SHASHIKANT H ZAVERI, MUMBAI v. ITO 16(3)(2),

ITA 4231/MUM/2010 | 1996-1997
Pronouncement Date: 18-03-2011 | Result: Partly Allowed

Appeal Details

RSA Number 423119914 RSA 2010
Bench Mumbai
Appeal Number ITA 4231/MUM/2010
Duration Of Justice 9 month(s) 23 day(s)
Appellant SHASHIKANT H ZAVERI, MUMBAI
Respondent ITO 16(3)(2),
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 18-03-2011
Assessment Year 1996-1997
Appeal Filed On 25-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI SMC BENCH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER I.T.A.NO.4231/MUM/2010 A.Y 1996-97 SHASHIKANT H. ZAVERI C/O. UMESH ZAVERI 77/79 NAGDEVI CROSS LANE 1 ST FLOOR MUMBAI. PAN: AEE[K 3884 M VS. INCOME TAX OFFICER 16 (3)(2) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M. SUBRAMANIAM. RESPONDENT BY : SHRI SATBIR SINGH. O R D E R THIS APPEAL HAS BEEN FILED LATE BY 25 DAYS AND PETI TION FOR CONDONATION OF DELAY ALONG WITH AN AFFIDAVIT HAS BE EN FILED. 2. THE LD.COUNSEL OF THE ASSESSEE THAT ASSESSEE WAS RESIDING WITH HIS PARENTS AT MUMBAI AND LATER ON SHIFTED TO AHMED ABAD. HE HAD INFORMED THE AO AS WELL AS CIT(A) REGARDING CHANGE OF ADDRESS AND HAD REQUESTED THE CIT(A) TO SEND ALL ORDERS TO G.M. KAPADIA & CO. HOWEVER ORDER WAS SENT BY CIT(A)S OFFICE TO ASSES SEES OLD ADDRESS AND THE SAME WAS RECEIVED BY OLDER MOTHER OF THE AS SESSEE WHO WAS ABOUT 75 YEARS OLD AND SHE DID NOT UNDERSTAND ANYTH ING ABOUT IT. THE ORDER WAS RECEIVED BY ASSESSEE ONLY WHEN HE CAME TO MUMBAI WHICH CAUSED DELAY IN FILING OF THE APPEAL. IN VIEW OF TH IS FACT THE DELAY SHOULD BE CONDONED. 3. ON THE OTHER HAND LD.DR DID NOT RAISE ANY SERIO US OBJECTION. 2 4. AFTER CONSIDERING THE SUBMISSIONS I AM OF THE V IEW THAT ASSESSEE HAD SUFFICIENT CAUSE FOR FILING APPEAL LAT E. THE DELAY IS ONLY FOR A PERIOD OF 25 DAYS AND ACCORDINGLY I CONDONE THE DELAY. 5. THE ISSUE REGARDING REOPENING OF ASSESSMENT WAS NOT PRESSED BEFORE ME AND THEREFORE GROUNDS REGARDING REOPENI NG OF ASSESSMENT ARE DISMISSED AS NOT PRESSED. 6. THE OTHER DISPUTE IS REGARDING ADDITION OF RS.2 03 090/- ON ACCOUNT OF PAYMENT OF ON MONEY. 7. AFTER HEARING BOTH THE PARTIES I FIND THAT AO H AD RECEIVED INFORMATION FROM INCOME TAX OFFICE WARD 11(2)M AHM EDABAD VIDE LETTER DATED 13-8-2002 THAT ASSESSEE HAD PAID ON M ONEY OF RS.2 03 090/- TO M/S. PRITHVI ORGANISERS IN CONNECT ION WITH THE PURCHASE OF FLAT NO.A-10 IN PADMAVATI APARTMENT PA LDI AT AHMEDABAD. THE AO REQUESTED ASSESSEE TO EXPLAIN THE SAME. THE ASSESSEE CATEGORICALLY DENIED HAVING PAID ANY ON MONEY TO M/S. PRITHVI ORGANISERS AND THEREFORE THERE WAS NO QUESTION OF EXPLAINING THE SAME. IN THE LIGHT OF THIS DENIAL AO WROTE A LETTE R DATED 6-11-2003 TO THE ITO WARD 11(2)M AHMEDABAD WITH A REQUEST TO S END A COPY OF THE STATEMENT OF M/S. PRITHVI ORGANISERS RECORDED A T THE TIME OF RAID. THE AHMEDABAD ITO SENT A LETTER TO DCIT CIRCLE G AHMEDABAD FOR SENDING THE STATEMENT AND OTHER MATERIAL BUT NO RE PLY WAS RECEIVED. HOWEVER AO ON THE BASIS OF THE LETTER RECEIVED MA DE ADDITION OF THIS AMOUNT TO THE INCOME OF THE ASSESSEE. 3 8. BEFORE THE CIT(A) IT WAS MAINLY SUBMITTED THAT A DDITIONS HAVE BEEN MADE MERELY ON SURMISES AND CONJECTURES AND NO COPY OF STATEMENT OF M/S. PRITHVI ORGANISERS HAS BEEN EVERY PROVIDED TO THE ASSESSEE. IT WAS ALSO SUBMITTED THAT IN VARIOUS CAS ES OF SIMILAR NATURE THE ADDITIONS HAVE ALREADY BEEN DELETED BY THE AHME DABAD BENCH OF THE TRIBUNAL. THE LD. CIT(A) AFTER EXAMINING THE IS SUE DECIDED THE SAME AGAINST THE ASSESSEE VIDE PARA-6 WHICH IS AS U NDER: 6. LOOKING TO THE FACTS OF THE CASE AND THE SUBMIS SIONS OF THE APPELLANT IT IS SEEN THAT THE ADDITION HERE BAS BE EN MADE ON THE BASIS OF A LETTER RECEIVED THE AO FROM ITO WD. 11(2) AHMEDA BAD STATING THAT THE BUILDERS HAD GIVEN A STATEMENT DURING THE COURS E OF SEARCH THAT THEY HAD RECEIVED ON MONEY ON SALE OF THE FLATS. THE ADD ITION HAS BEEN MADE ON THE BASIS OF THIS LETTER. THE MAIN BASIS OF THE AOS MAKING THE ADDITION IS AS STATED BY HIM IS THAT PREPONDERANCE OF PROBABILITY IS THAT THE APPELLANT PAID ON MONEY. THE APPELLANT HAS STA TED THAT HE HAS NOT BEEN GIVEN OPPORTUNITY TO CROSS EXAMINE THE PARTY. HOWEVER IT IS SEEN THAT IN ALL THE CASES QUOTED BY THE APPELLANT WHERE THE RELIEF HAS BEEN GIVEN BY THE CIT[A]S THE BUILDER HAD GIVEN LETTER TO STATE THAT NO ON MONEY HAD BEEN PAID BY THAT PARTY. EVEN THE JUDGMEN T OF THE HON'BLE ITAT SUBMITTED BY THE LEARNED COUNSEL OF THE APPELL ANT STATES THAT THAT PARTY WAS A ORIGINAL TENANT IN THAT BUILDING AND TH E BUILDER HAD SUBMITTED THAT NO ON MONEY HAD BEEN RECEIVED BY THE PARTY AS THEY WERE THE ORIGINAL TENANTS. IN THIS CASE THE APPELL ANT WAS NOT AN ORIGINAL TENANT. IT IS ALSO SEEN FROM THE HON'BLE TRIBUNALS ORDER IN THE CASE OF M/S. PRITHVI ORGANIZERS THE BUILDERS THAT THEY HAD THEMSELVES OFFERED ABOUT ` `` ` .50 LAKHS ADDITION RECEIPTS FOR TAX AS ON MONEY REC EIPTS. IT IS SEEN FROM THE HON'BLE TRIBUNALS ORDER IN THE CASE OF PANKAJ KUMAR BHOTI & REKHABEN BHOTI THAT THE BUILDERS HAD STATED THAT ` `` ` .2 03 090/- WAS THE AVERAGE ON MONEY RATE. SINCE THE BUILDERS H AVE ADMITTED TO HAVE RECEIVING THE ON MONEY AND THEY HAVE OFFERED I T FOR TAX IT MUST HAVE BEEN RECEIEVD FROM THE APPELLANT AND OTHERS. U NDER SUCH CIRCUMSTANCES IN THIS CASE SINCE THE APPELLANT HA S NOT FILED ANY LETTER FROM THE BUILDER DENYING RECEIVING ANY ON MONEY FRO M HIM NOR HAS BE PROVED THAT HE WAS THE ORIGINAL TENANT FROM WHOM NO ON MONEY WAS TAKEN BY THE BUILDER IT IS NOT PROVED TO THE SATIS FACTION THAT THE APPELLANT HAS NOT PAID ANY ON MONEY SPECIALLY WHEN THE ON MONEY HAS BEEN RECEIVED BY THE BUILDER FOR THE SALE OF FLATS AND OFFERED FOR TAXATION. UNDER SUCH CIRCUMSTANCES THE ADDITION MA DE BY THE AO STANDS CONFIRMED AND THE APPEAL OF THE APPELLANT ST ANDS DISMISSED. 4 9. BEFORE ME LD.COUNSEL OF THE ASSESSEE SUBMITTED T HAT ADDITION HAS BEEN MADE MAINLY ON CONJECTURES AND SURMISES. E VEN THE STATEMENT RECORDED FROM THE OTHER PARTY WAS NOT SUP PLIED TO THE ASSESSEE. NO MATERIAL HAS BEEN BROUGHT ON RECORD TO SHOW THAT ASSESSEE HAS REALLY PAID ANY ON MONEY. IN FACT A SSESSEE HAD DENIED PAYMENT OF ANY SUCH ON MONEY AT THE VERY FIRST OP PORTUNITY AVAILABLE TO HIM. HE ALSO RELIED ON THE DECISION OF HON'BLE M ADRAS HIGH COURT IN THE CASE OF CIT VS. P. V. KALYANASUNDARAM [283 ITR 259] WHEREIN ON THE BASIS OF THE DECISION OF THE HONBLE SUPREME C OURT IN THE CASE OF K. P. VARGHESE VS. ITO [131 ITR 397] THE ADDITION W AS DELETED. THIS ADDITION HAS ALREADY BEEN CONFIRMED BY THE HONBLE SUPREME COURT AND IS REPORTED AT 294 ITR 49. HE SUBMITTED THAT AS SESSEES CASE WAS ON A BETTER FOOTING BECAUSE NOTHING WAS FOUND WITH THE ASSESSEE FOR PAYMENT OF ON MONEY. SIMILAR ADDITIONS HAVE ALSO BEEN DELETED BY AHMEDABAD BENCH AS POINTED OUT BEFORE THE CIT(A). 10. ON THE OTHER HAND LD.DR STRONGLY SUPPORTED THE ORDER OF THE CIT(A). 11. I HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND FORCE IN THE SUBMISSIONS OF THE LD.COUNSEL OF THE ASSESSE E. THE AO HAD ONLY RECEIVED A LETTER SAYING THAT SOME ON MONEY HAS B EEN PAID BY THE ASSESSEE BUT EVEN THE COPY OF STATEMENT FROM M/S. P RITHVI ORGANISERS COULD NOT BE OBTAINED BY THE AO. NO SUCH STATEMENT WAS SUPPLIED TO THE ASSESSEE. THERE IS NO OTHER MATERIAL AVAILABLE WITH THE REVENUE TO SHOW THAT ASSESSEE REALLY MADE ON MONEY PAYMENT. BUT HONBLE 5 MADRAS HIGH COURT IN SIMILAR CASE WHERE A STATEMENT WAS GIVEN DURING SEARCH THAT SOME ON MONEY WAS PAID AND THIS STATE MENT WAS RETRACTED LATER ON HAS DELETED THE ADDITION BY QUO TING WITH APPROVAL THE FINDING OF THE TRIBUNAL BY FOLLOWING PARA: WE FIND THAT IT IS THE UNIFORM VIEW OF THE COURTS AND ALSO HELD BY THE APEX COURT AS REPORTED IN K.P. VARGHESE V. ITO [198 1] 131 ITR 597 THE BURDEN OF PROVING ACTUAL CONSIDERATION IN SUCH TRANSACTION IS THAT OF THE REVENUE. CONSIDERING THE ENTIRE GAMUT OF THE CA SE WE FIND THAT THE REVENUE HAS FAILED TO DISCHARGE ITS DUTIES AND AS H ELD BY THE LEARNED CIT(A) INSTEAD MADE UP A CASE ON SURMISES AND CONJ ECTURES WHICH CANNOT BE ALLOWED. UNDER THE CIRCUMSTANCES WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) AND WE UPHOLD THE APPELLATE ORDER IN THIS REGARD. SINCE IN THE CASE BEFORE ME NO MATERIAL WAS AVAILAB LE WITH THE AO OR CIT(A) TO PROVE THAT ANY ON MONEY HAS BEEN PAID AND EVEN BEFORE ME NO SUCH MATERIAL HAS BEEN FILED THEREFORE I SE T ASIDE THE ORDER OF THE CIT(A) AND DELETE THE ADDITION MADE ON ACCOUNT OF ON MONEY. 12. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 18/3/2011. SD/- (T.R.SOOD) ACCOUNTANT MEMBER MUMBAI:18/3/2011. P/-*