Siddhivinayak Buildcon Pvt. Ltd., Ahmedabad V. The ACIT, Central Circle 1(4), Ahmedabad

ITA 2294/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9296 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 24-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 13-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIBHA BHALLA
• Keywords: Gift; Recovery proceedings; Income from undisclosed sources
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: S H RI N.K. BILLAIYA , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER THE ACIT, CENTRAL CIRCLE 1(4), ROOM NO. 337, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD (APPELLANT) VS B. N ANJI ENTERPRISES LTD, MOORTI BUNGLOW, 5, ASHOKNAGAR CO - OP. HOUSING SOC IE TY LTD, NR. ISRO, B/H, SUNDARVAN, AHMEDABAD - 15 PAN: AACB7702P (RESPONDENT) THE ACIT, CENTRAL CIRCLE 1(4), ROOM NO. 337, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD (APPELLANT) VS SIDDHIVINAYAK BUILDCOM P. LTD ., MOORTI BUNGALOW, 5, ASHOKNAGAR, NEAR SUNDERBAN, BEHIND ISRO, SATELLITE, AHMEDABAD - 380015 PAN: AAICS3222P (RESPONDENT) REVENUE BY: S MT. VIBHA BHALLA, CIT - D.R. ASSESSEE BY: SHRI SAKAR SHARMA , A.R. I T (SS) A NO . 446 /AHD/20 12 A SSESSMENT YEAR 2010 - 11 IT (SS) A NO . 451/AHD/2012 A SSESSMENT YEAR 2010 - 11 I.T. (SS) A NO S .446 & 451 /AHD/20 12 & ITA NO. 2294/AHD /2013 A.Y. 2010 - 11 PAGE NO ACIT VS. B. NANJI ENTERPRISES LTD & ACIT VS. SIDDHIVIYAK BUILDCON PVT. LTD. 2 SIDDHI VINAYAK BUILDCON PVT. LTD, F - 1, NILAM APARTMENT, HIRABAUG, AMBAWADI, AHMEDABAD - 380015 PAN: AAICS3222P (APPELLANT) VS THE ACIT, CENTRAL CIRCLE 1(4), ROOM NO. 337, 3 RD FLOOR, AAYKAR BHAVA N, ASHRAM ROAD, AHMEDABAD (RESPONDENT) REVENUE BY : MR. R.P. MAURYA , SR. D . R. ASSESSEE BY: S H RI SAKAR SHARMA , A.R. DATE OF HEARING : 24 - 02 - 2 016 DATE O F PRONOUNCEMENT : 08 - 0 3 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS IS A SET OF THREE APPEALS FOR ASSESSMENT YEAR 2010 - 11 IN CASE OF TWO DIFFERENT ASSESSEES NAMELY M/S B. NANGI ENTERPRISES LTD AND M/S. SID D HI V I NA YAK BUIL DCON PVT. LTD. THE REVENUE S FIRST APPEAL IT(SS)A NO. 446/AHD/2012 CHALLENGES THE CIT(A) S ORDER DATED 18 - 07 - 2012 PA S SED IN CASE NO. CIT(A) - I/CC. 1(4)/319/2011 - 12 DEL ETING UNACCOUNTED CASH RECEIPT ADDITION OF 74 LACS ADDED BY THE ASSESSING OFFICER IN ASSE SSMENT ORDER DATED 30 - 12 - 2011. ITS NEXT ITA NO. 2294 /AHD/20 13 A SSESSMENT YEAR 2010 - 11 I.T. (SS) A NO S .446 & 451 /AHD/20 12 & ITA NO. 2294/AHD /2013 A.Y. 2010 - 11 PAGE NO ACIT VS. B. NANJI ENTERPRISES LTD & ACIT VS. SIDDHIVIYAK BUILDCON PVT. LTD. 3 APPEAL IN CASE OF LATTER ASSESSEE ASSAILS CORRECTNESS OF THE CIT(A) S ORDER DA TED 18 - 07 - 2007 IN APPEAL NO. CIT(A) - I/CC. 1(4)/354/2011 - 12 REVERSING ASSESSING OFFICER S IN DELETING AN IDENTICAL UNACCOUNTED CASH REC EIPT ADDITION OF RS. 80 LACS MADE IN ASSESSMENT ORDER OF THE SAME DATE GIVEN HEREINABOVE. THE RELEVANT PROCEEDINGS IN BOTH THESE APPEAL S ARE U/S. 143(3) R.W.S. 153B OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . THE LATTER ASSESSEE IN ITS APPEAL ITA 2294/AHD/2012 CHALLENGES ACTION OF BOTH THE LOWER AUTHORIT IES IN TREATING CASH SEIZED OF RS. 80 LACS ADVANCE TAX AND CONSEQUENTLY NOT GRANTING ANY RELIEF TOWARDS WRONG CHARGING OF INTEREST U/S. 234A, 234B AND 234C OF THE ACT. 2 . WE COME TO REVENUE S TWO APPEALS FIRST SEEKING TO RESTORE UNACCOUNTED CASH RECEIPTS ADDITIONS INDICATED HEREINABOVE. BOTH THESE ASSESSEES ARE COMPANIES ENGAGED IN REAL ESTATE, P ROPERTY DEVELOPMENT AND CONSTRUCTION BUSINESS ACTIVITIES. THE DEPARTMENT CARRIED OUT THE IMPUGNED SEA RCH IN THEIR CASES ON 04 - 03 - 2010 INTE R ALIA SEIZING CASH SUMS OF RS. 74 LACS AND RS. 80 LACS FROM BANK LOCKER NO S . 96 AND 102, HDFC BANK, PUNCHVATI BRANCH, AHMEDABAD RESPECTIVELY. THESE ASSESSEES FILED THEIR RETURNS ON 15 - 11 - 2011 AND 17 - 10 - 2011 DECLARING INCOME OF RS. 32,75,660/ - AND RS. 1,74,17,600/ - ; RESPECTIVELY. THE ASSESSING OFFICER TOOK UP SCRUTINY. HE SOUGHT TO ADD THE ABOVE STATED CASH AMOUNTS IN THEIR HANDS. I.T. (SS) A NO S .446 & 451 /AHD/20 12 & ITA NO. 2294/AHD /2013 A.Y. 2010 - 11 PAGE NO ACIT VS. B. NANJI ENTERPRISES LTD & ACIT VS. SIDDHIVIYAK BUILDCON PVT. LTD. 4 3. WE COME TO THE REPLY SUBMITTED BY THE FORMER ASSESSEE FIRST DATED 17 - 11 - 2011. IT S TATED THAT THE CASH SEIZED HEREINABOVE IN FACT BEL ONGED TO ITS CHAIRMAN SHRI BHIKUBHAI N. PADS ALA WHO HAD ALREADY CLAIMED OWNERSHIP THEREOF BY INCORPORATING THE SAME IN HIS CASH FLOW STATEMENT ALONG WITH AN EXPLANATION AS TO HOW THE SAME REACHED IN THE ASS ESSEE S BANK LOCKER. THE ASSESSING OFFICER DI D NOT AGREE TO THIS CONTENTION. HE OBSERVED THAT NEITHER THE ASSESSEE HAS ESTABLISHED THE FACT THAT SHRI BHIK UBHAI WAS THE RIGHTFUL OWNER OF THE CASH FOUND IN LOCKER NOR WAS THERE ANY BOARD S CONFERRING RIGHTS OF HOLDING CASH IN HIS FAVOUR. THE ASSESSING OFFICER ACCORDINGLY ADDED THE IMPUGNED CASH RECEIPT IN ASSESSEE S HANDS IN ASSESSMENT ORDER DATED 30 - 12 - 2011. 4. THE ASSESSEE PREFERRED APPEAL. IT HIGHLIGH TED THE FACT SHRI BHIK UBHAI N. PADS ALA HA S FILED APPLICATION BEFORE THE I NC OME TAX SETTLEMENT C OMMISSION OWNING THE IMPUGNED CASH SUM THEREBY INCLUDING THE SAME IN HIS CASH FLOW STATEMENT. ITS CASE WAS THAT THIS CASH SEIZED HAS BEEN GENERATED OUT OF UNACCOUNTED LAND TRANSACTIONS . THE LOWER APPEL LATE AUTHORITIES SOUGHT A REMAND REPORT. THE ASSESSING OFFICER FILED THE SAME ON 12 - 07 - 2012 INTER ALIA STATING THEREIN THAT SHRI BHIK UBHAI HAD INDEED INCLUDED THE IMPUGNED SUM IN HIS CASH FLOW STATEMENT SUBMITTED BEFORE THE SETTLEMENT C OMMISSION. THIS MA KES THE CIT(A) TO OBSERVE THAT THERE IS NO JUSTIFICATION FOR ADDING THE IMPUGNED CASH SEIZED IN ASSESSEE S HANDS. HE DELETED THE IMPUGNED ADDITION IN THE ASSESSEE S HANDS. I.T. (SS) A NO S .446 & 451 /AHD/20 12 & ITA NO. 2294/AHD /2013 A.Y. 2010 - 11 PAGE NO ACIT VS. B. NANJI ENTERPRISES LTD & ACIT VS. SIDDHIVIYAK BUILDCON PVT. LTD. 5 REVENUE PREFERS IT(SS)A 446/AHD/2012 AGAINST THIS LOWER APPELLATE ORDER PASSED IN CASE OF ASSESSEE M/S B NANJI ENTERPRISES LTD. 5. WE HAVE HEARD BOTH THE PARTIES. THE REVENUE STRONGLY ARGUES THAT THE LOWER APPELLATE AUTHORITY OUGHT NOT TO HAVE DELETED THE IMPUGNED ADDITION IN ASSESSEE S HANDS MERELY BECAUSE SHRI BHIK UBHAI HAD INCLUD ED THE CASH IN QUESTION IN HIS CASH FLOW STATEMENT FILED BEFORE THE S ETTLEMENT COMMISSION. IT REFERS TO SETTLEMENT C OMMISSION FINAL ORDER DATED 27 - 12 - 2011 NOT CONSIDERING SHRI BHIK UBHAI S CAPITALIZATION ACTION (SUPRA) AS UNDER: - 23. IT IS STATED THAT ALL THESE ASSETS ARE DULY REFLECTED IN THE CASH FLOW STATEMENT AND THESE WERE ACQUIRED OUT OF THE UNACCOUNTED INCOME EARNED IN VARIOUS ASSESSMENT YEARS WHICH ARE FORMING PART OF THE SETTLEMENT APPLICATION. THE APPLICANT'S CLAIM IN THE ABOVE MATTER IS FO UND TO BE VERIFIABLE FROM THE CASH FLOW STATEMENT AS WELL AS THE SEIZED MATERIALS. HENCE, THE SAME ARE ALLOWED TO BE CAPITALIZED. IN THIS CONNECTION, IT MAY BE MENTIONED THAT A SUM OF RS.74,00,000/ - WAS FOUND AND SEIZED FROM LOCKER NO.96, IN HDFC BANK, PA NCHVATI BRANCH, AHMEDABAD, WHICH STOOD IN THE NAME OF B. NANJI ENTERPRISES LTD.. THE APPLICANT HAD CLAIMED BEFORE THE SEARCH PARTY THAT THE ABOVE CASH BELONGED TO HIM. THE APPLICANT HAS INCORPORATED THE ABOVE CASH IN THE CASH FLOW STATEMENT FILED ALONGWI TH THE SOF. HOWEVER, IT IS FOUND THAT IN THE ASSESSMENT ORDER PASSED IN THE CASE OF M/S. B. NANJI ENTERPRISES LTD, THE ASSESSING OFFICER HAS BROUGHT THE ABOVE AMOUNT TO TAX IN THE HANDS OF THE ABOVE COMPANY. IT IS STATED BY THE A.R. THAT THE CIT(A) HAS DE LETED THE ABOVE ADDITION MAINLY ON THE GROUND THAT THE APPLICANT HAD OWNED UP THE ABOVE AMOUNT AND ITS ASSESSABILITY IN HIS HANDS BEFORE THE DEPARTMENT AS WELL AS IN THE SETTLEMENT APPLICATION. SINCE, WE ARE NOT AWARE OF THE FINAL DECISION TAKEN BY THE DEP ARTMENT ON THE CIT(A) S ORDER IN THE ABOVE MATTER, THE APPLICANT S CLAIM FOR CAPITALIZATION OF THE ABOVE AMOUNT IS NOT CONSIDERED IN THE PRESENT ORDER. I.T. (SS) A NO S .446 & 451 /AHD/20 12 & ITA NO. 2294/AHD /2013 A.Y. 2010 - 11 PAGE NO ACIT VS. B. NANJI ENTERPRISES LTD & ACIT VS. SIDDHIVIYAK BUILDCON PVT. LTD. 6 THE REVENUE ACCORDINGLY SEEKS TO REVIVE THE IMPUGNED UNACCOUNTED CASH ADDITION OF RS. 74 LACS IN ASSE SSEE S HANDS BY REITERATING ASSESSING OFFICER S REASONING. 6. THE ASSESSEE S ARGUMENTS TENDERED THROUGH ITS LD. AUTHORIZED REPRESENTATIVE DRAW STRONGLY SUPPORT FROM THE LOWER APPELLATE ORDER DELETING THE IMPUGNED ADDITI ON ON THE GROUND THAT SHRI BHIK UBH AI HAD INCORPORATED CASH SEIZED IN HIS CASH FLOW STATEMENT. IT QUOTES ALL RELEVANT DEVELOPMEN TS/DOCUMENTS PLACED BEFORE THE SETTLEMENT COMMISSION TO SUBMIT THAT THE REVENUE DID NOT RAISE ANY OBJECTION ON ABOVE STATED CAPITALIZATION ASPECT. IT ACCORDINGLY PRAYS FOR REJECTION OF THE INSTANT APPEAL. 7. WE HEARD THESE ARGUMENTS ON 18 - 02 - 2016. WE PUT UP A SPECIFIC QUERY TO THE LD. COUNSEL AS TO WHETHER SHRI BHIK UBHAI WAS THE AUTHORIZED PERSON TO OPERATE THE LOCKER IN QUESTION OR NOT. THE CASE WAS FIXED FOR HEARING ON 22 - 02 - 2016. RELEVANT DOCUMENTS DID NOT COME ON THE SAID DATE. WE AGAIN POSTPONE THE HEARING TO 24 - 02 - 2016 WITH LAST OPPORTUNITY RIDER. THE CASE IS AGAIN TAKEN UP FOR HEARING ON TODAY 24 - 02 - 2016. THE ASSESSEE FILES ITS CORRESPONDENCE WITH HD FC BANK LTD SEEKING CLARIFICATION ABOUT ITS AUTHORIZED SIGNATORY AS ON 04 - 03 - 2010 I.E. DATE OF IMPUGNED SEARCH. THE ASSESSEE FILES A CERTIFICATE DATED 22 - 02 - 016 BEFORE US TO THE EFFECT THAT MR. SANDI P B. P ADS ALA OPERATED ITS LOCKER IN QUESTION ON 04 - 03 - 20 10. THE AIR IS THEREFORE CLEAR THAT SHRI BHIK UBHAI WAS NOT I.T. (SS) A NO S .446 & 451 /AHD/20 12 & ITA NO. 2294/AHD /2013 A.Y. 2010 - 11 PAGE NO ACIT VS. B. NANJI ENTERPRISES LTD & ACIT VS. SIDDHIVIYAK BUILDCON PVT. LTD. 7 ASSESSEE S AUTHORIZED PERSON IN ITS HDFC BANK LOCKER FROM WHERE THE IMPUGNED CASH SUM AMOUNTING TO RS. 74 LACS WAS SEIZED DURING SEARCH. 8. THE ASSESSEE AT THIS STAGE VEHEMENTLY ARGUES THAT IT IS A REVENUE S NEUTRAL CASE S INCE BOTH ASSESSEE AND MR. BHIK UBHA I ARE ASSESSED AT THE SAME RATIO . IT FURTHER SUBMITS THAT ONCE THE IMPUGNED SUM ALR EADY STANDS INCLUDED IN MR. BHIK UBHAI S CASH FLOW STATEMENT, THERE IS NO REVENUE LOSS CAUSED TO THE DEPARTM ENT. IT FILES BEFORE US A CO - ORDINATE BENCH DECISION IN CIT VS. KALPANI I SHETH ITA 157/AHD/2010 DECIDED ON 06 - 07 - 2012 INTER ALIA UPHOLDING THE S AID ASSESSEE S ACTION DECLARING THE UNEXPLAINED CASH FOUND IN THE COMPANY S HANDS. WE ARE NOT IMPRESSED WITH THIS ARGUMEN T. WE REITERATE THAT SHRI BHIK UBHAI 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 TH E S ETTLEMENT C OMMISSION HAS ALSO NOT BEEN CONSIDERED (SU PRA). WE OBSERVE IN THESE PECULIAR FAC T S 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 ASSESSEE. WE AR E OF THE VIEW IN THESE FACTS THAT THE LD. CO - ORDINATE BENCH DECISION DOES NOT DEAL WITH AN IDENTICAL SITUATION WH EREIN THE SAID ASSESSEE HAD SATISFACTORILY PROVED THE CASH SEIZED TO BE BELONGING TO THE COMPANY AS AGAINST THE INSTANT O NE. I T STANDS DISTING UISHED ACCORDINGLY. WE HOLD THAT IT IS THE ASSESSEE ONLY WHO IS THE RIGHTFUL OWNER OF THE CASH SEIZED FROM ITS BANK LOCKER HEREINABOVE I.T. (SS) A NO S .446 & 451 /AHD/20 12 & ITA NO. 2294/AHD /2013 A.Y. 2010 - 11 PAGE NO ACIT VS. B. NANJI ENTERPRISES LTD & ACIT VS. SIDDHIVIYAK BUILDCON PVT. LTD. 8 IN ABSENCE 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 SAME DESERVES TO BE ASSESSED IN ITS HAND S AS AGAINST THAT IN SHRI BHIK UBHAI S CASE. WE ACCEPT REVENUE S ARGUMENTS SEEKING TO REVIVE ASSESSING OFFICER S ACTION. IT IS MADE CLEAR THAT THE ASSESSING AUTHORITY SHALL ENSURE THAT THE SAM E AMOUNT IS NOT TAXED TWICE . REVENUE S APPEAL IT(SS)A 446/AHD/2012 IS ACCEPTED. 9. WE COME TO REVENUE S APPEAL IT(SS)A 451/AHD/2012 IN CASE OF SECOND ASSESSEE M/S. SHI D DHI VINAYAK BUILDCON PVT. LTD. THE REVENUE INVITES OUR ATTENTION TO THE LOWE R APPELLATE O RDER AND SUBMITS THAT SHRI BHIK UBHAI HAD INCLUDED THE UNACCOUN TED CASH AMOUNT IN QUESTION OF R S. 80 LACS IN HIS CASH F LOW STATEMENT FILED BEFORE THE SETTLEMENT C OMMISSION AS IN THE OTHER APPEAL DECIDED HEREINABOVE IN ITS FAVOUR. THERE IS NO D ISPUTE THAT FACTS IN THESE TWO CASE S ARE ALMOST IDENTI CAL. THE SEARCH IN QUESTION UN EA R THED FROM HDFC BANK LOCKER THE IMPUGNED SUM OF RS. 80 LACS. WE NOTICE TH A T THERE IS SLIGHT DISTINCTION ON FACTS OF THESE CASES. THIS ASSESSEE IN ITS REPLY DATED 28 - 12 - 2011 CATEGORICALLY STAT ED TO HAVE DISCLOSED INCOME OF RS. 1.6 CRORES INCLUSIVE OF THE ABOVE STATED SUM OF RS. 80 LACS. IT FILES STATEMENT OF ITS INCOME BEFORE US STATING TO HAVE INCLUDED THIS SUM AS ADVANCE TAX PAID. THIS SPECIFIC PLEA HAS NOWHERE BEEN REJE CTED IN ASSESSMENT ORDER . THE LOWER APPELLATE ORDER IN TURN ACCEPTS ASSESSEE S PLEA SEEKING TO ASS ESSMENT OF THE IMPUGNED SUM IN SHRI BHIK UBHAI S HANDS AS PER SETTLEMENT C OMMISSION I.T. (SS) A NO S .446 & 451 /AHD/20 12 & ITA NO. 2294/AHD /2013 A.Y. 2010 - 11 PAGE NO ACIT VS. B. NANJI ENTERPRISES LTD & ACIT VS. SIDDHIVIYAK BUILDCON PVT. LTD. 9 PROCEEDINGS. THE ASSESSEE INVITES OUR ATTENTION TO ITS COMPUTATION D ECLARING AN INCOME OF RS. 1.6 CRORES AND ARGUES THAT THE SAME AMOUNT CANNOT BE ADDED TWICE IN EITHER CASE. WE FEEL IT MORE APPROPRIATE IN THESE FACTS AND CIRCUMSTANCES THAT THE LD. ASSESSING OFFICER NEEDS TO RE - DECIDE THE ENTIRE ISSUE AS PER LAW SINCE THER E ARE CONTRADICTION S BEING REVEALED QUA ASSESSMENT OF THE IMPUGNED UNACCOUNTED CASH AS INDICATED HEREINABOVE. WE MADE IT CLEAR THAT THE ASSESSEE SHALL BE AFFORDED ADEQUATE OPPORTUNITY OF HEARING IN CONSEQUENTIAL PROCEEDINGS. REVENUE S APPEAL IT(SS)A 454/ AHD/2012 IS ALLOWED FOR STATISTICAL PURPOSES. 10. THIS LEAVE S US WITH ASSESSEE S APPEAL ITA 229 4 /AHD/2013 CHALLENGING THE LOWER APPELLATE ORDER TREATING THE CASH SEIZED OF RS. 80 LACS AS ADVANCE TAX AND CONSEQUENTLY NOT GRANTING ANY RELIEF TOWARDS WRONGLY CHARGING OF INTEREST U/S. 234A, 234B AND 234C. IT QUOTES BEFORE US A CO - ORDINATE BENCH DECISION (2013) 143 ITD 716 (AHD) KANISHKA PRINT PVT. LTD VS. ACIT DECIDING THIS INTEREST ISSUE IN ITS FAVOUR HOLDING AS UNDER: - 11. WE HAVE HEARD THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT DURING THE COURSE OF SEARCH AT THE RESIDENCE OF DIRECTORS ON 8.2.2007 AND LOCKER ON 7.3.2007 AGGREGATE CASH OF RS 43 LACS WAS SEIZED. IT IS ALSO AN UNDISPUTED FACT THAT ASSESSEE VIDE HIS LETTER DATED 13.3.2007 SUBMITTED THAT OUT OF THE CASH SEIZED, RS 10 LACS BE TREATED TOWARDS PAYMENT OF ADVANCE TAX IN THE CASE OF ASSESSEE AND SIMILARLY BALANCE OF RS. 33 LACS BE TREATED TOWARDS PAYMENT OF ADVANCE TAX IN CASE OF FAMILY MEMBERS/GROUP COMPAN IES. IT IS ALSO A FACT THAT VIDE AFORESAID LETTER, THE ASSESSEE HAD REQUESTED THAT CASH OF RS 8 LACS BE CONSIDERED AS ADVANCE TAX IN THE CASE OF SHREEJI PRINTS P. LTD. THE CO - ORDINATE BENCH OF TRIBUNAL IN THE CASE OF SHREEJI PRINTS (ITA NO I.T. (SS) A NO S .446 & 451 /AHD/20 12 & ITA NO. 2294/AHD /2013 A.Y. 2010 - 11 PAGE NO ACIT VS. B. NANJI ENTERPRISES LTD & ACIT VS. SIDDHIVIYAK BUILDCON PVT. LTD. 10 359/AHD/2012 - O RDER DATED 20.4.2012) DECIDED IN FAVOUR OF ASSESSEE BY HOLDING AS UNDER: IT IS EVIDENT FROM A BARE READING OF THE AFORESAID PROVISIONS THAT THE EXISTING LIABILITY UNDER THE INCOME - TAX CAN BE DISCHARGED FROM THE ASSETS OR MONEY SEIZED. IN THE PRESENT CASE, THE SEARCH OPERATION WAS CONDUCTED ON 22 - 9 - 2005 AND THE ASSESSEE FILED RETURN ON 31 - 5 - 2006 DECLARING THE SEIZED MONEY AS INCOME. IN OUR OPINION, IF THE ASSESSEE HAS DECLARED INCOME, DURING THE YEAR UNDER CONSIDERATION IN THAT EVENTUALITY HE IS LIABLE TO P AY ADVANCE TAX AS PER LAW THEREFORE THE A.O. IS REQUIRED TO FIND OUT WHETHER SUCH LIABILITY WAS EXISTING ON THE DATE OF SEIZURE. IF SUCH LIABILITY IS EXISTING THEN HE IS EMPOWERED TO APPLY/ADJUST THE MONEY SEIZED IN DISCHARGE OF THE EXISTING LIABILITY EVEN WITHOUT ANY WRITTEN REPRESENTATION FROM THE ASSESSEE. NOW COMING TO THE FACT OF THE PRESENT CASE, IT IS NOT DISPUTED THAT THE MONEY SEIZED FROM THE PREMISES OF SHRI LALIT PATEL AND SAME WAS SUBSEQUENTLY DECLARED IN THE RETURN OF INCOME FILED ON 31 - 5 - 2006 . HENCE, IT CAN VERY WELL BE INFERRED FROM THE RETURN SO FILED THAT THE RESPONDENT/ASSESSEE WAS REQUIRED TO PAY ADVANCE TAX ON SUCH INCOME AS MANDATED U/S. 208 OF THE I. T. ACT. THEREFORE, IN VIEW OF THE FACT THAT THERE IS NO AMBIGUITY IN THE PROVISION SO FAR APPLICATION/ADJUSTMENT OF THE SEIZED MONEY IS CONCERNED. FURTHER, THE JUDGMENTS AS RELIED UPON BY THE LD. D.R WOULD NOT APPLY ON THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE SINCE THIS IS NOT A CASE WHERE APPLICATION U/S. 132(5) IS MADE. MOREOVER, S ECTION 132(5) IS NO MORE ON STATUTE BOOK, EVEN OTHERWISE THERE IS DIVERGENCE IN OPINION BETWEEN THE HON'BLE HIGH COURT OF MADHYA PRADESH AND HON'BLE DELHI HIGH COURT AS FAIRLY POINTED BY THE LD. D.R. THE ORDER OF THE ITAT DELHI BENCH IN ITA NO.LL51/DEL/200 8 AS RELIED BY THE LD. D.R. IS ON DIFFERENT SET OF FACTS THEREFORE, IS NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. THE ISSUE WHETHER THE SEIZED MONEY SHOULD BE APPLIED TOWARDS ADVANCE TAX LIABILITY OF ASSESSEE AND CREDIT SHOULD BE GIVEN CREDIT THERE - F ROM THE DATE OF SEIZURE OF MONEY HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT RAJKOT BENCH IN ITA NO. 1172/RJT/2010 IN THE CASE OF SHRI RAM S. SARDA V. DCIT AND THE DECISION OF ITAT MUMBAI BENCH IN THE CASE OF SUDHAKAR M. SHETTY V. AC IT IN ITA NO.4238 & 423 9/MUM/2007. RESPECTFULLY FOLLOWING THE RATIO LAID THEREIN WE DO NOT FIND ANY INFIRMITY INTO THE IMPUGNED ORDER.' 12. BEFORE US, LD. D.R. HAS RELIED ON THE AMENDMENT MADE TO S. 132A VIDE FINANCE BILL OF 2013, WE FIND THAT THE AMENDM ENT HAS I.T. (SS) A NO S .446 & 451 /AHD/20 12 & ITA NO. 2294/AHD /2013 A.Y. 2010 - 11 PAGE NO ACIT VS. B. NANJI ENTERPRISES LTD & ACIT VS. SIDDHIVIYAK BUILDCON PVT. LTD. 11 BEEN MADE BY INSERTION OF EXPLANATION AND THE EXPLANATION HAS BEEN MADE APPLICABLE WITH EFFECT FROM 1ST JUNE, 2013,. FOR READY REFERENCE, THE AMENDMENT MADE BY FINANCE BILL 2013 AND THE MEMORANDUM IS REPRODUCED HEREUNDER: - 13. THE AMENDMENT MADE B Y FINANCE BILL 2013 READS AS UNDER: - AMENDMENT OF SECTION 132B. 34. IN SECTION 132B OF THE INCOME - TAX ACT, THE EXPLANATION SHALL BE NUMBERED AS EXPLANATION 1 THEREOF AND AFTER EXPLANATION 1 AS SO NUMBERED THE FOLLOWING EXPLANATION SHALL BE INSERTED WITH EFFECT FROM THE 1ST DAY OF JUNE, 2013,(EMPHASIS SUPPLIED) NAMELY: - EXPLANATION 2. FOR THE REMOVAL OF DOUBTS IT IS HEREBY DECLARED THAT THE 'EXISTING LIABILITY' DOES NOT INCLUDE ADVANCE TAX PAYABLE IN ACCORDANCE WITH THE PROVISIONS OF PART C OF CHAPTER XVI I.'. THE EXPLANATORY MEMORANDUM TO THE FINANCE BILL READS AS UNDER : - THE EXISTING PROVISIONS CONTAINED IN SECTION 132B OF THE INCOME - TAX ACT, INTER ALIA, PROVIDE THAT SEIZED ASSETS MAY BE ADJUSTED AGAINST ANY EXISTING LIABILITY UNDER THE INCOME TAX ACT. WEALTH TAX ACT, THE EXPENDITURE - TAX ACT, THE GIFT - TAX ACT AND THE INTEREST TAX ACT AND THE AMOUNT OF LIABILITY DETERMINED ON COMPLETION OF ASSESSMENTS PURSUANT TO SEARCH, INCLUDING PENALTY LEVIED OR INTEREST PAYABLE AND IN RESPECT OF WHICH SUCH PERSON IS I N DEFAULT OR DEEMED TO BE IN DEFAULT. VARIOUS COURTS HAVE TAKEN A VIEW THAT THE TERM ' EXISTING LIABILITY' INCLUDES ADVANCE TAX LIABILITY OF THE ASSESSEE, WHICH IS NOT IN CONSONANCE WITH THE INTENTION OF THE LEGISLATURE. THE LEGISLATIVE INTENT BEHIND THIS PROVISION IS TO ENSURE THE RECOVERY OF OUTSTANDING TAX/INTEREST/PENALTY AND ALSO TO PROVIDE FOR RECOVERY OF TAXES/ INTEREST /PENALTY, WHICH MAY ARISE SUBSEQUENT TO THE ASSESSMENT PURSUANT TO SEARCH. ACCORDINGLY, IT IS PROPOSED TO AMEND THE AFORESAID SECT ION SO AS TO CLARIFY THAT THE EXISTING LIABILITY DOES NOT INCLUDE ADVANCE TAX PAYABLE IN ACCORDANCE WITH THE PROVISIONS OF PART C OF CHAPTER XVII OF THE ACT. THIS AMENDMENT WILL TAKE EFFECT FROM 1ST JUNE, 2013. I.T. (SS) A NO S .446 & 451 /AHD/20 12 & ITA NO. 2294/AHD /2013 A.Y. 2010 - 11 PAGE NO ACIT VS. B. NANJI ENTERPRISES LTD & ACIT VS. SIDDHIVIYAK BUILDCON PVT. LTD. 12 (EMPHASIS SUPPLIED) 14. IN TAXMANN'S PUBLI CATION 'INTERPRETATION OF STATUTES' 2ND EDITION BY SHRI D.P. MITTAL AT PAGE 807 IT HAS BEEN STATED AS UNDER: - 'THE EFFECT TO BE GIVEN TO AN EXPLANATORY AMENDMENT DEPENDS UPON SEVERAL FACTORS, INCLUDING ITS LANGUAGE. WHEN THE LEGISLATURE HAS MADE THE EXPLAN ATION OPERATIVE PROSPECTIVELY BY WORDS EXPRESSED THEREIN, ITS OPERATION SHALL HAVE TO BE CONFINED TO THE FUTURE DATE. THE SAME REASONING GOVERNS THE CASE WHEN PARLIAMENT LIMITS THE RETROSPECTIVITY OF THE EXPLANATION WITH EFFECT FROM A PARTICULAR DATE. IN S UCH A SITUATION, GIVING FUTURE RETROSPECTIVITY TO THE EXPLANATION WOULD BE HIJACKING THE INTENTION OF THE LEGISLATURE INTO AN IMPERMISSIBLE AREA - CIT VS. RAJASTHAN MERCANTILE CO. LTD. (1995) 211 ITR 400 (DELHI). THUS, THERE IS NO DOUBT THAT ORDINARILY, A ST ATUTE, AND PARTICULARLY WHEN THE SAME HAS BEEN MADE APPLICABLE WITH EFFECT FROM A PARTICULAR DATE, SHOULD BE CONSTRUED PROSPECTIVELY AND NOT RETROSPECTIVELY'. 15. THUS CONSIDERING THE TOTALITY OF THE AFORESAID, INTERPRETATION OF APPLICABILITY OF EXPLANATI ON, AND AMENDMENT MADE BY FINANCE BILL 2013, FACTS AND RESPECTFULLY FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH, WE ARE OF THE VIEW THAT THE AMENDED EXPLANATION CANNOT BE APPLIED IN PRESENT CASE. WE THEREFORE ALLOW THE APPEAL OF THE ASSESSEE AND DIRECT THE AO TO GIVE CREDIT OF RS 10 LACS AS ADVANCE TAX. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED. 11 . THE REVENUE FAILS TO POINT ANY DISTINCTION ON FACTS OR LAW THERETO. IT ONLY SUBMITS THAT THE ASSESSEE RAISED THIS ISSUE ONLY IN ITS RETURN AND NOT BEFOR E THAT. WE FIND THAT BOTH THE LOWER AUTHORITIES HAVE REJECTED ITS PLEA SEEKING INTEREST RELIEF INTER ALIA FOR WANT OF ANY SPECIFIC PRAYER BEING MADE AT ITS BEHEST. 12 . HEARD RIVAL CONTENTIONS. WE REITERATE THAT THE REVENUE DOES NOT POINT OUT ANY EXCEPTI ON TO LD. CO - ORDINATE BENCH DECISION EXTRACTED HEREINABOVE ACCEPTING IDENTICAL RELIEF OF INTEREST THEREIN SO I.T. (SS) A NO S .446 & 451 /AHD/20 12 & ITA NO. 2294/AHD /2013 A.Y. 2010 - 11 PAGE NO ACIT VS. B. NANJI ENTERPRISES LTD & ACIT VS. SIDDHIVIYAK BUILDCON PVT. LTD. 13 FAR CREDIT OF ADVANCE TAX IS CONCERNED. THE ASSESSEE HAS ALSO NOT FILED ANY EVIDENCE TO PROVE THAT IT HAD MADE ANY SPECIFIC PRAYER BEFORE FILING I TS RETURN ALONG WITH STATEMENT OF INCOME INCLUDING RS . 80 LACS SEIZED IN SEARCH AS ADVANCE TAX. WE DRAW SUPPORT FROM ABOVE STATED JUDICIAL PR ECEDENT AND HOLD THE ASSESSEE I S ENTITLED FOR CLAIMING THE IMPUGNED CREDIT RELIEF W.E.F. DATE OF FILING RETURN ON LY. THE LD. ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO PASS CONSEQUENTIAL ORDER. ITA 2294/AHD/2013 IS PARTLY ACCEPTED. 13. REVENUE S APPEAL IT(SS)A 446/AHD/2012 IS ALLOWED AND IT(SS)A 451/AHD/2012 IS ALLOWED FOR STATISTICAL PURPOSES. ASSESSEE S APPE AL 2294/AHD/2013 IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 08 - 0 3 - 201 6 SD/ - SD/ - ( N.K. BILLAIYA ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 0 8 /0 3 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,