Mukesh M. Kelalwala, Bharuch V. The DCIT, Cen. Circle- 1, Baroda

MA 385/AHD/2009

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1960 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-06-2014
• Assessment Year: misc
• Appeal Filed On: 06-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: M K PATEL
• Keywords: Income from undisclosed sources
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER M.A. NO.385/AHD/2009 (ARISING OUT OF IT(SS)A NO.35/AHD/2005) MUKESH M. KELAWALA, 4-5, SWAMI VIVEKANAND SOCIETY, NR, KASAK, BHARUCH. VS DY. COMMISSIONER OF INCOMET TAX, CENTRAL CIRCLE-1, VADODARA. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI O.P. BATHEJA, SR.D.R. , ASSESSEE(S) BY : SHRI M.K. PATEL, A.R. / DATE OF HEARING : 06/06/2014 / DATE OF PRONOUNCEMENT: 13/06/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS MISC. APPLICATION HAS BEEN FILED BY THE APPLIC ANT ON 6 TH OF NOVEMBER, 2009 ARISING FROM THE ORDER OF THE TRIBUN AL AS NOTED IN THE NOMENCLATURE SUPRA, ORDER DATED 30 TH OF DECEMBER, 2005. 2. THROUGH THIS MISC. APPLICATION, THE MAIN GRIEVAN CE OF THE APPLICANT IS AS PER PARAGRAPH 2 OF THE APPLICATION, FOR READY REFERENCE REPRODUCED BELOW: 2. THE MAIN CONTENTION OF THE ASSESSEE IN RESPECT OF T HE ABOVE ADDITION BEFORE THE HONBLE ITAT WAS THAT THE EVIDENCE IN FO RM OF INFORMATION GATHERED B THE LEARNED ASSESSING OFFICER UNDER SECT ION 133(6) OF THE ACT WAS NOT SUPPLIED TO THE ASSESSEE DURING THE COURSE OF A SSESSMENT PROCEEDINGS. THE REPLIES OF ALL THE RETIRING PARTNERS GIVEN TO THE L EARNED ASSESSING OFFICER UNDER SECTION 133(6) OF THE ACT ARE PLACED AT PAGE 8 TO 13 OF THE PAPER BOOK AND GUJARATI VERSION FROM PAGES 14 TO 19 OF THE PAP ER BOOK. IT WAS ALSO ARGUED BEFORE THE HONBLE ITAT WAS RECORDED ON PAGE 19 PARA 15 OF THE ORDER THAT A PERUSAL OF THE REPLIES WOULD SHOW THAT ALL THE ERSTWHILE PARTNERS HAVE CONFIRMED NOT TO HAVE RECEIVED THE TOTAL MONEY FROM THE ASSESSEE AND HIS MA NO.385/AHD/2009 IN IT(SS)A NO.35/AHD/2005 MUKESH M. KELAWALA VS. DCIT, CENTRAL CIRCLE-1, VADO DARA. - 2 - WIFE ON THEDATE OF THEIR RETIREMENT WHICH MAKES IT AMPLYT CLEAR THAT THE ASSESSEE HAS NOT PAID THE WHOLE AMOUNT ON THE DATE OF JOINTING THE PARTNERSHIP FIRM. THIS CONTENTION IS FURTHER SUPPORTED BY THE A FFIDAVIT OF ASSESSEE WHICH IS PLACED ON PAGE 4 AND 5 OF THE PAPER BOOK. 3. IT WAS ALSO FURTHER POINTED OUT THAT THESE REPLI ES WERE SUPPLIED TO THE ASSESSEE ONLY AFTER THE ASSESSMENT ORDER WAS FRAMED AND THE SAME WERE NOT CONSIDERED EITHER BY THE ASSESSING OFFICER OR B Y THE COMMISSIONER OF INCOME TAX (APPEALS) ALTHOUGH THE SAME WERE DULY FILED BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS). THE HONBLE IT AT HAS RECORDED THE FINDINGS ON PAGE 20 PARA 17 OF THE ABO VE ORDER AND MORE PARTICULARLY THE FINDING ON PAGE 22 PARA 18(I) GIVE N BY THE HONBLE ITAT READS AS UNDER:- ON THE OTHER HAND, THESE REPLIES SEEMS TO BE MAKE BELIEF EVIDENCE AT THE BEHEST OF THE ASSESSEE, OTHERWISE, THE STYLE AN D CONTENTS OF ALL THESE REPLIES WOULD NOT HAVE BEEN ALMOST SIMILAR. SINCE, NONE OF THOSE PERSONS SEEMS TO BE A RELATIVE OR CLOSE FRIENDS OF THE ASSESSEE, NONE OF THEM WOULD HAVE WAITED FOR ON MONEY TILL A PERIOD OF ABOUT SEVEN YEARS, I.E. FROM SEPTEMBER, 1997 TILL JULY 2004 AS HAS BEEN STATED IN THESE REPLIES. SUCH ASSERTION, ON THE OTHER HAND, B ELIES NOT ONLY THE CLAIM OF THE ASSESSEE, BUT THE STAND OF THE RETIRIN G PARTNERS ALSO. 3. FROM THE SIDE OF THE APPLICANT, LEARNED AR, MR. M.K. PATEL APPEARED. HE HAS INFORMED THAT AGAINST THE ORDER OF THE TRIBUNAL AN APPEAL WAS FILED BEFORE THE HONBLE GUJARAT HIGH CO URT AND VIDE TAX APPEAL NO.1070 OF 2006, ORDER DATED 28 TH OF FEBRUARY, 2007, IT WAS DIRECTED AS UNDER: LEARNED COUNSEL FOR THE APPELLANT SUBMITS THAT THE TRIBUNAL HAS USED THE MATERIAL, WHICH WAS NOT SUPPLIED AND SUPPLIED ONLY AFTER THE ASSESSMENT ORDERS FOR THE BLOCK YEARS ARE PASSED. AT THIS STAGE, WE CANNOT ENTERTAIN THIS APPEAL, BUT , LIBERTY IS RESERVED TO THE APPELLANT TO MOVE AN APPROPRIATE APPLICATION BEFORE THE TRIBUNAL AND THE TRIBUNAL IS DIRECTED TO LOOK INTO IT AGAIN. THIS APPEAL STANDS DISPOSED OF. 4. ON RECEIVING THE ORDER OF THE HONBLE HIGH COURT , THE ASSESSEE HAD MOVED THIS MISC. APPLICATION, NOW UNDER CONSIDERATI ON. HE HAS CONTENDED THAT IN A SITUATION WHEN HONBLE HIGH COU RT HAS DECIDED THE ISSUE ON MERITS AND GIVEN A LIBERTY TO MOVE AN APPR OPRIATE APPLICATION MA NO.385/AHD/2009 IN IT(SS)A NO.35/AHD/2005 MUKESH M. KELAWALA VS. DCIT, CENTRAL CIRCLE-1, VADO DARA. - 3 - BEFORE THE TRIBUNAL, THEREFORE, AS PER THAT DIRECTI ON NOW THE TRIBUNAL IS TO LOOK INTO THE MATTER AGAIN. FROM THE ORDER OF THE T RIBUNAL, IT IS EVIDENT THAT THE ASSESSEES CONTENTION WAS REJECTED ONLY ON PRESUMPTION. THE ORDER OF THE TRIBUNAL DATED 30 TH OF DECEMBER, 2005 IS THEREFORE REQUESTED TO BE RECALLED SO THAT THE MATTER CAN BE ADJUDICATE D AFRESH IN THE LIGHT OF THE EVIDENCES ON RECORD AND THE EVIDENCES WHICH CAM E TO THE NOTICE OF THE ASSESSEE AFTER THE COMPLETION OF THE ASSESSMENT . 5. FROM THE SIDE OF THE REVENUE, LEARNED SR.D.R., M R. O.P. BATHEJA HAS PLEADED THAT THE TRIBUNAL HAS GIVEN A CONSCIOUS DECISION HENCE SHOULD NOT BE RECALLED BEING OUT OF THE PURVIEW OF SECTION 254(2) OF IT ACT. HE HAS ALSO ARGUED THAT THERE WAS NO REQUIREME NT OF LAW TO GIVE AN OPPORTUNITY TO THE ASSESSEE FOR CROSS-EXAMINATION O F CERTAIN EVIDENCES WHICH WERE NOT THE WITNESS OF THE REVENUE DEPARTMEN T. REVENUE DEPARTMENT WAS UNDER NO OBLIGATION TO OFFER SUCH OP PORTUNITY TO THE ASSESSEE. IT WAS WRONG ON THE PART OF THE ASSESSEE TO SEEK RECALL OF A DETAILED ORDER ON THAT GROUND. HE HAS PLEADED THAT THE CONCLUSION OF THE TRIBUNAL WAS NOT SOLELY BASED UPON THAT REASON BUT THE APPEAL OF THE ASSESSEE WAS REJECTED ON SEVERAL OTHER REASONS. 6. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES. WE HAVE NOTED THAT ONLY SUBSTANTIVE GROUND WHICH WAS RAISED BY TH E ASSESSEE WAS THAT THE COMMISSIONER HAS ERRED IN LAW AND ON FACTS IN M AKING AN ADDITION OF RS.18,30,000/- AS UNDISCLOSED INCOME FROM INTEREST AND SALE OF DUMPERS AS THE SAME WERE RECOVERED IN THE RETURNED INCOME A S INVESTED IN M/S. EKTA CORPORATION ANKALESHWAR. THE MAIN OBJECTION OF THE AO WAS THAT THE DOCUMENT OF PARTNERSHIP DEED OF M/S. EKTA CORPO RATION WAS EXECUTED ON 24.4.1997, WHEREBY ASSESSEE GOT 85% SHARE OF LAN D OF M/S. EKTA MA NO.385/AHD/2009 IN IT(SS)A NO.35/AHD/2005 MUKESH M. KELAWALA VS. DCIT, CENTRAL CIRCLE-1, VADO DARA. - 4 - CORPORATION. ACCORDING TO AO, THE IMPUGNED INVESTME NT SHOULD HAVE BEEN MADE BY THE ASSESSEE ON OR BEFORE 24.09.1997. THE AO HAD NOT GIVEN ANY CREDIT OF THE AMOUNT RECEIVED SUBSEQUENT TO 24.09.1997. THEREFORE, THE CLAIM OF THE ASSESSEE THAT THE IMPUG NED UNACCOUNTED INCOME WAS FROM THE SALE OF DUMPERS WAS REJECTED. T HE AO HAS NOTED THAT THE NAMES OF MR. MUKESH M. KELAWAL AND SMT. BH ARTI M. KELAWALA HAVE BEEN ENTERED AS ONE OF THE OWNERS OF THE LAND OWNED BY M/S. EKTA CORPORATION. ACCORDING TO AO, A COMMON PRACTICE WAS THAT A DOCUMENT PERTAINED TO LAND IS OFFICIALLY EXECUTED ONLY AFTER THE RECEIPT OF FULL CONSIDERATION. LEARNED CIT(A) HAS ALSO NOTED THAT T HE UNDISPUTED FACT WAS THAT THE PAYMENTS HAVE BEEN RECEIVED AFTER 24.0 9.1997. ACCORDING TO LEARNED CIT(A), THERE WAS NO EVIDENCE ON RECORD TO SUGGEST THAT THE INVESTMENT IN THE SAID FIRM WAS MADE OUT OF THE SAL E PROCEEDS OF DUMPERS OR CASH WITHDRAWALS OR BANK A/C OF BOB. FURTHER, IT WAS ALSO NOTED BY THE REVENUE DEPARTMENT THAT THE STATEMENT OF SRI MUKESH M. KELAWALA WAS RECORDED DURING THE SEARCH PROCEEDING AND IN THAT S TATEMENT HE HAS ACCEPTED THAT A LOAN WAS GIVEN AND INTEREST WAS EAR NED. SINCE, THE ASSESSEE HAD ACCEPTED AN UNDISCLOSED INTEREST INCOM E; THEREFORE, THE AO HAD PROCEEDED TO TAX THE UNDISCLOSED PRINCIPLE AMOU NT OF RS.80 LACS (APPROXIMATE). THE ASSESSEE ON THE OTHER HAND HAS P LEADED THAT ERSTWHILE PARTNERS OF M/S. EKTA CORPORATION HAVE NOT RECEIVED FULL PAYMENT BUT RECOVERED THE PAYMENT IN BITS AND PIECES OVER THE YEARS AFTER THE RETIREMENT AND UPTO THE TIME OF SEARCH. THE CONTENT ION OF LEARNED AR BEFORE US IS THAT NO FINDING ON THAT FACT WAS GIVEN BY LEARNED CIT(A). HOWEVER, THIS PLEA OF THE ASSESSEE HAS NO SUBSTANCE BECAUSE THE REVENUE AUTHORITIES AS WELL AS THE TRIBUNAL HAVE PASSED A D ETAILED ORDER ON FACTS CONSIDERING ALL THOSE ASPECTS. IT WAS NOT AT ALL A CASE OF APPARENT MISTAKE. THE AO HAD RELIED UPON THE STATEMENT MADE AT THE TI ME OF SEARCH FOR MA NO.385/AHD/2009 IN IT(SS)A NO.35/AHD/2005 MUKESH M. KELAWALA VS. DCIT, CENTRAL CIRCLE-1, VADO DARA. - 5 - MAKING THE IMPUGNED ADDITIONS. MOREOVER, THE SEIZED MATERIAL HAVE NOT GIVEN ANY EVIDENCE THAT THE PAYMENTS TO OUTGOING PA RTNERS HAVE BEEN MADE OUT OF THE SALE OF THREE DUMPERS AS ALLEGED OR OUT OF THE WITHDRAWALS FROM THE BANK ACCOUNT. LEARNED CIT(A) H AS ALSO FOUND THAT IN THE STATEMENT RECORDED AT THE TIME OF SEARCH ON 13 TH AUGUST, 2002, THE ASSESSEE HAD NOT MENTIONED THAT THE SALE PROCEEDS O F DUMPERS HAVE BEEN USED FOR MAKING THE PAYMENT TO ERSTWHILE PARTNERS. OUT OF THE ADDITION OF RS.18,30,000/- AS MADE BY THE AO, LEARNED CIT(A) HA S NOTED THAT THE INTEREST INCOME WAS ONLY TO THE TUNE OF RS.5 LACS A S AGAINST THE INTEREST INCOME ASSESSED BY THE AO AT RS.7 LACS, THEREFORE, PART RELIEF WAS GRANTED AND THE ADDITION WAS CONFIRMED TO THE TUNE OF RS.16 ,30,000/-. WHEN THE MATTER WAS CARRIED BEFORE THE TRIBUNAL, RESPECTED I TAT B BENCH AHMEDABAD IN IT(SS)A NO.35/AHD/2005 HAVE DISCUSSED ALL THOSE EVIDENCES AT LENGTH, IN AN ORDER RUNNING 24 PAGES A ND THEREUPON CONCLUDED AS UNDER, RELEVANT PARAGRAPH 18 IS REPROD UCED BELOW: 18. AFTER CAREFUL CONSIDERATION OF AFORESAID REPLI ES OF ORDER ON BEHALF OF RETIRING PARTNERS, WE ARE OF THE OPINION : (I) THAT, NONE OF THESE REPLIES SUPPORTS THE ASSESS EES PLEA THAT PAYMENT OF UNDISCLOSED INVESTMENT IN M/S. EKTA CORPORATION HAD BEEN MADE DURING THE PERIOD 27/09/1997 TILL THE DATE OF SEARCH. ON THE OTHER HAND, THESE REPLIES SEEM TO BE A MAKE BELIEF EVIDENCE AT THE BEHEST OF THE ASSESSEE, OTHERWISE, THE STYLE AN D CONTENTS OF ALL THESE REPLIES WOULD NOT HAVE BEEN ALMOST SIMILAR. SINCE, NONE OF THESE PERSONS SEEMS TO BE A RELATIVE OR CLOSE FRIENDS OF THE ASSESSEE, NONE O F THEM WOULD HAVE WAITED FOR ON-MONEY TILL A PERIOD OF ABOUT SEVEN YEARS, I.E. FROM SEPTEMBER, 1997 TILL JULY, 2004 AS HAS BEEN STATED IN THESE REPLIES. SUC H ASSERTION, ON THE OTHER HAND, BELIES NOT ONLY THE CLAIM OF THE ASSESSEE, BU T THE STAND OF THE RETIRING PARTNERS ALSO. (II) THAT, FAILURE TO MENTION THE AMOUNT RECEIVED B Y THEM TILL JULY, 2004 ALSO GOES TO SHOW THAT NOTHING WAS DUE FROM THE ASS ESSEE. 19. IN VIEW OF ABOVE DISCUSSION AND TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE FACT THAT THE ASSESSEE HAS NOT BROUGHT ANY EVIDENCE TO ESTABLISH THAT THE UNDISCLOSED INVESTMENT IN PARTNE RSHIP-FIRM WAS MADE AFTER 24.09.1997 AND TILL THE DATE OF SEARCH, WE ARE, UNA BLE TO DEVIATE FROM THE FINDINGS OF THE REVENUE AUTHORITIES, CONSEQUENTLY, THE SAME ARE CONFIRMED. MA NO.385/AHD/2009 IN IT(SS)A NO.35/AHD/2005 MUKESH M. KELAWALA VS. DCIT, CENTRAL CIRCLE-1, VADO DARA. - 6 - 6.1 ONCE THE TRIBUNAL HAS TAKEN A CONSCIOUS DECISIO N AFTER CONSIDERING THE EVIDENCES ON RECORD AS ALSO THE FACTS OF THE CA SE, THEREFORE, IT IS NOT A SITUATION WHEN A MISTAKE AT ALL; WHAT TO SAY AN APP ARENT MISTAKE, WAS COMMITTED. IF THAT ORDER OF THE TRIBUNAL IS GOING T O BE DISTURBED THEN THE TINKERING SHALL AMOUNT TO REVIEW OF THE ORDER OF TH E TRIBUNAL WHICH IS OUT OF THE PURVIEW OF SECTION 254(2) OF IT ACT. WE, THE REFORE, HOLD THAT THE PRESENT MISC. PETITION HAS NO FORCE THUS DESERVES T O BE QUASHED. 7. IN THE RESULT, THE PRESENT MISC. PETITION IS HER EBY DISMISSED. SD/- SD/- (ANIL CHATURVEDI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED13/06/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD