ITSSA Nos. 65 and 67/JU/2006, (Assessment Year: 1991-1992;1992-1993;1993-1994;1994-1995;1995-1996;1996-1997;1997-1998;1998-1999;1999-2000;2000-2001). Case: 1. Vinod Kumar Mehta, 2. The ACIT, Udaipur Vs 1. The ACIT, Udaipur, 2. Shri Vinod Kumar Mehta. ITAT (Income Tax Appellate Tribunal)
| Case Number | ITSSA Nos. 65 and 67/JU/2006, (Assessment Year: 1991-1992;1992-1993;1993-1994;1994-1995;1995-1996;1996-1997;1997-1998;1998-1999;1999-2000;2000-2001) |
| Counsel | For Appellant: Shri Amit Kothari and For Respondents: Dr. Deepak Sehgal, D.R. |
| Judges | Hari Om Maratha, Member (J) and N.K. Saini, Member (A) |
| Issue | Income Tax Act, 1961 - Sections 113, 132, 132A, 154, 158BC, 4; Negotiable Instruments Act, 1881 - Section 138 |
| Judgement Date | May 23, 2014 |
| Court | ITAT (Income Tax Appellate Tribunal) |
Order:
N.K. Saini, Member (A), (ITAT Jodhpur Bench)
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These cross appeals by the assessee and the department are directed against the order dated 18/08/2006 of Ld. CIT(A), Udaipur for the Block Period 1991-92 to 2000-01 & upto 14/08/2000.
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First we will deal with the assessee's appeal in I.T.A. No. 65/JU/2006. The following grounds have been raised in this appeal:
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The Ld. CIT(A) erred in law as well as on the facts and circumstances of the case in confirming the addition of unexplained investment in property of Rs. 2,50,000/- made by the Assessing Officer.
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The Ld. CIT(A) erred in law as well as on the facts and circumstances of the case in confirming the addition of undisclosed income of Rs. 1,11,000/- made by the Assessing Officer on the basis of loose papers found during the course of search.
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The Ld. CIT(A) erred in law as well as on the facts and circumstances of the case in confirming the addition of rent of the property of Rs. 5,400/- for the assessment year 2000-01 and directing the Assessing Officer to re-compute the same after giving the reduction of Rs. 900/- only from such income.
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The appellant reserves the right to add to the above grounds of appeal and/or amend, modify and to delete any of them on or before the hearing of appeal.
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First issue vide Ground No. 1 relates to the confirmation of addition of Rs. 2,50,000/- made by the Assessing Officer on account of unexplained investment in property.
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The facts relating to this issue, in brief, are that the a search and seizure operation under section 132 I.T. Act, 1961 (hereinafter referred to as 'the Act' in short) were carried out at the residential premises of the assessee on 14/08/2000. In the course of search, cash, valuables and other incriminating documents were found and seized. Thereafter, the Assessing Officer issued notice under section 158BC of the Act. In response to the said notice, the assessee furnished return of income on 08/01/2001 declaring undisclosed income at NIL. The Assessing Officer during the course of assessment proceedings, noticed that the assessee had given advances of Rs. 1,70,000/-, Rs. 40,000/- & Rs. 40,000/- for three separate plots from Shri Udai Nathji and Shri Madav Nath as per agreement paged Nos. 32 & 33, 35 & 36 and 39 & 40 of Annexure-3, seized during the course of search, the advances were given on 29/08/1998. Shri Udai Nathji had filed an affidavit dated 13/06/2002 claiming that he had not received Rs. 2,50,000/-. The Assessing Officer asked the assessee to produce Shri Udai Nathji, but he failed to do so. The assessee submitted to the Assessing Officer vide his letter dated 13/06/2002 that the actual advance given by him was stated in the documents and the transaction could not materialize, sale deed was not registered and no further investment was made in respect of above properties. The Assessing Officer did not find merit in the explanation of the assessee by observing that it was clearly mentioned in the documents executed on stamp papers that advances aggregating to Rs. 2,50,000/- had been paid by the assessee on 29/08/1998. The Assessing Officer held that the advance paid by the assessee on 29/08/1998 remained unexplained. He also mentioned that the enquiry was made from Ward Inspector which revealed that those properties were got not registered in the name of the assessee because of those plots were acquired by Urban Improvement Trust (UIT) and in lieu thereof the vendor was allotted two plots at other places.
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Being aggrieved, the assessee carried the matter to the ld. CIT(A) and submitted that the deal could not be through because of the title defect with the UIT and Shri Udai Nathji had given affidavit that he did not receive any amount of advance.
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The learned CIT(A), after considering the submissions of the assessee, observed that in all the three agreements found during the course of search, it was clearly written and accepted by Shri Udai Nathji that he had received Rs. 1,70,000/-, Rs. 40,000/- & Rs. 40,000/- and there was no wording like was to be received or will be received. He further observed that agreement was the basis for receipt of advance money and after the search, the affidavit prepared by the assessee and given by Shri Udai Nathji did not have any relevance because it was clearly an afterthought. He was of the view that power of attorney and agreement accepted at one time could not be rejected at next time. He, accordingly, confirmed the addition made by the Assessing Officer. Now the assessee is in appeal.
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Learned counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the affidavit of Shri Udai Nathji submitted at the time of assessment proceedings, clearly indicated that no money was actually received or paid as the title of the property was not clear. He further submitted that the property was acquired by UIT, Udaipur, therefore, no sale or transaction could take place and the Assessing Officer himself had verified that no sale took place, as such there being no investment made and those agreements though related to the period of 1992, but till the date of search, no agreement registration could took place. Therefore, the addition made by the Assessing Officer and sustained by the Ld. CIT(A) deserves to be deleted.
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In his rival submissions, learned D.R. strongly supported the orders of the authorities below.
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We have considered the submissions of both the parties and carefully gone through the material available on record. In the present case, it is an admitted fact that during the course of search, agreements for three separate plots were found which indicated that the assessee had given advances of Rs. 1,70,000/-, Rs. 40,000/- & Rs. 40,000/- totaling to Rs. 2,50,000/- to Shri Udai Nathji and Shri Madhav Nath. Those agreements were written on the stamp papers, therefore, it cannot be said that the assessee did not make the payment even when the sale deed did not materialize due to defective title or the land being acquired by UIT, Udaipur, as the assessee paid the advance totaling to Rs. 2,50,000/-, it was his duty to explain the source for the same, but the assessee could not explain the source. Therefore, the Ld. CIT(A) rightly confirmed the addition made by the Assessing Officer. In that view of the matter, we do not see any merit in this ground of the assessee's appeal.
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Vide Ground No. 2, the grievance of the assessee relates to the confirmation of addition of Rs. 1,11,000/- made by the Assessing Officer on the basis of loose papers found during the course of search.
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Facts relating to this issue, in brief, are that the Assessing Officer added Rs. 3,11,000/- as unexplained income as per loose paper No. 183 of Annexure A-2 on the ground that the affidavit filed by Shri Mansoor Ali Hitawala on 25/07/2002 was defective and moreover the assessee himself had accepted to have received Rs. 3,11,000/- instead of Rs. 2,00,000/- as stated by Shri Mansoor Ali Hitawala.
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Being aggrieved, the assessee carried the matter to the ld. CIT(A) and submitted that the assessee received Rs. 3,11,000/- from Shri Mansoor Ali Hitawala from time to time on various dates and the Assessing Officer could not have made the addition of undisclosed income merely on the ground of non-furnishing the dates of receipt of the said amount. It was further stated that initial burden of onus lies upon the Assessing Officer to prove that how the undisclosed income had been generated out of the details mentioned in the loose paper, but the Assessing Officer failed to discharge his onus to prove in this regard.
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The learned CIT(A), after considering the submissions of the assessee, observed that the Assessing Officer added the income of Rs. 3,11,000/- on the acceptance of the assessee that he had received Rs. 3,11,000/- instead of Rs. 2,00,000/- from Shri Mansoor Ali Hitawala and once the assessee had accepted the high receipts why should the Assessing Officer disputed the receipts of higher income and secondly, the Assessing Officer had not given credit of Rs. 2,00,000/- on the ground that the dates of giving/receiving were not given by the assessee. The Ld. CIT(A) was of the view that once the assessee himself had accepted to have received Rs. 3,11,000/-, there was no burden of onus upon the Assessing Officer to prove otherwise. However, the Ld. CIT(A) was of the view that the credit of Rs. 2,00,000/- should have been given by the Assessing Officer which he had not given. He therefore, sustained the addition of Rs. 1,11,000/- and allowed the relief of Rs. 2,00,000/-. Now the assessee is in appeal.
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Learned counsel for the assessee reiterated the submissions made before the authorities below. In his rival submissions, learned D.R. relied on the order of the Assessing Officer.
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We have considered the submissions of both the parties and carefully gone through the material available on record. In the present case, it appears that the Assessing Officer made the addition of Rs. 3,11,000/- only on the basis of acceptance by the assessee, who stated that he received Rs. 3,11,000/- and not Rs. 2,00,000/- from Shri Mansoor Ali Hitawala as mentioned in the loose papers found during the course of search. The Assessing Officer while making the addition of Rs. 3,11,000/- did not allow the credit of Rs. 2,00,000/- which was disclosed by the assessee on the basis of acceptance by Shri Mansoor Ali Hitawala. Therefore, the Ld. CIT(A) was fully justified in directing the Assessing Officer to allow the credit of Rs. 2,00,000/- i.e. the amount which was given to the assessee by Shri Mansoor Ali Hitawala. We, therefore, do not see any infirmity in the order of the Ld. CIT(A), who sustained the addition of Rs. 1,11,000/-.
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Ground No. 3 was not argued considering the smallness of the amount involved. Therefore, the said ground is dismissed.
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Now we will deal with the appeal of the department in I.T.A. No. 67/JU/2006. The following...
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