ACIT, CHITTORGARH V. Shri Nadeem Anjum Khan, CHITTORGARH

ITA 274/JODH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74918 (ITAT-JODHPUR)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-02-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: SHYAM S SINGHVI
• Keywords: Accommodation entries; Procedural lapse

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.274/JODH/2013 (A.Y. 2003-04) ACIT, CIRCLE, VS. SHRI NADEEM ANJUM KHAN, CHITTORGARH. PROP. M/S. RUBINA TRANSPORT COMPANY, NIMBAHERA, CHITTORGARH. PAN NO. ABFPK 1120 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHYAM S. SINGHVI. DEPARTMENT BY : SHRI N.A. JOSHI- D.R. DATE OF HEARING : 25/02/2014. DATE OF PRONOUNCEMENT : 25/02/2014. O R D E R PER N.K. SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 20/02/2013 OF LD. CIT (A), UDAIPUR. THE ONLY GROUN D RAISED IN THIS APPEAL READS AS UNDER:- ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT(A) HAS ERRED IN:- 2 1. DELETING THE ADDITION OF RS. 30,00,000/- MADE U/ S 68 OF THE I.T. ACT ON PROTECTIVE BASIS DESPITE THE FACT THAT SHRI SHANTI LAL JAIN, WHERE THE SUBSTANTIVE ADDITION IS MADE, HAS DISPUTED THE ADDI TION & ISSUE HAS NOT REACHED FINALITY. THAT THE APPELLANT CRAVES TO ADD, ALTER, DELETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOUND THAT THE ASS ESSEE HAD RAISED CASH CREDIT OF RS. 30 LAC FROM M/S. ABHVYA INVESTMENT PV T. LTD., A FAMILY CONCERN OF SHRI GAJENDRA PORWAL, WHO ADMITTED THAT THE ACCOMMODATION ENTRIES WERE PROVIDED BY TAKING CASH EQUIVALENT TO THE ACCOMMODATION ENTRIES AND THE SAME WERE DEPOSITED INTO THE BANK A CCOUNT OF PORWAL GROUP. THE ASSESSING OFFICER MADE THE ADDITION OF R S. 30 LAC ON PROTECTIVE BASIS AND THE SUBSTANTIVE ADDITION WAS M ADE IN THE HANDS OF SHRI SHANTI LAL JAIN, WHO ADMITTED AND OWNED THE CA SH PAYMENTS IN THE BANK ACCOUNT OF ABHVYA INVESTMENT PVT. LTD., WHO HA D ACCOMMODATED THE LOAN ENTRY OF RS. 30 LAC TO THE ASSESSEE. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A), WHO VIDE ORDER DATED 24/01/2008 DELETED THE ADDITIO N MADE BY THE ASSESSING OFFICER. AGAINST THE SAID ORDER, THE DEP ARTMENT PREFERRED AN 3 APPEAL TO THE ITAT, JODHPUR BENCH, JODHPUR IN I.T.A .NO. 264/JU/2008, WHEREIN VIDE ORDER DATED 18/05/2009, THE MATTER WAS REMANDED BACK TO THE LD. CIT(A) BY OBSERVING AS UNDER:- 6. WE HAVE HEARD THE PARTIES AND HAVE CAREFULLY P ERUSED THE MATERIAL ON RECORD. THE APPEAL FOLDER OF LD. CIT(A ), UDAIPUR IN APPEAL NO. 402/IT/UDR/2006-07 WAS REQUISITIONED AND UPON P ERUSAL OF THE SAME, IT IS REVEALED THAT THERE IS NO MATERIAL OR E VIDENCE ON RECORD OF THE LD. CIT(A) SHOWING REQUISITION OF ASSESSMENT FO LDER OF SHRI SHANTI LAL JAIN THAT LED TO RECORDING OF FINDING THAT THE SAID AMOUNT OF RS. 30.00 LAKHS STANDS ADDED AS HIS INCOME ON SUBSTANTI VE BASIS. FOR RENDERING SUBSTANTIAL JUSTICE TO THE PARTIES, IT WA S INCUMBENT ON THE LD. CIT(A) TO HAVE REFLECTED ON RECORD THE PROCEDUR E FOLLOWED FOR INSPECTION OR VERIFICATION OF THE FACT FROM THE ASS ESSMENT ORDER IN THE CASE OF SHRI SHANTI LAL JAIN BEFORE DELETING PROTEC TIVE ADDITION IN THE HANDS OF THE ASSESSEE. THE LD. CIT(A) HOWEVER, COMM ITTED A PROCEDURAL LAPSE BEFORE RECORDING FINDINGS AS AFORE SAID. UNDER SUCH PECULIAR FACTS & CIRCUMSTANCES THE ORDER PASSED BY THE LD. CIT(A) CANNOT BE SUSTAINED AND NEEDS TO BE SET ASIDE FOR T AKING A DECISION AFRESH. WE, THEREFORE, SET ASIDE HIS ORDER AND RES TORE THE MATTER BACK TO HIM FOR TAKING A DECISION AFRESH IN ACCORDANCE W ITH LAW AFTER AFFORDING REASONABLE AND EFFECTIVE OPPORTUNITY OF B EING HEARD TO THE PARTIES AND HAVING REGARD TO THE OBSERVATIONS AS AF ORESAID IN THIS CASE. 4. TO COMPLY WITH THE ABOVE SAID DIRECTION OF THE IT AT, THE LD. CIT(A) WROTE A LETTER NO. CIT(A) /UDR/2011-12/128 DATED 27 /05/2011 AND REQUISITIONED THE CASE RECORDS OF SHRI SHANTI LAL J AIN TO THE CONCERNED ASSESSING OFFICER, WHO SEND THE CASE RECORDS VIDE L ETTER DATED 20/06/2011. THE LD. CIT(A) FROM THE CASE RECORD FO UND THAT THE SAID AMOUNT OF RS. 30 LAC WAS ADMITTED BY SHRI SHANTI LA L JAIN IN HIS AFFIDAVIT 4 GIVEN TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HAD BEEN ADDED IN HIS INCOME ON SU BSTANTIVE BASIS. HE, THEREFORE, DELETED THE ADDITION MADE IN THE HANDS O F THE ASSESSEE ON PROTECTIVE BASIS. NOW, THE DEPARTMENT IS IN APPEAL . 5. LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND FURTHER SUBMITTED THAT THE MEMBERS OF THE GROUP FIL ED AN APPLICATION UNDER SECTION 245C(1) OF THE I.T. ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT IN SHORT) BEFORE THE INCOME-TAX SETTLEMEN T COMMISSION ON 27/11/2006 AND THE ORDER HAD BEEN PASSED BY THE SET TLEMENT COMMISSION ON 29/03/2008 AFTER DETERMINING THE UNDISCLOSED INC OME OF THE ASSESSEE FOR THOSE ASSESSMENT YEARS WITHOUT BIFURCATING IT A SSESSMENT YEAR WISE AND THERE IS A PROPOSAL FOR FILING WRIT PETITION AG AINST THE ORDER OF THE SETTLEMENT COMMISSION. HOWEVER, HE COULD NOT CONTRO VERT THE OBSERVATION OF THE LD. CIT(A) THAT THE SAME AMOUNT WHICH WAS ADDED IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS WAS O FFERED FOR TAXATION BY SHRI SHANTI LAL JAIN, IN WHOSE CASE, ADDITION WAS M ADE ON SUBSTANTIVE BASIS. 6 . ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSESS EE IN HIS RIVAL SUBMISSIONS STATED THAT ON THE DIRECTION OF THE ITA T IN ORDER DATED 5 18/05/2009 IN I.T.A.NO. 264/JU/2008, LD. CIT(A) EXA MINED THE RECORD OF SHRI SHANTI LAL JAIN AND FOUND THAT HE HAS OFFERED THE AMOUNT FOR TAXATION AND HAD FURNISHED AN AFFIDAVIT IN RESPECT OF THAT O FFER. THEREFORE, THE ADDITION ON PROTECTIVE BASIS MADE IN THE HANDS OF T HE ASSESSEE WAS RIGHTLY DELETED. 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT APPEARS THAT THE AMOUNT WHICH WAS RECEIVED BY THE ASSESSEE AS A LOAN FROM M/S. ABHVYA INVESTMENT PVT. LTD. WAS CONS IDERED AS AN ACCOMMODATION ENTRY BY THE ASSESSING OFFICER. THE SAID AMOUNT WAS OFFERED FOR TAXATION BY SHRI SHANTI LAL JAIN, WHO F URNISHED AN AFFIDAVIT TO THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS AND THE AMOUNT WAS ADDED IN HIS HANDS ON SUBSTANTIVE BASIS. IT IS WEL L SETTLED THAT THE SAME AMOUNT CANNOT BE TAXED TWICE AND WHEN THE ADDITION HAS ALREADY BEEN MADE ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI SHAN TI LAL JAIN. THERE WAS NO OCCASION TO MAKE ADDITION IN THE HANDS OF THE AS SESSEE. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS, D O NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 6 8 . IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMIS SED. (ORDER PRONOUNCED IN THE COURT ON 25 TH FEBRUARY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25 TH FEBRUARY, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.