Shri Sagar Dhirajlal Sanghvi, Ahmedabad V. The Dy.CIT, Central Circle-2(4), Ahmedabad

ITSSA 44/AHD/2015

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0804 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 21-10-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 19-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Keywords: Unexplained investment; Loose papers
• Section: 73; 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) IT(SS)A. NO: 44/AHD/2015 (ASSESSMENT YEAR: 2011-12) SAGAR DHIRAJLAL SANGHVI A/13, THIRTHBHOOMI APARTMENT NR. LAW GARDEN, ELLISBRIDGE, AHMEDABAD-380006 PAN NO. BTAPS0001H V/S DCIT CENTRAL CIRCLE-2(4), AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIJAY RANJAN WITH MS. IRA KAPOOR , AR RESPONDENT BY : SHRI O.P. SHARMA, CIT/ D.R. ( )/ ORDER DATE OF HEARING : 23 -10-201 9 DATE OF PRONOUNCEMENT : 17 -12-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-12, AHMEDABAD DATED 24.12.2014 PERTAINING TO A.Y. 2011-12 AND ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: IT(SS)A NO. 44 /AHD/2015 . A.Y. 2011- 12 2 1. ON LAW AND IN FACTS AND CIRCUMSTANCES OF THE APP ELLANT'S CASE, THE LD. CIT(A) HAS ERRED IN UPHOLDING ADDITION OF RS 25,00,000 TOW ARDS UNEXPLAINED INVESTMENT IN PROPERTY WHEN NO SUCH ADDITION IS CALLED FOR. 1.1 ON LAW AND IN FACTS AND CIRCUMSTANCES OF THE AP PELLANT'S CASE, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT ALLEGED CASH PAYMENT OF RS 25,00,000 WAS APPLICATION OF UNDISCLOSED INCOME OF RS 10,66,82,59 0/~ MADE BY APPELLANT'S FATHER IN CURRENT ASSESSMENT YEAR HENCE NO SEPARATE ADDITION IS CALLED FOR IN THE HANDS OF APPELLANT. 2 ON LAW AND IN FACTS AND CIRCUMSTANCES OF TH E APPELLANT'S CASE, THE LD. CIT(A) HAS ERRED IN UPHOLDING ADDITION OF RS. 2,00,OOO/- F OR LOAN TAKEN UNDER SECTION 68 OF THE ACT WHEN NO SUCH ADDITION IS CALLED FOR. 2. FACTS OF THE CASE APPELLANT HAD PURCHASED A PROPERT Y AT DEVARSHI CO-OPERATIVE HOUSING SOCIETY LIMITED FROM RAJESHKUMAR B. GOHIL F OR DOCUMENTED PRICE OF RS. 8 LACS. DURING THE COURSE OF SEARCH ACTION AT T HE RESIDENTIAL PREMISES OF DHIRAJLAL V. SANGHVI(FATHER OF APPELLANT), A BANAKH AT INVENTORISED AS ANNEXURE - A/10 WAS SEIZED BY THE DEPARTMENT WHICH SUGGESTED T HE CONSIDERATION OF THE PROPERTY WAS AT RS. 33 LACS. THE ASSESSING OFFICER HAS MADE ADDITION OF RS 25,00,000 IN THE HANDS OF APPELLANT ON THE GROUND T HAT DIFFERENCE BETWEEN PRICE MENTIONED IN BANAKHAT AND MENTIONED IN DOCUME NTED PRICE REPRESENT UNEXPLAINED.INVESTMENT IN PROPERTY BY APPELLANT. TH E ADDITION MADE BY ASSESSING OFFICER WAS CONFIRMED BY LEARNED CIT(A) M AINLY ON THE GROUND THAT AS CHEQUE PROPORTION FOR PURCHASE OF PROPERTY WAS P AID BY APPELLANT, APPELLANT'S ARGUMENT THAT CASH PORTION IS PAID BY A PPELLANT'S FATHER MR DHIRAJLAL V SANGHVI CANNOT BE ACCEPTED. HE ALSO REJECTED THE APPELLANT'S EXPLANATION THAT AFORESAID CASH PAYMENT WAS PAID OUT OF DISCLOSURE O F RS 10,66,82,590/- MADE BY APPELLANT'S FATHER IN RETURN OF INCOME OF YEAR U NDER CONSIDERATION. IT(SS)A NO. 44 /AHD/2015 . A.Y. 2011- 12 3 3. IN THIS CONNECTION, APPELLANT SUBMITS WHILE UPHOLDI NG THE ADDITION THE LEARNED CIT(A) HAS FAILED TO APPRECIATE INTER ALIA : (I) THAT APPELLANT HAD PURCHASED THE FLAT AT D EVARSHI CO-OPERATIVE HOUSING SOCIETY (BIJAL APARTMENT) AFTER TAKING LOAN OF RS 8 .50 LACS FROM ANTALA REAL BROKING & IMPEX PRIVATE LIMITED AS NO OWN FUNDS WER E AVAILABLE WITH THE HIM FOR PURCHASING THE SAID FLAT. THOUGH CHEQUE PAYMENT WAS MADE BY APPELLANT, IT WAS OUT OF BORROWED FUNDS HENCE THERE IS NO REASON FOR NOT ACCEPTING APPELLANT'S PLEA THAT HENCE CASH PORTION WAS PAID B Y APPELLANT'S FATHER BEING HEAD OF FAMILY. (II) THAT APPELLANT'S FATHER IN HIS STATEMENT R ECORDED U/S 132(4) OF THE ACT ON 10/03/2011 HAS CATEGORICALLY STATED THAT THE CASH T RANSACTIONS OF MEMBERS AND PERSONS ASSOCIATED WITH THE =GROUP ARE DONE B Y HIM. !HE RELEVANT EXTRACT OF THE SAME IS REPRODUCED HERE UNDER FOR YO UR READY REFERENCE STATEMENT U/S. 1 32(4)131/133A STATEMENT ON OATH OF SHRI/SMUKU. DHIRA JLAL V. SANGRTVI SON/DAUGHTER/WIFE OF VAGHJIBHAL SHIVJIBHAI SANGHVI ON 10/03/2011 AT 11.00 A .M/ P.RN AT A-14, TIRTHBHUNI APPARTMENT LAW GAR DEN,ASBAD Q.4 WHAT IS YOUR ROLE/CONTRIBUTION IN YOUR AND YOUR FAMILY MEMBER'S TRADE/BUSINESS/OCCUPATION AND FINANCIAL ACTIVITIES? A.4 IN ANSWER TO THE ABOVE QUESTION I STATE THAT BE ING THE ELDEST PERSON IN THE FAMILY, I SUPPORT/ UNDERTAKE IN AIL THE TYPES OF TR ADE/BUSINESS/OCCUPATION AND FINANCIAL ACTIVITIES CARRIED ON BY MY SONS, SON'S W IVES AND MY WIFE. I ALONG WITH MY FAMILY LIVE TOGETHER IN HUF, I CARRY OUT FINANCI AL ACTIVITIES BUSINESS/OCCUPATION BY MY SELF. IT(SS)A NO. 44 /AHD/2015 . A.Y. 2011- 12 4 III) MR. DHIRAJLAI V. SANGHVI DURING THE COURSE OF RECORDING OF THE STATEMENT UNDER SECTION 131 ON OATH ON 26TH MAY, 2011 ADMITTE D RS. 25 LACS AS UNACCOUNTED INVESTMENT ON BEHALF OF THE ASSESSEE. T HE EXTRACT FROM THE RELEVANT QUESTION/ANSWER IS REPRODUCED HEREUNDER: Q-19: I AM SHOWING YOU MATERIALS COMPRISING PAPERS, DIAR IES, LOOSE PAPER FILE, ETC., SEIZED AND IMPOUNDED FROM YOUR RESIDENCE AND BUSINESS PLACES. PLEASE EXPLAIN THE CONTENTS OF THE PAGES OF THE SEIZED MAT ERIAL, IT IS ALSO SEEN THAT SOME PAGES PERTAIN TO EXPENSES MADE ON JEWELLERY PURCHAS E, VEHICLES, FINANCIAL TRANSACTIONS, ETC. YOU ARE ALSO REQUESTED TO EXPLAI N THE SOURCES AND ALSO WHETHER THEY ARE REFLECTED IN THE BOOKS OF ACCOUNT IN RESPECT OF EXPENSES AND FINANCIAL TRANSACTIONS APPEARING IN THE SEIZED AND IMPOUNDED MATERIAL. A-19: A-19 PARTY NO. ANNEXURE PAGE NO. EXPLANATION .. .. .. S-2 A/12 69 TO 73 COPY OF BANAKHAT AGREEMENT OF PROPERTY TP SCHEME NO. 3/5, FINAL PLOT NO. 682, DEVARSHI CO-OP. HOUSING SOCIETY LIMITED, FLAT NO. G-1, TOTAL AREA 90 SQ.YARD. AS PER BANAKHAT WAS PURCHASED BY SAGAR D. SANGHVI FROM RAJESH BAIWANTBHAI GOHIL FOR RS. 33 !ACS. HOWEVER, IN THE REGISTERED PURCHASE DEED IT(SS)A NO. 44 /AHD/2015 . A.Y. 2011- 12 5 THE PRICE HAS BEEN SHOWN AS R S. 8 LAC. I, THEREFORE, ADMIT RS. 25 LAC AS UNACCOUNTED INVESTMENT ON BHELF OF SAGRD. SANDHVI IV) THAT APPELLANT'S FATHER HAS DISCLOSED ADDITIONA L INCOME OF RS 10,66,82,590 IN HIS RETURN OF INCOME AND DURING THE COURSE OF ASSES SMENT PROCEEDINGS, A DETAILED CASH FLOW STATEMENT WAS ALSO SUBMITTED WHI CH INCLUDES ENTIRE UNACCOUNTED CASH TRANSACTIONS CARRIED OUT BY HIM FO R ENTIRE FAMILY MEMBERS WHICH INCLUDES CASH PAYMENT MADE FOR PURCHASE OF FL AT IN THE NAME OF APPELLANT, IT IS SUBMITTED THAT SHRI DHIRAJLAL SANG HVI CALCULATED HIS UNDISCLOSED INCOME AS TOTAL OF RECEIPTS INFLOW, DIFFERENCE OF T OTAL PAYMENTS AND TOTAL RECEIPTS, I.E. PEAK OF CASH FLOW STATEMENT. THE ID. A.O. DENIED THE BENEFIT OF TELESCOPING TO SHRI DHIRAJLAL SANGHVI FOR THE AFORE SAID PAYMENT ON THE GROUND THAT THE AFORESAID PROPERTY WAS PURCHASED IN THE NA ME OF HIS SON (APPELLANT) AND THEREFORE PAYMENT REFLECTED BY SHRI DHIRAJLAL S ANGHVI WAS NOT ACCEPTABLE AS APPLICATION OF HIS RECEIPTS. 4. BUT LD. A.O. WAS NOT AGREE WITH THE CONTENTION OF T HE ASSESSEE AND MADE ADDITION OF RS. 25,00,000/-. 5. THEREAFTER ASSESSEE PREFERRED FIRST STATUTORY APPEA L BEFORE THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE A.O. IT(SS)A NO. 44 /AHD/2015 . A.Y. 2011- 12 6 6. NOW ASSESSEE HAS COME BEFORE US BY WAY OF SECOND AP PEAL. 7. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER. IN THIS CASE, SEARCH AND SURVEY ACTION CARRIED OUT AT RESIDENTIAL AND BUSINESS PREMISES IN CASEOF DHIRAJLAL V. SANDHVI & GOUP, THE DEPARTMENTA L AUTHORITIES FOUND AND SEIZED CERTAINLOOSE PAPERS, NOTING, JOTTINGS ETC. A T PAGE NO. 7 INVENTORISED AT A/30 THERE ARE HAND WRITTEN DATE WISE ENTRIES OF MO NEY GIVEN TO MR. G.K. PATEL TOTALING TO RS.25 LACS FOR PURCHASE OF BUNGALOW IN VASANT VIHAR CO-OPERATIVE HOUSING SOCIETY IN THE NAME OF THE ASSESSEE. THIS M ONEY WAS PAID OUT OF RS. 106682590/- DECLARED BY HIS FATHER DURING SEARCH AN D SURVEY. IT IS PERTINENT TO MENTION HERE THAT TAXES HAVE BEEN PAID ON THE SAID AMOUNT AND CASH FLOW STATEMENT WAS ALSO SUBMITTED BEFORE THE LOWER AUTHO RITIES. 8. IN SUPPORT OF ITS CONTENTION, ASSESSEE SUBMITTED AN ORDER OF CO-ORDINATE BENCH IN IT(SS)A NO. 302/303 AND C.O. NO. 267 & 268/AHD/2 014 WHEREIN APPEAL OF THE DEPARTMENT WAS DISMISSED AND RELIEF WAS GRAN TED TO HIS FATHER. 9. IN OUR CONSIDERED OPINION, ASSESSEE HAS SUBMITTED A LL THE DETAILS SUCH AS SOURCE OF PAYMENT MADE FOR THE PURCHASE OF THE PROPERTY. S O IN THESE CIRCUMSTANCES, WE FIND IT APPROPRIATE TO GIVE RELIEF TO THE ASSESS EE AND ALLOW THIS GROUND OF APPEAL. 10. NOW WE COME TO GROUND NO. 2 RELATING TO THAT LD. CI T(A) HAS ERRED IN UPHOLDING ADDITION OF RS. 2,00,000/- LOAN TAKEN FRO M SHRI BABUBHAI DESAI. BEFORE THE LOWER AUTHORITIES NO DETAILS WERE SUBMIT TED BY THE ASSESSEE AND EVEN BEFORE US, LD. A.R. COULD NOT FURNISH ANY DETAILS P ERTAINING TO UNSECURED LOAN. THEREFORE IN THE ABSENCE OF DETAILS TO SUBSTANTIATE THE CLAIM BY THE ASSESSEE, WE ARE NOT INCLINED TO INTERFERE IN THE FINDING OF LD. CIT(A). IT(SS)A NO. 44 /AHD/2015 . A.Y. 2011- 12 7 11. THUS, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISM ISSED. 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED ORDER PRONOUNCED IN OPEN COURT ON 17- 12- 2019 SD/- SD/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 17/12/2019 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,AHME DABAD