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TMI Blog2016 (4) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the Ld. Commissioner of Income Tax (Appeals)-V erred in confirming amount of Rs. 18 lakhs as unexplained/undisclosed payment made to Ms. Zahira Sheikh and added the same to the total income. 2. On the facts and in the circumstances of the case and in law, the Ld. Assessing Officer, Ward 5(1) erred in treating and the Ld. Commissioner of Income Tax (Appeals)-V erred in confirming amount of Rs. 3,19,500/- as unexplained cash credit u/s 68 of the I.T. Act, 1961. 3. The appellant craves leave to amend, to alter, to add or to delete the grounds of appeal. 2.1 The only issue raised by the assessee in this appeal is with regard to the addition made by the Assessing Officer and confirmed by the CIT(A) amounting to Rs. 18 lakhs paid to Ms. Zahira Sheikh as unexplained/undisclosed payment. The facts of the issue are that in the case of Ms. Zahira H. Sheikh and others vs. State of Gujarat & Others, the Hon'ble Supreme Court delivered its judgment on 08.03.2006 for Criminal Miscellaneous Petition No.6658-6661 of 2004 in Criminal Appeals No.446-449 of 2004. In the said judgment, the Hon'ble Apex Court has given certain directions to the Income-tax Department, inter alia, observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r conversation with Shri Nisar Bapu was made and you admitted that you had given an amount of Rs. 18 lakhs to Ms. Zahira H Sheikh, Best Bakery, Hanuman Tekri, Baroda. Similarly these facts were admitted by your cousin Shri Chandrakant Ramcharan Shrivastava alias Bhattoo with Shri Nisar Bapu that you have given an amount of Rs. 18 lakhs to Ms. Zahira Sheikh and this payments were made at the residence of SHri Shaileshbhai Patel. This VCD narrates various dates of the happenings/events occurred in respect of Ms. Zahira Sheikh and accordingly, the financial transaction relates to this assessment year. Please explain the details elaborately in this regard. Do you want to see and go through this VCD and give the reasons thereof including the explanation of sources of this deal. Ans. I have already seen this Tehelka VCD in Supreme Court in big screen. Therefore, I do not want to see this VCD again. In this Tehelka VCD, my picture is reflected, but voice is not mine and it is duplicate. This was made only for the purpose of creating problems in political affairs as I am an MLA from BJP. The Supreme Court relieved me. I never met Ms. Zahira Heikh and I do not know her. Entire transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e after her arrival in November, 2004, the addition of Rs. 18 lakhs is sustained." 2.4 Before us, the ld. Authorized Representative for the assessee reiterated the submissions as were made before the CIT(A) and submitted that the addition in question be deleted. On the other hand, ld. Departmental Representative supported the orders of the authorities below. 2.5 Having considered the rival contentions and perused the material placed before us, we find that the assessee is a sitting MLA from Waghodia, Baroda, Guajrat. During the year under consideration, the assessee has shown income from salary, interest and other miscellaneous income. In case of Ms. Zahira H Sheikh & others V/s. State of Gujarat & Others, the Hon'ble Supreme Court delivered its judgment on 8.3.2006 for Criminal Miscellaneous Petition No. 6658- 6661 of 2004 in Criminal Appeals No.446-449 of 2007, as discussed above, wherein the Hon'ble Apex Court was pleased to direct the Income Tax Department and left it to their discretion to initiate appropriate proceedings as discussed above. It was also directed by the Hon'ble Apex Court that, if required, the Income Tax Authorities may inquire Madhu Shrivastav and B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and take the action only if any tangible material came to surface, as discussed above. Again, the direction of the Hon'ble Supreme Court are clear that the Income Tax Authorities could require Madhu Shrivastava and Bhatloo Shrivastava to explain as to why claim as made in the VCD of paying money shall not be further enquired into and if any tangible material comes to surface, appropriate action under the Income Tax Law shall be taken notwithstanding the findings recorded by the inquiry officer that there is no acceptable material to show that they had paid money, as claimed to Zahira. It shows that everything was left with the Income-tax Department. The Income-tax Authorities can take action against the assessee only if any tangible material comes to surface during the course of assessment as well as appellate proceedings. In the present case, there is nothing on record to suggest that the Revenue Authorities could unearth any evidence/tangible material against the assessee, either during the course of assessment proceedings or appellate proceedings, to show that the assessee has paid the money of Rs. 18 lakhs to Ms. Zahira Sheikh. It is only the version of DVD which is the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see - Shri Chandrakant R. Shrivastav 5. The sole ground raised by the assessee in this appeal reads as under:- The learned Commissioner of Income-tax (Appeals)-V erred in confirming the payment of Rs. 18 lacs made to Ms. Zahira H. Sheikh under section 69C of the Income-tax Act, 1961 on protective basis for the AY 2005-06 without considering the facts of the case. 5.1 In this case, the Assessing Officer made the addition of Rs. 18 lacs under Section 69C of the Act on protective basis which was confirmed by the CIT(A), by observing as under:- "3.8 I have carefully considered the submissions made by the AR of the appellant, remand report and also statements averred in the impugned assessment order. There is considerable force in the submissions made by the AR of the appellant. In this regard, it is to be mentioned here that Hon. Supreme Court is very clear that as per the findings recorded by the Inquiry Officer after considering the said VCD, there was no acceptable material to show that the appellant or other persons had paid money to Ms. Zahira as alleged. The AO has not been able to bring on record even an iota of evidence to prove that the appellant had paid Rs. 18 lacs to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that if any evidence is used against the appellant, without confronting the same to him, such an action is illegal, hence the addition needs to be quashed. In this regard, reliance is placed on the decision of Balbir Singh Narula vs. ITO, 53 ITD 88 (Delhi Bench). It is also a well settled legal position after the judgement of Hon'ble Supreme Court in the case of Kishinchadn Chellaram vs. CIT (1980) 125 ITR 713, that any material collected by the AO cannot be used against him unless the assessee has been allowed a chance to rebut the same. It is, therefore, abundantly clear that instead of bringing any material evidence that the appellant paid money to Ms. Zahira, the AO simply directed the appellant to prove that the VCD was fake. Since the AO has not brought any material on record or any evidence to prove that the alleged payment has been made to Ms. Zahira by the appellant, it is very difficult to sustain the addition in the hands of the appellant. Another peculiar feature of the addition is that the same has been added in both the assessment years 2004-05 and 2005-06, which is also very difficult to sustain. Above all, the addition has been made by the AO on protective basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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