SHRI NANDKUMAR BABULAL SONI, Mumbai V. D.C.I.T. - CENT. CIR. 5(1), Mumbai

ITA 1061/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3575 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 23-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAVITA P KAUSHIK
• Keywords: Retraction; Revised return
• Section: 143(3); 131; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1061/MUM/2018(A.Y. 2014-15) SHRI NANDKUMAR BABULAL SONI, 7/11, CHUNAWALA BLDG., KOLSA STREET, PYDHONIE, MUMBAI 400 003 PAN:ALLPS9573N ...... APPELLANT VS. DCIT CC-5(1), AIR INDIA BLDG., NARIMAN POINT, MUMBAI 400 021 ..... RESPONDENT APPELLANT BY : SHRI RAJESH SANGHVI RESPONDENT BY : MS. KAVITA P. KAUSHIK DATE OF HEARING : 18/09/2019 DATE OF PRONOUNCEMENT : 31 /10/2019 ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-53 ( IN SHORT THE CIT(A) ), MUMBAI DATED 22/12/2017 FOR ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE HAS RAISED FOLLO0WING GROUNDS OF APPEAL ASSAILING THE FINDING OF CIT(A) :- 1. IN THE FACTS & CIRCUMSTANCES OF THE CASE & IN L AW , THE LD CIT (A) HAVE ERRED BY DELETING THE PROTECTIVE ADDITION OF RS. 1,02,98, 500/- DONE BY THE A.O, IGNORING THE TYPICAL FACTS OF THE CASE, LEGALITIES, SATISFACTION U/S 153C AND OTHER GRIEVANCES ESPECIALLY CENTRALIZATION OF CASES OF TH E APPELLANT. 2 ITA NO.1061/MUM/2018(A.Y. 2014-15) 2. IN THE FACTS & CIRCUMSTANCES OF THE CASE & IN LA W , THE LD CIT (A) HAVE ERRED BY NOT APPRECIATING THAT THE APPELLANT WAS THE TRUE OWNER OF CASH OF RS. 1,03,00,000/-SEIZED ON 01-07-2013 & THAT THE APPELL ANT SHOULD HAVE BEEN SUBSTANTIVELY ASSESSED ACCORDINGLY BASED ON HIS RET URN FILED & OTHER EVIDENCES / STATEMENTS. 3. IN THE FACTS & CIRCUMSTANCES OF THE CASE & IN LA W , THE LD CIT (A) HAVE ERRED IN HIS DECISION BY RELYING ON THE ASSESSMENT ORDER DT: 27-07-2015 OF SHRI.SURESHBHAI SOMABHAI PRAJAPATI BY THE DCIT CC - 1(2) AHMEDABAD WHICH WAS MALAFIDELY DONE IN VIOLATION OF CENTRALIZATION PROVISIONS U/S 127 OF THE ITA & WITHOUT WAITING/COORDINATING WITH THE APPELLANTS ASSESSMENT PROCEEDINGS, THEREBY CAUSING CIVIL FINANCIAL LOSS TO THE APPELLA NT & FOR WHICH GRIEVANCES HAVE BEEN LODGED. 3. SHRI RAJESH SANGHVI APPEARING ON BEHALF OF THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS GIVING THE FACTS AND ARGUMENTS. THE SAME ARE REPRODUCED HEREIN BELOW:- 1) A SEARCH ACTION U/S 132 WAS CONDUCTED AT MUM BAI CENTRAL RAILWAY STATION ON 01-07-2013 & CASH OF RS 1,02,98,5007- WAS FOUND FROM THE DRIVER OF A TRUCK & SEIZED BY THE INVESTIGATION WING MUMBAI. THE OWNE R OF THE TRUCK I.E THE AANGADIA, MR. SURESHBHAI PRAJAPATI'S STATEMENT WAS RECORDED ON 04-07-2013 & 05-07-2013 (PB/101-113) WHEREIN HE CONFIRMED THAT T HE SAID'CASH OF RS 1,02,98,5007- BELONGED TO HIM. BUT HIS ANSWERS ON S OURCE (QTS 6 ON PB/105, QTS 9 ON PB/107 & QTS 9 ON PB/L 14) OF EARNING THIS RS. 1.03 CRS WAS VAGUE AND UNBELIEVABLE. HE STATED HE EARNED THIS MONEY FROM C OMMISSION, SALE OF PLOTS, PROPERTY, CARS DURING THE PERIOD 1-4-13 TO 1-7-13. THIS MEANS THAT JUST 3 MONTHS HE EARNED 1.03 CRS BUT HE COULD NOT PRODUCE ANY DOC UMENTARY EVIDENCE. HIS PAST ANTECEDENTS DID NOT SUPPORT THIS AVERMENT. 2) ON 15-07-2013 (PB/154) THE SAID SURESHBHAI P RAJAPATI FILED A RETRACTION & STATED THAT THE CASH OF RS 1,02,98,5007- BELONGS TO THE APPELLANT NANDKUMAR BABULAL SONI, ASSESSED AT MUMBAI (PROPRIETOR OF M/S . SHRI GANESH GOLD). HIS STATEMENT WAS ALSO RECORDED BY AHMEDABAD IT DEPT ON 13-9-13 (PB/L 16-126) WHEREIN HE ACCEPTED THAT CASH OF 1.03 CRS BELONGED TO THE APPELLANT (REFER QTS 5, QTS 9 TO 12 ON PB/L20-122, QTS 15 TO 16 PB/L24-1 25 & QTS 18 PB/L26}. THESE ANSWERS FROM THE AANGADIA ARE VERY IMPORTANT PIECE OF EVIDENCE FAVOURING THE APPELLANT AND PROVING THE FACT THAT THE CASH OF RS. 1.03 CRS BELONGED TO THE APPELLANT. 3 ITA NO.1061/MUM/2018(A.Y. 2014-15) 3) APPELLANT FILED A LETTER DT : 16-7-13 (PB/L55 ) NARRATING TRUE FACTS AND STATING THAT THE CASH 1.03 CRS BELONGED TO HIM AND SENT THI S LETTER TO VARIOUS IT AUTHORITIES (PB/L58) 4) THE APPELLANT BEING A DEALER IN GOLD, HAD SEN T THE CASH FOR TRANSPORTATION TO AHMEDABAD AND THE SAID SURESHBHAI PRAJAPATI IS J UST AN AANGADIA. THE CASH ON HAND WAS SUPPORTED BY CASH BALANCE IN BOOK OF AC COUNTS OF THE APPELLANT AS ACCEPTED BY AO ON INTERNAL PAGE 6, PARA 6.2 POINT ( 2) OF THE IMPUGNED ASST ORDER DT : 29-3-16. APPELLANT HAD ALSO SUBMITTED AL L BOOKS OF ACCOUNTS & BILLS AS SEEN FROM INDEX ON PB/L-2 AND REITERATED BY AO IN T HE ASST ORDER AT PARA # 3 & 6.2 (A). APPELLANT EXPLAINED THE SOURCES OF ACCUMUL ATION OF THE CASH OF 1.03 CRS BY WAY OF CASH SALES OF GOLD AND AUDITED BOOKS OF A CCOUNTS ETC WERE PRODUCED. 5) THE IT DEPT RECORDED STATEMENTS OF (I). APPEL LANT ON 13-9-13 (PB/96-100) AND OF (II). MR. BHAU TUKARAM KHILLARI (STAFF OF TH E APPELLANT WHO TOOK THE CASH TO THE AANGADIA) ON 13-9-13 (PB/127-128) AND OF (II I). MR. HITEN GANDHI (STAFF OF ANGADIA SURESH PRAJAPATI) ON 4-7-13 (PB/129-130) & EVERYONE CONFIRMED THAT THE SAID CASH OF RS 1,02,98,5007- BELONGED TO THE A PPELLANT AND WAS GIVEN TO THE AANGADIA. 6) MR. SURESHBHAI PRAJAPATI, THE ANGADIA WAS ASS ESSED AT AHMEDABAD & APPELLANT AT MUMBAI. IDEALLY, IN SUCH A SITUATION , BOTH THE CASES OUGHT TO HAVE BEEN CENTRALIZED AT MUMBAI OR AHMEDABAD U/S 127(2) & ASSESSMENTS DONE AT ONE PLACE U/S 153 A OR 153C TO DETERMINE WHO IS THE TRUE OWNER OF SAID CAS H SEIZED. THIS WAS NOT DONE . 7) THIS HAS LEAD TO THE CRITICAL LEGAL ISSUE IN THIS APPEAL, NAMELY ' IF AS PER INCOME TAX ACT THE SAME INCOME CANNOT BE TAXED TWIC E AND HAS TO BE ASSESSED IN ONE PERSONS HANDS, THEN IT IS ALSO EQUALLY IMPOR TANT THAT IT SHOULD BE ASSESSED IN THE CORRECT PERSONS HAND, BASED ON EVID ENCE & NOT ON FIRST-COME- FIRST-ASSESSED BASIS '. THE AO RECOGNIZES THIS ANOM ALY IN PARA 7 OF THE IMPUGNED ASST ORDER DT : 29-3-16 BUT STILL GAVE CRE DENCE TO THE EARLIER ASSESSED ASST ORDER DT: 27-7-15 OF THE AANGADIA DONE AT AHME DABAD. HENCE THOUGH THE INCOME OF 1.03 CRS WAS ASSESSED IN THE HANDS OF THE AANGADIA IT WAS ASSESSED IN THE HANDS OF THE WRONG PERSON WITHOUT ANY EVIDENCE AND AGAINST THE STATEMENTS OF VARIOUS PERSONS AND THE ANGADIA HIMSE LF AND EVEN WHEN THE AANGADIA FILED A REVISED RETURN WITHDRAWING THIS CL AIM IN HIS REVISED RETURN FILED ON 20-4-15. PRESUMABLY THE ONLY REASON FOR ASSESSIN G THIS INCOME (BY THE AHMEDABAD AO) IN THE HANDS OF THE ANGADIA WAS HIS F IRST STATEMENT ON 4-7-13 AND 5-7-13 OR REASONS BEYOND THE COMPREHENSION OF T HE APPELLANT. 8) MR. SURESH PRAJAPATI FILED HIS ORIGINAL IT R ETURN AT AHMEDABAD ON 29-9-14 DECLARING THE CASH OF 1.03 CRS AS HIS INCOME. THERE AFTER SINCE HE DID NOT PAY SELF ASST TAX ON THIS ORIGINAL INCOME, HE REVISED HIS RE TURN ON 20-4-15 IN WHICH HE WITHDREW THE INCOME OF 1.03 CRS AND DECLARED ONLY R S. 1,92,970/- AS HIS INCOME. 4 ITA NO.1061/MUM/2018(A.Y. 2014-15) THEN BY LETTER IN HIS ASST PROCEEDINGS HE ACCEPTS H IS ORIGINAL RETURN. FINALLY HE IS ASSESSED ON RS. 1.03 CRS ON SUBSTANTIVE BASIS VIDE HIS ASST ORDER DT: 27-7-15. (EXTRACTS FOUND ON PB/168-171). DETAILED ASST ORDER OF THE AANGADIA IS NOT WITH APPELLANT BECAUSE IT WAS DENIED TO HIM (PB/159) 9) APPELLANT FILED HIS RETURN ON 13-8-15 AND WAS ASSESSED ON PROTECTIVE BASIS ON THIS 1.03 CRS BECAUSE AS PER AO, THE ANGADIA WAS ALREADY ASSESSED EARLIER ON 27-7-15 AT AHMEDABAD ON SUBSTANTIVE BASIS. REFER PA RA 7 OF IMPUGNED ASST ORDER. NONE OF THE GLARING STATEMENTS OF ANY PERSON /STAFF, BACKGROUND OF THE APPELLANT OR BOOKS OF ACCOUNTS/BILLS/EVIDENCES WERE CONSIDERED. WHAT ONLY MATTERED WAS THAT SINCE THE ANGADIA WAS ALREADY SUB STANTIVELY ASSED AT AHMEDABAD, THE APPELLANT WAS ASSESSED ON PROTECTIVE BASIS. 10) IN OTHER WORDS, WHAT HAPPENED WAS THIS ENTIRE CASH OF RS 1.02.98.50/- WAS SUBSTANTIVELY ASSESSED IN THE HANDS OF SURESH P RAJAPATI ON 29/07/2015 BY DCIT AHMEDABAD AND THE AANGADIA MALAFIDELY CLAIMED THAT THE SEIZED CASH OF 1.03 CRS BE ADJUSTED AND BALANCE SEIZED CASH BE RET URNED TO HIM. WHEREAS THE APPELLANT BEING THE TRUE OWNER OF THE SEIZED CASH A ND WITH ALL STATEMENTS OF EVERYONE CONFIRMING HIS AND THE BOOKS OF ACCOUNTS, AND BILLS, STILL THE APPELLANTS STAND WAS IGNORED AND HE WAS ASSESSED IN MUMBAI, ON A PROTECTIVE BASIS WHICH WAS QUASHED BY THE CIT(A) IN HIS ORDER DT: 22-12-17 . HENCE THE APPELLANT LOST HIS CLAIM TO RS. 1.03 WHICH THE AANGADIA MISCHIEVOUSLY SEEKS TO USURP. ' 11) APPELLANT 2 GRIEVANCE BEING (I). WHY WERE BOTH THESE ASSESSMENTS NOT CENTRALISE D AND DONE AT THE SAME TIME , SAME PLACE BY A COMMON OFFICER. IN FACT THIS IS THE REASON WHY CENTRALIZATION OF CASES TAKE PLACE & SEC 127 (2) IS CREATED IN THE STATUTE. HENCE, INJUSTICE HAS BEEN CAUSED TO THE APPELLANT & HIS LE GITIMATE CASH OF RS 1,02,98,5007- HAS BEEN TAXED & THUS EFFECTIVELY GIV EN TO SURESH PRAJAPATI WHO WILL ENJOY THE SEIZED CASH POST TAX ADJUSTMENTS & (II). IF THE INCOME-TAX ACT STATES THAT THE SAME IN COME CANNOT BE TAXED TWICE THEN THE INCOME-TAX ACT ALSO DEMANDS THAT THE INCOM E SHOULD BE TAXED IN THE HANDS OF THE RIGHTFUL PERSON BASED ON EVIDENCE AND NOT ON A CONCEPT OF FIRST- COME-FIRST-ASSESSED. 12) APPELLANT IN HIS OWN CRUDE WAY AND IN HINDI F ILED OVER 54 GRIEVANCES LETTERS , TILL THE PMO, ON THIS LACK OF CO-ORDINATION AND M ALAFIDE STATE OF AFFAIRS INVOLVING VARIOUS IT OFFICERS (PB/131-153 & PB/180- 187). HE WAS CONSTANTLY ECHOING THE FACT THAT THE SAID SEIZED CASH BELONGED TO HIM BASED ON STATEMENTS OF VARIOUS PERSONS, RETRACTION OF THE ANGADIA, BOOK S OF ACCOUNTS AND BILLS ETC. BUT NOTHING HAPPENED. 13) THE APPELLANT ALSO WROTE TO THE PCIT, AHMEDAB AD TO INVOKE SEC. 263 TO CONCLUDED SUBSTANTIVE ASSESSMENT OF THE ANGADIA VID E LETTER DT : 5-2-18 (PB/188) THERE BEING TIME TILL 31-3-18, BUT THAT WA S SEEMINGLY IGNORED. 14) HENCE GROSS INJUSTICE BEING DONE TO THE APPEL LANT, IT IS PRAYED THAT: 5 ITA NO.1061/MUM/2018(A.Y. 2014-15) (A), THE LEGAL QUESTION IN POINT 11 BE ANSWERED (B). DIRECTIONS BE GIVEN TO THE AHMEDABAD IT DEPT T O DO THE NEEDFUL IN THE CASE OF AANGADIA AND NOT TO PART WITH ANY SEIZED CASH TO THE AANGADIA (C). STRICTURES BE FRAMED AGAINST THE IT DEPT FOR C AUSING FINANCIAL LOSS TO THE APPELLANT DUE TO COORDINATION ISSUES OF NOT CENTRAL IZATION OF CASES (D) THE APPELLANT CASE BE SENT BACK TO AO TO DECID E BASED ON EVIDENCES AND AS PER LAW, DE-NOVA. 4. MS. KAVITA P. KAUSHIK REPRESENTING THE DEPARTMEN T HAS VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND HAS PRAYED FOR DISM ISSING THE APPEAL BY THE ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATI VE POINTED THAT ADDITION OF THE SEIZED CASH AMOUNT RS.1,02,98,500 /- WAS MADE IN THE HANDS OF SHRI SURESHBHAI SOMABHAI PRAJAPATI ON SUB STANTIAL BASIS. IN HIS RETURN OF INCOME HE OWNED THE CASH AMOUNT SEIZE D. THE ADDITION OF RS.1,02,98,500/- MADE IN ASSESSMENT PROCEEDINGS UND ER SECTION 143(3) HAS BEEN ACCEPTED BY SURESHBHAI SOMABHAI PRAJAP ATI AND NO FURTHER APPEAL WAS FILED BY HIM. THE ADDITION OF SEIZED CASH WAS MADE ON PROTECTIVE BASIS IN THE HANDS OF ASSESSEE. NOW THAT SEIZED CASH AMOUNT HAS BEEN OWNED BY SURESHBHAI SOMABHAI PRAJAPATI. AND SUBSTANTIAL ADDITION MADE IN HIS HANDS HAS BEEN CONFIRMED, THE SAME AMOUNT CANNOT BE ADDED IN THE HANDS OF ASSESSEE ON THE BASIS OF P ROTECTIVE ADDITION. THE CIT(A) HAS RIGHTLY DISMISSED THE APPEAL OF ASSESS EE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY LD. DEPART MENTAL REPRESENTATIVE AND HAVE PERUSED THE WRITTEN ARGUMEN TS FILED BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE. IT IS AN UNDISPUTED FACT THAT CASH OF RS.1,02,98,500/- WAS FOUND AND SEIZED FROM SHRI PRAGARAM PRAJAPATI AN EMPLOYEE OF SHRI SURESHBHAI SOMABHAI PRAJAPATI AT MUMBAI 6 ITA NO.1061/MUM/2018(A.Y. 2014-15) CENTRAL RAILWAY STATION. STATEMENT OF SHRI SURESH BHAI SOMABHAI PRAJAPATI WAS RECORDED, UNDER SECTION 131 ON 04/07/ 2013 AND UNDER SECTION 132(4) ON 05/07/2013, WHEREIN HE ADMITTED THAT THE CASH SEIZED BELONGS TO HIM. SUBSEQUENTLY, ON 15/07/2013 SUR ESHBHAI SOMABHAI PRAJAPATI RETRACTED FROM HIS STATEMENT AND STATED THAT CASH SEIZED BELONGS TO THE ASSESSEE. HOWEVER, IN HIS RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153C, SURESHBHAI SOMABHAI PRAJAPATI DECLARED THE CASH AMOUNT SEIZED IN HIS RETURN OF IN COME. THE ASSESSING OFFICER VIDE ORDER DATED 27/07/2015 PASSED UNDER SECTION 143(3) R.W.S. 153B(B) OF THE ACT MADE ADDITION OF THE AFORESAI D AMOUNT IN THE HANDS OF SURESHBHAI SOMABHAI PRAJAPATI. THE AFORESAI D ASSESSMENT ORDER ATTAINED FINALITY AS NO APPEAL WAS FILED BY SURES HBHAI SOMABHAI PRAJAPATI AGAINST THE SAID ASSESSMENT ORDER. ON T HE BASIS OF RETRACTION STATEMENT OF SURESHBHAI SOMABHAI PRAJAPATI, CASH SEIZED WAS PROTECTIVELY ADDED IN THE HANDS OF THE PRESENT ASSE SSEE. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT SUBS TANTIATE SOURCE OF CASH RS.1.02,98,500/-. THE ASSESSEE HAD CLAIMED T HAT AMOUNT OF RS.1.02,98,500/- BELONGS TO HIM AND THE CASH WAS HANDED OVER TO SURESHBHAI SOMABHAI PRJAPATI BY THE ASSESSEE. HOWE VER, NO DOCUMENTARY EVIDENCE WAS PLACED ON RECORD TO SHOW HANDING OVER OF SUCH A HUGE CASH BY THE ASSESSEE TO SURESHBHAI SOMABHAI PRJAPATI. TH E IMPUGNED AMOUNT HAS BEEN OWNED BY SURESHBHAI SOMABHAI PRAJAPAT I IN HIS RETURN OF INCOME AND HAS BEEN ASSESSED TO TAX IN HIS HANDS. WE FIND NO INFIRMITY IN 7 ITA NO.1061/MUM/2018(A.Y. 2014-15) THE ORDER OF CIT(A) IN REJECTING ASSESSEES CLAIM. THE APPEAL OF THE ASSESSEE IS WITHOUT ANY MERIT, HENCE, THE SAME IS D ISMISSED. 6. IN THE RESULT, IMPUGNED ORDER IS CONFIRMED AND T HE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY THE 31ST DAY OF OCTOBER, 2019. SD/ SD/- (RAJESH KUMAR) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 31/10/2019 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI