The ACIT, Central Circle-2, Baroda V. M/s. Parshwa Corporation, Nadiad

ITA 1568/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89657 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-06-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 03-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: P M MEHTA
• Keywords: Income from undisclosed sources; Tangible material; Reassessment proceedings
• Section: 142(1); 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NO.1568/AHD/2011 ASST. YEAR 2002-03 ASSTT. CIT, CEN.CIR-2, BARODA. VS. M/S PARSHWA CORPORATION, JALDHARA APARTMENT, COLLEGE ROAD, NADIAD. PAN AACFP 3995 R APPELLANT RESPONDENT APPELLANT BY : SMT. SONIA KUMAR, SR.DR RESPONDENT BY : SHRI P. M. MEHTA, AR DATE OF HEARING : 04/06/2015 DATE OF PRONOUNCEMENT : 30/06/2015 O R D E R PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 9 TH MARCH, 2011 FOR AY 2002-03. ITA NO.1568/AHD/2011 ASST. YEAR 2002-03 2 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDER :- 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETIN G THE ADDITION OF RS.39,94,398/- WHICH WAS MADE ON ACCOUN T OF NEGATIVE CASH BALANCE AS ON 31.03.2002. 2. THE LD. CIT(A) FURTHER ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.7,38,000/- WHICH WAS MADE ON ACC OUNT OF UNEXPLAINED RECEIPTS. 3. THE FIRST GROUND RELATES TO DELETION OF ADDITION OF RS.39,94,398/- WHICH WAS MADE ON ACCOUNT OF NEGATIV E CASH BALANCE. IN THIS CASE, THE ASSESSEE HAS NOT FURNISH ED ANY EVIDENCE OF FILING OF ORIGINAL RETURN FOR THE YEAR AT ASSESS MENT STAGE. A PHOTOCOPY OF FORM NO.2D HAS BEEN FILED DECLARING TO TAL INCOME OF 76,760/- BUT THERE WAS NO RECEIPT STAMP ON SAID RET URN. THUS EVIDENCE OF FILING OF THIS RETURN WAS NOT PROVED. A SEARCH U/S 132 WAS CARRIED OUT IN THIS CASE AND THE GROUP CASES OF SHRI RAMESHBHAI BABUBHAI SHAH OF NADIAD ON 03/04/2008. M ANY INCRIMINATING DOCUMENTS/MATERIALS WERE SEIZED DURIN G THE COURSE OF SEARCH, INTER ALIA, LENOVO MAKE LAPTON. IN THE S AID LAPTON, DATA OF 65 COMPANIES (AS PER SOFTWARES LANGUAGE), I.E. ENTITIES(FILES), ITA NO.1568/AHD/2011 ASST. YEAR 2002-03 3 BOOKS OF ACCOUNT FOR DIFFERENT PERIOD WAS FOUND. AM ONG THESE 65 ENTITIES, THE ASSESSEE WAS THE ONE OF WHOM BOOKS OF ACCOUNT IN THE NAME OF (COMPANY AS PER TALLY SOFTWARE) PARSHWA COR PORATION WAS MAINTAINED. DURING THE COURSE OF SEARCH AS WELL AS POST SEARCH ENQUIRIES, THE KEY PERSON OF THE GROUP SHRI RAMESHB HAI B. SHAH CATEGORICALLY STATED THAT THESE ACCOUNTS WERE BEING MAINTAINED FOR VARIOUS BUSINESS TRANSACTIONS/ACCOUNTS WHICH WERE E ITHER TOTALLY OUT OF BOOKS OR PARTLY OUT OF BOOKS. THEREFORE, THE SE FILES CONTAINED DATA OF UNACCOUNTED BUSINESS TRANSACTIONS /INFORMATION OF UNACCOUNTED INCOME. SHRI RAMESHBHAI B. SHAH FAILED TO SUBMIT BIFURCATION OF ACCOUNTED AND UNACCOUNTED INCOME/BUS INESS DURING THE COURSE OF SEARCH AS WELL AS POST SEARCH INVESTI GATION. THUS THE DEPARTMENT CAME IN POSSESSION OF THE INFORMATION AB OUT THE FILES CONTAINING THE DATE OF UNACCOUNTED BUSINESS TRANSACTIONS/INFORMATION OF UNACCOUNTED INCOME. ACC ORDINGLY, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 O N 31.3.2009 AND SUBSEQUENTLY QUESTIONNAIRES WERE ISSUED CALLING FOR DETAILS/INFORMATION VIDE NOTICE U/S 142(1) ON 15.09 .2009, 12-10- ITA NO.1568/AHD/2011 ASST. YEAR 2002-03 4 2009 AND ON 05-11-2009. IN RESPONSE TO THE NOTICES, THE ASSESSEE MADE ITS SUBMISSIONS ALONG WITH OBJECTIONS ON 16.10 .2009, ON 26.10.2009 AND ON 16.11.2009 BEFORE THE ASSESSING O FFICER. THE ASSESSING OFFICER CONSIDERED THE SUBMISSIONS/OBJECT IONS BUT REJECTED THE SAME. THE ASSESSING OFFICER HAS DISCUS SED THIS ISSUE IN DETAIL VIDE PARA 9(2) OF THE ASSESSMENT ORDER. T HE ADDITION WAS MADE ON THE GROUND THAT THE ASSESSEE COULD NOT EXPL AIN THE SOURCE OF CASH RECEIPTS OF RS.8,59,350/- AND CASH PAYMENTS OF RS.59,65,178/-. THE SECOND ADDITION OF RS.8,59,350/ - WAS MADE ON ACCOUNT OF UNEXPLAINED CASH RECEIPTS. THE ADDITION OF RS.59,65,178/- WAS MADE AS THE CASH PAYMENTS INCLUD ING THE NEGATIVE CASH BALANCE WERE MORE THAN THE CASH RECEI PTS. 3. THE MATTER WAS CARRIED IN APPEAL BEFORE THE FIRS T APPELLATE AUTHORITY, WHO AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE DELETED THE IMPUGNED ADDITIONS. THE REVENUE BEING A GGRIEVED WITH THE ORDER OF FIRST APPELLATE AUTHORITY HAS PRE FERRED THIS APPEAL BEFORE THE TRIBUNAL. THE LD. DR SUPPORTED THE ORDER OF ASSESSING ITA NO.1568/AHD/2011 ASST. YEAR 2002-03 5 OFFICER WHEREAS THE LD. AR RELIED ON THE ORDER OF F IRST APPELLATE AUTHORITY AND RAISED VARIOUS LEGAL SUBMISSIONS TO S UPPORT THE ORDER OF ASSESSING OFFICER. ON OTHER HAND, LD. AR SUPPOR TED THE ORDER OF CIT(A). 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND GOIN G THROUGH THE MATERIAL AVAILABLE ON RECORD CAREFULLY, WE FIND THAT THE ASSESSING OFFICER HAS MADE THE REASSESSMENT WITHOUT DISPOSING OF THE OBJECTIONS OF THE ASSESSEE RAISED BEFORE HIM AS EVIDENT FROM RECORD. AN IDENTICAL ISSUE CAME UP BEFORE THE TRIBU NAL WHEREIN A RECENT DECISION IN THE CASE OF ACIT, CEN.CIR.-2, BA RODA VS. M/S SAGAR DEVELOPERS VIDE ORDER DATED 10/04/2015 IN ITA NO.1538/AHD/2011 FOR AY 2002-03 THE TRIBUNAL HAS DE CIDED THE ISSUE BY OBSERVING AS UNDER :- 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN TH E INSTANT CASE, THE RESPONDENT ASSESSEE IN TERMS OF RULE -27 OF THE INCOME-TAX APPELLATE TR IBUNAL RULES, 1963 SUPPORTED THE ORDER OF CIT(A) ON THE GROUND THAT THE IMPUGNED ASS ESSMENT ORDER WAS BAD IN LAW AS THE REASSESSMENT WAS MADE WITHOUT DISPOSING OFF THE OBJ ECTIONS RAISED BY THE ASSESSEE AGAINST THE INITIATION OF REASSESSMENT PROCEEDINGS BY A SEPARATE ORDER. WE FIND THAT, IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE ASS ESSEE FILED HIS OBJECTIONS AGAINST THE ISSUANCE OF NOTICE U/S 148 OF THE ACT VIDE HIS LETT ER DATED 11.11.2009 WHICH WAS RECEIVED BY THE OFFICE OF THE ASSESSING OFFICER ON 16.11.200 9. THEREAFTER, THE AO PASSED THE IMPUGNED RE-ASSESSMENT ORDER ON 20.11.2009 DISPOSIN G OFF THE OBJECTIONS TO ITA NO.1568/AHD/2011 ASST. YEAR 2002-03 6 REASSESSMENT PROCEEDINGS OF THE ASSESSEE IN THE ORD ER ITSELF. THUS THESE FACTS SHOW THAT THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE I SSUANCE OF NOTICE U/S 148 OF THE ACT WERE NOT DISPOSED OFF BY THE AO BY PASSING A SPEAKI NG ORDER THEREON AND ALLOWING REASONABLE TIME TO THE ASSESSEE AFTER COMMUNICATING THE FATE OF THE OBJECTIONS BEFORE PROCESSING WITH THE REASSESSMENT. THE HONBLE GUJAR AT HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA P. LTD. VS. DCIT (SUPRA) HAS H ELD AS UNDER :- FROM THE AFORESAID DISCUSSION, WE ARE OF THE CONS IDERED OPINION THAT THE WRIT PETITION UNDER ARTICLE 226 OF THE CONSTITUTION OF I NDIA IS MAINTAINABLE WHERE NO ORDER HAS BEEN PASSED BY THE AO DECIDING THE OBJECT ION FILED BY THE ASSESSEE UNDER SECTION 148 OF THE ACT AND ASSESSMENT ORDER H AS BEEN PASSED OR THE ORDER DECIDING AN OBJECTION UNDER SECTION 148 OF THE ACT HAS NOT BEEN COMMUNICATED TO THE ASSESSEE AND ASSESSMENT ORDER HAS DECIDED ALONG WITH THE ASSESSMENT ORDER. IF THE OBJECTION UNDER SECTION 148 HAS BEEN REJECTE D WITHOUT THERE BEING ANY TANGIBLE MATERIAL AVAILABLE WITH THE AO TO FORM AN OPINION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT AND IN THE ABS ENCE OF REASONS HAVING DIRECT LINK WITH THE FORMATION OF THE BELIEF, THE W RIT COURT UNDER ARTICLE 226 CAN QUASH THE NOTICE ISSUED UNDER SECTION 148 OF THE AC T. THE WRIT PETITION FILED BY THE PETITIONER IS MAINTAINABLE. THE AO IS MANDATED TO D ECIDE THE OBJECTION TO THE NOTICE UNDER SECTION 148 AND SUPPLY OR COMMUNICATE IT TO THE ASSESSEE. THE ASSESSEE GETS AN OPPORTUNITY TO CHALLENGE THE ORDER IN A WRIT PETITION. THEREAFTER, THE AO MAY PASS THE REASSESSMENT ORDER. WE HOLD THA T IT WAS NOT OPEN TO THE AO TO DECIDE THE OBJECTION TO NOTICE UNDER SECTION 148 BY A COMPOSITE ASSESSMENT ORDER. THE AO WAS REQUIRED TO, FIRST DECIDE THE OBJ ECTION OF THE ASSESSEE FILED UNDER SECTION 148 AND SERVE A COPY OF THE ORDER ON THE ASSESSEE. AND AFTER GIVING SOME REASONABLE TIME TO THE ASSESSEE FOR CHALLENGIN G HIS ORDER, IT WAS OPEN TO HIM TO PASS AN ASSESSMENT ORDER. THIS WAS NOT DONE BY T HE AO THEREFORE, THE ORDER ON THE OBJECTION TO THE NOTICE UNDER SECTION 148 AND T HE ASSESSMENT ORDER PASSED UNDER THE ACT DESERVES TO BE QUASHED. 8. THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECI SION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED ORDER OF REASSESSMENT PASSED BY THE AO WITHOUT DISPOSING OFF THE OBJECTIO NS RAISED BY THE ASSESSEE AGAINST THE ISSUANCE OF NOTICE U/S 148 BY A SEPARATE ORDER IS L IABLE TO BE QUASHED. WE ORDER ACCORDINGLY. THUS, THIS GROUND OF APPEAL OF THE REV ENUE IS DISMISSED. IN THIS LEGAL BACKGROUND, LD. AR SUPPORTED THE ORD ER OF CIT(A). NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BE HALF OF REVENUE ON THIS LEGAL PREPOSITION. FACTS BEING SIM ILAR, SO FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL AND IN LI GHT OF THE ITA NO.1568/AHD/2011 ASST. YEAR 2002-03 7 DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE GENERAL MOTORS INDIA P. LTD. VS. DCIT 354 ITR 0244 (GUJ), W E QUASH THE RE-ASSESSMENT PROCEEDINGS. THE ISSUE RAISED BY THE REVENUE ON MERIT IN THIS APPEAL, GOES ACADEMIC AND HENCE DISMI SSED. THUS, APPEAL OF REVENUE IS DISMISSED ON PRELIMINARY ISSUE AS DISCUSSED ABOVE. HOWEVER, REVENUE IS AT LIBERTY TO RAISE THE SAME AS AND WHEN NEED ARISES FOR SAME. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF JUNE, 2015 SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED : 30/6/2015 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD ITA NO.1568/AHD/2011 ASST. YEAR 2002-03 8 6. GUARD FILE BY ORDER DY.REGISTRAR,ITAT, AHMEDABAD 1. DATE OF DICTATION: 04/06/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 15/06/2015 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK:1 /7/2015 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: