Pusphendra Subhashchandra Parikh, Solapur V. ACIT, Pune

ITA 1077/PUN/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72083 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 28-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K OJHA
• Keywords: Income from undisclosed sources; Search and seizure
• Section: 234B; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI G. S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 1077 / P N/ 20 12 ASSESSMENT YEAR : 2009 - 10 PUSPHENDRA SUBHASHCHANDRA PARIKH, 2 07/8, W.M. PETH, CHATI GALLI, SOLAPUR VS. ACIT, CENTRAL CIRCLE - 2(3), PUNE (APPELLANT) (RESPONDENT) PAN NO. AVBP9541P APPELLANT BY: SHRI NIKHIL PATHAK RESPONDENT BY: SHRI K.K. OJHA DATE OF HEARING : 30 - 07 - 2013 DATE OF PRONOUNCEMENT : 26 - 0 8 - 201 3 ORDER P ER R.S. PADVEKAR , JM : - IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER OF THE LD. CIT(A), CENTRAL, PUNE DATED 23 - 02 - 2012 FOR THE A.Y. 2009 - 10. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS: 1) LEARNED A C CIT CENTRAL CIRCLE - 2 (3) PUNE ERRED IN CHARGING INTEREST & HON OURABLE CIT(A) CENTRAL CIRCLE UNJUSTIFIED IN CONFIRMING THE INTEREST U/S.234A, AS BEFORE FILING OF RETURNS, TAXES WERE PAID WHICH WAS MORE THAN TAX PAYABLE AS PER RETURNED INCOME. 2) LEARNED A C CI T CENTRAL CIRCLE - 2(3) PUNE ERRED IN CHARGING INTEREST & HON OURABLE CIT(A) CENTRAL CIRCLE UNJUSTIFIED IN CONFIRMING THE INTEREST U/S. 234B AS THE CASH SEIZED (I.E. 08 - 08 - 2008) WAS MUCH BEFORE DUE DATE OF ADVANCE TAX PAYABLE FOR THE A.Y. 2009 - 2010. 3) LEARN ED A C CIT CENTRAL CIRCLE - 2(3) PUNE ERRED IN CHARGING INTEREST & HON OURABLE CIT(A) CENTRAL CIRCLE UNJUSTIFIED IN CONFIRMING THE INTEREST U/S.234C AS THE CASH SEIZED (I.E. 08 - 08 - 2008) WAS MUCH BEFORE MARCH 2009 AND BEFORE THE DUE DATES OF ADVANCE TAX PAY ABLE FOR THE A.Y. 2009 - 2010. HENCE INTEREST CHARGED U/S.234A B C ARE UNJUSTIFIED & WRONG WHICH MAY BE CANCELLED. 2. THE SHORT ISSUE IN CONTROVERSY IS WHETHER THE LD. CIT(A) WAS JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE THAT THE CASH SEIZED OF 2 ITA NO.1077/PN/2012, PUSPHENDRA SUBHASHCHANDRA PARIKH, SOLAPUR RS. 1 ,02,72,299/ - ON 07 - 08 - 2008 WAS TO BE ADJUSTED AGAINST THE ADVANCE TAX LIABILITY FOR THE A.Y. 2009 - 10 AND NO INTEREST SHOULD HAVE BEEN LEVIED U/S. 234A, 234B AND 234C OF THE ACT. 3. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. ONE SHRI BHAGWAN S. CHAVAN OF SOLAPUR WAS TAKEN INTO CUSTODY BY THE SR. P.I., RPF WITH THE CASH OF RS.1.02 CRORE S AND GOLD JEWELLERY AND GOLD BARS WHILE SAID PERSON WAS TRAVELLING IN HUSSAIN SAGAR EXPRESS FROM SOLAPUR TO MUMBAI. THE INFORMATION WAS PASSED ON TO THE INVES TIGATION WING OF INCOME TAX DEPARTMENT VIDE LETTER DATED 07 - 08 - 2008 AND THE SAID CASH WAS SEIZED AND TAKEN INTO CUSTODY BY ISSUING THE WARRANT OF REQUISITION U/S. 132 A OF THE ACT. THE ASSESSEE ATTENDED BEFORE THE ADIT (INV.), MUMBAI ON 08 - 08 - 2008 AND CLAI MED OWNERSHIP OF THE CASH AND GOLD ITEMS. THE ASSESSEES STATEMENT WAS RECORDED ON THE SAME DATE. THE ASSESSEE OFFERED THE CASH AND GOLD ITEMS AS HIS UNACCOUNTED INCOME FOR THE A.Y. 2009 - 10. IN THE STATEMENT THE ASSESSEE REQUESTED THAT AS HE IS OFFERING THE UNACCOUNTED CASH AND GOLD JEWELLERY AGGREGATING RS.1,18,57,299/ - FOR TAXATION IN THE A.Y. 2009 - 10 , HENCE, THE CASH SEIZED ALSO MAY BE ADJUSTED AGAINST HIS TAX LIABILITY. WHILE COMPLETING THE ASSESSMENT , THE ASSESSING OFFICER CHARGED THE INTEREST U/S. 234A, 234B AND 234C DISCARDING THE REQUEST MADE BY THE ASSESSE IN THE STATEMENT GIVEN ON 08 - 08 - 2008 WHILE THE SAID CASH WAS OFFERED. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER FOR LEVYING INTEREST U/S. 234A, 234B AND 234C BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. THE LD. CIT(A) REJECTED THE CONTENTION OF THE ASSESSEE ON THE PREMISES THAT THE ASSESSEE HAS NOT M ADE THE SPECIFIC REQUEST FOR ADJUSTMENT OF THE SEIZED CASH AGAINST THE VARIOUS INSTALLMENTS OF THE ADVANCE TAX. IT IS OBSERV ED BY THE LD. CIT(A) THAT IN THE STATEMENT U/S. 132(4) ONLY T HE ASSESSEE REQUESTED TO ADJUST THE SEIZED CASH AGAINST HIS TAX LIABILITY. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 3 ITA NO.1077/PN/2012, PUSPHENDRA SUBHASHCHANDRA PARIKH, SOLAPUR 4. WE HAVE HEARD THE RIVAL SUB MISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE FACTS ARE NOT IN DISPUTE. THE LEARNED COUNSEL PLACED HIS RELIANCE ON THE FOLLOWING TWO DECISIONS OF THE HON'BLE HIGH COURT OF BOMBAY (I) CIT, CENTRAL - I, MUMBAI VS. SHRI JYOTINDRA B. MODY IN INCOME TAX APPEAL NO. 3741 OF 2010 JUDGMENT DATED 21 ST SEPT EMBER, 2011 AND (II) CIT, CENTRAL - I, MUMBAI VS. JAFFERALI KASAMLAI RATTONSEY IN INCOME TAX APPEAL NO. 2059 OF 2011 JUDGMENT DATED 18 TH FEBRUARY, 2013. HE SUBMITS THAT THE ISSUE STAND S IN FAVOUR OF THE ASSESSEE BY THE ABOVE TWO DECISIONS , MORE PARTICULARLY IN THE CASE OF MR. JAFFERALI KASAMLAI RATTONSEY (SUPRA). THE FACTS IN SAID CASE ARE IDENTICAL WITH THE ASSESSEE S CASE . 5. WE HAVE ALSO HEARD THE LD. DR. HE RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. IN THE PRESENT CASE, THE CASH WAS SEIZED BY I SSUING THE REQUISITION WARRANT WHICH WAS ADMITTED BY THE ASSESSEE AS HIS INCOME IN THE STATEMENT RECORDED U/S. 132(4) AND IN THE SAID STATEMENT T HE ASSESSEE REQUESTED THE REVENUE AUTHORITIES TO ADJUST THE SAID CASH AGAINST HIS TAX LIABILITY FOR THE A.Y. 20 09 - 10 . W E FURTHER FIND THAT THE REQUISITION WARRANT WAS ISSUED ON 08 - 08 - 2008 AND CASH WAS SEIZED BY THE RPF WHICH WAS IN THEIR CUSTODY. THE SAID DATE IS ADMITTEDLY BEFORE THE FIRST DATE OF THE PAYMENT OF THE INSTALLMENT OF THE ADVANCE TAX FOR THE A.Y. 20 09 - 10 I.E. 15 TH SEPTEMBER, 2008. WE FIND THAT THE ONLY REASON GIVEN BY THE LD. CIT(A) IS THAT NO SPECIFIC APPLICATION WAS MADE AND HENCE, MERELY REQUESTING IN THE STATEMENT RECORDED U/S. 132 (4) IS NOT SUFFICIENT. 6. IN THE CASE OF SHRI JYOTINDRA B. MODY (SUPRA) THE IDENTICAL ISSUE IS CONSIDERED BY THEIR LORDSHIPS . I N THE SAID CASE , I N THE SEARCH AND SEIZURE ACTION CASH AMOUNTING TO RS. 18 LACS WAS TO BE SEIZED. THE ASSESSEE ALSO PAID SUM OF RS.1.98 CRORE S BY PAY ORDER DATED 31 - 03 - 2007. THE ASSESSEE REQ UESTED THAT THE CASH SEIZED OF RS.18 LACS AND PAY ORDER 4 ITA NO.1077/PN/2012, PUSPHENDRA SUBHASHCHANDRA PARIKH, SOLAPUR AMOUNTING TO RS.1.98 CRORE S PAID BY THE ASSESSEE BE ADJUSTED TOWARD S THE ADVANCE TAX PAYABLE ON THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE. DURING THE COURSE OF SEARCH IN THE SAID CASE ALSO THE A DDITIONAL INCOME OFFERE D BY THE ASSESSEE HAS BEEN ACCEPTED BUT WITHOUT GIVING THE BENEFIT OF RS.18 LACS SEIZED DURING THE COURSE OF SEARCH AND RS.1.98 CRORE PAID BY THE ASSESSEE TOWARDS THE ADVANCE TAX. THE INTEREST WAS CHARGED U/S. 234A, 234B AND 234C OF THE INCOME - TAX ACT. THE TRIBUNAL DELETED THE SAID INTEREST. THE REVENUE HAS CARRIED THE MATTER BEFORE THE HON'BLE HIGH COURT AND THE HON'BLE HIGH COURT DISMISSED THE APPEAL FILED BY THE REVENUE. THE OPERATIVE PART OF THE DECISION IS AS UNDER: WE SEE N O MERIT IN THE ABOVE CONTENTION, BECAUSE, ONCE THE ASSESSEE OFFERS TO TAX THE UNDISCLOSED INCOME INCLUDING THE AMOUNT SEIZED DURING THE SEARCH, THEN THE LIABILITY TO PAY ADVANCE TAX IN RESPECT OF THAT AMOUNT ARISES EVEN BEFORE THE COMPLETION OF THE ASSESSM ENT. SECTION 132B(1) (I) OF THE ACT DOES NOT PROHIBIT UTILIZATION OF THE AMOUNT SEIZED DURING THE COURSE OF SEARCH TOWARDS THE ADV A NCE TAX PAYABLE ON THE AMOUNT OF UNDISCLOSED INCOME DECLARED DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, THE ASSESSEE , P RIOR TO THE LAST DATE FOR PAYMENT OF LAST INSTALLMENT OF ADVANCE TAX, HAD IN FACT BY HIS LETTER DATED 14 TH MARCH, 2007 REQUESTED THE ASSESSING OFFICER TO ADJUST THE AMOUNTS TOWARDS THE EXISTING ADVANCE TAX LIABILITY. SINCE ADVANCE TAX LIABILITY IS TO B E COMPUTED AND PAID IN AC C ORDANC E WITH THE PROVISIONS OF THE ACT EVEN BEFORE THE COMPLETION OF THE ASSESSMENT, NO FAULT CAN BE FOUND WITH THE DECI SIONS OF THE ITAT IN HOLDING THAT IN THE FACTS OF THE PRESENT CASE, THE AMOUNTS IN QUESTI O N W E RE LIABLE TO BE ADJUSTED TOWARDS THE EXISTING ADVANCE TAX LIABILITY. 7. IN THE CASE OF JAFFERALI KASAMLAI RATTONSEY (SUPRA) RS.41 LACS WERE SEIZED. THE ASSESSEE GAVE THE STATEMENT ON 27 - 07 - 2006 IN WHICH HE CATEGORICALLY STATED THAT THE SEIZED CASH MAY BE ADJUSTED AGA INST THE TAX LIABILITY ARISING OUT OF THE DISCLOSURE. THE ASSESSEE WAS LEVIED THE INTEREST U/S. 234A, 234B AND 234C DISCARDING THE REQUEST MADE BY HIM. T HE MATTER WA S CARRIED TO THE TRIBUNAL AND THE TRIBUNAL DELETED THE INTEREST LEVIED. THE DEPARTMENT C ARRIED THE MATTER FURTHER BEFORE THE HON'BLE HIGH COURT AND THE HON'BLE HIGH COURT CONFIRMED THE ORDER OF THE TRIBUNAL DELETING THE INTEREST LEVIED BY THE ASSESSING OFFICER TO THE 5 ITA NO.1077/PN/2012, PUSPHENDRA SUBHASHCHANDRA PARIKH, SOLAPUR EXTENT OF CASH SEIZED RS.42 LACS. IN OUR OPINION, THE ASSESSEES CASE IS SQ UARELY COVERED BY THE DECISION CITED (SUPRA). AS PER THE ASSESSMENT ORDER WE FIND THAT TOTAL INCOME TAX PAYABLE AS PER THE ASSESSMENT ORDER IS TO THE EXTENT OF RS. 39,53,215/ - WHICH IS MORE LESS THAN THE AMOUNT OF CASH SEIZED BY THE DEPARTMENT. WE, ACCORD INGLY, ALLOW THE GROUNDS TAKEN BY THE ASSESSEE. 8. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 26 - 0 8 - 20 1 3 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 26 TH AUGUST, 20 1 3 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A), CENTRAL, PUNE 4 THE CIT, CENTRAL, PUNE 5 THE DR, ITAT, B BENCH, P UNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE