Kailash Kanhaiyalal Gidwani, L/h of Late Devi K. Gidwani, Mumbai V. Assistant Commissioner of Income-tax, Circle - 2, Sangli

ITA 1800/PUN/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0884 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 19-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Set aside
• Section: 147; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT . . , . / ITA NO. 328 /PUN/201 7 / ASSESSMENT YEAR : 20 07 - 08 AMIT KANHAYALAL G IDWANI C.S.NO.34, LAXMI BUNGLOW, REVENUE COLONY, SOUTH SHIVAJI NAGAR, SANGLI - 416416 PAN : AEFPG7955P VS. ACIT, CIRCLE 1, SANGLI APPELLANT RESPONDENT . / ITA NO. 1794 /PUN/201 9 / ASSESSMENT YEAR : 20 06 - 07 MR. KAILASH KANHAIYAL AL GIDWANI FLAT NO.1001, 10 TH FLOOR, BHIMA BUILDING, WORLI SAGAR COOP HOUSING SOCIETY, SIR POCHKHANWALA ROAD, WORLI, MUMBAI - 400030 PAN : A DGPG5025J VS. ACIT, CIRCLE 2, SANGLI APPELLANT RESPONDENT . / ITA NO. 1789 /PUN/201 9 / ASS ESSMENT YEAR : 20 05 - 06 AMIT KANHAYALAL GIDWANI FLAT NO.1001, 10 TH FLOOR, BHIMA BUILDING, WORLI SAGAR COOP HOUSING SOCIETY, SIR POCHKHANWALA ROAD, WORLI, MUMBAI - 400030 PAN : AEFPG7955P VS. ACIT, CIRCLE 1, SANGLI APPELLANT RESPONDENT ITA NO S . 328/PUN/2017 & 5 ORS. GIDWANI GROUP 2 . / IT A NO. 1800 /PUN/201 9 / ASSESSMENT YEAR : 20 05 - 06 KAILASH KANHAIYALAL GIDWANI FLAT NO.1001, 10 TH FLOOR, BHIMA BUILDING, WORLI SAGAR COOP HOUSING SOCIETY, SIR POCHKHANWALA ROAD, WORLI, MUMBAI - 400030 PAN : AIMPG9942Q VS. ACIT, CIRCLE 1, SANGLI A PPELLANT RESPONDENT . / ITA NO S . 1802 & 1803 /PUN/201 9 / ASSESSMENT YEAR S : 20 05 - 06 & 2006 - 07 MRS. MEGHANA KAILASH GIDWANI FLAT NO.1001, 10 TH FLOOR, BHIMA BUILDING, WORLI SAGAR COOP HOUSING SOCIETY, SIR POCHKHANWALA ROAD, WORLI, MUMBAI - 400030 PAN : AEFPG7956Q VS. ACIT, CIRCLE 2, SANGLI APPELLANT RESPONDENT / ORDE R PER R.S.SYAL, VP : TH ESE SIX APPEALS BY DIFFERENT BUT CONNECTED ASSESSEE S ARISE OUT OF SEPARATE ORDER S PASSED BY THE CIT(A) - 1 , KOLHAPUR ON DIFFERENT DATES FOR THE CAPTIONED YEARS . SINCE ALL THESE APPEALS ARE BASED ON SIMILAR FACTS AND INVOLVE COMMON I SSUE, I APPELLANT BY SHRI SUNIL GANOO RESPONDENT BY MS. NISHTHA TIWARI & SHRI PRATHAMESH J.LAWAND DATE OF HEARING 09 - 06 - 20 20 DATE OF PRONOUNCEMENT 09 - 06 - 20 20 ITA NO S . 328/PUN/2017 & 5 ORS. GIDWANI GROUP 3 AM, THEREFORE, PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. ITA NO.328/PUN/2017 IS AN APPEAL BY SHRI AMIT K. GIDWANI FOR THE A.Y. 2007 - 08. THE ASSESSEE HAS RAISED THE FOLLOWING ADDITIONAL GROUND: SI NCE THE LEARNED ASSESSING OFFICER HAS FAILED TO MAKE ANY ADDITION ON THE GROUND ON WHICH THE ASSESSMENT WAS REOPENED, THE IMPUGNED REASSESSMENT MADE BY THE LEARNED ASSESSING OFFICER ON OTHER GROUNDS WHICH WERE NOT THE SUBJECT MATTER OF THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT, THE IMPUGNED REASSESSMENT ORDER IS BAD IN LAW AND VOID AB INITIO AND BEING WITHOUT JURISDICTION THE SAME MAY PLEASE BE ANNULLED. 3 . SINCE THE ADDITIONAL GROUND INVOLVES PURE QUESTION OF LAW AND DO ES NOT REQUIRE ANY FRES H EXAMINATION OF FACTS, I ADMIT IT IN THE HUE OF THE JUDGMENT OF HONBLE SUPREME COURT IN NATIONAL THERMAL POWER COMPANY LTD. VS. CIT (1998) 229 ITR 383 (SC) AND ESPOUSE IT FOR CONSIDERATION AND DECISION. 4 . THE FACTUAL MATRIX OF THE CASE IS THAT T HE ASS ESSEE FILED HIS RETURN DECLARING TOTAL INCOME AT 18,01,703/ . ON THE BASIS OF CERTAIN INFORMATION, T HE AO NOTED THAT T HE ASSESSEE WAS ALSO A MEMBER OF ADARSHA CO - OP. HOUSING SOCIETY AND HAD MADE INVESTMENT IN PURCHASE OF FLAT. THE AO RECORDED REASONS FOR INITIATING RE - ASSESSMENT. THE RE ASSESSMENT ORDER WAS FRAMED BY ITA NO S . 328/PUN/2017 & 5 ORS. GIDWANI GROUP 4 COMPU TING TOTAL INCOME AT RS.42,54,560 / - , INTER - ALIA, MAKING ADDITION S - U/S 68 OF THE INCOME TAX ACT , 1961 (H EREINAFTER CALLED AS THE ACT) ; LOW HOUSE HOLD EXPENSES ; LOANS RAISED FROM AIL; A ND SUBSTANTIVE ADDITION O N ACCOUNT OF UNSECURED LOANS . THE ASSESSEE REMAINED UNSUCCESSFUL BEFORE THE LD. CIT(A), WHICH HAS LED TO FILING OF THE INSTANT APPEAL BEFORE THE TRIBUNAL. 5 . I HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON R ECORD. A COPY OF REASONS RECORDED , AVAILABLE AT PAGE 8 OF THE PAPER BOOK , DECIPHERS THE REASONS AS UNDER: ACCORDING TO INFORMATION GATHERED FROM INFORMED SOURCES, LOCAL ENQUIRIES AND MEDIA REPORTS, IT HAS COME TO BE KNOWN THAT SHRI KANHAIYALAL GIDWANI, O WNS THREE FLATS, ONE IN HIS NAME AND TWO IN THE NAMES OF HIS TWO SONS KAILASH AND AMIT IN THE ADARSHA HOUSING SOCIETY. AGAIN, ONE FLAT IS LEARNED TO BE BOOKED IN THE NAME OF SHRI GAJANAN S. KOLI, WHERE APPARENTLY IT IS BELIEVED THAT SHRI SUNIL K. GIDWAN I, SON OF KANYIYALAL GIDWANI, HAS LENT FINANCE TO PURCHASE THE SAME. ALL PAYMENTS FOR THE SAME WERE APPARENTLY MADE THROUGH GIDWANI FAMILYS VARIOUS BANK ACCOUNTS IN WHICH APPARENTLY CASH AMOUNTS WERE DEPOSITED AND THE SAME WERE TRANSFERRED INTO THE ACCOU NTS OF GIDWANIS WIFE, SON AND DAUGHTER - IN - LAW IN HDFC BANK AT WORLI. THEREAFTER THE SAID AMOUNTS WERE APPARENTLY TRANSFERRED INTO THE ACCOUNT OF M/S JAY MAHARASHTRA CPL, HDFC BANK, WORLI, IN WHICH GIDWANIS SONS ARE DIRECTORS FOR MAKING PAYMENTS TOWARDS COST OF THE FLATS. SHRI AMIT KANYIYALAL GIDWANI HAS BEEN ALLOTTED FLAT IN ADARSH CHS. HE HAS PAID AN AMOUNT OF RS.56,08,787/ - TOWARDS THE ABOVE FLAT BETWEEN THE PERIOD FEB. 2003, TO JULY, 2010. 2. DURING THE YEAR AY 2007 - 08 THERE IS SOME MISTAKE IN CARR YING FORWARD THE BALANCE OF CLOSING BALANCE OF CAPITAL ACCOUNT AND ALSO THE FIGURE OF TOTAL ASSETS. THE CLOSING ITA NO S . 328/PUN/2017 & 5 ORS. GIDWANI GROUP 5 BALANCE OF THE CAPITAL ACCOUNT AS ON 31.03.2007 IS FOUND TO BE AT RS.18,02,863/ - AND AS PER BALANCE SHEET THE SAME IS SHOWN AT RS.18,49,906/ - W ITH TOTAL ASSET OF RS.70,44,413/ - . THUS THERE IS A DIFFERENCE OF RS.47,093/ - . THEREFORE, IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX TO THE EXTENT OF RS.47,093/ - [1802863 - 1849906] HAS ESCAPED ASSESSMENT WITHIN THE ME ANING OF SECTION 147 OF THE I.T. ACT, 1961. 6 . FROM THE FIRST PARA OF THE REASONS, IT IS SEEN THAT THE AO IS SIMPLY REFERRING TO ALLOTMENT OF FLAT TO THE ASSESSEE FOR WHICH, HE PAID RS.56.08 LAKHS FROM FEB, 2003 TO JULY, 2010. THIS PARA DOES NOT REFER TO ANY SPECIFIC ESCAPEMENT OF INCOME . I T IS THE SECOND PARA WITH REFERENCE TO THE ESCAPEMENT OF INCOME TOWARDS DIFFERENCE IN CLOSING CAPITAL AS ON 31.03.2007 AND OPENING BALANCE LEADING TO DIFFERENCE OF RS.47,093/ - . THAT IS H OW T HE AO CONCLUDED AT THE END OF THE REASONS THAT : ` I HAVE REASONS TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX TO THE EXTENT OF RS.47,093/ - [1802863 1849906] ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T. ACT, 1961. THUS, IT IS EVIDENT THAT THE RE - ASSESSMENT WA S INITIATED ON ACCOUNT OF DIFFERENCE IN CAPITAL TO THE TUNE OF RS.47,093/ - . ON SCRUTINY OF THE ASSESSMENT ORDER, IT TRANSPIRES THAT THE AO DID NOT MAK E ANY ADDITION ON THIS SCORE. THUS, IT IS APPARENT THAT THE AO DID NOT MAKE ANY ADDITION ON ACCOUNT OF R EASONS WHICH LED TO INITIATION ITA NO S . 328/PUN/2017 & 5 ORS. GIDWANI GROUP 6 OF RE - ASSESSMENT PROCEEDINGS. THE HONBLE BOMBAY HIGH COURT IN CIT VS. JET AIRWAYS (I) LTD. (2011) 337 ITR 236 (BOM) HAS HELD THAT AO CANNOT PROCEED WITH RE - ASSESSMENT IF GROUNDS MENTIONED IN RE - ASS ESSMENT NOTICE ARE NON - EXI STENT I.E. IF NO ADDITION IS MADE ON THE BASIS OF THE GROUNDS WHICH LED TO THE INITIATION OF RE - ASSESSMENT. SIMILAR VIEW HAS BEEN TAKEN BY HONBLE DELHI HIGH COURT IN CIT VS. CHEIL COMMUNICATIONS INDIA PVT. LTD. (2013) 354 ITR 549 (DEL) . IT HAS BEEN BROU GHT TO MY NOTICE THAT PUNE BENCH ES OF TRIBUNAL IN THE ASSESSEE - GROUP CASES HAS ALSO TAKEN SIMILAR VIEW. COPIES OF SUCH ORDERS NAMELY , ITA NO.769/PUN/2014, DATED 11.09.2019 AND ITA NO.329/PUN/2017, DATED 12.02.2020 HAVE ALSO BEEN PLACED ON RECORD. 7 . THE LD. DR CANDIDLY ADMITTED THAT THE FACTS AND CIRCUMSTANCES OF INSTANT APPEAL ARE COVERED BY SUCH DECISION S IN AS MUCH AS THE AO DID NOT MAKE ANY ADDITION ON ACCOUNT OF REASONS WHICH LE D TO INITIATION OF RE - ASSESSMENT PROCEEDINGS. IN VIEW OF FOREGOING DISC USSION AND RESPECTFULLY FOLLOWING THE PRECEDENT, I SET ASIDE THE IMPUGNED ORDER AND THE ASSESSMENT ORDER IN QUESTION. ITA NO S . 328/PUN/2017 & 5 ORS. GIDWANI GROUP 7 8 . ALL OTHER APPEALS ADMITTEDLY INVOLVE SIMILAR ISSUE. THE LD. DR FAIRLY ADMITTED THAT NO ADDITION WAS MADE ON A CCOUNT OF REASONS WHICH LED TO INITIATION OF RE - ASSESSMENT. FOLLOWING THE VIEW TAKEN HERE IN ABOVE, I SET ASIDE THE IMPUGNED ORDERS AND QUASH THE RESULTANT ASSESSMENT ORDERS. 9 . IN THE RESULT, ALL THE SIX APPEALS OF THE ASSESSEE S ARE ALLOWED ON THE LEGAL I SSUE . ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JUNE , 2020 . SD/ - ( R.S.SYAL ) / VICE PRESIDENT PUNE ; DATED : 9 TH JUNE , 2020 GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEAL S) - 1 , KOLH APUR 4. THE PR. CIT - 1, KOLHAPUR 5. , , SMC / DR SMC , ITAT, PUNE; 6. / GUARD FILE . // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO S . 328/PUN/2017 & 5 ORS. GIDWANI GROUP 8 DATE 1. DRAFT DICTATED ON 09 - 0 6 - 2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 09 - 0 6 - 2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -- JM 4. DRAFT DISCUSSED/ APPROVED BY SECOND MEMBER. -- JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8 . FILE SENT TO THE BENCH CLERK SR.PS 9 . DATE ON WHICH FILE GOES TO THE HEAD CLERK 10 . DATE ON WH ICH FILE GOES TO THE A.R. 1 1 . DATE OF DISPATCH OF ORDER. *