Jaikumar Babulal Bhandari, Pune V. Deputy Commissioner of Income tax, Pune

ITA 1029/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2589 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 25-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V L JAIN
• Keywords: Search and seizure; Document seized; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI R.S.SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO.1028/PUN/2017 / ASSESSMENT YEAR : 2008-09 CHANDRAVADAN V BHANDARI (HUF), A/3 ABHIMANSHREE SOCIETY, PASHAN, PUNE-411 008. PAN : AAAHB7240P .... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 8(1), PUNE. / RESPONDENT / ITA NO.1029/PUN/2017 / ASSESSMENT YEAR : 2008-09 JAIKUMAR BABULAL BHANDARI, A/3 ABHIMANSHREE SOCIETY, PASHAN, PUNE-411 008 PAN : AARPB9110B .... / APPELLANT / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-8, PUNE. / RESPONDENT ASSESSEE BY : SHRI V.L. JAIN REVENUE BY : SHRI SUDHENDU DAS / DATE OF HEARING : 06.03.2019 / DATE OF PRONOUNCEMENT : 07.03.2019 2 ITA NOS.1028 & 1029/PUN/2017 A.Y.2008-09 / ORDER PER PARTHA SARATHI CHAUDHURY, JM: THESE TWO APPEALS PREFERRED BY DIFFERENT ASSESSEES EMAN ATES FROM THE COMMON ORDER OF LD. CIT(APPEALS)-9, PUNE DATED 07.02.2017 FOR THE ASSESSMENT YEAR 2008-09 AS PER GROUNDS OF APPEAL ON RECORD. 2. THESE CASES RELATES TO TWO PARTNERS OF A PARTNERS HIP FIRM AND IT IS THE GRIEVANCE OF THE ASSESSEES HEREIN THAT WHEN SALE CONSIDE RATION IS RECEIVED BY PARTNERSHIP FIRM AND THE SAME IS REFLECTED IN THE BOOKS OF ACCOUNT OF THE PARTNERSHIP FIRM AND HAS BEEN OFFERED TO TAX THEN WHETHE R THE SAME AMOUNT CAN BE ASSESSED IN THE HANDS OF THE INDIVIDUAL PARTNERS FO R THE PURPOSE OF TAXATION. THESE CASES WERE HEARD TOGETHER. SINCE FACTS ARE SIMILAR AND ISSUES ARE COMMON, THESE APPEALS ARE BEING DISPOSED OF VIDE THIS CONS OLIDATED ORDER. FOR THE SAKE OF CONVENIENCE, WE WOULD REFER TO THE FACTS APP EARING IN ITA NO.1028/PUN/2017. 3. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE FILED RETURN O F INCOME FOR ASSESSMENT YEAR 2008-09 ON 30.07.2008 SHOWING RETURN IN COME AT RS.2,70,271/-. THE RETURN WAS PROCESSED U/S.143(1) OF THE I NCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ACCEPTING THE RETURNED INCOME. THEREAFTER, SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT ALONG WITH SURVEY U/S.133A OF THE ACT WAS CONDUCTED IN THE CASE OF M/S. P OOJA EXPORTS GROUP, MUMBAI. VARIOUS DOCUMENTS WERE SEIZED UNDER RELEVANT PRO VISIONS OF THE INCOME TAX ACT, WHEREIN IT WAS OBSERVED THAT SHRI SUNIL KOTHARI OF M/S. POOJA EXPORTS WHO WAS A DIRECTOR IN THE M/S. CORNERSTENE EST ATES PVT. LTD. HAS PAID CASH OF RS.7,88,63,213/- FOR THE PURCHASE OF LAND SITUATED AT VILLAGE WAKAD 3 ITA NOS.1028 & 1029/PUN/2017 A.Y.2008-09 PLOT 143 R ( 153868 SQ. FT.) OVER AND ABOVE THE AGREEMENT VALUE OF RS.5,94,00,000/- TO M/S. B.U. BHANDARI REAL ESTATE DEVELOPME NT CORPORATION WHICH WAS THE SELLER OF ABOVE MENTIONED LAND. MR. SUNIL KOTHA RI, IN HIS STATEMENT RECORDED ON OATH DURING THE COURSE OF SEARC H/SURVEY PROCEEDINGS ACCEPTED TO HAVE PAID RS.7,88,63,213/- TO M/S. B.U. BHANDA RI REAL ESTATE DEVELOPMENT CORPORATION. HE DISCLOSED THIS SET OF FACT ON T HE BASIS OF SEIZED DOCUMENTS. 4. AFTER PERUSING THE FACTS, THE ASSESSING OFFICER TOOK A V IEW THAT RS.7,88,63,213 WAS THE CASH COMPONENT RECEIVED BY M/S. B .U. BHANDARI REAL ESTATE DEVELOPMENT GROUP TOWARDS THE SALE OF LAND SITUAT ED AT WAKAD, PLOT NO.143R FROM M/S. CORNETSTENE ESTATE PVT. LTD. OF M/S. POO JA EXPORT GROUP. THE ASSESSING OFFICER FORMED AN OPINION THAT SINCE SHRI C.U B HANDARI (HUF) IS THE PARTNER IN M/S. B.U. BHANDARI REAL ESTATE COPORATION A ND ALONG WITH 8 OTHERS AS PER AGREEMENT DATED 29.11.2007 RECEIVED THE CASH OF RS.7,88,63,213/- AND NOT SHOWN HIS SHARE OF CASH RECEIPT IN HIS RETURN OF INCOME AND THEREFORE, NOTICE U/S.148 OF THE ACT WAS ISSUE D TO THE ASSESSEE. THE ASSESSEE IN HIS SUBMISSIONS STATED THAT SHRI SUNIL KOT HARI IN HIS STATEMENT NOWHERE ASSERTED THAT HE PAID THE CASH AM OUNT TO THE ASSESSEE AND OTHER. THE STATEMENT ONLY STATED THAT CASH HAS BEEN PAID TO THE VENDORS. THE ASSESSEE FURTHER STATED THAT THE TRANSACTION OF SALE O F PROPERTY HAS BEEN CARRIED OUT BY B.U BHANDARI REAL ESTATE CORPORATION. THE ASSESSE E SUBMITTED THAT NO CASH HAS BEEN RECEIVED BY THE ASSESSEE. THE CONTENT ION OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE ASSESSING OFFICER. IT WAS OBSERVED BY T HE ASSESSING OFFICER THAT ASSESSEE IS ONE OF THE BENEFICIARY OF CASH RECEIVED IN THIS LAND TRANSACTION. SINCE THE ASSESSEE IS THE PARTNER IN M/S. B.U. BHANDARI R EAL ESTATE CORPORATION AND AS PER AGREEMENT DATED 29.11.2011, THER E ARE 9 INDIVIDUAL PERSONS. HENCE, THERE ARE TOTAL 10 BENEFICIARIES IN THIS TRA NSACTION IN WHICH 4 ITA NOS.1028 & 1029/PUN/2017 A.Y.2008-09 CASH OF RS.7,88,63,213/- HAS BEEN RECEIVED OUT OF WHICH TH E ASSESSEES SHARE IS 10% I.E. RS.78,86,321/- WHICH HE HAS NOT SHOWN IN HIS RETU RN OF INCOME AND THEREFORE, SAME WAS ADDED TO THE TOTAL INCOME OF THE ASS ESSEE U/S.68 OF THE ACT. 5. DURING FIRST APPELLATE PROCEEDINGS, THE LD. CIT(APPEALS) A LSO HAS UPHELD THE FINDINGS OF THE ASSESSING OFFICER. ACCORDING TO THE LD. C IT(APPEALS) IN THE ENTIRE LAND TRANSACTION DONE BY THE PARTNERSHIP FIRM, THER E WERE 10 BENEFICIARIES AND ACCORDINGLY, THEIR SHARE OF INCOME SHOULD H AVE BEEN REFLECTED IN THEIR INDIVIDUAL RETURN OF INCOME WHICH THEY HAVE NOT DON E. IT WAS EXPLAINED BEFORE THE LD. CIT(A) THAT AS PER BOOKS OF ACCOUNTS, THE LAND THAT WAS SOLD BELONGS TO THE PARTNERSHIP FIRM AND THAT THE ENTIRE CONS IDERATION RECEIVED WAS RECEIVED IN THE BOOKS OF ACCOUNT OF THE PARTNERSHIP FIRM. THE INCOME FROM THE SAID TRANSACTION WAS ALSO OFFERED TO TAX IN THE HANDS OF THE PARTNERS HIP FIRM. 6. THAT BEING FURTHER AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BE FORE US. 7. THE LD. AR OF THE ASSESSEE AT THE TIME OF HEARING DEM ONSTRATED THAT THE TRANSACTIONS PERTAINS TO THE FIRM M/S. B.U. BHANDARI REAL ES TATE CORPORATION IN WHICH THE ASSESSEE IS A PARTNER. THIS IS EVIDENT FROM ST ATEMENT OF THE ACCOUNT OF THE SAID FIRM ANNEXED IN THE PAPER BOOK AS AN NEXURE-6. THE TRANSACTION IS DULY REFLECTED IN THE BOOKS OF ACCOUNT OF THE FIRM HAVING RECEIVED MONEY FROM M/S.CORNERSTENE ESTATES PVT. LTD. THE LAND AT VILLAGE WA KAD WHICH HAS BEEN SOLD BY THE PARTNERSHIP FIRM IS ALREADY REFLECTED IN THE BOOKS OF ACCOUNT OF THE PARTNERSHIP FIRM AND THE SALE CONSIDERATIO N THAT HAS BEEN RECEIVED AT RS.5,94,00,000/- AND THAT INCOME HAS ALREADY BEEN OFFERED TO TAX IN THE HANDS OF THE PARTNERSHIP FIRM. THE LD. AR FURTHER CONTENDED THAT WHEN THE TRANSACTION BEING DONE BY PARTNERSHIP FIRM, THE AMOUNT RE CEIVED BY 5 ITA NOS.1028 & 1029/PUN/2017 A.Y.2008-09 PARTNERSHIP FIRM AND IT HAS BEEN OFFERED TO TAX IN THE RET URN OF INCOME OF THE PARTNERSHIP FIRM, THEN IN NO POSSIBLE MANNER, THE AMOUNT CO ULD BE MADE TAXABLE IN THE HANDS OF THE ASSESSEE. THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT OF I NDIA IN THE CASE OF ITO VS. CH. ATCHAIAH REPORTED AT 218 ITR 239 (SC) AND DE CISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF ACIT VS. PRABHAKAR KAMATH AND 3 OTHERS REPORTED AS 68 TAXMANN.COM 359 (KAR.) WHEREIN THE PROPOS ITION OF LAW LAID DOWN BY THESE JUDGMENTS IS THAT ASSESSMENT HAS TO BE DONE IN THE RIGHT HANDS. 8. ON THE OTHER HAND, THE LD. DR HAS PLACED RELIANCE ON THE ORDERS OF THE SUB-ORDINATE AUTHORITIES. 9. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE R IVAL CONTENTIONS. WE HAVE ALSO ANALYZED THE JUDICIAL PRONOUNCEMENTS PLACED BE FORE US AND GONE THROUGH THE BOOKS OF ACCOUNT OF THE ASSESSEE AS WELL AS PARTNERSHIP FIRM. IT IS DEMONSTRATED THAT CASH PAYMENT WAS MADE BY THE M/S. POOJA EXPORT AND CREDITED TO THE FIRM M/S. B.U. BHANDARI REAL ESTATE CORPORA TION. TRANSACTION OF THE AMOUNT WAS ASSESSED IN THE HANDS OF THE M/S. B.U . BHANDARI REAL ESTATE CORPORATION. IN SUCH SCENARIO, TERMING THE ASSES SEE AS ULTIMATE BENEFICIARY IS NOT APPROPRIATE AS EVIDENT THROUGH THE FACT S ON RECORD. THAT THE HON'BLE SUPREME COURT IN THE CASE OF ITO VS. CH. ATCHAIA H (SUPRA.) HAS CLEARLY HELD THAT ASSESSMENT HAS TO BE DONE IN THE RIGHT HANDS . THEREFORE, IN THE PRESENT CASE, WHEN SALE OF LAND TRANSACTION HAS BEEN DON E BY THE PARTNERSHIP FIRM, ADDITION CANNOT BE MADE IN THE HANDS OF THE INDIVIDUA L ASSESSEE EVEN THOUGH HE IS A PARTNER OF THE FIRM. IN VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE LD . CIT(APPEALS) AND ALLOW THE APPEAL OF THE ASSESSEE. 6 ITA NOS.1028 & 1029/PUN/2017 A.Y.2008-09 10. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.1028 /PUN/2017 IS ALLOWED. 11. IN OTHER APPEAL FILED BY THE ASSESSEE IN ITA NO.1029 /PUN/2017, THE FACTS AND CIRCUMSTANCES OF THE CASE ARE IDENTICAL EXCEPT THE AMOUNTS. SINCE ALL OTHER FACTS, ARGUMENTS OF THE PARTIES ARE SAME AND SIMILAR , THE SAME RULING AS IN ITA NO.1028/PUN/2017 SHALL APPLY MUTATIS-MUTANDIS TO OTHER APPEAL HEREIN ALSO. THEREFORE, FOR THIS CASE ALSO, WE SET ASIDE THE ORDER OF LD. CIT(APPEALS) AND ALLOW THE APPEAL OF THE ASSESSEE ON THE SAME EXAMINA TION OF FACTS AND CIRCUMSTANCES. 12. IN THE COMBINED RESULT, APPEALS OF THE ASSESSEES IN ITA NOS.1028 & 1029/PUN/2017 ARE ALLOWED. ORDER PRONOUNCED ON 07 TH DAY OF MARCH, 2019. SD/- SD/- R.S.SYAL PA RTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 07 TH MARCH, 2019. SB !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS)-9, PUNE. 4. THE PR. CIT-5, PUNE. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 7 ITA NOS.1028 & 1029/PUN/2017 A.Y.2008-09 DATE 1 DRAFT DICTATED ON 0 6 .03 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 07 .03 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER