Gujarat High Court
Kishorbhai Bhagabhai Mistry vs Income Tax Officer on 6 September, 2017
Author: Akil Kureshi
Bench: Akil Kureshi, Biren Vaishnav
O/TAXAP/649/2017 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 649 of 2017
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KISHORBHAI BHAGABHAI MISTRY....Appellant(s)
Versus
INCOME TAX OFFICER, WARD-2, RANGPUJA BUILDING,....Opponent(s)
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Appearance:
MR. JAIMIN R DAVE, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 06/09/2017
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Assessee is in appeal against the judgement of the Income Tax Appellate Tribunal dated 28.04.2016 raising the following question for our consideration:
"Whether the Appellate Tribunal has substantially erred in law and facts in confirming addition of Rs.15,06,500/- made under section 69A of the Income Tax Act, 1961?"
2. Brief facts are that the appellant - assessee had filed the return of income for the assessment year 2006-07. The return was taken in scrutiny. During scrutiny assessment, it was Page 1 of 4 HC-NIC Page 1 of 4 Created On Sun Sep 10 05:43:35 IST 2017 O/TAXAP/649/2017 ORDER found that the assessee had sent a cash amount of Rs.15,06,500/- on 20.05.2005 to one Riyaz Lokhandwala through Angadia firm namely M/s. Rameshkumar Ambalal and Company. The amount was allegedly misappropriated by the employee of the Angadia who had filed a police complaint before the V.P Road Police Station, Mumbai on 21.05.2005.
3. This issue came up for consideration before the Assessing Officer. He asked the assessee to explain the source of such cash. Assessee denied the entire transaction. The Assessing Officer collected information from the Angadia Company and the police authorities. Statement of Rameshkumar K. Patel, partner of the Angadia firm was also recorded on oath. During such statement, he admitted that the assessee had handed over the said sum on 20.05.2005 at the Bilimora branch of the Angadia for delivery to Riyaz Lokhandwala at Mumbai. He also admitted that the Company had issued two receipts of Rs.8,06,500/- and Rs.7,00,000/- to the assessee. He could produce one of them on record.
4. The Assessing Officer also noted that statement of the appellant was recorded on 24.05.2005 in which also he had owned up the said amount. The Assessing Officer confronted the assessee with such materials by issuing a notice dated 26.12.2008. In response to the notice, the assessee appeared and denied the ownership of the amount or having entered into any transaction with the Angadia.
5. The Assessing Officer discarded the contentions of the appellant and held that the amount in question was of the appellant. He therefore added the same to his income by way Page 2 of 4 HC-NIC Page 2 of 4 Created On Sun Sep 10 05:43:35 IST 2017 O/TAXAP/649/2017 ORDER of unexplained investment. The CIT(Appeals) and the Tribunal both confirmed the view of the Assessing Officer whereupon this appeal has been filed.
6. Before the Tribunal the assessee had argued that the statement of the assessee recorded with the police under section 161 of the Criminal Procedure Code could not have been relied upon. He in fact disowned ever having made such statement. The Tribunal did not accept the contention and dismissed the appeal.
7. Learned counsel for the appellant may be correct in contending that the statement of a person recorded by the police authority under section 161 of Cr.P.C would have limited utility. Had this statement been the sole basis for making the addition, we would certainly have examined the issue further. However, the Assessing Officer had other independent and reliable material linking the amount to the appellant. The statement of the partner of the Angadia firm was recorded on oath in which he had stated that the amount was handed over by the assessee to the firm's Bilimora office for delivery at Mumbai. He had in fact produced one out of the two receipts stated to have been issued. There was absolutely no reason for the partner of the firm to make out a false case of the ownership of the amount. In fact the entire issue came to light only when the amount was allegedly misappropriated by the employee of the Angadia which forced the Angadia to file a police complaint. The fact that the FIR was filed at a police station in Mumbai would further suggest that the amount was actually in transit as per the instruction of the sender and would have been misappropriated after it Page 3 of 4 HC-NIC Page 3 of 4 Created On Sun Sep 10 05:43:35 IST 2017 O/TAXAP/649/2017 ORDER reached Mumbai.
8. Entire issue is based on evidence and appreciation thereof. No question of law arises. Tax appeal is dismissed.
(AKIL KURESHI, J.) (BIREN VAISHNAV, J.) divya Page 4 of 4 HC-NIC Page 4 of 4 Created On Sun Sep 10 05:43:35 IST 2017