JAYAMALA SUTRAVE, MUMBAI V. DCIT CEN CIR 24& 26, MUMBAI

ITA 2271/MUM/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100878 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 05-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 20-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VANDANA SAGAR
• Assessee Lawyers: PARESH VAKHARIA
• Keywords: Search and seizure
• Section: 153A; 132

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL, SMC BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN , ACCOUNTANT MEMBER ./ I.T.A. NO . 2271 AND 2272 / MUM/20 1 5 ( / ASSESSMENT YEA R S : 200 6 - 07 A ND 2007 - 08 ) MRS. JAYAMALA SUTRAVE, E - 1603, XCLUSIVE, AKURLI ROAD, LOKHANDWALA COMPLEX, KANDIVALI (E), MUMBAI - 40 0 1 01 / VS. DY. COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE - 24 AND 26, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400 020 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN. : AAZPN5847K / APPELLANT S BY SHRI PARESH VAKHARIA / R E SPONDENT BY SMT. VANDANA SAGAR / DATE OF HEARING : 5 . 8 . 201 5 / DATE OF PRONOUNCEMENT: 26 . 8. 201 5 / O R D E R P ER B ENCH : T HE ASSESSEE HAS FILED THESE APPEALS CHALLENGING THE SEPARATE ORDERS PASSED BY THE LD.CIT(A) - 51 , MUMBAI AND THEY RELATE TO THE ASSESSMENT YEARS 200 6 - 07 AND 2007 - 08. SINCE THE ISSUES URGED IN THESE APPEALS ARE IDENTICAL IN NATURE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS URGED BY THE ASSESSEE IN BOTH THE YEARS GIV E RISE T O THE FOLLOWING TWO ISSUES: A) VALIDITY OF SEARCH CONDUCED IN THE HANDS OF THE ASSESSEE UNDER SECTION 132 OF THE ACT ; AND B) VALIDITY OF ACCEPTING THE ADDITIONAL INCOME DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME FILED U/S 153A OF THE ACT . ITA NO. 2271 AND 2272 /M/201 5 2 3 . THE FAC TS RELATING TO THE ISSUE S ARE STATED IN BRIEF. A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF TRANSWORLD FURTICHEM PVT LTD. GROUP OF COMPANIES AND CONSEQUENTLY , THE ASSESSEE WAS ALSO COVERED IN THE SEARCH ACTION ON 11.2.2011 . PURSUANT TO THE SEARCH ACTION, NOTICE UNDER SECTION 153A OF THE ACT WAS ISSUED. IN RESPONSE THERETO THE ASSESSEE FILED RETURN OF INCOME FOR BOTH THE YEARS UNDER CONSIDERATION DISCLOSING ADDITIONAL INCOME AS UNDER: S.NO. ASSESSMENT YEAR INC OME DECLARED IN THE RETURN FILED U/S 153A ADDITIONAL INCOME OFFERED 1 2006 - 07 4,12,916 1,03,553 2 2007 - 08 3,78,660 1,91,139 THE AO COMPLETED THE ASSESSMENT OF BOTH THE YEARS ACCEPTING THE INCOME RETURN ED FILED BY THE ASSESSEE. 4 . IT APPEARS THAT THE REVENUE DID NOT UNEARTH ANY INCRIMINATING MATERIAL OR UNDISCLOSED INCOME DURING THE COURSE OF SEARCH OPERATIONS. HENCE, THE ASSESSEE CHALLENGED THE ASSESSMENT ORDERS BY FILING APPEALS BEFORE THE LD. CIT(A), WHEREIN HE CONTESTED THE VALIDITY OF SEARCH ACTI ON TAKEN U/S 132 OF THE ACT AND ALSO VALIDITY OF ACCEPTING THE ADDIT IONAL INCOME OFFERED BY THE ASSESSEE, WITHOUT THERE BEING ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 5. THE LD. CIT(A) REJECTED BOTH THE CLAIMS OF THE ASSESSEE AND HENC E THE ASSESSEE HA S FILED THESE APPEAL S BEFORE THE TRIBUNAL . 6 . I HAVE HEARD THE PARTIES AND PERUSED THE RECORDS . THE FIRST ISSUE RELATES TO THE VALIDITY OF SEARCH ACTION INITIATED IN THE HANDS OF THE ITA NO. 2271 AND 2272 /M/201 5 3 ASSESSEE . THE MAIN CONTENTION OF THE ASSESSEE IS THAT T HE SEARCH ACTION HAS NOT RESULTED IN UNE ARTHING OF ANY INCRIMINATING MATERIAL OR U NDISCLOSED INCOME , WHICH WOULD SHOW THAT THE REVENUE HAS INITIATED SEARCH PROCEEDINGS UNDER SECTION 132 OF THE ACT WITHOUT COMPLYING WITH THE CONDITIONS PRESCRIBED U/S 132 OF THE ACT. THE LD. AR HAS PLACED RELIANCE ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF C. RAMAIAH REDDY V/S ACIT (2012) 20 TAXMANN.COM 781 (KAR) IN ORDER TO SUBMIT THAT THE TRIBUNAL IS EMPOWERED TO DECIDE THE ISSUE RELATING TO VALIDI TY OF SEARCH. 7 . HOWEVER, IN MY VIEW, THE VALIDITY OF SEARCH ACTION SHOULD BE UPHELD IF ONE OF THE THREE CONDITIONS PRESCRIBED UNDER SECTION 132 (1) OF THE ACT HA S BEEN COMPLIED WITH BY THE REVENUE . I NOTICE THAT THE ASSESSEE IS RAISING THIS CONTENTION W ITHOUT BRINGING ANY MATERIAL ON RECORD TO SHOW THAT ANY ONE THE CONDITIONS HAVE NOT BEEN COMPLIED WITH BY THE REVENUE BEFORE INITIATING THE SEARCH ACTION. THE LD. AR CONTENDS THAT THE ASSESSEE TRIED TO GET THE INFORMATION UNDER RTI, BUT THE REVENUE HAS RE FUSED TO FURNISH RELEVANT DETAILS. HOWEVER, WE NOTICE THAT THE ONLY REASON ON WHICH THE ASSESSEE IS QUESTIONING THE VALIDITY OF SEARCH IS THAT THE SEARCH ACTION HAS NOT RESULTED IN UNEARTHING OF ANY INCRIMINATING MATERIAL OR UNDISCLOSED INCOME. IN MY VIE W, THE VALIDITY OF SEARCH COULD NOT BE QUESTION ED ON THE ABOVE SAID GROUND . IT IS NOT NECESSARY THAT THE SEARCH ACTION SHOULD ALWAYS RESULT IN UNEARTHING OF ANY INCRIMINATING MATERIAL OR UNDISCLOSED INCOME. EVEN IF NO INCRIMINATING MATERIAL OR UNDISCLOSED INCOME WAS UNEARTHED, IN MY VIEW, THE SEARCH WOULD BE VALID, IF ONE OF THE THREE CONDITIONS PRESCRIBED U/S 132(1) WAS COMPLIED WITH. UNDER THESE SET OF FACTS, I AM OF THE VIEW TH AT THERE IS NO MERIT IN THE CONTENTIONS OF THE ASSESSEE ON THIS ISSUE AND HENCE, THE SAME IS LIABLE TO BE DISMISSED. ITA NO. 2271 AND 2272 /M/201 5 4 8 . THE NEXT ISSUE RELATES TO THE VALIDITY OF ACCEPTING THE ADDITION AL INCOME DISCLOSED BY THE ASSESSEE WITHOUT THERE BEING ANY INCRIMINATING MATERIAL. THE CONTENTION OF THE ASSESSEE IS THAT BOTH THE YEARS UNDER CO NSIDERATION FALL IN THE CATEGORY OF CONCLUDED PROCEEDINGS, IN WHICH CASE, THE CONCLUDED ASSESSMENT WOULD NOT ABATE. THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD (137 ITD 287) AND ALSO THE HONBLE JURISDICTIONAL BOMBA Y HIGH COURT IN THE CASE OF MURLI AGRO PRODUCTS LTD HAVE HELD THAT THE ADDITIONS, IF ANY COULD BE MADE IN THE CASE OF CONCLUDED PROCEEDINGS ONLY ON THE BASIS OF INCRIMINATING MATERIALS. WE HAVE EARLIER NOTICED THAT THE ASSESSEE HAS OFFERED ADDITIONAL INC OME VOLUNTARILY IN BOTH THE YEARS UNDER CONSIDERATION IN THE RETURN S OF INCOME FILED U/S 153A OF THE ACT. BASED ON THE ABOVE SAID LEGAL PROPOSITIONS, THE ASSESSEE IS NO W CONTENDING THAT THE ADDITIONAL INCOME SO OFFERED WAS NOT RELATABLE TO ANY INCRIMINATI NG MATERIAL AND HENCE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, THE ASSESSING OFFICER SHOULD NOT HAVE ASSESSED THE SAME. THE LD. A . R PLACED HIS RELIANCE ON HOSTS OF DECISION WHEREIN THE ABOVE SAID PROPOSITION WAS FOLLOWED . THE LD. A . R ALSO PLACED HIS RELIANCE ON THE DECISION RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS.V.MR.P.FIRM (1965) ( 56 ITR 0067), WHEREIN THE HONBLE SUPREME COURT HELD THAT IF A PARTICULAR INCOME IS NOT TAXABLE UNDER THE IT ACT, IT CANNOT BE TAXED ON THE BASIS OF E STOPPELS OR ANY OTHER EQUITABLE DOCTRINE. 9. HOWEVER, WE NOTICE THAT THE ASSESSEE HAS GIVEN FOLLOWING EXPLANATION IN THE RETURN OF INCOME FILED FOR BOTH THE YEARS UNDER CONSIDERATION IN PURSUANCE OF NOTICE ISSUED U/S 153A OF THE ACT : INCOME FROM OTHER S OURCES COMPRISES OF INTEREST RECEIVED ON SAVINGS BANK ACCOUNT. FURTHER, OTHER INCOME COMPRISES OF CREDITS I N THE BANK ACCOUNT F OR WHICH SOURCE AND DETAILS ARE NOT READILY AVAILABLE . HENCE OUT OF ABUNDANT CAUTION , THIS AMOUNT IS OFFERED FOR TAXATION. ITA NO. 2271 AND 2272 /M/201 5 5 UN DER THE PROVISIONS OF THE ACT , THE ASSESSEE IS REQUIRED TO FILE RETURN OF INCOME IN RESPONSE TO NOTICE ISSUED U/S 153A OF THE ACT DULY DECLARING THEREIN ALL TYPES OF INCOME. THE ASSESSEE IS SO REQUIRED TO FILE RETURN OF INCOME, EVEN IF HE HAD FILED RETURN OF INCOME FOR THAT YEAR UNDER REGULAR PROVISIONS OF THE ACT . THE RETURN OF INCOME SO FILED BY T HE ASSESSEE SHALL BE CONSIDERED BY THE AO AND THEREAFTER ASSESSMENT ORDER SHALL BE PASSED BY HIM. AT THE TIME OF FILING OF RETURN OF INCOME, IT IS THE RESPONSI BILITY OF THE ASSESSEE TO DISCLOSE ALL THE INCOME RELATING TO A PARTICULAR YEAR ON THE BASIS OF RESULT S OF SEARCH OPERATION S . IN THE INSTANT CASE, T HE ASSESSEE HAS VOLUNTARILY OFFERED CERTAIN CREDITS FOUND IN HIS BANK ACCOUNT AS ADDITIONAL INCOME, SINCE H E FEL T THAT THE SOURCE OF THOSE CREDITS COULD NOT BE EXPLA IN ED BY HIM. HENCE, THE BASIS OF OFFER OF ADDITIONAL INCOME IS THE BANK ACCOUNT OF THE ASSESSEE. THERE SHOULD NOT BE ANY DISPUTE THAT THE AVAILABI LI TY OF UNDISCLOSED INCOME, IF ANY, WILL BE WITHIN THE PERSONAL KNOWLEDGE OF THE ASSESSEE, EVEN IF NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH . IN MY VIEW, THE PROVISIONS OF SECTION 153A NOWHERE STATES THAT THE ASSESSEE IS PRECLUDED FROM OFFERING SUCH KIND OF UNDISCLOSED INCOME IN THE RETURN OF INCOME FROM OUT OF HIS BANK ACCOUNT AND VOLUNTARILY OFFERED THE SAME FOR TAXATION U/S 153A OF TH E ACT. HENCE, IN MY VIEW, THE ASSESSEE WAS NOT ENTITLED TO CONTEND FOR EXCLUSION OF THE SAME, SINCE THE UNDISCLOSED INCOME HAS BEEN IDENTIFIED BY T HE ASSESSEE HIMSELF. 10. THE LEGAL PROPOSITION LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MURLI AGRO PRODUCT LTD (SUPRA), IN MY VIEW, PUTS EMBARGO UPON THE ASSESSING OFFICER, I.E. , THE ASSESSING OFFICER IS PRECLUDED FROM DISTURBING ALREADY CONCLUDED ISSUES OR FROM MAKING FRESH ADDITIONS UNLESS ITA NO. 2271 AND 2272 /M/201 5 6 THERE IS INCRIMINATING MATERIAL WARRANTING SUCH AN ACTION. IN MY VIEW, THE SAID LEGAL PROPOSITION COULD NOT BE USED BY THE ASSESSEE TO CONTEND FOR EXCLUSION OF INCOME, WHICH WAS VOLUNTARILY OFFERED B Y HIM. THE FILING OF RETURN OF INCOME AND PAYMENT OF TAX IS CALLED SELF ASSESSMENT AND HENCE THE TAX PAID U/S 140A OF THE ACT IS CALLED SELF ASSESSMENT TAX. THE ASSESSEE, HEREIN, HAS VOLUNTARILY IDENTIFIED THE UNDISCLOSED INCOME FROM OUT OF HIS BANK ACCOUNT, THOUGH THE SAME HAS NOT COME TO THE NOTICE OF THE SEARCH OFFICIALS. ACCORDINGLY, AFTER HAVING IDENTIFIED THE UNDISCLOSED INCOME AND VOLUNTARILY OFFERED THE SAME, IN MY VIEW, THE ASSESSEE IS PRECLUDED FROM PUTTING A CLAIM FOR EXCLUSION OF THE SAME . THE BASIS FOR OFFERING T HE ADDITIONAL INCOME IS THE BANK ACCOUNT OF THE ASSESSEE AND HENCE IT IS NOT CORRECT TO SAY THAT THERE IS NO BASIS OR MATERIAL FOR THE ADDITIONAL INCOME SO OFFERED. ACCORDINGLY , I DO NOT FIND ANY MERIT ON THE SECOND GROUND ALSO. 11. ACCORDINGLY , I UPHOLD THE VIEW TAKEN BY THE LD. CIT(A) ON BOTH THE ISSUES. 1 2 . IN THE RESULT, BOTH THE APPEAL S FILED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED ACCORDINGLY ON 26 TH AUGUST 2 015. 26TH AUGUST, 2015 ( B.R. BASKARAN) ACCOUNTANT MEMBER MUMBAI: 26 TH AUG , 2015 . . . ./ SRL , SR. PS ITA NO. 2271 AND 2272 /M/201 5 7 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI