Assistant Commissioner of Income-tax, V. Smt. Maya Sudhir Duggad, Pune

ITA 1499/PUN/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9499 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-01-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 18-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARCHANA S HETTY
• Keywords: Search and seizure
• Section: 142(1)

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1499/PUN/2015 / ASSESSMENT YEAR : 2012-13 ACIT, CENTRAL CIRCLE-1, NASHIK . /APPELLANT VS. SMT. MAYA SUDHIR DUGGAD, D-102, DAFFODILS, MAGARPATTA CITY, HADAPSAR, PUNE 411 041 PAN : ADZPD1171D . / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK & MS. ARCHANA S HETTY REVENUE BY : SHRI AJAY MODI, JCIT / DATE OF HEARING : 17.01.2018 / DATE OF PRONOUNCEMENT: 17.01.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS IS THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)- 12, PUNE, DATED 10-08-2015 FOR THE A.Y. 2012-13. 2. THE ONLY ISSUE REVENUE AGITATED IN THIS APPEAL RELATES TO THE RELIEF GIVEN BY THE CIT(A) IN RESPECT OF PROTECTIVE ADDITION OF RS.64,94,404/-. THE SAME WAS OFFERED FOR TAXATION IN THE CASE OF SHRI SUNIL KOTECHA AND IT REACHED THE FINALITY. 3. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND EARNED MONEY FROM COACHING CLASSES. THERE WAS SEA RCH AND SEIZURE ACTION ON THE KOTECHA GROUP OF CASES, JALGAON ON 09-08- 2011. AMONG MANY, THE DISCOVERY OF A LOCKER HELD IN THE NAME OF THE AS SESSEE IS ONE OF THEM. SEARCH RESULTED IN SEIZURE OF JEWELLERY KEPT IN THE S AID LOCKER. ITA NO.1499/PUN/2015 SMT. MAYA SUDHIR DUGGAD 2 DURING THE SEARCH PROCEEDINGS, SHRI SUNIL KOTECHA OWNED UP THE CONTENTS OF THE LOCKER AND OFFERED THE SAID UNACCOUNTED JEWELLERY OF RS.64,94,404/- (1731.37 GRAMS JEWELLERY AND 120 KARAT DIAMO ND) AS THE ADDITIONAL INCOME OF SHRI SUNIL KOTECHA. THIS IS PART OF GROSS DECLARATION OF ADDITION INCOME OF RS.6 CRORES GIVEN BY SHRI SUNIL KOTECHA DURING THE SEARCH AND SEIZURE ACTION. THERE IS NO DISPUTE ON THIS IS SUE. THE SAID AMOUNT WAS OFFERED TO TAX IN THE RETURN OF INCOME TOO. AS PER THE LD. AR FOR THE ASSESSEE, THIS ASSESSMENT HAS REACHED FINALITY AND THE SAID AMOUNT OF RS.64,94,404/- STOOD ASSESSED IN HIS NAME AS ON DATE. 4. DURING THE SEARCH ASSESSMENT PROCEEDINGS, THE AO PR OTECTIVELY ADDED THE SAID AMOUNT IN THE HANDS OF ASSESSEE AS PER THE DISCUSSION GIVEN IN PARA NO.7.02 OF THE ASSESSMENT ORDER. RELEVANT LIN ES ARE EXTRACTED HERE AS UNDER : 7.02 DURING THE COURSE OF POST ASSESSMENT PROCEEDI NGS IN THE CASE OF SHRI SUNIL MANAKCHAND KOTECHA, THE SAID SHRI SUNIL KOTECHA (WHOSE CASE IS ALSO CENTRALIZED WITH THIS OFFICE), FURNISHED AL ONG WITH LETTER DATED 25- 02-2014 A COPY OF THE STATEMENT RECORDED UNDER SECT ION 132(4) ON 14-09- 2011 DURING THE COURSE OF OPERATION OF LOCKER NO.1 OF JALGAON JANTA SAHAKARI BANK LTD. OMKARESHWAR BRANCH, JALGAON. AN NEXED TO THIS STATEMENT IS A DECLARATION THAT ALTHOUGH THE SAID L OCKER STANDS IN THE NAME OF SMT. MAYA SUDHIR DUGAD, WHO IS THE SISTER O F HIS WIFE, ALL THE JEWELLERY FOUND IN THIS LOCKER STANDS COVERED IN HI S DECLARATION OF ADDITIONAL INCOME TO THE TUNE OF RS.6 CRORES MADE B Y HIM DURING THE SEARCH/POST SEARCH PROCEEDINGS. IN THE LIGHT OF TH E ABOVE FACTS AND ABSENCE OF CONFIRMATION OF THESE FACTS FROM THE ASS ESSEE, IN SPITE OF A SPECIFIC QUERY MADE IN THIS REGARD VIDE THIS OFFICE NOTICE UNDER SECTION 142(1) DATED 19-02-2014, THE SUM OF RS.64,94,404/- IS ASSESSED AS THE ADDITIONAL INCOME OF THE ASSESSEE FOR THE YEAR UNDE R CONSIDERATION ON A PROTECTIVE BASIS. PENALTY PROCEEDINGS UNDER SECTIO N 271AAA OF THE ACT ARE INITIATED IN RESPECT OF THIS UNDISCLOSED INCOME OF RS.64,94,404/- FOR THE YEAR UNDER CONSIDERATION. 5. DURING THE FIRST APPELLATE PROCEEDINGS, AFTER HEARING TH E ASSESSEE AND CONSIDERING THE ASSESSEES SUBMISSIONS, THE CIT(A) D ELETED THE SAID ADDITION IN VIEW OF THE FACT THAT THE SAID JEWELLERY STANDS ASSESSED IN THE NAME OF SHRI SUNIL KOTECHA. CIT(A) CONSIDERED THE FACT OF D ENIAL OF OWNERSHIP OF THE SAID JEWELLERY BY THE ASSESSEE AND ENTE RTAINED THE AFFIDAVIT GIVEN BY THE ASSESSEE IN THIS REGARD. ACCORDINGLY , THE CIT(A) ITA NO.1499/PUN/2015 SMT. MAYA SUDHIR DUGGAD 3 DELETED PROTECTIVE ADDITION IN VIEW OF THE CONFIRMATION OF THE ADDITIONAL INCOME ASSESSED IN THE HANDS OF SHRI SUNIL KOTECHA. RELE VANT DISCUSSION IS GIVEN IN PARA NOS. 7.3 AND 7.4 OF THE ORDER O F CIT(A). FOR THE SAKE OF COMPLETENESS OF THIS ORDER, WE PROCEED TO EX TRACT THE OPERATIONAL PARA NO.7.4 WHICH READS AS UNDER : 7.4 WHILE MAKING ADDITION ON PROTECTIVE BASIS AO H AD WRONGLY MADE ADDITION IN THE AY 2012-13 DESPITE THE FACT THAT LO CKER WAS NOT OPERATED DURING 01-04-2011 TO 14-09-2011 (DATE OF SEARCH). ADDITION IN THE AY 2012-13 IS, THEREFORE, PRIMA FACIE NOT SUSTAINABLE. ON MERIT ALSO, SINCE ENTIRE JEWELLERY FOUND IN THE LOCKER INCLUDING THAT WHICH WAS OWNED BY THE APPELLANT INITIALLY, HAS ALREADY BEEN TAXED ON SUBS TANTIVE BASIS, THERE IS NO JUSTIFICATION OF ADDING THE SAME ON PROTECTIVE B ASIS IN THE HANDS OF APPELLANT IN ANY ASSESSMENT YEAR. APPELLANT SUCCEE DS ON THIS GROUND AND THE PROTECTIVE ADDITION MADE OF RS.64,94,404/- IS H EREBY DELETED. GROUND NO.3 MAY BE TREATED AS ALLOWED. 6. FROM THE ABOVE, IT IS EVIDENT THAT THE CIT(A) GAVE ADDIT IONAL REASON FOR GRANTING RELIEF, I.E. NON-ASSESSABILITY OF THE SAID AMOUNT ON PROTECTIVE BASIS TOO IN THE CURRENT A.Y. 2012-13. THE REASONING GIVE N BY THE REVENUE INCLUDES THAT THE LOCKER WAS NEVER OPERATED IN A.Y. 2012-13 BY THE ASSESSEE. AO REASONED THAT THE LOCKER IS IN THE H ANDS OF THE ASSESSEE AND THEREFORE, THE CONTENTS SHOULD ALSO ACCORD INGLY BE ASSESSED IN HER NAME. THE UNACCOUNTED ADDITIONAL INCOME IN THE HAN DS OF SHRI SUNIL KOTECHA WAS SEEN AS MALAFIDE AS THE ADDITIONAL INCOME STANDS ADJUSTED AGAINST THE BROUGHT FORWARD LOSSES OF SHRI SUN IL KOTECHA. AS SUCH, SHRI SUNIL KOTECHA DID NOT PAY ANY TAX ON THE SAID ADDITIONAL INCOME OF RS.64,94,404/-. 7. AGGRIEVED WITH THE ABOVE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 8. ON HEARING BOTH THE SIDES AND CONSIDERING THE ABOVE CONCLUSIONS DRAWN BY THE CIT(A), IT IS EVIDENT FROM THE FACT THAT THE S AID ADDITIONAL INCOME IS PROTECTIVELY ADDED IN THE HANDS OF THIS ASSESSE E WHO FLATLY DENIED THE OWNERSHIP OF THE SAID JEWELLERY. FURTHER, IT IS R ELEVANT FACT ITA NO.1499/PUN/2015 SMT. MAYA SUDHIR DUGGAD 4 THAT SHRI SUNIL KOTECHA HAS OWNED UP THE SAID JEWELLERY A ND OFFERED THE SAME AS ADDITIONAL INCOME IN HIS HANDS. FURTHER, IT IS A FAC T THAT THE LOCKER WAS NEVER OPERATED DURING THE YEAR UNDER CONSID ERATION. THEREFORE, MAKING ADDITION IN THE ASSESSMENT YEAR UNDER C ONSIDERATION IS UNSUSTAINABLE AS THE ASSESSMENT MADE BY THE AO IN TH E HANDS OF SHRI SUNIL KOTECHA HAS REACHED FINALITY AND THE SAME STOOD AS SESSED ON SUBSTANTIVE BASIS IN THE HANDS OF THAT ASSESSEE. AS SUC H, THE AO OF SHRI SUNIL KOTECHA HAS NO PROBLEM IN GRANTING THE SET OFF BENE FIT TO SHRI SUNIL KOTECHA. 9. CONSIDERING THE ABOVE UNDISPUTED FACTS WE FIND THAT ME RE OWNERSHIP OF LOCKER DOES NOT GRANT OWNERSHIP ON THE CON TENTS FOUND IN THE SAID LOCKER. FURTHER, IN THE SCHEME OF INDIAN FAMILY ST RUCTURE, THE LOCKER OF ANY ONE OF THE FAMILY MEMBERS IS OFTEN UTILIZED BY ALL MEMBERS OF THE FAMILY AND THE SAME IS A USUAL PRACTICE IN OUR CULTU RE IN JOINT FAMILIES. THE REVENUES ALLEGATION THAT THE SAME IS ADJUSTE D AGAINST BROUGHT FORWARDED LOSSES IN THE HANDS OF SHRI SUNIL KOTE CHA IS NOT A RELEVANT FACTOR AS THE SAID LOSS ANYWAY IS AVAILABLE FOR S ETTING OFF AS PER THE RULES IN THE STATUTE. AO OF SHRI SUNIL KOTECHA DID NO T RAISE ANY OBJECTION ON THIS ASPECT. THEREFORE, WE ARE OF THE OPINION THAT THE ORDER OF THE CIT(A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUNDS RAISED BY THE REV ENUE ARE DISMISSED, 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF JANUARY, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 17 TH JANUARY, 2018. ITA NO.1499/PUN/2015 SMT. MAYA SUDHIR DUGGAD 5 / COPY OF THE ORDER FORWARDED TO : BY ORDER // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT(A) - 1 2 , PUNE 4 . 5. CIT - 1 2 , PUNE % , , A BENCH PUNE; 6 . / GUARD FILE.