ASST CIT CEN CIR 18 & 19, MUMBAI v. PREMKUMAR T. BATRA, MUMBAI

ITA 8062/MUM/2010 | 2005-2006
Pronouncement Date: 25-04-2014 | Result: Dismissed

Appeal Details

RSA Number 806219914 RSA 2010
Assessee PAN AIIPB2350A
Bench Mumbai
Appeal Number ITA 8062/MUM/2010
Duration Of Justice 3 year(s) 5 month(s) 1 day(s)
Appellant ASST CIT CEN CIR 18 & 19, MUMBAI
Respondent PREMKUMAR T. BATRA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 25-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 25-04-2014
Date Of Final Hearing 01-04-2014
Next Hearing Date 01-04-2014
Assessment Year 2005-2006
Appeal Filed On 23-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI P.M. JAGTAP ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN JUDICIAL MEMBER ITA NO. 7771/MUM/2010 ASSESSMENT YEAR: 2007-08 RAJEEV C. BATRA 302 PINNACLE TOWER 3 RD FLOOR 9 TH ROAD TPS III. KHAR (WEST) MUMBAI- 400 052 VS. ACIT CEN CIR 18 & 19 AAYAKAR BHAWAN MUMBAI- 400 020 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO:- AIIPB 2350 A ITA NO. 1116/MUM/2011 ASSESSMENT YEAR: 2007-08 KARAN P. BATRA 321 TRILOK BUILDING 1 ST FLOOR NEAR MADHU PARK KHAR (W) MUMBAI-400 052 VS. ACIT CEN CIR 18 & 19 AAYAKAR BHAWAN MUMBAI- 400 020 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :AJWPB 7713 N ITA NOS. 7038 TO 7043/MUM/2010 ASSESSMENT YEARS: 2001-02 2002-03 2003-04 2004-05 2005-06 AND 2006-07 ACIT CEN CIR 18 & 19 ROOM NO. 401 4 TH FLOOR AAYAKAR BHAWAN MUMBAI- 400 020 VS. SHRI CHATURBHUJ T. BATRA 302 PINNACLE TOWER 3 RD FLOOR 9 TH ROAD TPS-3 KHAR (W) MUMBAI-400 052 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :AABPB 3512 F ITA NO. 7771/MUM/2010 ITA NO. 1116/MUM/2011 ITA NOS. 7038 TO 7043/MUM/2010. 8058 TO 8063/MUM/2010 RAJEEV C. BATRA KARAN P. BATRA SHRI CHATURBHUJ T. BATRA SHRI PREMKUMAR T. BATRA ASSESSMENT YEARS: 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 & 2007-08 2 ITA NOS. 8058 TO 8063/MUM/2010 ASSESSMENT YEARS: 2001-02 2002-03 2003-04 2004-05 2005-06 AND 2006-07 ACIT CEN CIR 18 & 19 ROOM NO. 401 4 TH FLOOR AAYAKAR BHAWAN MUMBAI- 400 020 VS. SHRI PREMKUMAR T. BATRA 302 PINNACLE TOWER 3 RD FLOOR 9 TH ROAD TPS-3 KHAR (W) MUMBAI-400 052 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :AABPB 3511 G ASSESSEE BY : SHRI RAJEEV KHANDELWAL REVENUE BY : SHRI A.C. TEJPAL DATE OF HEARING : 09.04.2014 DATE OF PRONOUNCEMENT : 25.04.2014 O R D E R PER BENCH: THERE ARE 14 APPEALS 2 FILED BY THE ASSESSEES AND 12 FILED BY THE REVENUE THE DETAILS OF WHICH ARE AFOREMENTIONED IN THE SHOR T CAUSE TITLE. SINCE SIMILAR ISSUES ARE INVOLVED IN ALL THESE APPEALS THE SAME ARE HEA RD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER. 2. THE ISSUE INVOLVED IN ALL THE 14 APPEALS PERTAIN S TO THE ADDITIONS MADE BY WAY OF ESTIMATING THE ADDITIONAL BROKERAGE INCOME AGAIN ST THE ASSESSES NAMELY SHRI RAJEEV C. BATRA SHRI KARAN P. BATRA SHRI CHATURBH UJ T. BATRA AND SHRI PREMKUMAR T. BATRA ON THE BASIS OF THE ENTRIES CONTAINED IN THE SEIZED MATERIALS AT PAGE NO. 8 OF ANNEXURE A-1 AND PAGE NO. 81 OF THE ANNEXURE 3. 3. BRIEFLY STATED THE ASSESSEES ARE MEMBERS OF BAT RA GROUPS WHO ARE ENGAGED IN CIVIL CONSTRUCTIONS AND REAL ESTATE BROKERS AND THE SAID GROUP WAS COVERED U. 132 OF THE INCOME-TAX ACT ON 18.01.2007. DURING THE COU RSE OF SEARCH THE BUSINESS PREMISES OF M/S. SUNRISE ENTERPRISES WERE COVERED U /S 133A OF THE ACT. THE OTHER RESIDENTIAL PREMISES INCLUDING LOCKERS WERE ALSO CO VERED U/S 132 OF THE ACT. THE AO ITA NO. 7771/MUM/2010 ITA NO. 1116/MUM/2011 ITA NOS. 7038 TO 7043/MUM/2010. 8058 TO 8063/MUM/2010 RAJEEV C. BATRA KARAN P. BATRA SHRI CHATURBHUJ T. BATRA SHRI PREMKUMAR T. BATRA ASSESSMENT YEARS: 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 & 2007-08 3 NOTED THAT THE GROUP WAS BASICALLY REAL ESTATE BROK ERS BRANCHED OUT INTO CIVIL CONSTRUCTION AND THE FIRST RESIDENTIAL BUILDING PRO JECT IN THE NAME OF SUDHA IN KHAR (W) WAS NEARING COMPLETION WHEN ACTION U/S 132 WAS CONDUCTED. THE PROJECT CONSISTED OF THREE APARTMENTS AND ONE UNIT WAS CLAI MED TO HAVE BEEN SOLD BY TAKING ADVANCE AT THE TIME OF ACTION U/S 132 OF THE ACT. A LL THE GROUP MEMBERS WERE ASSESSED TO INCOME TAX AND HAD ADMITTED REAL ESTATE BROKERAGE INCOME IN THEIR RESPECTIVE RETURNS. THE AO NOTED THAT DURING THE CO URSE OF SEARCH THE BATRA BROTHERS ADMITTED RS. 70 LAKHS AS THEIR UNDISCLOSED INCOME I N REAL ESTATE BROKERAGE AND ANOTHER RS. 5 LAKHS TOWARDS THE PROFIT ON SALE OF O NE RESIDENTIAL APARTMENT IN THEIR BUILDING PROJECT SUDHA. HOWEVER THE UNDISCLOSED INCOME WAS NOT REFLECTED IN ANY OF THE RETURNS FILED BY THE ASSESSEES. ON VERIFICAT ION OF SOME OF THE ENTRIES IN THE SEIZED MATERIALS AT PAGE NO. 8 OF ANNEXURE A-1 AND PAGE NO. 81 OF THE ANNEXURE 3 THE AO NOTED THAT THERE WERE UNACCOUNTED CASH COMPO NENT IN THE SALE PRICE OF THE PROPERTIES IN WHICH THE ASSESSEES ACTED AS REAL EST ATE BROKERS AND RECEIVED BROKERAGE IN RESPECT OF CASH COMPONENT OF THE SALE PRICE. ACCORDING TO THE AO THE REAL ESTATE TRANSACTION DONE BY BATRA FAMILY CONTAI NED THE CASH COMPONENT WHICH HAD GONE UNRECORDED IN THE BOOKS WHICH VARIES FROM 30% TO 70%. THE AO WAS OF THE OPINION THAT THE BATRA FAMILY MUST HAVE RECEIVE D 1% BROKERAGE ON UNRECORDED PART OF THE SALE CONSIDERATION. THEREFORE THE AO M ADE AN ESTIMATE IN THE BROKERAGE IN WHICH THE BATRA FAMILY INDULGED HAVING 50% CASH COMPONENT AND THEREBY ADDED ANOTHER 50% OF THE BROKERAGE INCOME TO THE TOTAL IN COME OF THE ASSESSEES ON ESTIMATE BASIS. WHILE DOING SO THE AO RELIED ON TH E ENTRIES IN THE SEIZED PAPER PAGE 4 IN ANNEXURE A SEIZED FROM THE RESIDENCE OF S HRI C.T. BATRA DURING THE COURSE OF SEARCH. THE ENTRIES FOUND IN PAGE NO. 8 OF ANNEX URE A-1 READ AS FOLLOWS:- 1 REGILAND BH-5 TH 70/30 2.55 CR. WITH 2 SOMMERSET 1.55CR. 800(C) 3 BAND STAND SEA FACING 7 TH FLOOR ACCORDING TO THE ASSESSEE FIRST ENTRY MEANS THAT T HE FLAT IS A THREE BEDROOM AND HALL FLAT ON THE 5 TH FLOOR 70/30 MENTIONED IN THE SEIZED MATERIAL MEAN S THAT CARPET AREA IS 70% AND THE REMAINING 30% IS SUPER BUILT UP AREA S. THE SECOND ENTRY THAT IS 800(C) MEANS THE CARPET AREA IS 800 SQ.FT. HOWEVER THE AO INTERPRETED 70/30 AS ITA NO. 7771/MUM/2010 ITA NO. 1116/MUM/2011 ITA NOS. 7038 TO 7043/MUM/2010. 8058 TO 8063/MUM/2010 RAJEEV C. BATRA KARAN P. BATRA SHRI CHATURBHUJ T. BATRA SHRI PREMKUMAR T. BATRA ASSESSMENT YEARS: 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 & 2007-08 4 70% OF THE SALE CONSIDERATION IN CHEQUE AND 30% OF THE SALE CONSIDERATION IN CASH. SIMILARLY 800(C) MEANS RS. 80 LAKHS CASH. IN VIEW O F THIS THE AO HELD THAT THE ASSESSEE USED TO COLLECT THE BROKERAGE IN CASH COMP ONENT AND THE BROKERAGE RECEIVED IN CASH WILL BE 50% OF THE TOTAL BROKERAGE . ACCORDINGLY THE AO HELD THAT THE GROSS BROKERAGE AND THE COMMISSION RECEIPT DECL ARED BY THE ASSESSEES REPRESENT ONLY 50% OF THE RECEIPTS OF ACCOUNTED AND CHEQUE TR ANSACTIONS AND THEREFORE THE AO MADE FURTHER ADDITION OF 50% ON AN ESTIMATE BASI S. ON APPEAL IN THE CASES OF SHRI RAJEEV C. BATRA AND SHRI KARAN P. BATRA FOR T HE ASSESSMENT YEAR 2007-08 THE LD.CIT(A) UPHELD THE ACTION OF THE AO. AGGRIEVED BY THE IMPUGNED DECISIONS THE ASSESSEES SHRI RAJEEV C. BATRA AND SHRI KARAN P. B ATRA ARE IN APPEAL BEFORE US. 3.1 APROPOS THE 12 APPEALS FILED BY THE REVENUE 6 EACH IN RESPECT OF SHRI CHATURBHUJ T. BATRA AND SHRI PREMKUMAR T. BATRA FO R THE ASSESSMENT YEARS FROM 2001-02 TO 2006-07 THE LD.CIT(A) DELETED SIMILAR ADDITIONS ON THE GROUND THAT SEIZED DOCUMENT DID NOT INDICATE ANY CASH COMPONENT OF BROKERAGE RECEIVED BY THE ASSESSEES UP TO THE ASSESSMENT YEAR 2006-07. THE LD .CIT(A) FURTHER NOTED THAT THE ASSESSMENT OF INCOME SHOULD BE MADE ON THE BASIS OF EVIDENCES COLLECTED EITHER DURING THE SEARCH OR DURING THE ASSESSMENT PROCEEDI NGS. ACCORDING TO THE LD.CIT(A) THERE WAS NO EVIDENCE TO SHOW THAT ANY UNACCOUNTED BROKERAGE WERE RECEIVED DURING THE RELEVANT ASSESSMENT YEARS. THUS THE EST IMATED ADDITIONS ON BROKERAGE WERE DELETED BY THE LD.CIT(A). AGGRIEVED BY THE IMP UGNED DECISION THE REVENUE IS IN APPEAL BEFORE US. 4. AT THE OUTSET IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE CASES IN HAND ARE SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI RAJEEV C. BATRA IN ITA NO. 7772/MUM/2010 FOR THE ASSESSMENT YEAR 20 03-04 WHEREIN SIMILAR ADDITION MADE/CONFIRMED BY THE AO/CIT(A) ON THE BAS IS OF THE SAME SEIZED DOCUMENT HAS BEEN DELETED BY THE TRIBUNAL AND THE F INDINGS OF THE TRIBUNAL IN PARA 6 OF THE SAID ORDER IS EXTRACTED HEREUNDER:- I HAVE CONSIDERED THE RIVAL SUBMISSIONS MAD BY BOT H THE SIDES PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I FIND THE ASSESSING OFFIC ER RELIED ON THE ORDER IN THE CASE OF SHRI C.B. BATRA AND HELD THAT THE ASSESSEE IS RECEIVING 50% OF THE ITA NO. 7771/MUM/2010 ITA NO. 1116/MUM/2011 ITA NOS. 7038 TO 7043/MUM/2010. 8058 TO 8063/MUM/2010 RAJEEV C. BATRA KARAN P. BATRA SHRI CHATURBHUJ T. BATRA SHRI PREMKUMAR T. BATRA ASSESSMENT YEARS: 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 & 2007-08 5 BROKERAGE IN CASH WHICH IS UNACCOUNTED IN THE BOOKS . I FIND THE ASSESSING OFFICER HAS TAKEN THIS VIEW ON THE BASIS OF SEIZED DOCUMENTS WITH REGARD TO TWO PROPERTIES NAMELY REGILAND FLAT IN 5 TH FLOOR AND FLAT AT SOMMERSET BUILDING. NO INDEPENDENT ENQUIRY FROM THE PURCHASER S HAS BEEN MADE. I FIND THE CIT(A) HAD MENTIONED IN PARA 11.1 OF HIS ORDER THAT AT THE OUTSET IT IS TO BE MENTIONED THAT THERE IS NO CLEAR CUT EVIDENCE AV AILABLE TO SHOW THAT ANY CASH COMPONENT IS INVOLVED IN THIS TRANSACTION. FU RTHER THE SUBMISSIONS OF THE ASSESSEE BEFORE THE CIT(A) THAT THE SEIZED DOCU MENT RELATING TO THE RESIDENTIAL FLAT WAS A TRADE ENQUIRY WHICH WAS SOLD TWO YEARS AFTER AND DOES NOT RELATE TO ASSESSMENT YEAR 2003-04 COULD NOT BE CONTROVERTED BY THE LD. D.R. FURTHER THE SUBMISSION OF THE ASSESSEE BEFORE THE CIT(A) THAT FLAT AT SOMMERSET BUILDING HAS NOT BEEN SOLD AND THE FINDIN G OF THE CIT(A) THAT THERE IS NO EVIDENCE TO SHOW THAT THE TRANSACTION T OOK PLACE THROUGH THE ASSESSEE ALSO COULD NOT BE CONTROVERTED BY THE LD D .R. I FIND IN PARA 11.4 OF THE CIT(A)S ORDER THE LD.CIT(A) HAS MENTIONED THA T HE WAS CONVINCED THAT THESE SEIZED DOCUMENTS DO NOT INDICATE ANY CASH COM PONENT OF BROKERAGE RECEIVED BY THE ASSESSEE. I FIND DESPITE GIVING THI S FINDINGS WHICH ARE REPRODUCED ELSEWHERE IN THIS ORDER THE CIT(A) SUST AINED THE ADDITION ON THE GROUND THAT THE APPELLANT WAS NOT ACCOUNTING THE BR OKERAGE INCOME CORRECTLY. THIS IN MY OPINION IS UNCALLED FOR. IT HAS BEEN H ELD BY VARIOUS JUDICIAL PRONOUNCEMENTS THAT PRESUMPTIONS AND SURMISES HOWE VER STRONG MAY BE CANNOT BE THE BASIS FOR ANY ADDITION. (DHAKESWARI C OTTON MILLS LTD. VS. CIT 26 ITR 775) IN THE INSTANT CASE THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THE ASSESSEE HAS RECEIVED BROKERAGE INCOME ON ACCOUNT O F CASH COMPONENTS. THE CIT(A) HAS ALREADY SUSTAINED THE UNEXPLAINED DE POSIT OF RS.98 765/- AND THE ASSESSEE IS NOT IN APPEAL FOR THE SAME BEFORE T HE TRIBUNAL. IT HAS ALSO BEEN HELD BY THE LD.CIT(A) THAT THE ONLY INCOME OF THE ASSESSEE IS FROM BROKERAGE. THEREFORE WHEN THE UNEXPLAINED DEPOSITS OF RS.98 765/- HAS BEEN ADDED AND THE ONLY SOURCE OF INCOME OF THE ASS ESSEE BEING BROKERAGE AND SINCE THE ASSESSEE BEING BROKERAGE AND SINCE TH E ASSESSEE HAS NOT CHALLENGED THE SAME THEREFORE CONFIRMING THE ADDI TION OF RS. 1 LAKHS MADE BY THE ASSESSING OFFICER ON ESTIMATE BASIS AND TELE SCOPING THE SAME IN MY OPINION IS NOT JUSTIFIED. I THEREFORE SET ASIDE TH E ORDER OF THE LD.CIT(A) ON THIS ISSUE THE GROUND RAISED BY THE ASSESSEE IS AC CORDINGLY ALLOWED. 4.1 AFTER CONSIDERING THE FACT THAT SIMILAR AD DITIONS OF ESTIMATED BROKERAGE MADE ON THE BASIS OF THE SAME DOCUMENT SEIZED HAS BEEN DELETED BY THE TRIBUNAL WE ARE OF THE CONSIDERED OPINION THAT THE IMPUGNED ADDITIO NS CONFIRMED BY THE LD.CIT(A) ON ESTIMATE BASIS AND TELESCOPING THE SAME IS NOT J USTIFIED IN THE CASES OF SHRI RAJEEV C. BATRA AND SHRI KARAN P. BATRA. THEREFORE WE SET ASIDE THE IMPUGNED ORDERS OF THE LD.CIT(A) IN THE SAID CASES AND THE A DDITIONS MADE/CONFIRMED ON THIS COUNT STAND DELETED. 4.2 AS REGARDS THE 12 APPEALS FILED BY THE RE VENUE IN RESPECT OF SHRI CHATURBHUJ T. BATRA AND SHRI PREMKUMAR T. BATRA FOR THE ASSES SMENT YEARS FROM 2001-02 TO ITA NO. 7771/MUM/2010 ITA NO. 1116/MUM/2011 ITA NOS. 7038 TO 7043/MUM/2010. 8058 TO 8063/MUM/2010 RAJEEV C. BATRA KARAN P. BATRA SHRI CHATURBHUJ T. BATRA SHRI PREMKUMAR T. BATRA ASSESSMENT YEARS: 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 & 2007-08 6 2006-07 IT IS PERTINENT TO MENTION THAT IN THE PRE CEDING PARAGRAPHS WHILE ADJUDICATING THE APPEALS FILED BY SHRI RAJEEV C. BA TRA AND SHRI KARAN P. BATRA IT HAS BEEN HELD THAT SIMILAR ADDITIONS CANNOT SUSTAINED O N THE BASIS OF THE SAME SEIZED MATERIAL. ALSO THE LD.CIT(A) HAS CORRECTLY OBSERVE D THAT SEIZED DOCUMENT DOES NOT INDICATE ANY CASH COMPONENT OF BROKERAGE RECEIVED B Y THE ASSESSEES AND THERE IS NO EVIDENCE TO SHOW THAT ANY UNACCOUNTED BROKERAGE HAV E BEEN RECEIVED DURING THE RELEVANT ASSESSMENT YEARS. IN VIEW OF THAT MATTER WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LD.CIT(A) DELETING THE IMPUGNED ADD ITIONS IN THE CASES OF SHRI CHATURBHUJ T. BATRA AND SHRI PREMKUMAR T. BATRA FO R THE ASSESSMENT YEARS FROM 2001-02 TO 2006-07 AND THUS THE DECISION OF THE LD. CIT(A) ON THIS COUNT IS UPHELD. 5. IN THE RESULT THE APPEALS FILED BY THE ASSESSEES ARE ALLOWED AND THAT OF THE REVENUE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 5 TH DAY OF APRIL 2014. SD/- SD/- (P.M. JAGTAP) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 25.04.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR C BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.