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

ITSSA 50/AHD/2015

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0805 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-10-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 20-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Assessee Lawyers: P M MEHTA
• Keywords: Unexplained investment; Loose papers
• Section: 131

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: 50/AHD/2015 (ASSESSMENT YEAR: 2011-12) SMT. KOKILABEN DHIRAJLAL SANGHVI A/13, THIRTHBHOOMI APARTMENT NR. LAW GARDEN, ELLISBRIDGE, AHMEDABAD- 380006 PAN NO. AEDPS 3414B V/S DCIT CENTRAL CIRCLE-2(4), AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P. M. MEHTA , 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. 50/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 85,00,000 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 85,00,000 WAS APPLICATION OF UNDISCLOSED INCOME OF RS 10,66,82,59 0/~ MADE BY APPELLANT'S HUSBAND IN CURRENT ASSESSMENT YEAR HENCE NO SEPARAT E ADDITION IS CALLED FOR IN THE HANDS OF APPELLANT. 2. THE APPELLANT CRAVES LEAVE TO ADD TO ALTER AMEND AND/OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR DURING THE CO URSE OF HEARING OF THE APPEAL. 2. FACTS OF THE CASE ARE APPELLANT HAD PURCHASED A PRO PERTY AT VASANT- VIHAR CO- OPERATIVE HOUSING SOCIETY LIMITED OF RS.1.15 CRORES . DURING THE COURSE OF SURVEY ACTION AT THE PREMISES OF AISHWARYA NX A DIA RY INVENTORIED AS ANNEXURE - A/30 WAS IMPOUNDED BY THE DEPARTMENT WHEREIN AT P AGE NO. 7, THERE ARE HAND WRITTEN DATE WISE ENTRIES OF CASH GIVEN TOTALI NG TO RS. 85 LACS TO SOMEONE REFERRED TO AS 'G. K. PATEL. 3. THAT APPELLANT HAD PURCHASED THE FLAT AT VASANT VIH AR CO-OPERATIVE HOUSING SOCIETY APPELLANT'S HUSBAND 'DHIRAJLAL SANGHVI' IN HIS STATEMENT RECORDED U/S 132(4) OF THE ACT ON 10/03/2011 HAS CATEGORICALLY S TATED THAT THE CASH TRANSACTIONS OF THE BY FAMILY MEMBERS AND PERSONS A SSOCIATED WITH THE GROUP ARE DONE BY HIM. THE RELEVANT EXTRACT OF THE SAME I S REPRODUCED HERE UNDER FOR YOUR READY REFERENCE STATEMENT U/S. 132(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 IT(SS)A NO. 50/AHD/2015 . A.Y. 2011- 12 3 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. 4. MR. DHIRAJLAL V. SANGHVI DURING THE COURSE OF RECOR DING OF THE STATEMENT UNDER SECTION 131 ON OATH ON 26TH MAY, 2011 ADMITTED RS. 85 LACS AS UNACCOUNTED INVESTMENT ON BEHALF OF THE ASSESSEE. THE EXTRACT F ROM THE RELEVANT QUESTION/ANSWER IS REPRODUCED HEREUNDER: Q-19: I AM SHOWING YOU MATERIALS COMPRISING PAPERS, DIARIES, 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 PU RCHASE, 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 PARTY NO. ANNEXURE PAGE NO. EXPLANATION .. .. .. S-13 A/30 7 A BUNGALOW WAS PURCHASED ON 14.09.2010. PLOT NO. 302, VASANTVIHAR CO- OP HOUSING SOCIETY TENEMENT NO. 15- B, 414.72 SQ. MTR. THIS PROPERTY WAS PUR CHASED BY MY WIFE KOKILABEN D. SANGHVI FROM IT(SS)A NO. 50/AHD/2015 . A.Y. 2011- 12 4 GUNVANTBHAI KANTILAL PATEL FOR RS. 1,15,00,0007- (DOCUMENTED PRICE). HOWEVER, DETAILS OF ACTUAL PAYMENT ARE GIVEN ON PAGE NO. 7. RS. 1.25 CRORE GIVEN TO GUNVANTBHAI ON 28.07.2010 IN CAS H ASWELL AS BY CHEQUE. RS. 25 LAC IN CASH GIVEN TO HIM ON 28.07.2010 RS. 20 LAC IN CASH GIVEN TO HIM ON 06.08.2010 RS. 10 LAC IN CASH GIVEN TO HIM ON 11.08.2010 RS. 20 LAC IN CASH GIVEN TO HIM ON 28.08.2010 I ADMIT THAT THE CASH AMOUNTS ARE NOT RECORDED IN MY BOOKS OF ACCOUNTS. 5. THAT APPELLANTS HUSBAND HAS DISCLOSED ADDITIONAL I NCOME 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 IT(SS)A NO. 50/AHD/2015 . A.Y. 2011- 12 5 UNACCOUNTED CASH TRANSACTIONS EARNED OUT BY HIM FOR 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 WIFE AND THEREFORE PAYMENT REFLECTED BY SHRI DHIRAJLAL SANGHVI WAS NOT ACCEPTABLE AS APPLICATION OF HIS RECEIPTS. THE OBSERVATION MADE BY ASSESSING OFFICER WAS CHALLENGED IN APPEAL BEFORE CIT (APPEALS) - II! WHEREIN THE ID. C IT(A) HAS HELD AS UNDER: '5.8 I INTEND TO AGREE WITH THE STAND TAKEN BY THE A R THAT WHEREVER THE INCOME IS SPECIFIC AND BELONGING TO THE SPECIFIC MEMBER OF TH E GROUP THE SAME HAS BEEN SHOWN IN HIS/HER RETURN OF INCOME BUT SINCE THE APP ELLANT WAS UNDERTAKING ALL THE FINANCIAL TRANSACTIONS, THE APPELLANT WAS CORRECT I N INCORPORATING THE SAME IN THE CASH FLOW STATEMENT AND TELESCOPING THE SAME AGAINS T THE PAYMENTS/APPLICATION. .. 5.10 ALSO, THE APPELLANT HAS PREPARED A DETAILED CA SH FLOW STATEMENT INCORPORATING ALL THE NOTINGS OF INFLOWS. THE ,OBSE RVATION OF THE ASSESSING OFFICER THAT THE APPELLANT HAS NOT SHOWN MANY INWARD AND OU TWARD TRANSACTIONS ON THE GROUND THAT EITHER THEY ARE NOT PERTAINING TO THE A PPELLANT (WHICH ARE RTGS TRANSACTIONS BELONGING TO THIRD PARTY OF RS. 5,29,4 3,000) OR ARE ACCOUNTED FOR IN THE BOOKS OF ACCOUNT IS UNACCEPTABLE SINCE THE APPE LLANT HAS EXPLAINED ALL SUCH TRANSACTIONS WITH NECESSARY DOCUMENTARY EVIDENCES F ILED WITH THE CASH FLOW STATEMENT IN THE COURSE OF ASSESSMENT PROCEEDINGS. 5.11 TO SUMMARISE THE ABOVE, ONCE THE ASSESSEE ADMI TS CERTAIN INCOME AS UNDISCLOSED INCOME AND OFFERS THE SAME AS PER PROVI SIONS OF THE ACT, THE FUND TO THAT EXTENT IS AVAILABLE WITH THE ASSESSES FOR MAKI NG IT(SS)A NO. 50/AHD/2015 . A.Y. 2011- 12 6 INVESTMENTS/EXPENSES/OUTFLOWS. THESE INVESTMENTS, O UTFLOWS OR EXPENSES CANNOT BE TREATED AS UNEXPLAINED UNLESS AND UNTIL IT IS PR OVED THAT FUNDS AVAILABLE WITH THE ASSESSEE WERE EXHAUSTED SOMEWHERE ELSE AND THE ASSESSEE WAS LEFT WITH NO FUNDS. IT ALSO NEEDS MENTION THAT THE BENEFIT OF TE LESCOPING IS ALSO WARRANTED ON THE GROUND THAT, AS ON THE DATE OF SEARCH THERE WER E NO OTHER UNACCOUNTED ASSETS/CASH/INVESTMENTS FOUND WHICH HAS BEEN POINTE D OUT BY THE ASSESSING OFFICER TO JUSTIFY THAT THE INCOME WHICH HAS BEEN O FFERED HAS BEEN APPLIED IN THIS UNACCOUNTED ASSETS. ACCORDINGLY, HAVING REGARD TO T HE FACTS OF THE CASE, THE STATEMENTS RECORDED BEFORE THE DEPARTMENTAL AUTHORI TIES AND THE ARGUMENTS PUT FORWARD BY THE AR OF THE APPELLANT IN THE COURSE OF HEARING, THE FOLLOWING INCOME WHICH HAS BEEN OFFERED TO TAX IS AVAILABLE FOR TELE SCOPING THE INVESTMENTS/EXPENSES/OUTFLOWS (AS STATED IN (B) HER EUNDER) AND THESE INVESTMENTS/EXPENSES/OUTFLOWS, STANDS EXPLAINED AND NO SEPARATE ADDITION IN THIS REGARD IS CALLED FOR.' 6. THAT APPELLANTS HUSBAND HAS OFFERED TO TAX THE ENT IRE GROSS RECEIPTS WITHOUT SETTING OFF THE PAYMENTS MADE BY HIM FROM SUCH RECE IPTS AND LEARNED C1T(A) WHILE ADJUDICATING THE APPEAL OF APPELLANT'S FATHER HAS ACCEPTED THAT THE PAYMENT MADE FOR PURCHASE OF PROPERTY AS APPLICATIO N FROM THE RECEIPTS AND SOURCE OF SUCH PAYMENT IS ALREADY TAXED THERE IS NO REASON FOR TAXING SUCH PAYMENT IN THE HANDS OF APPELLANT AS UNEXPLAINED IN VESTMENT BECAUSE THIS TREATMENT HAS LED TO DOUBLE TAXATION OF SAME INCOME I.E ONE IN THE HANDS OF APPELLANT AND OTHER IN THE HANDS OF APPELLANT'S HUS BAND. 7. THAT APPELLANT LIVING IN A JOINT FAMILY WITH HIS HU SBAND IS ENTITLED TO BENEFIT OF TELESCOPING AGAINST ADDITIONAL INCOME DISCLOSED BY HIS HUSBAND AS DEPARTMENT HAS NOT BROUGHT OUT ANY EVIDENCE OR REASONS TO SHOW THAT THE RECEIPTS OR INCOME WERE BEING UTILISED FOR ANY OTHER PURPOSE OT HER THAN WHICH THE IT(SS)A NO. 50/AHD/2015 . A.Y. 2011- 12 7 APPLICANT HAD SOUGHT FOR. IT IS AN ESTABLISHED LEGA L LAW THAT BOTH INCOME AND EXPENDITURE CANNOT BE TAXED TOGETHER. 8. BUT LD. A.O. WAS NOT AGREE WITH THE CONTENTION OF T HE ASSESSEE AND MADE ADDITION OF RS. 85,00,000/-. 9. THEREAFTER ASSESSEE PREFERRED FIRST STATUTORY APPEA L BEFORE THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE A.O. 10. NOW ASSESSEE HAS COME BEFORE US BY WAY OF SECOND AP PEAL. 11. 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.85 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 HER HUSBAND DURING SEARCH AND SURVEY. IT IS PERTINENT TO MENTION HERE THAT TAXES HAVE BEEN PAID ON THE SA ID AMOUNT AND CASH FLOW STATEMENT WAS ALSO SUBMITTED BEFORE THE LOWER AUTHO RITIES. 12. 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 HER HUSBAND. IT(SS)A NO. 50/AHD/2015 . A.Y. 2011- 12 8 13. 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. 14. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. 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