Shri Tarun K.Mody, Valsad v. The Income tax Officer, Ward-4,, Valsad

ITA 4087/AHD/2008 | 2005-2006
Pronouncement Date: 15-07-2011 | Result: Allowed

Appeal Details

RSA Number 408720514 RSA 2008
Assessee PAN ABGPM6228B
Bench Ahmedabad
Appeal Number ITA 4087/AHD/2008
Duration Of Justice 2 year(s) 6 month(s) 27 day(s)
Appellant Shri Tarun K.Mody, Valsad
Respondent The Income tax Officer, Ward-4,, Valsad
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 15-07-2011
Date Of Final Hearing 12-07-2011
Next Hearing Date 12-07-2011
Assessment Year 2005-2006
Appeal Filed On 19-12-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI A. K. GARODIA ACCOUNTANT MEMBER I.T.A. NO.4087 / AHD/2008 (ASSESSMENT YEAR 2005-06) SHRI TARUN K MODY GANESH HALL NANI MEHATWAD NEAR KASTURBA HOSPITAL VALSAD VS. ITO WARD 4 VALSAD PAN/GIR NO. : ABGPM6228B (APPELLANT) .. (RESPONDENT) APPELLANT BY: WRITTEN SUBMISSION RESPONDENT BY: SHRI MATHIVANAN M. SR. DR O R D E R PER SHRI A. K. GARODIA AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A) VALSAD DATED 26.08.2008 FOR THE ASSESSMENT YEAR 200 5-06. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE A PPOINTED DATE OF HEARING I.E. ON 12.07.2011 ALTHOUGH THIS DATE OF HE ARING WAS ANNOUNCED IN THE OPEN COURT ON 06.04.2011 WHEN THE MATTER WAS AD JOURNED ON THE REQUEST FORM LD. D.R. AND THE NEXT DATE OF HEARING WAS ANNO UNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE SIDES. IN SPITE OF TH IS NONE APPEARED ON BEHALF OF THE ASSESSEE ON THIS DATE OF HEARING I.E. 12.07. 2011 AND THERE IS NO REQUEST FOR ADJOURNMENT. HOWEVER A WRITTEN SUBMISSION OF LD. A.R. OF THE ASSESSEE IS ALREADY AVAILABLE ON RECORD WHICH WAS SUBMITTED ON 08.07.2011 AND IT IS NOTED IN THAT WRITTEN SUBMISSION THAT THE DATE OF H ARING IS 12.07.2011. HENCE WE PROCEED TO DECIDE THIS APPEAL OF THE ASSE SSEE AFTER CONSIDERING I.T.A.NO. 4087 /AHD/2008 2 THESE WRITTEN SUBMISSIONS OF THE ASSESSEE AND AFTER HEARING THE LD. D.R. OF THE REVENUE. 3. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. LEARNED A.O. HAS ERRED IN LAW AND ON FACTS T O MAKE ADDITION CONTRARY TO THE BOARD'S CIRCULAR TO THE EFFECT THAT NO ASSESSMENT SHOULD BE MADE ON THE BASIS OF DISCLOSURE OF INCOME WITHOU T FINDING ANY MONEY STOCK OR OTHER VALUABLE FOUND DURING SURVEY OR SEARCH. LD.CIT (APPLS.) VALSAD HAS ALSO ERRED IN SUSTAINING THE O RDER OF THE A.O. 2. LEARNED A.O. HAS ERRED IN LAW AND ON FACTS TO ADD AN AMOUNT OF RS.1 00 0007- BEING ON-MONEY OF M/S BHARUCHA CORPOR ATION IGNORING THE FACT THAT ALL THE MEMBERS/ FLAT / SHOP OWNERS W ERE SUMMONED U/S 131 OF THE ACT AND NONE OF THEM HAS ADMITTED TO HAV E PAID ON-MONEY TO THE APPELLANT ON THE BASIS OF LOOSE PAPER. LD. A .O. MADE ADDITION AND LD. CIT(APPLS.) VALSAD HAS ALSO ERRED IN SUSTA INING THE ORDER OF THE A.O. BY HOLDING DUMP PAPER AS PIECE OF EVIDENCE . 3. LEARNED A.O. HAS ERRED IN LAW AND ON FACTS TO ADD RS. 19 00 000/- TOWARDS SO CALLED SUNDRY DEBTORS RELYING ON THE AP PELLANT'S STATEMENT DURING THE COURSE OF SURVEY ON THE BASIS OF LOOSE P APER. LD.CIT (APPLS.) VALSAD HAS ALSO ERRED IN SUSTAINING THE O RDER OF THE A.O. IGNORING THE SETTLED LEGAL POSITION THAT DUMP PAPER HAS NO EVIDENTIARY VALUE UNDER THE ACT. 4. LEARNED A.O. HAS ERRED IN LAW AND ON FACTS TO ADD AN AMOUNT OF RS.24 00 000/- BEING INVESTMENT MADE BY THE APPELLA NT IN THE LAND LYING IN PARAS CO-OPERATIVE HSG. SOCIETY LTD. VALS AD WITHOUT BRINGING ANY DOCUMENTARY EVIDENCE. LD. CIT(APPLS.) VALSAD HAS ALSO ERRED IN SUSTAINING THE ORDER OF THE A.O. ESPECIALL Y WHEN THE APPELLANT HAS NEITHER MADE ANY INVESTMENT NOR HOLDING ANY POS T IN THE SAID SOCIETY. 5. LEARNED A.O. HAS ERRED IN LAW AND ON FACTS TO ADD RS. 13 730/- BEING 20% OF TOTAL EXPENSES REFLECTED IN P/L A/C O NLY ON ESTIMATED AND AD HOC BASIS. LD. CIT(APPLS.) VALSAD HAS ALSO ERRED IN CONFIRMING SUCH AD HOC ADDITIONS. 6. LEARNED A.O. HAS ERRED IN LAW AND ON FACTS TO VIOLATE THE PRINCIPLE OF NATURAL JUSTICE. LD. CIT (APPLS.) VALSAD HAS AL SO ERRED IN NOT DECIDING THE ISSUE BY SPEAKING ORDER. I.T.A.NO. 4087 /AHD/2008 3 4. THE LD. D.R. OF THE REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW ON ALL THE ISSUES. RELIANCE WAS PLACED BY THE LD. D .R. ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: (A) CIT VS OM PRAKASH JIAN AND OTHERS 322 ITR 362 ( BOMBAY) (B) KARUN DUBE VS ACIT 184 TAXMAN 467 (DEL.) (C) S.K. TRADERS VS CIT 237 CTR 46 (P&H) 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. D. R. OF THE REVENUE AND ALSO CONSIDERED THE WRITTEN SUBMISSIONS FILED B Y THE LD. A.R. OF THE ASSESSEE AND HAVE ALSO CONSIDERED THE PAPER BOOK OF 66 PAGES FILED BY THE ASSESSEE AND AVAILABLE ON RECORD. WE FIND THAT THE A.O. HAS MADE ADDITION OF RS.44 LACS. THE A.O. HAS NOTED IN PARA 4 OF THE ASSESSMENT ORDER THAT A SURVEY IN QUESTION U/S 133A WAS CARRIED OUT ON 03.0 1.2006 AT THE PREMISES OF GANESH HALL NEAR KASTURBA HOSPITAL VALSAD AND THE STATEMENT ON OATH WAS RECORDED OF SHRI T K MODI AND HE HAS DISCLOSED AN I NCOME OF THE FIRM FOR THE FINANCIAL YEAR 2004-05 RELEVANT TO ASSESSMENT Y EAR 2005-06 TO THE EXTENT OF RS.49 LACS WHICH INCLUDED RS.1 LACS ON ACCOUNT O F OWN MONEY (BHARUCHA CORPORATION) RS.5 LACS ON ACCOUNT OF SECURITY DEPO SIT (G. NEXT) RS.19 LACS SUNDRY DEBTORS AND RS.24 LACS ON ACCOUNT OF INVESTM ENT IN PARAS COOP. SOCIETY. THE A.O. FURTHER OBSERVED THAT ON PERUSAL OF THE RETURN FILED IT REVEALED THAT NO SUCH UNDISCLOSED INCOME AS ADMITTE D IN THE STATEMENT RECORDED ON OATH HAS BEEN OFFERED FOR TAXATION. THE A.O. ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY THIS UNDISCLOSED I NCOME OF RS.49 LACS SHOULD NOT BE BROUGHT TO TAX. IN REPLY IT WAS SUB MITTED BY THE ASSESSEE BEFORE THE A.O. THAT THE SAID DISCLOSURE HAD BEEN R ETRACTED. VARIOUS OTHER SUBMISSIONS WERE MADE BY THE ASSESSEE BEFORE THE A. O. BUT THE A.O. WAS NOT SATISFIED AND HE MADE ADDITION OF RS.44 LACS. BEIN G AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE CIT(A). LD. CI T(A) HAS GIVEN A FINDING IN PARA 5.1 OF HIS ORDER THAT NEITHER DURING THE CO URSE OF SURVEY ACTION NOR SUBSEQUENTLY THE ASSESSEE HAS RETRACTED FROM HIS O WN STATEMENT AND WHEN I.T.A.NO. 4087 /AHD/2008 4 THE A.O. ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE THE ASSESSEE CAME FORWARD WITH ALTOGETHER A NEW SET OF ARGUMENTS WHICH CANNOT BE ACCEPTED. HE HELD THAT RETRACTION OF DISCLOSURE MADE AFTER 1 YEARS FROM THE DATE OF SURVEY IS NOT VALID. IT IS ALSO NOTED BY THE LD. CIT(A) THAT ASSESSEE HAS NOT PROVED TO THE SATISFACTION OF THE A.O. THAT PART OF THE CONSI DERATION HAS NOT BEEN IN CASH AND SUNDRY DEBTORS AND INVESTMENT AS ADMITTED IN TH E STATEMENT RECORDED DURING THE COURSE OF SURVEY. IN THE WRITTEN SUBMIS SIONS FILED BEFORE US IT IS SUBMITTED BY THE ASSESSEE THAT LD. CIT(A) ALTHOUGH CONFIRMED THE ADDITION MADE BY THE A.O. BUT HE HAS ALSO GIVEN A FINDING TH AT THE A.O. HAS NOT CONFRONTED THE ASSESSEE REGARDING RECEIPT OF OWN MO NEY AND SUNDRY DEBTORS AND SOLELY RELIED UPON THE ASSESSEES STATEMENT REC ORDED DURING THE COURSE OF SURVEY. WE FIND THAT IN PARA 5.1 OF HIS ORDER LD. CIT(A) HAS IN FACT OBSERVED THAT THE A.O. HAS NOT CONFRONTED THE ASSES SEE REGARDING THE RECEIPT OF OWN MONEY AND SUNDRY DEBTORS AND SOLELY RELIED U PON THE STATEMENT OF THE ASSESSEE RECORDED DURING THE COURSE OF SURVEY PROCE EDINGS. IN THE LIGHT OF THESE FINDINGS OF LD. CIT(A) THAT THE A.O. HAS NOT CONFRONTED THE ASSESSEE REGARDING RECEIPT OF OWN MONEY AND SUNDRY DEBTORS A ND SOLELY RELIED UPON THE STATEMENT OF THE ASSESSEE WE FEEL THAT IN THE INTEREST OF JUSTICE THE MATTER SHOULD GO BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION AFTER CONFRONTING THE ASSESSEE ON ALL THE ISSUES IN THE LIGHT OF PAPE RS AND DOCUMENTS FOUND IN THE COURSE OF SURVEY. 6. REGARDING THE ADDITION MADE BY THE A.O. ON ACCOU NT OF INVESTMENT IN PARAS COOP HOUSING SOCIETY WE FIND THAT IT IS THE SUBMISSION OF THE ASSESSEE BEFORE US THAT NO EVIDENCE WAS FOUND IN THE SURVEY ON THIS ASPECT AND THE A.O. HAS RELIED ON THE STATEMENT OF SHRI GIRISH SHA H IN THE ASSESSMENT PROCEEDINGS U/S 147 AND THE COPY OF STATEMENT WAS N OT PROVIDED TO THE ASSESSEE AND THE OPPORTUNITY OF CROSS EXAMINATION O F MR. GIRISH SHAH WAS ALSO NOT ALLOWED BY THE A.O. HENCE ON THIS ISSUE ALSO WE FEEL THAT THE A.O. I.T.A.NO. 4087 /AHD/2008 5 SHOULD HAVE PROVIDED A COPY OF THE STATEMENT OF SHR I GIRISH SHAH TO THE ASSESSEE. 7. REGARDING RELIANCE PLACED BY THE LD. D.R. ON THE JUDGMENT OF HON'BLE HIGH COURT OF MUMBAI RENDERED IN THE CASE OF CIT VS OM PAKASH JIAN & OTHERS (SUPRA) WE FIND THAT IN THAT CASE HON'BLE H IGH COURT OF BOMBAY HAS HELD THAT APART FROM THE RETRACTED STATEMENT OF JAN 21 2004 THERE WAS SUBSEQUENT STATEMENT MADE BY THE ASSESSEE ON 25.03. 2004 WHICH HAS NOT BEEN CONSIDERED BY THE TRIBUNAL. IT IS ALSO POINTE D OUT BY THE HON'BLE HIGH COURT THAT THERE WAS DOCUMENTARY EVIDENCE ON RECORD . IT WAS HELD THAT DOCUMENTARY EVIDENCE MUST PREVAIL OVER THE ORAL STA TEMENT AND UNDER THESE FACTS THE MATTER WAS REMANDED BY THE HON'BLE HIGH COURT OF MUMBAI TO THE FILE OF THE A.O. FOR A FRESH DECISION ON ALL THE AS PECTS. THIS JUDGMENT OF HON'BLE HIGH COURT OF BOMBAY DOES NOT SUPPORT THE C ASE OF THE REVENUE THAT ADDITION CAN BE MADE MERELY ON THE BASIS OF THE STA TEMENT GIVEN BY THE ASSESSEE ALTHOUGH RETRACTED. WE ARE OF THE CONSIDE RED OPINION THAT WHETHER THERE IS STATEMENT OR NO STATEMENT ADDITION CAN BE MADE ON THE BASIS OF DOCUMENTS FOUND IN THE COURSE OF SURVEY IF ANY. CO PY OF SOME OF THE DOCUMENTS FOUND IN THE COURSE OF SURVEY BEING COPY OF LOOSE PAPERS HAS BEEN SUBMITTED BY THE ASSESSEE IN THE PAPER BOOK WH ICH IS AVAILABLE ON PAGE 16/1 TO 16/17. BUT THERE IS NO ANALYSIS AVAILABLE IN THE ASSESSMENT ORDER REGARDING THESE DOCUMENTS. THERE IS SOME MORE DOC UMENTS BEING A LETTER PAD OF TRILOKI CORPORATION WITH SOME NOTING THEREON WHICH HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE BY FURNISHING A C OPY OF THE SAME ALONG WITH HIS WRITTEN SUBMISSION BEFORE US. WE DO NOT K NOW WHETHER THERE IS ANY OTHER MATERIAL FOUND IN THE COURSE OF SURVEY AND HE NCE WE FEEL THAT THE MATER SHOULD GO BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION AFTER EXAMINING ALL THE DOCUMENTS FOUND IN THE COURSE OF SURVEY AND AFT ER CONFRONTING THE ASSESSEE ON ALL THE ASPECTS. REGARDING THE STATEME NT OF THE ASSESSEE WE ARE OF THE CONSIDERED OPINION THAT IF THE ASSESSEE CAN BRING SOME MATERIAL ON I.T.A.NO. 4087 /AHD/2008 6 RECORD TO CORROBORATE ITS SUBMISSIONS THAT THE STAT EMENT IN QUESTION IS EITHER UNDER DURESS OR UNDER SOME MISTAKEN BELIEF EITHER O F FACTS OR LAW THEN THE ASSESSEE CAN REBUT SUCH STATEMENT BY BRINGING ON RE CORD THE CORRECT FACTS. THE BURDEN IS ON THE ASSESSEE TO BRING ON RECORD AL ONG WITH COGENT EVIDENCE AS TO HOW AND WHAT WAS THE MISTAKEN BELIEF ON FACTS AND WHAT IS THE CORRECT FACT. MERE SUBMISSION THAT THE STATEMENT GIVEN EAR LIER WAS UNDER MISTAKEN BELIEF IS NOT SUFFICIENT. SINCE NO SUCH EXERCISE W AS DONE EITHER BY THE ASSESSEE OR BY THE A.O. AND IN THE LIGHT OF THESE F ACTS THAT THE A.O. HAS NOT CONFRONTED THE ASSESSEE REGARDING RECEIPT OF OWN MO NEY AND SUNDRY DEBTORS AND SOLELY RELIED UPON THE ASSESSEES RECORDED STAT EMENT DURING THE SURVEY PROCEEDINGS WE FEEL IT PROPER TO RESTORE THE MATTE R BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ORDER ACCORDINGLY. 8. REGARDING THE AD-HOC DISALLOWANCE OF RS.13 730/- BEING 20% OF THE TOTAL EXPENSES REFLECTED IN THE P & L ACCOUNT BASIS ALSO WE DIRECT THE A.O. TO DECIDE THE ISSUE AFRESH AFTER HEARING THE ASSESSEE ON ALL THE ASPECTS OF THE MATTER. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 10. PRONOUNCED IN THE OPEN COURT ON 15 TH JULY 2011. SD./- SD./- (BHAVNESH SAINI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED : 15 TH JULY 2011 SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR AHMEDABAD 6. THE GUARD FILE I.T.A.NO. 4087 /AHD/2008 7 1. DATE OF DICTATION 13/7 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 14/7 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 14/7 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 15/7 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S. 15/7 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15/7/11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..