Case Law Details

Case Name : ITO Vs Shri Parvez Mohammed Hussain Ghaswala (ITAT Mumbai)
Appeal Number : ITA No. 3318/Mum/2013 & ITA No. 819/Mum/2012
Date of Judgement/Order : 30/10/2015
Related Assessment Year : 2004-05 & 2007-08
Courts : All ITAT (1731) ITAT Mumbai (490)

Brief of the Case

ITAT Mumbai held in the case of ITO vs. Shri Parvez Mohammed Hussain Ghaswala that it is undisputed that papers showing the name of “Parvez Sir” were found in the premises of Alliance Hotel during the course of search action and not from assessee. Papers found were not in his handwriting. The partner of Alliance Hotel, Shri Kasam Ghaswala in his statement has stated that payment made to “Parvez Sir” is not the amount paid to the assessee. Neither the survey party nor the Assessing Officer of Alliance Hotel recorded the statement of assessee. Assessee, in his statement before the Assessing Officer, has categorically stated that he is not “Pervez Sir” as mentioned in the papers found from the premises of Alliance Hotel. Assessee also objected to the action of the Assessing Officer in making addition under section 69A. For invoking provisions of section 69A assessee should be the owner of any money, bullion, jewellery or any other valuable articles. In this case of assessee he was not found to be the owner of any money, bullion, jewellery or any other valuable articles. In such a situation invoking of provisions of section 69A was not justified.

Facts of the Case

The 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. 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. The firm approached Corporation Bank for a loan to enable it to re construct and renovate the hotel premises. An arrangement was made by the firm whereby the pay orders/cheque were issued in the name of certain suppliers of materials who were prepared to give bills to the Bank and after receiving the cheques from the Bank against the loan sanctioned. These suppliers claimed to be agreed to withdraw the loan amounts received and after retaining 1 % of the amount received towards their commission, agreed to pass on the balance amount of cash to M/s Alliance Hotel.

On 11.05.2007 and 12.05.2007 survey under section 133A was conducted at the premises of Hotel Royale Empire (Alliance Hotel). During the course of the survey certain loose papers containing figures and letters were found and impounded along with computer sheets and CDs. According to the Assessing Officer these papers show that a sum of Rs.2,62,40,000/- was paid to “Parvez Sir”. Cash statement impounded by the Department showed that Rs.40,00,000/- were paid in two installments of Rs.30,00,000 and Rs.10,00,000 to “Parvez Sir”. The Assessing Officer held that the words “Parvez Sir”, relates to the assessee and included the sums of Rs.2,62,40,000/- and Rs.40,00,000/- (30,00,000 + 10, 00,000) appearing on the cash statement dated 18.11.2006 as the assessee’s income u/s 69A.

Contention of the Assessee

The ld counsel of the assessee submitted that drew our attention to question of the assessment order wherein the question asked was “Who is Parvez Sir? In this regard the answer of assessee was that he is one of the contractor/ supervisor. Further question addressed was “Is he the same Parvez M. Ghaswala”? The answer was “He is not the same”. Further, our attention was drawn to question of the statement of assessee wherein he was asked whether there was any person working as staff/contractor/suppliers /supervisor named as Parvez. In response assessee answered that when we were partner in Alliance Hotel and Hotel City Palace nobody was in the name of Mr. Parvez. If after my retirement if anybody in the name of Mr. Parvez was appointed as staff/supervisor/contractor/ supplier, he was not aware of that fact. Further, our attention was drawn to the statement of Shri Kashan Ghaswala wherein vide letter dated 07.11.2009 submitted Retirement deed of M/s. Hotel City Palace and M/s. Alliance Hotel. From the retirement deed it is seen that Mr. Parvez M.H. Ghaswala retired from Alliance Hotel on 15.11.2006 and the money was received by Mr. Parvez Sir on 11.11.2006. The learned counsel also drew our attention to the assessment order wherein regarding admission it was submitted that an amount of Rs.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.

Contention of the Revenue

The ld counsel of the revenue submitted that the CIT (A) erred in directing to delete the addition of Rs.2,62,40,000/- made by Assessing Officer under section 69A of Income Tax Act solely relying on the submission made by assessee during the course of appellate proceedings ignoring the facts that in page No. 4 & 5 of the impugned loose sheets ,it was mentioned as “Parvez Sir” and an amount of Rs. 2,62,40,000/- was shown against this name. Assessing Officer, in his assessment order, established that “Parvez Sir” is none other than Shri Parvez M.H. Ghaswala, who has received an amount of `2,62,40,00/-. The material evidence procuredby the investigation wing during the course of survey and also the facts discussed by the Assessing Officer in the assessment order. Assessee failed to discharge the onus which lies upon him to prove source and nature of receipts.

Held by CIT (A)

CIT (A) deleted the addition and allowed the appeal of the assessee.

Held by ITAT

ITAT held that it is undisputed that papers showing the name of “Parvez Sir” were found in the premises of Alliance Hotel during the course of search action and not from assessee. Papers found were not in his handwriting. The partner of Alliance Hotel, Shri Kasam Ghaswala in his statement has stated that payment made to “Parvez Sir” is not the amount paid to the assessee. Neither the survey party nor the Assessing Officer of Alliance Hotel recorded the statement of assessee. Assessee, in his statement before the Assessing Officer, has categorically stated that he is not “Pervez Sir” as mentioned in the papers found from the premises of Alliance Hotel. Assessee also objected to the action of the Assessing Officer in making addition under section 69A. For invoking provisions of section 69A assessee should be the owner of any money, bullion, jewellery or any other valuable articles. In this case of assessee he was not found to be the owner of any money, bullion, jewellery or any other valuable articles in previous year relevant to assessment year. In such a situation invoking of provisions of section 69A was not justified.

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 Rs.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 11.11.2006 whereas the assessee retired from the firm on 15.11.2006.

Further, Revenue could not establish the nexus between these documents with assessee. Assessing Officer has not made any effort, whatsoever, to indicate that “Parvez Sir” or other noting in the documents are really referring to assessee. In such a situation some evidence was definitely required to establish the link between both.  No effort has been made in this regard and the inference that follows is that the coincidence of name can at best be said to be suggestive and not conclusive of that the documents belong to assessee. On the date of survey assessee was no more partner in the partnership firm. That definitely removes the link between the documents and assessee. Various objections raised by the counsel also established the same thing. In view of our discussion above we hold that CIT (A) was justified in deleting this addition.

Accordingly appeal disposed of.

Download Judgment/Order

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