The ACIT, Central Circle-2, Baroda V. Shri Jashwinder Singh Sethi, Baroda

ITA 2643/AHD/2009

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72957 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 26-12-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 24-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T P KRISHNA KUMAR
• Assessee Lawyers: P K TANDON
• Keywords: Cancellation of registration

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BENCH, AHMEDABAD , ! ' #$ #$ #$ #$ %, ' BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER $./ I.T.A. NO.2643/AHD/2009 ( ( )( ( )( ( )( ( )( / / / / ASSESSMENT YEAR : 2005-06) THE ASST.CIT CENTRAL CIRCLE-2 BARODA / VS. SHRI JASHWINDER SINGH SETHI C/O.COMED CHEMICALS LTD. 3 RD FLOOR, ORIENTAL BUSINESS CENTRE SAYAJIGUNJ, BARODA '* ! $./+, $./ PAN/GIR NO. : ACBPS 2718 J ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : SHRI T.P.KRISHNA KUMAR, CIT-DR ./*- 1 0 / RESPONDENT BY : SHRI P.K. TANDON 2 1 ! / / / / DATE OF HEARING : 26/12/2013 34) 1 ! / DATE OF PRONOUNCEMENT : 31/1/2014 5 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-IV, AHMEDABA D (CIT(A) FOR SHORT) DATED 19/03/2009 PERTAINING TO ASSESSME NT YEAR (AY) 2005- 06. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIR CUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.1,29,000/- OUT OF ADDITION OF RS.3,79,000/- MADE ON ACCOUNT OF SEIZED CASH. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIR CUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.47,99,125/- ON ACCOUNT OF SEIZED JEWELLERY. ITA NO.2643/AHD /2009 ACIT VS. SHRI JASHWINDER SINGH SETHI ASST.YEAR 2005-06 - 2 - 3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIR CUMSTANCES OF THE CASE IN DIRECTING A.O. TO GIVE SET OFF OF INCOM E OF RS.15 LAKH STATED TO BE OFFERED BEFORE THE SETTLEMENT COMMISSI ON. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER ON THE ABOVE POINTS. 5. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.C IT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED TO THE ABOVE EXTENT. 2. APROPOS TO GROUND NO.1, THE BRIEFLY STATED FACT S ARE THAT THE AO MADE ADDITION ON PROTECTIVE BASIS. THE SUBMISSION BEFORE THE AO WAS THAT THE WIFE OF THE ASSESSEE SMT.SATVINDER KAUR SE THI, HAS OWNED UP THE BALANCE AMOUNT OF RS.1,29,000/- AND A PETITION BEFO RE THE SETTLEMENT COMMISSION WAS FILED BY THE ASSESSEE AND HIS WIFE. THE LD.CIT(A) DELETED THE ADDITION ON THE GROUND THAT THE ISSUE I S PENDING BEFORE THE SETTLEMENT COMMISSION. 2.1. THE LD.CIT-DR VEHEMENTLY ARGUED THAT THE LD.CI T(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. 2.2. ON THE CONTRARY, THE LD.COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE AO MADE AN ADDITION OF RS.3,79,000/- ON ACCOUNT OF CASH SEIZED DURING THE COURSE OF SEARCH FROM THE RESIDENCE OF THE ASSE SSEE. HE SUBMITTED THAT AS PER PANCHANAMA DATED 09/09/2004 AND AS STATED AT THE TIME OF SEARCH THE AMOUNT FOUND WAS PART OF THE HOUSE HOLD KITTY AND SAVINGS OF MRS. SATWINDER KAUR SETHI, WIFE OF ASSESSEE. HE SU BMITTED THAT AN AMOUNT OF RS.1,29,000/- PERTAINS TO SMT.SATWINDER K AUR SETHI, WHO IS ALSO AN ASSESSEE AND SHE ALSO FILED AN AFFIDAVIT TO THIS EFFECT AND ALSO OFFERED RS.4,00,000/- BEFORE THE HONBLE SETTLEMENT COMMISSION. HE ITA NO.2643/AHD /2009 ACIT VS. SHRI JASHWINDER SINGH SETHI ASST.YEAR 2005-06 - 3 - SUBMITTED THAT SMT.SATWINDER KAUR SETHI, WIFE OF TH E ASSESSEE HAD OFFERED AN AMOUNT OF RS.4,00,000/- BEFORE THE ITS C AS ADDITIONAL INCOME WHICH WAS ALWAYS AVAILABLE WITH HER AND WAS THE SOURCE OF CASH FOUND FROM HER POSSESSION. SO THE CASH AMOUNTING TO RS.1,29,000/- OWNED UP BY HER WAS SOURCE OUT OF ADDITIONAL INCOME OF RS.4 LACS OFFERED BY HER BEFORE ITSC. HE PLACED ON RECORD A COPY OF SETTLEMENT COMMISSION ORDER DATED 27/12/2012. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THIS ADDITION WAS MADE ON PROTECTIVE B ASIS. THE AO HAS RECORDED THAT THE PETITION HAS BEEN FILED BEFORE T HE SETTLEMENT COMMISSION AND SMT.SATWINDER KAUR SETHI, WIFE OF T HE ASSESSEE HAD OWNED UP THE AMOUNT. WE FIND THAT FOR THE YEAR UND ER CONSIDERATION SMT.SATWINDER KAUR SETHI HAS OFFERED AN ADDITIONAL INCOME OF RS.2 LACS BEFORE THE SETTLEMENT COMMISSION. THEREFORE, AFTER CONSIDERING ALL ASPECTS OF THE MATTER, MORE PARTICULARLY THE REVENU E HAS NOT PLACED ANY MATERIAL ON RECORD CONTROVERTING THE FACT THAT SMT. SATWINDER KAUR SETHI HAS NOT OWNED UP THE AMOUNT, WE DO NOT FIND ANY INF IRMITY IN THE ORDER FO THE LD.CIT(A), THE SAME IS HEREBY UPHELD. THUS, TH IS GROUND OF THE REVENUES APPEAL IS REJECTED. 4. APROPOS TO GROUND NO.2, THE ASSESSING OFFICER R ECORDED THAT DURING THE COURSE OF SEARCH/SURVEY, JEWELLERY WORT H RS.47,99,125/- WAS FOUND FROM THE RESIDENCE, LOCKER NO.554 OF BANK OF BARODA, UNIVERSITY CAMPUS BRANCH, AND LOCK NO.13 OF CENTRAL BANK OF I NDIA, MAKARPURA ITA NO.2643/AHD /2009 ACIT VS. SHRI JASHWINDER SINGH SETHI ASST.YEAR 2005-06 - 4 - ROAD BRANCH, BARODA. THE AO DID NOT ACCEPT THE CLA IM OF THE ASSESSEE THAT THE JEWELLERY BELONGS TO WIFE OF THE ASSESSEE. THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, DELETED THE ADDITION MADE BY THE AO ON THE GROUND T HAT THE ENTIRE JEWELLERY HAD BEEN OWED UP BY SMT.SATWINDER KAUR SE THI, WIFE OF THE ASSESSEE AND A PETITION IS PENDING BEFORE THE SETTL EMENT COMMISSION. 4.1. THE SR.CIT-DR VEHEMENTLY ARGUED THAT THE LD.CI T(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. HE SUBMITTED T HAT SMT.SATWINDER KAUR SETHI, WIFE OF THE ASSESSEE HAS DISCLOSED IN HER PE TITION TO THE EXTENT OF JEWELLERY WORTH RS.22 LACS ONLY. HE SUBMITTED THAT THE ASSESSEE IS LIABLE FOR JEWELLERY FOUND IN HIS POSSESSION. 4.2. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT A CHART AS PER RULE-9 WHICH WAS FURNISHED BEFORE THE SETTLE MENT COMMISSION STATING THAT THE OWNERSHIP OF THE JEWELLERY FOUND F ROM THE RESIDENCE AND THE OTHER BANKS LOCKERS. AS PER STATEMENT GIVEN B EFORE THE SETTLEMENT COMMISSION, THE JEWELLERY BELONGED TO J.S.SETHI (HU F), SATWINDER SETHI, J.S.SETHI, AVNEET KAUR & JASHANJIT SETHI. OUT OF T HE JEWELLERY WORTH RS.47,99,125/-, THE ASSESSEE OWNED UP ONLY JEWELLER Y WORTH RS.85,650/-. HE SUBMITTED THAT THE REVENUE NEVER OBJECTED TO TH E SAID CHART AND RATHER ACCEPTED THE SAME BEFORE THE SETTLEMENT COMM ISSION AS THE PROCEEDING BEFORE THE COMMISSION ARE OF ARBITRATION IN NATURE WHERE BOTH THE PARTIES AGREE TO. NOW THE REVENUE CANNOT OBJEC T THE CHART. IT IS FURTHER CONTENDED BY THE LD.COUNSEL FOR THE ASSESSE E THAT OUT OF TOTAL JEWELLERY FOUND DURING THE COURSE OF SEARCH AND AS ACCEPTED IN THE CASE OF SMT.SATWINDER KAUR SETHI, WIFE OF THE ASSESSEE BEFO RE THE SETTLEMENT ITA NO.2643/AHD /2009 ACIT VS. SHRI JASHWINDER SINGH SETHI ASST.YEAR 2005-06 - 5 - COMMISSION THE UNEXPLAINED PORTION IS JUST RS.14,74 ,469/-. HE SUBMITTED THAT BEFORE THE SETTLEMENT COMMISSION AN ADDITIONAL INCOME OF RS.15 LACS WAS OFFERED BY THE ASSESSEE OUT OF WHICH THE ASSESSEE SHOULD BE GIVEN CREDIT TOWARDS JEWELLERY. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THESE DETAILS WERE NOT BEFORE THE LD.C IT(A). THE LD.CIT(A) HAS MERELY DECIDED THIS ISSUE ON THE BASIS THAT A P ETITION BEFORE THE SETTLEMENT COMMISSION IS PENDING. THEREFORE, IN OU R CONSIDERED VIEW, THIS ISSUE SHOULD BE RESTORED BACK TO THE FILE OF L D.CIT(A) FOR DECISION AFRESH. THE LD.CIT(A) IS HEREBY DIRECTED TO DECIDE THIS ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER VERIFYING THE CLAIM OF TH E ASSESSEE. THUS, THIS GROUND OF THE REVENUES APPEAL IS ALLOWED BUT FOR S TATISTICAL PURPOSES. 6. GROUND NO.3 IS AGAINST THE DIRECTION ISSUED TO T HE AO BY THE LD.CIT(A) TO GIVE SET OFF OF INCOME OF RS.15 LACS STATED TO BE OFFERED BEFORE THE SETTLEMENT COMMISSION. 6.1. THE LD.CIT-DR SUBMITTED THAT THE LD.CIT(A) WA S NOT JUSTIFIED IN GIVING SUCH DIRECTIONS. HE SUBMITTED THAT THE AO W AS JUSTIFIED IN MAKING THE ADDITION. 6.2. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE ASSESSEE HAD OFFERED AN ADDITIONAL INCOME OF RS.15 LACS BEFORE THE SETTLEMENT COMMISSION BUT THE APPLICATION FILED BEF ORE THE SETTLEMENT COMMISSION HAD ABATED. CONSEQUENTLY, THE AO WAS RE QUIRED TO MAKE ASSESSMENT AFTER TAKING INTO CONSIDERATION ALL INF ORMATION/ADMISSION/ ITA NO.2643/AHD /2009 ACIT VS. SHRI JASHWINDER SINGH SETHI ASST.YEAR 2005-06 - 6 - MATERIAL FILED BEFORE THE SETTLEMENT COMMISSION, AS IF THESE WERE FILED BEFORE THE AO, AS PER SECTION 245HA(3) OF THE ACT, BUT AO DID NOT CONSIDER THE ADDITIONAL INCOME. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO DID NOT GIVE THE CREDIT OF RS.1 5 LACS UNDER SECTION 245HA(3) OF THE ACT DISCLOSED BEFORE THE SETTLEMENT COMMISSION. THE LD.COUNSEL FOR THE ASSESSEE RELIED ON THE SECTION 2 45HA(3). THE SECTION 245HA(2)&(3) ARE REPRODUCED HEREINBELOW FOR THE S AKE OF CLARITY:- (2) FOR THE PURPOSES OF SUB-SECTION (1), THE ASSESS ING OFFICER SHALL BE ENTITLED TO USE ALL THE MATERIALS AND OTHER INFORMATION PROD UCED BY THE ASSESSEE BEFORE THE SETTLEMENT COMMISSION OR THE RESULTS OF THE INQ UIRY HELD OR EVIDENCE RECORDED BY THE SETTLEMENT COMMISSION IN THE COURSE OF THE PROCEEDINGS BEFORE IT AS IF SUCH MATERIALS, INFORMATION, INQUIR Y AND EVIDENCE HAD BEEN PRODUCED BEFORE THE ASSESSING OFFICER OR HELD OR RE CORDED BY HIM IN THE COURSE OF THE PROCEEDINGS BEFORE HIM. (3) FOR THE PURPOSES OF THE TIME-LIMIT UNDER SECTIO NS 149, 153, 154, 155 AND 231 AND FOR THE PURPOSES OF PAYMENT OF INTEREST UND ER SECTIONS 243 AND 244, IN A CASE REFERRED TO IN SUB-SECTION (1), THE PERIOD C OMMENCING ON AND FROM THE DATE OF THE APPLICATION TO THE SETTLEMENT COMMISSIO N UNDER SECTION 245C AND ENDING WITH THE DATE OF RECEIPT BY THE ASSESSING OF FICER OF THE ORDER OF THE SETTLEMENT COMMISSION SENDING THE CASE BACK TO THE ASSESSING OFFICER SHALL BE EXCLUDED; AND WHERE THE ASSESSEE IS A FIRM, FOR THE PURPOSES OF THE TIME- LIMIT FOR CANCELLATION OF REGISTRATION OF THE FIRM UNDER SUB-SECTION (1) OF SECTION 186, THE PERIOD AFORESAID SHALL, LIKEWISE, BE EXCLUDED. 7.1. AFTER A CONJOINT READING OF SECTION 245HA(2) & (3), WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE PLEA OF THE ASSESSEE. THEREFORE, WE DO NOT FIN D ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), THE SAME IS HEREBY UPHELD. THUS, THIS GROUND OF THE REVENUES APPEAL IS REJECTED. ITA NO.2643/AHD /2009 ACIT VS. SHRI JASHWINDER SINGH SETHI ASST.YEAR 2005-06 - 7 - 8. GROUND NOS.4 & 5 ARE GENERAL IN NATURE WHICH REQ UIRE NO INDEPENDENT ADJUDICATION. 9. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOWE D FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( ) ( %) ! ' ' ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31/01/2014 8.., .../ T.C. NAIR, SR. PS 5 1 .9 : 9) 5 1 .9 : 9) 5 1 .9 : 9) 5 1 .9 : 9)/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. $$ ; / CONCERNED CIT 4. ;() / THE CIT(A)-IV, AHMEDABAD 5. 9%< . , , / DR, ITAT, AHMEDABAD 6. <=( >2 / GUARD FILE. 5 5 5 5 / BY ORDER, /9 . //TRUE COPY// ? ?? ?/ // / $+ $+ $+ $+ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 16.1.14 (DICTATION-PAD 14- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 21.1.14 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.31.1.14 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.1.14 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER