Shri Ratanlal Sujanmal Dugar,, Pune v. ITO, Wd.2(3),, Pune

ITA 57/PUN/2011 | 2000-2001
Pronouncement Date: 29-03-2012 | Result: Allowed

Appeal Details

RSA Number 5724514 RSA 2011
Assessee PAN AAWPD7169F
Bench Pune
Appeal Number ITA 57/PUN/2011
Duration Of Justice 1 year(s) 2 month(s) 19 day(s)
Appellant Shri Ratanlal Sujanmal Dugar,, Pune
Respondent ITO, Wd.2(3),, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 29-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 29-03-2012
Date Of Final Hearing 07-03-2012
Next Hearing Date 07-03-2012
Assessment Year 2000-2001
Appeal Filed On 10-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JM AND SHRI R.K. PANDA AM I.T.A. NO. 57 & 58/PN/2011 A.Y. 2000-01 AND 2001-02 SHRI RATANLAL S. DUGAR 13 PUSHPAK NAGAR KALYANINAGAR PUNE-411 014 PAN AAWPD 7169 F APPLICANT VS. I.T.O. WARD 2(3) PUNE RESPONDENT APPLICANT BY : SHRI V.R. BHOJWANI RESPONDENT BY: MS. ANN KAPTHUAMA DATE OF HEARING: 07-3-2012 DATE OF PRONOUNCEMENT: ___-3-2012 ORDER PER SHAILENDRA KUMAR YADAV JM: BOTH THESE APPEALS PERTAIN TO THE SAME ASSESSEE ON SIMILAR ISSUE. SO THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAK E OF CONVENIENCE. ITA NO. 57/PN/2011 FOR A.Y. 2000-01 2. THE ASSESSEE IS AN INDIVIDUAL HAVING SHOW INCOME FROM SALARY FROM M/S. DUGAR & SONS PVT. LTD. AND SHOWN INCOME AS SALARY AND INTEREST FROM THE PARTNERSHIP FIRM M/ S. DUGAR INDUSTRIES WHERE HE WAS A PARTNER. IN THE ASSESSME NT ORDER IT WAS STATED THAT DURING THE SEARCH AND SEIZURE OPERA TION U/S 132 IN THE CASE OF SHRI SHRIRAM H. SONI ON 20-7-200 3 A LARGE 57 & 58/PN/2011 RATANLAL DUGAR A.Y. 2000-01 AND 2001-02 2 NUMBER OF SEIZED DOCUMENTS REVEALED THE TRANSACTION S RECORDED IN THE NAME OF VARIOUS PERSONS. IN THE CO URSE OF FINANCING BROKING AND MONEY LENDING BUSINESS OF SHR I SHRIRAM SONI AND HIS CONCERNS. THE SEIZED DOCUMENTS VIDE B N 98 AND 99 INDICATED ADVANCEMENT OF CASH LOANS BY CERTAIN I NVESTORS THROUGH SHRI SHRIRAM SONI OR HIS CONCERNS AND BORR OWING BY SOME OTHER PERSONS FROM SHRI SONI OUT OF THESE CASH LOANS FROM INVESTORS. THE SEIZED DOCUMENTS ALSO SHOWED BLANK PROMISSORY NOTES AND BLANK UNDATED CHEQUES DULY SIG NED BY THE BORROWERS WITH THE AMOUNTS AND NAMES MENTIONED ENTRIES IN CASH BOOK REGARDING RECEIPT AND PAYMENTS OF UNACCOUNTED CASH (BUNDLE NO. 100) CHECKLIST OF BOR ROWERS INDICATING DUE DATES OF PAYMENT OF INTEREST AND BRO KERAGE AND PAYMENT TO SHRI SONI ETC. AN ADDITION OF RS. 14.10 LAKHS BASED ON THE ENTRIES UNDER THE HEAD INVESTOR GIVE N IN SEIZED DOCUMENT BUNDLE NO. 98 WHICH ENTRIES WERE IDENTIFI ED TO BE BELONGING TO THE ASSESSEE. 3. THE ASSESSING OFFICER DISCUSSED THE MODUS OPERAN DI ENTERED INTO BY SHRI SONI RELATING TO HIS FINANCE B USINESS VIS- -VIS THE ENTRIES IN THE SEIZED DOCUMENTS. SHRI S ONI AND HIS YOUNGER BROTHER OBTAINED FUNDS FROM KNOWN PEOPLE WI TH READY CASH WHO WERE THE INVESTORS WHO WERE PAID INTER EST AT PRESCRIBED RATES AND OUT OF THIS CASH LOANS WERE A DVANCED TO THE BORROWERS. THESE DETAILS WERE ENTERED IN THE COMPUTERIZED CHECKLIST IN WHICH ENTRIES UNDER THE H EAD BORROWERS AND INVESTMENT ALONG WITH THE INVESTOR S LISTS WERE ENTERED. IT WAS FURTHER STATED BY THE ASSESSI NG OFFICER THAT THE DOCUMENTS IN BUNDLE NO. 98 AND 99 SHOWED S UCH AMOUNT INVESTED AND ADVANCED AND THE OUTSTANDING ON A GIVEN DATE ALONG WITH THE RATE OF INTEREST AND THE NAMES OF THE INVESTORS AS WELL AS BORROWERS WERE INDICATED. IT WAS HELD THAT THE INVESTMENTS AS WELL AS THE ADVANCES WERE OUT OF 57 & 58/PN/2011 RATANLAL DUGAR A.Y. 2000-01 AND 2001-02 3 UNACCOUNTED FUNDS. THE ENTRIES WERE ALSO FOUND IN THE NAME OF ASSESSEE AND THE HANDWRITTEN ENTRIES IN THE NAME OF INVESTOR/PERSON WITH DATE IN BUNDLE NO. 100 INDICAT ED THE INTEREST PAYMENT ON SUCH DATE TO THE ASSESSEE. IT WAS STATED THAT THE ASSESSEES NAME APPEARED IN THE SEIZED DOC UMENTS IN ABBREVIATED OR DISTORTED FORM LIKE DUGAR R OR D. RATAN INTENDED TO CONCEAL THE IDENTITY OF SUCH PERSONS. THOUGH SHRI SHRIRAM SONI CONFIRMED THAT HE HAD BORROWED THESE F UNDS FROM THE PERSONS WHOSE NAMES WERE ENTERED IN THE SE IZED PAPERS HE DECLINED TO IDENTIFY SUCH INVESTORS/PERS ONS IN A CONCRETE AND A CONCLUSIVE MANNER CITING THREAT TO HIS LIFE. IN THE ASSESSMENT PROCEEDINGS OF SHRI SHRIRAM SONI TH E ASSESSING OFFICER MENTIONED THAT THERE WERE PLENTY OF DIRECT AND INDIRECT EVIDENCES IN THESE SEIZED DOCUMENTS AP ART FROM THE NAMES WHICH INDICATED THE IDENTITY OF THESE P ERSONS. THE IMPUGNED AMOUNT MENTIONED IN THE NAMES OF SUCH INVE STORS WAS ADDED IN THE ASSESSMENT ORDER OF SHRI SHRIRAM S ONI ON PROTECTIVE BASIS WHICH WAS CONFIRMED BY THE CIT(A) PUNE ON SUBSTANTIVE BASIS. HOWEVER IN THE CASE OF SHRI SH RIRAM SONI VIDE ITS ORDER IN ITA NO. 474 TO 478 AND 518/PN/200 7 FOR A.Y. 1998-00 TO 2003-04 DATED 17 TH JUNE 2010 HELD THAT THE REVENUE HAD GONE WRONG IN ASSUMING THAT ALL THE TRA NSACTIONS OF MONEY LENDING AS RECORDED IN BUNDLE NO. 98 99 A ND 100 WERE THE MONEY LENDING TRANSACTIONS OF THE ASSESSEE AND THAT THE APPROACH OF THE REVENUE HAS BEEN IMPRACTICAL RA THER AN IMPOSSIBLE VIEW CONSIDERING THE TOTALITY OF THE FAC TS OF THE CASE. 4. NOW COMING TO THE ASSESSMENT ORDER THE ASSESSI NG OFFICER GOES ON TO GIVE THE DATE WISE LIST OF INVES TMENTS MADE BY THE ASSESSEE IN ACCORDANCE WITH THESE SEIZED DOC UMENTS ON WHICH THE RELEVANT PAGE NUMBERS AMOUNT DATE AND RATE OF INTEREST AS PER BUNDLE NO. 98 AS PER PAGE 2 OF ASSE SSMENT ORDER. THE WORKING SHOWS THAT THE TOTAL PRINCIPLE A MOUNT 57 & 58/PN/2011 RATANLAL DUGAR A.Y. 2000-01 AND 2001-02 4 INVESTED BY THE ASSESSEE DURING THE PERIOD JANUARY TO MARCH 2000 WAS RS. 14 10 000/- ON WHICH AN INTEREST AMOUN T OF RS. 7 972/- WAS COMPUTED FOR THE YEAR UNDER CONSIDERATI ON BASED ON THE SPECIFIC INTEREST RATE AND PERIOD MENTIONED IN THE SEIZED DOCUMENTS. THEREFORE AN AMOUNT OF RS. 14 10 000/- WAS INVESTED BY THE ASSESSEE IN MONEY LENDING BUSINESS AS ON 31- 3-2000 IN ACCORDANCE WITH THE SEIZED DOCUMENTS WHI CH WERE OUT OF UNACCOUNTED FUNDS. THE ASSESSING OFFICER ST ATED THAT OBTAINING THE ASSESSEES EXPLANATION PROCEEDED TO TREAT THIS AMOUNT OF RS. 14 10 000/- AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT AND THE INTEREST AMOUNT OF RS. 7 792/- W AS ADDED AS UNACCOUNTED INCOME DURING THE YEAR. IN APPEAL THE CIT(A) FOLLOWING THE DECISION OF I.T.A.T. DISCUSSED ABOVE DISMISSED THE APPEAL OF THE ASSESSEE. THE SAME HAS BEEN OPPO SED BEFORE US. 5. THE LEARNED AR POINTED OUT THAT THE NAME OR THE ASSESSEE APPEARED IN THE SEIZED DOCUMENTS IN ABBREV IATED OR DISTORTED FORM (D. RATAN OR RATANLAL DUGAR). THIS W AS INTENDED TO CONCEAL THE IDENTITY OF SUCH PERSON. NOTICE WAS ISSUED/S 142(1) OF THE ACT. IN RESPONSE TO NOTICE THE LEAR NED AR WAS REQUESTED TO FURNISH HIS REPLY WHICH HAS BEEN RELIE D UPON BY THE ASSESSING OFFICER. LETTER DATED 26-11-2007 WHI CH HAS BEEN SUMMARIZED BY THE ASSESSING OFFICER IN THE ASS ESSMENT ORDER ON PAGE 3 READS AS UNDER: YOU HAVE GIVEN US THE XEROX COPY OF DOCUMENTS ON 1 0- 10-2007 WHICH RUNS INTO MORE THAN 100 SHEETS AND ON SCRUTINY OF THE SAME WE FIND THAT NONE OF THE PAPER S BEAR SIGNATURE OF THE ASSESSEE I.E. SHRI RATANLAL DUGAR OR MR. SONI. HENCE THIS IS NOT AN ADMISSIBLE EVIDENCE. IT IS FURTHER SEEN THAT THERE IS NO SIGNATURE OF PE RSON FROM WHOSE CUSTODY THIS MATERIAL IS SEIZED AND MOST OF THE PAPERS ARE IN CODE WORDS HENCE YOU ARE REQUEST ED TO FURNISH US FOLLOWING INFORMATION 57 & 58/PN/2011 RATANLAL DUGAR A.Y. 2000-01 AND 2001-02 5 (A) STATEMENT OF SHRIRAM SONI RECORDED DURING SEARCH PROCEEDINGS U/S 132 RELEVANT TO OUR ASSESSEE I.E. S HRI RATANLAL DUGAR. (B) DECODED VERSION OF THE CODE WORDS IN THE DIARY (C) ANY DOCUMENT SHOWING MONEY ADVANCED BY SHRI RATANLAL DUGAR AND THE RECEIPT OF RETURN OF DEPOSIT AT LATER DATE. (D) PLEASE ARRANGE TO CALL SAID SHRI SHRIRAM SONI IN TH E PRESENCE OF THE ASSESSEE TO ARRIVE AT TRUTH IF ANY OF MONEY TRANSACTION RECORDED IN THE DIARY IN CODE WORDS ACCORDINGLY A COPY OF STATEMENT OF SHRI SHRIRAM H. SONI WAS CALLED FOR FROM THE A.O. HOWEVER DUE TO VOLUM INOUS SEIZED MATERIAL THE COPY COULD NOT BE MADE AVAILAB LE READILY. 6. FURTHER ACCORDING TO ASSESSING OFFICER FINAL OP PORTUNITY OF HEARING WAS GIVEN ON 26-11-2007 WHEN THE LEARNED AR STATED THAT IN THE ABSENCE OF STATEMENT OF SHRI SON I NO FURTHER SUBMISSION IS POSSIBLE. HE AGAIN SUBMITTED A LETTE R REQUESTING FOR COPY OF STATEMENT OF SHRI SONI. AFTER THIS TH E ASSESSING OFFICER HAS MADE THE ADDITION IN QUESTION WITHOUT G IVING STATEMENT OF SAID SONI TO THE ASSESSEE. FACTS REMA IN THAT THE STATEMENT OF SHRI SONI IS THE BASIS FOR MAKING THE ADDITION IN QUESTION BECAUSE THE SEARCH TOOK PLACE IN THE CASE OF SONI. THE SAID STATEMENT WAS REQUESTED BY THE ASSESSEE VI DE LETTER DATED 26-11-2007. THE ASSESSEE ALSO ASKED FOR REC ORDED VERSION OF THE CODE WORDS IN THE DIARY. THE ASSESS EE ALSO WANTED THE DOCUMENTS SHOWING QUANTUM OF MONEY ADVAN CED BY THE ASSESSEE AND RECEIPT OF RETURN OF DEPOSIT AT LETTER DATE. IT WAS ALSO SPECIFICALLY ASKED TO CALL SHRI SONI IN PERSON TO ARRIVE AT A CONCLUSION IF ANY MONEY TRANSACTIONS RE CORDED IN THE DIARY IN CODE WORD. THOUGH THE STATEMENT OF SH RI SONI WAS CALLED FOR FROM ASSESSING OFFICER BUT BECAUSE O F VOLUMINOUS SIZE MATERIAL COULD NOT BE MADE AVAILABL E READILY. THIS SHOWS THAT THE ASSESSEE WAS NEITHER GIVEN A ST ATEMENT OF SHRI SONI WHICH IS MADE THE BASIS FOR ADDITION NOR DOCUMENTS WERE FURNISHED WHICH ARE MADE BASIS FOR ADDITION AN D LASTLY 57 & 58/PN/2011 RATANLAL DUGAR A.Y. 2000-01 AND 2001-02 6 THE ASSESSEE WAS NOT PROVIDED AN OPPORTUNITY TO CRO SS EXAMINE MR. SONI WITH REGARDS TO THE STATEMENT IN S PITE OF THE SPECIFIC REQUEST. ACCORDING TO US THIS IS VIOLATI ON OF PRINCIPLES OF DUE OPPORTUNITY OF HEARING WHICH IS ESSENCE OF P RINCIPAL OF NATURAL JUSTICE. WE ARE OF THE VIEW THAT THE STATE MENT RELIED UPON FOR MAKING ADDITION SHOULD BE CONFRONTED TO TH E ASSESSEE AND THE ASSESSEE SHOULD BE GIVEN OPPORTUNITY TO CRO SS EXAMINE MR. SONI WITH REGARD TO HIS STATEMENT. SO IN THE INTEREST OF JUSTICE WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFI CER WITH A DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW AF TER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE INCLUDI NG THE TRIBUNAL DECISION . SINCE WE ARE RESTORING THE MAT TER TO THE ASSESSING OFFICER ON A PRELIMINARY ISSUE WE ARE RE FRAINING TO MAKE ANY COMMENT ON THE ISSUE AT HAND. IN ITA NO. 58/PN/2011 FOR A.Y. 2001-02 THE FACTS ARE SIMILAR TO THOSE IN A.Y. 200-01. SO FOLLOWING THE REASONS GIVEN IN THE PRECEDING PARAGRAPHS WE REMIT THE MATTER TO THE FI LE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE ON FACTS AND LAW AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSE E. 7. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 0RDER PRONOUNCED IN THE OPEN ON 29 TH MARCH 2012. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED THE 29 TH MARCH 2012 ANKAM 57 & 58/PN/2011 RATANLAL DUGAR A.Y. 2000-01 AND 2001-02 7 COPY FORWARDED TO: (1) ASSESSEE (2) DEPARTMENT (3) CIT(A) II PUNE (4) CIT- II PUNE (5) THE D.R. PUNE BENCH PUNE TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL PUNE BENCHES PUNE