Income Tax Appellate Tribunal - Ahmedabad
Sanjay Gaman Lal Choksi, Surat vs Department Of Income Tax on 9 August, 2007
IN THE INCOME TAX APPELLATE TRIBUNAL : 'D' BENCH : AHMEDABAD
Camp at Surat
(Before Hon'ble Shri T.K. Sharma, J.M. & Hon'ble Shri D.C. Agrawal, A.M.)
I.T.A. No. 4020/AHD./2007
Assessment Year : 1999-2000
Income Tax Officer Ward-2(1), Surat -vs.- Shri Sanjay Gaman Lal Choksi, Surat
(PAN : ABKPC 8620 M)
(Appellant) (Respondent)
Appellant by : Shri Sanjeev Kashyap, Sr. D.R.
Respondent by : Shri T.R. Mody
ORDER
Per Shri T.K. Sharma, Judicial Member :
This appeal filed by the Revenue is against the order dated 09.08.2007 of Learned Commissioner of Income Tax(Appeals)-II, Surat deleting the addition of Rs.25,90,000/- made by the Assessing Officer on account of unexplained investment for the assessment year 1999-2000.
2. Brief facts relating to controversy involved in this ground of appeal are that an intimation was received from ACIT, Central Circle-1, Surat that a search under section 132 of the IT Act was carried out at the residential premises of Shri Hiren V. Shah. In the course of search, a Power of Attorney was found, which stated that the assesee had been given Power of Attorney by one Smt. Savitri Devi Grover for an immovable property (land i.e. Survey No. 72, TPS No. 6 and 26) at Piplod, Surat against a consideration of Rs.25,90,000/-. The said sum of Rs.25,90,000/- paid by the assessee to Smt. Savitri Devi Grover was not reflected in the books of accounts of the assessee. Since the income of the assessee to the extent of Rs.25,90,000/- had escaped assessment, the case of the assessee for assessment year 2004-05 was reopened under section 147 of the I.T. Act vide notice under section 148 of the I.T. Act on 30.03.2006.
2 ITA No. 4020/AHD/20072.1. Thereafter the Assessing Officer framed the assessment under section 144 read with section 147 of the Act on 29.12.2006 making an addition of Rs.25,90,000/- on account of unexplained investment.
3. On appeal, the ld. CIT(A) vide order dated 09.08.2007 deleted the said addition by holding that without the document being notarized or registered, it could neither be treated as a final document nor could it carry any evidentiary value as the Power of Attorney was found without having any signature during the course of search proceedings. Aggrieved by the order of ld. CIT(A), the revenue is in appeal before the Tribunal.
4. At the time of hearing before us, on behalf of Revenue Shri Sanjeev Kashyap appeared and contended that the decision of the ld. CIT(A) is not acceptable for the following reasons :-
(1) During FY 1998-99 the assessee was doing brokerage business on sale of land and was working for Shri Hanskamal Grover who was a land dealer. Smt. Savitri Devi Grover was the mother of Shri Hanskamal Grover. As per the seized copy of power of attorney, the assessee paid Rs.25,90,000/- to Smt. Savitri Devi Grover during FY 1998-99 for which Smt. Savitri Devi Grover had executed an agreement in the form of power of attorney in favour of the assessee. During the assessment prccedings the assessee admi9tted that he had given the power of attorney to Shri Hiren Vasantlal Shah for sale of land and considering the keen interest of the assessee to sale of land through Shri Hiren Vasantlal Shah, the Assessing Officer came to conclusion that the assessee had paid Rs.25,90,000/- to Smt. Savitri Devi Grover out of his books of account in lieu of his power of attorney executed in his name.
(2) The Assessing Officer in the body of the order has discussed at length about the movement of money and genuineness the transaction through the power of attorney.
5. On the other hand, Shri T.R. Mody appearing on behalf of the assessee vehemently supported the order of ld. CIT(A). The ld. counsel of the assessee explained that Shri Hanskamal Grover was the land grover, who had prepared a fake power of attorney so that the assessee could get buyers for him on the strength of the said document. The document was bogus. The land in question neither belonged to Shri Hanskamal Grover nor to Smt. Savitriben Grover. He further submitted that no prudent man would pay any money simply on the basis of the execution 3 ITA No. 4020/AHD/2007 of a power of attorney. To sum up, the ld counsel of the assessee contended that the view taken by the ld. CIT(A) be upheld.
6. After hearing both the sides, we have carefully gone through the orders of authorities below and perused the material placed before us. From the record, we find that in the impugned order, the ld. CIT(A) held that the document itself was not legally valid because acceptance by the assessee of the power of attorney was not indicated. It did not contain the signature. The said document was not notarized or registered. The surrounding facts clearly showed that Smt. Savitridevi Grover could not have legally executed the power of attorney because she was not legally owner of the said piece of land, therefore no reliance could be placed on such a document. In our opinion, the ld. CIT(A) has given cogent reason for deleting the addition of Rs.25,90,000/-. We, therefore, incline to uphold the order of ld. CIT(A).
7. In the result, the appeal filed by the Revenue is dismissed.
The Order was pronounced in the Court on 21.05.2010.
Sd/- Sd/-
(D.C. Agrawal) (T.K. Sharma)
Accountant Member Judicial Member
DATED : 21 / 05 /2010
Copy of the order is forwarded to :
1) The Assessee
(2) The Department.
3) CIT(A) concerned, (4) CIT concerned, (5) D.R., ITAT, Ahmedabad.
True Copy By Order Deputy Registrar, ITAT, Ahmedabad Laha/Sr.P.S.