ITO, Wd 1(2), Jalgaon, v. Shamkant Baliram Sonawane,

ITA 1255/PUN/2008 | 2000-2001
Pronouncement Date: 17-01-2011 | Result: Dismissed

Appeal Details

RSA Number 125524514 RSA 2008
Assessee PAN BCPOS7848M
Bench Pune
Appeal Number ITA 1255/PUN/2008
Duration Of Justice 2 year(s) 3 month(s) 23 day(s)
Appellant ITO, Wd 1(2), Jalgaon,
Respondent Shamkant Baliram Sonawane,
Appeal Type Income Tax Appeal
Pronouncement Date 17-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 17-01-2011
Assessment Year 2000-2001
Appeal Filed On 24-09-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI D. KARUNAKARA RAO (AM) ITA NO. 1 255 /PN/200 8 ( ASSTT. YEAR : 200 0 - 01 ) THE INCOME TAX OFFICER WD.1(2) OPP.BALGANDHARVA KHULE NATYA GRIHA JILLHA PETH JALG AON .. APPELLANT V. SHRI.SHAMKANT BALIRAM SONAWANE 396 JAIKISANWADI JALGAON PA NO. BCPOS7848M . RESPONDENT APPELLANT BY : SHRI PANKAJ GARG RESPONDENT BY : SHRI SUNIL PATHAK ORDER PER I.C. SUDHIR J M THE REVENUE HAS QU ESTIONED FIRST APPELLATE ORDER MAINLY ON THE GROUND THAT THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS 14 40 000/ - MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN DEPOSITS WITH THE STATE GOVERNMENT FOR EXCAVATION OF SAND RIVER (GROUND NOS.1 TO 5). 2. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD IN VIEW OF THE ARGUMENTS ADVANCED BY THE PARTIES. THE RELEVANT FACTS ARE THAT THE ASSESSEE DEPOSITED AN AMOUNT OF RS. 14 40 000/ - ON 1 ST DECEMBER 1999 WITH TH E DISTRICT COLLECTORATE JALGAON FOR ACQUIRING THE RIGHT TO EXTRACT SAND FROM RIVER GIRNA. THE A.O ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THE SAID DEPOSITS. THE ASSESSEE EXPLAINED THAT THE AMOUNT WAS WITHDRAWN BY HIM FROM THE PARTNER SHIP FIRM M/S. S H R EE R AM BUILDERS IN WHICH HE WAS ALSO ONE OF THE PARTNERS. THE ASSESSEE FILED AFFIDAVITS OF OTHER 5 PARTNERS OF THE SAID FIRM. IT WAS ALSO CLARIFIED THAT THE PARTNERSHIP FIRM WAS NOT REGISTERED AND WAS NOT HAVING ANY BANK ACCOUNT. THE ITA NO 1255 /PN/200 8 SHRI.SHAMKANT BALIRAM SONAWANE.. A.Y. 2000 - 01 PAGE OF 5 2 A.O WAS NOT CON VINCED WITH THE EXPLANATION OF THE ASSESSEE AND MADE ADDITION OF RS. 14 40 000/ - U/S. 69 OF THE ACT AS UNEXPLAINED INVESTMENT ON THE FOLLOWING BASIS : A) THE PARTNERSHIP FIRM WAS NOT REGISTERED WITH THE REGISTRAR OF PARTNERSHIP FIRMS MUMBAI . B) THE PART NERSHIP DEED OF M/S. SHREE RAM BUILDERS WAS ON THE STAMP VALUE OF RS.160 ONLY WHEREA THE REQUISITE STAMP VALUE IS MUCH MORE AS PER THE BOMBAY STAMP ACT. C) M/S.SHREE RAM BUILDERS DID NOT HAVE ANY P.A.N. NOR FILED ANY RETURNS. D) THE FIRM DID NOT CARRY OUT ANY BUSINESS ACTIVITY AND DID NOT HAVE ANY BANK ACCOUNT. E) THERE IS NO NAME BOARD OF THE FIRM ON THE GIVEN ADDRESS. B) THE AFFIDAVITS FILED BY THE FIVE PARTNERS OF THE FIRM WERE AN AFTER THOUGHT. 3. BEFORE THE LD CIT(A) THE ASSESSEE TRIED TO MEET O UT THE OBJECTIONS OF THE A.O. THE LD CIT(A) BEING SATISFIED WITH THE SUBMISSION OF THE ASSSSEE HAS DELETED THE ADDITION. 4. BEFORE THE TRIBUNAL THE LD. D.R. HAS BASICALLY TRIED TO JUSTIFY ASSESSMENT ORDER DOUBTING THE VERY EXISTENCE OF A GENUINE FIRM M/S. SHRI RAM BUILDERS. HE SUBMITTED THAT THE SAID FIRM WAS NEITHER REGISTERED NOR HAVING ANY BANK ACCOUNT PAN OR BUSINESS. IT WAS CREATED TO EXPLAIN THE SOURCE OF THE DEPOSIT OF RS. 14 14 000/ - BY THE ASSESSEE WITH THE STATE GOVERNMENT. WITHOUT APPREC IATING THIS MATERIAL ASPECT THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION. 5. THE LD. A.R. ON THE OTHER HAND PLACED RELIANCE ON THE FIRST APPELLATE ORDER WITH THIS SUBMISSION THAT ALL THE PARTNERS HAD FILED THEIR ITA NO 1255 /PN/200 8 SHRI.SHAMKANT BALIRAM SONAWANE.. A.Y. 2000 - 01 PAGE OF 5 3 AFFIDAVITS GIVING COMPLETE DETAILS THEIR IDENTITY AND DETAILS OF CAPITAL CONTRIBUTION AND SOURCES THEREOF. THEREFORE THE ADDITION MADE BY THE A.O ABOUT THE UNEXPLAINED INVESTMENT WA S UNWARRANTED. HE ALSO REFERRED PAGE NO. 21 OF THE PAPER BOOK I.E. REMAND REPORT DT. 24.3.2008 BY THE I.T.O ADDRESSED TO THE LD CIT(A). IN RESPECT OF ASSESSEES SUBMISSION THAT MAJOR CAPITAL OF RS. 12 50 000/ - WAS CONTRIBUTED BY SHRI BALIRAM SONAWANE (H.U.F) IN THE FIRM AND DECLARED IN ITS CASE WHICH WAS ACCETED IN THE ASSESSMENT PROCEEDINGS THE I.T.O HAS NOT DENIED THE SAME AND SUBMITTED THAT IT HAS NOTHING TO DO WITH THE CASE OF THE ASSESSEE. THE LD. A.R ALSO REFERRED PAGE NO. 42 AND 43 OF THE PAPER BOOK I.E.LEDGER ACCOUNT AND CASH BOOK OF SHRI RAM BUILDERS SHOW ING THE CONTRIBUTION OF THE PARTNERS IN THE FI RM. 6. CONSIDERING THE ABOVE SUBMISSIONS IN VIEW OF THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD WE FIND THAT SOURCE OF DEPOSIT OF RS. 14 40 000/ - HAS BEEN DOUBTED BY THE A.O ONLY BECAUSE AS PER HIM M/S. SHRI RAM BUILDERS WAS NOT A GENUINE FIRM AND IT WAS CREATED ONLY TO EXPLAIN THE SOURCE OF SAID DEPOSITS. WE HAVE ALREADY DISCUSSED HEREINABOVE THE BASIS ON WHICH THE A.O DOUBTED THE VERY EXISTENCE OF THE SAID FIRM. THESE OBJECTIONS WERE THAT THE FIRM WAS NOT REGISTERED WITH THE REGISTRAR OF PARTNERSHIP FIRMS MUMBAI; THE PARTNERSHIP DEED OF THE FIRM WAS ON THE LOWER STAMP VALUE; THE FIRM DID NOT HAVE ANY PAN NOR FILED ANY RETURNS; THE FIRM DID NOT CARRY OUT ANY BUSINESS ACTIVITY NOR WAS HAVING ANY BANK ACCOUNTS; THERE WAS NO NAME - BOARD OF THE FIRM ON THE GIVEN ADDR ESS; AND AFFIDAVIT FILED BY ALL THE PARTNERS OF THE FIRM WERE AN AFTER - THOUGHT. THE ASSESSEE MET OUT THESE OBJECTIONS WITH TH I S EXPLANATION THAT THE STAMP TO THE EXTENT OF RS. 160/ - ONLY WERE READILY AVAILABLE WI TH THE STAMP VENDOR AT THE TIME OF PURCHASE; IN RURAL AREA OF ITA NO 1255 /PN/200 8 SHRI.SHAMKANT BALIRAM SONAWANE.. A.Y. 2000 - 01 PAGE OF 5 4 MAHARASHTRA MORE THAN 50% THE PARTNERSHIP FIRMS ARE NOT REGISTERED; THE FIRM WAS NOT LIABLE TO TAX HENCE THERE WAS NO REQUIREMENT TO FILE RETURNS UNDER THE I.T. ACT; THE FIRM THEREFORE DID NO T APPLY FOR PAN; THE FIRM HAD NOT STARTED ITS BUSINESS ACTIVITY THEREFORE ITS NAME BOAD WAS NOT FIXED; AS NO BUSINESS ACTIVITY WAS CARRIED OUT CASH BOOK WAS BOUND TO BE OF SINGLE PAGE RECORDING TRANSACTIONS ENTERED INTO AT INITIAL STAGE; AND THAT THE ALLEGATION THAT AFFIDAVIT S OF THE PARTNERS ARE AFTHE R - THOUGHT WAS WITHOUT ANY BASIS. IN PARA NO. 5.5 OF THE FIRST APPELLATE ORDER THE LD CIT(A) HAS NOTED THAT THE FIRM HAS FILED THE RETURN OF INCOME FOR THE A.Y. 2000 - 01. IT WAS SUBMITTED THAT THE SAID F IRM WAS ACTUALLY STARTED FOR THE REAL ESTATE BUSINESS BUT COULD NOT START THE BUSINESS. IT WAS THE REASON SHOWN FOR THE FIRM HAVING NOT ANY SIGN BOARD BANK ACCOUNT OR PAN. WE FIND THAT THERE IS NO DISPUTE ABOUT CONTRIBUTION OF CAPITAL BY THE PARTNERS THE MAIN CAPITAL CONTRIBUTION MADE BY SHRI BALIRAM TOTARAM SONAWANE (HUF) OF RS. 12 50 000/ - TO THE FIRM HAS NOT BEEN DISPUTED AS SHRI BALIRAM TOTARAM SONAWANE WAS REGULARLY ASSESSED TO TAX AND THE RETURN OF INCOME WAS FILED FOR THE A.Y. 2000 - 01. THE LD CIT(A) HAS NOTED IN PARA NO. 5.2 OF THE FIRST APPELLATE ORDER THAT THE SAME A.O WHO HAD JURISDICTION OVER THE CASE OF SHRI BALIRAM TOTARAM SONAWANE (HUF) HAD EXAMINED THE CASH - FLOW OF THE SIAD PARTNER IN HIS ASSESSMENT PROCEEDINGS AND ACCEPTED THE CAPITAL CONTRIBUTION AND COMPLETED THE ASSESSMENT FOR A.Y. 2000 - 01. LIKEWISE THE AFFIDAVIT S OF THE OTHER PARTNERS CONFIRMING CONTRIBUTION OF CAPITAL BY THEM TO THE FIRM CANNOT BE BRUSHED ASIDE ON THIS BASIS THAT THESE WERE AFTER - THOUGHT. THE A.O WAS SUPPOSED T O EXAMINE THE CONTENTS OF THOSE AFFIDAVITS TO VERIFY IDENTITY OF THE DEPONENTS GENUINENESS AND SOURCE FOR THE CAPITAL CONTRIBUTION CLAIMED TO HAVE BEEN MADE BY THEM IN THEIR AFFIDAVITS. IF THERE WAS UNDER VALUATION OF STAMP MEANT FOR THE PARTNERSHIP DE ED OR FIRM WAS NOT REGISTERED W I TH ITA NO 1255 /PN/200 8 SHRI.SHAMKANT BALIRAM SONAWANE.. A.Y. 2000 - 01 PAGE OF 5 5 THE REGISTRAR FIRMS THE SPECIFIC STATUTORY PROVISIONS ARE THERE TO TAKE NOTE OF SUCH DEFICIENCY BY THE AUTHORITIES CONCERNED. THUS IN OUR VIEW IT CANNOT BE A REASON TO DOUBT THE SOURCE OF THE DEPOSIT ESPECIALLY W HEN ALL THE PARTNERS WHO HAD CONTRIBUTED CAPITAL TO THE SAID FIRM HAS AFFIRMED IT FURNISHING DETAILS THEREOF AND THERE IS NO DISPUTE ABOUT THEIR IDENTITY AND CAPACITY. UNDER THESE CIRCUMSTANCES GENUINENESS OF THE TRANSACTIONS WAS ALSO NOT IN DOUBT. WE ARE THUS OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.14 40 000/ - MADE U/S. 69 OF THE ACT AS UNEXPLAINED INVESTMENT. THE FIRST APPELLATE ORDER IS THUS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 7. IN THE RESULT THE APPEA L IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17 TH JANUARY 201 1 . SD/ - SD/ - ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE DATED THE 17 TH JANUARY 20 1 1 US COPY OF THE ORDER IS FORWARDED TO : 1. THE A PPELLANT 2. THE RESPONDENT 3. THE CIT I I NASHIK 4. THE CIT(A) - I I NASHIK 5. THE D.R. B BENCH PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE