Rajendra R.Mantri, Pune V. Income-tax Officer, Ward - 3(1), Pune

ITA 1720/PUN/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0690 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2001-2002
• Appeal Filed On: 14-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Section: 69C

Judgement Text

SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NO.1720/PUN/2017 / ASSESSMENT YEAR : 2001-02 SHREE RAJENDRA R. MANTRI, 1201/11, RAJNIGANDHA SOCIETY, SHIROLE ROAD, PUNE 411 001 PAN : AAXPM1791F . /APPELLANT VS. INCOME-TAX OFFICER, WARD-3(1), PUNE . / RESPONDENT / APPELLANT BY : SHRI KISHOR PHADKE / RESPONDENT BY : SHRI M.K. VERMA / DATE OF HEARING : 01.10.2018 / DATE OF PRONOUNCEMENT: 01.10.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS IS THE APPEAL FILED BY ASSESSEE AGAINST THE ORDER O F CIT(A)-3, PUNE DATED 07-03-2017 FOR THE ASSESSMENT YEAR 2001-02. 2. ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL AND THE SAME ARE EXTRACTED AS UNDER : 1. THE LEARNED CIT(A)-3, PUNE ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITIONS O F RS . 16 , 57 , 500 MADE TO THE TAXABLE INCOME OF THE APPELLANT UNDER 153C PROCEED IN GS, WITHOUT APPRECIATING THAT, NO ANY SATISFACTION WAS REACHED BY THE LEARNED AO BEFORE INITIATING THE PROCEEDINGS U/S 153C OF THE ITA, 1961 . APPELLANT CONTENDS THAT , IN ABSENCE OF SATISFACTION NOTE, PROCEEDINGS U/S 153C ARE NULL AND VOID . 2. TH E LEARNED I-T AUTHORITIES ERRED IN LAW AND ON FACTS I N SUMMARILY REJECTING APPELLANT'S EXPLANAT I ONS THAT, THE CHEQUES FOUND WITH MR. SONI WERE EXTENDED FOR INVESTMENT PURSUIT OF THE APPELLANT, AND NOT FOR ANY ALLEGED CASH LOAN TRANSACTION. 3. THE LEARNED CIT(A)-3 PUNE ERRED IN LAW AND ON FA CTS IN SUSTAINING THE ADDITION OF RS. 15 , 00,000 MADE BY THE LEARNED AO U/S 69D OF THE ITA , 1961, FOR ALLEGED HUND I BORROWING . THE LEARNED I-T AUTHORITIES OUGHT TO HAVE APPRECIATED THAT BLANK CROSSED CHEQUES NOT BEARING ANY NAME ITA NO.1720/PUN/2017 SHREE RAJENDRA R. MANTRI 2 AND TERMS AND CONDITIONS CAN'T BE TREATED AS ANY AL LEGED HUNDI BORROWING, AND THAT, A HUNDI, AS SO REFERRED TO IN SECTION 69D IS TYPICALLY ONE, ENTERED IN VERNACULAR LANGUAGE. 4. THE LEARNED CIT(A)-3 , PUNE ERRED IN LAW AND ON FACTS IN SUSTAINING ADDITION OF RS . 1 , 57,500 I . E. RS. 135,000 (TOWARDS ALLEGED INTEREST PAYMENT) AND RS . 22,500 (TOWARDS ALLEGED BROKERAGE), MADE BY THE LEARNED AO U/S 69C OF THE ITA, 1 96 1 WITHOUT APPRECIATING THAT NO ANY INDEPENDENT EVIDENCE TO THAT EFFECT WAS BROUG H T ON RECORD. 5. THE LEARNED I-T AUTHORITIES ERRED ON FACTS IN NO T APPRECIATING THAT IN ABSENCE OF ANY PENALTY PROCEEDINGS U/S 271D / 271E BEING INITIATED IN APPELLANT'S OWN CASE , AND IN ABSENCE OF ANY SIMILAR ADDITIONS OF INTEREST IN AY 2002-03 AND ONWARDS, ALLEGATION AS T O CASH LOAN IN AY 2001-02 IS ILLOGICAL . 6. THE APPELLANT CRAVES , LEAVE TO ADD / MODIFY / DELETE ALL OR ANY OF THE GROUNDS O F APPEAL . 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND THERE WAS SEARCH ACTION U/S.132 OF ACT IN THE CASE OF SHRI SHRIRAM H. SONI ON 29-07-2003. IN RESPONSE TO NOTICE U/S.153C O F THE ACT ISSUED TO THE ASSESSEE, THE RETURN OF INCOME WAS FILED O N 24-04-2007 DECLARING TOTAL INCOME OF RS.1,96,270/-. AO NOTICED THAT ASS ESSEE TOOK RS.15 LAKHS LOAN IN CASH FROM SHRI SHRIRAM H. SONI AND HANDE D OVER BLANK CHEQUES TO SHRIRAM H. SONI AS SECURITY FOR REPAYMEN T OF THE SAID LOAN. AT THE END OF THE ASSESSMENT PROVISIONS, THE AO I NVOKED THE PROVISIONS OF SECTION 69D OF THE ACT AND MADE ADDITION OF R S.15 LAKHS. AO ALSO MADE ADDITION OF RS.1,35,000 ON ACCOUNT OF INTEREST AND RS.22,500/- ON ACCOUNT OF BROKERAGE U/S.69C OF THE ACT. IN THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) CONFIRMED THE ADDITIONS MAD E BY THE AO AND THUS DISMISSED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED WITH THE CONFIRMATION OF ADDITIONS BY THE CIT(A ), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE GROUNDS EXTRACTED ABOVE. 5. BEFORE ME, LD. COUNSEL FOR THE ASSESSEE FILED A COPY OF THE LETTER FROM ITO, WARD-3(1), PUNE AND SUBMITTED THAT THE ISSUE OF NOTICE ITA NO.1720/PUN/2017 SHREE RAJENDRA R. MANTRI 3 U/S.153C OF THE ACT WAS MADE IN RESPECT OF THE ASSESSME NT YEARS 1998- 99 TO 2003-04 WITHOUT RECORDING SATISFACTION ENVISAGED IN THE SAID SECTION 153C OF THE ACT. CONSIDERING THE FAILURE TO COMPLY WITH THE STATUTORY REQUIREMENT OF RECORDING SATISFACTION, THE ISSUE OF NOTICE U/S.158 OF THE ACT IS BAD IN LAW. THE SAME IS ARGUED IN T HE CONTEXT OF GROUND NO.1 RAISED BY THE ASSESSEE ON THE ISSUE OF FAILURE TO RECORD SATISFACTION AND NULLITY OF THE NOTICE U/S.153C OF THE ACT. 6. ON HEARING BOTH THE SIDES ON THIS LEGAL ISSUE, I PERU SED THE SAID LETTER DATED 06-05-2015 AND THE SAME IS EXTRACTED HERE AS UNDER : WITH REFERENCE TO YOUR LETTERS REQUESTING FOR ISSU E OF COPY OF SATISFACTORY NOTE, IT IS TO INFORM THAT THE SATISFACTORY NOTE FOR ISSUE OF NOTICE U/S.153C FOR THE A.YS. 1998-99 TO 2003-04 IS NOT AV AILABLE ON FILE . THUS, THE REPLY FROM AO INDICATES THE FAILURE OF THE AOS OF THE SEARCHED PERSON IN RECORDING THE SATISFACTION. CONSIDERIN G THE ABOVE STATED POSITION ON RECORD, I AM OF THE OPINION THAT THE N OTICE ISSUED U/S.153C IS BAD IN LAW. ACCORDINGLY, GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED. 7. CONSIDERING THE RELIEF GRANTED BY ME ON GROUND NO.1, I AM OF THE OPINION THAT ADJUDICATION OF OTHER GROUNDS ON MERITS BECO MES AN ACADEMIC EXERCISE. THEREFORE, THE SAID GROUNDS ON MERIT A RE DISMISSED AS ACADEMIC. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 01 ST DAY OF OCTOBER, 2018. SD/- (D.KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 01 ST OCTOBER, 2018. SATISH ITA NO.1720/PUN/2017 SHREE RAJENDRA R. MANTRI 4 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A)-3, PUNE 4. / THE PR.CIT-2, PUNE 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRI VATE SECRETARY , / ITAT, PUNE