TaxTMI 
TaxTMI 
2022 (7) TMI 1208
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....peals and the cross objections relate to the same assessee circumventing the identical issue, these are heard analogously and are being disposed of by common order. ITA No. 305/Ahd/2014 is taken as the lead case. 3. The brief facts leading to the case is this that a search was carried out under Section 132 of the Act in the Heart Care group of cases on 21.08.2008. The said Heart Care group consisted of Cardiologists and Cardiac Surgeons who were working under the concept of group practice; the main persons whereof are as follows: Cardiologists (1) Dr. Keyur Parikh (2) Dr. Milan Chag (3) Dr. Urmil Shah (4) Dr. Hemant Baxi (5) Dr. Anish Chandrana (6) Dr. Ajay Naik (7) Dr. Satya Gupta Cardiac Surgeon (1) Dr. Anil Jain (2) Dr. S. N. Mallya (3) Dr. Naman Shastri (4) Dr. Vishal Gupta (5) Dr. Chirag Mehta (6) Dr. Dhiren Shah (7) Dr. Bharat Trivedi 4. The Cardiologists and Cardiac Surgeon group decided to start hospital project for which land was identified near Sola, Ahmedabad and further decided to purchase the said land in the name of C....
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....t year 2008- 09 Income to be assessed in the hands of the appellant in assessment year 200708 Income to be assessed in the hands of CCCP L in assessment year 200809 Income to be assessed in the hands of CCCPL in assessment year 2007-08 Dr Keyur Parikh 552,50,000 130,00,000 300,000 107,00,000 315,00,000 Dr Dhiren Shah 25, 50,000 25, 15,000 Dr Hemang Baxi 55,00,000 55,00,000 Dr Milan Chag 112, 50,000 12,50,000 75,00,000 25,00.000 Dr A/ai Naik 21,25,000 21,25,000 Dr Satya Gupta 22,95,000 22 95,000 Dr Urmil Shah 46,75,000 11,75,000 35,00,000(subject to verification) Dr Anish Chandarana 46,75,000 31,75,000 15,00,000 8. On the above basis assessment was reopened by the Ld. AO and notice under Section 148 was issued on 15.11.2011 after recording the following reasons for the same the relevant extract whereof are reproduced herein below: "On going through entries in seized paper named as "Hosp. Det-Party pay de....
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.... and after verification and careful consideration of the material on record it was decided to tax the unaccounted income in relation to investment in land in the hands of the doctors. All the doctors had challenged the said addition in appeal before Honourable Commissioner (Appeal) III, Ahmedabad. After hearing of the appellants the Honourable Commissioner (Appeal) has decided to tax the unaccounted income in assessment years 2007-08 and 2008-09 in case of doctors and the assessee. The assessee had no opportunity to represent its case before Honourable Commissioner (Appeal). Therefore, the direction to tax the assessee without hearing is against the principles of natural justice. The settled issue is disturbed due to change of opinion. The addition is directed in case of the assessee for the reason that it could not be sustained in the case of doctors. All the doctors have not accepted the appellate order of CIT(A) and challenged the same before Hounrable (TAT, Ahmedabad. Therefore, the findings of CIT(A) are not final. It may be noted that the return of income filed u/s 153A has been assessed u/s 143(3) of the I.T. Act, 1961 vi....
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....to Dr Paras Doshi of Rs. 14 Lacs and Rupal Doshi of Rs. 10 Lacs ( both junior doctors attached to Dr Keyur Parikh ). Similarly against the entry of Rs. 60 lakh, Dr Keyur Parikh has shown investment in the shares of Akaash Ceramics Private Limited of Rs. 60 Lacs. The amount of Rs. 24 Lacs and 60 Lacs are still shown as receivable by Dr Keyur Parikh from these parties viz, Dr Paras Doshi/ Rupal Doshi and Akaash Ceramics Private Limited respectively. In the seized document it is categorically written that cash has been received by CCCPL from Dr Keyur Parikh. Therefore, based on the seized material found from the premises of the company CCCPL, it can be concluded that in cases where amount is shown as received in cash from a particular Doctor, then, that amount is considered to have been paid in cash to the company CCCPL by the said doctor and the onus is on the doctor to prove the source of the same. In case cheque has been shown as received by CCCPL from the particular doctor, then the onus lies on the company to explain the source of such cash payment given for the purchase of land. 5.6 On the basis of the above premise it is seen that the have either paid cash doctors have....
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.... Chandarana 3/26/2007 1,500,000 750000 to CCC 17/3/07 4/13/2007 1,500,000 Shaligram Buildcom P L 5/1/2007 500,000 5/16/2007 750,000 10/15/2007 200,000 11/15/2007 225,000 Sub Total 4,675,000 In the books of accounts of Dr Anish Chandarana Rs.15 Lacs has been shown as purchase, of equity shares of company Shaligram Buildcon Private Limited on 16/4/2007. Besides this, loan of Rs. 750,000/- has been paid to CCCPL on 19/3/2007. Some loan has been shown by in favour of his HUF namely Anishbhai Chandarana HUF of Rs. 20 Lacs on 19/2/2007, Rs.50 Lacs on 26/2/2007, Rs. 15 Lacs on 19/3/2007 and Rs. 15 Lacs on 7/4/2007. Further loan of f 10 lakh is also shown on 29/3/20$$ Himanshu DhananL Only the amount of Rs.15 lakh is shown as paid to Shaligram Buildcon Private Limited for the purchase of equity shares tallies with the books of accounts of Dr Anish Chandarana. Thus, Rs. 15 lacs is added in the case of the company CCCPL in the assessment year 2007-08 as payment ahs been made on 19.07.2007. (Addition R....
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....ah shown loan and advances as on 31/8/2011 4 15/10/07 2.50 No Direct nexus of Payment 5 01/11/07 1.75 No Direct nexus of Payment 6 23/01/2008 2.50 No Direct nexus of Payment Total 46.75 It is seen that cheque of Rs. 30 Lacs dated 24/4/2007 issued in the name of the TORREL Cosmetics Private Limited and of Rs. 5 Lacs dated 14/10/2007 in the names of Bharat Shah (Rs. 3 Lacs) and Milan Shah (Rs. 2 Lacs), hence the amount of Rs. 35 Lacs is taxed in the hands of the company CCCPL . As per the direction of the Ld. CIT(A), a letter was written to CCCPL to confirm whether the amount as mentioned above has been received by them. However, the assessee company has not admitted receipt of these cheques. However, from the bank account of Shri Urmil G Shah, it is evident that the cheque numbers as mentioned above has been issued. Further, as per entries in seized paper named as "Hosp. Det. - Party pay details" the amount of Rs. 30,00,000/-, Rs.500,000 and Rs.250,000/- has been shown as paid on 24/4/2007, 14/10/2007 and 15/10/2007, similarly as per the details of the loans advance and inv....
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....ench in the case of Dr. Keyur Parikh. On this aspect the Ld. A.R. drew our attention to Page 36 of the order passed by the Coordinate Bench. It was further argued by the Ld. Senior Counsel appearing for the assessee that so far as the statement of the doctors admitting cash involvement in such transaction is concerned it was already recorded by the Coordinate Bench that Dr Jain has kept on changing the statement and therefore as far as his statement is concerned, those are not said to be very dependable; a detailed discussion took place in the order passed by the Coordinate Bench as mentioned above in this respect which has been relied by the Ld. AR. It was further argued that all these aspect were duly taken care of by the Ld. CIT(A) while deleting addition made by the Ld. AO in the case of the Doctors. In that view of the matter the appeal preferred by the Revenue against the assessee herein has no basis and, thus, liable to be dismissed as argued by the Ld. AR. 15. We have heard the rival submissions made by the respective parties, and we have also perused the relevant materials available on record. 16. It appears that while deleting the addition made by the Ld. AO the Ld.....
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....ng where decision to fight the case was taken between the members of CCCPL and I retracted to the statement I made during the search. However, after realizing the amount of material seized from the heart Care Clinic, I felt it was a futile exercise to fight against the income Tax Department, so I declared the cash paid by me towards the hospital project, arranged from undisclosed sources and paid the tax with interest and penalty on the same to avoid further litigation with the income tax Department Que: 26 Do you remember when the questions which you have replied by statement dated 13/04/2010 were given to you by the Income tax Department Rs Ans: No I do not remember the exact date. Que.:26 Can you tell us within how many days from receiving this questions, you must have to replied the same Rs Ans.: No I do not remember the exact date. Que: 27 Can you tell us could it be more then month or less then one month Rs Ans: No. Que.:28 Did you personally go and deliver the typed copy to the department or did you deliver it through someone else Rs Ans: I think it was submitted by all of us, i.e., me, Chirag Mehta, and....
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....operand! of earning undisclosed income has not been find out. * There is no finding about the other persons who had also contributed cash for purchase of land by CCCPL. * The concerned officer had satisfied with the confirmation of payment of cash by the respective doctor and receipt of cash on exit * There is no finding that who has returned the cash. From the above submission it is argued that the purpose of recording of so called statement appears to trap the other doctors who are not accepting the cash payment in purchase of land by CCCPL. 4 No body has paid cash directly to the assessee as well as no body has received cash directly from the assessee. All the cash transactions are taken place with the third person. 5 None of the doctors know the land owners. However, Dr Bharat R Trivedi has signed the sale deed as witness for the signatory as seller of land. 6 None of the doctors have never seen or met land owners 7 None of the doctors are present when the payments are made to land owners. 8 All the doctors had contributed cash payments towards purchase of land by CCCPL. 9 No receipt has been....
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....of its income, penalty proceedings u/s.271AAA of the Act are initiated separately. 7. Shri R.G. Shah, CA, appeared on behalf of appellant and intimated that Hon'ble ITAT, 'B' Bench, Ahmedabad, has passed order dtd. 18/10/2013 in the case of Dr. Keyur Parikh and others. Copy of order of Hon'ble ITAT in IT(ss)A No. 604,610&601/Ahd/2011 was filed. From the perusal of this order it is found that the first ground of the revenue in the case of Dr. Keyur Parikh was as follows: "The Ld. CIT(A) has erred in law and on facts and circumstances of the case by providing relief of Rs. 4,22,50,000/-to the assessee out of an addition of Rs.5,52,50,000/- on the issue of unaccounted investment for the purchase of land by holding that the said amount should be taxed in the hands of the company M/s. CCCPL. " 8. This ground has been decided by Hon'ble ITAT with the following observation: "Next point. It is a universal law that the 'Suspicion howsoever strong cannot take the place of evidence'. At best, it can only lead to investigation. No person can be punished merely on the basis of a doubt, but side by side, must not be spared on the basis of u....
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....he Revenue. In the light of this submission, these grounds being general in nature and not raising any particular legal issue, therefore, dismissed being redundant. 15. Ground Nos.3,4 & 5 are reproduced below: "3. The learned Commissioner (Appeal) erred in fact and in law in confirming the addition of Rs.1,30,00,000/- as unaccounted income utilized in acquiring the land by the company CCCPL 4. The learned Commissioner (Appeal) erred in fact and in law in directing the addition of Rs.3,00,000/- as unaccounted income in assessment year 2007-08 utilized in acquiring the land by the company CCCPL 5.(A) The learned Commissioner (Appeal) erred In fact and In law in directing the addition of Rs. 1,Q7,OOQ/- in the hands of company CCCPL as unaccounted income in assessment year 2007-08 utilized in acquiring the land. (B) The learned Commissioner (Appeal) erred in fact and in law in directing the addition of Rs 3,15,00,000/- in the hands of company CCCPL as unaccounted income in assessment year 2008-09 utilized in acquiring the land, (c) The learned Commissioner (Appeal) erred in fact and in law in directing the addition of Rs.4,57,23,509....
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....re found recorded as per the seized material. There was another fact that the appellant hod shown share application money of Aakash Ceramic Pvt. Ltd. of Rs.13 lacs dated 11.12.2007. Therefore, the assessee has tried to explain the source of the deposit. Learned CIT(A) has examined those facts and thereupon arrived at the conclusion as under: "Further, since the amount of Rs.25 lakh has been shown as paid on 3.1.2007, therefore, this amount has to be considered in the hands of CCCPL in assessment year 2007-08. In short, the addition of Rs. 12.50 lacs is sustained in the hands of the appellant Dr. Milan Chug in assessment year 2008-09 and the balance amount of Rs.100 lacs is directed to be assessed in the hands of the company CCCPL in two different assessment years i.e. Rs.25 Lacs in assessment year 2007-08 and Rs. 75 Lacs in assessment year 2008-09." 29. A view has already been taken that in the absence of a direct evidence of cash involvement the impugned addition did not survive. In consequence thereof the relief given by learned CIT(A) pertaining to the year under consideration is hereby confirmed. The ground of the Revenue is, therefore, dismissed. 10.....
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....taxed in the hands of the company CCCPL and the balance amount of Rs.11.75 lacs in the hands of the appellant Doctor. Otherwise, the whole amount ofRs.46.75 lacs is to be taxed in the hands of the appellant Doctor. 42. We are not convinced the manner in which learned CIT(A) has held that the balance amount of Rs.11.75 lacs was to be taxed in the hands of the assessee. As far as cash investment towards purchase of property is concerned a view has already been taken which is to be applied in the present case as well. Resultantly, the ground of the Revenue has no force. Hence dismissed. 43. In the result, appeal of the Revenue is dismissed." 17. It appears from the records that the order passed by the Ld. CIT(A)III, Ahmedabad, dated 27.09.2011 cross appeals respectively filed by the assessee and the Revenue before us in IT(SS)A No. 604/Ahd/2011, IT(SS)A No.610/Ahd/2011, IT(SS)A No.601/Ahd/2011, IT(SS)A No.674/Ahd/2011, IT(SS)A No.603/Ahd/2011, IT(SS)A No.639/Ahd/2011, IT(SS)A No.612/Ahd/2011, C.O. No.29/Ahd/2012, IT(SS)A No.602/Ahd/2011, IT(SS)A No.640/Ahd/2011, IT(SS)A No.634/Ahd/2011, IT(SS)A No.652/Ahd/2011, IT(SS)A No.611/Ahd/2011, C.O. No.28/Ahd/2012 for A.Y.....
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....rvation is made hereinbelow: "8.5 Next point. We have also examined the statements of various doctors which were used by the Revenue Department against the assessee. A statement of Dr. Anil R. Jain was recorded on 23rd of September, 2008 u/s. 132(4) of IT Act. In that statement, there was no such acceptance of involvement of cash transaction. Question No.7, 8 &9 and Answer No.7, 8 & 9 of the said statement were the direct questions but in those answers there was categorical denial of any investment other than the share capital. Dr. Anil Jain has stated that he had opted out from the project and the amount he has invested was refunded as his share application money. Later on an another statement was recorded by the ITO and in that statement Dr. Anil Jain had taken a turtle-turn and alleged the cash component. If we compare a statement u/s.132(4) with the statement made u/s.131 of IT Act then the law is very clear that a statement u/s132(4) has evidentiary value and not the statement made u/s.131 of IT Act. A statement recorded u/s. 132(4) is a statement on oath. Therefore, a statement recorded on oath can be used as an evidence. As against that a statement recorded u/s.131 ....
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....egal action so far was taken against the sellers of the property. According to him, Revenue Department should have charged the capital gain on the alleged cash component from those companies who have sold the property. By not taking any action the Revenue Department had weakened the allegation. We have asked this question from the Revenue Department but failed to get any satisfactory reply. 8.12 From the side of assessee few case laws have been cited in support of the contention that learned CIT(A) went wrong in directing the assessment to be in the hands of the assessee company. In the case of CIT Vs. Krishi Udpadan Mandi Samiti, 336 ITR 77 (Ald), it was held that there was no material with CIT(A) to direct the receipts to be taxed in the hand of the Mandi Parishad. It was held that such directions were without jurisdictions. Likewise in the case of Mrs. Banoo E. Cawasji, 10 Taxman 97 (MP) it was held that CIT(A) was not competent to issue direction to cancel an assessment made in the case of the deceased. An another order has also been cited, namely, Sun Metal Factory (I) (P.) Ltd., 124 ITD 14 (Chennai). In this judgment, a search was on the assessee and on the managing ....
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.... suspected by the Revenue Department. We hereby hold that there was no evidence in possession of the Revenue Department to hold that the assessee had in fact made an unaccounted investment towards the purchase of the property." ............ "12. With this background, we have heard both the sides. As far as the issue of the existence of cash component in the purchase of the land is concerned, we have already taken a view that it was not conclusively established by the Revenue Department. In addition to the discussion made hereinabove on this issue, again we have noted that while deciding this ground learned CIT(A) has reiterated that the AO had presumed that some of the doctors have contributed cash for the allotment of the shares. This is the point which has been emphasized and vehemently objected by the assessee that the entire proceedings in respect of the involvement of cash towards purchase of property was based upon the presumption made by the AO. Even the learned CIT(A) has opined that, "even if it is presumed that the cash was paid back to the outgoing surgeons, the same was paid by the company CCCPL and not by Keyur Parikh in his individual capacity"....
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....e as mentioned in Paragraph 19 hereinabove which was initially admitted by the Hon'ble High Court by and under its order dated 15.10.2014. However, the entire set of appeals have been dismissed on 04.09.2018 since all were withdrawn by the Revenue due to tax effect below the minimum threshold limit provided by the CBDT in its Circular dated 11.07.2018 enabling the Department to prefer and maintain appeals before the High Court. Copy of both the orders passed by the Hon'ble High Court were duly been filed before us by the respective parties. Dismissal of this order dated 04.09.2018 passed by the Hon'ble Gujarat High Court R/Tax Appeal No. 26 of 2014 and ors. confirms the fact of the order dated 18.10.2013 passed by the Coordinate Bench attaining finality. As we have already discussed on the observation made by the Coordinate Bench on the identical issue involved in this matter relation to the addition on the ground of unaccounted investment for the purchase of land whereby and whereunder it has been repeatedly hold that there was no evidence found in the possession of Revenue to hold that assessee had in fact made unaccounted investment towards the purchase of the property or was th....