The DCIT, Circle-1(1)(2), Ahmedabad V. Shri Bhikhubhai Nanjiabhai Padsala, Ahmedabad

ITA 2091/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5863 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 12-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 234B; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMB ER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO. 2091/AHD/2016 (ASSESSMENT YEAR : 2010-11) DCIT, CIR.1(1)(2), AHMEDABAD APPELLANT VS. SHRI BHIKHUBHAI NANJIBHAI PADSALA 10, PARTH BUNGLOW NR. SHALBY HOSPITAL, OPP. KARNAVATI CLUB, S. G. HIGHWAY, AHMEDABAD-54 RESPONDENT PAN: ALDPP1570A / BY REVENUE : SHRI ALOK KUMAR, SR. D.R. / BY ASSESSEE : NONE /DATE OF HEARING : 12.03.2018 /DATE OF PRONOUNCEMENT : 13.03.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2010-11, ARISES AGAINST THE CIT(A)-1, AHMEDABADS ORDER DATED 24.05.2016, IN CA SE NO. CIT(A)- VI/DCIT(OSD), R-1/329/2014-15, PARTLY REVERSING AS SESSING OFFICERS ACTION CHARGING INTEREST U/S.245D(6A) IN HIS RECTIFICATION ORDER DATED 15.09.2014, IN PROCEEDINGS U/S. 154 OF THE INCOME TAX ACT, 1961, H EREINAFTER THE ACT. ITA NO. 2091/AHD/2016 (DCIT VS. SHRI BHIKHUBHAI N. PADSALA) A.Y. 2010-11 - 2 - 2. CASE CALLED TWICE. NONE APPEARS AT ASSESSEES B EHEST. THE REGISTRY HAS ALREADY SENT AN RPAD NOTICE DATED 12.03.2018 INDICA TING THAT THE REVENUES INSTANT APPEAL SUFFERS FROM FIVE DAYS DELAY IN FIL ING. NEITHER ASSESSEE HIMSELF NOR HIS AUTHORIZED REPRESENTATIVE HAVE PUT IN APPEARANC E. WE THUS PROCEED EX PARTE AGAINST THE ASSESSEE. COMING TO DELAY ISSUE, WE FI ND THAT THE REVENUE STATES THAT THE SAME TO HAVE OCCURRED ON ACCOUNT OF THE FACT TH AT THE RELEVANT DETAILS COULD NOT BE FURNISHED TO THE SUPERIOR AUTHORITIES BECAUSE OF SURVEY DUTY. ALL THIS INDICATES THAT THE IMPUGNED DELAY OF FIVE DAYS ON REVENUES P ART IN INSTITUTING THE PRESENT APPEAL IS NEITHER INTENTIONAL NOR DELIBERATE. THE SAME IS ACCORDINGLY CONDONED. 3. WE NOW ADVERT TO MERITS OF THE ISSUE IN QUESTION . THE INSTANT LIS HAS ARISEN FROM THE SEARCH IN QUESTION DATED 04.03.2010 CONDUC TED IN M/S. NANJI GROUP INCLUDING THE ASSESSEE HEREIN AS ITS CHAIRMAN. THE SAID SEARCH LED TO SEIZURE OF CASH SUM OF RS.74LACS FOUND IN THE ABOVE ENTITYS B ANK LOCKER. THE RESPONDENT ASSESSEE SOUGHT TO ASSESS THE SAME IN HI S HANDS. HE ALSO FILED A SETTLEMENT APPLICATION BEFORE THE INCOME TAX SETTLE MENT COMMISSION. THE LEARNED SETTLEMENT COMMISSION DECIDED THE SAME IN I TS ORDER DATED 26.11.2012. CASE FILE REVEALS THAT THE ASSESSEE THEREAFTER STAT ED BEFORE THE ASSESSING OFFICER THAT SECTION 234B INTEREST HAD TO BE CHARGED UP TO THE DATE OF ORDER PASSED U/S.245D(1) I.E. 04.01.2012. THE ASSESSING OFFICER THEREAFTER PASSED SECTION 245D(6) ORDER ON 14.12.2012. THIS MADE THE ASSESSE E TO PRAY FOR RECTIFICATION SEEKING CREDIT OF THE ASSESSED CASH ALONGWITH CONSE QUENTIAL RE-COMPUTATION. THE ASSESSING OFFICER REJECTED THE SAME IN HIS ORDER IN QUESTION DATED 15.09.2014. HE INTER ALIA OBSERVED THAT THE ASSESSEE HAD PAID THE DEMAND IN QUESTION IN INSTALLMENT AFTER 35 DAYS FROM THE DATED OF GIVING EFFECT ORDER OF THE SETTLEMENT COMMISSIONS ADJUDICATION BUT INTEREST U/S.245D(6A) WAS TO BE LE VIED ON THE BALANCE PAYABLE AFTER EACH INSTALLMENT. HE ACCORDINGLY DIRECTED TH E ASSESSEE TO PAY INTEREST UNDER THE ABOVE STATUTORY PROVISION QUA THE BALANCE TAX P AYABLE AFTER PAYMENT OF EACH INSTALLMENT. ITA NO. 2091/AHD/2016 (DCIT VS. SHRI BHIKHUBHAI N. PADSALA) A.Y. 2010-11 - 3 - 4. THE ASSESSEE PREFERRED APPEAL. IT RAISED AN ADD ITIONAL GROUND DURING THE PENDENCY OF LOWER APPELLATE PROCEEDINGS THAT A CO-O RDINATE BENCH IN REVENUES APPEAL IT(SS)A NO.446/AHD/2012 HAD DIRECTED THAT TH E CASH SEIZED OF RS.74LACS IS TO BE ASSESSED IN THE HANDS OF M/S. B. NANJI ENTERP RISES LTD. THAN ITS CHAIRMANS CASE. THE CIT(A) PARTLY ACCEPTS ASSESSEES CASE TH EREAFTER AS UNDER: 2.3. THE SUBMISSION OF THE APPELLANT BEFORE CIT (A) IN THIS REGARD IS AS UNDER: 1. IN CONTINUATION TO THE SUBMISSIONS MADE EARLIER, I WOULD LIKE TO BRING TO YOUR HONOUR'S KIND ATTENTION TO THE RECENT ORDER OF HON'BLE ITAT IN THE CASE OF B. NANJI ENTERPRISES LTD IN IT (SS) A NO 446/AHD/ 2012 DATED 08/03/2016 WHEREIN IT HAS BEEN HELD THAT SINCE BANK LOCKER WAS IN THE NAM E OF B. NANJI ENTERPRISES LTD AND SINCE SHRI APPELLANT WAS NOT AUTHORIZED TO OPER ATE THE SAID BANK LOCKER, CASH SEIZED FROM THE BANK LOCKER IS REQUIRED TO BE HELD TO BE BELONGING TO B NANJI ENTERPRISES LTD INSTEAD OF BELONGING TO THE APPELLA NT. DURING THE COURSE OF HEARING APPELLANT BROUGHT TO THE NOTICE OF HON'BLE BENCH THAT CASH SEIZED OF RS. 74,00,000/- WAS MADE UP OF THE FOLLOWINGS 'ON MONEY ' RECEIPTS AGAINST SALE OF LANDMARK LAND INCOME OF WHICH HAS BEEN ASSESSED IN THE HANDS OF APPELLANT BY HON'BLE SETTLEMENT COMMISSION AND HAS NOT BEEN FURT HER CHALLENGED BEFORE THE HON'BLE HIGH COURT AND THEREFORE, ORDER OF HON'BLE SETTLEMENT COMMISSION BECOME FINAL AND BINDING ON THE DEPARTMENT: PAPER BOOK PAGE NO. CASH FLOW SERIAL NO. DATE AMOUNT 336 1209 14/03/2009 2000000 341 1250 28/03/2009 1500000 349 1355 15/04/2009 3500000 350 1361 18/04/2009 500000 TOTAL 7500000 ATTENTION OF HON'BLE BENCH WAS ALSO DRAWN TO THE FO LLOWINGS FACTS: CASH FOUND IN THE BANK LOCKER WAS INCORPORATED IN T HE CASH FLOW STATEMENT SUBMITTED BEFORE THE ITSC BY THE APPELLANT BEING GE NERATED OUT OF 'ON MONEY' RECEIPTS FOR 'LANDMARK LANDS' AND THE SAME WAS VERI FIED BY THE INVESTIGATING OFFICERS OF ITSC. FURTHER, APPELLANT DISCLOSED 'ON MONEY' RECEIPT PERTAINING TO 'LANDMARK PROJECT' IN HIS INDIVIDUAL HANDS BEFORE T HE INCOME-TAX SETTLEMENT COMMISSION AND THE SAME HAS BEEN HELD TO BO ASSESSE D IN HIS INDIVIDUAL HANDS AFTER OVERRULING THE OBJECTIONS OF DEPARTMENT AND F INDING OF THE HON'BLE ITSC HAS NOT BEEN CHALLENGED BEFORE THE HON'BLE HIGH COURT B Y THE DEPARTMENT NOR ANY ATTEMPT WAS MADE TO TAX 'ON MONEY' RECEIPTS IN THE HANDS OF B. NANJI ENTERPRISES LTD. APPLICANT MADE FOLLOWING DISCLOSURES IN THE S ETTLEMENT APPLICATION: ITA NO. 2091/AHD/2016 (DCIT VS. SHRI BHIKHUBHAI N. PADSALA) A.Y. 2010-11 - 4 - 2. DISCLOSURES MADE IN SETTLEMENT APPLICATION PAPER BOOK PAGE NO. PARA NO. BRIEF DESCRIPTION 16 15(A) TREATMENT OF CASH SEIZED AT RESIDENCE AS WELL AS BA NK LOCKERS HELD IN THE NAME OF B NANJI ENTERP RISES LTD AND SIDDHI VINAYAK BUILDCON P LTD 18 16.2 INITIAL DISCLOSURE OF RS. 15 CRORES BY SHRI SANDIP B PADSALA IN HIS NAME, OTHER FAMILY MEMBERS AND GROUP CONCERNS 19 16.3 UPWARD REVISION OF DISCLOSURE TO RS. 20.93 CRORES B Y SHRI SANDIP B PADSALA AND DISCLOSURE OF INCOME IN THE HANDS OF SHRI BHIKHUBHAI N PADSALA 20 16.4 AFFIRMATION OF DISCL OSURE BY SHRI BHIKHUBHAI N PADSALA IN HIS INDIVIDUAL NAME 21 16.6 NATURE OF INCOMES DISCLOSED BY SHRI BHIKHUBHAI N PADSALA INCLUDING IN RESPECT OF GODH AVI LANDMARK LANDS AND JAGATPUR LANDS 29 5.1 (XXII) QUANTUM OF INCOME OFFER ED FOR GODHAVI LANDMARK LANDS. FINDINGS IN SETTLEMENT ORDER PAPER BOOK PAGE NO. PARA NO. OF SETTLEMENT ORDER BRIEF DESCRIPTION 126 4.1 ISSUES TO BE SETTLED BASED ON RULE 9 REPORT 136 7 REFERENCE TO VERIFICATION OF CASH FLOW STATEMENT BY INVESTIGATING OFFICERS OF ITSC 137-141 8 SETTLEMENT OF ISSUE RELATING TO TAXATION OF INCOME IN RELATION TO LANDMARK PROJECT LANDS AND AFTER TAKING COGNISANCE OF ASSESSMENT ORDERS PASSED IN THE CASE OF B NANJI ENTERPRISES LTD FOR A.Y. 2009-10 AND 2010-1 1 INSPITE OF FURNISHING OF ABOVE CATEGORICAL INFORMAT ION, HONBLE ITAT RULED THAT CASH SEIZED BELONG TO B. NANJI ENTERPRISES LTD. AND ACCORDINGLY, VIDE PARA 8 OF THE ORDER HELD AS UNDER: '.....WE HOLD THAT IT IS THE ASSESSEE ONLY WHO IS T HE RIGHTFUL OWNER OF THE CASH SEIZED FROM ITS BANK LOCKER HEREINABOVE IN ABS ENCE OF ANY EXCEPTION BEING POINTED OUT. WE CONCLUDE THAT THE UNACCOUNTED CASH SEIZED SUM OF RS.74 LACS BELONGED TO THE ASSESSEE ONLY AND THE SA ME DESERVES TO BE ASSESSED IN ITS HANDS AS AGAINST THAT IN SHRI BHIKH UBHAI'S CASE. WE ACCEPT REVENUE'S ARGUMENTS SEEKING TO REVIVE ASSESSING OFF ICER'S ACTION. IT IS MADE CLEAR THAT THE ASSESSING AUTHORITY SHALL ENSUR E THAT THE SAME AMOUNT IS NOT TAXED TWICE. REVENUES APPEAL IT(SS)A 446/A HD/2012 IS ACCEPTED. UNDER THESE CIRCUMSTANCES, YOUR APPELLANT IS RAISIN G FOLLOWING ADDITIONAL GROUND: ITA NO. 2091/AHD/2016 (DCIT VS. SHRI BHIKHUBHAI N. PADSALA) A.Y. 2010-11 - 5 - ADDITIONAL GROUND IN VIEW OF ORDER OF HON'BLE ITAT IN IT(SS)A NO 446 /AHD/ 2012, INCOME ARISEN M SALE OF LANDMARK LANDS AND TAXED IN THE HA NDS OF APPELLANT TO THE EXTENT OF 74,00,000/- IS REQUIRED TO BE EXCLUDED OT HERWISE IT WILL AMOUNT TO DOUBLE TAXATION WHICH WILL BE CONTRARY TO THE DIREC TIONS OF TAXATION PRINCIPLES AS WELL AS DIRECTIONS OF HON'BLE TRIBUNA L.' 3. APPELLANT SUBMITS THAT FOR THE REASONS GIVEN IN THE ITAT ORDER IN IT(SS)A NO. 446/AHD/ 2012, INCOME OF THE APPELLANT TO THE E XTENT OF RS. 74,00,000/-IS REQUIRED TO BE EXCLUDED FROM THE INCOME ASSESSED FO R A.Y.2010-11 AND THEREFORE, NECESSARY DIRECTIONS BE GIVEN TO THE ASSESSING OFFI CER TO MODIFY INCOME OF APPELLANT FOR A.Y. 2010-11 BY EXCLUDING INCOME TAXE D ON SALE OF LANDMARK LANDS TO THE EXTENT OF RS. 74,00,000/-IN THE HANDS OF THE APPELLANT AS THE SAME IS DIRECTED TO BE TAXED IN THE HANDS OF B NANJI ENTERPRISES LTD . THIS DIRECTION IS NECESSARY SO THAT SAME AMOUNT CANNOT BE TAXED TWICE BOTH ILL THE HANDS OF APPELLANT AS WELL AS IN THE HANDS OF B NANJI ENTERPRISES LTD. COPY OF IT AT ORDER IS ENCLOSED HEREWITH FOR READY REFERENCE'. 2.4 I HAVE CAREFUL CONSIDERATION TO THE APPELLANT'S WRITTEN SUBMISSION AND ALSO HAVE CAREFULLY PERUSED THE RELEVANT PARA OF THE REC TIFICATION ORDER UNDER APPEAL. AS PER PARA 8 OF THE HON'BLE ITAT AHMEDABAD, 'C' BE NCH ORDER NO. IT(SS)A NO. 446/AHD/2012 FOR A.Y. 2010-11 HAS DIRECTED TO TAX R S. 74 LACS IN THE HANDS OF B. /VAN/7 ENTERPRISES WHICH WAS ORIGINALLY TAKEN-TO TH E HANDS OF BHIKHUBHAI N. PADSALA IN A.Y. 10-11. THE RELEVANT PARA 8 OF THE O RDER IS AS UNDER: '8. THE ASSESSEE AT THIS STAGE VEHEMENTLY ARGUES TH AT IT IS REVENUE'S NEUTRAL CASE SINCE BOTH ASSESSEE AND MR. BHIKUBHAI ARE ASSESSED AT THE SAME RATIO. IT FURTHER SUBMITS THAT ONCE THE IMPUGN ED SUM ALREADY STANDS INCLUDED IN MR. BHIKUBHAI'S CASH FLOW STATEMENT, TH ERE IS NO REVENUE LOSS CAUSED TO THE DEPARTMENT. IT FILES BEFORE US A CO-O RDINATE BENCH DECISION IN CIT VS. KALPANI I. SHETH ITA 157/AHD/2010 DECIDED O N 06-07-2012 INTER ALIA UPHOLDING THE SAID ASSESSEE'S ACTION DECLARING THE UNEXPLAINED CASH FOUND IN THE COMPANY'S HANDS. WE ARE NOT IMPRESSED WITH THIS ARGUMENT. WE REITERATE THAT SHRI BHIKUBHAI HAS NOT BEEN ABLE TO PROVE HIMSELF AS THE AUTHORIZED PERSON TO OPERATE THE LOCKER IN QUESTION ON THE DATE OF SEARCH. HIS CORRESPONDING PLEA BEFORE THE SETTLEMENT COMMIS SION HAS ALSO NOT BEEN CONSIDERED (SUPRA). WE OBSERVED IN THESES PECU LIAR FACTS AND CIRCUMSTANCES THAT NOT ONLY ASSESSMENT OF AN INCOME IS OF PARAMOUNT IMPORTANCE IN SCRUTINY PROCEEDINGS, BUT ALSO IT IS EQUALLY SIGNIFICANT THAT THE SAME HAS TO BE DONE IN THE HANDS OF THE RIGHT A SSESSEE. WE ARE OF THE VIEW IN THESE FACTS THAT THE ID. CO-ORDINATE BENCH DECISION DOES NOT DEAL WITH AN IDENTICAL SITUATION WHEREIN THE SAID ASSESS EE HAD SATISFACTORILY PROVED THE CASH SEIZED TO BE BELONGING TO THE COMPA NY AS AGAINST THE INSTANT ONE. IT STANDS DISTINGUISHED ACCORDINGLY. W E HOLD THAT IT IS THE ASSESSEE ONLY WHO IS THE RIGHTFUL OWNER OF THE CASH SEIZED FROM ITS BANK LOCKER HEREIN ABOVE IN ABSENCE OF ANY EXCEPTION BEI NG POINTED OUT. WE CONCLUDE THAT THE: UNACCOUNTED CASH SEIZED SUM OF R S.74 LACS BELONGED TO THE ASSESSEE ONLY AND THE SAME DESERVES TO BE ASSES SED IN ITS HANDS AS AGAINST THAT IN SHRI BHIKUBHAI'S CASE. WE ACCEPT RE VENUE'S ARGUMENTS ITA NO. 2091/AHD/2016 (DCIT VS. SHRI BHIKHUBHAI N. PADSALA) A.Y. 2010-11 - 6 - SEEKING TO REVIVE ASSESSING OFFICER'S ACTION. IT IS MADE CLEAR THAT THE ASSESSING AUTHORITY SHALL ENSURE THAT THE SAME AMOU NT IS NOT TAXED TWICE. REVENUES APPEAL 1T(SS)A 446/AHD/2012 IS ACCEPTED'. REGARDING THE CREDIT OF ADVANCE TAX THE HON'BLE ITA T AHMEDABAD, 'C' BENCH ORDER NO. IT(SS)A NO. 446/AHD/2012 FOR A.Y. 2010-11 HAS DIRECTED AS UNDER IN PARA 12: '12. HEARD RIVAL CONTENTIONS, WE REITERATE THAT THE REVENUE DOES NOT POINT OUT ANY EXCEPTION TO ID. CO-ORDINATE BENCH DECISION EXTRACTED HEREIN ABOVE ACCEPTING IDENTICAL RELIEF OF INTEREST THEREI N SO FAR CREDIT OF ADVANCE TAX IS CONCERNED. THE ASSESSEE HAS ALSO NOT FILED A NY EVIDENCES TO PROVE THAT IT HAD MADE ANY SPECIFIC PRAYER BEFORE FILING ITS RETURN ALONG WITH STATEMENT OF INCOME INCLUDING RS.80L.ACS SIZED IN S EARCH AS ADVANCE TAX. WE DRAW SUPPORT FROM ABOVE STATED JUDICIAL PRECEDEN T AND HOLD THE ASSESSEE IS ENTITLED FOR CLAIMING THE IMPUGNED CRED IT RELIEF W.E.F. DATE OF FILING RETURN ONLY. THE ID. ASSESSING OFFICER IS AC CORDINGLY DIRECTED TO PASS CONSEQUENTIAL ORDER. ITA 2294/AHD/2013 IS PARTLY AC CEPTED'. IN VIEW OF THE DECISION OF HON'BLE ITAT AHMEDABAD ' C' BENCH ORDER NO. IT(SS)A NO. 446/AHD/2012 FOR A.Y. 2010-11, THE A.O. IS DIRE CTED TO DO THE SAME AS DIRECTED TO THE HON'BLE ITAT AS SUPRA. 3. IN RESULT, THE APPEAL OF APPELLANT IS PARTLY ALLOWED. THIS LEAVES REVENUE AGGRIEVED. 5. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIV E STRONGLY REITERATING REVENUES CASE THAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN PARTLY ACCEPTING ASSESSEES CONTENTIONS CHALLENGING CORREC TNESS OF THE ASSESSING OFFICERS RECTIFICATION ACTION RAISING INTEREST DEMAND U/S.24 5D(6A) OF THE ACT. WE SOUGHT TO KNOW ABOUT THE FINAL OUTCOME OF TRIBUNALS ORDER DI RECTING ASSESSMENT OF THE CASH TO BE ASSESSED IN THE HANDS OF M/S. B. NANJI ENTERP RISES LTD.(SUPRA). LEARNED DEPARTMENTAL REPRESENTATIVE INFORMS US THAT HONBLE JURISDICTIONAL HIGH COURT IN TAX APPEAL NO. 276/2017 DECIDED ON 26.07.2017 HAS R EVERSED TRIBUNALS ORDER THEREBY RESTORING ASSESSMENT OF THE ABOVE CASH ASSE SSED AMOUNTING TO RS.74LACS IN PRESENT ASSESSEES HANDS. HE FILES BEFORE US A COP Y OF HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT AS WELL. WE OBSERVE IN THIS FACTU AL BACKDROP OF THE CIT(A)S ABOVE FINDINGS DIRECTING EXCLUSION OF THE ABOVE CAS H SEIZED IN PRESENT ASSESSEES HANDS ARE NO MORE SUSTAINABLE. THE SAME ARE ACCORD INGLY REVERSED. WE THEREFORE REMIT THE INSTANT ISSUE BACK TO THE ASSESSING OFFIC ER TO TAKE AFRESH CALL AS PER LAW ITA NO. 2091/AHD/2016 (DCIT VS. SHRI BHIKHUBHAI N. PADSALA) A.Y. 2010-11 - 7 - IN VIEW OF ALL THE FACTS AND CIRCUMSTANCES INVOLVED HEREIN AFTER AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. THIS REVENUES APPEAL IS ACCEPTED FOR STATISTICA L PURPOSES. [PRONOUNCED IN THE OPEN COURT ON THIS THE 13 TH DAY OF MARCH, 2018.] SD/- SD/- (N. K. BILLAIYA) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD: DATED 13/03/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE . ! / CONCERNED CIT 4. !- / CIT (A) (. )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1. +23 45 / GUARD FILE. BY ORDER / . // . /0