SANJEEV KUMAR DAITAPATI,PURI vs. ITO WARD, PURI, PURI

Shri Mohit Sheth, Mohit Sheth, ld AR appeared for the assessee and Shri the assessee and Shri S.C.Mohanty, Sr. S.C.Mohanty, Sr. DR appeared for the revenue.

It was submitted by ld AR t was submitted by ld AR that the assessee is an individual who is a s an individual who is a Sevayat in Lord Jagannath Mandir, Puri Sevayat in Lord Jagannath Mandir, Puri. It was the submission that t submission that the P a g e 1 | 45 assessee had filed his return of income for the relevant assessment year disclosing a total income of ₹3,40,200/-. The Assessing Officer had received certain information from the Income Tax Officer, Ward- 32(2)(1), Mumbai vide letter dated 30.10.2017 that the assessee had made certain investments in immovable property. It was submission that the allegation was that the assessee was a partner in one Jai Bhavani Enterprises and that the said Jai Bhavani Enterprises had invested in the acquisition of the immovable property. Consequent to the information received, the Assessing Officer had obtained the financial details and that the assessee was asked to explain the source of Rs.58,00,000/- invested in the firm Jai Bhavani Enterprises. The assessee had responded by saying that the assessee has never introduced capital of Rs.58,00,000/- in the partnership firm Jai Bhavani Enterprises. There was an intention to form a partnership firm but that never fructified and that the land had been purchased through a Power of Attorney issued by Jignesh R Mehta who was the proprietor of Jai Bhavani Enterprises. After receipt of the reply from the assessee, the Assessing Officer issued further correspondence with the Income Tax Officer, Ward- 32(2)(1), Mumbai and further clarifications had been sought. Further clarifications were not given by the Income Tax Officer, Ward- 32(2)(1), Mumbai and just on the ground that the balance sheet and capital account of Jai Bhavani enterprise showed that the assessee had invested Rs.58,00,000/- towards capital contribution in the P a g e 2 | 45 said firm, treated the said amount as unexplained income of the assessee and made addition. It was the further submission that on further appeal before the ld CIT(A), the assessee had filed a specific affidavit specifically confirming that the assessee is not a partner in Jai Bhavani Enterprise. The affidavit reads as follows:

Ld CIT(A) called for a Remand Report from the Assessing Officer on 8.7.2019. The Remand Order reads as follows:

No Remand Report was submitted by the Assessing Officer. However, the ld CIT(A) proceeded to dispose of the appeal of the assessee by dismissal vide order dated 30.3.2024.

On the basis of this affidavit, a Remand Report had been called for from the Assessing Officer on 13.8.2024, which reads as follows:

On 13.9.2024, a Remand Report has been sent to the ITAT, Cuttack with enclosures, which reads as follows:

A perusal of the Remand Report shows that none of the information called for in the remand order has been replied to by the Assessing Officer. Purely tangential issues have been discussed. Another peculiarity which is noticed in the present case is that on perusal of anmnexure-2 of the remand report, which is a letter dated 26 September 2019, the name of the assessee Shri Sanjeev Kumar Daitapati has been brought out as Rs. 58,00,000/-. This is a letter addressed by the Income Tax Officer, Puri Ward, Puri to the Income Tax Officer, Ward- 32(2)(1), Mumbai whereas on perusal of the letter dated 19.8.2019 of the Income Tax Officer, Ward- 32(2)(1), Mumbai shows the name as Sanjeev Jagannath Daitapati. Here it would also be worthwhile to mention that the information received from the Income Tax Officer, Ward- 32(2)(1), Mumbai, which included the copy of the balance sheet and P&L account shows that the name of the partner therein is Sanjeev Jagannath Daitapati, as follows:

A perusal of Annexure-I to Remand Report shows that various specific queries have been raised by the Income Tax officer, Puri Ward Puri to the Income Tax Officer, Ward- 32(2)(1), Mumbai. All these queries clearly showed that the Assessing Officer in the impugned assessment itself was not sure of the addition made and he was seeking further evidence. In short, in the Remand Report, other than giving response to the queries raised by the Tribunal, the Assessing Officer has sought it fit to transfer all his communication with the Income Tax Officer, Ward- 32(2)(1), Mumbai to which, no replies have also been received in the form of Remand Report to the Tribunal. Much more interesting is the letter of the Additional Commissioner of Income Tax, Range-1, Bhubaneswar dated 12.9.2024, who has proceeded to bring out a totally different colour to the issue by claiming that the assessee is trying to mislead the Court by trying to establish the existence of two persons in the same name i.e. M/s. Jai Bhavani Enterprise. Copy of the general Power of Attorney for purchase of immovable property was also available to the Assessing Officer, which reads as follows:

In reply, ld Sr DR submitted that all attempts have been made by the Assessing Officer to obtain information as sought by the Tribunal in the reminder proceedings and non cooperation by the ITO Mumbai is causing the problem. It was a submission that the issues in the appeal could be restored to the file of the AO for ascertainment of the true facts and the adjudication. It was a submission that the only issue in the appeal is in regard to the Capital contribution of Rs. 58,00,000/- and the investment in the land was not the issue in the assessment. It was a submission that the Income Tax Officer, Puri is handicapped on account of non-cooperation from the Officer at Mumbai and no adverse inference should be taken against the Assessing Officer, Puri.

We have considered the rival submissions. A perusal of the facts of the present case clearly shows that admittedly, the Income Tax Officer, Puri has attempted to collect information from the Income Tax Officer, Ward- 32(2)(1), Mumbai and there has been utter failure. The Income Tax Puri, Ward Puri has also stopped processing the information after that. Ld. CIT(A) having called for the Remand Report, decided to dismiss the appeal of the assessee without waiting the Remand Report or calling for a reminder. Ld CIT(A) says that there was no response from the assessee P a g e 43 | 45 and dismissed the appeal of the assessee. Surprisingly, the remand order dated 8th July 2019, which has been extracted earlier clearly shows that there were submissions by the assessee and that the assessee has also produced evidence, which has led the ld CIT(A) to call for a Remand Report. Even before the Tribunal, the Remand Report is not replied to in regard to the remand. A perusal of the balance sheet and profit and loss account, which is the foundation, on which the addition has been made by the Assessing Officer shows that the said balance sheet and PL account is not audited nor signed by the person who has prepared the same, therefore, its veracity remains questionable. The Assessing Officer, Mumbai himself recognises in one of his correspondence that Sri Manoj Champaklal Bajoria has categorically denied the existence of the firm at his address and that he is not a partner but the balance sheet shows Manoj Champaklal Bajoria is shown as 45% partner. The statement of Shri Manoj champaklal Bajoria is accepted but when it came to the assessee at Puri, he is assessed. No evidence and nothing to show what happened in the case of Jignesh R Meheta is also coming out. This being so, we are of the view that the addition made by the Assessing Officer of Rs.58,00,000/- towards the alleged capital contribution by the assessee in the alleged firm M/s. Jai Bhavani Enterprise is unsupported by any evidence in the form of either the bank transactions, partnership deed, certified balance sheet or P a g e 44 | 45 Pan Data Base evidence and consequently, the addition made by the Assessing Officer and confirmed by the ld CIT(A) stands deleted..

In the result, appeal of the assessee stands allowed.