CHANDRAKANT KANU KARKARE,MUMBAI vs. DY CIT, CC-1(2), MUMBAI

�थायी लेखा सं./जीआइआर सं./PAN/GIR No. : ADAPK8405A Appellant .. Respondent Appellant by : Mr.Vishnu Agarwal.AR Respondent by : Ms.Kavita Kaushik.DR Date of Hearing 08.06.2022 Date of Pronouncement 17.06.2022 आदेश / O R D E R

PER PAVAN KUMAR GADALE JM:

1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in making the addition to the salary income to the tune of Rs. 18,44,966/- which is not reflected in Mr. Chandrakant Kanu Karkare, Mumbai - 2 -

the Form 16 issued by the company nor received by the appellant in his Bank statement.

2. The brief facts of the case are that the assessee is a CFO and is engaged in the business. The assessee has filed the return of income for the A.Y 2015-16 on 31.08.2015 disclosing a total income of Rs.28,29,240/-.There was a search action conducted u/s 132 of the Act on 20.02.2018 in the case of M/s. Hyderabad Gems SEZ Ltd and others. The assessee is a Chief Financial Officer (CFO) of M/s. Gitanjali Gems Ltd. was also covered u/s 132 of the Act, therefore notice u/s 153A of the Act was issued. In compliance to the notice, the assessee has filed the return of income electronically on 20.12.2019 disclosing a total income of Rs.28,29,240/-. Subsequently, the notice u/s 143(2) and 142(1) of the Act along with questionnaire was issued. The A.O dealt on the facts and search back ground in respect of Shri Muhel C. Choksi Group and a statement was recorded in respect of the assessee’s salary. The A.O. found that as per the statement he is drawing gross annual

Mr. Chandrakant Kanu Karkare, Mumbai - 3 - salary of Rs.50 lakhs per annum, whereas the assessee has declared the salary of Rs. 31,86,040/- in the return of income filed in response to the notice u/s 153A of the Act. The assessee was issued notice u/s 142(1) of the Act to provide bank statement in respect of credits of salary received from M/s. Gitanjali Gems Ltd.

5. At the time of hearing, the Ld. AR submitted that the CIT(A) erred in not considering the facts of salary receipt and further the Ld. AR substantiated that on the similar issue the Hon’ble Tribunal in the assessee own case has granted the relief and relied on the order of the ITAT. Contra, the ld. DR supported the order of the CIT(A).

6. We heard the rival submissions and perused the material on record. The Ld.AR submitted that the CIT(A) has erred in not considering the factual aspects of salary income of the assessee . We find the Hon’ble Tribunal in & 379/Mum/2021 for the A.Y 2018-19 & 2017-2018 dated 26.04.2022 has observed at Page 3 Para5 of the order read as under:

5. Under these issues the assessee has challenged the addition of the salary income to the tune of Rs. 21,22,060/-. The Ld. Representative of the assessee has argued that the statement of assessee was recorded u/s 131 which was retracted subsequently. The document i,e promotion letter was found with the employer M/s. Gitanjali Gems Ltd. which was never acted upon but the Mr. Chandrakant Kanu Karkare, Mumbai - 5 -

AO has wrongly raised the addition, therefore, the finding of the AO as well as CIT(A) is not justifiable, hence, is liable to be set aside. However, on the other hand, the Ld. Representative of the revenue has strongly relied upon the order passed by the CIT(A) in question. On appraisal of the order of the AO, we noticed that the AO raised the addition on the basis of the statement recorded on 15.01.2017. during the survey conducted u/s 133A on Gitanjali Group. The statement was recorded u/s 131 of the Act. However, the statement was retracted while filing the return u/s 153A of the Act. The promotion letter dated 01.06.2014 was found in which the assessee was promoted the Chief Financial Officer and his salary was revised @ 4.50% which works out of 54 lakh. In brief, the statement of the assessee as well as the letter dated 01.06.2014 found during search, was the basis of assessing the income to the tune of Rs.50,25,000/-. The assessee has retracted from his & 378/M/2021 A.Ys.2017-18 & 2018-19 4 statement and the assessee has also contended that he was never promoted to the post of Chief Financial Officer in the pay of Rs.4,50,000/- per month. No doubt, the statement was made and the letter was found during search but the assessee denied this fact and produced the evidence in support of his claim which was not taken into consideration. The assessee filed the Form-16 for the A.Y.2017-18 lies at page no. 4 to 7 of the paper book which speak about this facts that the assessee was getting his salary income to the tune of Rs.33,15,390/- per annum. The assessee was paying the quarterly tax as mentioned in Form-16. The bank statement of the assessee for the A.Y. 1.04.2016 to 31.03.2017 was also produced which lies at page no. 8 to 18 of the paper book. The said bank statement speaks about the credit of salary to the tune of Rs.2,15,220/- and so on till at the Mr. Chandrakant Kanu Karkare, Mumbai - 6 - end of the year. All these documents with the AO as well as before the CIT(A). The statement of the assessee nowhere supported by any incriminating evidence on record even the promotion letter for the promotion of Chief Financial Officer w.e.f. 30.05.2014 lies at page no. 30 of the paper book never acted upon. Anyhow, addition merely on the basis of the statement as well as on the basis of the letter recovered during survey which was never acted upon nowhere seems justifiable to raise the addition, therefore, we set aside the finding of the CIT(A) on this issue and delete the addition. In the result, the appeal filed by the assessee is hereby allowed.

Order pronounced in the open court on 17.06.2022.