Pratik Rameshbhai Savaliya, Surat V. ITO, Ward-1(3)(8), , Surat

MA 45/SRT/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3018 (ITAT-SURAT)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-04-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-12-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 13-06-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Loose papers; Document seized; Principle of natural justice; Opportunity of cross examination; Documents seized
• Section: 143(3); 250; 254(2); 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM Miscellaneous Application No.44/SRT/2023 [Arising out of IT(SS)A No.2/SRT/2022] Assessment Year: (2011-12) (Physical Hearing) Rameshbhai Bhemjibhai Savaliya, 43/44, Lalji Nagar, B/h Vishal Nagar, Adajan, Surat - 395009 Vs. The ITO, Ward- 1(3)(8), Surat (Appellant) (Respondent) èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ADOPS3294B Miscellaneous Application No.45/SRT/2023 [Arising out of IT(SS)A No.3/SRT/2022] Assessment Year: (2011-12) Pratik Rameshbhai Savaliya, 43/44, Lalji Nagar, B/h Vishal Nagar, Adajan, Surat - 395009 Vs. The ITO, Ward- 1(3)(8), Surat (Appellant) (Respondent) èथायीलेखासं./जीआइआरसं./PAN/GIR No.: CNTPS6046J Appellant by Shri V. I. Rudalal, AR with Shri Rushi Parekh, CA Respondent by Shri Vinod Kumar, Sr. DR Date of Hearing 22/12/2024 Date of Pronouncement 12/04/2024 आदेश / O R D E R PER DR. A. L. SAINI, AM: By way of these two Miscellaneous Applications (MA), the assessee is seeking to recall the order of this Tribunal in IT(SS)A Nos. 2 & 3/SRT/2022 whereby the appeal of the assessee was dismissed by the Tribunal in order dated 15.05.2023. Both the appeals were related with the family member and facts in both the appeals were common, thus, both the appeals were adjudicated by way of common order. Since, common order was passed in both the appeal, thus, both the M.A.s are Page | 2 MA.62/SRT/2023/AY.2013-14 M/s Mega Aims consolidated together and are decided with common order. For appreciations of fact, the facts in MA No.2/SRT/2023 is treated as ‘lead case’. 2. The contention raised by the assessee in this Miscellaneous Application is as follows: “The appeal ITA No. 2/SRT/2022 is against order passed by CIT (A) - 3 Surat u/s - 250 of the IT Act, in this case Hon ITAT Surat Bench dismissed the appeal against order of the CIT(A) -confirming additions made of the Rs.22,84,000/- and Rs.8,88,600/-. The assessment order framed u/s/ 143(3) dt. was passed in complete violation of principles & natural justice by not furnishing the statement of purchaser of bunglow no. 65 & 66 Laljinagar, Adajan, Surat. The loose paper contains the erroneous figure of sale consideration of Rs. 38,75,000/- which is correctly totaled as Rs. 29,15,000/-. There was mismatch in signature of assesse on Satakhat which argument was not considered by Hon. ITAT Bench. The A.O. also erroneously held and applied jantri rate @ 40-60 ratio for Laljinagar property no 49 for Rs.14,66,000 additionally given to assessee as sale consideration for bunglow no. 65 & 66. There was no proof of property holding by the purchasers or the relative of purchaser which is given as sale consideration for bunglow no. 65 & 66. Mistake apparent from record 254 1. Hon ITAT Bench, Surat, erroneously held that statement recorded u/s 132(4) of the act has gone unrebutted as the assesse has not challenged the same either before A.O. or during the appellate proceedings. In fact the assessee has frequently asked for the statement of purchaser as well as cross examination right from assessment stage and reiterated it in appellant proceedings also. 2. The Hon ITAT Bench wrongly held that the fact of undervaluation is proved by revenue the burden shifted on the assessee did not prove in his favor. The reliance on dumb document like loose paper and reliance on the cancelled statement did not prove gilt to the hilt. The lion IT AT Bench incorrectly held that the agreement to sale dt. 24/04/2010 is a valid document and a precise one giving specific dates of payment made to the assessee and his son. The assessee’s claim of having cancelled the Stakhat is not supported by any further cancellation as also not accepted by the purchaser. The overall documentary evidence found during the course of search corroborates each other and proves the veracity of the agreement dt. 24/04/2010. Page | 3 MA.62/SRT/2023/AY.2013-14 M/s Mega Aims The agreement to sale (satakhat) did not give specific dates of the payment to the seller (assessee). The delayed payment as per terms of satakhat automatically cancelled the satakhat as per terms of satakhat. There is no need to prepare separate cancellation of Satakhat. The fact that the cancellation of Satakhat is not accepted by the purchaser but in absence of statement recorded U/s 132(4) of the purchaser & he is not accepting cancellation, was naturally not in the knowledge of assessee. The assessee was kept in dark. The overall documentary evidence found like loose paper did not correctly reflected the figure of sale consideration of Rs. 39,75,000/- but instead it is totalled at Rs. 29,15,000/-. How can such incorrect loos paper be said to be in corroboration of statement with any document found during search. Further there is mismatch of signature of assessee on satakhat making it a dump document and also the incorrect loose paper be definitely a dump document. The reliance of AO in clearly establishing the receipts of amount referred to in agreement to sale itself is faulty as not properly appreciated by Hon. ITAT Bench. 4. The Hon. ITAT Bench observed the variation in figure of loose paper as Rs. 29,15,000/- and not Rs. 38,75,000/- as merely technical objection. There is no corroboration of Satakhat with the loose paper. The applying ration of 40 - 60 as per Satakhat is also not deciphered from the Satakhat itself but it is presumptive and baseless. 5. The addition of Rs.8,88,600/- being investment in buglow no. 49 and upheld by CIT(A) is without any infirmity and assessee did not produce any relevant details to disprove the same, as asserted by ITAT Bench. In fact the onus on revenue is not discharged by revenue by producing the property no. 49 owners details, their property purchase deed registry, their whereabouts, their relation with address, their intention to part with property no. 49 for sale consideration of property no. 65 & 66 of assessee, the amount of consideration received by them, final sale deed registry in the name of assessee. Thus the transfer of property no. 49 by some unknown owner against the sale of property no. 65 & 66 to purchase Darshi A. Shah is merely super hypothetical assumption & no legs to stand. 6. The Hon. ITAT Bench erroneously held that no evidence was brought before the Bench that the assessee had requested the AO for an opportunity of cross examination & AO denied it and the materials facts narrated by AO are against the assessee. The material facts which is established with cogent evidence against the assessee cannot be overruled by providing opportunity of cross examination. The opportunity of cross examination is fundamental & lawful as held by Gujarat High Court. It cannot be overruled by cogent materials (evidence). The fact that the statement recorded u/s 132(4) of purchaser was not given to assessee itself proved that the question of asking again & again cross examination did not arise.” Page | 4 MA.62/SRT/2023/AY.2013-14 M/s Mega Aims 3. The ld Counsel for the assessee argued on the lines of his MA. In addition, the ld Counsel for assessee also filed written submissions on record. The ld Counsel for the assessee submits that CIT(A) passed the order without verification of facts. Before CIT(A) the assessee challenged jurisdictional error committed by the assessing officer. the lower authority decided the issue on the basis of non-existent facts and evidences. The bench while deciding the appeal of the assessee approved the finding of the CIT(A). To support of his contention, Ld. Counsel for the assessee relied upon the following decisions: (i) Sony Pictures Network India Pvt. Ltd. v. ITAT (2019) 411 ITR 447 (Bom. HC) (ii) Prathana Construction (P) Ltd. vs. DCIT (2001) 70 TTJ 122 (Ahd) (iii) M/s Southern Gujarat Chamber Trade & Industry Development Centre vs ITO (Exemption) Ward, Surat. MA. 34/SRT/2018 (iv) CIT vs S. S. Gupta, 257 ITR 440 (Raj. HC) 4. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the Revenue submitted that the Tribunal has passed the speaking order and the said order should not be recalled. The assessee is seeking revive of the order which is not permissible under section 254(2). The scope of application under section 254(2) is limited to the mistake apparent on record and not to appreciate or re-appreciate the facts and submissions of the parties. 5. We have heard both the parties and perused the material available on record including the written submissions filed by the assessee. We have also considered the case laws relied by the ld Counsel in his submissions. We note that the Tribunal in the case of Rameshbhai Bhemjibhai Savaliya vs ITO, in IT(SS)A No.2/SRT/2022 for AY.2011- 12, order dated 15.05.2023, concluded the issue observing as follows: “13. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. Page | 5 MA.62/SRT/2023/AY.2013-14 M/s Mega Aims We note that assessee and his father have sold bungalow no. 65 & 66 to Ms. Darshi A. Shah, daughter of Mr. Atul Shah. The recorded consideration which is received in cheque has been admitted by the assessee in his return of income. The Satakhat which is found during the course of search dated 24.04.2010 which contains the total sale consideration for both the Bungalows at Rs. 62,75,000/- which further clarifies that Rs.24,00,000/- by cheque and Rs. 38,75,000/- by cash. The said Satakhat has the signatures of the assessee and his father and even the purchasers. If the Satakhat is cancelled as claimed by the assessee, the entire transaction would have been cancelled. However, that is not the case here. Both the bungalows have been transferred to the same persons i.e. Ms. Darshi shah and for the consideration of Rs.24,00,000/- which is the cheque consideration mentioned in the Satakhat. Thus, the circumstantial evidences prove beyond doubt that assessee and his father received Rs.38,75,000/- in cash as mentioned in the Satakhat which is confirmed by Mr. Atul Shah in his statement before the DDIT. Thus, it is an admitted position that the agreement to sell had been executed between the assessee and his father as sellers and Ms. Darshi Shah as the purchaser. Mr. Atul Shah, father of Ms. Darshi Shah in his statement recorded under section 132(4) of the Act has clearly stated that on-money had been paid by him to the extent stated in the agreement to sell to the assessee and his father. Under the circumstances, the statement of the purchaser recorded under section 132(4) of the Act has gone unrebutted as the assessee has not challenged the same either before the Assessing Officer or during the appellate proceedings. Reliance is placed upon the decision of the Delhi High Court in the case of Malik Bros. (P.) Ltd. v. CIT [2007] 162 Taxman 43, for the proposition that when the assessee is afforded reasonable opportunity, despite which he does not ask for any documents for cross examination, it goes to show that the assessee had nothing to explain. The statement made by Mr. Atul Shah under section 132(4) of the Act was voluntary and there was no allegation that there was any undue influence or coercion had been used by the Income Tax Authorities. Mr. Atul Shah having clearly stated in his statement under section 132(4) of the Act that the on-money to the extent stated in the agreement to sale had been paid to the assessee and his father was sufficient evidence that has been produced on record by the Assessing Officer. Reliance is also placed upon the decision of the Hon'ble Kerala High Court in the case of CIT v. P.M. Aboobackei [2014] 363 ITR 447/45 taxmann.com 172/225 Taxman 178 (Mag.), wherein the court found that no such evidence was adduced by the assessee to support his case and it was held that the revenue has to prove the existence of a fact that undervaluation was made by the assessee and that the assessee had paid more amounts for the purchase of property. When that fact is proved, the burden shifts to the assessee to prove otherwise. The Assessing Officer has clearly, on the basis of the seized documents and the statement of Mr. Atul Shah proved the existence of the fact that the payments for purchase of bungalows were made as per the Satakhat found during the course of search and the sale deeds came to be executed as per the Jantri rates for which payments were made by cheque in addition to the payments made in cash as stated in the Satakhat. 14. We have examined the above stated facts narrated by ld CIT(A) and case law relied by him and noted that agreement to sell (Satakhat) dated Page | 6 MA.62/SRT/2023/AY.2013-14 M/s Mega Aims 24.04.2010 is a valid document and a precise one giving specific dates of payment made to the assessee and his father, therefore the same should be relied. We note that ld CIT(A) relied upon the decision of the Delhi High Court in the case of CIT v. Jai Pal Aggarwal [2013] 212 Taxman 1/28 taxmann.com 269, for a similar proposition of law and ld CIT(A) also placed reliance upon the decision of the Madras High Court in the case of CIT v. K. Dadakhan [2003] 133 Taxman 732. The evidence which has been brought on record viz., the agreement to sell (Satakhat) dated 24.04.2010 is a valid document and a precise one giving specific dates of payment made to the assessee and his father. The assessee's claim of having cancelled the agreement (Satakhat) is not supported by any further cancellation agreement which should normally have been available with the assessee and the buyer and should have been found during the search; the fact of cancellation had not been accepted by the purchaser Mr. Atul Shah on behalf of his daughter Ms. Darshi Shah. The overall documentary evidence found during the course of search corroborates each other and proves the veracity of the agreement dated 24.04.2010. Therefore it is evident that the AO has clearly established receipt of the amounts referred to in the agreement to sell. It was further found that the purchaser has filed returns of income declaring the payment of the amount mentioned in the agreement to sell in cash and have paid tax thereon, which shows that the transactions have gone through on the higher amount as per the agreement and not on the petty amount shown in the sale deed as claimed by the assessee. Therefore, ld CIT(A) noted that AO has clearly made out a case that the assessee had received consideration from the purchaser in terms of the agreement to sell, whereas the assessee had failed to discharge the onus of rebutting this evidence. 15. The ld CIT(A) observed that assessee has merely raised some technical objections during the course of appellate proceedings that actual cash payment as per seized material is Rs.29,15,000/- and not Rs. 38,75,000/-. Here, the assessee is contradicting himself as he has submitted that copies of the seized documents which were not given to him. Therefore, ld CIT(A) noted that as Satakhat is the reliable document for the parties to the agreement and as Mr Atul Shah has confirmed the payment of Rs. 38,75,000/- in cash which is evident from Satakhat as well, this technical objection will not help the assessee. The assessee has referred to the decision on dumb document which are not relevant to the assessee's case for the reason that the Satakhat is not a dumb document and it contains all the details about the property, about the parties, the dates and the amounts. Therefore, the Satakhat cannot be called as a dumb document by any stretch of imagination. During the appellate proceedings, the assessee has stated that the loose papers are rough estimates and hence, should not be relied upon. The seized Satakhat is not a loose paper and hence, his submissions including the judicial pronouncements will not come to his rescue. Accordingly, the addition of Rs.14,66,000/- being 40% of Rs. 38,75,000/- made by the AO being the assessee's share (balance 60% is that of assessee's father Mr. Ramesh Savalia) was confirmed by ld CIT(A). 16. About the addition of Rs.5,92,400/- being investment in Bungalow no. 49, the ld CIT(A) noted that as per the Satakhat dated 24.04.2010, the assessee sold two Bungalows no. 65 & 66 to Ms. Darshi Shah and purchased Page | 7 MA.62/SRT/2023/AY.2013-14 M/s Mega Aims Bungalow no. 49 from Nilesh Kumar Mangaldas Shah. The investment in the said bungalow has not been disclosed by the assessee in the return of income. As the Bungalows no. 65 & 66 and 49 are of the same size, AO treated the investment in the said bungalow at Rs. 14,81,000/- applying the same rate as received by the Appellant for bungalow No. 65 & 66. Appellant's share of 40% was taken as Rs.5,92,400/- which was treated as undisclosed investment in purchase of the bungalow no. 49 and brought to tax. During the appellate proceedings, the assessee has not produced any relevant details to disprove that the said investment was not made. Therefore, the addition of Rs.5,92,400/- made by the AO which is on the basis of evidence found in the Satakhat dated 24.04.2010 was sustained by ld CIT(A). We have gone through the above findings of ld CIT(A) on factual aspect and noted that there is no infirmity in the findings of ld CIT(A). We have also gone through the paper book filed by the assessee and observed that above facts narrated by ld CIT(A) are correct. Hence, these appeals deserve to be dismissed by upholding the orders passed by the Ld. CIT(A) and so far merits of the case are concerned, they are dismissed. 17. Before us, ld Counsel argued that satisfaction note under section 153C of the Act is not in accordance with law. We have gone through the satisfaction note under section 153C of the Act and observed that it is in accordance with law. The Hon`ble Supreme Court in the case of Vikram Sujitkumar Bhatia [2023] 149 taxmann.com 123(SC) held that amendment in section 153C by the Finance Act, 2015, w.e.f. 01.06-2015, with respect to incriminating material pertaining to third party, shall apply to searches conducted before 01.06.2015. The Hon`ble Supreme Court further held that object and purpose of Section 153C is to address the persons other than the searched person. Even as per the unamended section 153C, the proceeding against other persons (other than the searched person) was on the basis of the seizure of books of account or documents seized or requisitioned "belongs or belong to" a person other than the searched person. However, it appears that as in the case of Pepsico India Holdings Private Limited, the Hon'ble Delhi High Court interpreted the words "belong to" restrictively and/or narrowly and which led to a situation where, though incriminating material pertaining to a third party / person was found during search proceedings under Section 132, the Revenue could not proceed against such a third party, which necessitated the Legislature / Parliament to clarify by substituting the words "belongs or belong to" to the words "pertains or pertain to" and to remedy the mischief that was noted pursuant to the judgment of the Hon'ble Delhi High Court. Therefore, if the submission on behalf of the respective respondents – assessees that despite the fact that the incriminating materials have been found in the form of books of account or documents or assets relating to them from the premises of the searched person, still they may not be subjected to the proceedings under Section 153C solely on the ground that the search was conducted prior to the amendment is accepted, in that case, the very object and purpose of the amendment to Section 153C, which is by way of substitution of the words "belongs or belong to" to the words "pertains or pertain to" shall be frustrated. Any interpretation, which may frustrate the very object and purpose of the Act / Statute shall be avoided by the Court. Therefore, we reject the contention raised by the ld Counsel to the effect that Page | 8 MA.62/SRT/2023/AY.2013-14 M/s Mega Aims satisfaction note u/s 153C of the Act is not in accordance with law, in fact we observed that it is as per the scheme of the Act. 18. About the opportunity to cross examine of the other party from whose premises the incriminating material was found, we note that no evidence was brought before us that the assessee had requested the Assessing Officer for an opportunity of cross examination and the Assessing Officer denied it. At this juncture, ld DR for the Revenue submitted that, for the sake of arguments, even if the opportunity of cross examination is provided to the assessee, in that situation also, the material facts narrated by the Assessing Officer are against the assessee, hence addition should be sustained. The material facts which is established with cogent evidence against the assessee, cannot be over ruled by providing opportunity of cross examination. We note that the opportunity of cross examination was not asked by the assessee during the assessment proceedings, therefore we reject this plea raised by the ld Counsel. 19. In the result, appeal filed by the assessee is dismissed. 20. Since, we have adjudicated the issue by taking lead case in IT(SS) no. 3/SRT/2022 and the facts and grounds of appeal in IT(SS) No.2/SRT/2022 are identical and similar as both these appeals pertain to son and father, therefore our instant adjudication shall apply mutatis mutandis to the aforesaid other appeal in IT(SS) No.2/SRT/2022 also. 21. In combined result, both assessee’s appeals are dismissed.” 6. From the above order of the Tribunal, we note that Tribunal has considered the submissions of the Ld. Counsel for the assessee as well as submissions of the ld. Sr. DR for the Revenue and adjudicated the issue under consideration on the basis of the submissions of the parties and the material available on record. It is not the case of ld Counsel for assessee that his submissions are not recorded properly or the decision of Tribunal is not based on the material on record. The assessee is seeking revive of the order which is not permissible under garb of application under section 254(2) of the Act. The ratio of various decisions relied by assessee is not applicable on the facts of the present appeal, the ratio in all those decisions are based on specific facts of those cases. In case of Sony Picture Network India Pvt Ltd (supra), the submissions of the assessee was not dealt with by the Tribunal. The decision in Prarthana Construction (P) ltd (supra) is not on the scope of section 254(2) rather Page | 9 MA.62/SRT/2023/AY.2013-14 M/s Mega Aims on the merits of case. In Southern Gujarat Chamber of Commerce (supra) the bench accepted that the case laws relied by the assessee was not considered by the Tribunal. And in CIT Vs S.S Gupta (supra), the Tribunal inadvertently took into consideration such information which was never disclosed to the assessee. However, the assessee has not taken any such plea in his application. The assessee failed to bring any such mistake which may be taken as mistake apparent on record which require rectification. In the result, the MA filed by the assessee is dismissed. 7. As in both the MA(s), the assessee has raised similar plea, thus on the basis of our finding in MA No. 44/Srt/2023, the other application MA No. 45/Srt/2023 is also dismissed. 8. In the result, both the M.A.(s) filed by the respective assessees are dismissed Order is pronounced on 12/04/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 12/04/2024 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat