTS AS FOLLOWS: DURING SEARCH ACTION EVIDENCES REGARDING DISPOSAL OF THESE PROPERTIES AND OTHER BENAMI PROPERTIES OF THE ASSES SEE GROUP WERE FOUND. SPECIAL REFERENCE NEEDS TO BE MADE OF ANNEXU RE A-3, PAGE-18 SEIZED FROM THE RESIDENCE OF ARVIND SHAH, ACCOUNTAN T OF THE GROUP. THIS PAGE EVIDENCES THE SALE OF FLATS AND BASEMENTS IN SAVITA PARK. ISANPUR AHMEDABAD TO SHRI CHHAGANBHAI PATEL, RAPIP. AS PER THE TRANSACTIONS NOTED IN PAGE-18 A-3 THE TOTAL VALUE O F THESE FLATS IS RS.12115000. THIS PAPER IS SIGNED BY SHRI JIVRAJBHA I V. DESAI, SHRI R.J. DESAI AND SHRI KANUBHAI C. PATEL (ON BEHALF OF CHHAGAN KAKA). THE ABOVE MENTIONED 3 PROPERTIES ARE ALSO INCLUDED IN THE LIST OF PROPERTIES ON PAGE- ANNEXURE A-3. 2.2 THEN THE AO HAS ALSO REFERRED AN ENTRY IN THE S AID DIARY WHEREIN ON PAGE 6 THE ACCOUNT OF CHHAGAN KAKA IS MA INTAINED. THE SAID ACCOUNT WAS CREDITED BY A FIGURE OF RS.18, 85,000/- DATED 1.2.2000. THE NARRATION OF THE SAID NOTING ON THAT ACCOUNT WAS REPRODUCED BY THE AO. THE AO HAS THEN CONCLUDED THA T THIS EVIDENCES THAT TOTAL PAYMENT DUE TO SHRI CHHAGAN KA KA WAS OF RS.1,41,00,000/- OF WHICH RS.1,21,15,000/- WAS MADE BY WAY OF SALE OF FLATS IN SAVITA FLATS AND REMAINING AMOUNT OF RS.18.85 LACS WAS CREDITED IN HIS ACCOUNTS. 2.3. FINALLY, THE AO HAS COMPUTED THE ADDITION WHIC H WAS MADE ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE AS FOLLOWS: IT(SS)A NO.409, 410 & 411/AHD/2003 ACIT CIRCLE AHMEDABAD VS. SAVITABEN, ASHABEN, ALKAB EN R. DESAI - 4 - ON THE BASIS OF THE ABOVE EVIDENCES THE TOTAL SALE CONSIDERATION OF RS.1,21,15,000 RELATING TO THE PROPERTIES REFLECTED ON PAGE-18 OF ANNEXURE A-3 HAS BEEN SUBSTANTIVELY CONSIDERED AS U NDISCLOSED INCOME OF SHRI JIVRAJ V. DESAI IN THE BLOCK ASSESSM ENT ORDER U.S. 158 BC DT.31.10.2002 PASSED IN HIS CASE. HOWEVER, AS TH E PROPERTY B-13. SAVITA PARK. ISANPUR IS REFLECTED AS OWNED BY SMT S AVITA RAJNIBHAI DESAI IN ANNEXURE A-143, PAGE-14 THE SALE PROCEEDS OF THE SAME AS REFLECTED ON PAGE-18 OF ANNEXURE A-3 IS CONSIDERED AS UNDISCLOSED INCOME IN THE HANDS OF SMT. SAVITA RAJNI DESAI ON P ROTECTIVE BASIS. THE COMPUTATION OF THE SAME IS AS UNDER:- AREA OF THE FLAT AS PER A-3, PAGE-18 130 SQ. YDS. RATE PER SQ. YD. AS PER A-3, PAGE-18 RS.3500 P ER SQ. YD. SALE PROCEEDS RS.4,55,000 MAINTENANCE CHARGES AS PER A-3, PAGE 18 FOR 8 FLATS IN BLOCK A (130 SQ. YDS.) RS.1,20, 000 MAINTENANCE CHARGES OF FLAT B-13 RS.15,000 TOTAL SALE PROCEEDS OF FLAT B-13 RS,4,70,000 (ADDITION: RS.4,70,000) 3. BEING AGGRIEVED, THE MATTER WAS CARRIED BEFORE T HE FIRST APPELLATE AUTHORITY WHO HAS CONSIDERED THE ARGUMENT S AS WELL AS CERTAIN DOCUMENTS AND THEREAFTER ARRIVED AT THE CON CLUSION THAT IN THE ABSENCE OF DIRECT EVIDENCE, IN THE CASE OF THE ASSESSEE, THE SAME IS NOT TO BE TAXED BY INVOKING THE PROVISIONS OF SE CTION 158BD IN THE HANDS OF THE ASSESSEE. HOWEVER, HE HAS HELD THA T THE IMPUGNED AMOUNT COULD BE CONSIDERED IN THE HANDS OF SRI JIVR AJ V. DESAI. RELEVANT PORTION OF THE CIT(A) IS REPRODUCED BELOW: FROM THE SECTION, IT IS APPARENT THAT THE ASSESSING OFFICER OF SHRI JIVRAJBHAI V. DESAI SHOULD HAVE BEEN SATISFIED THAT UNDISCLOSED INCOME BELONGED TO THE APPELLANT THEN ONLY ACTION U /S.158BD COULD HAVE BEEN TAKEN AND ONCE THE ASSESSING OFFICER MADE SUBSTANTIVE ADDITION IN THE HANDS OF SHRI JIVRAJBHAI V. DESAI, THERE COULD BE NO SITUATION IN WHICH THERE COULD BE SATISFACTION THAT THE INCOME BELONGED TO SOMEONE ELSE. IT IS THUS, APPARENT THAT WHILE FR AMING AN ORDER U/S.158BD OF THE ACT, NO PROTECTIVE ADDITION CAN BE MADE AS IT WOULD BE BEYOND THE SCOPE OF SECTION 158BD OF THE ACT WHI CH REQUIRES THE SATISFACTION THAT IT BELONGS TO A PARTICULAR PERSON . AS ASSESSING OFFICER IT(SS)A NO.409, 410 & 411/AHD/2003 ACIT CIRCLE AHMEDABAD VS. SAVITABEN, ASHABEN, ALKAB EN R. DESAI - 5 - OF SHRI JIVRAJBHAI V. DESAI HAS ALREADY MADE SUBSTA NTIVE ADDITION IN HIS CASE AND THE APPELLANT HAS ALSO DENIED THAT PRO PERTY BELONGS TO HER, NO PROTECTIVE ADDITION IS PERMISSIBLE IN HER H ANDS AND IT CAN ONLY BE CONSIDERED IN THE HANDS OF SHRI JIVRAMBHAI V. DE SAI IF THE SITUATION SO DEMANDS. 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE CONSIDERED OPINION THAT AS FAR AS THESE THREE A PPEALS ARE CONCERNED, SINCE THERE WAS NO DIRECT EVIDENCE THROU GH WHICH IT COULD BE ESTABLISHED THAT THESE THREE PERSONS HAVE ACTUALLY INVESTED THE AMOUNT IN THE PROPERTY KNOWN AS SAVITA PARK, TH EREFORE, THE PROTECTIVE ADDITION MADE WAS NOT JUSTIFIABLE. ACCOR DING TO US, LEARNED CIT(A) HAS RIGHTLY MADE AN OBSERVATION THAT THE IMPUGNED ADDITION COULD BE CONSIDERED ONLY IN THE CASE OF JI VRAJ V. DESAI. THIS REASONING OF THE LEARNED CIT(A) APPEARS TO BE FACTUALLY CORRECT BECAUSE THE SUBSTANTIVE ADDITION WAS MADE I N THE HANDS OF JIVRAJ V. DESAI AND IN THAT CASE THE NATURE OF SOUR CE OF INVESTMENT WAS REQUIRED TO BE CONSIDERED. AS FAR AS THESE THRE E APPEALS ARE CONCERNED, THE ADDITION BEING PROTECTIVE IN NATURE WHILE FRAMING THE BLOCK ASSESSMENT, WE HEREBY HOLD THAT THE SAME WAS RIGHTLY DELETED FROM THE HANDS OF THESE THREE PERSONS. RESU LTANTLY, WE HEREBY CONFIRM THE VIEW OF LEARNED CIT(A). GROUNDS RAISED BY THE REVENUE ARE REJECTED. 5. IN THE RESULT, ALL THE THREE APPEALS OF THE REVE NUE ARE DISMISSED. SD/- SD/- (T.R. MEENA) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 13 /12/2013 PRABHAT KR. KESARWANI, SR. P.S. TRUE COPY IT(SS)A NO.409, 410 & 411/AHD/2003 ACIT CIRCLE AHMEDABAD VS. SAVITABEN, ASHABEN, ALKAB EN R. DESAI - 6 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD