Iapl/162/2011 Of Commissioner Of Income-Tax v. Shri Deepak M.kothari

Hon'ble Bharati Sapru,J.Hon'ble Salil Kumar Rai,J. This appeal under Section 260-A of the Income Tax Act, 1961(hereinafter referred to as the 'Act') has been filed by thedepartment against the order of the Income Tax AppellateTribunal dated 15.02.2011 and restore the Assessment orderu/s 158 BC of the Income Tax Act, 1961 dated 28.12.2001passed by the Assessing Officer for Block Period ending on18.11.1999. The questions of law sought to be answered as ashereunder: "(1) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was justifiedin law in dismissing the departmental appeal thereby deleting the addition of Rs.2.60 croresin respect of undisclosed investment in Karaka properties based on documents seized duringthe course of search under Section 132 of the I.T. Act, which has the evidentiary value for thepurpose of assessment proceedings also in terms of Section 132 (4A) generally and inspecifically in terms of Section 292C of the I.T. Act." We have heard Shri Shubham Agrawal, learned counsel for theappellant and Shri Abhinav Mehrotra, learned counsel for therespondent. Upon perusal of the assessment order, the order of the CIT(Appeals) as well as the order of the Tribunal, the wellestablished finding of fact is that the assessee had infact notinvested more than 1.5 crores in the Karaka property and theaddition which was sought to be made on the basis of thepresumption that a total amount of Rs.2.60 crores was notsupported or corroborated by any evidence. The findings ofthe Tribunal is recorded in para 18 of the Tribunal's order,which reads as hereunder:- "After considering the submissions of both the parties and the material on record, it appearsthat the Assessing Officer made the impugned additon on the basis of certain unsigned draftMOUs found at the premises of the Ramji Mehrotra and eh was of the view that the assessseehad invested a sum of Rs.2.6 crores in the Karaka Property. The learned CIT (A)categorically states that there was no evidence on record to suggest that the assessee hadpaid anything in excess of Rs.1.5 crore in respect of Karaka property and in this regard affidavit of Shri Ashok Dalal was filed which the Assesing Officer considered it as a self-serving documents and did not giv e any gognizance to the same. According to erhe learnedCIT (A), Shri Ashok Dalal was not a related person of the assessee. In the present case, theassessee made a draft memorandum of Understanding (MOU) with Shri Ashok Dalal for thetenanted property and it was presumed that if the said property got evicted from the tenantsthe market value would have become so as the assessee may get back a sum of Rs.2.6 crore onthe investment of Rs.1.5 crores. However, nothing was found during the course of search orbrought on record that he assessee in fact invested a sum of Rs.2.6 crores. The learned CIT(A)categorically stated in para (ix) at page 27 of the impugned order that no paper orcorrborative evidence was recovered from the assessee or any of his premises at the time ofsearch action and also no corresponding assets were found with the assessee and that therewas not an iota of evidence to prove that the assessee had given a sum of Rs.2.60 crores.According to the learned CIT (A), the entire addition was based on conjectures and surmiseswithout any basis, therefore, the impugned addition was deleted. Nothing contrary to theabove observations of the learned CIT (A) has been brought on record.. We, therefore,considering the totality of the facts, as discussed in the former part of this order, do not seeany valid ground to interfere with the findings of the learned CIT (A) particularly when theaddition was made by the Assessing Officer only on the basis of presumption. In that view ofthe matter, we do not see any merit in this appeal of the Department." No question of law arises as the matter is completely sealed bythe findings of fact. The question is therefore, answered infavour of the assessee and against the department. The appeal is accordingly dismissed.