The DCIT, Bhruch Circle, Bharuch V. Hotel Hero, Bharuch

ITA 2880/AHD/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68099 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 17-12-2013
• Assessment Year: 2000-2001
• Appeal Filed On: 14-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Assessee Lawyers: K H SHAH
• Keywords: Unexplained cash credit
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMADABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI N. S. SAINI , ACCOUNTANT MEMBER ITA NOS. 2880 & 2881/AHD/2010 ASSESSMENT YEAR :2000-01 & 01-02 DEPUTY COMMISSIONER OF INCOME TAX, BHARUCH CIRCLE, BHARUCH V/S . M/S. HOTEL HERO, GIDC ESTATE, ANKLESHWAR, DIST. - BHARUCH PAN NO. A A BFH9294M (APPELLANT) .. (RESPONDENT) BY REVENUE SHRI R. K. DHANESTA, SR.D.R. /BY ASSESSEE SHRI K. H. SHAH, A.R. /DATE OF HEARING 17.12.2013 /DATE OF PRONOUNCEMENT 31.12.2013 O R D E R PER : SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER THESE TWO APPEALS HAVE BEEN FILED BY THE REVENUE FO R A.Y. 2000-01 & 01-02, ARISING FROM THE CONSOLIDATED ORDER OF CIT(A )-VI, BARODA DATED 06.07.2010. RESPECTIVELY THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: A.Y. 2000-01 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY U/S.271(1) (C) OF RS.86,900/- ON THE ADDITION OF RS.3,50,000/- IN RESPECT OF UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT ON ACCOUNT OF INTRODUCTION OF CAPITAL BY ON E OF THE PARTNERS ABDUL SALEMAN H. SULEMAN, AS THE CREDITWORTHINESS OF THE SAID PARTNER COULD NOT BE ESTABLISHED. ITA NOS. 2880 & 2881/AHD/10 A.Y. 00-01 & 01-02 PAGE 2 A.Y. 2001-02 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY U/S.271(1) (C) OF RS.5,26,600/- ON THE ADDITION OF RS.15,00,000/- IN RESPECT OF UNEXPL AINED CASH CREDIT U/S.68 OF THE ACT ON ACCOUNT OF INTRODUCTION OF CAPITAL BY ONE OF THREE PARTNERS OF THE ASSESSEE FIRM VIZ. HARISH H. DARRADRA, ISRAIL D AUD MAKHNOGIA AND SAUKAT ABBAS SUMASARA, AS THE CREDITWORTHINESS OF T HE SAID PARTNERS COULD NOT BE ESTABLISHED. 2. THE ABOVE REFERRED IMPUGNED PENALTIES WERE IMPOS ED BY THE A.O. VIDE TWO ORDERS U/S. 271(1)(C) BOTH DATED 26.03.2009. O N MERITS, LD. CIT(A) HAS DELETED THE PENALTY VIDE A CONSOLIDATED ORDER AS RE FERRED ABOVE DATED 06.07.2010. FURTHER, WE HAVE BEEN INFORMED THAT FO R THESE TWO ORDERS, THE CASES WERE RE-OPENED U/S. 148/147 OF IT ACT, CONSEQ UENCE UPON A SEARCH U/S.132 OF IT ACT CARRIED OUT IN THE MASTER GROUP OF CASES OF MEHSANA ON 20 TH OCTOBER, 2000. SIMULTANEOUSLY, AT THE TIME OF THAT SEARCH THE ASSESSEE I.E. M/S. HOTEL HERO, ANKLESHWAR WAS ALSO COVERED U /S. 132 OF IT ACT. IN COMPLIANCE OF THE NOTICE U/S. 148 OF IT ACT, A NIL RETURN WAS FILED FOR A.Y. 2000- 01 ON 16.12.2005, HOWEVER FOR A.Y. 01-02, A RETURN OF LOSS OF RS. 610/- FILED ON 16.12.2005. 3. NOW BEFORE US, AN ORDER OF ITAT D BENCH, AHMED ABAD, IS PLACED ON RECORD WHEREIN IN IT(SS)A NO.45-46/AHD/2008 FOR BLO CK ASSESSMENT FROM 1/4/90 TO 20/10/00 & ITA NOS. 1185-1186/AHD/2008 FO R A.Y. 2000-01 & 01-02 VIDE AN ORDER DATED 16.12.2010, THE TRIBUNAL HAS HE LD IN RESPECT OF THESE TWO YEARS AS UNDER: NOW COMING TO ASSESSEE'S APPEALS IN ITA NO.1185-11 86/AHD/2008. ITA NOS. 2880 & 2881/AHD/10 A.Y. 00-01 & 01-02 PAGE 3 17. THE FIRST COMMON ISSUE IN BOTH THE APPEAL OF AS SESSEE IS AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE REOPENING OF ASSE SSMENTS BY INVOKING THE PROVISIONS OF SECTION 147 OF THE ACT. FOR THIS, ASSESSEE HAS RAISED THE COMMON GROUNDS IN BOTH THE YEARS, AS THE ISSUE SAME AND FACTS ARE IDENTICAL, HENCE, WE ARE REPRODUCING THE GROUNDS RA ISED BY ASSESSEE FOR ASSESSMENT YEAR 2000-01 AS UNDER:- ITA NO.1185/AHD/2008. '1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-VI, BARODA ['THE CIT(A)'] ERRED IN FACT AND IN LAW IN CONFIRMI NG ACTION OF THE DEPUTY COMMISSIONER OF INCOME TAX, BHARUCH CIRCLE [ 'THE AO'] IN REOPENING THE ASSESSMENT BY INVOKING THE PROVISIONS OF SECTION 147 OF THE INCOME TAX ACT, 1961 ['THE ACT'] AND COMPLET ING THE ASSESSMENT, COMMENCED UNDER INVALID EXERCISE OF POW ERS U/S.147 OF THE ACT. ------------------------- 21. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE ORDER O F CIT(A) IN APPEAL NO. CAB/III-226/2002-03 DATED 24-03-2004 THAT CIT(A) HA S SPECIFICALLY OBSERVED, 'HOWEVER, IT WAS FURTHER OBSERVED THAT ON MERITS OF THE CASE THE APPELLANT HAS NOT FULLY DISCHARGE ITS ONUS AS MUCH AS THAT THE IDENTITY OF THE PERSONS WERE ESTABLISHED AND CONFIRMATIONS FROM THE PERSONS MAINLY PARTNERS WAS FURNISHED, MOREOVER, CREDITWORTHINESS OF THESE PARTNERS AND THE IMMEDIATE SOURCE OF MONEY IN ORDER TO CONTRIBUT E THE CAPITAL. THIS ISSUE MAY BE EXAMINED IN THE REGULAR ASSESSMENT PRO CEEDINGS.' WE FIND FROM THE ABOVE OBSERVATIONS THAT IT IS A MATTER WHI CH COULD HAVE BEEN CONSIDERED IN REGULAR ASSESSMENT PROCEEDINGS. WE FI ND FROM THE ABOVE REASONS RECORDED, WHEREIN THE ASSESSING OFFICER USE D THE WORDS 'THEREFORE' IN THE LIGHT OF THE OBSERVATION OF CIT( A), WHICH ITSELF PROVES THAT THE AO HAS NOT APPLIED HIS INDEPENDENT MIND BEFORE ISSUING NOTICE U/S.147 OF THE ACT. IN SIMILAR CIRCUMSTANCES, THE TRIBUNAL NAGPUR BENCH IN THE CASE OF M.V. TRADERS V. ACIT (2010) 41 DTR 441 (NAG ) HELD THAT RE- ASSESSMENT PROCEEDINGS MUST BE BASED ON THE 'BELIEF ' OF THE ASSESSING ITA NOS. 2880 & 2881/AHD/10 A.Y. 00-01 & 01-02 PAGE 4 OFFICER AND NOT THE 'BELIEF' OF THE APPELLATE AUTHO RITY, I.E. CIT(A) OR THE ITAT. HERE, IN THE PRESENT CASE EVEN THERE IS NO DI RECTION BY CIT(A) WHICH CAN BE CONSIDERED TO BE DIRECTION U/S 150(1) OF THE ACT.. ACCORDINGLY, WE ARE OF THE VIEW THAT THE REOPENING IS BAD IN LAW AN D ACCORDINGLY QUASHED. ONCE, THE ADMITTED FACTUAL POSITION IS THAT THE RE- OPENING ITSELF HAD BEEN QUASHED BY THE RESPECTED CO-ORDINATE BENCH, THEREFO RE, THE SUBSEQUENT STEPS TAKEN BY THE REVENUE DEPARTMENT, SUCH AS, LEV Y OF CONCEALMENT OF PENALTY, NOW IN QUESTION, DID NOT SURVIVE. INSTEAD OF DISCUSSING THE MERITS OF THE CASE, WE HEREBY HOLD THAT ON THIS PRELIMINARY I SSUE OF JURISDICTION, THE REVENUES APPEALS DESERVE TO BE DISMISSED. WE HOLD ACCORDINGLY. 4. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE HEREBY DISMISSED. THESE ORDERS PRONOUNCED IN OPEN COURT ON 31.12.2013 SD/- SD/- (N. S. SAINI) ( MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. $%$& ' '( / CONCERNED CIT 4. ' '(- + / CIT (A) 5. -.+' &, ' ++' &, 01 % / DR, ITAT, AHMEDABAD 6. .34 56 / GUARD FILE. BY ORDER/ , 7/0' $+ ' ++' &, 01 % 9