TMI Blog2013 (11) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... Jain. For the Respondent : Rashmikant C. Modi. ORDER:- PER : Sanjay Arora This is an Appeal by the Revenue agitating the Order by the Commissioner of Income Tax (Appeals)-29, Mumbai ('CIT(A)' for short) dated 17.01.2011, allowing the assessee's appeal contesting its assessment for the assessment year (A.Y.) 2005-06 u/s.143(3) r.w.s 147 of the Income Tax Act, 1961 ('the Act' hereinafter) vide order dated 31.12.2007. 2. The appeal involves an addition in the sum of Rs.60 lakhs toward payment in respect of a tenanted property by the assessee, on account of the same being undisclosed. The same having been since deleted by the ld. CIT(A), the Revenue is in appeal. 2.1 The matter is, thus, essentially factual. It would be relevant to recount the background facts as gathered from the material on record. There was a search operation u/s.132 of the Act on 06.07.2004 on Ajani's Group. Several incriminating documents were recovered from the residential premises of one, Shri Nudruddin B. Ajani and Shri Dawoodali N. Israni. One such was a 'Note' dated 04.04.2004 (copy on record), written in the hand of Shri Nuruddin B. Ajani, which reads as under:- "Regarding Office at Byc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veral years, or even a bank account. The premises under reference was an office premises, taken on rent by a private limited company by the name, Empire Continental Exports (P.) Ltd. There was a change in the share-holding in the said company in September, 2003, with Mrs. Noorjahan N. Jamal and Naushad N. Jamal, the assessee's wife and son respectively, becoming major shareholders therein. As such, even if any money may be considered to have been paid by way of premium for taking the property on rent, the same could have been only during the financial year (f.y.) 2003-04 and not f.y. 2004-05, which is the relevant previous year. As such, even if the Jamals were considered to have made the impugned payment, the same could not be, firstly, in the hands of the assessee in-as-much as he had no interest in the said company and, secondly, could only be for A.Y. 2004-05; the possession according to the Note itself being supposed to be given on 21.03.2004. The appellant had not been given the copy of the statement by the Ajanis for cross-examination, so that it was also not clear if the amount had been disclosed by them in their respective returns. There was also no corroborative evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, rather supports the inference of the money having changed hands, and for the purpose as stated in the Note. That is, the same (Note) is in respect of an actual transaction, i.e., which was actually executed, and which in fact is the sum and substance and the purport of section 292C. Reference in this context is made to the decision by the hon'ble jurisdictional high court in the case of Surendra M. Khandhar v. Asstt. CIT [2010] 321 ITR 254 (Bom.). As such, the said explanation, rather than leading to a rebuttal of the statutory presumption, which the assessee could no doubt with evidence - the same being only a presumption, only reinforces the inference of the fact of the money having been paid in relation to an actual transaction toward taking possession of a property. As regards the date of taking or handing over the possession, the assessee seeks to draw mileage therefrom in-as-much as the Note states of the possession being supposed to be given on 21st March. However, the words subsequent to the said date in the Note would show that the possession could not be given by 21st March, and that a revised date for giving possession was set, i.e., 15th April, 2004, which is apparen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent matter. The absence of an interest (in the company, say) could be pleaded where the payment is denied, i.e., in defence of non-payment, and not to substantiate a difference in the date (of payment). In the instant case, the fact of payment is imminent from the Note, which is to be regarded as, and has been found to be, true. As afore-stated, why the assessee paid the money or made the investment, once it is so found, is for him to state or explain. In other words, the said plea, i.e., absence of interest in the company, which is only an agency through which the possession stands taken, becomes secondary once the fact of payment is established, which is what, being unexplained with regard to its nature and source, is brought to tax. Put differently, the taking of the property on rent by the company is only a part of the explanation, explaining the nature of the transaction, which is otherwise fairly reflected in the Note dated 04.04.2004, so that the said explanation is, as afore-noted, corroborative. However, that would only be with regard to the nature of the amount paid, i.e., toward a purchase consideration or for taking possession of property, and not with regard to it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to raise some aspects, which we find to rather reinforce the presumption and the inference as drawn by the Revenue in view of the evidences found in search, the validity and truth of which for the purpose of effecting an addition to income is not in doubt, having not been rebutted in any manner, and given the mandate of law as explained by the hon'ble high court in the case of Surendra M. Khandhar (supra). The pleadings as raised by the assesse, which found favour with the ld. CIT(A), were on examination found to be of little merit. Thus, while the Revenue has a strong prima facie case, the assessee has not been able to discharge the burden of proof cast on it u/s.69/69A of the Act, though to be fair, for good reasons, so that we cannot preclude the possibility of the assessee having a satisfactory explanation in-as-much as the assessee was indisposed; rather, in a critical state. We think that his legal heirs (who have now been impleaded as representative assessees), being in the know of the transaction/s, ought to have cooperated and assisted in the assessment proceedings. Nevertheless, the assessee's critical state, which may have impacted the whole family, cannot be overlook ..... X X X X Extracts X X X X X X X X Extracts X X X X
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