Ronak Yogeshchandra Shah, Surat V. The Income tax Officer,Ward-3(4), Surat

ITA 1691/AHD/2009

• Counselvise Citation: 169120514 RSA 2009
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-08-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 22-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH; HARDIK VORA ARS
• Keywords: Opportunity of being heard; Validity of assessment
• Section: 153A; 147; 131; 69; 148; 154

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE S/SHRI D.K. TYAGI, JM AND A.K. GARODIA, A.M . RONAK YOGESHCHANDRA SHAH, A-9, MERULAXMI APARTMENT, 2 ND FLOOR, SURAT. & NIMESH N. SHROFF, 403, SANDHYA DARSHAN APPT., OPP. BHULKA BHAVAN, SURAT. INCOME-TAX OFFICER, WARD-3(4), SURAT. APPELLANTS VS RESPONDENT ASSESSEES BY :- SHRI RASESH SHAH & SHRI HARDIK VORA, ARS REVENUE BY:- SHRI SAMIR TEKRIWAL, SR.DR O R D E R DATE OF HEARING 25/8/2011 DATE OF PRONOUNCEMENT -25/8/2011. PER D.K. TYAGI, JUDICIAL MEMBER . THESE ARE TWO APPEALS FILED BY TWO SEPARATE ASSESS EES AGAINST SEPARATE ORDERS OF LD. CIT(A)-II, SURAT DATED 13.03 .2009. SINCE THE ISSUES RAISED IN THESE TWO APPEALS ARE COMMON EXCEPT THE A MOUNT OF ADDITION ON IDENTICAL FACTS, THESE ARE TAKEN UP TOGETHER FOR DI SPOSAL BY THIS COMMON ITA NOS.1691/AHD/2009 & ITA NO.1692/AHD/2009 ASST. YEAR 2001-02 ITA NOS.1691 & 1692/AHD/2009 ASST. YEAR 2000-01 2 ORDER FOR THE SAKE OF CONVENIENCE. THE GROUND RAISE D BY SHRI RONAK YOGESHCHANDRA SHAH IN HIS APPEAL ARE AS UNDER :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT THE LD. CIT(A) HAS ERRED IN CONFIRMI NG THE ACTION OF ASSESSING OFFICER IN ISSUING NOTICE U/S 148 AND COMPLETING ASSESSMENT U/S 147. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF AO IN MAKING ADDITION OF RS.13,79,034/- ON ACCOUNT OF INVESTMENT IN FIXED DEPOSIT. 2. AT THE OUT SET THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT - (1) THE ADDITION OF RS. 13,79,034/- HAS BEEN MADE O N ACCOUNT OF INVESTMENT IN FIXED DEPOSIT IN CASE OF SHRI RONAK S HAH AND SIMILAR ADDITION OF RS. 14,73,012/- WAS MADE IN CASE OF SHR I NIMESH SHROFF. IN THE APPEALS FILED BEFORE YOUR HONOURABLE ITAT, ADDI TIONS WERE CHALLENGED ON MERITS AND ALSO ON LEGALITY OF ASSESSMENT MADE U /S 147 OF THE IT. ACT, 1961. (2) THE FIXED DEPOSIT WORTH RS. 75,95,153/- WERE FO UND IN THE COURSE OF SEARCH ACTION CARRIED OUT IN CASE OF SHRI AKSHAY SHETH ON 16.03.2007. THE FIXED DEPOSIT RECEIPTS WERE ISSUED BY THE STATE BANK OF BIKANER AND JAIPUR, MADAN MOHAN MALVIYA ROAD, AMRITSAR. THESE F IXED DEPOSITS WERE PUT UNDER THE PROHIBITORY ORDER AND FINALLY TH IS FIXED DEPOSIT WERE SEIZED ON 03.04.2007 FOR WHICH DETAILED INVENTORY W AS PREPARED. THE FIXED DEPOSIT RECEIPTS WERE OF SMALL DENOMINATIONS STANDING IN THE NAMES OF DIFFERENT BENAMI/BOGUS PERSONS. THE FIXED DEPOSI T RECEIPTS STANDING IN THE NAME OF DIFFERENT PERSONS WERE DECLARED BY FIVE PERSONS WHO ARE EMPLOYEES/RELATIVES OF THE ASSESSEE. THEY HAVE DISC LOSED INVESTMENT IN ALLEGED THE FIXED DEPOSIT RECEIPTS IN THEIR RETURNS OF INCOME FILED AT AMRITSAR, ALTHOUGH THEY WERE GUJARATI AND RESIDING IN GUJARAT. (3) IN THE COURSE OF STATEMENT RECORDED ON 03.04 20 07, RECORDED DURING THE COURSE OF SEARCH PROCEEDINGS IN THE CASE OF SHR I AKSHAY SHETH, HE ADMITTED THE OWNERSHIP OF VARIOUS FIXED DEPOSITS. T HE NOTICE THEREFORE WAS ISSUED TO SHRI AKSHAY SHETH U/S 148 OF THE IT. ACT, 1961 ON 28,03.2007 THE BOTH ASSESSEES DENIED IN MAKING INVE STMENT OUT OF THEIR ITA NOS.1691 & 1692/AHD/2009 ASST. YEAR 2000-01 3 INCOME BY GIVING THEIR STATEMENT U/S 131 OF THE J.T . ACT, 1961 ON 03.042007. (4) ASSESSING OFFICER HAS GIVEN THE DETAILS OF THE FIXED DEPOSIT FOR WHICH ADDITION HAS BEEN MADE PASSING ORDER U/S 154 OF THE IT, ACT, 1961 ON 24.05.2009. THE FIXED DEPOSITS WHICH WERE SUBJEC T TO ADDITION ARE RECONCILED WITH THE INVENTORY PREPARED AT THE TIME OF SEARCH IN CASE OF SHRI AKSHAY SHETH AS PER ANNEXURE ENCLOSED. (5) THE ABOVE TWO ASSESSEE WERE AMONG FIVE EMPLOYEE S/RELATIVES OF SHRI AKSHAY SHETH FOR THE PURPOSE OF DECLARATION OF FIXED DEPOSIT IN THE RETURN OF INCOME FILED AT AMRITSIR. (6) FROM THE ANNEXURE, IT IS CLEAR THAT THE AMOUNT OF FIXED DEPOSIT ON WHICH ADDITIONS WERE IN CASE OF SHRI RONAK SHAH AND SHRI NIMESH SHROFF COME TO RS. 10.79.694/- AND RS.1,38,879/- RELEVANT TO A.Y. 2001-02 RESPECTIVELY AND NOT RS. 13.79.034/- AND 14,73,012/ - FOR WHICH ADDITION WAS MADE IN THEIR HAND. AS AGAINST THIS THE SHRI AK SHAY SHETH HAS DISCLOSED RS. 14,80,000/- AS HIS ADDITIONAL INCOME DISCLOSED IN HIS SETTLEMENT APPLICATION FILED BEFORE SETTLEMENT COMM ISSION WHICH IS MORE THAN THE TOTAL OF THE ABOVE TWO SUMS WHICH COM ES TO RS. 12.18.573/-. AKSHAY SHSTH MADE THE INVESTMENT OF TA X WITH THE INTEREST OF RS. 7,44,810/- ON INCOME DISCLOSED BEFORE SETTLEMEN T COMMISSION. THE SEIZED FIXED DEPOSIT RECEIPTS OF RS. 75,95,111/- WE RE ULTIMATELY RELEASED IN CASE OF SHRI AKSHAY SHETH ONLY AND NEW FIXED DEP OSIT OF RS 75,95,180/-WAS MADE IN HIS NAME ON 14.01.2009 WITH SAME BANK THE INTEREST OF RS. 24.16.944/- WAS ACCRUED ON RS. 75,9 5,111/- AND A SEPARATE FIXED DEPOSIT OF RS 24.16.944/-WAS MADE IN HIS NAME ON THE SAME DATE. (7) THE YEAR WISE BREAK UP OF INVESTMENT IN FIXED DEPOSITS TOGETHER WITH INTEREST IS AS UNDER. A.Y. F.D. (RS. ) INTEREST (RS.) TOTAL(RS.) 2000-01 14,80,000 : 14,80,000 2001-02 33,20,000 4,32,000 37,52,000 2002-03 - 4,44,720 4,44,720 2003-04 13,94,762 5,23,609 19,18,391 TOTAL 61,94,782 14,00,329 75,95,111 ITA NOS.1691 & 1692/AHD/2009 ASST. YEAR 2000-01 4 (8) ABOVE AMOUNTS WERE DECLARED BY SHRI AKSHAY SHET H IN THE RETURN OF INCOME FOR A.Y 2001-02, 2002-03 AND 2003-04 FILE D IN RESPONSE TO NOTICE U/S 153A OF THE LT. ACT, 1961, (9) IN RESPONSE TO ACTION U/S 147 OF THE I.T. ACT, 1961 FOR AY, 2000-01 NO RETURN OF INCOME WAS FILED BY SHRI AKSHAY SHETH BUT AMOUNT WAS DISCLOSED FOR TAXES AND INTERESTS WERE PAID BY HIM. (10) AS SETTLEMENT COMMISSION COULD NOT PASS THE OR DER WITHIN STIPULATED TIME, PROCEEDINGS SETTLEMENT COMMISSION WERE ABATED. HOWEVER, ASSESSING OFFICER DIDN'T PASS THE ORDER U/ S 147 OF THE I.T. ACT, 1961 FOR A,Y. 2000-01 ALTHOUGH HE PASSED ORDER U/S 153A OF THE |ACT. 1961 ASSESSING INVESTMENT IN FIXED DEPOSIT FOR A.YS . 2001-02, 2002-03 AND 2003-04. HOWEVER, AS STATED ABOVE SHRI AKSHAY S HETH DULY PAID TAX WITH INTEREST FIXED DEPOSIT FOR A.Y. 2000-01 ALSO. (11) IT IS TO BE NOTED THAT EVEN OTHERWISE THE ADDI TION U/S 69 OF THE I.T. ACT, 1961 CANNOT BE MADE AS THE ASSESSEES HAVE NOT MADE INVESTMENTS. THE FIXED DEPOSIT WERE FOUND IN POSSESSION OF SHRI AKSHAY SHETH AND SO PRESUMPTION U/S 292C OF THE IT. ACT, 1961 CAN ONLY BE RAISED AGAINST SHRI AKSHAY SHETH NOT ON ABOVE ASSESSEES. IN THE VIEW OF ABOVE SUBMISSION, THE LD. COUNSEL O F THE ASSESSEE SUBMITTED THAT EITHER THE ADDITION MADE IN CASE OF ASSESSEES BE DELETED OR MATTER BE SET ASIDE TO THE ASSESSING OFFICER FOR PA SSING FRESH ASSESSMENT ORDER CONSIDERING THE ABOVE FACTS. 3. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER S OF LOWER AUTHORITIES. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. WE AGREE WITH THE SUBMISSIONS MADE BY TH E LD. COUNSEL OF THE ASSESSEE. WE ARE OF THE OPINION THAT IN THE INTERES T OF JUSTICE IT WILL BE JUST ITA NOS.1691 & 1692/AHD/2009 ASST. YEAR 2000-01 5 AND PROPER IF THE MATTER IS RESTORED TO THE AO FOR VERIFICATION OF THE DETAILS SUBMITTED BY THE LD. AR, AFTER PROVIDING RE ASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECIDING THE MATTER AFRESH. THE COMMON GROUNDS RAISED IN BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE S ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 25/8/2011. SD/- SD/- (A. K. GARODIA) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED : 25/8/2011. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD ITA NOS.1691 & 1692/AHD/2009 ASST. YEAR 2000-01 6 1.DATE OF DICTATION 25/8/11. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 30/8/11. /OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..