SHASHI VAISH, Allahabad V. DCIT, Allahabad

ITA 114/ALLD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2716 (ITAT-ALLAHABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 30-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NAMITA
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Set aside
• Section: 143(3); 133A; 153A; 153C; 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ALLAHABAD BENCH, ALLAHABAD (THROUGH VIRTUAL COURT) BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NOS. 114 & 115/ALLD/2017 ASSESSMENT YEAR: 2006-07 & 2008-09 MRS. SHASHI VAISH 86, NEW BAIHRANA, ALLAHABAD V. DCIT, CENTRAL CIRCLE, ALLAHABAD PAN: ADKPV 3246 N (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI PRAVEEN GODBOLE, CA RESPONDENT BY: MS. NAMITA S. PANDEY, CIT-DR DATE OF HEARING: 25. 11. 2020 DATE OF PRONOUNCEMENT: 26.11. 2020 O R D E R PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER: THESE TWO APPEALS, FILED BY ASSESSEE, BEING ITA NOS. 114 & 115/ALLD/2017, ARE DIRECTED AGAINST TWO SEPARATE APPELLATE ORDERS BOTH DATED 31.03.2017 IN APPEAL(S) NO. 70/581/DCIT/CC/ALLD/CIT(A)-III/LKO/14-15 AND 91/583/DCIT /CC/ALLD/CIT(A)-III/LKO/14-15 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS,)-III, LUCKNOW (HEREINAFTER CALLED 'THE CIT(A)'),FOR ASSESSMENT YEARS(AYS)2006-07 AND 2008-09 RESPECTIVELY , THE APPELLATE PROCEEDINGS HAD ARISEN BEFORE LEARNED CIT(A) FROM TWO SEPARATE ASSESSMENT ORDER(S) BOTH DATED 29.03.2013 PASSED BY LEARNED ASSESSING OFFICER (HEREINAFTER CALLED 'THE AO') U/S 143(3) READ ITA NOS. 114 & 115/ALLD/2017 ASSESSMENT YEAR: 2006-07 & 2008-09 SHASHI VAISH 2 WITH SECTION 153C READ WITH SECTION 153A OF THE INCOME-TAX ACT , 1961 (HEREINAFTER CALLED 'THE ACT') FOR AYS: 2006-07 & 2008-09 RESPECTIVELY . WE HAVE HEARD BOTH THE PARTIES THROUGH VIDEO CONFERENCING MODE THROUGH VIRTUAL COURT. 2. THE GROUNDS OF APPEALS RAISED BY ASSESSE IN ITA NO. 114/ALLD/2017 FOR AY : 2006-07 IN MEMO OF APPEAL FILED WITH INCOME-TAX APPELLATE TRIBUNAL, ALLAHABAD (HEREINAFTER CALLED THE TRIBUNAL) READS AS UNDER : 1. THAT IN ANY VIEW OF THE MATTER THE ASSESSMENT MADE ON AN INCOME OF RS. 5,32,840/- VIDE ORDER DATED 29-03-2013 PASSED U/S 153C R.W.S. 153A R.W.S. 143(3) OF THE IT ACT AS AGAINST THE RETURNED INCOME OF RS 2,33,510/- IS BAD BOTH ON THE FACTS AND IN LAW. 2. THAT IN ANY VIEW OF THE MATTER THE ADDITION OF RS. 2,32,100/- AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD CIT(A)- III, LUCKNOW IS HIGHLY UNJUSTIFIED AND INCORRECT WHEN THE ALLEGED CASH DEPOSITS IN BANK ARE FROM DEFINITE SOURCES DULY EXPLAINED BY THE ASSESSEE ESPECIALLY WHEN THE RELEVANT BANK ACCOUNTS ARE ALREADY DISCLOSED AND A CASH FLOW HAS ALSO BEEN PLACED ON RECORD HENCE ADDITION MADE AND CONFIRMED BY CIT(A) IS HIGHLY UNJUSTIFIED. 3. THAT IN ANY VIEW OF THE MATTER THE FINDINGS AND OBSERVATIONS OF THE LD CIT(A) REGARDING THE ADDITION OF RS.2,32,100/- IS TOTALLY INCORRECT AND CONTRARY TO THE FACTS OF THE CASE. 4. THAT IN ANY VIEW OF THE MATTER THE INTEREST CHARGED UNDER DIFFERENT SECTIONS OF THE ACT IS HIGHLY UNJUSTIFIED. 5. THAT IN ANY VIEW OF THE MATTER THE APPELLANT RESERVES HIS RIGHT TO TAKE ANY FRESH GROUNDS OF APPEAL BEFORE HEARING OF APPEAL. IT IS THEREFORE PRAYED THAT IN THE LIGHT OF SUBMISSIONS MADE ABOVE RELIEF MAY BE ALLOWED ACCORDINGLY. 3. THE GROUNDS OF APPEALS RAISED BY ASSESSE IN ITA NO. 115/ALLD/2017 FOR AY: 2008-09 IN MEMO OF APPEAL FILED WITH THE TRIBUNAL READS AS UNDER : ITA NOS. 114 & 115/ALLD/2017 ASSESSMENT YEAR: 2006-07 & 2008-09 SHASHI VAISH 3 1. THAT IN ANY VIEW OF THE MATTER THE ASSESSMENT MADE ON AN INCOME OF RS. 65,85,510/- VIDE ORDER DATED 29.03.2013 PASSED U/S 153C R.W.S 153A R.W.S. 143(3) OF THE IT ACT AS AGAINST THE RETURNED INCOME OF RS. 2,33,510/- IS BAD BOTH ON THE FACTS AND IN LAW. 2 THAT IN ANY VIEW OF THE MATTER THE ADDITION OF RS. 86,000/- AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) III, LUCKNOW IS HIGHLY UNJUSTIFIED AND INCORRECT WHEN THE ALLEGED CASH DEPOSITS IN BANK ARE FROM DEFINITE SOURCES DULY EXPLAINED BY THE ASSESSEE ESPECIALLY WHEN THE RELEVANT BANK ACCOUNTS ARE ALREADY DISCLOSED AND A CASH FLOW HAS ALSO BEEN PLACED ON RECORD HENCE ADDITION MADE AND CONFIRMED BY CIT(A) IS HIGHLY UNJUSTIFIED. 3.THAT IN ANY VIEW OF THE MATTER THE FINDINGS AND OBSERVATIONS OF THE LD. CIT(A) WITH REGARD TO ADDITION OF RS. 86,000/- IS TOTALLY INCORRECT AND CONTRARY TO FACTS OF THE CASE. 4.THAT IN ANY VIEW OF THE MATTER THE INTEREST CHARGED UNDER DIFFERENT SECTIONS OF THE ACT IS HIGHLY UNJUSTIFIED. 5.THAT IN ANY VIEW OF THE MATTER THE APPELLANT RESERVES HIS RIGHT TO TAKE ANY FRESH GROUNDS OF APPEAL BEFORE HEARING OF APPEAL. IT IS THEREFORE PRAYED THAT IN THE LIGHT OF SUBMISSIONS MADE ABOVE RELIEF MAY BE ALLOWED ACCORDINGLY. 4. THE BRIEF FACTS OF THE CASE THAT THE ASSESSEE IS AN INDIVIDUAL AND WAS PARTNER IN THE FIRM VIJAY STONE PRODUCT, MANGALAM STONE PRODUCT & R.J. STONE PRODUCT . THE ASSESSEE DERIVED INCOME FROM SUPPLY OF CONTRACT WORK AND ALSO DERIVED SALARY AND INTEREST INCOME. THE ASSESSEE ALSO DERIVED SALARY FROM MANGALAM SERVICE STATION AND RAMJI & BROS. AND INCOME FROM TRANSPORTATION/TRAVEL AGENCY BUSINESS. THERE WAS A SEARCH AND SEIZURE OPERATION CARRIED OUT BY REVENUE U/S 132 OF THE 1961 ACT, ON 03.02.2011 AT THE RESIDENTIAL AND BUSINESS PREMISES BELONGING TO THE VAISH GROUP. THERE WAS AN SIMULTANEOUS SURVEY ACTION U/S 133A OF THE ACT AGAINST CERTAIN BUSINESS PREMISES OF THE VAISH GROUP. THE REVENUE HAS CLAIMED THAT AFTER RECORDING OF SATISFACTION AND BASED ON SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIONS, PROVISIONS OF SECTION 153C OF THE 1961 ACT WERE INVOKED AGAINST ITA NOS. 114 & 115/ALLD/2017 ASSESSMENT YEAR: 2006-07 & 2008-09 SHASHI VAISH 4 THE ASSESSEE . WHILE FRAMING ASSESSMENT U/S 153C OF THE ACT R.W.S. 153A, R.W.S. 143(3) OF THE 1961 ACT, THE AO HAD OBSERVED THAT CASH WAS DEPOSITED BY ASSESSEE IN TWO BANK ACCOUNTS MAINTAINED BY ASSESSEE WITH PUNJAB NATIONAL BANK AND THE ASSESSEE HAS NOT SUBMITTED ANY PERSONAL BOOKS OR CASH FLOW STATEMENT IN RESPECT OF DEPOSIT AMOUNTING TO RS. 2,32,100/- IN AY: 2006-07 (RS. 86,000/- IN AY: 2008-09) WHICH LED TO ADDITIONS IN THE HANDS OF THE ASSESSEE. THE ASSESSEE HAD SUBMITTED BEFORE THE AO THAT THE MONEY HAS BEEN ROUTED IN THE BANK ACCOUNTS BY WITHDRAWAL FROM THE OTHER BANK ACCOUNTS. HOWEVER NO EVIDENCE TO THAT EFFECT WAS SUBMITTED BY ASSESSEE BEFORE THE AO TO SUBSTANTIATE ITS STAND, WHICH LED TO THE ADDITIONS BEING MADE BY THE AO TO THE INCOME OF THE ASSESSEE TO THAT EFFECT TO THE TUNE OF RS. 2,32,100/- IN AY: 2006-07 (RS. 86,000/- IN AY: 2008-09), VIDE SEPARATE ASSESSMENTS FOR BOTH THE AYS VIZ. AY: 2006-07 AND 2008-09. 5. THE ASSESSEE BEING AGGRIEVED BY AFORESAID ADDITIONS SO MADE BY AO FILED FIRST APPEAL BEFORE LEARNED CIT(A). THE ASSESSEE SUBMITTED CASH FLOW STATEMENT BEFORE LEARNED CIT(A), IN WHICH THE ASSESSEE HAS CLAIMED THAT THE CASH HAS BEEN DEPOSITED IN THE BANK ACCOUNT IN PREVIOUS YEAR 2005-06 CORRESPONDING TO AY: 2006-07, MAINLY OUT OF OPENING CASH BALANCE AS OF 01.04.2005 OF RS. 405800/-. THE LD. CIT(A) REJECTED THE SAID CASH FLOW STATEMENT AND OBSERVED THAT THIS WAS NOT SUBMITTED WITH THE RETURN OF INCOME NOR WAS FILED DURING ASSESSMENT PROCEEDINGS AND HENCE THE SAID CASH FLOW STATEMENT CANNOT BE ACCEPTED. SIMILARLY, FOR AY: 2008-09, THE ASSESSEE SUBMITTED CASH FLOW WHICH ALSO STOOD REJECTED BY LEARNED CIT(A). THE ASSESSEE IS NOW BEING AGGRIEVED AND HAS FILED AN SECOND APPEAL BEFORE TRIBUNAL FOR BOTH THE AYS: 2006-07 AND 2008-09. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE THE BENCH DURING THE COURSE OF HEARING THAT THERE WAS NO INCRIMINATING MATERIAL PERTAINING TO THE ASSESSEE FOUND FOR AY: 2006-07 DURING THE COURSE OF ITA NOS. 114 & 115/ALLD/2017 ASSESSMENT YEAR: 2006-07 & 2008-09 SHASHI VAISH 5 SEARCH PROCEEDINGS AGAINST VAISH GROUP OF CONCERNS, WHILE THERE WAS SOME MATERIAL PERTAINING TO ASSESSEE WHICH WAS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS CONDUCTED AGAINST VAISH GROUP U/S 132 OF THE 1961 ACT , FOR AY 2008-09. IT WAS SUBMITTED BY THE LD. AR THAT THE ASSESSEE HAS DULY EXPLAINED THE DEPOSIT OF CASH IN THE TWO BANK ACCOUNTS WITH PNB, BEFORE LD. CIT(A) HENCE THERE IS NO JUSTIFICATION FOR LEARNED CIT(A) TO HAVE REJECTED THE CONTENTIONS OF THE ASSESSEE AND UPHOLDING THE ADDITIONS AS WERE MADE BY THE AO. THE LD. CIT- DR, ON THE OTHER HAND, VEHEMENTLY OPPOSED THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT ADDITION BE CONFIRMED AND THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CARRIED OUT BY REVENUE AGAINST VAISH GROUP OF CONCERNS, AND INCRIMINATING MATERIAL AGAINST THE ASSESSEE WAS FOUND DURING THE COURSE OF SEARCH WHICH LED TO INVOCATION OF SECTION 153C OF THE ACT. THUS, THE LEARNED CIT-DR JUSTIFIED THE INVOCATION OF SECTION 153C OF THE 1961 ACT AGAINST THE ASSESSEE. IT WAS SUBMITTED BY LEARNED CIT-DR THAT WHAT IS IMPORTANT FOR INVOKING SECTION 153C IS THE INCRIMINATING MATERIAL BELONGING TO TAX-PAYER BEING FOUND DURING THE SEARCH AGAINST SOME OTHER PERSON AND SATISFACTION OF THE AO THAT INCRIMINATING MATERIAL PERTAINING TO THE TAX-PAYER AGAINST WHOM PROCEEDINGS U/S 153C IS INITIATED IS FOUND DURING THE COURSE OF SEARCH CONDUCTED BY REVENUE AGAINST SOME OTHER PERSON. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE MATERIALS ON RECORD. WE HAVE OBSERVED THAT THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED BY REVENUE AGAINST VAISH GROUP OF CONCERN ON 03.02.2011. THERE WERE SIMULTANEOUSLY SURVEY OPERATIONS CARRIED OUT BY REVENUE U/S 133A OF THE 1961 ACT AGAINST CERTAIN BUSINESS CONCERNS OF THE VAISH GROUP. THERE WAS SOME INCRIMINATING MATERIAL PERTAINING TO ASSESSEE BEING FOUND DURING THE COURSE OF SEARCH OPERATIONS CONDUCTED BY REVENUE U/S 132 OF THE 1961 ACT AGAINST VAISH GROUP OF CONCERNS , AS IS EMANATING FROM THE RECORD , WHICH LED ITA NOS. 114 & 115/ALLD/2017 ASSESSMENT YEAR: 2006-07 & 2008-09 SHASHI VAISH 6 TO INVOCATION OF SECTION 153C OF THE 1961 ACT AGAINST THE ASSESSEE AND ADDITIONS BEING MADE BY THE AO IN THE HANDS OF THE ASSESSEE BASED ON THE SAID INCRIMINATING MATERIAL. FINDING OF INCRIMINATING MATERIAL PERTAINING TO TAX- PAYER DURING THE COURSE OF SEARCH CONDUCTED AGAINST SOME OTHER PERSON, IS RELEVANT FOR INVOCATION OF SECTION 153C OF THE ACT AGAINST THE TAX-PAYER AND SATISFACTION OF THE AO THAT THE PRIMA FACIE INCOME PERTAINS TO OTHER PERSON IS RELEVANT . FURTHER THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED BEFORE THE BENCH THAT THE SAID BANK ACCOUNTS WERE DECLARED WITH THE DEPARTMENT FROM YEAR TO YEAR , BUT NO EVIDENCE HAS BEEN BROUGHT BEFORE THE BENCH, AS IS EMANATING FROM THE RECORDS. FURTHER WE HAVE OBSERVED THAT THE ASSESSEE HAS CLAIMED BEFORE THE AO THAT THE AMOUNTS HAD BEEN DEPOSITED IN CASH IN THE BANK ACCOUNTS MAINTAINED WITH THE PUNJAB NATIONAL BANK OUT OF CASH WITHDRAWALS FROM OTHER BANK ACCOUNTS . HOWEVER, BEFORE THE LD. CIT(A) , THE ASSESSEE HAS CLAIMED THAT THERE WAS AN OPENING CASH BALANCE OF RS. 405800/- AS AT 01.04.2005 WHICH IS PRIMARILY USED FOR DEPOSIT OF CASH IN BANK ACCOUNTS IN PREVIOUS YEAR 2005-06. WE ALSO NOTE THAT THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT THE SAID OPENING CASH BALANCE OF RS. 4,05,800/- AS AT 01.04.2005 WAS THE CLOSING CASH BALANCE OF THE EARLIER YEAR AS AT 31.03.2005 AND THE CASH FLOW OF THE EARLIER YEAR HAS BEEN ACCEPTED BY THE REVENUE , BUT THE SAID FACTS ARE NOT EMANATING FROM THE RECORD BEFORE US. IT IS ALSO NOT CLEAR THAT THE SAID BANK ACCOUNTS WITH PNB WERE DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME REGULARLY FILED WITH THE REVENUE FROM YEAR TO YEAR FOR THE EARLIER YEARS AND ALSO WHETHER THE SAID CASH IN HAND OF RS. 4,05,800/- WAS ACCEPTED BY REVENUE IN THE EARLIER YEAR AND UNDER THESE CIRCUMSTANCES IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER BE SET ASIDE AND RESTORED TO THE FILE OF AO FOR AFRESH CONSIDERATION FOR BOTH THE ASSESSMENT YEARS VIZ. AY: 2006-07 AND 2008-09 FOR DENOVO ADJUDICATION OF THE MATTER ON MERITS IN ACCORDANCE WITH LAW . ALL THE CONTENTIONS ARE KEPT OPEN. THE ASSESSEE ITA NOS. 114 & 115/ALLD/2017 ASSESSMENT YEAR: 2006-07 & 2008-09 SHASHI VAISH 7 IS DIRECTED TO PRODUCE ALL RELEVANT EVIDENCES BEFORE THE AO IN SUPPORT OF HER CONTENTIONS TO JUSTIFY THAT THE SAID BANK ACCOUNTS WITH PNB WERE DECLARED FROM YEAR TO YEAR IN THE RETURN OF INCOME FOR EARLIER YEARS , AND ALSO THAT THE OPENING CASH IN HAND AS AT 01.04.2005 WAS DULY DECLARED AND DISCLOSED AS CLOSING CASH IN HAND FOR THE EARLIER YEAR WHICH WAS ACCEPTED BY THE REVENUE IN THE EARLIER YEAR. SIMILARLY FOR AY: 2008-08, THE ASSESSEE IS DIRECTED TO PRODUCE ALL NECESSARY EVIDENCES TO JUSTIFY AND SUPPORT HER STAND. THUS, WE RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR FRESH CONSIDERATION AND DENOVO DETERMINATION OF THE ISSUES ON MERITS IN ACCORDANCE WITH LAW. THE AO IS DIRECTED TO PROVIDE PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW AND EVIDENCES/EXPLANATIONS FILED BY ASSESSEE IN SUPPORT OF HER CONTENTIONS SHALL BE ADMITTED BY THE AO AND ADJUDICATED ON MERITS IN ACCORDANCE WITH LAW. THUS, THE APPEALS OF THE ASSESSEE FOR BOTH THE AYS VIZ. AY: 2006-07 AND 2008- 09 ARE ALLOWED FOR STATISTICAL PURPOSES. WE ORDER ACCORDINGLY. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE WITH TRIBUNAL IN ITA NO.114&115/ALLD./2017 FOR AYS: 2006-07 & 2008-09 ARE ALLOWED FOR STATISTICAL PURPOSES, AS INDICATED ABOVE. ORDER PRONOUNCED ON 26/11/2020 AT ALLAHABAD SD/- SD/- [VIJAY PAL RAO] [RAMIT KOCHAR] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26/11/2020 BISWAJIT ITA NOS. 114 & 115/ALLD/2017 ASSESSMENT YEAR: 2006-07 & 2008-09 SHASHI VAISH 8 COPY FORWARDED TO: 1. APPELLANT SHASHI VAISH. 2. RESPONDENT DCIT, CENTRAL CIRCLE, ALLAHABAD 3. CIT(A) - 4. CIT 5. DR - BY ORDER ASSISTANT REGISTRAR