ACIT CEN CIR-8, MUMBAI V. DINESH B. MODY, MUMBAI

ITA 1883/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7531 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 12-02-2010
• Assessment Year: 2007-2008
• Appeal Filed On: 25-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DURGESH SUMROTT
• Assessee Lawyers: D R RAIYANI
• Keywords: Search and seizure; Revised return
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI A.L.GEHLOT, AM & SMT. P.MADHAVI DEVI, JM I.T.A.NO.1883/MUM/2009 - A.Y 2007-08 ASST. COMMISSIONER OF I.T., CENTRAL CIRCLE 8, MUMBAI. SHRI DINESH B. MODY, 83, B&C, SHETH GOVINDRA SMRUTI, DR. A.B.ROAD, WORLI, MUMBAI 400 018. PAN NO.AABPM 9043 Q (APPELLANT) (RESPONDENT) REVENUE BY : SHRI DURGESH SUMROTT, DR ASSESSEE BY : SHRI D.R.RAIYANI. O R D E R PER P.MADHAVI DEVI, JM: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST CIT (A)S ORDER DATED 28/01/2009. 2. IN THIS APPEAL, THE ONLY GRIEVANCE OF THE RE VENUE IS AGAINST THE ORDER OF THE CITA(A) IN DIRECTING THE AO TO TREAT T HE SEIZED CASH OF RS.194.95 LAKHS AS ADVANCE TAX AND GIVE CREDIT THER EON IN CALCULATING THE TAX AND INTEREST. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL. THERE WAS A SEARCH AND SEIZURE ACTION U/S.132 OF TH E I.T.ACT IN THE CASE OF THE ASSESSEE, M/S J.B.CHEMICALS AND PHARMAC EUTICALS LTD., GROUP CONCERNS, DIRECTORS, RELATIVES OF DIRECTORS A ND KEY EMPLOYEES ON 10-1-07. THE ASSESSEE FILED HIS RETURN OF INCOME FO R THE A.Y 2007-08 DECLARING TOTAL INCOME OF RS.7,96,79,190/- AND ALSO REVISED RETURN ON 2-4-08 DECLARING AN INCOME OF RS.7,85,79,190/-. DUR ING THE COURSE OF 2 ASSESSMENT PROCEEDINGS THE ASSESSEE FILED A LETTER DATED 14-3-07 STATING THAT A SUM OF RS.89.95 LAKHS WAS SEIZED DUR ING THE COURSE OF SEARCH ACTION ON 11-1-07 AND THE ASSESSEE HAS ALSO GIVEN A PAY ORDER OF RS.1,05,00,000/- IN FAVOUR OF DIT (INV) II AND T HAT IN THE STATEMENT GIVEN U/S.132(4), THE ASSESSEE HAS DECLARED AN ADDI TIONAL INCOME OF RS.5,79,17,409/- AND THEREFORE THE SEIZED AMOUNT OF RS.89,95,000/- MAY BE ADJUSTED AGAINST THE TAX PAYABLE BY THE ASSE SSEE ON THE ADDITIONAL INCOME OF RS.5,79,17,409/- FOR A.Y 2007- 08 AND TREAT THE SAME AS ADVANCE TAX FOR THE RELEVANT ASSESSMENT YEA R. HOWEVER, AO DID NOT GIVE CREDIT FOR THE SEIZED/DEPOSITED CASH A ND HAS LEVIED INTEREST UNDER SECTIONS 234A, 234B AND 234C. AGGRIEVED, ASSE SSEE FILED AN CITA APPEAL BEFORE THE CIT(A) WHO ALLOWED THE SAME AND D IRECTED THE AO TO CALCULATE THE INTEREST U/S.234A, 234B AND 234C IN A CCORDANCE WITH THE DIRECTIONS GIVEN IN HIS ORDER AFTER GIVING CREDIT F OR THE SEIZED/DEPOSITED CASH. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 4. THE LD.DR RELIED UPON THE ORDER OF THE AO WHILE THE LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE CIT(A) AND ALSO PLACED BEFORE US A COPY OF THE ORDER OF THE TRIBUNAL IN TH E CASE OF ASSESSEES BROTHER SHRI J.B.MODY IN I.T.A.NO.1884/M/09 DATED 9 -12-09 ON THE SAME ISSUE. HE HAS ALSO PLACED BEFORE US A COPY OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KES R KIMAM KARYALAYA REPORTED IN 278 ITR 596 WHICH HAS BEEN RELIED UPON BY THE LD. CIT(A) IN GIVING RELIEF TO THE ASSESSEE. 3 5. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THEIR RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THA T THE TRIBUNAL IN THE ASSESSEES BROTHERS CASE HAS PLACED RELIANCE UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF KESR KIMAM KARYALAYA [CITED SUPRA] AND AT PARA-6 OF ITS ORDER HAS HELD AS UNDER - 6. HOWEVER, IT WAS NOTICED BY US THAT THE ADJUSTME NT WAS POSSIBLE ONLY BEFORE THE LAST INSTALLMENT WHICH WAS DUE ON 1 5-3-2007 AND, THEREFORE, THE ASSESSEE MAY BE LIABLE TO LEVY OF INTEREST UNDER SECTION 234B OF THE ACT. WHEN THIS SITUATION WAS EXPLAINED TO THE LD. COUNSEL FOR THE ASSESSEE HE FAIRLY CONCEDED THAT THE ASSESSEE MAY BE LIABLE TO INTEREST UNDER SECTION 234C BUT THE SAME HAD ALSO T O BE RECALCULATED AFTER GIVING CREDIT FOR THE AMOUNTS ALREADY PAID BY THE ASSESSEE INCLUDING THE AMOUNT OF RS.18,00,000/- IN CASH AND RS.1.98 CRORES BY DEMAND DRAFT. THEREFORE, WE FIND NOTHING WRONG WITH THE ORDER OF LD. CIT[A] AND DIRECT THE AO TO GIVE CREDIT FOR THE AMOUNT OF RS.2.16 CRORES CONSISTING OF SEIZED CASH OF RS.18,00,000/- AND DEMAND DRAFT OF RS.1.98 CRORES AND THEN RECALCULATE THE INTEREST AS PER LAW. 6. AS FACTS AND CIRCUMSTANCES ARE SIMILAR, RESPECTF ULLY FOLLOWING THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF AS WELL AS THE DECISION OF THE CO-ORDINATE BENCH IN ASSESSEES BROTHERS SH RI J.B.MODYS CASE [CITED SUPRA], WE UPHOLD THE ORDER OF THE CITA(A) A ND DIRECT THE AO TO GIVE CREDIT FOR THE SEIZED/DEPOSITED AMOUNT AS ADVA NCE TAX AND THEN RECALCULATE THE INTEREST AS PER LAW. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED ON THIS 22ND DAY OF FEBRUARY, 2010 . SD/- SD/- (A.L.GEHLOT) (P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 22 ND FEBRUARY, 2010. P/-* 4 COPY TO- 1) APPELLANT 2) RESPONDENT 3) CITA MUMBAI. 4) CIT CITY MUMBAI 5) DR BENCH MUMBAI TRUE COPY BY ORDER DY /ASST.REGISTRAR,ITAT MUMBAI.