M/s. Manish Prabhakar Ladkat ,, Pune v. ITO Central- 1, Pune

ITA 1160/PUN/2010 | 2003-2004
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 116024514 RSA 2010
Assessee PAN ABUPL3192R
Bench Pune
Appeal Number ITA 1160/PUN/2010
Duration Of Justice 1 year(s) 7 month(s) 4 day(s)
Appellant M/s. Manish Prabhakar Ladkat ,, Pune
Respondent ITO Central- 1, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-03-2012
Date Of Final Hearing 07-02-2012
Next Hearing Date 07-02-2012
Assessment Year 2003-2004
Appeal Filed On 25-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NOS. 1160 TO 1162/PN/2010 (ASSTT. YEARS : 2003-04 TO 2005-06 ) M/S. MANISH PRABHAKARLADKAT ... APPELLANT 267 BHAWANI PETH PUNE PAN : ABUPL3192R V. INCOME TAX OFFICER CENTRAL - I RESPONDENT PUNE APPELLANT BY : SHRI. S.N. DOSHI RESPONDENT BY : MS. ANN KAPTHUAMA DATE OF HEARING :07/2/12 DATE OF PRONOUNCEMENT : 30 -3-12 ORDER PER I.C. SUDHIR JM IN ALL THESE APPEALS PREFERRED BY THE ASSESSEE A COMMON GROUND HAS BEEN RAISED THAT LD CIT(A) HAS ERRED IN CONFIR MING ADDITION OF RS. 66 000/- ON ACCOUNT OF UNEXPLAINED RENT DISREGARDIN G THE SUBMISSION OF THE ASSESSEE AND ONLY ON THE BASIS THAT ASSESSEE HAS DECLARED THE SAME IN HIS STATEMENT RECORDED U/S. 132(4) OF THE ACT. 2. AT THE OUTSET OF HEARING THE LD. A.R. POINTED OUT THAT AN IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE A.O IN A.Y. 2006- 07 WHILE GIVING COMPLIANCE TO THE ORDER PASSED U/S . 264 OF THE ACT. IN SUPPORT HE REFERRED PAGE NO. 18 OF THE PAPER BOOK WHEREIN COPY OF THE SAID ORDER HAS BEEN MADE AVAILABLE. THE LD. A.R. A LSO ARGUED THE CASE ON MERITS. 3. THE RELEVANT FACTS ARE THAT THE ASSESSEE ONE OF THE MEMBERS OF THE LADKAT GROUP WAS SUBJECTED TO SEARCH AND SEIZURE AC TION ON 6.7.2006. DURING THE COURSE OF SEARCH LEAVE AND LICENSE AGRE EMENT DATED ITA . NOS.1160 TO 1162//PN/2010 M/S. MANISH PRABHAKAR LADKAT A.YS. 2003-04 TO 2005-06 PAGE OF 5 2 01/03/2002 EXECUTED BETWEEN ONE MRS. JAYSHREE BOR SE AND SMT. KAVYA MANISH LADKAT (WIFE OF THE ASSESSEE) IN RESPECT OF FLAT NO. C01/6 2 ND FLOOR OXFORD COMFORT WANWADI PUNE -40 WAS FO UND AND SEIZED. THE SAME WAS MARKED AS PAGE NOS. 35 TO 38 OF THE BUNDL E CONTAINING LOOSE PAPERS 1 TO 8 OF ANNEXURE A1. THE A.O. NOTED TH AT AT THE TIME OF SEARCH IT WAS STATED BY THE ASSESSEE THAT HE ALONG WITH HIS FAMILY WAS STAYING IN THE SAID FLAT ON RENTAL BASIS ON A MONTH LY RENT OF RS. 5500/- FROM MARCH 2002 TO MARCH 2006. IT WAS FURTHER STAT ED BY THE ASSESSEE THAT RENTAL PAYMENTS WERE MADE BY HIM IN CASH OUT OF WITHDRAWALS FROM THE FIRM M/S. LADKAT BROTHERS IN WHICH HE IS A PART NER. SINCE NO CASH BOOK WAS MAINTAINED AND THE ASSESSEE COULD NOT SAT ISFACTORILY EXPLAIN THE SOURCE OF EXPENDITURE ON ACCOUNT OF RENT FOR TH E PERIOD TILL DECEMBER 2004 A DISCLOSURE OF ADDITIONAL INCOME TO THE EXT ENT OF RS. 1 90 000/- WAS MADE. THE A.O NOTED FURTHER THAT THE ASSESSEE HAD PROMISED THAT FOR THE REMAINING PERIOD THE DETAILS OF SOURCE OF RENTAL PAYMENT WOULD BE SUBMITTED BY THE ASSESSEE BUT NO SUCH DETAILS WERE FURNISHED. THE A.O. ACCORDINGLY PROPOSED TO MAKE THE ADDITION OF RS. 66 000/- FOR THE A.YS. 2003-04 2004-05 AND 2005-06 TREATING THE RENTAL PA YMENT AS UNEXPLAINED EXPENDITURE. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS IT WAS CONTENDED BY THE ASSESSEE THAT THE RENTAL PA YMENTS FOR THE PERIOD UPTO 31 ST MARCH 2004 HAVE BEEN MADE BY SMT. KAVYA LADKAT WI FE OF THE ASSESSEE OUT OF HER REGULAR SOURCE OF INCOME DUL Y RECORDED IN THE RETURN FILED BY HER AND FOR THE PERIOD RELEVANT TO THE A.YS. 2005-06 AND 2006-7 THE SAME WERE STATED TO BE PAID OUT OF THE WITHDRAWALS MADE FROM THE FIRM M/S. LADKAT BROTHERS IN WHICH THE ASS ESSEE IS A PARTNER. IT WAS STATED THAT AT THE TIME OF SEARCH THE ASSESSEE DID NOT CONSIDER THE BOOKS OF ACCOUNT AND THE ENTRIES MADE THEREIN IN CA SE OF THE PARTNERSHIP FIRM. THE A.O DID NOT AGREE WITH THIS SUBMISSION A S THE SAME WAS ITA . NOS.1160 TO 1162//PN/2010 M/S. MANISH PRABHAKAR LADKAT A.YS. 2003-04 TO 2005-06 PAGE OF 5 3 CONTRARY TO THE STATEMENTS RECORDED U/S. 132(4) AN D TREATING THE SAME AS AN AFTER-THOUGHT HE IN THE ABSENCE OF CASH BOOK MADE THE PROPOSED ADDITION FOR ALL THE A.YS. UNDER CONSIDERATION. 4. BEFORE THE LD CIT(A) THE ASSESSEE REITERATED SA ME CONTENTIONS MADE BEFORE THE A.O THAT THE RENTAL PAYMENTS UPTO THE PERIOD 31MARCH 2004 WERE MADE BY MRS. KAVYA LADKAT OUT OF HER OWN SOURCES OF INCOME AND FOR THE PERIOD 1.4.2004 TO 31 ST MARCH 2006 THE PAYMENTS WERE FUNDED OUT OF WITHDRAWALS MADE BY THE ASSESSEE FROM THE FIRM M/S. LADKAT BROTHERS IN WHICH HE IS A PARTNER. IN SUPP ORT OF THE CLAIM THE ASSESSEE FURNISHED COPY OF CAPITAL A/C. OF MRS. KAV YA LADKAT FOR THE YEARS 2003-04 AND ALSO ACCOUNT EXTRACT OF MRS. JAYS HREE BORSE TO WHOM THE PAYMENTS OF RENT WERE MADE AS APPEARING IN TH E BOOKS OF ACCOUNT OF SMT. KAVYA LADKAT FOR THE PERIOD UPTO 31 ST MARCH 2004 AND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE FOR THE PERIOD FR OM 1.4.2004 TO 31 ST MARCH 2006. COPIES OF ASSESSMENT ORDER IN THE CASE OF MRS. KAVYA LADKAT FOR THE A.YS. 2003-04 TO 2005-06 WERE ALSO F URNISHED STATING THAT THE RETURNS OF INCOME FILED BY MRS. KAVYA LADKAT IN WHICH RENTAL PAYMENTS UPTO PERIOD 31 ST MARCH 2004 HAVE BEEN ACCOUNTED FOR HAVE BEEN ACCEPTED BY THE A.O. REGARDING THE STATEMENTS MADE AND RECORDED U/S. 132(4) THE ASSESSEE SUBMITTED THAT THE DECLAR ATION PER SE SHOULD NOT BE CONSIDERED AS CONCLUSIVE UNLESS THE A.O POSS ESSES ANY OTHER DOCUMENTARY EVIDENCE AND FURTHER SUBMITTED THAT SUC H DECLARATION ALONE SHOULD NOT BE THE BASIS FOR MAKING THE ADDITION PAR TICULARLY WHERE THE ASSESSEE PROVES THE SOURCE FOR THE EXPENDITURE INCU RRED OR INVESTMENT MADE. THE LD CIT(A) DID NOT AGREE WITH THE SUBMISS ION OF THE ASSESSEE WITH THIS FINDING THAT IN THE CASE OF LEDGER CASH B OOK WAS NEVER PRODUCED DURING THE SEARCH AND SEIZURE PROCEEDINGS AND THE C ASH BOOK HAS BEEN ITA . NOS.1160 TO 1162//PN/2010 M/S. MANISH PRABHAKAR LADKAT A.YS. 2003-04 TO 2005-06 PAGE OF 5 4 PREPARED SUBSEQUENTLY AND CASH BALANCE WAS BUILT U P IN THE CASH BOOK TO EXPLAIN AWAY THE SOURCES OF PAYMENT. HE ALSO NOTED THAT THE ASSESSEE HAS RETRACTED FROM THIS STATEMENT RECORDED U/S. 13 2(4) OF THE ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AFTER TWO YEAR S. THE LD CIT(A) HAS DEALT WITH THE ISSUE IN DETAIL MEETING OUT EACH AND EVERY SUBMISSION OF THE ASSESSEE AND BEING NOT SATISFIED WITH THE EVIDE NCE FURNISHED BY THE ASSESSEE HE HAS SUSTAINED THE ADDITION. 5. IN OPPOSITION TO THE APPEAL THE LD. D.R. HAS BA SICALLY PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW FOR THE A.Y. UNDER CONSIDERATION. 6. WE AGREE WITH THE VIEW OF THE LD. CIT(A) IN THE FIRST APPELLATE ORDER TO THIS EXTENT THAT RETRACTION FROM HIS STATEMENTS RECORDED U/S. 132(4) OF THE ACT BY THE ASSESSEE DURING THE COURSE OF ASSESS MENT PROCEEDINGS AFTER LAPSE OF 2 YEARS CREATES DOUBT THAT THE DOCUM ENTS FURNISHED IN SUPPORT ARE NOTHING BUT AN AFTER-THOUGHT. WE HOWE VER FIND THAT UNDER THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE DU RING THE A.Y. 2006-07 THE LD CIT U/S. 264 OF THE ACT HAD SET ASIDE THE M ATTER TO THE FILE OF A.O FOR FRESH ADJUDICATION ON THE ISSUE AFTER CONSIDERI NG THE EVIDENCE AND NECESSARY DETAILS FILED BY THE ASSESSEE. IN COMPLI ANCE OF THE SAID ORDER U/S. 264 OF THE LD CIT THE A.O. IN THE ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S. 264 HAS DELETED THE ADDITION OF RS. 66 000/- MADE ON ACCOUNT OF UNEXPLAINED RENT FOR THE A.Y. 2006-07. IN VIEW OF THIS DEVELOPMENT AND TO MAINTAIN CONSISTENCY IN THE APP ROACH OF THE A.O ON AN IDENTICAL ISSUE UNDER SIMILAR SET OF FACTS AND CIRCUMSTANCES WE DIRECT THE A.O TO DELETE THE ADDITION IN QUESTION FOR THE A.YS. UNDER CONSIDERATION. THE GROUND IS ACCORDINGLY ALLOWED. ITA . NOS.1160 TO 1162//PN/2010 M/S. MANISH PRABHAKAR LADKAT A.YS. 2003-04 TO 2005-06 PAGE OF 5 5 7. IN A.Y. 2004-05 THE ASSESSEE HAS RAISED ONE MOR E GROUND QUESTIONING THE FIRST APPELLATE ORDER IN SUSTAININ G THE ADDITION OF RS. 16 047/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JE WELLERY DIS-REGARDING THE SUBMISSION GIVEN BY THE ASSESSEE. 8. DURING THE COURSE OF ARGUMENT THE LD. A.R. DID NOT PREFER TO PURSUE THIS GROUND. THE GROUND IS ACCORDINGLY REJE CTED. 9. IN RESULT APPEALS ARE ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30TH MARCH 2012. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE DATED THE 30TH MARCH 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (CENTRAL) PUNE 4. THE CIT(A)-I PUNE 4. THE D.R. A BENCH PUNE 5. GUARD FILE /-TRUE COPY-/ BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE