Shri Rameshkumar Hargovandas Shah, Mehsana V. The ACIT.,Mehsana Circle, Mehsana

ITSSA 55/AHD/2006

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9521 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-03-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 16-03-2010
• Assessment Year: misc
• Appeal Filed On: 24-03-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Assessee Lawyers: S N DIVATIA
• Keywords: Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D. C. AGRAWAL , AM) IT(SS)A NO.55/AHD/2006 BLOCK PERIOD: 1-4-1990 TO 25-7-2000 RAMESHKUMAR HARGOVANDAS SHAH, BAZAR, KHERALU, MEHSANA PA NO. ADIPS 2120A VS THE A. C. I. T., MEHSANA CIRCLE, MEHSANA (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. DIVATIA, AR RESPONDENT BY SHRI M. C. PANDIT, DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XXI, AHMEDABAD DATE D 27-09-2005 FOR THE ABOVE BLOCK PERIOD CHALLENGING THE ADDITION OF RS.7 5,500/-. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL AVAILABLE ON RECORD. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT DURING T HE COURSE OF SEARCH A COPY OF SATAKHAT WAS SEIZED AND ON GOING THROUGH TH E ABOVE DOCUMENT, IT WAS FOUND THAT THE ASSESSEE HAD PURCHASED PROPERTY KNOWN AS BUNGALOW NO.5 AT SHIVSHAKTI SOCIETY, RANDER ROAD, S URAT FROM SHRI NAGINDAS B. SHAH (SURATI) FOR A DOCUMENT PRICE OF R S.4,90,000/-. THE BUNGALOW WAS ACTUALLY SOLD FOR RS.21,50,000/- AS PE R SATAKHAT WHICH IS SIGNED BETWEEN THE ASSESSEE AND SHRI NAGINDAS B. SH AH (SURATI) IN 1997. IT WAS STATED THAT SHRI NAGINDAS B. SHAH (SURATI) M ADE ADMISSION THAT HE HAS RECEIVED RS.9,00,000/- AS CASH ON MONEY ON THE SALE OF THIS BUNGALOW IN HIS STATEMENT. IT WAS, THEREFORE, APPAR ENT THAT THE ASSESSEE IT(SS)A NO.55/AHD/2006 RAMESHKUMAR HARGOVANDAS SHAH 2 HAD EARNED INCOME WHICH WAS UNDISCLOSED. NOTICE U/S 158 BD OF THE IT ACT WAS ISSUED TO THE ASSESSEE AND HE WAS ASKED TO FILE RETURN OF INCOME. THE ASSESSEE FILED RETURN FOR THE BLOCK PERIOD DECL ARING TOTAL UNDISCLOSED INCOME OF RS.15,85,500/- AND PAID TAX OF RS.9,51,30 0/-. THE ASSESSEE ATTENDED THE BLOCK ASSESSMENT PROCEEDINGS AND CHALL ENGED THE BLOCK ASSESSMENT PROCEEDINGS. IT WAS SUBMITTED THAT THE A SSESSEE HAD DISCLOSED INCOME OF RS.15,85,500/- IN THE RETURN F OR THE BLOCK PERIOD IN TRUE SPIRIT AND CO-OPERATION. THE AO HOWEVER, NOTED THAT DURING THE SEARCH ACTION IN THE CASE OF NAGINDAS B. SHAH (SURA TI) A SATAKATH (SALE AGREEMENT) WAS FOUND AND SEIZED ACCORDING TO WHICH THE BUNGALOW WAS PURCHASED BY THE ASSESSEE FROM SHRI NAGINDAS B. SHA H (SURATI) AT THE COST OF RS.21,51,000/- OUT OF WHICH ONLY RS.4,90,00 0/- WAS PAID BY THE ASSESSEE THROUGH CHEQUE. BALANCE OF RS.16,61,000/- WAS PAID BY THE ASSESSEE THROUGH CASH WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESSEE ALSO IN HIS STATEMENT ADMITTED THE TOT AL VALUE OF RS.21,51,000/- OUT OF WHICH CHEQUES OF RS.4,90,000/ - WAS GIVEN AND BALANCE WAS PAID IN CASH. THE AO, THEREFORE, NOTED THAT BLOCK ASSESSMENT PROCEEDINGS HAVE BEEN RIGHTLY INITIATED AGAINST THE ASSESSEE. THE ASSESSEE ALSO NOTED THE SAME FACTS IN THE RETUR N OF INCOME WHICH IS REPRODUCED BY THE AO AT PAGE 11 OF THE ASSESSMENT O RDER. IT WAS ALSO EXPLAINED THAT TOTAL SALE CONSIDERATION AGREED WAS RS.21,51,000/- OUT OF WHICH RS.4,50,000/- WAS ADJUSTED ON HIS ACCOUNT AS SALE PRICE OF SHOP NO.7 RAJKUMAR TERRACE SHOPPING CENTRE, RANDER ROAD, SURAT. THE SHOP WAS INITIALLY ACQUIRED IN THE NAME OF HIS WIFE SMT. MADHUBEN RAMESH SHAH IN SEPTEMBER, 1994 AT THE COST OF RS.75,500/-. THE COST OF SUCH ACQUISITION IS DULY REFLECTED IN HER RETURN OF INCO ME. THE ASSESSEE, THEREFORE, CLAIMED THAT SINCE THE SHOP ACQUIRED BY THE WIFE OF THE ASSESSEE IS TRANSFERRED TO SHRI NAGINDAS B.SHAH (SU RATI), THEREFORE, SET OFF OF THE AMOUNT OF RS.75,500/- SHALL HAVE TO BE GIVEN TO THE ASSESSEE. THE AO HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE AS SESSEE BECAUSE THE SHOPS AT RAJKUMAR TERRACE SHOPPING CENTRE WAS PURCH ASED BY SMT. IT(SS)A NO.55/AHD/2006 RAMESHKUMAR HARGOVANDAS SHAH 3 MADHUBEN R. SHAH FOR RS.1,51,000/- OUT OF HER OWN F UNDS AND SHE DID NOT EXECUTE ANY SUCH DOCUMENTS FOR TRANSFER OF ONE OF THE SHOPS IN FAVOUR OF THE ASSESSEE. SINCE THE ASSESSEE WAS NOT OWNER OF ANY SHOP WHICH IS ALLEGED TO BE TRANSFERRED TO SHRI NAGINDAS B. SHAH (SURATI), THEREFORE, SALE PROCEEDS OF SUCH TRANSFER CANNOT BE CONSIDERED IN THE HANDS OF THE ASSESSEE. THE AO, THEREFORE, CONSIDERE D THE UNDISCLOSED INCOME OF THE ASSESSEE AT RS.16,61,000/- ( RS.21,51 ,000 MINUS RS.4,90,000/-). THUS, PRACTICALLY ADDITION OF RS.75 ,500/- WAS MADE AS AGAINST DECLARED UNDISCLOSED INCOME IN THE RETURN F ILED FOR THE BLOCK PERIOD. THE LEARNED CIT(A) CONFIRMED THE ADDITION O N THE SAME REASONING AS GIVEN BY THE AO. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. ON THE OTHER HAN D, THE LEARNED DR RELIED UPON THE ORDER OF THE AO. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMED DEDUCTION OF RS.75, 500/-, BECAUSE THE SHOP WHICH WAS TRANSFERRED TO SHRI NAGINDAS B. SHAH (SURATI) BY HIS WIFE SMT. MADHUBEN R. SHAH. IT WOULD, THEREFORE, CLEARLY PROVE THAT DURING THE SEARCH AS PER THE SATAKATH (SALE AGREEMENT) THE ASSESSEE PURCHASED THE BUNGALOW AT RS.21,51,000/-. THE ASSESSEE ADMITT EDLY PAID RS.4,90,000/- THROUGH CHEQUES. THE BALANCE AMOUNT O F RS.16,61,000/- WAS ADMITTEDLY PAID BY THE ASSESSEE THROUGH CASH FO R WHICH NO SOURCE WAS EXPLAINED. THE ASSESSEE DECLARED RS.15,85,500/- IN THE RETURN FILED FOR BLOCK PERIOD AND PAID THE TAX ON THE SAME. THE DIFFERENCE BETWEEN THE CASH PAID AND THE INCOME UNDISCLOSED IN THE RETURN FOR THE BLOCK PERIOD REMAINED TO BE EXPLAINED IN A SUM OF RS.75,500/-. T HE ASSESSEE CLAIMED THAT THE SHOP WHICH WAS TRANSFERRED BY HIS WIFE TO SHRI NAGINDAS B SHAH (SURATI) MAY BE TAKEN INTO CONSIDERATION FOR THE PU RPOSE OF GIVING SET OFF. HOWEVER, IT REMAINED FACT THAT THE WIFE OF THE ASSE SSEE DID NOT EXECUTE IT(SS)A NO.55/AHD/2006 RAMESHKUMAR HARGOVANDAS SHAH 4 ANY DOCUMENT IN FAVOUR OF THE ASSESSEE FOR TRANSFER OF ANY SHOP. THEREFORE, THERE WAS NO QUESTION OF HAVING ANY SHOP BY THE ASSESSEE. NO EVIDENCE IS FILED ON RECORD TO SHOW ANY ADJUSTMENT OF SHOP SOLD BY THE WIFE OF THE ASSESSEE TO SHRI NAGINDAS B. SHAH (SURA TI). IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE ON RECORD THE AUTHORITIES BELOW WERE JUSTIFIED IN HOLDING THAT SET OFF OF RS.75,500/- CANNOT BE GI VEN TO THE ASSESSEE. THE UNDISCLOSED INCOME IS ADMITTED BY THE ASSESSEE. HOWEVER, THE ASSESSEE CLAIMED SET OFF OF RS.75,500/- FOR WHICH N O EVIDENCE IS GIVEN BY THE ASSESSEE TO THE SATISFACTION OF THE AUTHORITIES BELOW. WE, THEREFORE, DO NOT FIND IT TO BE A FIT CASE FOR INTERFERENCE. IN T HE ABSENCE OF ANY COGENT EVIDENCE OR MATERIAL ON RECORD, THE ASSESSEE WOULD NOT BE ENTITLED FOR DEDUCTION OF RS.75,500/-.AS A RESULT, THERE IS NO M ERIT IN THE APPEAL OF THE ASSESSEE. THE SAME IS ACCORDINGLY DISMISSED. 6. AS A RESULT, APPEAL OF THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 22-03-2010. SD/- SD/- (D.C.AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 22- 03-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD