LATE SHRI KANTILAL C. KOTHAWALA BY LEGAL HEIR DR. ASHA JHAVERI,MUMBAI vs. ITO - 18(1)(3), MUMBAI

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ITA 6535/MUM/2016Status: DisposedITAT Mumbai31 January 2017AY 2001-023 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO failed to provide clinching evidence of payment and the burden was on the AO to demonstrate the payment. Following previous similar judgments, the ground raised on merits was allowed.

What were the facts?

The Assessing Officer (AO) made an addition of Rs. 11,02,500/- based on a diary seized from a third party. The assessee argued that the diary's authenticity was not verified and the person who allegedly maintained it denied receiving money from the assessee during cross-examination.

What were the issues?

Whether an addition under Section 68 of the Income Tax Act is justified based on a diary seized from a third party without proper verification and corroboration.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC, MUMBAI

Before: Shri R P Tolani

For Respondent: Ms. Beena Santosh
Hearing: 31.01.2017Pronounced: 31.01.2017

O R D E R Per R P Tolani, Judicial Member

This is assessee’s appeal.

2.

Ground no.I in relation to section 148(1) was not pressed and, hence, dismissed.

3.

One issue is raised by following ground:

“II Merit 3. The Ld. CIT(A) erred in upholding the action of A.O. in making addition of Rs.11,02,500/- relying on the diary seized from the premises of a third party without verifying the authenticity of the contents of the said diary. The Appellant, therefore, prays that the addition of Rs.11,02,500/- under section 68 of the Act is unjustified and the same may be deleted.

Late Shri Kantilal C Kothawala By legal heir Dr. Asha Jhaveri.

4.

The Ld. CIT(A) failed to appreciate that Mr. Shashikant J Mandavkar, purported to have been maintained the seized diary, during the cross examination categorically denied of receiving any money from the Appellant. Hence, the addition of Rs.11,02,500/- under section 68 of the Act is without any basis and the same may be deleted.” 4. The learned counsel for the assessee contends that identical issue arose in various other cases, which have been considered by the Tribunal vide its order dated 11.09.2015 in ITA 306/Mum/2014 for A.Y. 2001-02 in the case of Dr Prakesh Kher, which are as under:

i. Mr. Babanrao V Mande, ITA 3441/Mum/2009, A.Y. 2000-01, dated 20/08/2010 ii. Mr. Vijay D Dagha, A.Y. 2001-02 dated 27/08/2014 iii. Mr. Vilas Shankar Dalvi, ITA No.1807/Mum/2013 dated 12/06/2013 Considering all these orders, it was held that i) no material has been brought on record by the AO that any clinching evidence of payment of capitation fees to Shri Prakash Patil was brought on record. ii) The burden was on the AO to demonstrate by sufficient evidence that the assessee had indeed paid separate cash donation/capitation fees in cash to DY Patil Group for medical college.

In the aforesaid three judgments, on similar facts and circumstances, learned CIT(A) had deleted the additions, whereas in the case of Dr. Prakash Kher and the assessee in question, the learned CIT(A) has taken different view without giving any cogent reason as to why a different view has been taken.

Late Shri Kantilal C Kothawala By legal heir Dr. Asha Jhaveri.

5.

The learned counsel for the assessee contended that the issue in question, on facts and circumstances, is covered in favour of the assessee by numerous judgments as mentioned above.

6.

The learned DR supported the orders of the authorities below.

7.

I have heard the rival submissions and have perused the material available on record. The facts and circumstances are similar in the above referred cases, which has been decided by the Mumbai Bench of this Tribunal in the case of Dr. Prakash Kher (supra). Respectfully following them the ground raised on merits is allowed.

8.

In the result, the assessee’s appeal is partly allowed.

Order pronounced in the open court on this day of 31st January, 2017.

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