TMI Blog2015 (10) TMI 2575X X X X Extracts X X X X X X X X Extracts X X X X ..... additional room with attached toilet in Alliance Hotel, 3rd floor, Empire Building. The fact of reconstruction of Alliance Hotel was accepted by Shri Kasan Ghaswala, being Managing Partner of the firm. In view of this it is absolutely evident that the Assessing Officer has made the addition on conjuncture and surmises without concrete evidence in his possession. The Assessing Officer of Alliance Hotel did not make any separate addition of ₹ 40,00,000/-. In fact in the aforesaid computer sheet did not add this amount to the total income of Alliance Hotel. This sum of ₹ 1.08 Crores included the sum of ₹ 4000,000/-, added by Assessing Officer of the assessee to the total income of the assessee. Thus, Assessing Officer of Alliance Hotel was of the opinion that over and above ₹ 2,62,40,000/-, no further addition of ₹ 40,00,000/- is required to be made. In view of our discussion coupled with the fact that provisions of section 69A has no application on the act of assessee’s case therefore, the addition of ₹ 40,00,000/- made by Assessing Officer under section 69A of the Act was rightly directed to be deleted. Accordingly, both the additions of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant prays that the order of the CIT(A) on the above ground be set aside and that of the A.O be restored. 3. Assessee was a partner in M/s. Alliance Hotel upto 14.11.2006. This firm has been running hotel in the name of Empire Royale Hotel on D N Road, Fort, Mumbai. As on 14.11.2006, the partners of this firm were (a) Rukhsana Khalid Ghaswala (b) Farank Omidazdeh and (c) Parvez Mohammed Hussain Ghaswala. Subsequently, the assessee has retired on14.11.2006 and in place of him Kasarn Khalid Ghaswala and Mr. Zishan Khand Ghaswala were admitted into the partnership with aforesaid remaining two partners. M/s. Alliance Hotel wanted to reconstruct and renovate its hotel premises in Empire building at D.N. Road, Mumbai. For this purpose, a project report was prepared in which the expenditure on renovation and reconstruction was estimated at ₹ 6,18,04,770/-. The firm approached Corporation Bank for a loan to enable it to re construct and renovate the hotel premises As per the terms of the Bank, one of the conditions for granting the loan was that the pay orders would be issued by it directly to the contractors or suppliers of construction materials. However, the contractors and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow this amount was utilized by making payment to various persons including ₹ 40,00,000/- to Parvez Sir . (ii) Shri Kashan Ghaswala is a nephew of the assessee became a partner with effect from 15.11.2006 in the firm of M/s Alliance Hotel. In his statement he stated that Parvez Sir appearing on Loose Papers 4 and 5 and also in the cash statement dated 18.11.2006 did not relate to the assessee (Parvez Mohammed Hussain Ghaswa!a). Assessee, in his statements recorded during the course of the assessment proceedings, has also maintained the same stand that Parvez Sir appearing on pages 4 and 5 and the cash statement dated 18.11.2006 did not relate to the assessee. However, the Assessing Officer held that the words Parvez Sir , relates to the assessee and included the sums of R.2,62,40,000/- (appearing on pages 4 and 5 of the impounded papers) and ₹ 40,00,000/- (30,00,000 + 10, 00,000) appearing on the cash statement dated 18.11.2006 as the assessee s income. 5. In appeal assessee submitted written statements, which are reproduced in para 5 of the order of CIT(A). As per the above said statement the Assessing Officer made additions under section 69A of the Act of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the money was received by Mr. Parvez Sir on 11.11.2006. As per the statement recorded of Mr. Parvez Ghaswala he has stated that there is no other person in Alliance Hotel and Hotel City Palace in the name of Parves Sir at the relevant point of time. The learned counsel also drew our attention to para 8 of the assessment order wherein regarding admission it was submitted that an amount of ₹ 6,88,22,000/- has been admitted as unaccounted income of Alliance Hotel. So the additions are not justified and the same have been rightly deleted by the CIT(A). The learned A.R. for the assessee also opposed application of provisions of section 69A and submitted that the order of CIT(A) be upheld. 6. After going through the rival submissions and material on record we find that the addition has been made mainly on the basis of Parvez Sir appearing on the loose paper bearing No. 4 5 and cash statement dated 18.11.2006. In this regard the consistent stand of the assessee has been that Parvez Sir appearing on the loose paper bearing No. 4 5 and cash statement dated 18.11.2006 does not relate to him. He stated that he seized to be a partner with effect from 15.11.2006 in the firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p corner of page 5 shows that the entries were made on 19.12.2006 (after the assessee retired from the firm), the transactions as such relate to 11.11.2006, 11.12.2006, 16.12.2006 and 19.12.2006 showing that the entries were made a few days after the transactions were completed. In this background the stand of the assessee has been that the amounts alleged to have been paid to Parvez Sir (as per the impounded papers) also show that such amounts were disbursed by him to the various heads of labourers in getting the renovation work executed. Having considered the same the CIT(A) rightly held that assessee was not found to be owner of any money, bullion, jewellery or other valuable articles. No concrete evidence has been brought on record by Assessing Officer to establish that the entry Parvez Sir in the impounded paper establishes the fact that it refers to the assessee, i.e. Shri Parvez Mohammed Hussain Ghaswala. Similarly the amount of ₹ 2,62,40,000/- mentioned against the entry of Parvez Sir was ever paid to the assessee. Assessing Officer had made the addition only on surmise that the impounded papers bearing No. 4 5 were containing entries which are dated 11.11.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy been upheld by us in the preceding paragraphs. So there is no use of further discussion on the issue. As regard to the addition of ₹ 40,00,000/-, it was claimed by assessee that this sum of ₹ 40,00,000/- (30,00,000+10,00,000) formed part of ₹ 2,62,42000/- appearing on page 4 of the impounded papers. Further submission in regard to this sum of ₹ 40,00,000/- was that assessee was not found to be the owner of money or valuables of ₹ 40,00,000/- and therefore section 69A of the Act has no bearing. The stand of the assessee has been that under section 69A of the Act, addition can be made if the assessee is found to be the owner of any money or other valuables and such money or valuables were not recorded in the books of account maintained by assessee and the explanation offered by the assessee was not to the satisfaction of Assessing Officer. The consistent stand of assessee in this regard was that as the assessee was not found to be the owner of any money or other valuables, so no addition can be made in assessee s hand invoking section 69A of the Act. The argument of the assessee was that while arriving at unexplained investment made on the reconstruct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/-. In fact in the aforesaid computer sheet did not add this amount to the total income of Alliance Hotel. This sum of ₹ 1.08 Crores included the sum of ₹ 4000,000/-, added by Assessing Officer of the assessee to the total income of the assessee. Thus, Assessing Officer of Alliance Hotel was of the opinion that over and above ₹ 2,62,40,000/-, no further addition of ₹ 40,00,000/- is required to be made. In view of our discussion coupled with the fact that provisions of section 69A has no application on the act of assessee s case therefore, the addition of ₹ 40,00,000/- made by Assessing Officer under section 69A of the Act was rightly directed to be deleted. Accordingly, both the additions of ₹ 2,62,40,000/- plus ₹ 40,00,000/-, aggregating to ₹ 3,02,40,000/-, were rightly directed to be deleted. This reasoned findings of the CIT(A) need not any interference from our side. We uphold the same. In the result, appeal of the Revenue is dismissed. 11. ITA No. 3318/Mum/2013: This appeal was filed by Revenue on following grounds: - (1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was carried before the first Appellate Authority wherein the issue of reopening was challenged. The same has been rejected by the CIT(A). With regard to addition of ₹ 10,69,420/- on basis of digitalized information found in the course of survey conducted on the partnership firm where assessee was a partner. It has been contended that in the alternative only the peak balance of ₹ 4,70,500/- could have been added to the income of the assessee. CIT(A) has considered the submission made on behalf of the assessee and allowed the appeal of assessee. 13. Same has been opposed before us on behalf of Revenue, inter alia, submitting that CIT(A) was no justified in deleting the addition of ₹ 10,69,420/- made by the Assessing Officer under section 69A of the Act relying on the decision of his predecessor in the assessee's own case for AY 2007-08 ignoring the fact that assessee was not able to prove that the said cash was expended for the activities of the firm, as such the assessee obviously becomes the owner of the money so received, and therefore it is correctly taxed in the hands of assessee. Accordingly order of CIT(A) be set aside and that of Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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