ACIT, Cir-5, Pune, V. Shri Pramod M. Lunawat,

ITA 1793/PUN/2005

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49991 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-07-2011
• Assessment Year: misc
• Appeal Filed On: 02-12-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO. 1793/PN/2005 BLOCK PERIOD 1995-96 TO 2000-01 ASSTT. CIT CIR. 6, PUNE APPELLANT VS. SHRI PRAMOD M. LUNAWAT 576 BUDHWAR PETH, PUNE PAN AANPL 4834 A RESPONDENT APPELLANT BY: SMT ANN KAPTHUAMA RESPONDENT BY: SHRI NIKHIL PATHAK ORDER PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST T HE ORDERS OF THE CIT(A)-II PUNE DATED 5-9-2005 DATED 1 2-6- 2009 FOR A.Y. 2003-04 ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) ERRED IN DELETING THE ADDITION OF RS. 35 LAKHS WHEN IN FACT THE SEIZED MATERIAL IN THE CASE OF LUNAWAT BHOR CONSTRUCTIONS PVT. LTD., PUNE SHOWS THAT THE ASSESSEE HAD RECEIVED RS. 35 LAKHS FROM TH E ABOVE SAID PRIVATE LIMITED COMPANY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) ERRED IN DELETING THE ABOVE ADDITION WHE N IN FACT, THE STATEMENTS OF SHRI JAYANT LUNAWAT AND SHR I M.K. PURANDARE REVEALED THAT A POWER OF ATTORNEY WA S EXECUTED BY THE GAJANAN B CO-OP. HOUSING SOCIETY JOINTLY IN FAVOUR OF THE ASSESSEE AND SMT. SHOBHA NAHAR IN LIEU OF SECURITY OF RS. 20 LAKHS INVESTED BY THE ASSESSEE IN THE ABOVE PVT. LTD. COMPANY. 2 ITA NO. 1793/PN/2005 PRAMOD LUNAWAT BLOCK PERIOD 1995-96 TO 2000-01 OUT OF RS. 35 LAKHS, RS. 20 LAKHS WAS ADVANCED BY T HE ASSESSEE TO THE ABOVE PRIVATE LIMITED COMPANY AND R S. 15 LAKHS AS COMPENSATION FOR THE ABOVE SUM ADVANCED. THIS POWER OF ATTORNEY WAS ASSIGNED TO MR . A.M. PURANDARE AND SHRI A.S. PINGALE ON 1-7-1995 ON RECEIPT OF RS. 35 LAKHS FROM THE ABOVE PRIVATE LIMI TED COMPANY. 3. THE ORDER OF THE CIT(A) BE VACATED AND THAT OF T HE A.O BE RESTORED. 2. AT THE OUTSET OF HEARING, THE LEARNED AR POINTED OUT THAT THE ADDITION IN QUESTION HAS BEEN MADE BY INVO KING THE PROVISIONS OF SECTION 158BD OF THE ACT. THE LE ARNED AR FURTHER SUBMITTED THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE CO-ORDINATE BENCH OF THE TRIBU NAL IN THE CASE OF SHRI LUNAWAT JAYANT MANIKLAL (2008) 112 ITD 268 (PUNE) WHEREIN IN SIMILAR SET OF SITUATION, THE TRIBUNAL HELD THAT NOTICE U/S 158BD WAS ISSUED TO THE ASSESS EE TO FILE RETURN FOR BLOCK ASSESSMENT IN RESPONSE TO WHI CH ASSESSEE DEMANDED A COPY OF SATISFACTION RECORDED B Y THE ASSESSING OFFICER. THEREUPON THE CONCERNED ASSESSI NG OFFICER INFORMED THE ASSESSEE THAT THE PROCEEDINGS U/S 158BD WERE INITIATED ON THE BASIS OF INTIMATION REC EIVED FROM CIT(A) DURING THE COURSE OF APPEAL PROCEEDINGS OF LBCPL (LUNAWAT BHOR CONSTRUCTIONS PVT. LTD.), THE P ERSON SEARCHED. PERUSAL OF THE ORDER OF CIT(A) IN APPEAL LBCPL ALSO SHOWED THAT HE HAD UNEQUIVOCALLY DIRECTED THE ASSESSING OFFICER TO COMMUNICATE THOSE OBSERVATIONS TO THE CONCERNED OFFICER TO TAKE REMEDIAL MEASURES U/S 3 ITA NO. 1793/PN/2005 PRAMOD LUNAWAT BLOCK PERIOD 1995-96 TO 2000-01 158BD/148 OF THE ACT AGAINST THE ASSESSEE. ON THE OTHER HAND, ASSESSING OFFICER ASSESSING LBCPL HAD DISALLO WED THE CLAIM OF LBCPL OF HAVING PAID THE SUM OF RS. 35 LAKHS TO ASSESSEE AND HAD MADE ADDITION U/S 69-C OF THE A CT. ON DISALLOWANCE BEING CHALLENGED BY LBCPL, CIT(A) A GAIN EXAMINED THE ASSESSEE AND FINDING HIS EXPLANATION N OT SATISFACTORY CONCLUDED THAT THE AMOUNT REQUIRED ADD ITION IN THE HANDS OF ASSESSEE AS UNDISCLOSED INCOME. T HIS ORDER OF THE CIT(A) WAS AGAIN CHALLENGED BY THE REV ENUE IN APPEAL BEFORE THE TRIBUNAL. IT IS THE ASSESSING OF FICE IN POSSESSION OF THE SEIZED MATERIAL WHO WAS AUTHORIZE D TO RECORD SATISFACTION FOR PURPOSES OF SEC. 158BD OF T HE ACT WAS NOT HAVING MATERIAL ON RECORD TO ESTABLISH THAT THE SAID ASSESSING OFFICER HAD RECORDED THE REQUIRED SATISFACTION. IN SUCH A SITUATION, ASSUMPTION OF JURISDICTION U/S 158BD WAS HELD TO BE INVALID. ACC ORDINGLY ADDITION MADE U/S 158BD WAS QUASHED. THE ASSESSEE BEFORE US, IS SIMILARLY PLACED PERSON WITH REGARDS TO SAME TRANSACTION. ON THE SIMILAR SET OF FACTS AND SITU ATION, THE TRIBUNAL HAS QUASHED THE PROCEEDINGS U/S 158BD IN T HE CASE OF LUNAWAT JAYANT MANIKLAL (SUPRA). SO FOLLO WING THE SAME REASONING PROCEEDINGS U/S 158BD DESERVES TO BE QUASHED. IT IS PERTINENT TO MENTION HERE THAT THE CIT(A) HAS GRANTED RELIEF ON MERITS. HOWEVER, THE LEARNED AR FOR THE ASSESSEE HAS RAISED LEGAL CONTENTION BEFORE US AND 4 ITA NO. 1793/PN/2005 PRAMOD LUNAWAT BLOCK PERIOD 1995-96 TO 2000-01 HAVING AGREED TO THE SAME AND FOLLOWING THE PROPOSI TION AS LAID DOWN IN THE CASE OF LUNAWAT JAYANT MANIKLAL (S UPRA) WE HOLD THAT THE PROCEEDINGS U/S 158BD DESERVES TO BE QUASHED. SINCE WE ARE UPHOLDING THE ORDER OF THE C IT(A) ON A PRELIMINARY ISSUE, WE ARE REFRAINING TO COMMEN T ON MERITS OF THE ISSUE AT HAND. IF REQUIRED THE SAME MAY BE AGITATED AS AND WHEN THE SITUATION ARISES FOR THE S AME. 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 29 TH JULY 2011 SD/- SD/- (D. KARUNAKARA RAO) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV JUDICIAL MEMBER PUNE DATED THE 29 TH JULY 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)- II PUNE 4. THE CIT III PUNE 5. THE D.R, B BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL