The DCIT, Central Circle-2(2),, Ahmedabad v. M/s. Kothi Sons, Ahmedabad

ITA 179/AHD/2009 | 2005-2006
Pronouncement Date: 04-03-2011 | Result: Dismissed

Appeal Details

RSA Number 17920514 RSA 2009
Assessee PAN AAHFK5863A
Bench Ahmedabad
Appeal Number ITA 179/AHD/2009
Duration Of Justice 2 year(s) 1 month(s) 15 day(s)
Appellant The DCIT, Central Circle-2(2),, Ahmedabad
Respondent M/s. Kothi Sons, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 04-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 04-03-2011
Date Of Final Hearing 03-03-2011
Next Hearing Date 03-03-2011
Assessment Year 2005-2006
Appeal Filed On 19-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL VP AND BHAVNESH SAINI JM) ITA NO.179/AHD/2009 A. Y.: 2005-06 THE D. C. I. T. CENTRAL CIRCLE-2(2) ROOM NO. 309 3 RD FLOOR AAYAKAR BHAVAN ASHRAM ROAD AHMEDABAD VS M/S. KOTHI SONS B/4 JAL VIHAR FLATS V/H. AJANTA COMMERCIAL CENTRE ASHRAM ROAD AHMEDABAD PA NO. AAHFK 5863A (APPELLANT) (RESPONDENT) APPELLANT BY D. S. BENUPANI DR RESPONDENT BY SHRI S. N. SOPARKAR AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDER OF THE LEARNED CIT(A)-III A HMEDABAD DATED 13-10-2008 FOR ASSESSMENT YEAR 2005-06 CHALLENGING THE DELETION OF ADDITION OF RS.10 LACS MADE ON ACCOUNT OF UNACCOUNT ED CASH ON MONEY RECEIVED FROM ASPI N. GANDHI. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE AO N OTED THAT SEARCH U/S 132 OF THE IT ACT WAS CONDUCTED ON 29-5-2005 AT THE RESIDENCE OF SHRI ASPI N. GANDHI. THE SEIZED DOCUMENTS (PAGE 12 AND 33 OF ANNEXURE A-1) REVEALED PURCHASE OF 3 SHOPS LOCATED AT CAMPS CORNER BY SHRI ASPI GANDHI FROM THE ASSESSEE AT THE TOTAL COST OF RS.27.50 LACS OUT OF WHICH RS. 10 LACS WAS PAID IN CASH. SHRI GANDHI IN HIS STATEMENT U/S 132(4) OF THE IT ACT ON THE DA TE OF SEARCH ALSO CONFIRMED IT. HOWEVER SUBSEQUENTLY IN HIS STATEMEN T RECORDED ON 17- 1-2006 SHRI GANDHI STATED THAT PAYMENT OF RS.10 LA CS TO M/S. KOTHI ITA NO.179/AHD/2009 DCIT CENT. CIR- 2(2) AHMEDABAD VS M/S. KOTHI SONS 2 SONS I.E. THE ASSESSEE WAS FOR REPAIRS AND RENOVATI ON BUT LATER ON FILED AFFIDAVIT STATING THAT RS.10 LACS WAS PAID IN CASH FOR REPAIR AND RENOVATION BUT NOT TO THE ASSESSEE. THE AO STATED T HAT SINCE SHRI GANDHI HAS ADMITTED AND DISCLOSED PAYMENT OF RS.10 LACS IN CASH BUT CHANGED THE STATEMENT LATER ON THEREFORE SHOW CAUSE NOTICE WAS ISSUED IN WHICH THE ASSESSEE EXPLAINED THAT THE LOO SE/SEIZED DOCUMENTS AND THE STATEMENT OF OTHER PERSON DO NOT CONSTITUTE BOOKS OF ACCOUNT AND NO ADDITION CAN BE MADE. THE AO OBSE RVED THAT IN THE INITIAL STATEMENT OF SHRI GANDHI UNACCOUNTED RECEIP T OF RS. 10 LACS IS ADMITTED FOR 3 SHOPS THEREFORE ADDITION WAS ACCOR DINGLY MADE. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT ADDITI ON IS UNJUSTIFIED BECAUSE THERE IS NO SUPPORTING EVIDENCE OR MATERIAL AVAILABLE ON RECORD FOR PROCEEDINGS U/S 153C OF THE IT ACT. IT W AS SUBMITTED THAT THE LOOSE PAPER IS NOT A DOCUMENT OR BOOKS OF ACCOU NT NO ADDITION CAN BE MADE. FURTHER LOOSE PAPER FOUND FROM THE RE SIDENCE OF THE THIRD PARTY WOULD NOT DISCLOSE ANY UNDISCLOSED INCO ME. THE LEARNED CIT(A) HOWEVER NOTED FROM THE SEIZED DOCUMENT ANNE XURE A-1/ NO.12 AND 33 THAT THERE WERE ADEQUATE REASONS TO PR OCEED AGAINST THE ASSESSEE U/S 153C OF THE IT ACT. THE LEARNED CI T(A) HOWEVER NOTED FROM THE EVIDENCES AND MATERIAL ON RECORD THA T SHRI GANDHI STATED IN HIS STATEMENT TO HAVE PURCHASED PROPERTY AND MADE THE PAYMENT OF RS.27.50 LACS OUT OF THIS RS. 10 LACS WA S PAID IN CASH. THEREFORE IT IS RECORDED THAT PAYMENT IS MADE BY C ASH AND CHEQUE. HOWEVER FURTHER STATEMENT WAS RECORDED AND SEVERAL QUESTIONS WERE REFERRED TO IN WHICH IT WAS STATED THAT APPROXIMATE LY RS. 9/ RS.10 LACS WAS PAID FOR EXTENSION AND RENOVATION. FURTHER AFF IDAVIT WAS FILED BY SHRI GANDHI IN WHICH IT WAS STATED THAT THE STATEME NT WAS MADE ITA NO.179/AHD/2009 DCIT CENT. CIR- 2(2) AHMEDABAD VS M/S. KOTHI SONS 3 REGARDING SEIZED DOCUMENTS UNDER STRESS AND WITHOUT VERIFYING THE SEIZED DOCUMENTS. IT WAS FURTHER STATED IN THE AFFI DAVIT THAT RS.10 LACS IN CASH WAS NOT PAID TO THE ASSESSEE FOR RENOVATION . THE LEARNED CIT(A) THEREFORE NOTED THAT SHRI GANDHI RETRACTED FROM HIS STATEMENT AND FURTHER NOTED THAT THE SEIZED DOCUMENTS DO NOT REVEAL THE NAME OF THE ASSESSEE AND THE ENTRIES CONTAINED IN THE SE IZED DOCUMENTS DID NOT BELONG TO THE ASSESSEE. THEREFORE NO ADDIT ION CAN BE MADE AGAINST THE ASSESSEE EVEN IF RS.10 LACS WAS OFFERED FOR TAX BY SHRI GANDHI. THE LEARNED CIT(A) FOLLOWING THE ORDER OF T HE TRIBUNAL IN THE CASE OF PRARTHANA CONSTRUCTIONS 70 TTJ 122 AND THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF V. C. SHUKLA & OTHERS (1998) 3 SCC 410 DELETED THE ADDITION. 3. THE LEARNED DR RELIED UPON THE ORDER OF THE AO A ND SUBMITTED THAT STATEMENT OF SHRI ASPI GANDHI RECORDED ON THE DATE OF SEARCH IS RELEVANT FOR MAKING THE PAYMENT OF RS.10 LACS IN CA SH WHICH IS FURTHER CONFIRMED IN HIS STATEMENT REGARDING PAYMENT OF RS. 10 LACS IN CASH FOR RENOVATION WORK. THE LEARNED DR THEREFORE SUB MITTED THAT RETRACTION OF STATEMENT BY FILING AFFIDAVIT IF OF N O CONSEQUENCE. 4. ON THE OTHER HAND THE LEARNED COUNSEL FOR THE A SSESSEE REITERATED THE STATEMENT MADE BEFORE THE AUTHORITIE S BELOW AND SUBMITTED THAT SINCE THE ASSESSEE IS RESPONDENT TH EREFORE THE ASSESSEE CAN RAISE THE GROUND IN SUPPORT OF ORDER O F THE LEARNED CIT(A) TO CHALLENGE THE PROCEEDINGS U/S 153 C OF TH E IT ACT AND SUBMITTED THAT NO INCRIMINATING DOCUMENT WAS RECOVE RED AGAINST THE ASSESSEE AND NO SEIZED DOCUMENT BELONGED TO THE ASS ESSEE ITA NO.179/AHD/2009 DCIT CENT. CIR- 2(2) AHMEDABAD VS M/S. KOTHI SONS 4 THEREFORE PROCEEDINGS U/S 153C OF THE IT ACT MAY B E QUASHED. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE DE CISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF VIJAY N. CHANDRANI VS ACIT 231 CTR 474. THE LEARNED COUNSEL FOR THE ASSESSEE H OWEVER SUBMITTED THAT IN CASE THE ORDER OF THE LEARNED CIT (A) IS UPHELD ON MERIT HE WOULD NOT BE PRESSING THE ABOVE LEGAL GRO UND . 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. IT IS ADMITTED FACT THAT THE S EIZED DOCUMENTS I.E. LOOSE PAPER ANNEXURE A-1 PAGE 12 AND 33 WERE FOUND AND SEIZED DURING THE COURSE OF SEARCH FROM THE RESIDENCE OF S HRI ASPI N. GANDHI. THIS IS THE ONLY DOCUMENT REFERRED TO FOR M AKING THE ADDITION AGAINST THE ASSESSEE IN THE PROCEEDINGS U/S 153C OF THE IT ACT. THE STATEMENT OF SHRI GANDHI WAS RELIED UPON BY THE AO FOR THE PURPOSE OF MAKING THE ADDITION WHICH WAS RECORDED ON THE DA TE OF SEARCH BUT SUCH STATEMENT WAS LATER ON RETRACTED AND IN FURTHE R STATEMENT IT WAS EXPLAINED THAT SUCH AMOUNT WAS PAID FOR RENOVATION AND EXTENSION. IT WOULD SHOW THAT LATER ON EARLIER STATEMENT WAS CHAN GED AND IT WAS NOT ACCEPTED THAT ANY SALE CONSIDERATION OF THE SHO PS WAS PAID TO THE ASSESSEE. IN THE FURTHER AFFIDAVIT FILED BY SHRI GA NDHI HE HAS DENIED EVEN PAYMENT FOR RENOVATION AND EXTENSION. HE HAS C LARIFIED IN HIS AFFIDAVIT THAT NO SUCH AMOUNT WAS PAID TO THE ASSES SEE. IT IS ALSO ADMITTED FACT THAT THE SEIZED PAPERS DO NOT REVEAL THE NAME OF THE ASSESSEE. THE LEARNED CIT(A) GAVE SPECIFIC FINDING TO THAT EFFECT THAT THE SEIZED DOCUMENTS DID NOT CONTAIN ANY NAME OF TH E ASSESSEE FOR ALLEGED PAYMENT. THEREFORE NO INCRIMINATING DOCUME NT IS AVAILABLE ON RECORD TO SHOW THAT THE ASSESSEE RECEIVED ANY AL LEGED AMOUNT IN ITA NO.179/AHD/2009 DCIT CENT. CIR- 2(2) AHMEDABAD VS M/S. KOTHI SONS 5 CASH. THE AO MERELY RELIED UPON THE RETRACTED STATE MENT OF SHRI GANDHI WHICH CANNOT BE READ IN EVIDENCE AGAINST THE ASSESSEE BECAUSE IT WAS DISPUTED BY THE MAKER HIMSELF AND FU RTHER SUCH STATEMENT WAS NOT SUBJECTED TO CROSS EXAMINATION ON BEHALF OF THE ASSESSEE AT THE ASSESSMENT STAGE. IN THE ABSENCE OF ANY EVIDENCE OR MATERIAL ON RECORD THE LEARNED CIT(A) WAS JUSTI FIED IN DELETING THE ADDITION. WE THEREFORE DO NOT FIND ANY MERIT IN T HE DEPARTMENTAL APPEAL. THE ORDER OF THE LEARNED CIT(A) ON MERIT IS UPHELD AND THE DEPARTMENTAL APPEAL IS DISMISSED. IN VIEW OF THE AB OVE FINDINGS THE LEARNED COUNSEL FOR THE ASSESSEE WOULD NOT BE PRESS ING THE LEGAL SUBMISSION. THEREFORE NO FURTHER FINDING IS REQUIR ED. 6. IN THE RESULT THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 04-03-2011 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 04 -03-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR ITAT AHMEDABAD