Asst. Commissioner of Income Tax,Central Circle-2, Belgaum V. M/s . Sri Bhagwandas Mukundas Jaju, ICHALKARANJI

ITA 205/PAN/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9493 (ITAT-PANAJI)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2015
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 23-12-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 19-06-2014
• Court: TRIBUNAL
• Department Lawyers: VINAY SINGH RAWAT LD
• Keywords: Unexplained cash credit; Income from undisclosed sources; Peak credit; Deemed dividend
• Section: 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ,PANAJI BENCH, PANAJI [BEFORE SHRI P. K. BANSAL, AM & SHRI D.T GARASIA, JM ] I.T . A NO . 2 05 /PNJ/201 4 A.Y . 200 1 - 02 ACIT, CENTRAL C IR - 2 , BELGAUN VS. SHRI BHAGWANDAS MUKUNDAS JAJU PAN:APAPJ6318B ( DEPARTMENT ) ( RESPONDENT ) C.O NO . 32 /PNJ/201 4 [ITA NO. 205 / PNJ/201 4 A.Y 200 1 - 02 ] SHRI BHAGWANDAS MUKUNDAS JAJU VS. ACIT, CENTRAL CIR - 2, BELGAUN ( CROSS OBJECTOR/ASSESSEE ) ( RESPONDENT /DEPARTMENT ) FOR THE APPELLANT /DEPARTMENT : SHRI VINAY SINGH RAWAT, LD.DR FOR THE CROSS OBJECTOR /ASSESSEE : SHRI A SHOK A KULKARNI, ADVOCATE, LD.AR DATE OF HEARING: 08 - 01 - 201 5 DATE OF PRONOUNCEMENT: 08 - 0 1 - 2015 ORDER PER SHRI D.T GARASIA, J M: THIS APPEAL AND CROSS OBJECTIONS HAVE BEEN FILED BY THE DEPARTMENT AND THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), BANGALORE DATED 28 TH MARCH 2014 FOR THE ASSESSMENT YEAR 2001 - 02. 2. THE ABOVE APPEAL AND CROSS OBJECTION PERTAIN TO SAME ASSESSEE, THEREFORE, THESE ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. THE FOLLO WING GROUNDS ARE RAISED BY THE DEPARTMENT IN ITA NO . 205 / PNJ/2014 FOR THE ASSESSMENT YEAR 2001 - 02: - 1. THE LD.CIT(A) HAS ERRED IN GIVING RELIEF OF RS. 72,29,094/ - ON ACCOUNT OF UN ACCOUNTED CASH CREDITS WHICH THE ASSESSING OFFICER HAD ADDED UNDER SECTI ON. 68 AS UNEXPLAINED CASH CREDITS. 2. THE LD.CIT(A) HAS ERRED IN GIVING THE IMPUGNED RELIEF AFTER RELYING ON HER JUDGMENT IN ITA NOS. TR.41/42/43/44/ACIT, CC PANAJI/CIT(A) - VI/BNG/ 2 013 - 2014 FOR THE A.Y 2001 - 02 TO 2004 - 05 IN THE CASE OF SRI MURUGESH R. NIRANI & OTHERS (AOP), MUDHOL, WHICH ARE NOT ACCEPTABLE AND ARE SEPARATELY BEING CONTESTED. 2 ITA NO .205 & CO NO.32/PNJ/2014 SH.BHAGWANDAS MUKUNDAS JAJU 4. SHORT FACTS OF THE CASE ARE THAT A SEARCH U/S 132 OF THE ACT WAS CONDUCTED SIMULTANEOUSLY IN THE M/S. NIRANI SUGAR MILLS LTD ON 28 - 01 - 2004. DURING T HE COURSE OF SEARCH AT THE PREMISES OF SHRI NAROTTAM PAREKH, ACCOUNTANT OF M/S. NIRANI SUGARS LTD THE BOOKS OF ACCOUNT ENLISTED I ANNEXURE A/NP PANCHANAMA DATED 28 - 01 - 2004 WERE FOUND AND SEIZED. ON SCRUTINIZING THE SEIZED BOOKS , IT WAS NOTICED THAT AT PAG E NO.12 OF SEIZED BOOKS MARKED AS A/NP A LEDGER ACCOUNT IN THE NAME OF THE ASSESSEE IS FOUND TO BE MAINTAINED AS PER IN WHICH THE OPENING BALANCE IS RS.72,290/94. THE ASSESSEE WAS GIVEN SHOW CAUSE NOTICE AND HE SUBMITTED THAT HE HAS NO DEALING WITH THE AS SESSEE COMPANY DURING THE PERIOD UNDER CONSIDERATION. HE HAS NOT DEPOSITED OR WITHDRAWN ANY AMOUNT FROM THE COMPANY . THUS, THE AO HAS WORKED OUT A PEAK CREDIT OF RS.72,29,094/ - IN THE HANDS OF THE ASSESSEE. 5 . MATTER CARRIED TO LD. CIT(A) AND CIT(A) HAS DISPOSED OF THE APPEAL BY OBSERVING AS UNDER: - 4.4 I HAVE CONSIDERED THE FACTS OF THE CASE AND HAVE UPHELD THE ADDITION THOUGH MADE ON PROTECTIVE BASIS BY THE ASSESSING OFFICER (VIDE MY ORDER OF EVEN DATE IN ITA NOS. TR - 12/TR - 13/TR - 14/TR - 15/ACIT, CC, P ANAJI/CIT(A) - VI/BNG/2013 - 2014 OF EVEN DATE FOR A.YS 2001 - 02 TO 2004 - 05 ) IN THE HANDS OF COMPANY, M/S. NIRANI SUGARS LTD AS SUBSTANTIVE ADDITION. THE ADDITION ALSO MADE IN THE HANDS OF THE AOP SRI MURGESH NIRANI & OTHERS, THOUGH PROTECTIVE ADDITION HAS ALS O BEEN DELETED BY ME IN MY ORDER (VIDE ITA NOS. TR - 12/TR - 13/TR - 14/TR - 15/ACIT, CC, PANAJI/CIT(A) - VI/BNG/2013 - 2014 FOR A.YS 2001 - 02 TO 2004 - 05 OF EVEN DATE). THIS ADDITION IN THE HANDS OF THE INDIVIDUAL APPELLANT UNDER THE FACTS AND CIRCUMSTANCEDS OF THE CA SE CANNOT BE UPHELD. AS THERE ARE NO APPARENT ACCUMULATED PROFITS OF THE COMPANY, NO ADDITION ON DEEMED DIVIDEND ARISES EITHER IN HANDS OF THE SAID INDIVIDUALS. HOWEVER, IT IS RELEVANT TO NOTE THAT THE SAID COMPANY, M/S. NIRANI SUGARS LTD, THOUGH A PUBL IC LTD COMPANY, HAS NOT TAKEN ANY STEPS EITHER TO BRING INTO ITS BOOKS THE UNACCOUNTED INCOME EARNED OR TO RECOVER THE SAME FROM THE AID PERSONS TO WHOM THE PROFITS ARE CREDITED AS PER THE UNACCOUNTED BOOKS. 4.5 WITH THESE FINDINGS, THE ADDITION MADE IN THE HANDS OF THE APPELLANT IS DELETED. 6 . THE DEPARTMENT AND ASSESSEE BOTH ARE IN APPEAL AGAINST THE DECISION OF THE LD.CIT(A). 7 . WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT A SEARCH U/S 132 OF THE ACT WAS CONDUCTED ON 28 - 01 - 2004 IN THE PREMISES OF M/S. NIRANI SUGAR MILLS LTD. WE FIND THAT THE ADDITION WAS MADE IN THE HANDS OF M/S. NIRANI SUGARS LTD. WE HAVE ALREADY CONFIRMED THE ADDITION IN THE HANDS OF M/S. NIRANI SUGARS LTD . WE HAVE ALSO DELETED THE ADDITION IN THE HANDS O F AOP SHRI MURUGESH NIRANI & ORS. THE LD.CIT(A) HAS ALSO DELETED THE ADDITION AS THIS 3 ITA NO .205 & CO NO.32/PNJ/2014 SH.BHAGWANDAS MUKUNDAS JAJU TRANSACTION PERTAINING TO COMPANY . AS WE HAVE ALREADY HELD IN ITA NOS.201 TO 204/PNJ/2014 VIDE ORDER DATED 08 - 01 - 2015 BY CONFIRMING THE ADDITION IN THE HANDS OF THE ASSES SEE COMPANY. THE ADDITION IN THIS CASE IS, THEREFORE, DELETED BY UPHOLDING THE ORDER OF THE LD.CIT(A). THIS ISSUE OF DEPARTMENTAL APPEAL IS DISMISSED. 8 . IN RESPECT OF C.O NO.32/PNJ/2014 ARISING OUT OF ITA NO.205/PNJ/2014 FOR THE ASSESSMENT YEAR 2001 - 02 (BY THE ASSESSEE), WE FIND THAT THE SAME ADDITION HAS BEEN CONFIRMED BY US IN ITA NOS. 201 - 204/PNJ/2014 IN THE HANDS OF M/S. NIRANI SUGARS LTD. THEREFORE, THE AO AND LD.CIT(A) BOTH WERE JUSTIFIED IN MAKING THE ADDITION BY INVOKING THE PROVISIONS OF SECTI ON 68/69 OF THE I.T ACT 1961 IN THE HANDS OF M/S. NIRANI SUGARS LTD. THEREFORE, THIS CROSS OBJECTION FILED BY THE ASSESSEE DESERVES TO BE DISMISSED. 9 . IN THE RESULT, APPEAL OF THE DEPARTMENT AND CROSS OBJECTION OF THE ASSESSEE BOTH ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 08 - 01 - 2015 SD/ - SD/ - ( P. K. BANSAL ) ( D.T GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 08 - 01 - 2015 **PRADIP (SR.P.S.) COPY OF THE OR DER FORWARDED TO: 1. A PPELLANT 2 RESPONDENT 3. THE CIT(A) CONCERNED 4. 5. THE CIT CONCERNED THE D . R 6. GUARD FILE TRUE COPY, BY ORDER, ASSTT. REGISTRAR