ACIT CEN. CIR. - 20, MUMBAI v. Sri. M.N. KHARIWALA, MUMBAI

ITSSA 863/MUM/2003 | misc
Pronouncement Date: 21-09-2011 | Result: Allowed

Appeal Details

RSA Number 86319916 RSA 2003
Assessee PAN AAACB4198B
Bench Mumbai
Appeal Number ITSSA 863/MUM/2003
Duration Of Justice 7 year(s) 9 month(s) 4 day(s)
Appellant ACIT CEN. CIR. - 20, MUMBAI
Respondent Sri. M.N. KHARIWALA, MUMBAI
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 21-09-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted H
Tribunal Order Date 21-09-2011
Date Of Final Hearing 14-09-2011
Next Hearing Date 14-09-2011
Assessment Year misc
Appeal Filed On 17-12-2003
Judgment Text
IN THE INCOME TAX APPELLATE TRIB UNAL MUMBAI BENCHES H MUMBAI BEFORE SHRI R.S.SYAL AM AND SHRI V.DURGA RAO JM IT(SS)A NO.859/MUM/2003 : BLOCK PERIOD 01.04.1988 T O 19.08.1998 THE ASSTT.COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 20 MUMBAI. VS. MRS.M.B.BANDRAWALA DINA VILLA 2 ND FLOOR 2 PALI ROAD BANDRA (WEST) MUMBAI 400 050. PAN : DC-CC-20/65-M (APPELLANT) (RESPONDENT) REVENUE BY : SHRI GOLI SRINIWAS RAO ASSESSEE BY : SHRI H.L.KAKKAD IT(SS)A NO.863/MUM/2003 : BLOCK PERIOD 01.04.1988 T O 19.08.1998 THE ASSTT.COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 20 MUMBAI. VS. SHRI M.N.KHARIWALLA 401 KAKAD APARTMENTS 4 PALI ROAD BANDRA (WEST) MUMBAI 400 050. PAN : AAACB4198B. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI GOLI SRINIWAS RAO ASSESSEE BY : SHRI B.V.JHAVERI IT(SS)A NO.865/MUM/2003 : BLOCK PERIOD 01.04.1988 T O 19.08.1998 THE ASSTT.COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 20 MUMBAI. VS. SHRI D.B.BANDRAWALA DINA VILLA 2 ND FLOOR 2 PALI ROAD BANDRA (WEST) MUMBAI 400 050. PAN : AADPB8329G (APPELLANT) (RESPONDENT) REVENUE BY : SHRI GOLI SRINIWAS RAO ASSESSEE BY : SHRI VIPUL JOSHI IT(SS)A NO.788/MUM/2003 : BLOCK PERIOD 01.04.1988 T O 19.08.1998 SHRI D.B.BANDRAWALA DINA VILLA 2 ND FLOOR 2 PALI ROAD BANDRA (WEST) MUMBAI 400 050. VS. THE ASSTT.COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 20 MUMBAI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI GOLI SRINIWAS RAO ASSESSEE BY : SHRI VIPUL JOSHI DATE OF HEARING : 14.09.2011 DATE OF PRONOUNCEMENT : 21.09.2011 O R D E R PER R.S.SYAL AM : THIS BATCH OF FOUR APPEALS BY CERTAIN CONNECTED ASS ESSES RELATES TO BLOCK PERIOD FROM 01.04.1988 TO 19.08.1998. SINCE SOME OF THE ISSUES RAISED IN THESE IT(SS)A NO.863/MUM/2003& ORS. SHRI M.N.KHARIWALLA & ORS. 2 APPEALS REQUIRE CONSIDERATION IN ONE GO WE ARE TH EREFORE DISPOSING THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE . SHRI M.N.KHARIWALLA : IT(SS)A NO.863/MUM/2003 : 2. THE ONLY ISSUE RAISED BY THE REVENUE IN ITS AP PEAL IS AGAINST THE DELETION OF ADDITION OF RS.40 LAKH MADE ON ACCOUNT OF MONEY REC EIVED BY THE ASSESSEE FROM TWO PROSPECTIVE TENANTS WHO SUBSEQUENTLY BECAME OWN ERS OF THE FLATS. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT A SEARCH ACTI ON U/S 132 WAS TAKEN ON 19.08.1998 AT THE RESIDENTIAL PREMISES OF THE ASSESSEE. A RETU RN DECLARING UNDISCLOSED INCOME FOR THE BLOCK PERIOD AMOUNTING TO RS.30 LAKH WAS FILED BY THE ASSESSEE. DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS IT WAS O BSERVED BY THE AO THAT THE ASSESSEE AND SMT.M.B.BANDRAWALLA RESPONDENT IN OTH ER APPEAL UNDER CONSIDERATION WERE OWNERS / LANDLORDS OF A PLOT O N WHICH A PROJECT NAMELY WHITE ORCHID WAS CONSTRUCTED BY PARTNERSHIP FIRM M/S.M.R. P.ENTERPRISES. A TOTAL CONSIDERATION OF RS.1.40 CRORE WAS TO BE GIVEN BY M /S. M.R.P. ENTERPRISES FOR THE ASSIGNMENT OF PROPERTY. THE ASSESSEE RECEIVED RS.70 LAKH AS HIS SHARE IN CONSIDERATION FROM M/S.M.R.P.ENTERPRISES AND PROPER LY DISCLOSED IN THE RETURN OF INCOME. THE ASSESSEE DECLARED UNDISCLOSED INCOME OF RS.30 LAKH IN THE BLOCK RETURN ON THE GROUND THAT HE RECEIVED THIS ADDITION AL AMOUNT IN CASH FROM M/S.M.R.P.ENTERPRISES WHICH WAS NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. CERTAIN INCRIMINATING DOCUMENTS WERE FOUND DURING T HE COURSE OF SEARCH AND STATEMENTS OF THE RESPECTIVE PERSONS WERE RECORDED AT THAT TIME. THE ASSESSEE SUBMITTED THAT THE PLOT WAS OCCUPIED BY A NUMBER OF TENANTS. SINCE THE SAID PLOT WAS OCCUPIED BY TENANTS WHO WERE REFUSING TO VACATE NO BUILDER WAS SHOWING ANY INTEREST IN BUYING THE SAID PLOT. EVENTUALLY M/S. M.R.P.ENTERPRISES AGREED TO BUY THIS PROPERTY FOR A SUM OF RS.1.40 CRORE PROVIDED T HAT THE TENANTS WERE REMOVED BY THE LANDLORD. WHEN THE TENANTS WERE CONTACTED TO VA CATE THE LAND THEY DEMANDED MONEY TO DO THE SAME. IT WAS STATED THAT AS THE LAN DLORDS DID NOT HAVE SUFFICIENT FUND TO DO THE NEEDFUL THEY ALONG WITH M/S.M.R.P.E NTERPRISES DECIDED THAT TWO IT(SS)A NO.863/MUM/2003& ORS. SHRI M.N.KHARIWALLA & ORS. 3 CLIENTS NAMELY SHRI AMAR JAISINGH AND SHRI GIRDHAR JAISINGH WERE TO BE FALSELY INTRODUCED AS TENANTS IN PLACE OF SOME OLD TENANTS. NECESSARY BOGUS DOCUMENTS WERE CREATED TO SHOW THAT THESE TWO PERSONS WERE AC TUAL TENANTS AND AGREEMENTS WERE ALSO MADE TO SHOW THAT THESE CLIENTS HAD BEEN ASSIGNED FLATS IN WHITE ORCHID IN LIEU OF THEIR SURRENDER OF TENANCY. IT WAS EXPLA INED THAT THE AMOUNT OF RS.1.40 CRORE RECEIVED IN CASH FROM SHRI AMAR JAISINGH AND SHRI GIRDHAR JAISINGH WAS TO BE USED FOR REMOVING THE ORIGINAL TENANTS AND BALAN CE TO BE SHARED BETWEEN THE LAND LANDLORDS. DURING THE COURSE OF SEARCH ACTION STATEMENTS OF THE ASSESSEE SHRI AMAR JAISINGH AND SHRI GIRDHAR JAISINGH ALONG WITH SHRI D.B.BANDRAWALA THE OTHER ASSESSEE IN THE PRESENT BATCH OF APPEALS WHO HAPPENS TO BE THE SON OF SMT.M.B.BANDRAWALA CO-OWNER IN THIS PROPERTY AND A LSO RESPONDENT IN ONE OF THE APPEALS IN QUESTION. ON THE BASIS OF THESE STATEME NTS IT WAS CONCLUDED BY THE AO THAT THE SUM OF RS.1.40 CRORE WAS PAID BY SHRI AMAR JAISINGH AND SHRI GIRDHAR JAISINGH TO THE ASSESSEE AND THE OTHER CO-OWNERS AT RS.70 LAKH EACH. IT WAS ALSO SEEN THAT THE ORIGINAL STATEMENT GIVEN WAS SUBSEQUE NTLY RETRACTED BY FILING CERTAIN AFFIDAVITS ETC. THE ASSESSING OFFICER OPINED THAT THE ASSESSEES AND SMT. M.B. BANDRAWALA RECEIVED RS.70 LAKH EACH FROM SHRI AMAR JAISINGH AND SHRI GIRDHAR JAISINGH. AS RS.30 LAKH WAS DECLARED BY THE ASSESS EE AS UNDISCLOSED INCOME IN THE BLOCK RETURN THE A.O. MADE ADDITION FOR RS.40 LAK H IN THE HANDS OF THE ASSESSEE. THE LEARNED CIT(A) HOWEVER DELETED THE ADDITION A FTER CONSIDERING THE ASSESSMENT ORDERS IN THE CASES OF M/S.M.R.P.ENTERPR ISES SHRI PHATU NIHALANI PARTNER IN M/S.M.R.P.ENTERPRISES BOTH THE OWNERS O F THE PROPERTY AND SHRI D.B.BANDRAWALA ALONG WITH THE ASSESSMENT ORDERS OF SHRI AMAR JAISINGH AND SHRI GIRDHAR JAISINGH. HE ACCEPTED THE CONTENTION RAISE D ON BEHALF OF THE ASSESSEE THAT THE AMOUNT PAID BY JAISINGH BROTHERS WAS COLLECTED BY SHRI PHATU NIHALANI WHO THEN PAID THE AMOUNT TO THE REAL TENANTS AND GAVE T HE SURPLUS TO THE ASSESSEES AS PART OF SALE PROCEEDS AND TO SHRI D.B.BANDRAWALA FO R THE SERVICES RENDERED BY HIM IN GETTING THE TENANTS EVICTED. HE FURTHER HELD THA T WHEN THE LAND OWNERS HAD NEVER MET PROSPECTIVE TENANTS EVEN THOUGH THEY WERE BOGUS THERE WAS NO QUESTION OF IT(SS)A NO.863/MUM/2003& ORS. SHRI M.N.KHARIWALLA & ORS. 4 THEIR HAVING PAID ANY MONEY TO THE THEM. HE FURTHER HELD THAT IT WAS AMPLY PROVED THAT THE MONEY WAS PAID BY JAISINGH BROTHERS TO SHR I PHATU NIHALANI AND M/S.M.R.P.ENTERPRISES. AT THIS STAGE IT WOULD BE R ELEVANT TO MENTION THAT THE DEVELOPER IN FACT TRANSFERRED THE POSSESSION OF TWO FLATS TO JAISINGH BROTHERS ON PAYMENT OF RS.10 LAKH EACH PURPORTEDLY FOR THE PROV ISION OF CERTAIN AMENITIES. THE LD. CIT(A) HELD THAT THERE WAS NO POSSIBILITY O F M/S.M.R.P.ENTERPRISES RECEIVING ONLY RS.10 LAKH AGAINST THE PRICE OF FLAT AT RS.80 LAKH. HE THEREFORE DELETED THE ADDITION OF RS.40 LAKH MADE IN THE HAND S OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAD NO ROLE TO PLAY IN THE EVICTI ON OF THE TENANTS AND HENCE WAS NOT A PARTY TO THE TRANSACTIONS ENTERED INTO WITH J AISINGH BROTHERS. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AT LENGTH AN D PERUSED THE RELEVANT MATERIAL ON RECORD. AT THE VERY OUTSET IT IS RELEVA NT TO MENTION THAT THE INDENTURE OF ASSIGNMENT DATED 26 TH APRIL 1996 WAS EXECUTED BETWEEN M/S.M.R.P.ENTERPR ISES AND THE ASSESSEE AS WELL AS MRS.M.B.BANDRAWALA THE CO-OWNERS OF THE PROPERTY. THE CONSIDERATION HAS BEEN STATED TO BE RS.70 LAKH PAYABLE TO EACH OF THE CO- OWNERS. CLAUSE 11 OF THIS INDENTURE CLEARLY MENTION S THAT THE ASSIGNMENT IS ON AS IS WHERE IS BASIS AND AS SUCH THE ASSIGNERS SHALL NOT BE LIABLE TO GIVE VACANT POSSESSION TO THE ASSIGNEES. AS PER THIS INDENTURE OF ASSIGNMENT THERE IS A LIST OF TENANTS GIVEN IN THE ANNEXURE-B. NOW THE CASE OF TH E A.O. IS THAT THE ASSESSEE AND MRS.M.B.BANDRAWALA RECEIVED A SUM OF RS.70 LAKH EA CH FROM JAISINGH BROTHER WHICH OUGHT TO HAVE BEEN DISCLOSED AS INCOME. ON T HE OTHER HAND THE ASSESSEES CONTENTION IS THAT THE SAID AMOUNT WAS NOT PAID TO THEM BUT IN FACT PAID FOR THE EVICTION OF THE EXISTING TENANTS. WE ARE UNABLE TO ACCEPT THIS CONTENTION FOR THE REASON THAT AS PER THE INDENTURE OF ASSIGNMENT THE PROPERTY WAS TO BE GIVEN ON AS IS WHERE IS BASIS AND IT WAS NEVER THE RESPONSIBIL ITY OF THE OWNERS TO GIVE VACANT POSSESSION TO THE ASSIGNEE I.E. M/S.M.R.P.ENTERPRIS ES. IN SUCH A SITUATION THERE CANNOT BE ANY QUESTION OF THE ASSESSEE PROVIDING FR EE AND UNENCUMBERED PROPERTY TO M/S.M.R.P.ENTERPRISES AFTER THE REMOVAL OF TENAN TS AS HAS BEEN MADE OUT BEFORE IT(SS)A NO.863/MUM/2003& ORS. SHRI M.N.KHARIWALLA & ORS. 5 THE AUTHORITIES BELOW. IT WAS THE SOLE RESPONSIBILI TY OF M/S.M.R.P.ENTERPRISES TO GET THE PROPERTY VACATED FROM THE TENANTS AND THE ASSES SEE HAD NO ROLE TO PLAY IN THE PROCESS OF SUCH ALLEGED EVICTION. THE LEARNED A.R. HAS RELIED ON PAGE 83 OF THE PAPER BOOK STATING IT TO BE STATEMENT OF SHRI DINAN ATH PAWAR RECORDED ON 19 TH AUGUST 1998 CLAIMING HIM TO BE THE REAL TENANT IN THE PROPERTY. AT THE SAME TIME IT WAS ALSO ARGUED THAT ANNEXURE-B TO THE INDENTURE OF ASSIGNMENT CONTAINS DETAILS OF REAL TENANTS AS WELL AS FICTITIOUS NAMES OF JAIS INGH FAMILY MEMBERS. WHEN WE CONSIDER THIS STATEMENT AT PAGE 83 OF THE PAPER BOO K THAT OF SHRI DINANATH PAWAR ALLEGED TO BE THE REAL TENANT AND THEN COMPARE IT WITH NAMES AS PER ANNEXURE-B TO THE INDENTURE WE FIND THAT SHRI DINANATH PAWAR IS NOT APPEARING IN THE SAID ANNEXURE-B. 4. A GREAT DEAL OF EMPHASIS WAS MADE BY T HE LEARNED A.R ON THE PENULTIMATE PARA ON PAGE 2 OF THE ASSESSMENT ORDER BY CONTENDIN G THAT THESE WERE THE REASONS OF THE ASSESSING OFFICER AND NOT THE SUBMISSIONS OF THE ASSESSEE. WE ARE UNABLE TO ACCEPT THIS CONTENTION AS THE CONTENTS OF THIS PARA ARE IN FACT THE REITERATION OF THE THEORY PROPOUNDED BY THE ASSESSEE ABOUT THE FAKE TE NANTS ETC. THE REASON IS OBVIOUS THAT THE 4 TH LINE OF THE PARA INDICATES THAT : SINCE THE SAID PLOT WAS OCCUPIED BY TENANTS WHO WERE REFUSING TO VACATE NO BUILDER WAS SHOWING ANY INTEREST IN BUYING THE SAID PLOT FINALLY ONE BUILD ER M/S.M.R.P.ENTERPRISES AGREED TO BUY THIS PROPERTY .. IT CANNOT BE THE OBSERVATI ON OF THE ASSESSING OFFICER BECAUSE HE CANNOT KNOW AS TO WHETHER OR NOT ANY BUI LDER WAS SHOWING INTEREST IN THE BUYING PLOT. SECONDLY IT HAS BEEN MENTIONED IN THIS PARA THAT M/S.M.R.P.ENTERPRISES AGREED TO BUY THIS PROPERTY F OR RS.1.40 CRORE PROVIDED THE TENANTS WERE REMOVED BY THE LANDLORDS. AGAIN IT CAN NOT BE THE CASE OF THE ASSESSING OFFICER BECAUSE IT WAS THE CASE OF THE AS SESSEE THAT THE ASSESSEE DID NOT HAVE SUFFICIENT FUNDS TO PAY TO THE EXISTING TENANT S FOR WHICH THE ASSESSEE AND BUILDER ROPED IN JAI SINGH BROTHERS TO BAIL THEM OU T FROM THE FINANCIAL PROBLEM. EVEN THIS THEORY RUNS CONTRARY TO WHAT HAS BEEN ST ATED IN THE INDENTURE OF IT(SS)A NO.863/MUM/2003& ORS. SHRI M.N.KHARIWALLA & ORS. 6 ASSIGNMENT THAT THE ASSIGNERS SHALL NOT BE RESPONS IBLE FOR THE EVICTION OF THE TENANTS AS THE PROPERTY WAS TRANSFERRED ON `AS IS W HERE IS BASIS. THE NEXT LINE IN THE SAME PARA : WHEN THE TENANTS WERE CONTACTED TO VACATE THE LAND THEY DEMANDED MONEY TO DO THE SAME HOWEVER THE LANDLOR DS DID NOT HAVE SUFFICIENT FUND TO DO THE NEEDFUL. AGAIN IT IS OBVIOUS THAT I T CAN ONLY BE THE SUBMISSION OF THE ASSESSEE AND NOT THE OBSERVATION OF THE ASSESSI NG OFFICER AS IT IS ONLY THE ASSESSEE WHO COULD KNOW THAT THE TENANTS WERE CONTA CTED WHO DEMANDED MONEY. THE SUBSEQUENT LINES IN THE SAME PARA ABUNDANTLY PR OVES THAT THESE WERE THE SUBMISSIONS MADE BY THE ASSESSEE AND ARE IN NO WAY THE OBSERVATIONS OF THE ASSESSING OFFICER AS HAS BEEN ALLEGED BY THE LEARNE D A.R. THIS PARA INDICATES THE EXPLANATION OF THE ASSESSEE PLACED BEFORE THE ASSE SSING OFFICER. FURTHER WHEN WE EXAMINE PAGES 33 TO 35 OF THE PAPER BOOK BEING TH E LETTER DATED 8 TH NOVEMBER 2000 ADDRESSED BY THE ASSESSEE TO THE A.O. IT BECO MES AMPLY CLEAR THAT THIS WAS THE VERSION BY THE ASSESSEE BEFORE THE A.O. WHICH WAS SUMMARIZED BY THE AO IN THIS PARA ON PAGE 2 OF THE ASSESSMENT ORDER. IT BEC OMES MORE CLEAR WHEN WE TURN TO PAGE 3 ONWARDS OF THE ASSESSMENT ORDER WHERE FROM T HE DISCUSSION STARTS GIVING THE VIEW POINT OF THE ASSESSING OFFICER ON THE POINT. 5. THE LEARNED CIT(A) HAS DELETED THE ADDITION BY H OLDING THAT RS.1.40 CRORE WAS RECEIVED BY M/S.M.R.P.ENTERPRISES AS HE COULD NOT HAVE SOLD THE PLOT FOR TOTAL SUM OF RS.20 LAKH TO JAISINGH BROTHERS. HIS POINT O F VIEW WAS THAT A TOTAL OF RS.1.60 CRORE WAS AGREED TO BE PAID BY JAISINGH BRO THERS TO M/S.M.R.P.ENTERPRISES OUT OF WHICH RS.1.40 CRORE THE SUBJECT MATTER OF A DDITION IN THE HANDS OF THE ASSESSES IN APPEAL BEFORE US WAS RECEIVED BY M/S. M.R.P.ENTERPRISES AND HENCE THE ASSESSEE COULD NOT HAVE RECEIVED THIS AMOUNT. T HIS VIEW POINT FAILS WHEN WE EXAMINE THE ORDER OF THE TRIBUNAL DATED 31.05.2002 IN IT(SS)A NO.87/MUM/ 2001PASSED IN THE CASE OF M/S.M.R.P.ENTERPRISES. IN THE CASE OF M/S.M.R.P.ENTERPRISES THE ASSESSING OFFICER MADE A DDITION OF RS.49 31 080 IN RESPECT OF COST OF ALTERNATE ACCOMMODATION PROVIDE D TO JAISINGH BROTHERS BY IT(SS)A NO.863/MUM/2003& ORS. SHRI M.N.KHARIWALLA & ORS. 7 HOLDING THAT THE PROPORTIONATE COST OF THE CONSTRUC TION OF THE FLATS ALLOTTED TO JAISINGH BROTHERS COULD NOT BE ALLOWED AS DEDUCTION . WHEN THE MATTER CAME UP BEFORE THE TRIBUNAL THE SAID ADDITION WAS DELETED A ND FURTHER IN PARA 30 OF THE SAID ORDER THE TRIBUNAL HAS RECORDED AS UNDER:- IN THE INSTANT CASE THE TWO TENANTS HAVE PAID RS. 70 00 000/- EACH TO THE LANDLORDS FOR GETTING TENANCY RIGHT. THIS IS AL TOGETHER A DIFFERENT TRANSACTION IN DIFFERENT CONTEXT BETWEEN THE LANDLO RD AND THE TENANTS. THE ALLEGED BOGUS TENANTS HAVE NOT PAID RS.70 00 00 0/- TO THE APPELLANT FIRM TOWARDS PURCHASE CONSIDERATION OF FL ATS. THERE IS NOT IOTA OF EVIDENCE THAT ASSESSEE HAS RECEIVED ANY `ON MONEY ON SALE OF FLATS. HAD THE ASSESSEE FIRM RECEIVED RS.70 00 000/ - FROM EACH OF THE TWO TENANTS THINGS COULD HAVE BEEN OTHERWISE. BUT THE FACT REMAINS THAT THE APPELLANT FIRM HAVE NOT RECEIVED ANY MONEY FROM THE ALLEGED TWO BOGUS TENANTS. 6. FROM THE ABOVE OBSERVATIONS OF THE TRIBUNAL WH ICH IS THE FINAL FACT FINDING AUTHORITY IT IS APPARENT THAT THE TENANTS PAID RS. 70 LAKH EACH TO THE LANDLORDS NAMELY THE ASSESSEE IN QUESTION AND MRS.M.B.BANDR AWALA AND THE SAID AMOUNT WAS NOT RECEIVED BY M/S.M.R.P.ENTERPRISES. IN THE LIGHT OF THIS FINDING RECORDED BY THE TRIBUNAL THE VIEW TAKEN BY THE LEARNED CIT( A) IN THE IMPUGNED ORDER THAT A SUM OF RS.1.40 CRORE WAS RECEIVED BY M/S.M.R.P.ENTE RPRISES AND HENCE IT COULD NOT HAVE BEEN RECEIVED BY THE LEGAL OWNERS GETS A UTOMATICALLY VACATED. 7. NOW THE POSITION WHICH EMERGES IS THAT JAISINGH BROTHERS DID PART WITH RS.1.40 CRORES AND THAT IS EVIDENCED BY THE FACT TH AT THEY WERE ALLOTTED FLATS IN THE WHITE ORCHID FOR THE APPARENT CONSIDERATION OF RS.2 0 LACS AND THAT TOO TOWARDS ALTERATION. ONCE MONEY HAS COME OUT OF THEM IT CO ULD HAVE BEEN POSSIBLY RECEIVED BY EITHER OF THE FOLLOWING PARTIES :- A. M.R.P ENTERPRISES OR ITS PARTNERS ; OR B. LEGAL OWNERS OF THE PROPERTY NAMELY THE ASSESSEE A ND HER SISTER ; OR C. ALLEGED TENANTS IT(SS)A NO.863/MUM/2003& ORS. SHRI M.N.KHARIWALLA & ORS. 8 8. THE PAYMENT TO THE ALLEGED TENANTS IS RU LED OUT PRIMARILY BECAUSE OF THE FACT THAT THE NAME OF SHRI DINANATH PAWAR ALLEGED TO BE THE REAL TENANT DOES NOT APPEAR IN THE LIST OF TENANTS AS PER ASSIGNMENT INDENTURE WHICH AS PER THE LD. ARS OWN VERSION IS THE LIST OF REAL TENANTS AND ALSO FAKE TENANTS IN THE SHAPE OF JAISINGH BROTHERS. FURTHER OUR ATTENTION HAS NOT BEEN DRAWN TOWARDS ANY EVIDENCE WORTH THE NAME TO INDICATE THAT ANY PAYMENT WAS MADE TO ANY ALLEGED REAL TENANTS. DESPITE THE AOS SPECIFIC REQUISITION OF DETAILS AND EVIDEN CE IN THIS REGARD THE ASSESSEE FAILED TO FURNISH SUCH DETAILS AS CAN BE NOTICED FROM THE OBSERVATIONS OF THE A.O. ON THE SECOND LAST PAGE OF THE ASSESSMENT ORDER STA TING THAT : `NO TENANTS WERE PRODUCED BEFORE ME FOR CROSS VERIFICATION SO THAT C LAIMED EXPENSES COULD BE VERTIFED TO CERTAIN EXTENT. 9. THE OTHER POSSIBILITY OF THE RECIPIENT CAN B E MRP ENTERPRISES OR ITS PARTNERS. THE TRIBUNAL IN THEIR CASE HAS HELD THAT THE SUM O F RS.1.40 CRORES WAS NOT RECEIVED BY THEM BUT BY THE LEGAL OWNERS OF THE PROPERTY. THIS ORDER PASSED BY THE TRIBUNAL IN THE CASE OF MRP ENTERPRISES HAS ATTAINED FINALI TY IN AS MUCH AS NO EFFORTS WERE MADE TO GET IT MODIFIED. NOW THE LD. AR HAS COME OU T WITH A PROPOSITION THAT SUCH FINDINGS OF THE TRIBUNAL IN THE CASE OF MRP ENTERPR ISES ARE ONLY OBITER DICTA AND HENCE SHOULD BE IGNORED. WE ARE UNABLE TO ACCEPT TH IS CONTENTION FOR THE OBVIOUS REASON THAT THE TRIBUNAL AFTER CONSIDERING THE E NTIRE FACTUAL MATRIX OF THE CASE HAS RECORDED A CATEGORICAL FINDING OF FACT THAT THE AM OUNT OF RS.1.40 CRORES WAS RECEIVED BY THE TWO ASSESSES IN QUESTION. THE FACT UAL FINDING OF FACT RECORDED BY THE TRIBUNAL ON ATTAINING FINALITY CANNOT BE DIST URBED BY THE SUBSEQUENT BENCH OF THE TRIBUNAL IN ANOTHER RELATED CASE. IF NOW WE ACC EPT THIS FINDING THAT THE PRESENT ASSESSES DID NOT RECEIVE THE AMOUNT IT WOULD LEAD TO A SITUATION THAT THE SUM OF RS.1.40 CRORES WAS RECEIVED BY NONE WHICH IS NOT THE CASE AS THE MONEY WAS ADMITTEDLY PAID BY JAISINGH BROTHERS. FURTHER IT I S IMPERATIVE TO NOTE THAT THE CONDUCT OF THE ASSESSEE CANNOT BE LOST SIGHT OF. IT HAS BEEN ADMITTED THAT THE ASSESSEE WAS SHORT OF FUNDS AND HENCE A FALSE ARRA NGEMENT WAS ENTERED INTO IT(SS)A NO.863/MUM/2003& ORS. SHRI M.N.KHARIWALLA & ORS. 9 BETWEEN THE LEGAL OWNERS AND JAISINGH BROTHERS THA T THEY WILL PAY THE MONEY TO THE ASSESSEE WHICH WOULD BE UTILISED TO EVICT THE TENA NTS. IN FACT WHAT APPEARS TO HAVE HAPPENED IS THAT THE MONEY WAS PAID BY JAISINGH BRO THERS BUT THAT WAS MEANT FOR THE ASSESSES AND NOT TO BE UTILISED IN PAYING TO TH E ALLEGED TENANTS. OUR VIEW GETS SUPPORT FROM THE ATTENDING TWO CIRCUMSTANCES. FI RSTLY AS PER THE INDENTURE OF ASSIGNMENT THE EVICTION OF TENANTS WAS THE RESPONS IBILITY OF MRP ENTERPRISES AND NOT THAT OF THE ASSESSES. SECONDLY THERE IS NOT E VEN AN IOTA OF EVIDENCE THAT ANY AMOUNT WAS PAID TO THE ALLEGED TENANTS. IT IS A CAS E IN WHICH THE PARTIES INITIALLY GAVE SOME ADVERSE STATEMENTS DURING THE COURSE OF S EARCH AND THEREAFTER RETRACTED TO SERVE THE DESIRED END. WE ARE NOT INCLINED TO RE LY ON SUCH SELF-SERVING STATEMENTS AND AFFIDAVITS WHEN THE FACTS ARE APPARENT TO THE NAKED EYES THAT THE ASSESSEE DID RECEIVE THE MONEY BUT FAILED TO DISCLOSE EVEN IN T HE BLOCK RETURN. 10. NEXT CONTENTION RAISED ON BEHALF OF THE ASSESSEE WAS THAT IF AT ALL THE BENCH WAS NOT CONVINCED WITH THE SUBMISSIONS FOR THE DELE TION OF TOTAL ADDITION THEN IT SHOULD BE CONSIDERED THAT THE ENTIRE AMOUNT OF RS.1 .40 CRORES WAS PARTLY SPENT ON EVICTING THE TENANTS AND SOME AMOUNT WAS PAID TO SH . D.B.BANDRAWALA AND THE ADDITION BE CONSIDERED ONLY FOR THE REMAINING AMOUN T. WE ARE NOT PERSUADED WITH THIS SUBMISSION AS WELL FOR THE REASON OF OUR HOLDI NG THAT THE ENTIRE SUM OF RS.1.40 CRORE WAS RECEIVED BY THE PRESENT ASSESSES AND NO M ONEY WAS PAID TO ANY THIRD PERSON. 11. IT IS THEREFORE AMPLY CLEAR THAT THE ASSESSEE RECEIVED A SUM OF RS.70 LAKH FROM JAISINGH BROTHERS IN CASH IN CONNECTION WITH T HE TRANSFER OF ITS PROPERTY. AS THE SUM OF RS.30 LAKH WAS DECLARED AS UNDISCLOSED I NCOME IN OUR CONSIDERED OPINION THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DE LETING THE REMAINING ADDITION OF RS.40 LAKH MADE BY THE A.O. WE THEREFORE SET ASID E THE IMPUGNED ORDER ON THIS ISSUE AND RESTORE THE ACTION OF THE A.O. IN MAKIN G THE ADDITION OF RS.40.00 LACS AS UNDISCLOSED INCOME. 12. IN THE RESULT THE APPEAL IS ALLOWED. IT(SS)A NO.863/MUM/2003& ORS. SHRI M.N.KHARIWALLA & ORS. 10 SMT. M.B.BANDRAWALA : IT(SS)A NO.859/MUM/2003 : 13. FIRST GROUND TAKEN BY THE REVENUE IN THIS APPEA L IS AGAINST THE DELETION OF RS.2 LAKH MADE ON ACCOUNT OF UNACCOUNTED CASH FOUND DURING THE COURSE OF SEARCH. CASH OF RS.3 LAKH WAS FOUND FROM THE RESIDENTIAL PR EMISES OF THE ASSESSEE. ON BEING CALLED UPON TO JUSTIFY THE AVAILABILITY OF IT S NATURE AND SOURCE THE ASSESSEE STATED THAT SHE HAD MADE WITHDRAWALS FROM SIX BANKS DURING THE PERIOD 01.04.1996 TO 19.08.1998. IT WAS ALSO STATED THAT HER HUSBAND LEFT RS.50 000. THE A.O. MADE ADDITION OF RS.2 LAKH WHICH CAME TO BE DELETED IN THE FIRST APPEAL. 14. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL ON RECORD IT IS NOTED THAT THE ASSESSEE WAS RESIDING W ITH HER CHILDREN AND WAS REGULARLY ASSESSED TO TAX. SHE HAD WITHDRAWN A SUM OF RS.2.29 LAKH FROM HER BANK ACCOUNT AND IT WAS NOT SHOWN BY THE ASSESSING OFFICER AT AN Y STAGE THAT THIS SUM WAS SPENT ELSEWHERE. APART FROM THAT THE SUM OF RS.50 000 WAS RECEIVED FROM HER HUSBAND. IN OUR CONSIDERED OPINION THE LEARNED CIT(A) WAS J USTIFIED IN DELETING THE ADDITION OF RS.2 LAKH MADE ON THIS ISSUE. THIS GROUND IS NOT ALLOWED. 15. SECOND GROUND IS AGAINST THE DELETION OF ADDITI ON OF RS.70 LAKH MADE ON ACCOUNT OF THE AMOUNT RECEIVED BY THE ASSESSEE AS C O-OWNER FROM JAISINGH BROTHERS. SHRI M.N.KHARIWALLA THE OTHER CO-OWNER A ND BROTHER OF THE PRESENT ASSESSEE DISCLOSED A SUM OF RS.30 LAKH AND THE A.O . MADE ADDITION OF RS.40 LAKH ON THE GROUND THAT THE SUM OF RS.70 LAKH EACH WAS R ECEIVED BY SHRI KHARIWALLA AND THE PRESENT ASSESSEE MRS.M.B.BANDRAWALA . THE PRES ENT ASSESSEE HAD NOT DECLARED ANY UNDISCLOSED INCOME ON THIS SCORE. THAT IS THE R EASON FOR WHICH ADDITION OF RS.70 LAKH WAS MADE BY THE A.O. WHICH CAME TO BE DE LETED IN THE FIRST APPEAL FOR THE SIMILAR REASONS AS GIVEN BY THE LD. CIT(A) IN T HE CASE OF SHRI M.N.KHARIWALLA. BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES OF THIS ISSUE ARE MUTATIS MUTANDIS SIMILAR TO THOSE ARGUED IN THE APPEAL OF SHRI M.N.K HARIWALLA. FOLLOWING THE VIEW TAKEN HEREINABOVE WE HOLD THAT THIS SUM OF RS.70 LAKH WAS IT(SS)A NO.863/MUM/2003& ORS. SHRI M.N.KHARIWALLA & ORS. 11 RIGHTLY INCLUDED BY THE ASSESSING OFFICER IN THE TO TAL INCOME OF THE ASSESSEE. THE IMPUGNED ORDER IS VACATED TO THIS EXTENT AND THIS G ROUND IS ALLOWED. 16. THE ONLY OTHER GROUND IS AGAINST THE DELETION O F ADDITION OF RS.23 LAKH MADE ON ACCOUNT OF UNDISCLOSED CASH RECEIVED BY THE ASSE SSEE ON ACCOUNT OF SURRENDER OF TENANCY RIGHTS. THE FACTS OF THIS GROUND ARE THAT T HE ASSESSEE ON THE DATE OF SEARCH STATED THAT SHE HAD RECEIVED A SUM OF RS.93 LAKH FO R SURRENDER OF HER TENANCY RIGHTS ON THE FLAT WHEREAS IN HER RETURN SHE DISCLOSED A S UM OF RS.70 LAKH ONLY. THE FURTHER FACT THAT SHE HAD RECEIVED A SUM OF RS.70 L AKH WAS FURTHER CORROBORATED BY SHRI PHATU NIHALANI PARTNER OF M/S.M.R.P.ENTERPRIS ES WHO ALLEGEDLY MADE THE PAYMENT. THE A.O. MADE ADDITION OF RS.23 LAKH WHICH WAS DELETED IN THE FIRST APPEAL. 17. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD IT IS SEEN THAT IN THE CASE OF SHRI PHATU NI HALANI CAME UP FOR ADJUDICATION BEFORE THE TRIBUNAL. FROM THE ORDER OF THE TRIBUNA L DATED 29 TH DECEMBER 2005 IN THAT CASE AND ALSO THE ORDER OF THE TRIBUNAL IN TH E CASE OF M/S.M.R.P.ENTERPRISES (SUPRA) IT IS NOTICED THAT THE RESPECTIVE ADDITIO N MADE IN THE HANDS OF SHRI PHATU NIHALANI HAS BEEN DELETED. IN THAT VIEW OF THE MATT ER THERE REMAINS NO BASIS FOR SUSTAINING THE ADDITION IN THE HANDS OF THE PRESENT ASSESSEE ALSO. WE THEREFORE UPHOLD THE IMPUGNED ORDER. 18. IN THE RESULT THE APPEAL IS PARTLY ALLOWED. SHRI D.B. BANDRAWALA : IT(SS)A NO.865 & 788/MUM/20 03 : 19. THE ONLY GROUND RAISED BY THE REVENUE IN ITS AP PEAL IS AGAINST THE DELETION OF ADDITION OF RS.1.10 CRORE MADE ON PROTECTIVE BAS IS ON ACCOUNT OF UNACCOUNTED CASH RECEIVED BY THE ASSESSEE. THE ASSESSING OFFICE R MADE OUT A CASE THAT A SUM OF RS.1.40 CRORE FROM JAISINGH BROTHERS WAS RECEIVED B Y THE LEGAL OWNERS OF THE PROPERTY. TO BE ON A SAFER SIDE HE MADE PROTECTIV E ADDITION IN THE HANDS OF SHRI IT(SS)A NO.863/MUM/2003& ORS. SHRI M.N.KHARIWALLA & ORS. 12 D.B.BANDRAWALA SON OF MRS.M.B.BANDRAWALA TO THE TU NE OF RS.1.10 CRORE BECAUSE THE SUM OF RS.30 LAKH WAS DISCLOSED BY SHRI M.N.KHA RIWALLA AS HIS UNDISCLOSED INCOME. THE LEARNED CIT(A) DELETED THE ADDITION. 20. AFTER CONSIDERING THE RIVAL SUBMISSION S AND PERUSING THE RELEVANT MATERIAL ON RECORD WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY US SUPRA IN THE CASES OF MRS.M.B.BANDRAWALA AND SHRI M.N.KHARIWALLA UPHOLD ING THE ADDITIONS ON SUBSTANTIVE BASIS TO THE TUNE OF RS.70.00 LACS AND RS.40.00 LACS RESPECTIVELY. IN THAT VIEW OF THE MATTER THERE REMAINS NO BASIS FOR SUSTAINING ANY ADDITION IN THE HANDS OF THE PRESENT ASSESSEE ON PROTECTIVE BASIS. THE IMPUGNED ORDER IS UPHELD TO THIS EXTENT. 21. THE ONLY GROUND RAISED BY THE ASSESSEE IN ITS A PPEAL IS AGAINST THE SUSTENANCE OF ADDITION OF RS.17 17 714. BRIEFLY STATED THE FAC TS OF THIS GROUND ARE THAT THE ASSESSEE DURING THE COURSE OF SEARCH WAS FOUND T O BE OWNER OF UNEXPLAINED CASH AMOUNTING TO RS.2.20 LAKH UNPROVED INVESTMENT IN F DRS OF RS.11 25 000 AND UNEXPLAINED JEWELLERY OF RS.3 72 714. AGGREGATE OF THESE THREE ITEMS NAMELY RS.17 17 714 WAS ADDED TO THE ASSESSEES INCOME. IN THE FIRST APPEAL IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT A SUM OF R S.32 LAKH WAS DECLARED AS UNDISCLOSED INCOME IN THE BLOCK RETURN AND THIS ADD ITION OF RS.17.17 LAKH MAY BE TELESCOPED INTO THIS UNDISCLOSED INCOME OF RS.32 LA KH. THE LEARNED CIT(A) REFUSED TO ACCEPT THIS CONTENTION ON THE GROUND THAT THESE AMOUNTS TOTALED TO RS.17.17 LAKH AS AGAINST THE DECLARED SUM OF RS.32 LAKH. HE THER EFORE SUSTAINED THE ADDITION. 22. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD IT IS OBSERVED THAT THE ASSESSEE DISCLOSED I NCOME OF RS.32 LAKH IN ITS BLOCK RETURN BY CLAIMING TO HAVE RECEIVED THIS SUM FROM S HRI PHATU NEHALANI. IT IS OBSERVED THAT THE ADDITION IN THE HANDS OF SHRI PHA TU NEHALANI ON ACCOUNT OF MAKING PAYMENT TO THE ASSESSEE HAS BEEN DELETED BY THE TRIBUNAL. DESPITE THAT THE ASSESSEE STUCK TO ITS STAND THAT HE RECEIVED A SUM OF RS.32 LAKH FROM SH. PHATU IT(SS)A NO.863/MUM/2003& ORS. SHRI M.N.KHARIWALLA & ORS. 13 NEHALANI AND DID NOT RETRACT THERE FROM. WHEN THE SAID AMOUNT OF RS.17.17 LAKH FOR WHICH ADDITION WAS MADE ALONG WITH OTHER AMOUNT S FOR WHICH THE ASSESSEE MADE INVESTMENTS IS TOTALED UP THE AMOUNT AS PER T HE LD. DR COMES TO RS.31.70 LAKHS. AS AGAINST THAT THE ASSESSEE SURRENDERED A S UM OF RS.32 LAKH WITHOUT ANY SPECIFIC MENTION ABOUT THE NATURE OF INCOME. IN SUC H A SITUATION WHEN THE UTILIZATION OF UNDISCLOSED INCOME BY THE ASSESSEE T O THE TUNE OF RS.32 LAKH HAS NOT BEEN SHOWN ELSEWHERE BY THE REVENUE THE NATURAL CO ROLLARY FOLLOWS THAT THE SAID SUM OF RS.17.17 LAKH CAME OUT OF THIS UNDISCLOSED I NCOME. IT IS A CASE OF SEARCH IN WHICH EACH AND EVERY ASPECT OF THE PERSON SEARCHED IS EXAMINED. WHEN THE REVENUE HAS NOT FOUND OUT ANY UTILIZATION OF THIS A MOUNT OF RS.32 LAKH SURRENDERED BY THE ASSESSEE AS UNDISCLOSED INCOME IN THE BLOCK RETURN IN OUR CONSIDERED OPINION THE SAID SUM OF RS.17.17 LAKH HAS TO BE HE LD AS EMANATING FROM THE SUM DECLARED. WE THEREFORE ORDER FOR THE DELETION OF ADDITION. 23. IN THE RESULT THE REVENUES APPEAL IS DISMISSE D AND THAT OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF SEPTEMBER 2011. SD/- SD/- (V.DURGA RAO) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 21 ST SEPTEMBER 2011. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) CENTRAL - IV MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI.