SHIVAM PARIVAR DEVELOPERS P. LTD, MUMBAI V. DCIT CEN CIR 8(1), MUMBAI

ITA 1778/MUM/2017

AI Insights

The case involves M/s. Shivam Parivar Developers Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)-50, Mumbai, concerning an addition of Rs.3,66,30,100/- to their income for the Assessment Year 2013-14. This amount was derived from a seized document during a search operation related to the Kamala Group, which included cash receipts and expenses. The primary legal issue was whether this amount could be assessed in the hands of the assessee company. The Tribunal noted that the same transactions had been acknowledged and the income therefrom offered by Shri Ravi S. Bhandari, a director in the assessee company, in his settlement application to the ITSC, which was accepted under section 245D(4) of the Income Tax Act. Consequently, the Tribunal ruled in favor of the assessee, directing the deletion of the addition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302439 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Next Hearing Date: 04-01-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 13-03-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Document seized; Additional evidence; Documents seized
• Section: 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘G‘ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI, M.BALAGANESH, ACCOUNTANT MEMBER ITA No.1778/Mum/2017 (Asse ssment Year :2013-14) M/s. Shivam Parivar Developers Pvt. Ltd. 2/13, Siddharth Nagar Part-V, Opp. Prabhodhan Krida Bhavan Goregaon (W) Mumbai – 400 062 Vs. The DCIT Cent. Cir-8(1) Room No.656, 6 th Floor Aayakar Bhavan M.K.Road, Mumbai – 400 020 PAN/GIR No.AAICS 9094F (Appellant) .. (Respondent) Assessee by Shri Snehal Shah Revenue by Shri Rajnish Yadav Date of Hearing 05/01/2023 Date of Pronouncement 09/01/2023 आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in ITA No. 1778/Mum/2017 for A.Y.2013-14 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-50, Mumbai in appeal No.CIT(A)-50/IT-143/2015-16 dated 09/12/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 30/03/2015 by the ld. Dy. Commissioner of Income Tax, Cent.Cir-8(1), Mumbai (hereinafter referred to as ld. AO). ITA No.1778/Mum/2017 M/s. Shivam Parivar Developers Pvt. Ltd. 2 2. Though the assessee has raised several grounds of appeal before us, we find that the only effective issue to be decided in this appeal is as to whether a sum of Rs.3,66,30,100/- could at all be assessed in the hands of the assessee company herein in the facts and circumstances of the case. 3. We have heard rival submissions and perused the materials available on record. The assessee is engaged in the business of redevelopment of existing buildings either constructed on private land or constructed on MHADA land or BMC land or Government land. A search and seizure action u/s.132 of the Act was carried out on 09/01/2013 in Kamala Group cases, wherein certain documents belonging to assessee were found. Also from the residence of Shri Nilesh Krishna Gawade, who is connected with Kamala group, a pen drive was found and seized. The ld. AO observed that this pen drive contains documents belonging to assessee company herein in the form of an excel sheet. The return of income for the A.Y.2013-14 was filed by the assessee company on 05/05/2014 declaring total income of Rs.41,33,230/-. Admittedly, the pen drive seized is nothing but an excel sheet which contain certain cash receipts on the left hand side of the seized document and contain certain cash expenses on the right hand side of the seized documents. For the sake of convenience, the said excel sheet which is seized pursuant to document titled as “Shivam P” vide seized document reference C-435 and which is also forming part of the pen drive is reproduced below:- 11/12 59.000 G. Mohar, Snehal Singh, 10 th Floor 7/12 6.000 Anand Ngr. Layout (P. K) 12/12 50.000 G. Mohar- C.P.Saroj 8/12 3.500 Nutan Bissa School (P. K) ITA No.1778/Mum/2017 M/s. Shivam Parivar Developers Pvt. Ltd. 3 12/12 73.700 G.Mohar-C.P.Saroj (123.70) 8/12 0.800 Court Exp. (P. K) 50+30 9/12 10.090 Sal. (July to Aug 2012) 9/12 150.000 Direct MRG (LS) 10/12 7.000 Anand Ngr. Revised Offer Letter (P) 10/12 5.095 Sal Sept (Raj B.). 10/12 3.000 Party A/c - Rajubhai 10/12 6.000 Party A/c Rajubhai 10/12 0.900 Party A/c-Pol & Traffic (PK) 10/12 0.766 Exp. 11/12 2.000 Party A/c- Rajubhai 11/12 2.650 Party A/c-R. Daru 11/12 6.500 Sal. (Oct)- Direct (P. K) 11/12 5.090 Party A/c-Gol (Rajubhai) 11/12 3.910 Bonus Pramod, Ajit & Rajesh (P. K) 11/12 3.000 Party A/c- ITA No.1778/Mum/2017 M/s. Shivam Parivar Developers Pvt. Ltd. 4 Rajubhai 12/12 14.000 Party A/c Mini P (Rajubhai) 12/12 25.000 B.-Raj B. Direct (PK) 12/12 5.500 Sal. (Nov)- Direct (PK) 12/12 105.500 Chhada Area - Direct (PK) 182.70 366.301 3.1. During the course of regular assessment proceedings in the hands of the assessee for the A.Y.2013-14, the ld. AO based on possession of these seized documents, questioned the assessee to explain the said seized documents. More particularly, the ld. AO asked the assessee to explain the cash outflow made in the sum of Rs.3,66,30,100/- which is reflected in the seized document. The assessee stated that the said seized document was seized from the premises of Kamala Mills Ltd during the course of their search and the said seized document would be explained by them and assessee is no way connected with the said seized document. The assessee also stated before the ld. AO that Kamala Mills Ltd and certain individuals belonging to that group had filed an application before the Hon’ble Income Tax Settlement Commission (ITSC) and in that application, the transactions reflected in the said pen drive had been duly considered by them and income offered thereon. The ld. AO observed in page 5 of his order in para 3.3 that even if this plea of assessee is accepted, the application at Settlement Commission is only at acceptance stage and that final order u/s.245D(4) is not passed. Accordingly, he proceeded to treat the cash outflow made by the assessee based on the said seized documents of pen drive / excel sheet ITA No.1778/Mum/2017 M/s. Shivam Parivar Developers Pvt. Ltd. 5 wherein cash payments to the tune of Rs.3,66,30,100/- was reflected as unexplained expenditure made by the assessee and proceeded to add the same to the total income of the assessee. 3.2. In the course of first appellate proceedings, the assessee submitted that the sum of Rs.3,66,30,100/- have been duly considered and offered by one Shri Ravi S Bhandari in his petition filed before the ITSC u/s.245C(1) of the Act. In support of this, the assessee filed the following additional evidences before the ld. CIT(A):- (i) A letter from Ravi S. Bhandari to the assessee dated 25.10.2016 along with enclosure. (ii) Settlement Application of Shri Ravi Surajmal Bhandari before the Income Tax Settlement Commission with Annexure I to Annexure V. (iii) Fund flow of unaccounted funds . (iv) Statement of capitalization . The figure of Rs 3,66,30,100/- is duly reflected in this statement of capitalization. (v) Order u/s 245D(4) dated 20.09.2016 in the case of Kamala Group of cases. 3.3. The ld. CIT(A) admitted the aforesaid additional evidences and forwarded the same to the ld. AO to rebut the said additional evidences as required in Rule 46A of the Income Tax Rules 1962. The ld. AO was granted time to reply by the ld. CIT(A). Since no reply was received from the ld. AO, the ld. CIT(A) concluded that the ld. AO has got nothing to comment on this matter. Accordingly, he proceeded to examine the said additional evidences on his own. But since there was no cooperation from the side of the assessee in explaining the additional evidences before the ld. CIT(A), the ld. CIT(A) upheld the action of the ld. AO and dismissed the appeal of the assessee. ITA No.1778/Mum/2017 M/s. Shivam Parivar Developers Pvt. Ltd. 6 3.4. Before us, the ld. AR duly placed on record the same set of additional evidences together with the workings for each assessment year wherein additional income was duly offered by Shri Ravi S Bhandari before the Hon’ble ITSC. From the same, we find that Shri Ravi S Bhandari had duly owned up the entire excel sheet styled “Shivam P” which was found during the course of search in Kamala Group cases and had duly considered the entire transactions thereon, in Settlement Commission filed u/s.245C(1) of the Act. Ultimately, the Hon’ble ITSC had also passed an order u/s.245D(4) of the Act dated 20/09/2016 accepting the application of Shri Ravi S Bhandari wherein the same seized document has already been considered and offered by him. It is a fact on record that Shri Ravi S Bhandari is Director in assessee company. It is also a fact on record that the Hon’ble ITSC, while passing the order u/s.245D(4) of the Act settling the disputes of Kamala Group cases and Shri Ravi S Bhandari, had duly obtained Rule 9 report from the ld. Pr. Commissioner of Income tax. Hence, all the seized documents that were found during the course of search in Kamala group cases which includes the transactions belonging to the assessee in the form of excel sheet which is reproduced supra have been subject matter of detailed consideration by the ld. PCIT in Rule 9 report filed before the Hon’ble ITSC. It is a fact on record that the said excel sheet had been duly considered by Shri Ravi S Bhandari in his application filed before the Hon’ble ITSC u/s.245C(1) of the Act and the same has been accepted by the Hon’ble ITSC vide their order u/s.245D(4) of the Act dated 20/09/2016. When these facts are staring on us, we do not find any justifiable reason to sustain the very same addition emanating out of the very same seized documents in the hands of the assessee company herein. In other words, taxing a sum of Rs.3,66,30,100/- in the hands of the assessee company would only result in double addition. When Shri Ravi S Bhandari had already owned up the ITA No.1778/Mum/2017 M/s. Shivam Parivar Developers Pvt. Ltd. 7 impugned transactions together with the said seized documents, there is absolutely no case for making addition in the hands of the assessee company herein. Hence, we have no hesitation in directing the ld. AO to delete the addition made in the sum of Rs.3,66,30,100/- in the hands of the assessee company herein. Accordingly, the ground Nos. 2 & 3 raised by the assessee are allowed. 4. The ground No.1 raised by the assessee does not emanate from the orders of the lower authorities. The assessment for A.Y.2013-14 framed herein is u/s.143(3) of the Act. It is only a regular assessment and not a search assessment framed u/s.153A / 153C of the Act. Hence, the ground No.1 is hereby dismissed. 5. In the result, appeal of the assessee is partly allowed. Order pronounced on 09/01/2023 by way of proper mentioning in the notice board. Sd/- (AMIT SHUKLA) Sd/- (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 09/01/2023 KARUNA, sr.ps ITA No.1778/Mum/2017 M/s. Shivam Parivar Developers Pvt. Ltd. 8 Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy//