The ACIT, Circle-1, RAJKOT-GUJARAT V. Harshaben Rajnikant Shah, RAJKOT-GUJARAT

ITSSA 9/RJT/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0006 (ITAT-RAJKOT)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-01-2014
• Assessment Year: misc
• Appeal Filed On: 05-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N R SONI
• Assessee Lawyers: RU SHIT R SHETH
• Keywords: Block assessment
• Section: 131; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. BEFORE SHRI T. K. SHARMA JM AND SHRI B. R. JAIN AM IT(SS) NO. 09/RJT/2013 / ASSESSMENT YEARS: BLOCK PERIOD A.Y. 1992-93 TO 2001-02 AND PERIOD FROM 01-04-2001 TO 31-05-2001 . ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, RAJKOT. ( / APPELLANT V/S HARSHABEN RAJNIKANT SHAH SARLA COTTAGE, 43, JANTA SOCIETY, RAJKOT. PAN- ARAPS7426Q / RESPONDENT ! '# / REVENUE BY SHRI N.R. SONI, D.R. $% ! '# / ASSESSEE BY SHRI RUSHIT R. SHETH ' & ' %( / DATE OF HEARING 01-01-2014 ) %( / DATE OF PRONOUNCEMENT 09-01-2014 / ORDER PER B. R. JAIN, A. M. : THIS APPEAL BY THE REVENUE AGAINST THE ORDER DATED 15/03/2013 OF DR. RAJEEV RANADE, THE LEARNED CIT(A)-II, RAJKOT RA ISES THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A)-II, RAJKOT HAS ERRED IN LAW AND ON FACT OF THE CASE IN DELETING THE ADDITION OF RS. 12,50,000/- MA DE BY THE AO AS INCOME FROM UNDISCLOSED SOURCE FOR THE BLOCK PERIOD 1992-93 TO 2001-02. 2. THE LD. CIT(A)-II, RAJKOT HAS ERRED IN LAW AND O N FACT THAT SH. BECHARBHAI PARMAR HAS ACCEPTED IN HIS STATEMENT REC ORDED U/S 131 OF THE IT ACT THAT HE RECEIVED AMOUNT OF RS . 25.00 LAKHS AS CONSIDERATION FOR THE SAID PLOTS OF LAND I N QUESTION BUT THERE IS NO DOCUMENTARY PROOF THAT HE RETURNED THI S AMOUNT BACK TO THE ASSESSEE. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE L D. CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE REST ORED. 2. BRIEFLY THE FACTS ARE THAT AN ACTION U/S 132 OF THE I.T. ACT, 1961 (IN SHORT THE ACT) WAS CARRIED OUT AT THE PREMISES OF S HRI BECHAR P. PARMAR ON 31/5/2001. DURING THE COURSE OF SEARCH, ONE AGREEME NT WAS FOUND AND ITA 09/RJT/2013 2 SEIZED FOR SALE OF PLOT NOS. 66, 67 AND 68 AT REVEN UE SURVEY NO. 83, VILLAGE NANA MAUVA, DISTRICT- RAJKOT AND WAS INVENT RISED AS SEIZED ANNEXURE A-1/1. AS PER THIS AGREEMENT, THE PURCHASE RS NAMELY SHARVSHRI NARANBHAI VAGHJIBHAI AKBARI AND NARANBHAI BECHARBHA I PARMAR HAD PAID AN AMOUNT OF RS. 25 LACS AS AN ADVANCE FOR PURCHASE OF PLOT NOS. 66 TO 68. OUT OF THESE THREE PLOTS, PLOT NOS. 66 AND 68 WERE STATED TO BE OWNED BY SMT. HARSHABEN RAJNIKANT SHAH, SARLA COTTAGE, 43, J ANTA SOCIETY, RAJKOT. ACCORDINGLY, A NOTICE U/S 158D OF THE ACT WAS ISSUE D ON 30/8/2004 REQUIRING THE ASSESSEE SMT. HARSHABEN RAJNIKANT SHA H TO PREPARE A TRUE AND CORRECT RETURN OF HER TOTAL INCOME FOR THE BLOC K PERIOD ENDING ON 31/05/2001. THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME IN RESPONSE THERETO. THEREAFTER THE A.O. ISSUED A SHOW CAUSE NO TICE REQUIRING THE ASSESSEE TO EXPLAIN AS TO WHY AN AMOUNT OF RS. 17,2 4,259/- OF HER SHARE SHOULD NOT BE TREATED AS HER UNDISCLOSED INCOME OF BLOCK PERIOD AND BROUGHT TO TAX IN HER HANDS ACCORDINGLY. IN RESPONS E THERETO, THE ASSESSEE THROUGH HER COUNSEL DENIED TO HAVE MADE ANY SALE TR ANSACTION WITH SHRI BECHARBHAI PARMAR GROUP OR TO HAVE GIVEN ANY POWER OF ATTORNEY TO SHRI CHANDRAKANT V MEHTA OR ANY OTHER PERSON IN RESPECT OF LAND AT PLOT NO. 66, WHICH IS THE ONLY PLOT CLAIMED TO HAVE BEEN OWNED B Y THE ASSESSEE SMT. HARSHABEN RAJNIKANT SHAH. THIS PLOT WAS ALSO STATED TO HAVE BEEN ACQUIRED ON INHERITANCE THROUGH A PROBATE ON DATED 26/9/1997 AFTER DEATH OF HER FATHER ON 22/8/1989. SHE CATEGORICALLY DENIE D OF ANY RECEIPT THROUGH THE SAID AGREEMENT AND STATED THAT SHE HAS NO KNOWL EDGE ABOUT THE AGREEMENT ENTERED BY SHRI C.V. MEHTA WITH THE ABOVE PARTY. THE A.O. UPON EXAMINATION OF MATERIAL ON RECORD, ACCEPTED TH AT PLOTS NO. 67 AND 68 DO NOT BELONG TO THE ASSESSEE SMT. HARSHABEN RAJNIK ANT SHAH. HE, HOWEVER, DID NOT ACCEPT THE ASSESSEES CLAIM THAT T HE AGREEMENT IS BOGUS. GOING BY THE AGREEMENT AND THE FACT THAT THE PURCHA SERS HAVE PAID RS. 25 LACS AS ADVANCE FOR PURCHASE OF THE PLOTS MENTIONED IN THE AGREEMENT, HE ITA 09/RJT/2013 3 WORKED OUT THAT AN AMOUNT OF RS. 12.50 LACS WAS ON ACCOUNT OF SALE CONSIDERATION OF PLOT NO. 66 BELONGING TO THE ASSES SEE. THE SAME WAS TREATED AS UNDISCLOSED INCOME FOR ASSESSMENT YEAR 1 998-99 FORMING PART OF BLOCK PERIOD AND ASSESSMENT STOOD COMPLETED ON 3 0/8/2006. 3. THE LD. CIT(A) CONSIDERING THE ORDER IN THE CASE OF APPELLANTS SISTER SMT. NAYANABEN NARESH KUMAR KOTHARI, WHERE ALSO AN IDENTICAL ADDITION WAS MADE AND STOOD DELETED BY THE LD. CIT(A)-XXV, M UMBAI VIDE ITS ORDER DATED 08/1/2008 IN APPEAL NO. CIT(A)/XXV/25(1)IT/75 /07-08 AND ALSO THE JUDGMENT BY THE RAJKOT BENCH OF THE TRIBUNAL IN IT( SS)A NO. 24/RJT./2004 IN THE CASE OF SHRI BECHARBHAI PARMAR, DELETED THE ADDITION OF RS. 12.50 LACS MADE IN THE HANDS OF THE RESPONDENT ASSESSEE. THE SUBSTANTIVE FINDING VIDE PARA 6.6 OF THE IMPUGNED ORDER ARE REP RODUCED AS UNDER:- IT IS APPARENT THAT THE ASSESSING OFFICER IGNORED T HE MATERIAL DOCUMENTS AND STATEMENTS RECORDED BY HIM DURING THE ASSESSMENT PROCEEDINGS WHICH WERE CLEARLY IN CONTRADICTION OF HIS FINDING GIVEN IN THE ASSESSMENT ORDER MAKING THE BASIS FOR THE AD DITION OF RS. 12,50,000/- AGITATED THROUGH THIS APPEAL. THE ASSES SING OFFICER OUGHT TO HAVE CONDUCTED INDEPENDENT INQUIRIES WITH THE REGISTRAR OF PROPERTIES ABOUT THE REGISTRATION OF THIS DRAFT SAL E AGREEMENT, ANY FURTHER SALE DEEDS EXECUTED BY SHRI BECHARBHAI P. P ARMAR OR ANYBODY DURING THE BLOCK ASSESSMENT PERIOD TO ARRIV E AT THE LOGICAL CONCLUSION THAT THE APPELLANT HAD SOLD THE PLOT IN QUESTION TO SHRI BECHARBHAI P. PARMAR. THE A.O. SHOULD HAVE ALSO GIV EN THE APPELLANT A CHANCE TO CROSS EXAMINE SHRI MEHTA. NON E OF THESE ACTIONS HAVE BEEN TAKEN BY THE A.O. THEREFORE, I DO NOT FIND ANY SUBSTANCE IN THE STAND TAKEN BY THE A.O.. ON THE OT HER HAND, THE FACTS APPEAR TO BE HIGHLY IN FAVOUR OF THE APPELLAN T. FIRSTLY, THE SAID PLOT HAS BEEN SOLD AS A LATER DATE. SECONDLY, CASH WHICH WAS GIVEN BY SHRI BECHARBHAI PARMAR HAS BEEN RETURNED BACK TO HIM AND HAS BEEN TREATED AS HIS INCOME FOR THE YEAR. THIRDLY, T HE DOCUMENT ON THE BASIS OF WHICH THE ADDITION IS BASED IS ONLY A DRAFT AND NOT A REGISTERED DOCUMENT. FOURTHLY, THERE IS NO POWER OF ATTORNEY BY THE APPELLANT ON RECORD IN FAVOUR OF THE PERSON MAKING THE DRAFT AGREEMENT. ITA 09/RJT/2013 4 CONSIDERING THE ABOVE FACTUAL MATRIX AND THE DISCUS SIONS, THE ADDITION OF RS. 12,50,000/- IS DIRECTED TO BE DELET ED WITH CONSEQUENTIAL REDUCTION OF TAX AND INTEREST CHARGED U/S 158BFA(1) OF THE ACT. 4. WE HAVE HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECORD. THE RESPONDENT ASSESSEE HAS MADE A CLAIM BEFORE THE A.O . THAT THE SAID PLOT NO. 66 WAS SOLD BY THE ASSESSEE TO SMT. SAVITABEN K ETANBHAI MARVADI, INDRAPRASTH NAGAR, STREET NO. 2, JEET, B/H VIRANI H IGH SCHOOL, RAJKOT AND THE SAID PLOT NO. 66 HAS BEEN REGISTERED ON 02/8/20 03 BY REGISTER NO. 5487. COPY OF SALE DEED EXECUTED, WAS ALSO PLACED O N HIS RECORD. THE A.O., HOWEVER, DID NOT FIND ANY ADVERSE MATERIAL TH EREOF. THIS SALE IS OUTSIDE THE BLOCK PERIOD. THE RAJKOT BENCH OF THE A PPELLATE TRIBUNAL IN THE CASE OF SUCH PERSON IN IT(SS)A NO. 24/RJT/2004 AND IT(SS)A NO. 29/RJT/2004 BY ITS ORDER DATED 30/9/2005 HAVE RECOR DED A CATEGORICAL FINDING THAT THE AGREEMENT FOR PURCHASE OF THE PLOT HAS NOT MATERIALIZED AND THE MONEY SO ADVANCED THROUGH THE AGREEMENT STO OD REFUNDED. HE HAS ALSO REPRODUCED THE REPLY TO QUESTION NO. 7 OF THE STATEMENT OF SEARCHED PERSON RECORDED U/S 132 OF THE ACT WHEREBY HE HAS STATED THAT THE AGREEMENT WAS CANCELLED AND HE HAS RECEIVED TH E AMOUNT BACK AND THE AMOUNT WAS UTILIZED IN MONEY LENDING BUSINESS. THE APPELLATE TRIBUNAL, THUS, HAS ADMITTED THE FACT OF NON-MATERI ALIZATION OF SALE DEED AND REFUND OF AMOUNT MADE TO THE SEARCHED PERSON. T HESE FINDINGS OF FACT ARE NOT SHOWN TO HAVE BEEN SET ASIDE BY ANY HIGHER AUTHORITY. SINCE IN THE CASE OF SEARCHED PERSON, THE APPELLATE TRIBUNAL HAS RECORDED FINAL FINDING OF FACT THAT THE AGREEMENT STANDS CANCELLED AND MON EY PURPORTED TO HAVE BEEN ADVANCED STOOD RETURNED TO THE SEARCHED PERSON , IT HAS THE EFFECT THAT THE RESPONDENT ASSESSEE DID NOT CARRY OUT ANY SALE OF THE PLOT NO. 66 SITUATED AT REVENUE SURVEY NO. 83, VILLAGE NANA MAU VA, DISTRICT- RAJKOT DURING THE FINANCIAL YEAR 1997-98 RELEVANT TO ASSES SMENT YEAR 1998-99 FORMING PART OF THE BLOCK PERIOD AND AS SUCH THERE WAS NO UNDISCLOSED ITA 09/RJT/2013 5 INCOME BELONGING TO THE RESPONDENT IN THAT REGARD. THE CONCLUSION TO DELETE THE ADDITION REACHED BY THE LD. CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. 6. IN THE RESULT, GROUNDS RAISED IN APPEAL STAND RE JECTED AND APPEAL BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/01/2014. SD/- SD/- ( T. K. SHARMA ) ( B. R. JAIN ) '* /JUDICIAL MEMBER #( '* / ACCOUNTANT MEMBER *#+ ,*-/ ORDER DATE 09/01/2014 /RAJKOT *RANJAN / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, RAJKOT. 2. /RESPONDENT- HARSHABEN RAJNIKANT SHAH, RAJKOT. 3. '-2- % & 3% / CIT-I, RAJKOT. 4. & 3%- / CIT (A)-II, RAJKOT. 5. 789 % , , / DR, ITAT, RAJKOT 6. 9; <= / GUARD FILE. *#+ '# / BY ORDER TRUE COPY PRIVATE SECRETARY, , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.