RADHA MOHAN SHARMA, Jaipur V. ACIT, Jaipur

ITA 300/JPR/2013

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6202 (ITAT-JAIPUR)
• Duration Of Justice: 5 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 21-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA JCIT DR DHK
• Section: 147; 131; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 300/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2006-07 SHRI RADHA MOHAN SHARMA MAHARSHI ASHRAM, WARD NO. 2 VIA JHOTWARA, SIRSI ROAD, JAIPUR CUKE VS. THE ACIT CENTRAL CIRCLE-2 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ARWPS 4707 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI S.L. JAIN, ADVOCATE JKTLO DH VKSJ LS@ REVENUE BY:SMT. SEEMA MEENA, JCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 07/03/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 5/04/2018 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDE R OF THE LD. CIT(A)-III, JAIPUR DATED 24-10-2011 FOR THE ASSESSM ENT YEAR 2006-07 RAISING THEREIN FOLLOWING REVISED GROUNDS OF APPEAL . 1. THE REASONS FOR REOPENING OF THE ASSESSMENT NOT VALID:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS GROSSLY ERRED IN LAW AND FACTS IN CONFIR MING ACTION INITIATED U/S 147 ON THE GROUND THAT THE AMOUNT RECEIVED FROM RANKA COLONIZERS PVT. LTD. HAS BEEN APPROPRIATED BY HIM AND THERE IS NO FINDING IN REGARD TO FORMATION OF BELIEF THAT THERE IS ESCAPEMENT OF INCOME. - LAKHMANI MEWAL DAS 103 ITR 473 (SC) ITA NO.300 /JP/2013 SHRI RADHA MOHAN SHARMA. VS ACIT, CENTRAL CIRCLE-2 ,JAIPUR 2 - GANGA SARAN & SONS (P) LTD VS ITO, 130 ITR 1 (SC) 2. ASSUMPTION OF JURISDICTION ON PRESUMPTION THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND FACTS IN UPHOLD ING THE ASSUMPTION OF JURISDICTION FOR RE-ASSESSMENT. THE RE-ASSESSMEN T PROCEEDINGS ON THIS CASE WERE ONLY BASED ON PRESUMPTION/ SUSPICION AND WERE THUS NOT VALIDLY INITIATED. 3. ADDITION RS. 65,00,000/- (A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND FACTS IN CONFIRMING THE ADDITION OF RS. 65,00,000/-ON ACCOUNT OF NON-FURNIS HING OF EVIDENCE OF RETURN OF THE MONEY TO THE RANKA COLONIZERS PVT. LT D. ADDITION IS BASED ON NO EVIDENCE. THE ASSESSEE HAS FURNISHED AL L POSSIBLE EVIDENCES. (B) THAT RANKA COLONIZERS PVT. LTD SURRENDERED UNDI SCLOSED INCOME AND PAID TAXES AND THEREFORE DOUBLE TAXATION IS NOT PERMISSIBLE. THAT THE AUTHORITY BELOW ERRED IN NOT APPRECIATIN G THAT ASSESSEE WAS MERE AGENT AND COULD ONLY BE TAXED ON RECEIPT IF ANY AMOUNTING TO SUCCESSFUL REAL ESTATE DEAL AND THEREF ORE, ERRED IN CONFIRMING THE ADDITION OF RS. 65,00,000/-. (D) THE LD. CIT(A) FURTHER ERRED IN UPHOLDING THE A DDITION WHICH HAS BEEN MADE WITHOUT NAMING THE HEAD OF INCO ME OR SECTION ETC AND THEREBY NOT FOLLOWING PROVISIONS OF LAW. (E) THAT THE ADDITION ON THE BASIS OF STATEMENT OF HOSTILE PERSON THAT TOO RECORDED BEHIND THE BACK OF THE ASS ESSEE AND NEVER CONFRONTED TO HIM. 4. ISSUE OF NOTICE U/S 143(2) THAT THE AO HAS ERRED IN LAW AND FACT IN NOT ISSUI NG STATUTORY NOTICE U/S 143(2) FOR MAKING REGULAR ASSESSMENT U/S 143(3). HENCE ORDER IS ILLEGAL. 5. COVERED MATTER:- THAT IN THE CASE OF NAYAN TIWARI FOR THE ASSESSMENT YEAR 2006-07 ITA NO.113/JP/2012 (ON IDENTICAL FACTS), TH E HON'BLE ITAT JAIPUR BENCH, JAIPUR HAS DELETED TOTAL ADDITION. ITA NO.300 /JP/2013 SHRI RADHA MOHAN SHARMA. VS ACIT, CENTRAL CIRCLE-2 ,JAIPUR 3 6. NO OPPORTUNITY OF EFFECTIVE HEARING . THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND FACTS IN NOT PR OVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE APPELLANT AND NOT APP RECIATING REPLIES AND EVIDENCES OF THE ASSESSEE. 7. NO SHOW CAUSE NOTICE THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, LD. CIT(A) HAS GROSSLY ERRED IN LAW AND FACTS IN MAKING DISPUTED ADDITIONS WITHOUT SERVING SHOW CAUSE NOTICE WHICH IS MANDATOR Y AS PER CBDT CIRCULAR. 2.1 APROPOS THE ABOVE MENTIONED GROUNDS OF APPEALS OF THE ASSESSEE, THE RELEVANT FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- 2.2 I HAVE PERUSED THE ASSESSMENT ORDER AND CONSI DERED THE MATERIAL AVAILABLE ON RECORD. IT IS EVIDENT FRO M THE RECORD THAT NOTICE U/S 148 WAS ISSUED AFTER RECORDING THE REASO NS. IN FACT, AFTER FILING OF THE RETURN IN RESPONSE TO NOTICE U/S 148, NO REQUEST OF APPELLANT VIDE HIS LETTER DATED 6-07-09, COPY OF TH E REASONS WAS SUPPLIED TO THE APPELLANT VIDE ORDER SHEET ENTRY DA TED 7-07-09. ACCORDINGLY, THE GROUNDS SO TAKEN THAT THE AO HAS E RRED IN LAW AND IN ON FACTS BY INITIATING ACTION U/S 147/148, IS NO T HAVING ANY MERIT AND IS REJECTED. 2.3 FROM PERUSAL OF RECORDS, IT IS SEEN THAT M/S. R ANKA COLONIZERS PVT. LTD HAS PAID RS. 65 LAKHS TO THE AP PELLANT. QUESTIONNAIRE WAS ISSUED TO THE APPELLANT ON 23-06- 2010. IN THE STATEMENT OF THE APPELLANT SO RECORDED AS WELL AS I N HIS CROSS EXAMINATION, THE APPELLANT HAS ADMITTED THAT THE AM OUNTS WERE RECEIVED BY HIM IN CASH FROM MEMBERS OF RANKA GROUP , AS MENTIONED IN THE ASSESSMENT ORDER AND NOT CONTROVER TED BY THE APPELLANT. TOTAL AMOUNT RECEIVED BY HIM IN CASH AMO UNTS TO RS. 65 ITA NO.300 /JP/2013 SHRI RADHA MOHAN SHARMA. VS ACIT, CENTRAL CIRCLE-2 ,JAIPUR 4 LAKHS. MOREOVER, THE APPELLANT WAS GIVEN SHOW CAUSE NOTICE ALSO AS TO WHY THE ADDITION OF RS. 65 LAKHS SHOULD NOT B E MADE IN HIS HANDS. THE ARGUMENT OF THE APPELLANT THAT THE AMOUN TS RECEIVED BY HIM WERE PASSED ON EITHER TO THE FARMERS OR SELLERS AND HE WAS ONLY WORKING AS AGENT HAS BEEN RIGHTLY REJECTED BY THE A O. IN VIEW OF THE FACT THAT THE APPELLANT HAS NOT GIVEN ANY EVID ENCE THAT HE HAS PASSED ON THE AMOUNT RECEIVED BY HIM TO THE FARMERS / SELLERS. APPELLANT HAS ALSO FAILED TO FURNISH ANY EVIDENCE O F RETURN OF THE MONEY RECEIVED FROM RANKA GROUP. IN VIEW OF THESE F ACTS AND CIRCUMSTANCES, THE AO WAS JUSTIFIED I MAKING ADDITI ON OF RS. 65,00,000/-IN THE HANDS OF APPELLANT AND I SEE NO R EASON TO INTERFERE WITH THE FINDING OF THE AO IN THIS REGARDS. ACCORDI NGLY GROUND SO TAKEN BY THE APPELLANT IS REJECTED. 2.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED THAT THE LD. CIT(A) HAS ERRED IN DISMISSING THE APPEAL R AISED BEFORE HIM FOR WHICH THE LD.AR OF THE ASSESSEE FILED THE WRITTEN S UBMISSION FOR ALLOWING THE RELIEF. THE RELEVANT CONTENTION OF THE LD.AR OF THE ASSESSEE AS MENTIONED IN THE WRITTEN SUBMISSION ARE AS UNDER:- ..1.1 IT IS SUBMITTED THAT ACTION TAKEN U/S 148 BY THE AO OF THE SEARCHED PERSON ITSELF INVALID BECAUSE T HE AO HAS ISSUED NOTICE ONLY ON THE BASIS OF STATEMENT OR CLAIM OF T HE SEARCHED PERSON WITHOUT PROVIDING ANY MATERIAL TAKEN BEHIND HIM OR STATEMENT OF THE PERSONS 2.1..IT IS SUBMITTED THAT THE SEARCH WAS CONDUCTED AT THE RANKA GROUP AND THE ACTION IN THE PRESENT CASE HAS BEEN TAKEN ON THE STATEMENT AND CLAIM OF THE RANKA GROUP THAT THEY HA VE PAID CASH AND CHEQUE TO SHRI RADHA MOHAN AND THE FARMERS / SELLER S BETWEEN 07-11- 2005 TO 07-03-2006. AS THE ASSESSEE HAS STATED THAT (I) HE HAS ACTED AS AN AGENT OF M/S. RANKA COLONIZER (P) LTD (II) THAT THE AMOUNT RECEIVED BY HIM WERE PASSED ON EITHER TO THE FARMER / SELLER OR TO (III) THAT THE ITA NO.300 /JP/2013 SHRI RADHA MOHAN SHARMA. VS ACIT, CENTRAL CIRCLE-2 ,JAIPUR 5 ACCOUNTS OF PAYMENTS MADE TO SELLERS/ FARMERS AND W ERE GIVEN TO M/S. RANKA COLONIZERS PVT LTD. ON THE SAME DAY IN THE EV ENING WHEN SUCH PAYMENTS WERE MADE (V) THAT NO MONEY HAS BEEN RECEI VED BY HIM TOWARDS COMMISSION FROM M/S. RANKA COLONIZERS PVT. LTD. HOWEVER, IT IS ALLEGED THAT HE HAS NOT PROVED HIS CONTENTION WITH THE HELP OF EVIDENCE. IN THIS REGARD, IT IS SU BMITTED THAT AS IN THE PRESENT CASE AS THE AO HAS NOT PROVIDED THE DOCUMEN T AS STATEMENTS OF THE PERSONS OF RANKA GROUP, SEIZED RECORD IN THE CA SE OF RANK GROUP, PAPERS RELATED TO ASSESSEE DESPITE VARIOUS LETTER T O AO HE HAS FAILED TO PROVIDE THE SAME. IN ABSENCE OF WHICH VITAL MATERIA L EVIDENCE AVAILABLE IN THE RECORD OF THE AO HOW THE ASSESSEE CAN FILE I TS OBJECTION AND DETAILS. RATHER THE AO HAS STATED THAT THEY BOTH (A SSESSEE AND HIS COUNSEL) HAS CONTINUOUS TO RAISE DEMAND FOR PROVIDI NG THE DOCUMENTS WHICH WERE NEITHER NOT RELEVANT TO THEIR CASE OR WE RE THIRD PARTY DOCUMENTS WHICH WERE NOT EVEN INTENDED TO BE USED A GAINST THEM AND THE LD. CIT(A) HAS ALSO REPEATED THE SAME THING. IN THIS REGARD IT IS SUBMITTED THAT HOW IT CAN BE S AID OR CAN BE PRESUMED BY BOTH THE AUTHORITY THAT THE DOCUMENTS W ERE EITHER NOT RELEVANT TO THEIR CASE OR WERE THIRD PARTY DOCUMENT S WHICH WERE NOT EVEN INTENDED TO BE USED AGAINST THEM. WHEN IT WAS THE ADMITTED FACTS THAT IN THE CASE OF ASSESSEE 148 HAS BEEN GIVEN DUE TO SEARCH CONDUCTED IN THE CASE OF RANKA GROUP WHEREIN THE DOCUMENTS RE LATED TO SALE PURCHASE OF AGRICULTURE LAND, PAYMENT RECEIPT, TRAN SACTION RELATED TO ASSESSEE ETC. ALL THESE SHOWS CONTRADICTORY APPROAC H OF THE AO BECAUSE ONE SIDE THE AO ON THE BASIS OF DOCUMENTS O R STATEMENT OF THE SEARCHED PERSON HAS TAKEN THE ACTION AGAINST THE AS SESSEE (THIRD PARTY) WITHOUT CONFRONTING THE SAME TO THE ASSESSEE AND OT HER SIDE WHEN THE ASSESSEE HAS DEMANDED THE DOCUMENTS THE AO STATED T HAT THE DOCUMENTS BELONGS TO THE THIRD PARTY. HENCE, HOT AN D COLD CANNOT BLOW IN THE SAME BREATH. FURTHER THE AO DID NOT PROVIDE ANY OPPORTUNITY FOR CROSS EXAMINATION AND ALSO NOT GIVEN ANY SHOW CAUSE NOTIC E BEFORE ALLEGING SO. IN THE CASE OF KANHAIYA LAL (HUF) VS CIT & AN R.247 ITR 686 (ALL.) IT HAS BEEN HELD THAT WHENEVER ANY MATERIA L IS PROPOSED TO BE USED AGAINST A PARTY COPIES OF THE SAME SHOULD BE S UPPLIED IN ADVANCE TO THAT PART SO THAT HE CAN HAVE AN OPPORTUNITY TO EXPLAIN THE SAME OR REBUT IT. NEITHER THE STATEMENT OF THE THIRD PARTY NOR THE REPORT ON ENQUIRIES WITH THE BANK NOR THE REPORT OF INTELLIGE NCE WING OF THE DEPARTMENT ON WHICH THE DEPARTMENT WAS RELYING TO T AKE ACTION AGAINST THE ASSESSEE WERE CONFRONTED TO HIM. ITA NO.300 /JP/2013 SHRI RADHA MOHAN SHARMA. VS ACIT, CENTRAL CIRCLE-2 ,JAIPUR 6 STATEMENT NOT READ IN FULL: FURTHER IT IS SUBMITTED THAT THE AO HAS RELIED ONLY THEIR PARTY EVIDENCE/CLAIM/ STATEME NT WHICH HAS BEEN USED AGAINST THE ASSESSEE ON THE OTHER HAND THE AO HAS IGNORED THE STATEMENT OF THE ASSESSEE RECORDED ON THE VERY SAME DATE U/S 131 WHEREIN HE HAS FULLY EXPLAINED ALL THE MODUS OPERAN DI AND ALSO PRODUCED ALL THE EVIDENCES AND RECORDS/DETAIL. HOWE VER, THE AO HAS FAILED TO CONSIDER ALL THESE THINGS IN THEIR TRUE S ENSE AND PERSPECTIVE. IF THE AO HAS CONSIDERED ALL THESE MINUTELY THE POSITI ON COULD HAVE BEEN DIFFERENT. A STATEMENT SHOULD BE READ IN TOTO NOT I N PARTLY. THE AO HAS NOT GIVEN ANY BASIS OR REASONING OR EVIDENCE OF ACC EPTING THE CLAIM OR RANKA GROUP AND DENYING THE CLAIM OF THE ASSESSEE. 2.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ERS OF THE LOWER AUTHORITIES. 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN GROUND NO. 6 OF APPEAL, THE LD.AR OF THE ASSESSEE HAD PLEADED THAT NO OPPORTUNITY OF EFFECTIVE HEARIN G WAS PROVIDED AND THE REPLY OF THE ASSESSEE AND EVIDENCES PRODUCED WERE N OT CONSIDERED. IT WAS ALSO PLEADED THAT NO SHOW CAUSE NOTICE WAS ISSUED T O THE ASSESSEE. IT IS A CASE WHERE ASSESSEE HAS BEEN CHARGED FOR SIPHONING OF MONEY WORKING AS AGENT BETWEEN RANKA COLONIZERS AND LAND OWNERS. IT WAS NOT A CASE OF EARNING INCOME AND NOT PAYING TAXES. WE NOTED FROM THE AVAILABLE RECORDS THAT THE ASSESSEE WAS DEPRIVED OF SUBMITTIN G ALL THE RELEVANT RECORDS BEFORE THE AUTHORITIES BELOW CONCERNING TO THIS ISSUE. THE LD. CIT(A) HAD CONFIRMED THE ADDITION. THE ASSESSEE IS ALSO FACING CRIMINAL CHARGES ON SUCH SIPHONING OF THE MONEY. IN SUCH A F ACTUAL MATRIX, IT WILL ITA NO.300 /JP/2013 SHRI RADHA MOHAN SHARMA. VS ACIT, CENTRAL CIRCLE-2 ,JAIPUR 7 BE IN THE INTEREST OF EQUITY AND JUSTICE TO RESTORE THE APPEAL TO THE FILE OF THE AO FOR AFRESH ADJUDICATION WITH THE DIRECTION T O THE AO TO PROVIDE THE EFFECTIVE HEARING TO THE ASSESSEE. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05 -04-2018 . SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 05/04/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RADHA MOHAN SHARMA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CENTRAL CIRCLE-2, JAIPU R 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.300/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR