The ACIT, Central Circle-2, Baroda V. Shri Yogesh Shantilal Shah, Godhra

ITSSA 48/AHD/2005

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7764 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-02-2012
• Assessment Year: misc
• Appeal Filed On: 03-03-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Keywords: Document seized; Block assessment; Onus to prove; Documents seized
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH BEFORE SHRI G.C.GUPTA, VICE-PRESIDENT (AZ) AND SHRI B.P. JAIN, ACCOUNTANT MEMBER IT(SS)A NO.48/AHD/2005 BLOCK PERIOD FROM: 1/4/90 TO 30/11/00 ASSTT. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, BARODA / V/S . SHRI YOGESH SHANTILAL SHAH GEETANNAGAR SOCIETY, BAMORLI ROAD, GODHRA PAN NO.AIPPS8551F / APPELLANT .. / RESPONDENT / APPELLANT BY SHRI S.K. GUPTA, CIT-DR /RESPONDENT BY SHRI MILIN MEHTA, AR / DATE OF HEARING 13-02-2012 / DATE OF PRONOUNCEMENT 17-02-2012 !' !' !' !' / // / ORDER PER B.P. JAIN, ACCOUNTANT MEMBER:- THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F LD. COMMISSIONER OF INC-TAX (APPEALS)-IV, AHMEDABAD DATED 29-11-2004 FOR THE BLOCK PERIOD FROM 01-04-1990 TO 30-11-2000. THE REVENUE HAS RAIS ED THE REVISED GROUNDS OF APPEAL:- 1. IN THE LAW AND ON THE FACTS OF THE CASE, THE LD . C.I.T.(A) ERRED IN: (1) ALLOWING THE DISALLOWANCES MADE BY THE ASSESSIN G OFFICER TO THE TDUNE OF RS.69,20,589/-, WHEREIN NOT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE, THEREBY: (A) WRONGLY ACCEPTING THE SOURCES OF FUNDS OF RS.5, 76,000/- BEING ON ACCOUNT OF ALLEGED SALE CONSIDERATION, AVOIDING VAR IOUS DISCREPANCIES AND INACCURACIES FOUND IN THE SUBSEQU ENT SUBMISSIONS, WHICH DOES NOT MATCH WITH THE SEIZED P APERS; ITA NO.1050/AHD/2005 A.Y. 1990-91 ACIT CIR-4, ABD V. GHCL LTD. PAGE 2 (B) OVERLOOKING THE VARIOUS DISCREPANCIES FOUND DUR ING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS REGARDING SOURCE OF FU ND TO THE EXTENT OF RS.17,72,289/- AS UNDER: (I) CONTRADICTION IN THE NAMES OF THE PERSONS MENTI ONED IN THE SEIZED DOCUMENTS AND THAT FOUND ON THE ASSESSEES R ECORD TO THE EXTENT OF RS.12,60,000/- (II) NO SPECIFIC DATE OF TRANSACTION MENTIONED ON R ECORD, FOR THE RECEIPT OF RS.5,12,289/-; ACCEPTING THE SOURCE OF INVESTMENTS TO THE EXTENT OF RS.45,72,000//- INSPITE OF THE FACT THAT DURING THE COURSE OF SEARC H, NO EVIDENCE ARE FOUND IN THE SEIZED PAPER TO WARRANT SUCH PRESUMPTI ON. (2) NOT APPRECIATING THE FACT THAT THE DISALLOWANCE S MADE WERE IN ABSENCE OF PROPER DETAILS PRODUCED BY THE ASSESSEE IN SUPPORT OF THE GENUINENESS OF THE SOURCE OF INVESTMENT. THE ASSESS ING OFFICER HAS RIGHTLY COMPUTED THE UNDISCLOSED INCOME IN VIEW OF THE SECTION 158BB(2) OF THE I.T. AC 1961, WHICH CLEARLY LAYS DO WN THAT PROVISIONS OF SECTION 68, 69, 69A, 69B & 69C SO FAR AS MAY BE , SHALL APPLY IN COMPUTING THE UNDISCLOSED INCOME OF THE I.T. ACT. 2. ON THE FACTS AND INN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 3. THE APPELLANT CRAVES TO ADD TO, AMEND OR ALTER T HE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. 2. AS REGARDS GROUND NO.1 (A), THE BRIEF FACTS ARE THAT THE ASSESSING OFFICER MADE AN ADDITION OF RS.5,76,300/- SINCE THE ASSESSEE COULD NOT EXPLAIN THE SOURCE ON ACCOUNT OF SALE CONSIDERATION FOUND WITH RESPECT TO VARIOUS PROPERTIES IN THE SEIZED ANNEXURES. 3. LD. CIT(A) DELETED THE SAME AFTER OBTAINING THE REMAND REPORT FROM THE ASSESSING OFFICER AND CONSIDERING THE EXPLANATION O F THE ASSESSEE. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AS REGARDS RS.86,000/-, THE EXPLANATION OF THE ASSE SSEE WAS THAT THE ASSESSEE HAD RECEIVED THIS AMOUNT ON SALE OF LAND B EARING R.S. NO.44/19. ITA NO.1050/AHD/2005 A.Y. 1990-91 ACIT CIR-4, ABD V. GHCL LTD. PAGE 3 THE REGISTERED SALE DEED WAS EXECUTED IN FAVOUR OF THE BUYER BEFORE THE DATE OF SEARCH. THE ASSESSING OFFICER HAS MENTIONED THAT NO DOCUMENTS WERE SEIZED WITH REGARD TO AMOUNT OF RS.86,000/- AND THE REFORE THE ASSESSEE COULD NOT BE GIVEN CREDIT OF THE SAME. THE ASSESSEE SUBMI TTED THE TOTAL PURCHASE OF THIS LAND IS REFLECTED IN ANNEXURE-A/4 PAGE NO. 5 AND A/124 REPRESENTS SALE OF PLOT TO SHRI BADGIBHAI PARGI. SINCE THE TOTAL LAND PURCHASED IS REFLECTED IN THE SEIZED MATERIAL, THE ASSESSEE IS REQUIRED TO CONSID ER TOTAL SALE PROCEEDS AT THE TIME OF COMPUTING UNDISCLOSED INCOME FOR THE BL OCK PERIOD. THE ASSESSEE HAS DECLARED CAPITAL GAINS OF RS.5,308 WHICH IS DIS CLOSED IN THE RETURN OF INCOME FOR THE BLOCK PERIOD AND THEREFORE THE ASSES SEE IS REQUIRED TO INCLUDE THE SALE PROCEEDS IN BLOCK PERIOD OF BOOKS. SINCE T HE SALE IS PROVED BY A DULY EXECUTED REGISTERED SALE DEED, THERE IS NO REASON W HY THE SAME BE NOT CONSIDERED FOR CASH IN FLOWS, COPY OF THE SALE DEED S WERE ENCLOSED IN PAPER BOOK. AS REGARDS BALANCE AMOUNT, THE EXPLANATION OF THE ASSESSEE WAS THAT THE BANAKHAT FOR PURCHASE OF THE LAND IS AVAILABLE IN THE SEIZED MATERIAL MARKED AS ANNEXURE-A-1/22. THIS LAND WAS NOT TRANSF ERRED IN THE NAME OF THE ASSESSEE AND THE SELLER HAD DIRECTLY EXECUTED THE S ALE DOCUMENT IN THE NAME OF THE BUYER. SINCE THE ASSESSEE HAD PURCHASED THE LAND AND HAD SOLD IT AND INCLUDED THIS AMOUNT IN THE BLOCK RETURN BOOKS, COP Y OF BANAKHAT WERE ENCLOSED IN THE PAPER BOOK. 5. FROM THE EXPLANATION OF THE ASSESSEE, IT IS CLEA R THAT THE ASSESSEE HAS ALREADY DECLARED THE INVESTMENT WHICH IS PROVED BY DULY EXECUTED DEEDS AND CONFORMATIONS BY THE RESPECTIVE PERSONS. ALL THESE DOCUMENTS WERE AVAILABLE BEFORE THE ASSESSING OFFICER. THE OBJECTION MADE BY LD. CIT-DR THAT THESE DOCUMENTS WERE NOT AVAILABLE BEFORE THE AO CANNOT B E ACCEPTED. THEREFORE IN THE CIRCUMSTANCES AND FACTS OF THE CASE, WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A). THUS, GROUND NO.1(A) OF THE REVENUE IS DISM ISSED. 6. AS REGARDS GROUND NO.1(B), THE BRIEF FACTS ARE T HAT THERE ARE TWO PARTS, WHERE THE ASSESSING OFFICER MADE THE ADDITIONS. TH E FIRST PART COMPRISING OF ITA NO.1050/AHD/2005 A.Y. 1990-91 ACIT CIR-4, ABD V. GHCL LTD. PAGE 4 RS.12.60 LAKH WAS NOT ACCEPTED AS VALID SOURCE BY T HE AO ON THE GROUND THAT THE SEIZED RECORDS MENTIONED IN THE NAME OF ONE PER SON, WHEREAS THE ASSESSEE DURING THE COURSE OF SEARCH PROCEEDINGS AN D BLOCK PERIOD ASSESSMENT CONTENDED THAT THE MONEY IS ACTUALLY REC EIVED FROM SOME OTHER PERSON. FOR BALANCE SUM OF RS.5,12,289/-, THE AO CO NTENDED THAT EXACT DATES WERE NOT MENTIONED IN THE SEIZED DOCUMENTS AND THER EFORE THE SAME CANNOT BE ACCEPTED AS VALID SOURCE. 7. THE LD. CIT(A) DELETED THE SAME BY ACCEPTING THE EXPLANATION OF THE ASSESSEE AS PER PARA-9.5 [(A) & (B)] OF HIS ORDER. THE EXPLANATION OF THE ASSESSEE IS THAT THE ASSESSING OFFICER HAS ACCEPTED THE FACT THAT THE TRANSACTIONS WERE REFLECTED IN THE SEIZED RECORDS. IT WAS ONLY THE NAMES WHICH ARE DIFFERENT. IT SO HAPPENED THAT THE CONCERNED CU STOMER IS STAYING OUTSIDE GODHRA AND THEREFORE HE DOES THE DEALING THROUGH HI S REPRESENTATIVE. THERE ARE ALSO CASES WHERE A RELATIVE OR FRIEND IS ACTING FOR OTHERS. IN ALL SUCH CASES, A SYSTEM OF RECORDING THE NAMES OF PERSONS DEALING WITH THE ASSESSEE. THE NAMES OF THE PERSONS IN THE SEIZED MATERIALS OF THE PERSON WHO HAD HANDED OVER THE MONEY TO THE ASSESSEE IN THEIR REPRESENTAT IVE CAPACITY WERE SUBMITTED. THE ASSESSEE HAD IDENTIFIED EACH AND EVE RY PERSON AND HAS RECORDED THE NAME OF THE RESPECTIVE PERSONS FROM WH OM THE MONEY WAS RECEIVED. THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT PROPERLY APPRECIATED THE FACTS RELEVANT TO THE ASSESSEE. IT IS ALSO RELEVANT TO MENTION THAT CONFIRMATIONS OF EACH AND EVERY PERSON WERE SU BMITTED TO THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS. THEREFORE THE CLAIM OF THE ASSESSEE IS ALSO SUPPORTED BY CONFIRMATIONS OF RESPECTIVE PERSONS. T HE ASSESSEE HAD SUBMITTED THE DETAILED CHART IN SUPPORT OF HIS EXPL ANATION WHICH IS AVAILABLE AT PAGE-42 OF LD. CIT(A)S ORDER. 8. THE EXPLANATION OF THE ASSESSEE WAS AVAILABLE BE FORE THE ASSESSING OFFICER AND THE SAME CANNOT BE DENIED. BUT MENTION OF RS.12.60 LAKH WAS THERE IN THE SEIZED DOCUMENTS AS FAR AS THE RECEIPT OF THE AMOUNT IS ITA NO.1050/AHD/2005 A.Y. 1990-91 ACIT CIR-4, ABD V. GHCL LTD. PAGE 5 CONCERNED. THE SEIZED DOCUMENTS CLEARLY SHOWED THE MONIES RECEIVED AS ADVANCE FOR LAND ONLY. IN THE SEIZED RECORDS, THE N AME OF THE PERSON WHO GENERALLY DEALS WITH THE ASSESSEE IS NOTED FOR THE REFERENCE PURPOSE THOUGH ACTUALLY ADVANCE MAY BELONG TO SOME OTHER PERSON. T HE ASSESSEE HAS SUBMITTED THE SAID EXPLANATION AND NO DEFECT IN THE SAME HAS BEEN POINT OUT. WITH RESPECT TO SECOND OBJECTION, THE ASSESSEE MENT IONED THAT SINCE FACTUALLY IT WAS NOTICED THAT THE MONIES RECEIVED WERE MENTIO NED IN THE SEIZED DOCUMENTS. IT CLEARLY SHOWS THAT THE MONIES WERE R ECEIVED PRIOR TO THE DATE OF SEARCH. SINCE THE MONIES WERE RECEIVED PRIOR TO THE DATE OF SEARCH, AND THE AO HAS WORKED OUT THE TOTAL ASSETS IN ASSESSEES PO SSESSION AS ON THE DATE OF SEARCH. ALL THE FUNDS AVAILABLE PRIOR TO THE DAT E OF SEARCH ARE TO BE TAKEN INTO CONSIDERATION. THEREFORE IN THE CIRCUMSTANCES AND FACTS OF THE CASE WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A). 9. AS REGARDS GROUND NO.1 OF THE REVENUE, THE BRIE F FACTS ARE THAT THERE WERE CERTAIN DOCUMENTS SHOWING THE MONIES RECEIVED FROM VARIOUS PERSONS FOR SALE OF PLOTS OF LAND WERE NOT REFLECTED IN THE SEIZED DOCUMENTS AS THE AGREEMENT TO SALE IN RESPECT OF THESE PROPERTIES WE RE LYING WITH PARTNER OF THE ASSESSEE. THE ASSESSEE TOOK CREDIT FOR AGGREGATE SU M OF RS.45.72 LAKH ON ACCOUNT OF SUMS RECEIVED ON THIS COUNT. THE ASSESSI NG OFFICER OBSERVED THAT THERE WERE NO SEIZED DOCUMENTS IN RESPECT OF THESE ITEMS, NO CREDIT FOR THE SAID SUMS BE GIVEN TO THE ASSESSEE. THE AO THEREFOR E SUMMARILY REJECTED THE CONTENTION OF THE ASSESSEE ON THIS ISSUE. THE AO AC CORDINGLY MADE THE ADDITION OF RS.45.72 LAKH. 10. THE LD. CIT(A) AFTER TAKING THE REMAND REPORT A ND CONSIDERING THE EXPLANATION OF THE ASSESSEE DELETED THE ADDITION MA DE BY THE AO VIDE PARA 9.6 OF HIS ORDER. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE EXPLANATION OF THE ASSESSEE WAS THAT ALL THE TR ANSACTIONS WERE SUPPORTED ITA NO.1050/AHD/2005 A.Y. 1990-91 ACIT CIR-4, ABD V. GHCL LTD. PAGE 6 BY DULY EXECUTED BANAKHATS AND BANAKHATA WERE PRODU CED BEFORE THE ASSESSING OFFICER AND ALSO THE SPECIAL AUDITORS AND NO FAULT THEREIN WAS FOUND. ALL THE PERSONS WHO HAVE GIVEN ADVANCES HAVE GIVEN CONFIRMATIONS FOR HAVING GIVEN THE ADVANCE. THE SAID CONFIRMATIONS CONTAIN N AMES, ADDRESSES, OCCUPATION OF THE PURCHASER, DETAILS OF THE PLOT FO R WHICH ADVANCE WAS GIVEN AND ALSO THE DATE AND MODE OF GIVING ADVANCES. THE ASSESSEE HAS TIME AND AGAIN OFFERED TO PRODUCE THESE PERSONS AT VARIOUS S TAGES BUT THE AO HAS BY HIS OWN CHOICE NOT EXAMINED THEM. ALL THE PLOTS FOR WHICH THE ADVANCES ARE RECEIVED ARE THE PLOTS OF THE LAND WHICH IS PURCHAS ED BY THE ASSESSEE AND INVESTMENT THERE IS REFLECTED. SINCE THE ASSESSEE C ARRIED OUT LAND INVESTMENT IN PARTNERSHIP THE DOCUMENT IN RELATION TO BANAKHAT ETC., WERE LYING WITH ITS PARTNERS AND THEREFORE NOT FOUND DURING SEARCH. THE FACTS OF THE ADVANCES WERE STATED IMMEDIATELY AFTER SEARCH IN AN AFFIDAVI T DATED 03-12-2000. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) THAT THE PA PERS RELATING TO THE SAID ADVANCES RECEIVED BY THE ASSESSEE WERE NOT FOUND DU RING THE COURSE OF SEARCH. THE ONUS TO PROVE THAT THESE ADVANCES ARE A CTUALLY RECEIVED IS ON THE ASSESSEE AS THE MATTER WOULD NOT OTHERWISE BE COVER ED BY SECTION 132(4) OF THE ACT. THE ASSESSEE HAS GIVEN REASONS WHY THESE D OCUMENTS WERE NOT FOUND DURING THE COURSE OF SEARCH. THE AO HAS NOT D ISPUTED THIS. THE ASSESSEE HAS ALSO PRODUCED BANAKHATS EVIDENCING THE PAYMENTS RECEIVED BY THE ASSESSEE. THE ASSESSEE HAS ALSO PRODUCED CONFIR MATION FROM EACH OF THE PERSONS FROM WHOM THE PAYMENTS WERE RECEIVED BY THE ASSESSEE. THE ASSESSEE RECOGNIZING THAT THE ONUS HEAVILY RESTS ON THE ASSESSEE, ALSO VOLUNTARILY AND ON HIS OWN OFFERED TO PRODUCE THESE PERSONS BEFORE THE AO AND ALSO IN THE ALTERNATIVELY REQUESTED THE AO TO I SSUE SUMMONS BY INVOKING SECTION 131. DURING THE COURSE OF REMAND PROCEEDING S ALSO THE AO WAS SPECIFICALLY ASKED BY LD. CIT(A) TO EXAMINE VARIOUS SOURCES CLAIMED BY THE ASSESSEE. THE AO HAS HOWEVER DECIDED NOT TO EXAMINE THESE PERSONS. THE AO HAS ALSO NOT POINTED OUT ANY ERRORS OR OMISSIONS IN THE EVIDENCES PRODUCED BY THE ASSESSEE. IN VIEW OF THE SAME, THE EVIDENCES FURNISHED BY THE ASSESSEE CANNOT BE IGNORED. THE ADVANCES ARE RE CEIVED IN THE NORMAL ITA NO.1050/AHD/2005 A.Y. 1990-91 ACIT CIR-4, ABD V. GHCL LTD. PAGE 7 COURSE OF THE BUSINESS OF THE ASSESSEE AND FOR THE LAND FOR WHICH THE ASSESSEE HAS ALREADY MADE DISCLOSURE AS INVESTMENT. IT IS NOT IN RESPECT OF ASSETS FOR WHICH INVESTMENT IS NOT MADE BY THE ASSE SSEE. IN THE CIRCUMSTANCES AND FACTS OF THE CASE AND IN THE ABSE NCE OF CONTRARY MATERIAL BY THE ASSESSING AUTHORITY, WE FIND NO REASON TO IN TERFERE IN THE ORDER OF LD. CIT(A). THUS, GROUND NO.1(C) OF THE REVENUE IS DISM ISSED. 12. GROUND NO.2 AND 3 OF THE REVENUE ARE GENERAL IN NATURE AND THEREFORE DO NOT REQUIRE ANY ADJUDICATION. 13. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. # !' $!%& 17 /0 2 /2012 * + , - THIS ORDER PRONOUNCED IN OPEN COURT ON 17/02/ 2012 . SD/- SD/- ( G.C.GUPTA ) ( B.P. JAIN ) (VICE PRESIDENT) (ACCOUNTANT MEMBER) $!%&- 17/02/2012 /!! - DKP* !' !' !' !' 001 001 001 001 21 21 21 21 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. %%05 6 / CONCERNED CIT 4. 6- / CIT (A) 5. 19, 0005, 05, /!! / DR, ITAT, AHMEDABAD 6. ,<= ># / GUARD FILE. BY ORDER/ !' , /TRUE COPY/ ?// %@ 05, /!! -