ITO 11(2)(3), MUMBAI v. DR. HASTIMAL MOHAN JAIN, MUMBAI

ITA 130/MUM/2011 | 2001-2002
Pronouncement Date: 11-10-2013 | Result: Dismissed

Appeal Details

RSA Number 13019914 RSA 2011
Assessee PAN AABPJ9679D
Bench Mumbai
Appeal Number ITA 130/MUM/2011
Duration Of Justice 2 year(s) 9 month(s) 5 day(s)
Appellant ITO 11(2)(3), MUMBAI
Respondent DR. HASTIMAL MOHAN JAIN, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 11-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 11-10-2013
Date Of Final Hearing 25-09-2013
Next Hearing Date 25-09-2013
Assessment Year 2001-2002
Appeal Filed On 06-01-2011
Judgment Text
INCOME TAX APPELLATE TRIBUNAL MUMBAI - H BENCH. . .. . ! ! ! ! '#$% '#$% '#$% '#$% #&'() #&'() #&'() #&'() '# '# '# '# *+ *+ *+ *+ BEFORE S/SH.D.MANMOHAN VICE-PRESIDENT & RAJENDR A ACCOUNTANT MEMBER ./ ././ ./ ITA NO.130/MUM/2011 ! # ! # ! # ! # - - - -/ // / ASSESSMENT YEAR-2001-02 ITO 11(2)(3) R.NO. 441 4 TH FLOOR AAYAKAR BHAVAN M.K.ROAD NEW MARINE LINES MUMBAI-400020 V/S. DR. HASTIMAL MOHANLAL JAIN SHOP NO. 13 PADMABVATI DARSHAN JAIN DIAGNOSTIC CENTRE N.M.JOSHI MARG MUMBAI. PAN: AABPJ9679D ( #./ / // / APPELLANT ) ( 01./ / RESPONDENT ) #./ #./ #./ #./ 2 2 2 2 ' '' ' / APPELLANT BY : S HRI PITAMBAR DAS 01./ 3 2 ' / RESPONDENT BY : SHRI K.GOPAL SATENDRA PANDEY !# !# !# !# 3 33 3 4# 4# 4# 4# / DATE OF HEARING : 30/09/2013 5- # 3 4# / DATE OF PRONOUNCEMENT : 11/10/2013 ! ! ! ! 1961 3 33 3 ## ## ## ## 254(1) ' '' ' (464 (464 (464 (464 *'7 *'7 *'7 *'7 ORDER U/S.254(1)OF THE INCOME-TAX ACT 1961(ACT) PER RAJENDRA A.M: CHALLENGING THE ORDER DT.08.10.2010 OF THE CIT(A)-3 MUMBAI ASSESSING OFFICER(AO)HAS FILED FOLLOWING GROUNDS OF APPEAL: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) MUMBAI HAS ERRED IN DELETING THE ADDITIONS OF RS.17 50 000/- U/S- 69C OF THE I.T. ACT IN RESPECT OF THE CAPITATION FEES PAID BY THE ASSESSEE FOR ADMISSION OF HIS SON IN MEDICAL COLLEGE. 2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW T HE LD. CIT(A) MUMBAI FAILED TO APPRECIATE THE FACT THAT THE ADDITION IS BASED ON THE APPRAISAL REPORT AND DOCUMENTS SEIZED AND ANALYSED. 3.THE APPELLANT PRAYS THAT THE ORDER OF CIT(APPEALS) ON THE ABOVE GRO UNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORES. 4.THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. ASSESSEE AN INDIVIDUAL HAD FILED HIS RETURN OF INC OME ON 30.07.2001 DECLARING TOTAL INCOME OF RS.1 88 762/-.HIS RETURN WAS PROCESSED U/S.143(1)OF THE ACT.LATER ON MATTER WAS REOPENED BY THE AO AND WAS FINALISED ON 30.12.2008 U/S.143(3) R.W.S .147 OF THE ACT DETERMINING HIS TOTAL INCOME AT RS.19 99 320/-. FACTS OF THE CASE : 2.1. EFFECTIVE GROUND OF APPEAL PERTAINS TO ADDITION MAD E BY THE AO U/S.69C OF THE ACT .DURING THE ASSESSMENT PROCEEDINGS AO FOUND THAT SEARCH AND SEI ZURE ACTION WAS CARRIED OUT ON 20.07.2005 IN THE D.Y. PATIL GROUP CASES THAT SEARCH ACTION RESUL TED IN SEIZURE OF CERTAIN DOCUMENTS AND BOOKS OF ACCOUNTS FROM THE OFFICE OF RAMA RAO ADIK EDUCATION SOCIETY WORLI THAT AS PER THE SEIZED ITEMS ITEM NO.6 OF ANNEXURE A-II WAS A DIARY CONTAINING THE DETAILS OF COMMITMENT/DONATION FEES RECEIVED FROM THE STUDENTS DURING THE FY- 2000-01 THAT IN THE SAID DIARY NAME OF SHRI JAYESH JAIN SON OF THE ASSESSEE APPEARED THAT PAYMENT MADE ON HIS BEHALF WAS MENTIONED AS RS. 1615/- AND RS. 100 THAT AMOUNT PAID BY THE ASSESSEE WAS WRITTEN I N CODE AND THREE ZEROS HAD BEEN OMITTED THAT DURING THE COURSE OF SEARCH STATEMENT OF ONE SHRI S HASHIKANT JAYRAM MANDAVKAR ACCOUNTS CLERK WERE RECORDED ON 21.07.2005. SUBSEQUENTLY STATEMENT OF THE ASSESSEE WERE RECORDED ON 27.03.2008 BY THE INVESTIGATION WING MUMBAI WHEREIN HE DENIED TO HAVE PAID ANY AMOUNT IN CASH AS CAPITATION FEES.REFERRING TO THE STATEMENT OF SHRI SHASHIKANT JAYRAM MANDAVKAR AO HELD THAT ASSESSEE HAD PAID DONATION/CAPITATION FEES OF RS. 1 7.5 LACS TO RAMA RAO ADIK EDUCATION SOCIETY 2 ITA NO. 130 MUM 2011 DR. HASTIMAL MOHANLAL JAIN AND MADE AN ADDITION OF SAID AMOUNT U/S. 69C OF THE ACT. TO THE INCOME OF THE ASSESSEE. 2.1. AGAINST THE ORDER OF THE AO ASSESSEE PREFERRED AN A PPEAL BEFORE THE FIRST APPEAL AUTHORITY (FAA).ASSESSEE REQUESTED FOR CROSS-EXAMINATION OF SHASHIKANT JAYRAM MANDAVKAR AND TO SUPPLY THE COPIES OF THE SEIZED DOCUMENT. FAA SENT BACK TH E MATTER TO THE AO. AO VIDE HIS REPORT FORWARDED TO ADDITIONAL CIT DATED 21.04.2010 STATED THAT REQUEST OF THE ASSESSEE FOR INSPECTING THE SEIZED DOCUMENTS SHOULD NOT BE ENTERTAINED. WITHOUT PREJUDICE ASSESSEE WAS SHOWN THE COPIES OF THE SEIZED DOCUMENTS AND WAS ALLOWED TO CROSS-EXAMI NE THE WITNESS. FAA FOUND THAT COPY OF THE QUESTION ASKED AND ANSWER GIVEN BY THE WITNESS WERE ENCLOSED WITH THE REPORT OF THE AO. SHE FURTHER FOUND THAT AO DID NOT RE-EXAMINE THE WITNES S AFTER CROSS-EXAMINATION WAS OVER. AFTER CONSIDERING THE CROSS-EXAMINATION OF SHRI SHASHIKAN T JAYRAM MANDAVKAR FAA FOUND THAT MANDAV -KAR HAD CATEGORICALLY STATED THATA HE HAD NOT RECE IVED ANY MONEY THAT THE DIARY WAS MAINTAINED BY HIM UNDER THE INSTRUCTION OF ONE SHRI PRAKASH PATIL THAT TRUSTWORTHINESS OF THE ENTRIES MADE IN THE DIARY IN THE CASE OF SHRI JAYESH JAIN SON OF THE AS SESSEE WAS NOT VERIFIABLE. ASSESSEE SUBMITTED THAT NO ADDITION COULD BE MADE IN HIS HANDS BY RELYING O N THE STATEMENT OF SHRI SHASHIKANT JAYRAM MANDAVKAR OR ON THE BASIS OF THE SEIZED DIARY. ASSE SSEE PLACED RELIANCE ON THE DECISION OF THE I BENCH OF THE ITAT MUMBAI DELIVERED IN THE CASE OF B ABANRAO V MANDE (ITA NO. 3441/MUM/ 2009 DATED 20.08.2010-AY 2000-01).AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER FAA HELD THAT THE ASSESSEES CASE WAS SIMILAR ON THE FACTS TO THE CASE DECIDED BY THE TRIBUNAL AND RELYING UPON BY THE ASSESSEE THAT IN VIEW OF THE TRIBUNALS CLEAR OBSERVATION AND DECISION ON SIMILAR FACT ADDITION MADE BY THE AO CO ULD NOT BE UPHELD. FINALLY SHE DELETED THE ADDITION MADE BY THE AO U/S. 69C OF THE ACT AMOUNTI NG TO RS. 17.5 LACS. 2.2. BEFORE US DEPARTMENTAL REPRESENTATIVE (DR)SUBMITTED THAT IN THE DIARY SEIZED DURING THE SEARCH ACTION BY THE DEPARTMENT FROM THE OFFICE PREMISES O F RAMA RAO ADIK EDUCATION SOCIETY NAME OF THE SON OF THE ASSESSEE WAS APPERING THAT CODE LANG UAGE WAS USED FOR THE CAPITATION FEES PAID BY THE ASSESSEE.AUTHORISED REPRESENTATIVE(AR) SUBMITTED TH AT FACTS OF THE CASE UNDER CONSIDERATION WERE SIMILAR TO THE CASE OF BABANRAO V MANDE (SUPRA) TH AT TRIBUNAL HAD DISCUSSED THE RELIABILITY OF THE STATEMENT OF SHASHIKANT JAYRAM MANDAVKAR THAT ON THE BASIS OF ENTRIES IN A DIARY OF THIRD PARTY NO ADDITION COULD BE MADE. 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT SIMILAR ISSUE HAD ARISEN IN THE CASE OF BABANRAO V MANDE (S UPRA).IN THAT CASE I BENCH OF MUMBAI TRIBUNAL HAD DECIDED THE ISSUE AS UNDER: 7.WE HAVE HEARD THE SUBMISSIONS OF LEARNED DR WHO REITERATED THE STAND OF THE ASSESSING OFFICER AS CONTAINED IN THE ASSESSMENT ORDER. 8.WE HAVE CONSIDERED HIS SUBMISSIONS.WE HAVE ALSO P ERUSED THE STATEMENT OF MR.SHASHIKANT MANDAVKAR RECORDED AT THE TIME OF SEARCH AND CROSS EXAMINATION OF THE ASSESSEE OF MR. SHASH -IKANT MANDAVKAR. IT IS CLEAR FROM THE CROSS EXAMINATION O F MR. SHASHIKANT MANDAVKAR THAT THERE IS NO EVIDENCE TO LINK THE ASSESSEE OR HIS DAUGHTER WITH THE ENTRIES FOUND IN THE DIARY. AS RIGHTLY CONTENDE D BY THE ASSESSEE MR. SHASHIKANT MANDAVKAR RECORDED E NTRIES IN THE DIARY BASED ON THE INSTRUCTION OF HIS SUPERIORS. THOSE SUPERIORS WERE NOT EXAMINED BY ANYBODY.FURTHER MR.SHASHI -KANT MANDAVKAR DID NOT KNOW THE ASSESSEE. MR. SHASHIKANI. MANDAVKA R CLAIMED THAT THE MONIES WERE CAPITATION FEES PAID IN CASH TO THE TRUSTEE.THE ASSESSEE DENIES IN ACQUAINTANCE WITH THE TRUSTEE.THUS ADDITION HAS BEEN MADE PURELY ON THE BASIS OF ENTRIES MADE IN TH E DIARY OF THE THIRD PARTY CONTENTS OF WHICH HAVE NOT BEEN ESTABLISHED TO BE ON THE BASIS OF TRUE FAC TS. IN THE ABOVE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE ADDITION HAS BEEN MADE BY THE ASSESSING OF FICER ON ASSUMPTION AND PRESUMPTION WITHOUT ANY ACCEPTABLE EVIDENCE.WE THEREFORE CONFIRM THE OR DER OF LEARNED CIT(A).IN VIEW OF THE DECISION ON MERITS THE OTHER ISSUE REGARDING VALIDITY OF REOPE NING OF ASSESSMENT ARE NOT TAKEN UP FOR CONSIDERATION. 9.IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. 3 ITA NO. 130 MUM 2011 DR. HASTIMAL MOHANLAL JAIN BEFORE US DR ADMITTED THAT DEPARTMENT HAD NOT FILED APPEAL BEFORE THE HONBLE HIGH COURT IN THE CASE OF BABANRAO V MANDE (SUPRA).WE FIND THAT ORDER OF BABANRAO V MANDE (SUPRA) WAS DECIDED BY THE TRIBUNAL ABOUT THREE YEARS BACK.SO IT CAN SA FELY BE INFERRED THAT THE DEPARTMENT HAS ACCEPTED THE ORDER OF THE TRIBUNAL.FAA HAS FOLLOWED THE SAID ORDER OF THE TRIBUANL AS THE FACTS OF BOTH THE CASES WERE SIMILAR.ONLY DIFFERENCES IS ABOUT THE NA MES OF INSTITUTIONS AND THE AMOUNTS OF CAPITATION FEES CLAIMED TO HAVE BEEN PAID.IN THESE CIRCUMSTANC ES RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINATE BENCH WE HOLD THAT FAA HAD RIGHTLY DELET ED THE ADDITION MADE BY THE AO.CONFIRMING HER ORDER WE DECIDE EFFECTIVE GROUND OF APPEAL AGAI NST THE AO. AS A RESULT APPEAL FILED BY THE AO STANDS DISMISSED . 8 #+9 ! #84 - # :## *#; !#&< 3  =. ORDER PRONOUNCED IN THE O PEN COURT ON 11 TH OCTOBER 2013 *'7 3 5- # ' (## > ?*!# 11 @A < 2013 3 6 B SD/- SD/- ( . ! ! ! ! / D. MANMOHAN ) ( #&'() #&'() #&'() #&'() / RAJENDRA) '#$% '#$% '#$% '#$% / VICE-PRESIDENT '# '# '# '# *+ *+ *+ *+ /ACCOUNTANT MEMBER / MUMBAI ?*!# /DATE: 11.10.2013 SK *'7 *'7 *'7 *'7 3 33 3 04C 04C 04C 04C D'C-4 D'C-4 D'C-4 D'C-4 / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / #./ 2. RESPONDENT / 01./ 3. THE CONCERNED CIT(A)/ E F 4. THE CONCERNED CIT / E F 5. DR H BENCH ITAT MUMBAI / CG#6 04! . . (## . 6. GUARD FILE/ 6# H# 1#C4 04 //TRUE COPY// *'7#!# / BY ORDER ' / # &# DY./ASST. REGISTRAR /ITAT MUMBAI