PRATIMA H MEHTA, MUMBAI V. ACIT CC 23, MUMBAI

ITA 2694/MUM/2012

• Counselvise Citation: 269419914 RSA 2012
• Duration Of Justice: 2 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 05-08-2013
• Assessment Year: 1992-1993
• Appeal Filed On: 20-04-2012
• Court: TRIBUNAL
• Assessee Lawyers: VIJAY MEHTA
• Keywords: Unexplained investment; Search and seizure; Opportunity of being heard; Rule of consistency; Cost of acquisition
• Section: 132; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI . , , , BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUD ICIAL MEMBER . / ITA NO. 2694 /MUM./ 2012 ( / ASSESSMENT YEAR : 1992 93 ) MRS. PRATIMA H. MEHTA 32, MADHULI, DR. A.B. ROAD WORLI, MUMBAI 400 018 .. / APPELLANT V/S ASSTT . COMMISSIONER OF INCO ME TAX CENTRAL CIRCLE 23, AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER ABNPM8226C / ASSESSEE BY : MR. VIJAY MEHTA / REVENUE BY : D R. P. DANIAL, SPECIAL COUNSEL A/W MR. MORYA PRATAP / DATE OF HEARING 12 .06.2014 / DATE OF ORDE R 30.06.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPE AL HA S BEEN PREFERRED BY THE ASSESSEE , CHALLENGING THE IMPUGNED ORDER DATED 29 TH FEBRUARY 2012 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) XXXX I , MUMBAI , FOR THE QUANTUM OF ASSESSMENT P ASSED UNDER SECTION 14 4 R/W SECTION 254 OF THE INCOME MRS. PRATIMA H. MEHTA 2 TAX ACT, 1961 ( FOR SHORT 'THE ACT' ) FOR THE ASSESSMENT YEAR 1992 93 , ON THE FOLLOWING GROUNDS: 1. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE ASSESSING OFFICER HAS NOT COMPLIED WITH THE PRINCIPLES OF NATU RAL JUSTICE EITHER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS OR DURING THE COURSE OF THE REMAND PROCEEDINGS. 2. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT DETERMINING THE INCOME BASED ON THE FINAL BOOKS OF ACCOUNT THEREBY CONFIRMING THE MANNER OF DETERMINATION OF INCOME BY THE ASSESSING OFFICER. THE LEARNED C I T(A) OUGHT TO HAVE ACCEPTED BOOK RESULTS SHOWN BY THE APPELLANT. 3. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE CORRECT QUANTITY OF PURCHASE AND SALE OF SHARES SHOULD BE ADOPTED WHILE DETERMINING THE INCOME OF THE ASSESSING OFFICER. 4. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN UPHOLDING THE WORKI NG OF UNEXPLAINED INVESTMENTS RELYING ON THE VARIOUS SOURCES OF INFORMATION. 5. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN GRANTING PARTIAL CREDIT IN RESPECT OF THE PURCHASES MADE BY THE APPELLANT AND REJECTING THE BALANCE PART ON THE GROUND THAT THE EVIDENCES THEREOF WERE NOT FILED DURING THE ORIGINAL ASSESSMENT PROCEEDINGS BUT ONLY DURING THE SET ASIDE PROCEEDINGS. 6. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN UPHOLDING THE DETERMINATION OF UNACCOUNTED INVESTMENTS AS PER ANNEXURE 1 OF THE ASSESSMENT ORDER AMOUNTING TO RS. 33,86,87,172/ - ON THE BASIS OF THE INFORMATION COLLECTED FROM VARIOUS COMPANIES ALLEGEDLY SHOWING THE SHAREHOLDING OF THE APPELLANT WITHOUT APPRECIATING THA T THE COPIES OF THE SAID LETTERS/INFORMATION WAS NEITHER PROVIDED TO THE APPELLANT DURING ASSESSMENT PROCEEDINGS NOR DURING REMAND PROCEEDINGS. MRS. PRATIMA H. MEHTA 3 7. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE VALUE OF T HE UNEXPLAINED INVESTMENT BASED ON THE AVERAGE OF THE MARKET RATES AS ON 1.4.1991 AND 3L.3.1992 WITHOUT APPRECIATING THAT THE VALUE OF INVESTMENTS OUGHT TO HAVE BEEN DETERMINED AT THE COST OF ACQUISITION BASED ON THE DATES OF PURCHASE. 8. THE LEARNED CO MMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF ` 56,05,783/ - ON ACCOUNT OF DIVIDEND AND INTEREST INCOME. 9. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF ` 12,92,833/ - ON ACCOUNT OF UNEXPLAINED RECEIPTS. 10. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF RS. 2,52,075/ - ON ACCOUNT OF PROFIT FROM SUNRISE ENTERPRISE. 11. THE LEARNED C OMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF RS. 15,73,548/ - ON ACCOUNT OF SHARE TRADING PROFIT. 12. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISAL LOWANCE OF DEDUCTION ON ACCOUNT OF INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. 13. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT GRANTING SET OFF OF ADDITION ON ACCOUNT OF SOURCE AGAINST THE APPLICATION OF SUCH SOURCE BASED ON TELESCOPING THEORY. 14. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE LEVY OF INTEREST ULS, 234A AND 2348 OF THE ACT. 15. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN L AW AND IN FACTS IN NOT APPRECIATING THAT THE PROVISIONS OF S. 220(2) OF THE ACT CANNOT BE INVOKE D IN CASE OF A NOTIFIED ENTITY. MRS. PRATIMA H. MEHTA 4 2 . BESIDES THIS, THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND, WHICH READS AS UNDER: THE LEARNED CIT(A) OUGHT TO HAVE APPR ECIATED THAT AS PER THE DECISION OF HON'BLE SPECIAL COURT DATED 30.04.2010 IN MP NO.41 OF 1999, THE ASSETS UNDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEHTA AND HENCE THE INCOME ASSESSED BY THE ASSESSING OFFICER OUGHT TO HAV E BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA, AND NOT IN THE HANDS OF THE APPELLANT . 3 . BEFORE US, THE LEARNED COUNSEL, M R . VIJAY MEHTA, ON BEHALF OF THE ASSESSEE, SUBMITTED THAT THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL AND THE ISSUE INVOLVED ARE SIMILAR TO THE OTHER APPEALS OF THE ASSESSEES GROUP CONCERNS, WHEREIN, THIS ISSUE HAS BEEN DECIDED BY THE TRIBUNAL. THE LEARNED COUNSEL HAS SUBMITTED COPY OF THE FOLLOWING DECISIONS OF THE TRIBUNAL. I ) HITESH S. MEHTA V/S DCIT, ITA NO.538/MUM./2012, AS SESSMENT YEAR 1992 93, ORDER DATED 1 ST MAY 2013; II ) SMT. JYOTI H. MEHTA V/S ACIT, ITA NO.3211/MUM./2012, ASSESSMENT YEAR 1992 93, ORDER DATED 21 ST MARCH 2014; III ) SMT. RASILA S. MEHTA V/S DCIT, ITA NO.3352/MUM./2012, ASSESSMENT YEAR 1992 93, ORDER DATED 7 TH JUN E 2013; AND IV ) SMT. PRATIMA H. MEHTA, ITA NO.4671/MUM./2003, ASSESSMENT YEAR 1992 93, ORDER DATED 23 RD FEBRUARY 2005. 4 . THE LEARNED SPECIAL COUNSEL SUBMITTED THAT THE SIMILAR ISSUE S W ERE INVOLVED IN THE AFORESAID APPEAL ALSO , WHEREIN THE TRIBUNAL HAS SET ASI DE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR PASSING OF THE ASSESSMENT DENOVO AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. HOWEVER, HE SUBMITTED THAT HIS MAIN PLANK OF ARGUMENT IS THAT THE ASSESSEES BOOKS OF ACCOUNT WERE NOT P ROPERLY MAINTAINED MRS. PRATIMA H. MEHTA 5 AND THE SAME WERE UNAUDITED AND, THEREFORE, NO PURPOSE WOULD BE SERVED BY REMANDING THE MATTER TO THE ASSESSING OFFICER. THUS, THE GROUNDS RAISED BY THE ASSESSEE HAVE NO MERITS. 5 . AFTER CONSIDERING THE IMPUGNED ORDER, VARIOUS TRIBUNAL ORD ERS IN THE GROUP CASES OF THE ASSESSEE AND ALSO THE GROUNDS RAISED BEFORE US, WE FIND THAT IN THE CASE OF SMT. RASILA S. MEHTA (SUPRA) AND IN OTHER CASES ALSO , SIMILAR GROUNDS WERE RAISED. IN THESE CASES, T HE TRIBUNAL HAS SET ASIDE THE ENTIRE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR MAKING FRESH ASSESSMENT DENOVO. SINCE THE FACTS OF THE ASSESSEES CASE ARE SIMILAR TO OTHER CASES VIZ. HITESH S. MEHTA, RASILA S. MEHTA, JYOTI H. MEHTA AND PRATIMA H. MEHTA, CITED ABOVE , THEREFORE, F OR THE SAKE OF READY R EFERENCE, THE RELEVANT FINDINGS , AS GIVEN IN THE DECISION OF RASILA S. MEHTA, IS REPRODUCED HEREIN BELOW: 3.2 HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CAREFUL PERUSAL OF THE RELEVANT MATERIAL ON RECORD, WE NOTE THAT THE CIT(A) WHILE DECIDING THE MATT ER HAS RELIED UPON THE ORDER IN THE CASE OF SHRI HITESH 5 MEHTA, AS IT IS EVIDENT FROM PARA 9.20 AS WELL AS PARA 10.1 OF THE IMPUGNED ORDER. WE FURTHER NOTE THAT THE FACTS IN THE CASE OF THE ASSESSEE AS WELL AS IN THE CASE OF SHRI HITESH S. MEHTA, ARE IDEN TICAL AND THE MATTER ARISING FROM THE SAME SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT. THE CO ORDINATE BENCH OF THE TRIBUNAL, WHILE DECIDING THE IDENTICAL MATTER IN THE CASE OF SHRI HITESH S. MEHTA, HAS DISPOSED OFF THE SAME IN PARA 4 & 5 AS UNDER: 4. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDER THEM CAREFULLY. WE HAVE ALSO PERUSED THE COPIES OF THE ORDER OF THE TRIBUNAL IN CASE OF SMT. PRATIMA MEHTA AND THE ASSESSEE PASSED IN FIRST ROUND. 5, AFTER CONSIDERING ALL THE RELEVANT MATERIAL, WE FOUND THAT T HE MATTER SHOULD GO BACK TO THE FILE OF THE ASSESSING OFFICER TO PASS A FRESH ORDER, IT IS SEEN THAT FOR REJECTING THE BOOKS OF ACCOUNT, THE AO HAS NOT GIVEN ANY VALID REASONS AS NO SPECIFIC DEFECT HAS BEEN POINTED OUT IN. THE BOOKS OF ACCOUNT, THEREFORE I N OUR VIEW THE ASSESSING OFFICER SHOULD GO THROUGH MRS. PRATIMA H. MEHTA 6 THE BOOKS FOR DETERMINING THE INCOME ON THE BASIS OF BOOKS ACCOUNTS' THE ASSESSING OFFICER HAS TO BRING ON RECORD SPECIFIC E VIDENCE OR DEFECT TO PROVE FALSITY OF BOOKS OF ACCOUNT AS NO FALSITY HAS BEEN PRO VED IN THE ASSESSMENT ORDER PASSED BY THE AO. BESIDES THIS THE DEPARTMENT HAS TO PROVIDE ALL THE DETAILS AND MATERIAL ON WHICH BASIS THE ADDITION HAVE BEEN MADE EARLIER. IF SUCH MATERIAL IS DISPUTED BY THE ASSESSEE THEN IN OUR VIEW CORRECTNESS OF SUCH MAT ERIAL HAS TO BE EXAMINED AS PER PROVISION OF LAW, W E ARE NOT CONVENIENED WITH THE ARGUMENT OF I D. DR THAT ASSESSEE CAN COLLECT INFORMATION FROM PARTIES FROM WHERE ASSESSING OFFICER HAS OBTAINED THE COPIES ON WHICH BASIS THE ADDITION HAVE BEEN MADE, THEREFO RE, ASSESSING OFFICER IS DIRECTED TO PROVIDE THE COPIES OF ALL INFORMATION ON WHICH BASIS, THE AO WANTED TO MADE ADDITIONS IN THE HANDS OF THE ASSESSEE. IF THE AO DOES NOT PROVIDE THE MATERIAL THEN IN OUR VIEW ADDITION CANNOT BE MADE, IN VIEW OF ABOVE FACT S AND C IRCUMSTANCES, WE SET ASIDE ORDER OF THE AUTHORITIES BELOW AND RESTORE THE ISSUES TO THE FILE OF THE ASSESSIN G OFFICER TO PASS A SSESS MENT DE NOVO AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND AS PER OBSERVATIONS OF OURS M ADE IN THE ORDER AS ABOVE. WE ORDER ACCORDINGLY. 4 SINCE THE FACTS AND CIRCUMSTANCES ARE IDENTICAL AND THE NATURE OF ISSUE RAISED IN THE CASE OF THE ASSESSEE AS WELL AS IN THE CASE OF SHRI HITESH S MEHTA (SUPRA) ARE ALSO SIMILAR; THEREFORE, TO MAINTAIN THE RULE OF CONSISTENCY, WE SET ASIDE THE MATTER TO THE RECORD OF THE ASSESSING OFFICER WITH THE SIMILAR DIRECTIONS AND TERMS AS IN THE CASE OF SHRI HITESH S MEHTA (ABOVE). 6 . THUS, CONSISTENT WITH THE VIEW TAKEN BY THE TRIBUNAL IN ALL THESE CASES, WHEREIN IDENTICAL FACTS AND ISSUES ARE INVOLVED, THEREFORE, WE ALSO SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND RESTORE BACK THE ENTIRE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DENOVO ASSESSMENT WITH SIMILAR DIRECTIONS. THE ASSESSING MRS. PRATIMA H. MEHTA 7 OFFICER SHALL PROVIDE DUE AND EFFECTIVE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE ORDER ACCORDINGLY. 7 . 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPO SES. 30 TH JUNE 2014 ORDER PRONOUNCED IN THE OPEN COURT O N 30 TH JUNE 2014 SD/ - . D. KARUNAKARA RAO ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER M UMBAI, DATED : 30 TH JUNE 2014 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI