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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI R. C. SHARMA, AM & SHRI SANDEEP GOSAIN, JM
2 & 3618/Mum/2013 (AY 2004-05) Ashok Bastimal Siroya & Lalita Ashok Siroya आदेश / O R D E R
Per Sandeep Gosain, Judicial Member:
The present two appeals have been filed by the revenue against the order of Commissioner of Income Tax (Appeals)-11, Mumbai and dated 25.02.2013 and 19.03.2013 respectively for A.Y. 2004-05 on the grounds of appeal
mentioned herein below.
2. Since the issues raised in these two appeals are identical, except for the name of respondents, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed of by this consolidated order.
3. First of all, we take up Revenue’s appeal in 2004-05. The grounds of appeal are mentioned herein below:-
1. Whether on the facts and the circumstances of the case and in law, the id. CIT(A) was correct in deleting the addition made u/ s.69 of the IT Act on the basis of loose paper and mismatch of payments found during the course of Search Operation without correctly appreciating the fact that the payments made through cheques mentioned on the loose paper matches with the books of accounts of the builder.
2. Whether on the fact and the circumstances of the case, the ld.CIT(A) erred in not correctly appreciating the fact that the area mentioned in the loose paper was super built up area which explains the mismatch in the area mentioned in the sale agreement and that in the loose paper seized. 3. Whether on the fact and in the circumstances of the case, the 3 & 3618/Mum/2013 (AY 2004-05) Ashok Bastimal Siroya & Lalita Ashok Siroya ld.CIT(A) was correct in holding that the loose paper seized cannot be held as genuine and reliable even though the same was seized from the site office for the construction project "Legend" in which the assessee has purchased the flat and on the seized paper the flat number and floor of the flat is mentioned and details of cheque and cash payments is mentioned. 4. Whether on the facts and circumstances of the case and in law, the ld.CIT(A) was correct in deleting the addition made u/s.69 even though the addition made on account of 'On Money' received from the assessee has been confirmed by the ld.CIT(A) in the case of M/s. Layer Exports Pvt. Ltd., the Company from whom the assessee has purchased the flat. 5. The Appellant prays that the order of the Id. CIT (A) be set aside on the above grounds and that of the Assessing Officer be restored. 6. The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary.
4. The brief facts of the case are that the assesse is non-resident and has not filed return of income for AY 2004-05. The AO after serving notice containing reasons for reopening the agreement, had passed order of assessment thereby making additions.
5. Aggrieved by the order of the AO, assessee preferred an appeal before CIT(A) and the CIT(A) after considering the case of both the parties had partly allowed the appeal of assesse and deleted the additions made by AO.
4 & 3618/Mum/2013 (AY 2004-05) Ashok Bastimal Siroya & Lalita Ashok Siroya 6. Aggrieved by the order of CIT(A), the revenue filed the present appeal before us on the grounds mentioned herein above. Ground No. 1 & 4. 7. Since all the grounds raised by the revenue are inter-connected and inter- related therefore, we thought it fit to dispose of the same through the present common order.
8. The Ld. DR appearing on behalf of the revenue relied upon the orders passed by the AO u/s 143(3) r.w.s 147 of the Income Tax Act and submitted that the assessee in the previous year relevant to assessment year under consideration jointly alongwith spouse booked a flat for total consideration of Rs,2.37,52,200/- as per the agreement. 'The flat was booked with M/s Layer Export Pvt. Ltd. who were constructing the building named "LEGEND", at Malabar Hill, Walkeshwar, Mumbai - 400006. The assessee booked flat No. 14 admeasuring 145 Sq. Mt. equivalent to 1565.73 sq.ft. carpet area. It was further submitted by Ld. DR that subsequent to the booking of flat as mentioned above, an action was taken u/s 132 of the Act on 15.03.2008 on Bharat Shah group of cases. M/s Layer Export Pvt. Ltd. being a company of this group was also covered u/s 132(1) of the Act and during the course of Search and Seizure action certain documents were seized and as per the documents, the booking of the flat in the building Legend, M/s Layer Export Pvt. Ltd. were charging purchased consideration in two forms 5 & 3618/Mum/2013 (AY 2004-05) Ashok Bastimal Siroya & Lalita Ashok Siroya being cheque and cash. Ld. DR further submitted that the cash element attributable to the transaction was collected on the day of booking. Ld. DR further submitted that during the search proceedings cheque and cash elements were found and elements of cheque was reflected in the books of account. Ld. DR further submitted that this view also concurs with the findings made by AO in the assessment of M/s Layer Export Pvt. Ltd. and the AO has rightly held that the ratio of cheque and cash will go hand in hand and has rightly made additions in the case of assessee as well as his wife. Ld. DR further submitted that Ld. CIT(A) erred in deleting the addition made u/ s.69 of the IT Act on the basis of loose paper and mismatch of payments found during the course of Search Operation. Ld. DR further submitted the area mentioned in the loose paper was super built up area which explains the mismatch in the area mentioned in the sale agreement and that in the loose paper seized. It was further submitted by Ld. DR that Ld. CIT(A) erred in holding that the loose paper seized cannot be held as genuine and reliable even though the same was seized from the site office for the construction project called "Legend".
On the other hand, Ld. AR appearing on behalf of the assessee while relying upon the orders of Ld. CIT(A)submitted that Hon’ble Tribunal has already deleted the additions made in case of M/s Layer Export Pvt. Ltd in ITA 6 & 3618/Mum/2013 (AY 2004-05) Ashok Bastimal Siroya & Lalita Ashok Siroya No. 3019, 3020, 3021, 2985 & 2986/Mum/11. It was further submitted by Ld. AR that the Hon’ble Tribunal has also dismissed the appeal of revenue in the case of assessee in ITA No. 3361/Mum/2014 for AY 2007-08 on identical issues..
We have heard the counsels for both the parties on these grounds and we have also perused the material placed on record as well as the orders passed by the revenue authorities. We have noticed that the Ld. CIT(A) dealt with these grounds and has passed the detailed order containing the facts pleaded by the assessee which are mentioned in para 2.2 and 2.4 of its order. We have further noticed that Ld. CIT(A) has also considered the order of AO in detail and after seeking remand report, Ld. CIT(A) has passed detailed order appreciating the contentions of both the parties and distinguished the case laws mentioned by both the parties. We have further noticed that Ld. CIT(A) in para no. 2.9 of its order has categorically mentioned that the copies of remand report and documents provided by the AO were also provided to the Assessee for reply and therefore it shows that Ld. CIT(A) has also considered the detailed submissions filed by the assessee on 11.02.13 and also taken into consideration the remand report filed by the AO. The Ld. CIT(A) has dealt with this ground in para No.4.8 to 4.13 of his order. The operative portion is reproduced below:-
7 & 3618/Mum/2013 (AY 2004-05) Ashok Bastimal Siroya & Lalita Ashok Siroya 4.8 Submission of the Ld. AR alongwith remand report of the AO and the facts of the case has been. considered. Mismatch in the area of fiat as per the sheet and as per the agreement is evident. The submission of the AO that sales of flat are made on the basis of super built up area which is about 35 - 40% higher than the carpet area also do not lead to conclusion that said document relates to the assessee because carpet area of the flat is 1565.75 sq.ft. and therefore, super built up area being 40% higher than the carpet area would be 2192.05 sq.ft. whereas the area mentioned in the paper is 2550 sq.ft. If it is considered that super built up area is about 40% higher than the built up area, still the built up area would be 2630.46 sq.ft. But it would be 68% higher than the carpet area which appears ridiculous. 4.9 Secondly, the cheque amount as per the document is indisputably Rs.198,92,949/- whereas the cheque amount actually paid by the assessee with his wife is Rs.237,52,200/-. This fact is also discernable from Q.No.6 in the statement of Shri Ashok Siroya dt. 12.10.2009. Further as per the said sheet, cash amount of Rs.56.70 Iakhs is shown receivable whereas AO has proceeded on the premise that the entire cash of Rs.160,90,101/- has been paid at the time of booking of flat on 04.11.2003. 4.10 As per the details of payment furnished vide page 1 of the Paper Book and reproduced in para 4.1'above, total cheque payment in F.Y.2003-04 is Rs.1,53,00,000/-, 77,00,000/-paid by the assessee and Rs.76,00,000/- paid by Smt. Lalita Siroya (wife of the assessee). Date of search in this case is 15.03.2008 and from the details of payment in the said chart, the entire cheque payment of Rs.2,37,52,200/- has been made by 18.02.2008. As per the, seized document, cheque payment 8 & 3618/Mum/2013 (AY 2004-05) Ashok Bastimal Siroya & Lalita Ashok Siroya received, as seen, is Rs.1 Crore only. Therefore, even the details of cheque payment till the date of search do not match with the noting in the sheet. 4.11 On a careful examination of the copy of seized document as provided together with the facts as admitted, and in light of the glaring mismatches as above, and absence of any independent, reliable, corroborative evidence, it cannot be said that the said document, in any manner, can be held as genuine and reliable to hold that the assessee has paid unaccounted cash for the purchase of property as held by AO. 4.12 In view of submissions of Ld. AR and the case laws relied upon and the mismatch in the area of flat and the amounts of cheque payments, in absence of any other corroborative evidence to establish a direct nexus, it cannot be said that the notings in the said paper are genuine and, therefore, constitute sufficient evidence to hold that undisclosed cash payment-of Rs.160,90,191/- has been made by the appellant with his wife. More so in view of the fact that in the seized paper, part of cash amount is shown receivable. 4.13 It is hereby held that addition made by the AO regarding payment of unaccounted cash for purchase of property is without any sound basis and hence is hereby deleted. Hence grounds 3, 4(partly) and 5 are allowed.
After analyzing the aforementioned order as well as the order passed by Hon’ble Tribunal and after hearing the arguments of both the parties, we have noticed on page No. 12 in para no. 27 in the order of Hon’ble ITAT in I.T.A. No. 3619 & 3618/Mum/2013 (AY 2004-05) Ashok Bastimal Siroya & Lalita Ashok Siroya 3019, 3020, 3021, 2985 & 2986/Mum/11 there is a chart which contains summary of yearwise receipts of amount and also contains the name of assessee at serial no.
This case pertains to the builder where under the same search and similar additions were made on the basis of same loose sheets as were made in the case of assessee and while deleting the additions, the Coordinate Bench of Hon’ble ITAT has decided this issue in favour of assessee. Further the similar additions were deleted in assessee’s own case for AY 2007-08. The Hon’ble ITAT while deciding the revenue’s appeal in ITA No. 3361/Mum/14 in para 6 at page 25 has upheld the order of Ld. CIT(A) who deleted the additions. The operative portion of Hon’ble ITAT is reproduced below:- “6. We notice that the Ld C1T(A) has made comprehensive analysis of the facts prevailing in the instant case and also appreciated the various judicial pronouncements on the impugned issue and accordingly taken the decision by applying the case law on the facts of the instant case. We have noticed that the basis for making the impugned addition is the loose sheet found during the course of search conducted in the Bharat Shah Group. A very important point is that the said loose paper does not contain the name of the assessee, it was an undated document and does not bear signature of anyone. Another important point is that both the purchaser as well as seller has denied the contents of the said document. We notice that the assessing officer has tried to decipher the information found in the said document by interpreting that "Sh" represents Cash payment and "Q" represents 10 & 3618/Mum/2013 (AY 2004-05) Ashok Bastimal Siroya & Lalita Ashok Siroya cheque payment. We notice that the assessing officer has not brought any material on record to corroborate his interpretation. A perusal of the document would show that the letter written after 45 looks like “C” and hence it is capable to different interpretation also as against the interpretation given by the AG as "Lakhs". The assessing officer has only tried to corroborate his interpretation by comparing the aggregate amount noted in the loose sheet with the stamp duty valuation. However, as pointed out by the assessee, the alleged cash payment together with the purchase value declared by the assessee far exceeds the stamp duty valuation and hence such kind of corroboration is not acceptable. Even otherwise, the stamp duty valuation stated to be adopted by sec 50C is only a legal fiction applicable to a seller of property and it does not automatically support the conclusion that the difference between the stamp duty valuation and the actual sale consideration as passed hands. Though the AO has interpreted that the cheque payment made by the assessee was Rs.2.85 crores, the said interpretation has been proved to be wrong by the co-owners, since they have actually paid a sum of Rs.3.85 crores by way of cheque. Further, the assessee has stated that the payments have been made in 2004, 2010 and 2011, which fact also does not support the interpretation given by the assessing officer. Under these set of facts, we are of the view that the Ld CIT(A) was justified in observing that the assessing officer has made the impugned addition on surmises and conjectures. The decision rendered by Hon'ble jurisdictional High Court in the case of Lata Mangeshkar (97 1TR 696) supports the case of the assessee. Accordingly, we are of the view that the Ld CIT(A) has passed a From the cogent reading of order passed by Ld. CIT(A) in this case and while taking into consideration the orders of Hon’ble ITAT in 3020, 3021, 2985 & 2986/Mum/11 and 3361/Mum/14, we are of the considered view that Ld. CIT(A) after considering the material placed on record as well as appreciating the various judicial pronouncement on the impugned issue had accordingly taken the decision by applying the law on the facts of the instant case. We have further noticed that the basis for making the impugned additions in the present case is the loose sheets found during the course of search conduct on the Bharat Shah Group. We have also noticed that a very important point that the said loose papers does not contain the name of the assessee, it was undated document and does not bear signature of anyone. Another important point is that both the purchaser as well as seller has denied the contents of the said document. We have further noted that Ld. CIT(A) has rightly considered that as per the details of payment furnished vide page No. 1 of the paper book, total cheque payment in FY 2003-04 is Rs. 1,53,00,000/-, 77,00,000/- paid by the assessee and Rs. 76,00,000/- paid by Smt Lalita Siroya (wife of assessee). Date of search in this case is 15.03.2008 and from the details of payment in the said chart, the entire cheque payment of Rs. 2,37,52,200/- has been made by 12 I.T.A. No. 3619 & 3618/Mum/2013 (AY 2004-05) Ashok Bastimal Siroya & Lalita Ashok Siroya 18.02.2008. As per the seized document, cheque payment received, as seen, is Rs. 1 crore only. Therefore, even the details of cheque payment till the date of search do not match with the noting in the sheet. After appreciating the detailed findings recorded by Ld. CIT(A), we found that Ld. CIT(A) has rightly concluded that on the examination of the copy of seized documents as provided together with the facts of the case and also considering the glaring mis-matches, there was an absence of independent, reliable, corroborative evidence and therefore it was rightly held by Ld. CIT(A) that the said document, in any manner cannot be held as genuine and reliable to hold that the assessee has paid unaccounted cash for the purchase of property. We are also of the considered view that in the absence of any other corroborative evidence to establish a direct nexus, it cannot be said that the notings in the loose paper are genuine and hence by virtue of said document, the AO could not have hold that undisclosed cash payment of Rs. 1,60,90,191/- has been made by the assessee with his wife. Moreover the Coordinate Bench of ITAT has already adjudicated this issue. No new circumstances or arguments have been brought on record before us by the learned DR in order to controvert or rebut the findings recorded by the learned CIT (A). Moreover, there are no reason for us to deviate from the findings recorded by the learned CIT (A). Therefore, we are of the considered view that