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2016 (4) TMI 636 - ITAT AHMEDABAD

2016 (4) TMI 636 - ITAT AHMEDABAD - TMI - Unexplained/undisclosed payment - Held that:- 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 ₹ 18 lakhs to Ms. Zahira Sheikh. It is only the version of DVD which is the basis for making the addition in question, on whic .....

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six out of nine creditors, i.e., Shri Dipak Patel, Shri Sudeep Shrivastav, Shri Naresh Shrivastav, Shri Ramesh Shrivastav, Shri Jagdishbhai Patel and Shri Vivek Shrivastav have filed returns of income and also have PAN and have also filed the confirmation letters. In the case of Shri Anil Kale, it was claimed that he was doing electrical repair work and his income was below taxable limit; and that the loan was advanced out of his savings. In the case of Smt. Santaben Patel, there was a balance .....

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ld be filed. The CIT(A) also held that the payment received by account payee cheque by itself does not fulfill the requirement of section 68 of the Act. In this background, the CIT(A) rightly held that the creditworthiness was not established in respect of loans of ₹ 3,19,500/- in respect of Mrs. Santaben Patel and Shri Jayendra Zala and accordingly confirmed this addition. These reasoned findings of the CIT(A) do not require any interference from our side; we uphold the same. - Decided ag .....

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da dated 08.10.2010 for Assessment Year 2007-08. Since both the appeals relate to some common transactions, these appeals were heard together and are being disposed of by this common order for sake of convenience. ITA No.499/Ahd/2010: AY 2005-06 Assessee - Shri Mahendrabhai B. Shrivastav 2. In this appeal, the assessee has raised following grounds of appeal:- 1. 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. Commi .....

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o 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 ₹ 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 Pe .....

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rivastava and Bhattoo Shrivastava to explain as to why the 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 Incometax 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. We make it clear that we are not directing initiation of proceedings as such, but leaving the matter to th .....

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kh were furnished. After going through the transcript of VCD of Tehelka.com which was received by the Assessing Officer on 11.12.2006 from the Registrar General of Supreme Court of India, the Assessing Officer felt that further investigation/inquiry was required to be conducted in the case of assessee. Accordingly, the Assessing Officer issued summons u/s.l31 of the Act to the assessee on 10.12.2007. Subsequently, the assessee appeared before the Assessing Officer on 18.12.2007 and his statement .....

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or details in respect of financial transactions. In this context, there is one Thehalka VCD, in which your conversation with Shri Nisar Bapu was made and you admitted that you had given an amount of ₹ 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 ₹ 18 lakhs to Ms. Zahira Sheikh and this payments were made .....

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ee 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 transactions of ₹ 18 lakhs with Ms. Zahira Sheikh as seen with Nisar Bapu are not genuine. This can be verified from my bank accounts. I also state that Shri Chandrakant Bhattoo is my cousin and .....

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(1) of the I.T. Act 1961 was recorded on 18.12.2007 wherein you categorically stated that the voice recorded in C.D. was not yours in reply to Q. No. 7 which was specifically admitted by you at the time of conversation with Shri Nisar Bapu. Further, these facts were noticed from the conversation of Shri Nisar Bapu with your cousin Shri Chandrakant R Shrivastava and Shri Shailesh Patel. Please submit your basis/evidences that the voice is not yours. In absence of your justification and evidences, .....

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ssions made by the assessee and concluded that the assessee had failed to prove/justify his claim in respect of financial transaction of ₹ 18 lakhs made with Zahira Shaikh and he added the same as unexplained payment. 2.3 Matter was carried before the First Appellate Authority, wherein various contentions were raised and having considered the same, the CIT(A) upheld the order of the Assessing Officer, by observing as under:- 4.6 I have carefully considered the submission made by the AR of .....

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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 delivere .....

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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. Accordingly the assessee's case was selected for scrutiny. The Assessing Officer has mentioned in his assessment order that after going through the transcript of VCD of Tehelka.com, which was received by him from the Registrar General of Supreme Court of India, he was of the opinion that further investigation needed to be condu .....

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sessee by considering the same as unexplained/undisclosed payment. In this regard, the stand of the assessee has been that during the riots that took place in Vadodara in 2002 which involved burning down of Best Bakery, Ms. Zahira Sheikh had emerged as the witness to the said incident. However, after few days she turned hostile saying that she had not seen anything of the attack for which a case was filed against her in the Supreme Court. An Indian Newspaper, Tehelka released a VCD showing the a .....

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at even though materials do exist to show that money played a vital role in the change of Zahira's stand, yet it could not be directly linked to Madhu Shrivastava or Bhatto Shrivastava." Thus, the Hon ble Supreme Court did not find any evidence against the assessee and the matter was merely left to the Income-tax Authorities to look into the matter 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 .....

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e-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 ₹ 18 lakhs to Ms. Z .....

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ith regard to confirming the addition of ₹ 3,19,500/- as unexplained cash credit u/s 68 of the Income-tax Act. 3.1 The Assessing Officer made addition of ₹ 4,50,000/- as unexplained credit as he was not satisfied regarding the credit worthiness of the 9 creditors. In appeal before the CIT(A), the CIT(A) observed that six out of nine creditors, i.e., Shri Dipak Patel, Shri Sudeep Shrivastav, Shri Naresh Shrivastav, Shri Ramesh Shrivastav, Shri Jagdishbhai Patel and Shri Vivek Shrivast .....

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l income; however, according to CIT(A), no proof of any agricultural activity such as 7/12 records or sale receipts etc. could be produced to establish the credit worthiness. The CIT(A) also noted that Shri Jayendra Zala could not appear before the Assessing Officer and no details such as confirmation or his creditworthiness could be filed. The CIT(A) also held that the payment received by account payee cheque by itself does not fulfill the requirement of section 68 of the Act. In this backgroun .....

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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 ₹ 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 ₹ 18 lacs under Section 69C of the Act on protective basis which was confirmed by the .....

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r 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 ₹ 18 lacs to Ms. Zahira. The AO has not even cited the provisions of section under which he made the addition of ₹ 18 lacs. In the case of the appellant, he has stated all throughout the assessment proceedings that such alleged payment had not been made by him. The AO has also not pinpointed with any cogent material evidenc .....

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trained to finalize the assessment order within the stipulated time. For this reason, further opportunities requested by the assessee, cannot be granted. The main person / star witness of Best bakery, Baroda, i.e. Ms.Zahira Sheikh who received money of ₹ 18 lacs in cash for changing her stand in press conference after returning from Mumbai i.e. on 3.11.2004 as shown in VCD of Tehelka.Com., could appear on 28.12.2007 before the undersigned after at the fag end of December, 2007 i.e. at the .....

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ld make addition as unexplained money paid to Ms.Zahira. In this regard, it is worthwhile to mention here that the appellant has not been provided the alleged VCD even though he has specifically requested the AO to provide the same. It is an established position of law that unless the appellant is provided with the evidence which is intended to be used against the appellant, such evidence cannot be validly used against him. Moreover, it is a settled law that no material can be used against the a .....

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