DCIT, Central Circle-1(2), Ahmedabad V. M/s. Angel Infra, Ahmedabad

ITSSA 94/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3420 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-03-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 27-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMALD
• Assessee Lawyers: KETAN SHAH LD
• Keywords: Loose papers; Document seized; Documents seized; Set aside
• Section: 143(3); 133A; 69A; 153C

Judgement Text

IT(SS)A NO.94/AHD/2018 M/S. ANGEL INFRA ASSESSMENT YEAR :2011-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE HONBLE SHRI MAHAVIR PRASAD, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T(SS). A. NO.94/AHD/2018 ( / ASSESSMENT YEAR: 2011-12) D.C.I.T CENTRAL CIRCLE - 1(2) ROOM NO.305, 3 RD FLOOR AAYKAR BHAVAN ASHRAM ROAD, AHMEDABAD. / VS. M/S. ANGEL INFRA SURVEY NO.261 NEAR KHODIYAR HOTEL, BHADAJ DASKROI, AHMEDABAD ./ ./PAN/GIR NO. AASFA-1996-K ( /APPELLANT ) : ( / RESPONDENT ) ASSESS EE BY : SHRI KETAN SHAH- LD. AR REVENUE BY : SHRI O. P. SHARMA-LD. CIT-DR / DATE OF HEARING : 03/03/2020 / DATE OF PRONOUNCEMENT : 06/03/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2011-12 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME- TAX (APPEALS)-11, AHMEDABAD [IN SHORT REFERRED TO A S CIT(A)], APPEAL NO. CIT(A)-11/C.C.1(2)/ABD/521-A/2016-17 DATED 17/0 1/2018 ON FOLLOWING GROUNDS: - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.1,96,25,000/- MADE IN HANDS OF ASSESSEE WITHOUT APPRECIATING THAT ENTRIES OF CHEQUE ON SEIZ ED DIGITAL DOCUMENT MATCHED WITH BOOKS OF ASSESSEE, THE NAME OF PROJECT WAS WRI TTEN IN ANOTHER SEIZED IT(SS)A NO.94/AHD/2018 M/S. ANGEL INFRA ASSESSMENT YEAR :2011-12 2 DOCUMENTS, I.E., MOU WHOSE CONTENTS MATCHED WITH DI GITAL SEIZED DOCUMENT & HENCE IT CANNOT BE TERMED AS DUMB DOCUMENTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE L D. CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT. AS EVIDENT, THE SOLE SUBJECT MATTER OF APPEAL IS AD DITION OF RS.196.25 LACS. 2. WE HAVE CAREFULLY HEARD THE ARGUMENTS ADVANCED B Y BOTH REPRESENTATIVES. WE HAVE ALSO PERUSED RELEVANT MATE RIAL ON RECORD INCLUDING DOCUMENTS PLACED IN THE PAPER-BOOK. OUR A DJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCE EDING PARAGRAPHS. 3.1 BRIEFLY STATED THE ASSESSEE BEING RESIDENT FIR M STATED TO BE ENGAGED IN BUILDING CONSTRUCTION WAS SUBJECTED TO A N ASSESSMENT U/S 143(3) R.W.S. 153C ON 21/12/2016 WHEREIN THE ASSESS EE WAS, INTER-ALIA, SADDLED WITH AN ADDITION ON ACCOUNT OF UNEXPLAINED CASH RECEIPT U/S 69A FOR RS.196.25 LACS. 3.2 PURSUANT TO A SEARCH ACTION BY THE DEPARTMENT O N 04/12/2014 AT THE PREMISE OF SHRI ASIT HARIBHAI VORA AND SHRI SANKET J. SHAH , AN ALLEGED ACCOMMODATION ENTRY PROVIDER GROUP, THE ASS ESSEE WAS SUBJECTED TO SURVEY PROCEEDINGS U/S 133A ON THE SAM E DAY. THE DOCUMENTS AND DIGITAL DATA FOUND DURING THE COURSE OF SEARCH PROCEEDINGS REFLECTED CERTAIN CASH PAYMENT MADE TO THE ASSESSEE. CONSEQUENTLY, NOTICE U/S 153C WAS ISSUED TO THE ASS ESSEE FOR AYS 2011-12 TO 2014-15. CERTAIN MATERIAL WAS SEIZED / I MPOUNDED FROM IT(SS)A NO.94/AHD/2018 M/S. ANGEL INFRA ASSESSMENT YEAR :2011-12 3 ASSESSEES PREMISES DURING SURVEY PROCEEDINGS WHICH WAS INVENTORIZED / TABULATED AS ANNEXURE-A, ITEM NOS. 1 TO 9. THE DE TAILS OF THE SAME HAS BEEN PLACED ON PAGE NO. 66 OF THE PAPER-BOOK, WHICH WE HAVE ALREADY PERUSED. THE MATERIAL INCLUDED LOOSE PAPERS, VOUCHE R BOOK, DIGITAL DATA IN THE FORM OF MIRROR IMAGE OF COMPUTER HARD DISK E TC. THE ASSESSEE, IN ITS SUBMISSIONS DATED 06/12/2016 TO LD. AO, EXPLAIN ED THE CONTENTS OF THE LOOSE PAPERS / VOUCHER FILES WHICH WERE INVENTO RIZED AS PER ANNEXURE-A, ITEM NOS. 1 TO 8. 3.3 DURING SEARCH OPERATIONS, ONE LOOSE PAPER NO. 2 3 FOUND AND SEIZED FROM THE RESIDENCE OF SHRI ASIT HARIBHAI VORA AND SHRI SANKET VORA INDICATED CERTAIN CASH PAYMENT TO THE ASSESSEE AGAI NST SALE OF 9 FLATS. AS PER COPY OF MEMORANDUM OF UNDERSTANDING (MOU) SE IZED DURING SEARCH OPERATIONS, IT TRANSPIRED THAT THE ASSESSEE ENTERED INTO AGREEMENT FOR SALE OF 9 FLATS AT WIND CHIMES TO A FIRM NAMELY M/S RAJ SHAH ENTERPRISES PVT. LTD. (REPL). THE RECORDED COS T OF RS.44.59 CRORES CORRELATED WITH THE AMOUNT MENTIONED IN THE MOU. IN ONE OF COMPUTER FILE NAMELY TOTAL AMOUNT.XLS, DATE-WISE PAYMENT WAS RECORDED. IN THE SAID SHEET, SOME OF THE TRANSACTIO NS CASH WAS RECORDED AGAINST PAYMENT AND DATES. AFTER ANALYSIS, IF TRANS PIRED THE CASH OF RS.196.25 LACS WAS PAID AGAINST THE FLATS SITUATED AT WIND CHIMES. AS PER THE TERMS OF MOU, REPL AGREED TO MAKE PAYMENT O F RS.858.76 LACS AGAINST ALLOTMENT OF 9 FLATS. THE RELEVANT DOC UMENTS /DETAILS SEIZED FROM THE RESIDENT OF SHRI HARIBHAI VORA AND SHRI SA NKET J. SHAH WAS VERIFIED WITH THE DETAILS FOUND FROM ASSESSEES PRE MISES DURING THE COURSE OF SURVEY. AFTER PERUSAL OF LOOSE PAGE NO. 2 3 FOUND DURING SEARCH IT(SS)A NO.94/AHD/2018 M/S. ANGEL INFRA ASSESSMENT YEAR :2011-12 4 PROCEEDINGS, IT WAS NOTED THAT REPL MADE CHEQUE PAY MENT OF RS.90 LACS ON 29/10/2010 AND ANOTHER PAYMENT OF RS.196.25 LACS IN CASH. THE CASH TRANSACTION WAS NOT REFLECTED IN ASSESSEE S BOOKS WHICH LED LD.AO TO SHOW-CAUSE THE ASSESSEE TO EXPLAIN THE SAM E. 3.4 THE ASSESSEE, IN DEFENSE, VIDE SUBMISSIONS DATE D 13/12/2016, PLEADED THAT THE PAYMENT OF RS.1,96,250/- AS WRITTE N IN THE LOOSE PAPER WAS ALLEGEDLY READ AS 196.25 LACS ON MERE ASSUMPTIO N WITHOUT ASCERTAINING THE SAME FROM THE AUTHOR OF THE SHEET. NO OPPORTUNITY OF CROSS-VERIFICATION WAS PROVIDED TO THE ASSESSEE. TH IS WAS FURTHER FORTIFIED BY THE FACT THAT THE PROPOSED AGREEMENT WAS CANCELE D SUBSEQUENTLY AND THE CHEQUE PAYMENT OF RS.90 LACS WAS ALREADY RETURN ED TO THE PARTY CONCERNED. AN AFFIDAVIT OF THE PARTNER SUPPORTING T HE SAME WAS ALSO FILED. 3.5 HOWEVER, NOT CONVINCED, LD.AO REJECTED THE SUBM ISSIONS IN VIEW OF THE FACT THAT ACTUAL AMOUNT RECEIVED WAS REDUCED BY LAST TWO DIGITS OF THE ENTIRE AMOUNT AND THEREFORE, CHEQUE PAYMENT OF RS.9 0 LACS AS ACCEPTED BY THE ASSESSEE WAS WRITTEN AS RS.90,000/- . IN SIMILAR MANNER, THE CASH TRANSACTION WRITTEN AS RS.1,96,250/- WOULD REPRESENT AMOUNT OF RS.196.25 LACS. FINALLY, ALLEGED CASH COMPONENT OF RS.196.25 LACS WAS ADDED TO THE INCOME OF THE ASSESSEE AS UNACCOUNTED MONEY U/S 69A. 4.1 BEFORE LD. CIT(A), THE ASSESSEE ARGUED THAT THE LOOSE PAPER WAS NOT FOUND AT ASSESSEES PREMISES. THE SAME WAS NEIT HER SIGNED NOR IN THE HANDWRITING OF ANY PARTNER OF THE FIRM AND THER EFORE, THE SAME WAS MERELY A DUMB DOCUMENT WHICH COULD NOT BE RELIED UP ON TO MAKE IT(SS)A NO.94/AHD/2018 M/S. ANGEL INFRA ASSESSMENT YEAR :2011-12 5 ADDITIONS IN THE HANDS OF THE ASSESSEE. RELIANCE WA S PLACED ON VARIOUS JUDICIAL PRONOUNCEMENTS TO SUPPORT THE SAME. THE AS SESSEE ALSO DENIED THE CONTENTS OF MOU SINCE THE SAME WAS NOT SIGNED B Y ALL THE PARTIES AND NONE OF THE PARTNERS OF THE ASSESSEE SIGNED IT. IT WAS AGAIN REITERATED THAT BOOKING OF FLATS WERE CANCELLED AND AMOUNT WAS ALREADY REFUNDED TO REPL IN JULY, 2012 WELL BEFORE THE DATE OF SEARCH. IT WAS ALSO SUBMITTED THAT NO INCRIMINATING DOCUMENT WAS F OUND DURING SURVEY OPERATION UPON THE ASSESSEE AND THE CONTENTS OF EAC H AND EVERY DOCUMENT WAS EXPLAINED. 4.2 AFTER DUE CONSIDERATION, CONCURRING WITH ASSESS EES SUBMISSIONS, LD.CIT(A) DELETED IMPUGNED ADDITIONS BY OBSERVING A S UNDER: - 4.2.2 THE ASSESSMENT ORDER AND THE SUBMISSIONS OF T HE APPELLANT ALONG WITH CASE LAWS CITED UPON HAVE BEEN CAREFULLY CONSIDERED. ONG OING THROUGH THE FACTS MENTIONED IN THE ASSESSMENT ORDER AND THE SEIZED DO CUMENTS, THERE IS NO DISPUTE ABOUT THE LOOSE PAPERS, WHICH HAVE BEEN RELIED UPON FOR MAKING THE ADDITIONS WERE NOT FOUND AT THE PREMISES OF THE APPELLANT BUT THES E WERE FOUND AT THE PREMISES OF SHRI ASIT H VORA & SHRI SANKET J SHAH. THESE PAPERS ARE NOT IN THE HANDWRITINGS OF ANY PARTNER OR EMPLOYEE OF THE APPELLANT FIRM. THES E PAPERS ARE NOT SIGNED BY ANYONE, AND NOT BY ANY PARTNER OR ANY EMPLOYEE OF T HE APPELLANT FIRM. IN SUCH SITUATION, THIS DOCUMENT CAN ONLY BE HELD AS DUMB D OCUMENT AS FAR AS THE APPELLANT IS CONCERNED. THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF CIT V/S. KULRAM RAI (2007) 75 CCH 0149 (DELHI HO HELD THAT IF THE ASSESSEE HAS NOT SIGNED THE DOCUMENTS, ADDITIONS ON THE BASIS OF SUCH DOCUMENTS CANNOT BE MADE. FURTHER, STATEMENTS TO EXPLAIN THE CONTENTS OF THESE PAPERS WERE NOT RECORDED EITHER DURING THE SEARCH, DURING POST-SEARCH ENQUIRIES OR DURING ASSESSMENT PROCEEDINGS. NO QUESTION WAS ASKED TO THE PERSONS FROM WHOSE RESIDE NCE, THESE PAPERS WERE SEIZED. IN SUCH CIRCUMSTANCES, ADDITIONS MADE ON TH E BASIS OF SUCH EVIDENCES WHICH WERE NOT CONFRONTED TO ANYONE AT ANY STAGE OF INVESTIGATION CANNOT BE HELD JUSTIFIED. THE HON'BLE HIGH COURT OF DELHI HELD IN THE CASE OF CIT V/S. S.M. AGRAWAL (2007) 293 ITR 0043 THAT THE ONLY PERSON COMPETENT TO GIVE EVIDENCE ON THE TRUTHFULNESS OF THE CONTENTS OF THE DOCUMENT IS THE WRITER. KEEPING IN VIEW THE JUDGEMENTS OF THE HON'BLE HIGH COURT OF DELHI, THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH AT THIRD PARTY ARE NOT RELIABLE EV IDENCES IN THIS CASE. THE AO MADE THE ADDITIONS, AS ONE ENTRY OF RS.90 LAKH PAID BY C HEQUES TALLIED WITH THE BOOKS OF ACCOUNTS OF THE APPELLANT, WHEREAS, ANOTHER THREE E NTRIES ON SAME PAGE THROUGH IT(SS)A NO.94/AHD/2018 M/S. ANGEL INFRA ASSESSMENT YEAR :2011-12 6 CHEQUES DID NOT MATCH WITH THE APPELLANT'S BOOKS OF ACCOUNTS. THUS, IT IS REASONABLE TO BELIEVE THAT ALL THE ENTRIES WRITTEN ON THESE PA GES DO NOT BELONG TO THE APPELLANT. THE SEIZED DOCUMENTS SHOULD BE READ AS A WHOLE TO F IND OUT THE CORRECT NATURE OF TRANSACTION AND READING THE SEIZED MATERIAL SELECTI VELY IS NOT PERMISSIBLE. THEREFORE, ADDITIONS MADE BY THE AO ON THIS GROUND ALSO NOT FOUND JUSTIF IED. THE AO MADE THE ADDITIONS STATING THAT SHRI AJAY PATEL HAS SIGNED MOU WITH FG PL, REPL & SMT. GIRA SHAH. BUT THE APPELLANT'S CONTENTION THAT SHRI AJAY PATEL IS NEITHER PARTNER NOR EMPLOYEE/AUTHORIZED PERSON BY THE APPELLANT TO SIGN ANY SUCH DOCUMENT. THESE FACTS HAVE BEEN FOUND FACTUALLY CORRECT. SHRI AJAY PATEL IS NOT PARTNER OF THE APPELLANT FIRM, AS VERIFIED FROM THE PARTNERSHIP DEED. THIS M OU HAS NOT SIGNED BY SMT. GIRA SHAH, THEREFORE, IT IS NOT AN ADMISSIBLE EVIDENCE, AS UNSIGNED DOCUMENT IS NOT BINDING AND CANNOT BE ENFORCED BY LAW. HENCE, THE ADDITIONS MADE BY THE AO FOR THIS REASON ARE ALSO NOT HELD JUSTIFIED. NAME OF THE 'WIND CHIM ES' PROJECT IS NOWHERE MENTIONED IN THE PAPERS FOUND. NAME OF THE APPELLANT'S ANY PARTN ERS OR APPELLANT IS ALSO NOT MENTIONED ON THESE PAGES. STILL, LINKING OF THESE P AGES TO THE APPELLANT CANNOT BE CONSIDERED JUSTIFIED. FURTHER, AS ALLEGED BOOKING O F 9 FLATS BY THE REPL, THE APPELLANT CONTENDED THAT 3 FLATS HAVE BEEN SOLD TO OTHER PERSONS AND SALE DEEDS HAVE BEEN FILED, WHICH ARE PLACED ON RECORDS. FIRST INSTALLMENT FOR 2 FLATS WERE RECEIVED BY THE APPELLANT BEFORE THE DATE OF SEARCH . THIS IS EVIDENT FROM THE BANK ACCOUNT OF THE APPELLANT AND ENTRIES IN THE BANK AC COUNT CANNOT BE BACK DATED. SIX FLATS ARE STILL UNSOLD AND REFLECTED AS CLOSING STO CK IN THE BOOKS OF ACCOUNTS BY REPL. IN SUCH CIRCUMSTANCES, CONSIDERING RECEIPT OF RS.1,96,25,000/- BY THE APPELLANT FROM REPL IN CASH IS NOT REASONABLE AND J USTIFIED. KEEPING IN VIEW THE DISCUSSION ABOVE, THE ADDITIONS MADE BY THE AO ARE NOT FOUND SUSTAINABLE FACTUALLY AND LEGALLY. HENCE, THE ADDITIONS OF RS.1,96,25,000 /- ARE DELETED. THIS GROUND OF APPEAL IS ALLOWED. AGGRIEVED AS AFORESAID, REVENUE IS UNDER APPEAL BEF ORE US. 5. UPON DUE CONSIDERATION OF FACTUAL MATRIX AS ENUM ERATED HEREINABOVE, WE FIND THAT LD. CIT(A) HAS CLINCHED T HE ISSUE IN CORRECT PERSPECTIVE. THE ONLY BASIS OF MAKING IMPUGNED ADDI TION WAS LOOSE PAPER FOUND AT THE PREMISES OF THE THIRD PARTY. HOW EVER, NO CORRESPONDING INCRIMINATING MATERIAL WAS FOUND FROM ASSESSEES PREMISES WHICH WOULD CORROBORATE THE SAME. IN FACT, EACH AND EVERY DOCUMENT IMPOUNDED FROM ASSESSEES PREMISES WAS EXP LAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND NO INFIRMI TY COULD BE FOUND IN THE SAME. WE ARE OF THE OPINION THAT IT WAS INCUMBE NT UPON LD. AO TO IT(SS)A NO.94/AHD/2018 M/S. ANGEL INFRA ASSESSMENT YEAR :2011-12 7 MAKE FURTHER INQUIRIES IN THE MATTER TO SUBSTANTIAT E THE VERACITY OF THE LOOSE PAPER AND BRING ON RECORD COGENT MATERIAL / E VIDENCES TO ESTABLISH THAT CASH WAS RECEIVED BY THE ASSESSEE. IN THE ABSE NCE OF ANY SUCH INCRIMINATING MATERIAL/ EVIDENCES, NO SUCH ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE. IT IS ALSO EVIDENT THAT BOOK ING OF FLATS AGAINST WHICH THE CASH WAS ALLEGED TO BE RECEIVED BY THE AS SESSEE WAS ALREADY CANCELLED MUCH BEFORE THE DATE OF SEARCH AND CHEQUE AMOUNT WAS ALREADY REFUNDED BY ASSESSEE TO OTHER PARTY WHICH W OULD FURTHER WEAKEN THE STAND OF LD.AO. THEREFORE, NO FAULT COULD BE FO UND WITH THE APPROACH OF LD. FIRST APPELLATE AUTHORITY. 6. OUR VIEW FIND SUPPORT FROM THE DECISION OF HONB LE GUJARAT HIGH COURT RENDERED IN CIT V/S MAULIKKUMAR K.SHAH (307 ITR 137) WHEREIN HONBLE COURT REFUSED TO ADMIT REVENUES APPEAL, INTER-ALIA BY NOTING THAT LD. AO HAD NOT BROUGHT ANY CORROBORATIVE MATERIAL O N RECORD TO PROVE THAT ON-MONEY WAS RECEIVED. THE ONUS WAS ON REVENUE TO PROVE WITH CORROBORATIVE EVIDENCE THAT THE ENTRIES IN THE SEIZ ED DAIRY ACTUALLY REPRESENTED THE SALES MADE BY THE ASSESSEE. MERE EN TRIES IN THE SEIZED MATERIAL WAS NOT SUFFICIENT TO PROVE THAT THE ASSES SEE HAS INDULGED IN SUCH A TRANSACTION. THE INFERENCE OF LD.AO THAT THE ASSESSEE RECEIVED ON-MONEY WAS MERELY BASED ON SUSPICION AND SURMISES AND THERE WAS NO MATERIAL WHATSOEVER TO SUPPORT THE CONCLUSION OF LD. AO THAT THE ASSESSEE HAD IN FACT RECEIVED ANY ON-MONEY. THEREFO RE, THE ADDITIONS BASED ON MERE PRESUMPTIONS AND ASSUMPTIONS AND WITH OUT ANY CORROBORATIVE EVIDENCE COULD NOT BE SUSTAINED. IT(SS)A NO.94/AHD/2018 M/S. ANGEL INFRA ASSESSMENT YEAR :2011-12 8 7. HENCE, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/03/2020 SD/- SD/- (MAHAVIR PRASAD) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DATED: 06/03/2020 SS, PS TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 0 ( ) / THE CIT(A) 4. 0 / CIT CONCERNED 5. 12 34456 , 56 , 7 8 / DR, ITAT, AHMEDABAD 6. 3 9:; / GUARD FILE / BY ORDER, / !' (DY./ASSTT.REGISTRAR) '#$ , 7 8 / ITAT, AHMEDABAD.