KIRAN H SHAH, MUMBAI V. ASST CIT, MUMBAI

CO 274/MUM/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0420 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 29-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S PADMAJA
• Keywords: Difference of opinion; Change of opinion
• Section: 143(3); 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM ./I.T.A. NO. 5964/MUM/2013 ( / ASSESSMENT YEAR: 2010-11) ACIT CENTRAL CIRCLE 15 & 16, R.NO. 402, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400 020 / VS. SHRI KIRAN H. SHAH, 4/5 AMRUT TOWER, 247 TELANG ROAD, MATUNGA, MUMBAI-400019, ./ ./PAN/GIR NO. AACPS0379N ( /APPELLANT ) : ( !' / RESPONDENT ) !' ./C.O. NO. 274/MUM/2014 (ARISING OUT OF ITA NO.5964/MUM/2013 ( / ASSESSMENT YEAR: 2010-11) SHRI KIRAN H. SHAH, 4/5 AMRUT TOWER, 247 TELANG ROAD, MATUNGA, MUMBAI-400019 / VS. ACIT CENTRAL CIRCLE 15 & 16, R.NO. 402, 4 TH FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400 020 ./ ./PAN/GIR NO. AACPS0379N ( /APPELLANT ) : ( !' / RESPONDENT ) # $ / APPELLANT BY : MS. S. PADMAJA !' # $ / RESPONDENT BY : SHRI NITIN M. FURIA %& ' # ( / DATE OF HEARING : 23.02.2015 )*+ # ( / DATE OF PRONOUNCEMENT : 11.03.2015 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE AND CROSS OBJECTIO N (CO) BY THE ASSESSEE ARISING OUT OF THE ORDER DATED 02.07.2013 BY THE CO MMISSIONER OF INCOME TAX (APPEALS)-39, MUMBAI (CIT(A) FOR SHORT) ALLOWING THE ASSESSEES APPEAL CONTESTING 2 ITA NO. 5964/MUM/2013& C.O.NO.274/MUM/2014 (A.Y. 20 10-11) SHRI KIRAN H. SHAH.VS. ACIT ITS ASSESSMENT U/S. 143(3) OF THE INCOME-TAX ACT, 1961 DATED 18.12.2012 FOR THE ASSESSMENT YEAR (AY) 2010-2011. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS FOUND DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO HAVE DEPOSITED A SUM OF R S. 10.20 LAKHS IN HIS BANK ACCOUNT WITH INDIAN BANK, MATUNGA BAZAR BRANCH, MUM BAI ON 31.03.2010. THE ASSESSEE, WHO WAS SUBJECT TO SEARCH PROCEEDING U/S. 132 OF THE ACT ON 22.09.2005 AND, CONSEQUENTLY, ASSESSMENT U/S. 143(3) R/W S. 153C FO R THE AYS 2000-01 TO 2006-07, EXPLAINED THE SOURCE THEREOF AS THE OPENING CASH BA LANCE OF RS.2.33 CRS. AS AT THE BEGINNING OF THE SAID PERIOD, I.E., AS ON 01.04.199 9. THE EXISTENCE OF THE CASH BALANCE THEREAT FOUND CONFIRMATION WITH THE TRIBUNAL, I.E., IN APPEAL AGAINST THE ASSESSMENTS FRAMED IN CONSEQUENCE TO THE ORDER/S U/S. 263, INAS MUCH AS THE ASSESSING OFFICER (AO) HAD, IN ACCEPTING THE SAID BALANCE, TAKEN A PR OBABLE VIEW, SO THAT ITS NON- ACCEPTANCE BY THE LD. CIT UNDER REVIEW PROCEEDINGS WAS ONLY A CHANGE OF OPINION. THE AO, IN EXAMINATION OF THE ASSESSEES CLAIM OF T HE IMPUGNED DEPOSIT AS BEING ONLY AN APPLICATION OF THE SAID CASH BALANCE (I.E., AS O N 01.04.1999), DEPOSITED IN BANK DURING THE CURRENT YEAR, FOUND THE ASSESSEE TO HAVE CLAIMED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS FOR AY 2008-09, TO HAVE APPL IED THE SAME TO THE EXTENT OF RS. 10.20 LACS BY DEPOSIT IN HIS BANK ACCOUNT IN MARCH, 2010. FURTHER, IT WAS OBSERVED THAT THE SAID BALANCE OF RS. 2.33 CRORES HAD ALREAD Y BEEN ADDED TO THE ASSESSEES INCOME FOR AY 2000-01 VIDE ASSESSMENT U/S 143(3) R/ W S. 263 DATED 28.12.2010. HE, ACCORDINGLY, ASSESSED THE SAME IN THE ASSESSEES HA NDS FOR THE CURRENT YEAR PROTECTIVELY. THE LEARNED CIT(A) HAS DELETED THE SA ME IN VIEW OF THE TRIBUNALS ORDER SUPRA, I.E., QUASHING THE ORDER U/S. 263. AGGRIEVED , THE REVENUE IS IN APPEAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE ONLY REASON STATED BY THE REVENUE PER ITS GROUN D/S OF APPEAL IN NOT ACCEPTING THE IMPUGNED ORDER IS THE NON-ACCEPTANCE OF THE TRIBUNALS ORDER SUPRA QUASHING THE ORDER U/S. 263 FOR AYS 2000-01 TO 2006 -07, HAVING BEEN APPEALED AGAINST THE SAME BEFORE THE HONBLE HIGH COURT. WE ARE UNABLE TO APPRECIATE THE REVENUES CASE. DECIDEDLY, A PROTECTIVE ASSESSMENT IS ONLY TO SAFEGUARD THE INTEREST OF THE REVENUE. IT IS NOT THE CASE THAT ANY CASH WAS F OUND DURING SEARCH. AS APPARENT, CERTAIN INVESTMENTS, AS THE CASH DEPOSITED IN THE B ANK ACCOUNT DURING THE CURRENT YEAR, 3 ITA NO. 5964/MUM/2013& C.O.NO.274/MUM/2014 (A.Y. 20 10-11) SHRI KIRAN H. SHAH.VS. ACIT WERE FOUND FOR THE PREVIOUS YEARS RELEVANT TO A.YS. 2000-01 TO 2006-07, DURING SEARCH, AND WHICH WERE EXPLAINED BY THE ASSESSEE AS TO THEIR SOURCE WITH REFERENCE TO THE CASH WITH HIM AS ON 31.03.1999, SO THAT IT WAS AVAILABLE WITH HIM AS AN OPENING BALANCE ON 01.04.1999. THE DATE 31.03.1999, OR EA RLIER TO IT, I.E., FROM WHICH THE CASH WAS STATED TO BE AVAILABLE, FALLING PRIOR TO T HE PERIOD FOR WHICH THE ASSESSMENTS WERE INITIATED PURSUANT TO THE SEARCH, THE SAME COU LD NOT BE BROUGHT TO TAX FOR THOSE YEARS AND, THUS, AT ALL. THE REVENUE DISPUTING THE SAID AVAILABILITY OF CASH, I.E., AS ON 31.03.1999 (OR PRIOR TO 01.04.1999), WHEREBY THE AS SESSEE EXPLAINED THE VARIOUS INVESTMENTS FOR THE FOLLOWING YEARS, OUGHT TO HAVE BEEN TAXED THE CORRESPONDING SUMS FOR THE SAID YEARS, I.E., SUBSTANTIVELY, AND THERE IS NO CASE FOR ANY PROTECTIVE ASSESSMENT. THE REVENUE, HOWEVER, ASSESSED THE ENTI RE SUM OF RS.2.33 CRS. FOR THE FIRST YEAR, I.E., A.Y. 2000-01, ADMITTING THUS TO T HE AVAILABILITY OF CASH IN THAT YEAR. HOW COULD THAT BE? THE ONLY CONTROVERSY IS WHETHER THE CASH WAS AVAILA BLE WITH THE ASSESSEE ON 31.03.1999 OR NOT ? IF THE CASH IS NOT AVAILABLE WITH THE ASSESSEE ON 31.03.1999, HOW COULD IT SUDDENLY APPEAR WITH HIM O N 01.04.1999, OR DURING THE PREVIOUS YEAR BEGINNING WITH THAT DATE, VALIDATING THE ASSESSMENT FOR A.Y. 2000-01. THE OTHER FALL-OUT OF SUCH SUBSTANTIVE ASSESSMENT ( OF THE ENTIRE SUM) FOR A.Y. 2000-01 IS THAT THE ASSESSMENT/S QUA THE RESPECTIVE INVESTMENT/S FOR THE FOLLOWING YEARS IS ON A PROTECTIVE BASIS. THIS IS AGAIN NOT UNDERSTANDABLE. ASSUMING THE AVAILABILITY OF CASH ON 01.04.1999 (OR DURING THE PREVIOUS YEAR RELEVANT TO A.YS. 2000-01, I.E., F.Y. 1999- 2000), THE INVESTMENT FOR THE SUBSEQUENT YEARS IS O NLY ITS APPLICATION, SO THAT IT WOULD NOT LEAD TO OR RESULT IN A FRESH ASSESSMENT/S, EITH ER SUBSTANTIVE OR PROTECTIVE. IT IS TO BE APPRECIATED THAT THIS IS NOT A CLASSICAL CASE OF A PROTECTIVE ASSESSMENT, AS WHERE THE DISPUTE IS AS TO THE YEAR OF ASSESSMENT, SO THAT TH E ASSESSMENT FOR ONE YEAR IS MADE SUBSTANTIVELY AND FOR ANOTHER, PROTECTIVELY, I.E., TO PROTECT THE INTEREST OF THE REVENUE. IT IS RATHER A CASE OF EITHER AN ASSESSMENT FOR THE YEAR OF INVESTMENT, WHICH IS THUS IN SUBSTANCE A SUBSTANTIVE ASSESSMENT, OR OF NO ASSESS MENT AT ALL, I.E., WHERE THE AVAILABILITY OF CASH AS ON 31.03.1999 IS ACCEPTED. THIS IS PRECISELY WHAT HAS HAPPENED IN THE INSTANT CASE, WITH THE TRIBUNAL QUASHING THE SECTION 263 ORDER ASSAILING THE ACCEPTANCE OF ADEQUATE CASH AVAILABILITY WITH THE A SSESSEE AS ON 31.03.1999 BY THE A.O. THE CONFIRMATION OF THE TRIBUNALS ORDER BY TH E HONBLE JURISDICTIONAL HIGH COURT, 4 ITA NO. 5964/MUM/2013& C.O.NO.274/MUM/2014 (A.Y. 20 10-11) SHRI KIRAN H. SHAH.VS. ACIT AS URGED BY THE ASSESSEE PER ITS CO, WHICH IS SUPPO RTIVE, THUS SEALS THE REVENUES CASE AGAINST IT. FOR THE CURRENT YEAR AS WELL, THE ASSESSEE EXPLAINI NG THE SOURCE OF THE BANK DEPOSIT/S AS THE CASH BALANCE (WITH HIM) AS ON 31.0 3.1999, THE SAME STANDS ASSESSED IN HIS HANDS ON A PROTECTIVE BASIS. THAT IS, THE VERY FACT THAT THE ASSESSMENT FOR THE CURRENT YEAR QUA THE BANK DEPOSIT/S WAS MADE ON A PROTECTIVE BASIS I TSELF ESTABLISHES THAT THE A.O. WAS SATISFIED THAT THE SOURCE THEREOF FORMS PART OF THE CASH BALANCE OF RS.2.33 CRS. AS ON 31.03.1999, I.E., AS ASCRIBED TO BY THE ASSESSEE, OR, AT BEST, DURING THE PREVIOUS YEAR RELEVANT TO AY 2000-01. WE HAVE A LREADY CLARIFIED THAT THE FATE OF THE IMPUGNED ASSESSMENT DOES NOT HINGE ON THAT OF T HE SUBSTANTIVE ASSESSMENT FOR THAT YEAR (A.Y. 2000-01). IT IS, ON THE CONTRARY, A CASE OF EITHER ASSESSMENT/S FOR THE RELEVANT YEAR, I.E., THE YEAR OF INVESTMENT/S, AS T HE CURRENT YEAR, OR NO ASSESSMENT AT ALL, AS WHERE THE AVAILABILITY OF CASH AS AT THE BEGINNI NG OF 01.04.1999 IS ACCEPTED. THE LATTER HAVING BEEN ACCEPTED, REMOVES THE VERY BASIS OF THE REVENUES CASE. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED , AND THE ASSESSEES C.O. TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 11, 201 5 SD/- SD/- (AMIT SHUKLA) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ,' MUMBAI; -% DATED : 11.03.2015 & . % . ./ S.K. PS. !'#$ %$' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. .&/ 0 !%12 , ( 12+ , ,' / DR, ITAT, MUMBAI 6. 0 34 5 ' / GUARD FILE & / BY ORDER, ' / &( ) (DY./ASSTT. REGISTRAR) , ,' / ITAT, MUMBAI