The ACIT Central Circle 1, Mumbai v. Smt. Kusum Ramniklal Sanghani, Mumbai

ITSSA 516/MUM/2004 | misc
Pronouncement Date: 05-02-2010 | Result: Dismissed

Appeal Details

RSA Number 51619916 RSA 2004
Assessee PAN EYEAR2001S
Bench Mumbai
Appeal Number ITSSA 516/MUM/2004
Duration Of Justice 5 year(s) 4 month(s) 24 day(s)
Appellant The ACIT Central Circle 1, Mumbai
Respondent Smt. Kusum Ramniklal Sanghani, Mumbai
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 05-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 05-02-2010
Date Of Final Hearing 01-02-2010
Next Hearing Date 01-02-2010
Assessment Year misc
Appeal Filed On 11-09-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J BEFORE SHRI R.S.SYAL(A.M) & SHRI N.V.VASUDEVAN(J .M) IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) THE ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1 THANE. (APPELLANT) VS. SMT. KUSUM RAMNIKLAL SANGHANI MITRA CHHAYA BUILDING AYREROAD DOMBIVILI (E) PAN: NOT AVAILABLE (RESPONDENT) C.O.NO.93/MUM/08(ARISING OUT OF IT(SS)A NO.516/M/04 ) (BLOCK PERIOD 01/01/1990 TO 14/12/2000) SMT. KUSUM RAMNIKLAL SANGHANI MITRA CHHAYA BUILDING AYREROAD DOMBIVILI (E) (CROSS OBJECTOR) THE ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1 THANE. (APPELLANT IN APPEAL) REVENUE BY : SHRI N.K.BHALODIA ASSESSEE BY : S/SHRI H.N. MOTIWALA& P.S. CH HAJED ORDER PER N.V.VASUDEVAN J.M IT(SS)A NO.516/M/04 IS AN APPEAL BY THE REVENUE A GAINST THE ORDER DATED 25/6/04 OF CIT(A) I THANE RELATING TO THE BLOCK PE RIOD 1/4/1990 TO 14/12/2000. THE ASSESSEE HAS FILED A CROSS OBJECTION AGAINST THE VE RY SAME ORDER OF THE CIT(A). THE CROSS OBJECTION WAS HOWEVER NOT PRESSED AND THE SAM E IS THEREFORE DISMISSED AS NOT PRESSED. THE GROUNDS OF APPEAL RAISED BY THE REVEN UE READ AS FOLLOWS: (1)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE IN ALLOWING THE RELIEF THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.33 0 7 500/- FOUND FROM THE IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 2 ASSESSEES BANK LOCKER BY ACCEPTING PLEA OF THE AS SESSEE THAT THE SAME REPRESENTED DONATION RECEIVED ON BEHALF OF THE TRUS T. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE IN ALLOWING THE RELIEF THE LEARNED CIT(A) HAS IGNORED AND OVERLOOKED THAT:- (A) THE TRUST HAD A SEPARATE BANK A/C. THERE WAS N O EXPLANATION FOR NOT KEEPING THE MONEY THERE IN THE LOCKER OF ASSESSEE WHO AT T HE TIME OF SEARCH WAS NOT EVEN A TRUSTEE OF THE SAID TRUST. (B) MOST OF THE SO CALLED DONERS WERE NEAR RELATIVE S AND FRIENDS OF THE ASSESSEES SON-IN-LAW ( WHO WAS COVERED U/S. 132 ACTION) AND O THER PERSONS OF MODEST MEANS LIKE TEACHERS GARAGE OWNERS SOCIAL WORKERS RICKSHAW OWNERS ETC. WHO WERE INCAPABLE OF MAKING SIZABLE CASH DONATION. (C) NO DONOR WAS PRODUCED BEFORE THE AO UPTO THE LA ST DESPITE SUCH REQUIREMENT AND AS SUCH THE CIT(A) WAS INCORRECT IN HOLDING THA T THE AFFIDAVITS WERE REJECTED MERELY ON SUSPICION AND ASSUMPTION WHEN AN ANALYSIS OF THIS WAS MADE IN PARA 10 OF THE ASSESSMENT ORDER. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS. 4 50 000/- REPRESEN TING CASH DEPOSITS IN S.B. A/C. ON 19/7/2000 AND 25/10/2000 BY ACCEPTING PLEA OF TH E ASSESSEE THAT THE SAME REPRESENTATED DONATION RECEIVED ON BEHALF OF THE TR UST. 2. THE FACTS AND CIRCUMSTANCES GIVING RISE TO THE P RESENT APPEAL BY THE REVENUE ARE AS FOLLOWS: 2.1 THE ASSESSEE IS AN INDIVIDUAL. ONE SHRI RAVIND RA M. PATIL IS THE SON-IN-LAW OF THE ASSESSEE. THERE WAS A SEARCH ACTION UNDER SECT ION 132 OF THE ACT CONDUCTED ON 14/12/2000 IN THE CASE OF RAVINDRA PATIL GROUP OF CASES AT DOMBIVILI. SHRI RAVINDRA M. PATIL WAS ALSO SEARCHED ON 14/12/2000. IN THE COUR SE OF SEARCH FOUR KEYS SUSPECTED TO BE OF BANK LOCKERS WERE FOUND IN A CUPBOARD IN THE BED ROOM OF SHRI RAVINDRA M. PATIL. THOSE KEYS WERE SEIZED BY THE DEPARTMENT. IN THE P RELIMINARY STATEMENT RECORDED BEFORE COMMENCEMENT OF THE SEARCH AS WELL AS THE ST ATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT DURING THE COURSE OF SEARCH SHRI RAVINDRA M. PATIL DID NOT DISCLOSE EXISTENCE OF ANY BANK LOCKER EITHER IN HIS NAME OR IN THE NAME OF HIS FAMILY MEMBERS. IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 3 SUBSEQUENTLY IT TURNED OUT THAT ONE OF THE KEYS RE COVERED FROM SHRI.RAVINDRA M.PATIL WAS IN RESPECT OF BANK LOCKER NO.85 AT BANK OF MAHA RASHTRA AYRE ROAD BRANCH DOMBIVILI. THE SAID LOCKER STOOD IN THE NAME OF TH E ASSESSEE. A WARRANT OF AUTHORIZATION UNDER SECTION 132(1) WAS ISSUED IN RE SPECT OF THE AFORESAID LOCKER IN THE NAME OF THE ASSESSEE ON 23/12/2000. THE LOCKER WAS SEALED ON 27/12/2000. THE BANK LOCKER WAS LATER ON OPENED ON 19/1/2001 AND SEARCHE D AND CASH OF RS. 33 07 500/- WAS FOUND THEREIN. 2.2 IN THE POST SEARCH PROCEEDINGS BEFORE THE DDIT (INV) KALYAN THE ASSESSEE VIDE HER LETTER DATED 22/1/04 SUBMITTED THAT THE ENTIRE CASH FOUND IN THE LOCKER IS THE DONATION/CONTRIBUTION MADE BY VARIOUS PERSONS FOR T HE MOTOSHREE ANANDIBAI CHARITABLE TRUST (MACT). THE LIST OF THE NAMES OF PERSONS MAK ING CONTRIBUTIONS ON DIFFERENT DATES ALONGWITH DETAILS OF ADDRESSES OF THOSE PERSONS WAS ALSO ENCLOSED ALONGWITH SAID LETTER. THE ASSESSEE WAS CALLED UPON BY THE DDIT (INV) KAL YAN TO PRODUCE ALL THE DONORS FOR EXAMINATION. IT APPEARS THAT THE ASSESSEE DID NOT PRODUCE THE DONORS FOR EXAMINATION. IN THE POST SEARCH ENQUIRIES CONDUCTED BY THE DDIT (INV) KALYAN IT TRANSPIRED THAT SEVERAL DONORS BELONG TO DOMBIVILI AND DIFFERENT PA RTS OF MAHARASHTRA AND GUJARAT. ONE SHRI MAHENDRABHAI CHANDAN OF BARODA WAS EXAMINED AN D IT TURNED OUT THAT HE DENIED ACQUAINTANCE WITH SHRI RAVINDRA M. PATIL OR HIS FA MILY MEMBERS OR MATHOSHRI ANANDIBAI CHARITABLE TRUST 2.3 THE A.O THEREAFTER ISSUED NOTICE UNDER SECTION 158BC ON 5/2/2002. THE ASSESSEE HAS FILED A NIL RETURN OF INCOME FOR THE B LOCK PERIOD IN RESPONSE TO THE NOTICE UNDER SECTION 158BC. IN THE ASSESSMENT PROCEEDINGS THE ISSUE WAS WITH REGARD TO THE IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 4 SOURCE OF CASH FOUND IN THE LOCKER IN THE NAME OF T HE ASSESSEE. THE ASSESSEE WAS EXAMINED ON 19.1.2001 WHEN THE LOCKER WAS SEARCHED AND IN HER STATEMENT SHE EXPLAINED THAT THE CASH DOES NOT BELONG TO HER BUT BELONGS TO MATHOSHRI ANANDIBAI CHARITABLE TRUST. IN THE COURSE OF ASSESSMENT PRO CEEDINGS THE ASSESSEE REITERATED HER STAND THAT THE MONEY FOUND IN THE LOCKER DID NOT BE LONG TO HER BUT MATHOSHRI ANANDIBAI CHARITABLE TRUST. IN SUPPORT OF THE OF EXISTENCE OF MATHOSHRI ANANDIBAI CHARITABLE TRUST THE ASSESSEE FILED THE COPY OF THE TRUST DEE D DATED 19/7/1997 COPY OF THE REGISTRATION CERTIFICATE GRANTED BY THE CHARITY COM MISSIONER THANE DATED 1/1/1998 A COPY OF THE DONORS LIST ALONGWITH NAME AND ADDRESSE S TOGETHER WITH CONSENT LETTERS FOR TREATING THEIR DONATIONS AS CORPUS. THE ASSESSEE A LSO FILED COPY OF THE CONVEYANCE DEED EVIDENCING PURCHASE OF A PLOT BY THE MATHOSH RI ANANDIBAI CHARITABLE TRUST. THE TRUST HAD PURCHASED A PIECE OF LAND ON 15/10/2000 ( BEFORE THE DATE OF SEARCH IN THE CASE OF THE ASSESSEE WHICH WAS ON 19/1/2001). THE ASSESSEE ALSO FILED A COPY OF THE REGISTRATION CERTIFICATE UNDER SECTION 12A OF THE A CT GRANTED BY THE CIT THANE. THIS CERTIFICATE WAS GRANTED TO THE TRUST TO HAVE EFFECT FROM 1/4/2000. IN FACT THE APPLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12A WAS MAD E BY THE TRUST ONLY ON 24/1/2001(AFTER THE DATE OF SEARCH) AND THE ORDER O F THE CIT THANE ALLOWING REGISTRATION UNDER SECTION 12A WAS PASSED ON 27/3/2001. IN TH E LIGHT OF THE ABOVE DOCUMENTS ASSESSEE SUBMITTED THAT CASH FOUND IN THE LOCKER CA NNOT BE ASSESSED AS HER UNDISCLOSED INCOME. 2.4 THE A.O HOWEVER REJECTED THE CLAIM OF THE ASSE SSEE FOR THE FOLLOWING REASONS: (A) THE TRUST WAS CONSTITUTED BY TRUST DEED DATED 1 9/7/1997 AND WAS REGISTERED WITH THE CHARITY COMMISSIONER THANE ON 1/1/1998. THERE WAS NO FINANCIAL STATEMENT IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 5 OF THE TRUST UPTO THE DATE OF SEARCH ON 19/1/2001. THE FINANCIAL STATEMENT WERE FILED WITH CHARITY COMMISSIONER ON 27/2/2001 WHICH WAS AF TER THE DATE OF SEARCH. (B) THE ORIGINAL TRUSTEES OF THE TRUST WERE SHRI RA VINDRA M. PATILAND SHRI NITIN N. PATEL. THE ASSESSEE CLAIMED THAT IN A MEETING OF T HE TRUSTEES HELD ON 14/12/2000 FIVE NEW TRUSTEES WERE APPOINTED AND THE ASSESSEE WAS ON E OF SUCH NEW TRUSTEE SO APPOINTED. ACCORDING TO THE A.O THE REPORT REGARDI NG APPOINTMENT OF TRUSTEES WAS SUBMITTED TO THE CHARITY COMMISSIONER ONLY ON 28/2/ 2001 AFTER THE DATE OF SEARCH. ACCORDING TO THE A.O THE RESOLUTION WAS JUST CREATE D TO SUBSTANTIATE THE PLEA TAKEN BY THE ASSESSEE REGARDING CASH FOUND IN THE LOCKER. (C) THE APPLICATION FOR REGISTRATION OF THE TRUST U NDER SECTION 12A OF THE ACT WAS MADE ONLY AFTER THE DATE OF SEARCH. THE CIT GRANTE D APPROVAL TO THE TRUST ONLY ON 1/4/2004 AS THERE WAS NO REASONABLE CAUSE FOR GRANT OF REGISTRATION FROM THE DATE OF CONSTITUTION OF THE TRUST. (D) THE TRUST FILED THE RETURN OF INCOME UNDER THE INCOME TAX ACT 1961 ONLY ON 5/2/2001 AFTER THE DATE OF SEARCH. (E) THE ASSESSEE HAD FILED AFFIDAVIT OF 24 DONORS IN SUPPORT OF THE FACT THAT THEY HAD GIVEN DONATIONS TO THE TRUST. THE A.O FOUND ON AN EXAMINATION OF THESE PERSONS THAT THEY WERE FRIENDS OF SHRI RAVINDRA M. PATIL AND HAD MEAGER SOURCE OF INCOME AND WERE NOT CAPABLE OF GIVING GIFTS TO THE EXTENT CLAIMED B Y THEM. MOREOVER THESE AFFIDAVITS WERE FILED AFTER THE SEARCH. (F) THE TRUST HAD A BANK ACCOUNT NAMELY SB A/C. NO. 9412 IN BANK OF MAHARASHTRA AURAY ROAD DOMBIVILI. THIS ACCOUNT WAS OPENED IN JANUARY 1998. THE DONATIONS RECEIVED HAD NOT BEEN DEPOSITED IN THIS BANK ACCOUN T. THE ASSESSEE HAD CLAIMED THAT THE AMOUNT WAS KEPT IN THE LOCKER TO FACILITATE SPE EDY PURCHASE OF LAND AND CONSTRUCTION IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 6 OF VRIDHASHRAM. ACCORDING TO THE A.O THERE WAS NO EVIDENCE TO SHOW REQUIREMENT OF CASH FOR ANY IMMEDIATE PURPOSES. ACCORDING TO A.O THE BEST OPTION THAT WAS OPEN TO THE TRUST (ASSUMING THAT IT WAS MONEY BELONGING TO THE TRUST) WAS DEPOSIT MONEY IN THE BANK ACCOUNT RATHER THAN KEEPING IT IN THEIR LOCKER S. (G) ALL THE DONATIONS WERE RECEIVED IN CASH AND NOT EVEN A SINGLE DONATION WAS IN THE FORM OF CHEQUE. (H) THE CASH FOUND FROM THE LOCKER COMPRISED OF 13 BUNDLES OF 100 NOTES EACH OF DENOMINATION OF RS.500/-. FOUR BUNDLES OF 100 NOTE S OF DENOMINATION OF RS.500/- HAVING CONSECUTIVE SERIAL NUMBERS ON THE NOTE. ANO THER 49 BUNDLES OF 100 EACH OF DENOMINATIONS OF 500 WERE FOUND. THE DATE MENTIONE D IN MOST OF THESE BUNDLES WAS PRIOR TO THE DATE ON WHICH THE ALLEGED DONATIONS WE RE CLAIMED TO HAVE BEEN GIVEN. THIS ACCORDING TO THE AO SHOWED THAT THE PLEA OF THE MON EY BELONGING TO THE TRUST HAVING BEEN RECEIVED AS DONATION FROM DIFFERENT PERSONS WA S FALSE. PRIOR TO THE SEARCH ON 19- 1-2001 THE LOCKER WAS LAST OPERATED ON 22/8/2000. 2.5 FOR ALL THE ABOVE REASONS THE A.O HELD THAT THE CASH FOUND FROM THE LOCKER OF THE ASSESSEE BELONGS TO THE ASSESSEE AND NOT TO THE TRU ST. THE CASH FOUND TO THE EXTENT OF RS.33 07 500/- WAS HELD BY THE AO TO BE UNEXPLAINED CASH AND THE SAME WAS ADDED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PE RIOD. 2.6 . FURTHER THE AO NOTICED THAT THE ASSESSEE MAI NTAINED S.B. A/C. NO.10055 IN THE SAME BANK. IT WAS OBSERVED FROM THE EXTRACT OF THE ACCOUNT THAT AN AMOUNT OF RS. 2 00 000 HAS BEEN DEPOSITED ON 19//7/2000 AND RS. 2 50 000/- ON 25/10/2000. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF THE ABO VE CASH DEPOSITS. THE ASSESSEE IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 7 EXPLAINED THAT THE DEPOSITS WERE MADE OUT OF THE DO NATIONS OF THE TRUST. FOR THE SAME REASONS AS DISCUSSED ABOVE THE ASSESSEES CLAIM WA S REJECTED AND THE CASH DEPOSITS AGGREGATING TO RS.4 50 0000/- WAS HELD AS ASSESSEE S UNEXPLAINED CASH AND TAXED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PE RIOD. 3. ON APPEAL BY THE ASSESSEE THE LD. CIT(A) DELETE D THE ADDITION MADE BY THE A.O FOR THE FOLLOWING REASONS: (I) THE CIT(A) NOTICED THAT IN THE STATEMENT OF TH E ASSESSEE RECORDED ON 19/01/2001 AT 1.30 P.M WHILE OPENING THE BANK LOCKER WITH BANK OF MAHARASHTRA AYARE ROAD BRANCH DOMBIVILI IN ANSWER TO QEUSTION NO.2 ASSESSEE HAD CLEARLY STATED THAT CASH FOUND IN THE LOCKER OF RS.33 07 500/- BELONG TO MATHOSHRI A NANDIBAI CHARITABLE TRUST. THE ADDRESS OF THE TRUST VIZ. ITS REGISTERED OFFICE W AS ALSO GIVEN AS 10 SHRINIVAS BUILDING AYARE ROAD DOMBIVILI. SHE CLAIMED THAT SHE WAS TR USTEE OF THE TRUST AND THAT THE CASH FOUND IN THE LOCKER WAS COLLECTED BY WAY OF DONATIO NS FOR THE PURPOSE OF CONSTRUCTION ELDERS HOME AND HOSPITAL. IT HAS BEEN STATED THAT APPELLANT HAD GIVEN RECEIPT FOR THE COLLECTED AMOUNT. THAT THESE AMOUNTS WERE COLLECTE D FROM JULY AUGUST 2000 ONWARDS AND THAT THE ASSESSEE HAD ISSUED RECEIPTS FOR THE A MOUNTS COLLECTED. THE CLAIM OF THE ASSESSEE HAS NOT BEEN CONTRADICTED BY THE ASSESSING OFFICER. (II) IN THE POST SEARCH ENQUIRY BY THE INV. WING TH E ASSESSEE ON 24.1.01 THE ASSESSEE HAD GIVEN LIST OF DONORS WITH COMPLETE NAM ES ADDRESSES INCLUDING THEIR CONSENT LETTERS. THE PLEA REGARDING THE TRUST DESI RING TO CONSTRUCT AN ELDERS HOME AT DOMBIVILI WAS REITERATED. IT WAS ALSO SUBMITTED TH AT THE ASSESSEE HAD COLLECTED DONATION TOWARDS CORPUS FUND AMOUNTING TO RS.38 00 000/- OUT OF WHICH RS. 5 50 000/- IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 8 WAS INVESTED IN ACQUIRING A PIECE OF LAND ON 15/10/ 2000 WHICH WAS MUCH BEFORE THE DATE OF SEARCH. THE ASSESSEE HAD ALSO STATED THAT THE TRUST HAD ISSUED PROPER RECEIPTS FOR THE AMOUNTS COLLECTED IN THE NAME OF MATHOSHRI ANANDIBAI CHARITABLE TRUST. THIS CLAIM OF THE ASSESSEE HAD NOT BEEN CONTRADICTED BY THE INV. WING. (III) THE TRUST HAD ACQUIRED PIECE OF LAND ON 15/10 /2000 BEFORE THE DATE OF SEARCH ON 19/01/2001 FROM BOMBAY GOGRAS SANSTHA FOR RS. 5 50 000/-. A PHOTO COPY OF LETTER DATED 1/10/2000 FROM BOMBAY GOGRAS (BHIKSHA) SOCIET Y FROM WHOM LAND WAS PURCHASED BY THE TRUST AND PHOTO COPY OF LETTER DAT ED 29/10/2000 FROM BOMBAY GOGRAS (BHIKSHA) SOCIETY ADDRESSED TO THE ASSESSEE INTIMAT ING THAT PROPOSAL FOR ACQUISITION OF LAND HAVE BEEN APPROVED BY THE SAID TRUST IN ITS ME ETING HELD ON 20/09/2000 WERE ALSO FILED. ALL THESE EVENTS HAPPENED PRIOR TO THE DATE OF SEARCH ON 19/1/2001. ASSESSING OFFICER HAS NOT POINTED OUT ANY CONTRADICTION REGAR DING EXISTENCE OF THESE DOCUMENTS PRIOR TO THE DATE OF SEARCH. SINCE THE CONVEYANCE OF THE LAND TOOK PLACE PRIOR TO THE DATE OF SEARCH ASSUMPTION THAT MATHOSHRI ANANDIBA I CHARITABLE TRUST WAS ONLY EXISTING ON PAPER ON THE DATE OF SEARCH WAS NOT CO RRECT. (IV) THE DEPARTMENT ITSELF HAS GRANTED 12A REGISTRA TION TO MATHOSHRI ANANDIBAI CHARITABLE TRUST ON 27/3/2001 W.E.F. 1/4/2000. TH E HONBLE CIT THANE HAD GRANTED EXEMPTION CERTIFICATE U/S. 80G(5) DATED 27/03/2001 W.E.F. 24/01/2001 TO 31/3/2002. THUS EXISTENCE OF MATHOSHRI ANANDIBAI CHARITABLE T RUST CANNOT BE DENIED. (V) RIGHT FROM THE DATE OF SEARCH THE ASSESSEE WA S CLAIMING THAT SHE HAD COLLECTED DONATIONS ON BEHALF OF MATHOSHRI ANANDIBAI CHARITA BLE TRUST. THE ASSESSEE HAD ALSO CLAIMED THAT PROPER DONATION RECEIPTS WERE ISSUED F OR THE AMOUNT. IT WAS ALSO CLAIMED THAT THERE EXISTED PROPER BOOKS OF ACCOUNTS ALONG W ITH DONATION RECEIPT TO SUPPORT HER CLAIM. THE EXISTENCE OF THE TRUST AND RECEIPT OF D ONATIONS HAS THEREFORE ESTABLISHED. IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 9 THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DEFE CT OR DEFICIENCY IN THE DONATION RECEIPTS OR BOOKS OF ACCOUNTS MAINTAINED BY THE TRU ST DURING THE ASSESSMENT PROCEEDINGS. (VI) THE CASH FOUND FROM THE LOCKER COMPRISED OF 1 3 BUNDLES OF 100 NOTES EACH OF DENOMINATION OF RS.500/-. FOUR BUNDLES OF 100 NOTE S OF DENOMINATION OF RS.500/- HAVING CONSECUTIVE SERIAL NUMBERS ON THE NOTE. ANO THER 49 BUNDLES OF 100 EACH OF DENOMINATIONS OF 500 WERE FOUND. THE DATE MENTIONE D IN MOST OF THESE BUNDLES WAS PRIOR TO THE DATE ON WHICH THE ALLEGED DONATIONS WE RE CLAIMED TO HAVE BEEN GIVEN. ACCORDING TO THE AO THIS FACT SHOWED THAT THE PLEA OF THE MONEY BELONGING TO THE TRUST HAVING BEEN RECEIVED AS DONATION FROM DIFFERENT PER SONS WAS FALSE. IN THE APPELLATE PROCEEDINGS THE ASSESSEE HAD EXPLAINED THAT FOR CON VENIENT KEEPING OF CASH IN LOCKER THE CASH RECEIVED AS DONATIONS WAS EXCHANGED FOR TH E BUNDLE OF NOTES REFERRED TO IN THE ORDER OF ASSESSMENT AS WELL AS IN THE PANCHANAMA PR EPARED AT THE TIME OF SEARCH OF THE LOCKER. THE ASSESSEES EXPLANATION REGARDING E XCHANGE OF BUNDLE OF NOTES HAS NOT BEEN CONTRADICTED BY THE ASSESSING OFFICER IN THE R EMAND REPORT FILED BEFORE THE CIT(A). (VII) THE ASSESSEE HAD PRODUCED COPY OF S/B A/C. N O. 10055 FROM WHICH CHEQUE OF RS.4 50 000/- WAS ISSUED FOR THE PURCHASE OF LAND. THESE CHEQUES WERE RECEIVED BY M/S. BOMBAY GOGRAS(BHIKSHA) SOCIETY. THE PURCHASE OF LAND HAPPENED BEFORE THE DATE OF SEARCH. DUE CONSIDERATION FOR THIS FACT HA S TO BE GIVEN. (VIII) THE ASSESSEE HAD GIVEN AFFIDAVITS OF 24 PER SONS DURING THE BLOCK ASSESSMENT PROCEEDINGS. 4 PERSONS HAD GIVEN AFFIDAVITS DIRECT LY TO THE ASSESSING OFFICER. THE ASSESSING OFFICER IF HE DID NOT BELIEVE THE AVERMEN TS IN THE AFFIDAVIT COULD HAVE SUMMONED THESE PERSONS AND COULD HAVE BEEN EXAMINED THEM. INSTEAD THESE AFFIDAVITS HAVE BEEN REJECTED MERELY ON THE BASIS O F SUSPICION AND ASSUMPTION. THERE IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 10 IS ALSO MENTION OF ONE OF THE DONORS OF BARODA HAVI NG DENIED GIVING DONATIONS TO THE APPELLANT. IN THE ABSENCE OF COPY OF STATEMENT GIV EN TO THE ASSESSEE NO COGNIZANCE OF THAT STATEMENT CAN BE TAKEN BY THE DEPARTMENT. FOR THE ALL THE ABOVE REASONS THE CIT(A) CONCLUDED THAT THE CLAIM MADE BY THE ASSESSEE HAVING RECEIVED DONATION WAS SUPPORTED BY PROPER BOOKS OF ACCOUNTS AND DONATION RECEIPT AND WERE REJECTED WITHOUT ANY FURT HER ENQUIRIES AND VERIFICATION. THE EXISTENCE OF MATHOSHRI ANANDIBAI CHARITABLE TRUST WAS NOT IN DISPUTE AND THE TRUST WAS MAINTAINING REGULAR BOOKS OF ACCOUNTS PERTAININ G TO ITS TRUST. THE ASSESSING OFFICER HAS NOT BROUGHT FORWARD ANY FURTHER EVIDENCE OR MAT ERIAL ON RECORD TO CONTRADICT THE CLAIM MADE BY THE ASSESSEE. THE CIT(A) THEREFORE H ELD THAT THE CASH FOUND IN THE BANK LOCKER AND CASH DEPOSIT MADE IN THE BANK ACCOUNTS A RE FULLY EXPLAINED OUT OF DONATION RECEIVED ON BEHALF OF MATHOSHRI ANANDIBAI CHARITAB LE TRUST DURING THE BLOCK PERIOD. THE ADDITION MADE BY THE AO WAS THUS DELETED BY THE CIT(A). AGGRIEVED BY THE ORDER OF LD. CIT(A) THE REVENUE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE SUBMISSIONS OF THE LD. D.R WH O NARRATED THE VARIOUS CIRCUMSTANCES POINTED OUT BY THE A.O IN THE ORDER O F ASSESSMENT AND SUBMITTED THAT THE ADDITION MADE BY THE A.O WAS CORRECT AND HAD TO BE RESTORED. IN THIS REGARD LD. D.R RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT 214 ITR 804(SC) WHEREIN IT WAS LAID DOWN BY T HE HONBLE SUPREME COURT THAT WHAT IS APPARENT MUST BE CONSIDERED REAL UNLESS THE RE ARE REASONS TO BELIEVE THAT THE APPARENT IS NOT REAL. IN DOING SO THE REVENUE AUTH ORITIES ARE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY A ND THE MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILITIES. FURTHER RELIANCE WAS PLACED ON THE FOLLOWING IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 11 DECISIONS (1) RAGHUVIR SINGH VS. ITAT 209 CTR 394( P&H) REGARDING THE BURDEN ON THE ASSESSEE TO ESTABLISH THE CAPACITY OF THE DONOR TO MAKE GIFTS IAC VS. INDIA ART EMPORIUM 121 CTR (BOM) (TRIB) 291 FOR PROPOSITIO N THAT WHERE THERE IS LACK OF EVIDENCE TO SUPPORT FINDINGS OF CIT(A) ADDITION DEL ETED SHOULD BE SUSTAINED B.C. PAUL VS. CIT 136 ITR 395(CAL) REGARDING APPLICATION OF TEST OF HUMAN PROBABILITIES. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE LD. CIT(A) AND THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE A SSESSEE IN SUPPORT OF THE CLAIM THAT THE MONEY FOUND IN THE LOCKER BELONGS TO THE T RUST GAVE A LIST OF DONORS AND SUBMITTED THAT THE MONEY FOUND IN THE LOCKER WAS DO NATIONS RECEIVED. THE DONATIONS WERE EVIDENCED BY DONATIONS RECEIPTS CONTAINING REC EIPT NO. DATE NAME OF DONOR ADDRESS OF DONOR AND THE AMOUNT GIVEN AS DONATION. APART FROM THE ABOVE THE ASSESSEE HAS ALSO FIELD CONFIRMATION FROM 28 DONORS . THESE DOCUMENTS ARE AVAILABLE AT PAGE 15 TO 42 AND 44 TO 107 RESPECTIVELY OF THE ASS ESSEES PAPER BOOK. THE CLAIM OF ALL THE DONORS WAS THAT THESE MONIES HAD BEEN PAID BY T HEM AS DONATION TO THE TRUST. WE ALSO NOTICE THAT THE KEY OF THE LOCKERS WERE FOUND IN THE CUSTODY OF SHRI RAVINDRA M.PATIL. THE ASSESSEE IN THE PRESENT CASE HAS NO I NDEPENDENT SOURCE OF INCOME. AS ON THE DATE OF SEARCH IN THE YEAR 2001 SHE WAS AGED 65 YEARS. WHEN THE LOCKER WAS SEARCHED ON 19/1/2001 HER STATEMENT WAS RECORDED AN D SHE EXPLAINED THAT THE CASH FOUND IN THE LOCKER BELONGS TO THE TRUST AND DOES N OT BELONG TO HER. THE STAND TAKEN BY THE ASSESSEE HAS ALSO BEEN AFFIRMED BY THE ALLEGED DONORS WHO CLAIMED THAT THEY HAD GIVEN CASH TO THE TRUST. THE ADDITION IN THE PRESE NT CASE CAN BE MADE ONLY INVOKING THE PROVISIONS OF SECTION 69A OF THE ACT. SEC.69-A IS AS FOLLOWS: IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 12 SECTION 69A:UNEXPLAINED MONEY ETC. WHERE IN ANY FINANCIAL YEAR THE ASSESSEE IS FOUND T O BE THE OWNER OF ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE AND SU CH MONEY BULLION JEWELLERY OR VALUABLE ARTICLE IS NOT RECORDED IN THE BOOKS OF AC COUNT IF ANY MAINTAINED BY HIM FOR ANY SOURCE OF INCOME AND THE ASSESSEE OFFERS N O EXPLANATION ABOUT THE NATURE AND SOURCE OF ACQUISITION OF THE MONEY BULL ION JEWELLERY OR OTHER VALUABLE ARTICLE OR THE EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE ASSESSING OFFICER SATISFACTORY THE MONEY AND THE VALUE OF T HE BULLION JEWELLERY OR OTHER VALUABLE ARTICLE MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR. UNDER SECTION 69A OF THE ACT THE BURDEN TO SHOW THA T THE MONEY BELONGS TO THE ASSESSEE IS ON THE REVENUE. IN THE PRESENT CASE FR OM THE FACT THAT THE LOCKER FROM WHICH THE CASH WAS FOUND STANDS IN THE NAME OF THE ASSESSEE IT CANNOT BE CONCLUSIVELY SAID THAT THE CASH BELONGS TO THE ASSESSEE ESPECIA LLY IN THE LIGHT OF THE EXPLANATION GIVEN BY THE ASSESSEE REGARDING THE CASH FOUND AND THE CIRCUMSTANCES UNDER WHICH THE KEY TO THE LOCKERS WERE FOUND VIZ. FROM THE BEDROO M OF MR.RAVINDRA M.PATIL. APART FROM THE ABOVE CONSIDERING THE FACT THAT THE ASSESSEE HA S NO SOURCE OF INCOME IT IS NOT POSSIBLE TO CONCLUDE THAT THE ASSESSEE COULD HAVE E ARNED UNDISCLOSED INCOME TO THE EXTENT OF 37 57 500/-. THE PROVISIONS OF SEC.69-A IF ASSESSEE IS FOUND TO BE OWNER OF MONEY AND IF THE ASSESSEE OFFERS NO EXPLANATION ABO UT THE NATURE AND SOURCE OF ACQUISITION OF THE MONEY OR THE EXPLANATION OFFERE D BY HIM IS NOT IN THE OPINION OF THE ASSESSING OFFICER SATISFACTORY THE MONEY AND THE VALUE OF THE BULLION JEWELLERY OR OTHER VALUABLE ARTICLE MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR. THE USE OF THE EXPRESSION MAY IN THE ABOVE PRO VISIONS SHOWS THAT IT IS MATTER WITHIN THE DISCRETION OF THE OFFICER TO MAKE OR NOT TO MAKE AN ADDITION IN A GIVEN CASE. THE UNSATISFACTORINESS OF THE EXPLANATION DO ES NOT AND NEED NOT AUTOMATICALLY RESULT IN DEEMING THE MONEY FOUND TO BE INCOME OF T HE ASSESSEE. UNDER SECTION 69A OF THE ACT THE DISCRETION TO MAKE AN ADDITION ON AC COUNT OF UNEXPLAINED MONEY HAS TO IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 13 BE EXERCISED KEEPING IN MIND THE ABOVE FACT THAT TH E ASSESSEE HAS NO SOURCE OF INCOME. THE HONBLE SUPREME COURT IN THE CASE OF C IT VS. P.K.NOORJAHAN 237 ITR 570 (SC) HAS HELD THAT UNSATISFACTORY EXPLANATION D OES NOT AND NEED NOT AUTOMATICALLY RESULT IN DEEMING THE VALUE OF THE INVESTMENT TO BE THE INCOME OF THE ASSESSEE. THE DISCRETION LIES WITH THE A.O AND THAT DISCRETION HA S TO BE EXERCISED ON THE FACTS AND CIRCUMSTANCES OF A GIVEN CASE. IT WAS CLAIMED ON B EHALF OF THE ASSESSEE THAT THE TRUST HAS BEEN FILING RETURNS OF INCOME. IN THE COURSE O F THE HEARING SPECIFIC QUESTION WAS PUT TO THE LD. D.R HAS TO WHETHER THE CASH FOUND WAS AD DED AS INCOME IN THE CASE OF SHRI RAVINDRA M.PATIL OR IN THE CASE OF THE TRUST. LD. D.R WAS NOT AWARE AS TO WHETHER ANY ACTION HAD BEEN TAKEN IN THE CASE OF THE TRUST OR S HRI RAVINDRA M. PATIL. IN THE FACTS AND CIRCUMSTANCES OF THIS CASE WE ARE OF THE VIEW THAT THE ADDITION MADE IN THE HANDS OF THE ASSESSEE SHOULD BE DELETED FOR THE REASONS GIVEN BY THE CIT(A) AND THE REASONS GIVEN ABOVE. THE CIRCUMSTANCES BROUGHT OUT BY THE A.O DO ARISE SUSPICION AGAINST THE ASSESSEE BUT ARE NOT GOOD ENOUGH TO MAKE ADDITION I N THE HANDS OF THE ASSESSEE. FOR ALL THE REASONS GIVEN ABOVE WE CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 6. IN THE RESULT THE APPEAL BY THE REVENUE IS DISM ISSED AND CROSS OBJECTION FILED BY THE ASSESSEE ALSO DISMISSED AS NOT PRESSED. ORDER PRONOUNCED ON THE DAY OF FEB. .2010 (R.S.SYAL) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED. FEB.2010 IT(SS)A NO.516/MUM/2004 (BLOCK PERIOD 01/01/1990 TO 14/12/2000) 14 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RG BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR I TAT MUMBAI BENCHES MUMBAI. VM. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 2/2/2010 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 3/2/2010 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER