BHARAT V RELAN,MUMBAI vs. ITO 9(3)(2), MUMBAI

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ITA 1686/MUM/2013Status: DisposedITAT Mumbai30 August 2016AY 2008-094 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee was not given a fair opportunity to cross-examine the partner of Shivam Corporation, whose statement formed the basis of the additions. Therefore, the matter was restored back to the Assessing Officer.

What were the facts?

The Assessing Officer made an addition of Rs. 10,63,598/- for cash payment towards property purchase and Rs. 5,71,428/- for car parking charges. These additions were based on a survey conducted in the case of Shivam Corporation, where its partner admitted unaccounted cash payments.

What were the issues?

Whether the addition made by the Assessing Officer, based on a survey conducted in another entity's case, is sustainable without providing the assessee an opportunity for cross-examination.

Which sections of the Income-tax Act were involved?

Section 133A,Section 143(3),Section 147,Section 148,Section 254(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI “B” BENCH

For Respondent: Ms. Vinita Menon-DR, Shri Hari Krishan
Hearing: 30.08.2016Pronounced: 30.08.2016

Order u/s 254(1) of the Income-tax Act, 1961(the Act) O R D E R �याियक सद�य के अनुसार Per Mahavir Singh,JM : This appeal by the assessee is arising out of the order of CIT(A)-20, Mumbai in Appeal No.CIT(A)20/9(3)(2)/IT-377/2011-12, order dated 14.12.2012. Assessment was framed by ITO ward-9(3)-2, Mumbai u/s. 143(3) r.w.s. 147 of the income tax Act, 1961 (hereinafter “the Act”) for the assessment year 2008-09 vide his order dated 29.11.2011.

2.

The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the Assessing Officer in making addition of payment for purchase of property, in cash in excess of payment disclosed in the sale deed, at 1686/M/13 Bharat Relan Rs.10,63,598/- and also payment of car parking charges amounting to Rs.5,71,428/-.

For this the assessee has raised the following two grounds:-

1.

“1.The ld.CIT(A)-20, Mumbai has erred in confirming the action of A.O. of adding Rs.10,63,598/- towards payment for purchase of property in cash.

2. The ld.CIT(A)-20, Mumbai has also erred in confirming the action of A.O. of adding Rs.5,71,428/- on account of payment for car parking charges in cash.”

3.

We have heard rival contentions and gone through the facts and circumstances of the case. Briefly stated facts are that a survey u/s.133 of the Act was carried out by the department in the case of M/s. Shivam Corporation, wherein Shivam Corporation admitted unaccounted cash payment and addition made by AO in their hands is as under :-

Details of additional income A] Parking Cash – Rs.40,00,000/- The assessee ahs not maintained the list regarding names of persons from whom the parking charges have been received in cash.

B] Statement showing difference between ready Reckoner Price and Agreement Price Enclosed statement showing difference between Ready Reckoner Price and Agreement Price. The difference is Rs.1,13,54,845/- As per statement at the time of survey in page no.8 the assessee has written Sale by Cash Rs.1,58,00,000/- Thus the Income declared under sale by cash is as under:- Difference between Ready Reckoner Price - Rs.1,13,54,845/- Miscellaneous Income - Rs. 14,45,155/- - Rs.1.58,00,000/- We are also enclosing herewith following Agreements:-

1.

Ramesh B. Shah 2. Kantilal Manilal Shah

1686/M/13 Bharat Relan

3. Rajnikant Popatlal Shah 4. Sushila Gunvantlal Dalal 5. Bharat V.Relan 6. Muktiram Agrawal 7. Hetal B. Gogri Total Additional Income :- Parking charges Cash Rs. 40,00,000/- Sale by cash as stated above Rs.1,58,00,000/- Rs.1,98,00,000/- 4. From the above it can be noticed that the assessee has purchased one flat No.401 admeasuring 1218 sq.ft. and also car parking space. According to AO the assessee has paid a sum of Rs.10.6 lakhs as own money for purchase of flat and Rs.5,71,428/- for parking space allotment. The assessee requested the AO that this addition is made on the basis of statement of partner of Shivam Corporation-Mr.

Deepak B. Sahni recorded on 19.10.2011 i.e., during the course of survey u/s. 133A of the Act. According to AO, out of the total disclosure these two amounts were paid by the assessee as own money. Accordingly, the assessment was re-opened by issuing notice u/s. 148 of the Act after recording of reasons. The CIT(A) also confirmed the action of the Assessing Officer making addition. Aggrieved, by the orders of lower authorities, now assessee is in second appeal before the Tribunal.

5.

Before us ld. Counsel for the assessee made only one plea that no opportunity of cross examination of Shri Deepak B. Sahni was allowed by the Revenue despite a specific plea taken before the Assessing Officer as well as before CIT(A). On query from the Bench, ld. SR.DR fairly conceded that a fair opportunity of hearing/cross examination of Shri Deepak B. Sahani be allowed to the assessee. In view of the above facts and circumstances, we are of the view that let this issue be restored back

1686/M/13 Bharat Relan to the file of AO to allow assessee an opportunity to cross examine Shri Deepak B. Sahni, partner of Shivam Corporation. Accordingly, we set aside the orders of lower authorities and remand the matter back to the file of Assessing Officer.

6.

In the result, appeal of the assessee is allowed for statistical purposes.

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