Appeal details
Counselvise Citation
[2011] 134 COUNSELVISE.COM (IT) 7793 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 10 month(s) 21 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
29-03-2011
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
J
Next Hearing Date
21-02-2011
Assessment Year
1998-1999
Appeal Filed On
08-05-2007
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'J' BENCH, MUMBAI BEFORE SHRI R.V. EASWAR, PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 3558/MUM/2007 (ASSESSMENT YEAR: 1998-99) SHRI SHASHIKANT A.SHAH INCOME TAX OFFICER - 24(2)( 2) L/H OF SMT. RAMILA S. SHAH, MUMBAI SHRI H.S. SHAH & SHRI PARIN S. SHAH VS. B-109, MEGHDOOT, RAHEJA TOWNSHIP MALAD (E), MUMBAI 400097 PAN - AMZPS 3985 M APPELLANT RESPONDENT ITA NO. 3630/MUM/2007 (ASSESSMENT YEAR: 1998-99) INCOME TAX OFFICER - 24(2)(2) SHRI SHASHIKANT A.SH AH MUMBAI L/H OF SMT. RAMILA S. SHAH, VS. SHRI H.S. SHAH & SHRI PARIN S. SHAH B-109, MEGHDOOT, RAHEJA TOWNSHIP PAN - AMZPS 3985 M APPELLANT RESPONDENT ASSESSEE BY: SHRI HARESH P. SHAH REVENUE BY: SHRI SUMEET KUMAR O R D E R PER B. RAMAKOTAIAH, A.M. THESE CROSS APPEALS ARE BY THE ASSESSEE AND THE REV ENUE FOR A.Y. 1998- 99 ARISING OUT OF THE ORDER OF THE CIT(A-XXIV, MUMB AI DATED 20.02.2007. ASSESSEES APPEAL WAS FILED BY DELAY OF ONE DAY WHI CH HAPPENED DUE TO THE DELIVERY OF CHALLAN OF FILING FEE BY THE BANK BELAT EDLY AND ASSESSEE REQUESTED FOR CONDONATION OF DELAY OF ONE DAY IN FILING THE A PPEAL. AFTER CONSIDERING THE PRAYER AND THE AFFIDAVIT THE DELAY IN FILING THE AP PEAL IS CONDONED. 2. THE ISSUE ARISING IN THE PRESENT APPEALS IS THAT TH E ASSESSEE, SHRI SHASHIKANT A. SHAH WAS ASSESSED TO INCOME TAX AND I N THE ASSESSMENTS FOR A.Y. 1993-94 AND 1995-96 THE CASH CREDITS AND INTER EST WERE DISALLOWED UNDER SECTION 143(3) R.W.S. 147. LATER ASSESSEE FIL ED DECLARATION UNDER VDI ITA NOS. 3558&3630/MUM/2007 SHRI SHASHIKANT A.SHAH 2 SCHEME WITH THE CIT. HOWEVER, THE ASSESSEE FAILED T O PAY THE TAXES AND ACCORDINGLY THE VDIS DECLARATION WAS FORWARDED TO T HE JURISDICTIONAL A.O. CONSEQUENT TO THAT THE A.O. REOPENED THE ASSESSMENT FOR A.Y. 1998-99 AND ISSUED NOTICE UNDER SECTION 148 ON 29.03.2005. IN T HE COURSE OF SCRUTINY PROCEEDINGS IT WAS ASSESSEES SUBMISSION THAT THE U NSECURED LOANS RECEIVED BY THE ASSESSEE ALONG WITH INTEREST CLAIMS WERE OFF ERED UNDER VDIS RESPECTIVELY FOR ASSESSMENT YEARS 1993-94,1994-95 & 1995-96 AND THE AMOUNTS MENTIONED IN THE VDI DECLARATION WERE NOTHI NG BUT THE CASH CREDITS AND INTEREST IN THE RESPECTIVE YEARS WHICH WERE ALREADY SUBJECTED TO TAX. IT WAS HIS CONTENTION THAT THE ASSESSMENT FOR AY1998-99 CANNOT BE REOPENED AS THE RESPECTIVE INCOMES PERTAIN TO THE A BOVE THREE ASSESSMENT YEARS. THE A.O. DID NOT AGREE AND TOOK THE TECHNICA L VIEW THAT THE ASSESSEE HAS MENTIONED CASH IN THE LAST COLUMN AND ACCORDING LY SINCE THE DECLARATION WAS MADE IN THE YEAR 1997-98 RELEVANT F OR A.Y. 1998-99 THE AMOUNT WAS TO BE BROUGHT TO TAX IN THE IMPUGNED A.Y . BEFORE THE CIT(A), ASSESSEE CONTESTED THE ADDITION OF THE ENTIRE AMOUN T DECLARED IN VDIS AND CAN CORRELATE WITH THE AMOUNTS ALREADY ASSESSED IN THE SCRUTINY ASSESSMENTS FOR ASSESSMENT YEARS 1993-94 & 1995-96. FOR A.Y. 1994-95 ASSESSEE SUBMITTED THAT THE AMOUNTS PERTAIN TO THE SAID A.Y. BUT HE DID NOT HAVE ANY RECORD AT THE MOMENT TO SUBSTANTIATE THE A MOUNTS. THE CIT(A), AFTER EXAMINING THE SUBMISSIONS AND AMOUNTS, DELETE D THE ADDITION IN ASSESSMENT YEARS 1993-94 AND 1995-96 WHEREAS CONFIR MED THE SAME FOR A.Y. 1994-95 AS ASSESSEE FAILED TO FURNISH ANY EVID ENCE THAT THE RETURNS WERE FILED IN THE IMPUNED YEAR.THE PRESENT APPEAL FILED BY THE ASSESSEE IS WITH REFERENCE TO THE FINDINGS OF THE CIT(A) FOR A. Y. 1994-95 IN NOT DELETING THE ADDITIONS PERTAINING TO THAT YEAR WHEREAS THE R EVENUE IS AGGRIEVED ON THE AMOUNTS DELETED BY THE CIT(A) IN A.Y. 1993-94 A ND 1995-96. 3. THE ASSESSEE WAS REPRESENTED BY LEGAL HEIRS, WHO AR E BROUGHT ON RECORD CONSEQUENT TO THE DEATH OF THE ASSESSEE ON 1 6.09.2007, AFTER PASSING OF THE ORDER BY THE CIT(A). THE LEGAL HEIRS PLACED A PAPER BOOK ON RECORD INDICATING THE RELEVANT ACKNOWLEDGEMENTS FOR RESPEC TIVE ASSESSMENT YEARS ITA NOS. 3558&3630/MUM/2007 SHRI SHASHIKANT A.SHAH 3 INCLUDING A.Y. 1994-95 AND AUDITED ACCOUNTS TO SUBM IT THAT THE AMOUNT SO DECLARED IN A.Y. 1994-95 WAS ARISING OUT OF THE BOO KS OF ACCOUNT MAINTAINED AND SO THERE IS NO NEED TO BRING THE SAME AMOUNT TO TAX IN A.Y. 1998-99. THE PAPER BOOK WAS PERUSED BY THE LEARNED D.R. WHO HAD NO OBJECTION WITH REFERENCE TO THE PLACING OF THE ACKNOWLEDGEMENTS ON RECORD WHICH WERE NOT FURNISHED TO THE A.O. OR TO THE CIT(A) EARLIER. 4. WE HAVE HEARD THE LEARNED COUNSEL AND DR AND EXAMI NED THE RECORD. THE DETAILS OF VDIS DECLARATION MADE BY THE ASSESSE E UNDER VDI SCHEME 1997 WERE AS UNDER: - AMOUNT DECLARED A.Y. TO WHICH THE INCOME RELATES DESCRIPTION OF ASSET PARTICULARS `42,23,735/- 1993-94 CASH UNSECURED LOAN OF ` 39,25,000/- & INTEREST OF ` 2,98,735/- `15,16,442/- 1994-95 CASH UNSECURED LOAN OF ` 8,00,000/- & INTEREST OF ` 7,16,442/- `8,80,066/- 1995-96 CASH INTEREST ON HAWALA LOANS AS SEEN FROM THE ABOVE LOANS AND INTEREST WERE CLAI MED PERTAINING TO ASSESSMENT YEARS 1993-94, 1994-95 AND 1995-96. SINC E THE AMOUNT DECLARED PERTAINS TO THE RESPECTIVE ASSESSMENT YEARS, WE ARE OF THE OPINION THAT THE A.O. WAS NOT CORRECT IN INITIATING PROCEEDINGS IN A.Y. 1 998-99 JUST BECAUSE THE ASSESSEE FILED THE DECLARATION IN THE FINANCIAL YEA R RELEVANT TO THE ASSESSMENT YEAR. MOREOVER, AS EXAMINED BY THE CIT(A) THE AMOUN TS DO PERTAIN TO THE RESPECTIVE ASSESSMENT YEARS. HIS FINDINGS FOR A.Y. 1993-94 ARE AS UNDER: - 5.2.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF THE APPELLANT CAREFULLY. I HAVE ALSO GONE THROUGH THE A SST. RECORD FOR THE A.Y. 1993-94. THE APPELLANT FURNISHED RETURN OF INC OME FOR THE A.Y. 1993-04 ON 31.10.1993. HE FILED THEREWITH AUDIT REP ORT IN FORM 3CD DT. 20.10.1993 ALONGWITH BALANCE SHEET, P&L ACCOUNT , LOAN STATEMENT EXCEEDING RS.20,000/- ETC. AS PER THAT LO AN STATEMENT THE LOANS TAKEN DURING THE YEAR WERE RS.61,35,000/- AND RS.6,32,980/- WAS INTEREST ON OLD AS WELL AS NEW LOANS. TOTAL INT EREST ON UNSECURED ITA NOS. 3558&3630/MUM/2007 SHRI SHASHIKANT A.SHAH 4 LOANS WAS CLAIMED AT RS.6,40,821/- IN THE P&L ACCOU NT. ASSESSMENT WAS COMPLETED U/S. 143(3) ON 30.11.1995 IN WHICH EN TIRE LOANS OF RS.61,35,000/- AND ENTIRE INTEREST OF RS.6,40,821/- WERE ADDED BACK TO THE TOTAL INCOME. THE CIT(A) XXXVIII, MUMBAI VID E HIS ORDER DT. 25.11.1997 SET ASIDE THE ASST. TO BE FRAMED DE-NOVO . IN THE FRESH ASSTT. ORDER U/S 143(3) DT. 21.03.2000 THE ADDITION ON ACCOUNT OF LOANS WAS REDUCED TO RS.40,35,000/- AND THAT ON ACC OUNT OF INTEREST WAS REDUCED TO RS.6,27,071/-. THE CIT(A) XXXI, MUMB AI VIDE HIS ORDER DT. 23.03.2001 CONFIRMED THE ADDITION OF LOAN S AND INTEREST. THE HONBLE ITAT, MUMBAI CONFIRMED THE CIT(A)S ORD ER VIDE ITA NO. 4072/MUM/2001 DT. 26.09.2005 5. HOWEVER, WITH REFERENCE TO A.Y. 1994-95 THE ASSESSE E COULD NOT FURNISH THE RELEVANT ACKNOWLEDGEMENT FOR HAVING FIL ED THE RETURN BEFORE THE CIT(A). NEITHER THE A.O. HAD SENT THE RECORDS FOR A .Y. 1994-95 WHEN THE MATTER WAS REMANDED BY THE CIT(A). UNDER THE CIRCUM STANCES THE CIT(A) CONFIRMED THE ADDITION SAID TO BE PERTAINING TO A.Y . 1994-95 ON THE SAME REASONING AS GIVEN BY THE A.O. IN ASSESSING THE INC OME IN A.Y. 1998-99. THE FINDING IS AS UNDER: - 5.4.3 UNDER THE CIRCUMSTANCES IT CANNOT BE ACCEP TED THAT THE APPELLANT HAD FILED THE RETURN OF INCOME FOR THE A. Y. 1994-95. IT CAN ALSO NOT BE ACCEPTED THAT HE HAD FILED THE AUDIT RE PORT COMPRISING THE DETAILS OF LOANS AND INTEREST. HE ALSO COULD NOT PR ODUCE ANY EVIDENCE TO SHOW THAT RS.15,16,442/- WAS ASSESSED IN THE A.Y . 1994-95. SO, HE COMPLETELY FAILED TO PROVE WITH COGENT EVIDENCE THAT THE AMOUNTS OF RS.15,16,442/- PERTAINED TO THE A.Y. 1994-95. TH E DESCRIPTION OF THE ASSET DECLARED UNDER THE VDIS97 WAS SHOWN AS CASH. THE DECLARATION WAS MADE IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 1998-99. SINCE THE CLAIM THAT THE S AID AMOUNT REPRESENTED LOANS AND INTEREST OF A.Y. 1994-95 COUL D NOT BE PROVED BY THE APPELLANT AND THE DESCRIPTION OF THE ASSET D ECLARED WAS CASH, THE ONLY LOGICAL CONCLUSION WOULD BE THAT T HE SUM BELONGED TO THE ASSESSMENT YEAR IN WHICH THE DECLARATION WAS MA DE. IT WOULD BE DEEMED AS INCOME OF THE YEAR OF DECLARATION. THE AS SESSING OFFICER WAS THEREFORE FULLY JUSTIFIED TO ADD IT TO THE INCO ME F THE A.Y. 1998-99. THE ADDITION OF RS.15,16,442/- IS CONFIRMED. 6. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE PLAC ED ON RECORD THE ACKNOWLEDGEMENT OF FILING RETURN FOR A.Y. 1994-95 I N PAPER BOOK PAGES 69 TO 71 WHICH INDICATE THAT THE RETURN FOR A.Y. 1994-95 WAS FILED WITH RECEIPT NO. 262525 DATED 28 TH OCTOBER 1994. ASSESSEE HAD DECLARED TOTAL INCOME O F ITA NOS. 3558&3630/MUM/2007 SHRI SHASHIKANT A.SHAH 5 RS.1,56,152/- AND PAID TOTAL TAX OF ` 50,910/-. THIS RETURN WAS PROCESSED BY THE DEPARTMENT BY THE ITO, WARD 28(6) ON 14.03.1995 VIDE DCR NO. C- 1/2002(6)/94-95 DETERMINING THE NET DEMAND OF ` 55,979/- WITHOUT GIVING CREDIT TO ANY OF THE PRE-PAID TAXES. ASSESSEE ALSO ENCLOSED THE AUDIT REPORT DATED 22.10.1994. ASSESSEE ALSO PLACED ON RECORD TH E NOTICE UNDER SECTION 221 OF THE I.T. ACT DATED 13.09.1995 INDICATING THA T THERE WERE ARREARS FOR A.Y. 1994-95 OF ` 55,979/- AND FOR 1993-94 OF ` 1,02,946/-. IN VIEW OF THIS IT CANNOT BE STATED THAT THE RECORD FOR 1994-95 WAS NO T AVAILABLE WITH THE DEPARTMENT. BE THAT AS IT MAY, ASSESSEE HAS SHOWN T HE CREDITS AND INTEREST IN THE BOOKS OF ACCOUNT AND WHAT WAS DECLARED IN TH E VDIS STATEMENT DO PERTAINS TO A.Y. 1994-95. THERE IS NO NEED FOR SUST AINING THE ADDITION OF ` 15,16,442/- PERTAINING TO LOANS AND INTEREST OF A.Y . 1994-95. THEREFORE, WE ARE OF THE OPINION THAT ASSESSEES GROUNDS ARE TO B E ALLOWED AND THE AMOUNT IS TO BE DELETED AS THE SAME PERTAINS TO A.Y. 1994- 95 AND CANNOT BE BROUGHT TO TAX IN A.Y. 1998-99. SINCE THE CIT(A) EXAMINED THE RECORD FOR A.Y. 1993- 94 AND 1995-96 AND DELETED THE ADDITIONS ON SIMILAR GROUNDS, WE CONCUR WITH THE FINDINGS FOR THE ABOVE TWO ASSESSMENT YEAR S CONTESTED BY THE REVENUE IN ITS APPEAL. THE ADDITION SUSTAINED BY TH E CIT(A) PERTAINING TO A.Y. 1994-95 IN A.Y. 1998-99 IS DELETED FOR THE RE ASONS STATED ABOVE. ASSESSEES APPEAL IS ALLOWED. AS REVENUE FAILED TO CONTROVERT THE FINDINGS OF THE CIT(A) ON FACTS, ORDER OF THE CIT(A) DELETING T HE AMOUNTS PERTAINING TO A.Y. 1993-94 AND 1995-96 ARE UPHELD. ACCORDINGLY R EVENUES APPEAL STANDS DISMISSED. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED AND REV ENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH MARCH 2011. SD/- SD/- (R.V. EASWAR) (B. RAMAKOTAIAH) PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 29 TH MARCH 2011 ITA NOS. 3558&3630/MUM/2007 SHRI SHASHIKANT A.SHAH 6 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXIV, MUMBAI 4. THE CIT XXIV, MUMBAI CITY 5. THE DR, J BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.
