DCIT, CC-XIII, Kolkata, Kolkata V. Shri Nandu K. Belani, Kolkata

ITA 1829/KOL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9263 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-03-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 24-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P P SARKAR
• Assessee Lawyers: ROHIT SHUKLA
• Keywords: Audit objection; Tax effect

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH-A: KO LKATA ( ) . . , , . . , ,) [BEFORE HONBLE SHRI B.R. MITTAL, J.M. & HONBLE SH RI C.D. RAO, A.M] ! ! ! ! /I.T.A. NO. 1829/KOL./2010 '# '# '# '# $% $% $% $% /ASSESSMENT YEAR : 2008-2009 DEPUTY COMMISSIONER OF INCOME TAX, -VS.- SHRI NANDU K. BELANI, KOLKATA CENTRAL CIRCLE-XIII, KOLKATA (PAN : ADJPB 3418 P ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.P. SARKAR, D.R. RESPONDENT BY : SHRI ROHIT SHUKLA, A.R. ' ' ' ' /O R D E R PER SHRI B. R. MITTAL, JUDICIAL MEMBER / . . , : THE DEPARTMENT HAS FILED THIS APPEAL FOR THE ASSES SMENT YEAR 2008-09 AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS), CENTRA L-II, KOLKATA DATED 30.06.2010 ON THE FOLLOWING GROUNDS :- (1) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A.) HAS ERRED IN HOLDING THAT THE SEIZED CASH O F RS.31,80,000/- SHOULD BE HELD AS PAID ON 28.02.2008 I.E. THE DATE ON WHIC H 120 DAYS TIME UNDER THE PROVISIONS OF SECTION 132B(1)(I) EXPIRED AND ACCORD INGLY ERRED IN DIRECTING TO RECOMPUTE THE INTEREST CHARGEABLE UNDER SECTION. 234B, 234C AND 220(2) OF THE ACT. (2) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT(A.) HAS ERRED IN HOLDING THAT THE DEEMED PAYMEN T OF RS.31,80,000/- WOULD AMOUNT TO PAYMENT OF ADVANCE TAX ON BEHALF OF THE ASSESSEE FOR THE AY 2008-09 WITHOUT CONSIDERING THE FACT THAT THE CA SH WAS SEIZED MUCH EARLIER ON 30.07.2007 AND ON 11.10.2007, WHICH COUL D NOT HAVE BEEN APPLIED TOWARDS PAYMENT OF ADVANCE TAX UNDER THE PR OVISIONS OF SECTION 132B OF THE ACT AS THE LIABILITY OF ADVANCE TAX IS NOT AN EXISTING LIABILITY. ITA NO.1829/KOL.2010 2 (3) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THAT THE ORDER PASSED BY THE CIT(A.) IS CONTRARY TO THE PROV ISIONS OF SECTION 132B OF THE ACT WHICH STIPULATES THAT THE SEIZED ASSET CAN BE APPROPRIATED TOWARDS EXISTING LIABILITY AND THE LIABILITY DETERMINED ON COMPLETION OF ASSESSMENT. (4) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A.) HAS ERRED IN INVOKING THE 2 ND PROVISO TO SECTION 132B OF THE ACT IN THE INSTANT CASE WHICH IS APPLICABLE TO THE TIME LI MIT WITHIN WHICH AN APPLICATION MADE BY THE ASSESSEE FOR RELEASE OF ASS ETS, THE NATURE AND SOURCE OF ACQUISITION OF WHICH IS EXPLAINED TO THE SATISFA CTION OF THE AO CAN BE DECIDED AND WITHOUT CONSIDERING THAT THIS PROVISO H AS NO APPLICATION AT ALL TOWARDS ADJUSTMENT OF THE SEIZED ASSETS WITH THE LI ABILITY OF THE ASSESSEE. (5) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT(A.) HAS ERRED IN PRESUMING THAT THE SEIZED CASH OF RS.31,80,000/- PRAYED BY THE APPELLANT FOR APPLICATION TOWARDS THE TAX LIABILITY WAS ACCEPTED BY THE AO WHEN THE PROVISIONS OF ACT DOES NOT STIPULATE FOR ANY SUCH PRESUMPTION. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 3. DURING THE COURSE OF HEARING, THE LD. DEPARTMENT AL REPRESENTATIVE RELIED ON THE ORDER OF THE ASSESSING OFFICER AND WHEREAS THE LD. AUTHORIZE D REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (AP PEALS). THE LD. A.R. SUBMITTED THAT THE ASSESSEE MADE A REQUEST FOR ADJUSTMENT OF SEIZED CA SH TOWARDS TAX LIABILITY OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. HE SUBMITT ED THAT AS PER PROVISO 2 ND TO SECTION 132B(1)(I) OF THE INCOME TAX ACT, THE PERIOD OF 120 DAYS OF TIME FROM THE END OF THE MONTH IN WHICH THE ASSET WAS SEIZED EXPIRED ON 28.02.2008 AN D, THEREFORE, THE LD. CIT(APPEALS) HAS RIGHTLY HELD THAT THE DATE OF 28 TH FEBRUARY,2008 SHOULD BE TREATED AS THE PAYMENT OF THE AMOUNT TO ADVANCE TAX PAYMENT. HE SUBMITTED THAT THE SIMIL AR ISSUE WAS CONSIDERED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS.- K.K. MAR KETING [278 ITR 596] AND THE LD. CIT(APPEALS) HAS FOLLOWING THE SAID DECISION DIRECT ED THE ASSESSING OFFICER RIGHTLY TO CALCULATE THE INTEREST UNDER SECTIONS 234B, 234C AND 220(2) O F THE ACT ACCORDINGLY. THE LD. D.R. COULD NOT DISPUTE THE FACT THAT THE ASSESSEE MADE REPEATE D REQUEST FOR ADJUSTMENT OF SEIZED CASH BUT THE ASSESSING OFFICER DID NOT TAKE ANY ACTION AND H E HAD DONE THE SAME THING BY WITHDRAWING THE SEIZED CASH KEPT IN THE P.D. ACCOUNT ONLY ON 23 .10.2009 AND PAYING IT IN THE NAME OF THE ASSESSEE FOR NO FAULT OF THE ASSESSEE. CONSIDERING THE ABOVE FACTS AND THE PROVISIONS OF THE ITA NO.1829/KOL.2010 3 INCOME TAX ACT AND ALSO CONSIDERING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF K.K. MARKETING (SUPRA), WE DO NOT FIND ANY INFIR MITY IN THE ORDER OF LD. CIT(APPEALS). THEREFORE, WE UPHOLD HIS ORDER BY REJECTING THE GRO UNDS OF APPEAL TAKEN BY THE DEPARTMENT. 4. BESIDES ABOVE, IT IS ALSO OBSERVED THAT THE TAX EFFECT IN THIS APPEAL IS BELOW RS.2 LAKHS. THEREFORE, IN VIEW OF CBDT CIRCULAR NO. 279/MISC.-6 4/05-ITJ DATED 24.10.05 READ WITH INSTRUCTION NO.5 OF 2008 DATED 15.05.2008, THE APPE AL OF THE DEPARTMENT IS NOT MAINTAINABLE. THE DEPARTMENT IN ABOVE INSTRUCTION DATED 15.05.200 8 HAS SPECIFIED 3 GROUNDS IN PARA 8 STATING THAT THE APPEAL COULD BE FILED BEFORE THE TRIBUNAL WHERE THE TAX EFFECT IS LESS THAN RS.2.00 LAKHS ONLY IN RESPECT OF THE FOLLOWING 3 CASES :- (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE ARE UNDER CHALLENGE. (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OF CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES. (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT. EVEN OTHERWISE, THE APPEAL FILED BY THE DEPARTMENT IS LIABLE TO BE DISMISSED AS THE LD. D.R. COULD NOT POINT OUT AT THE TIME OF HEARING ANY OF T HE EXCEPTIONS AS IS PROVIDED UNDER PARA 8 OF THE SAID CIRCULAR. NONE OF THE ABOVE CIRCUMSTANCES STATED BY C.B.D.T. APPLIES TO THE CASE OF THE ASSESSEE. HENCE, THE APPEAL OF THE DEPARTMENT IS DI SMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE DEPARTME NT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.03. 2011. SD/- SD/- [C. D. RAO ( . . )] [ B.R . MITTAL / . . ] ACCOUNTANT MEMBER/ JUDICIAL MEMBER/ ] DATED : 18/ 03/ 2011 ITA NO.1829/KOL.2010 4 COPY OF THE ORDER FORWARDED TO: 1. SHRI NANDU K. BELANI, 1B, MONTO PARK, KOLKATA-27. 2 DCIT, CC-XIII, KOLKATA, 18, RABINDRA SARANI, KOLKAT A-1. 3. CIT(A)- ,KOLKATA 4. CIT- , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR I.T.A.T., KOLKATA. LAHA, SR. P.S.