ANOOP VRAJLAL MEHTA, MUMBAI V. PR CIT CEN 2, MUMBAI

ITA 3671/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9873 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Revision of order; Search and seizure; Salary income
• Section: 142(1); 153A; 234B; 148; 263

Judgement Text

IN T HE INCOME TAX APPELLATE TRIBUNA L A BENCH, MUMBAI BEFORE SHRI RAJENDRA , AM AND SHRI AMARJIT SINGH , JM / I .T.A. NO. 3671 / M/ 20 1 6 ( / ASSESSMENT YEAR: 20 0 6 - 0 7 ) ANOOP VRAJLAL MEHTA 901, EL - CID 13A, RIDGE RD MUMBAI - 4000 06 / VS. PR CIT CEN 2 AIR INDIA BLDG , NARIMAN POINT, MUMBAI - 4000 21 ./ ./ PAN/GIR NO. : AACPM 0814 A ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 27 .0 4 .2017 / DATE OF PRONOUNCEMENT : 17 . 07 .2017 / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 22 .0 3 .201 1 PASSED BY THE COMMIS SIONER OF INCOME TAX (CENTRAL) - 2 , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEAR 200 6 - 07 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - GROUND NO.1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE PRINCIPAL COMMISSIONER OF INCOME TAX ERRED IN INVOKING THE PROVISIONS OF SECTION 263 IN THE APPELLANTS CASE IN HOLDING THAT THE ASSESSMENT ORDER DATED 22.03.2016 MADE BY THE LD. AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST O F THE REVENUE. THE APPELLANT PRAYS THAT THE ORDER OF THE HONBLE PRINCIPAL COMMISSIONER OF INCOME TAX UNDER SECTION 263 MAY KINDLY BE ASSESSEE BY: SHRI VIJAY MEHTA DEPARTMENT BY: SHRI R.P. MEENA ANOOP VRAJLAL MEHTA 2 QUASHED AND THE ASSESSMENT ORDER OF THE LD. AO DATED 22.03.2016 MAY BE RESTORED. GROUND NO.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE PRINCIPAL COMMISSIONER OF INCOME TAX ERRED IN DIRECTING LD. AO TO MAKE ADDITION OF US$ 17,95,426 (INR 8,07,94,197) ON PROTE4CTIVE BASIS, WHEN THE SAME WAS ALREADY ASSESSED TO BE TAXABLE IN THE HANDS OF ESTA TE OF LATE MR. VRAJLAL C. MEHTA ON SUBSTANTIVE BASIS FOR A.Y. 2006 - 07. THE APPELLANT PRAYS THAT THE SAID ACTION OF HONBLE PRINCIPAL COMMISSIONER OF INCOME - TAX IS BAD IN LAW AND MAY KINDLY BY QUASHED. THE APPELLANT CRAVES, LEAVE TO ADD, AMEND, ALTER, OMIT ANY OF THE GROUNDS OF APPEAL BEFORE THE HEARING OF THE APPEAL, IF SO ADVISED. 3 . THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE ACTION U/S 132(1) OF THE I.T. ACT, 1961 WAS CARRIED OUT IN THE CASE OF M/S. MOHIT DIAMOND P. LTD. ALONG WITH OTHER GROUP CONCERNS AND INDIVIDUAL ENTITIES ON 13.09.2011. THE ASSESSEE WAS THE MAIN DIRECTOR IN MOHIT GROUP AND WAS COVERED UNDER A SEARCH AND SEIZURE ACTION U/S 132(1) OF THE ACT. NOTICE U/S 153A DATED 30.11.2012 WAS ISSUED AND SERVED UPON THE ASSESSE E. IN RESPONSE NOTICE U/S 153A OF THE ACT, THE ASSESSEE FILED THE RETURN OF INCOME ON 31.12.2012 DECLARING TOTAL INCOME TO THE TUNE OF RS.20,51,350/ - . THE ASSESSEE FILED THE ORIGINAL RETURN OF INCOME U/S 139(1) OF THE ACT ON 30.03.2007 DECLARING TOTAL INCO ME TO THE TUNE OF RS. 20,51,350/ - . THEREAFTER, NOTICE U/S 143(2) OF THE ACT DATED 30.07.2013 AND NOTICE U/S 142(1) DATED 03.09.2013 WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE WAS AN INDIVIDUAL AND WAS EARN ING THE INCOME FROM SALARY, HOUSE PROPER TY, CAPITAL GAIN AND OTHER SOURCES . DURING THE YEAR UNDER CONSIDERATION , THE INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS. 20,51,350/ - . SUBSEQUENTLY ANOOP VRAJLAL MEHTA 3 THE PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL - 2, MUMBAI INVOKE D THE POWER U/S 263 OF THE I.T. ACT . IT WAS NOTICE D THAT THE ASSESSEE WAS HAVING AN ACCOUNT IN HSBC BANK A/C., GENEVA ACCOUNT NO. BUP - SIFIC - PER - ID - 5090162310 TO THE PROFILE CLIENT CODE NO.5091334050 OF M/S. YEEL INVESTMENT INC. THE ASSESSEE DISCLOSE D THAT THE AMOUNT WAS LYING IN THE HANDS OF THE ESTATE OF LATE SHRI V.C. MEHTA AND PAID TAXES. ASSESSMENT WAS MADE IN THE YEAR 2007 - 08 U/S 148 OF THE ACT ON 31.03.2015 AND FOR THE A.Y. 2006 - 07 U/S 148 OF THE ACT ON 04.11.2015 ADDING UNDISCLOSED INCOME TO TH E TUNE OF RS. 1.58 CRORE AND RS.8 CRORE RESPECTIVELY ON ACCOUNT OF FOREIGN BANK ACCOUNT. THE PROTECTIVE ASSESSMENT WAS MADE IN THE ASSESSEE S CASE FOR THE A.Y. 2007 - 08 AT THE PEAK VALUE TO THE TUNE OF RS.9.57,07,316/ - . AS PER THE NOTE , THE PEAK VALUE OF AMO UNT LYING AND UNDISCLOSED AMOUNT WAS TO THE TUNE OF RS.8,07,94,197/ - FOR THE A.Y. 2006 - 07 WHICH SHOULD HAVE BEEN ADDED TO THE ASSESSEES INCOME A.Y. 2006 - 07 AS PROT ECTIVE BASIS WHICH WAS NOT DONE AND INSTEAD OF THAT ENTIRE PEAK OF RS.9,57,07,312/ - WAS ADDE D ON PROTECTIVE BASIS IN A.Y. 2007 - 08. SINCE, THE SAID AMOUNT WAS NOT ADDED TO THE A.Y. 2006 - 07. THEREFORE, ASSESSMENT ORDER WAS FOUND TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. THEREAFTER, THE NOTICE WAS GIVEN U/S 253(1) WAS GIVEN B UT NONE APPEARED THEREFORE THE MATTER WAS RE OPENED FOR FRESH ASSESSMENT ON THE ABOVE SAID GROUNDS. FEELING AGGRIEVED, THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US. ANOOP VRAJLAL MEHTA 4 GROUND NO.1 & 2 : - 4 . THE GROUND NO. 1 & 2 IS INTER - CONNECTED THEREFORE THESE GROUNDS ARE BEING TAKEN UP TOGETHER FOR ADJUDICATION FOR THE SAKE OF CONVENIENCE. UNDER THESE GROUNDS THE ASSESSEE HAS CHALLENGED THE REOPENING OF THE CASE IN VIEW OF PROVISION S U/S 263 OF THE ACT AND ALSO CHALLENGED THE AD DITION HELD BY THE COMMISSIONER OF INCOME TAX CENTRAL - 2, MUMBAI TO THE TUNE OF RS.8,07,94,197/ - ON PROTECTIVE BASIS WHICH HA D ALREADY BEEN ASSESSED IN THE HANDS OF ESTATE OF LATE MR. VRAJLAL C. MEHTA FOR THE A.Y. 2006 - 07. THE LD. REPRESENTATIVE OF THE ASSE SSEE HAS ARGUED THAT THE HONBLE PRINCIPAL COMMISSIONER OF INCOME - TAX HAS WRONGLY INVOKED THE PROVISION S U/S 263 OF THE ACT FOR THE ADDITION OF THE AMOUNT TO THE TUNE OF RS.8,07,94,197/ - ON PROTECTIVE BASIS WHEREAS THE SAME HAS BEEN ASSESSED AND TAXED IN THE HANDS OF MR. VRAJLAL C. MEHTA ON SUBSTANTIVE BASIS FOR THE A.Y. 2006 - 07, H ENCE, ORDER IS NOT LIABLE TO BE SUSTAINABLE OF IN THE EYE OF LAW. IT IS ALSO ARGUED THAT T HE SAID AMOUNT HAS FURTHER BEEN ADDED IN THE CASE OF FATHER, SONS W IFE AND IN THE CASE OF THE WIFE AND IN THIS REGARD T HE MATTER HAS BEEN DECIDED BY THE HONBLE ITAT IN ITA. NO. 3672/M/2016 IN THE CASE OF WIFE TITLED AS SMT. DEVAUNSHI ANOOP MEHTA VS.PCIT CENTRAL - 2, MUMBAI. IT IS SPECIFICALLY HELD THAT THE AMOUNT WAS BELONGING TO SMT. V.C. MEHTA WHICH HAS ALREADY BEEN TAXED. THEREFORE, THE ORDER U/S 263 OF THE ACT IS WRONG AND HAS BEEN ORDER TO BE SET ASIDE. ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE ANOOP VRAJLAL MEHTA 5 DEPARTMENT HAS REFU TED THE CONTENTION. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEARNED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE HAS CHALLENGED THE ORDER DATED 22.03.2016 PASSED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL - 2, MUM BAI IN WH ICH HE INVOKE D THE PROVISIONS U/S 263 OF THE I.T. ACT O N ACCOUNT OF NON ASSESSING THE INCOME TO THE TUNE OF RS. 8,07,94,197/ - FOR THE A.Y. 2006 - 07 AND CONSIDERATION OF THE PEAK AMOUNT TO THE TUNE OF RS. 9,57,07,312/ - WHICH WAS ADDED ON PROTECTIVE BASIS FOR THE A.Y. 2007 - 08 LYING WITH THE BANK ACCOUNT NO. BUP - SIFIC - PER - ID - 5090162310 WHICH HAS LINKED WITH PROFILE CLIENT CODE NO.5091334050 OF M/S. YEEL INVESTMENT INC. ON THE BASIS OF THE SAME FACTS THE PRINCIPAL COMMISSIONER O F INCOME TAX HAS ALSO INVOKED THE PROVISION U/S 263 OF THE ACT AGAINST SMT. DEVAUNSHI ANOOP MEHTA . T HE SAME GROUND S ARE IN QUESTION IN WHICH THE ASSE SSEE I.E SMT. DEVAUNSHI ANOOP MEHTA TOOK THE PLEA THAT THE SAID AMOUNT WAS BELONGING TO HER FATHER - IN - LAW SHRI V.C. MEHTA WHICH HAS ALREADY BEEN CHALLENGED IN THE ORDER U/S 263 OF THE ACT AND THE SAID ORDER WAS SET ASIDE BY THE HONBLE ITAT IN ITA. NO. 3672/M/ 2016 FOR THE A.Y. 2006 - 07 DATED 14.12.2016. IN THE SAID ORDER IT HAS SPECIFICALLY BEEN HELD THAT THE AMOUNT TO THE TUNE OF RS. 80,09,400/ - FOR THE A.Y. 2006 - 07 AND RS.1,57,86,230/ - FOR THE A.Y. 2007 - 08 AND AN AMOUNT OF RS.24,32,046/ - FOR THE A.Y. 2012 - 13 HAS ALREADY BEEN ASSESSED IN THE HANDS OF LATE SMT. V.C. MEHTA. THERE FORE, THERE WAS NO NEED TO ASSESS THE AMOUNT AGAIN IN THE HANDS OF THE SMT. ANOOP VRAJLAL MEHTA 6 DEVAUNSHI ANOOP MEHTA ON PROTECTIVE BASIS . H OWEVER, TO MAKE MORE CONVEN IENT WE ARE REFERRING THE RELEVANT PART OF THE ORDER PASSED BY THE TRIBUNAL FOR READY REFERENCE : - WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALSO GONE THROUGH THE RECORDS. A SPECIFIC QUESTION WAS ASKED TO THE LD. A.R. THAT WHETHER ANY APPEAL HAS BEEN FILED BY THE LEGAL HEIRS/EXECUTORS OF THE ESTATE OF LATE SHRI V.C. MEHTA CHALLENGING THE ABOVE ADDITIONS MADE BY THE AO IN THE HANDS OF LATE SHRI V.C. MEHTA. AT THIS, THE LD. A.R. HAS SUBMITTED THAT THOUGH AN APPEAL HAS BEEN FILED BUT THAT HAS BEEN FILED RELATING TO CERTAIN OTHER GROUNDS. HOWEVER, THE ESTATE OF LATE SHRI V.C. MEHTA HAVE OWNED UP OF THE BALANCES LYING IN THE HSBC BANK ACCOUNT A ND HAVE PAID THE TAXES THEREON IN VARIOUS ASSESSMENT YEARS. AT THIS, THE LD. A.R. WAS ASKED TO FILE THE COPY OF THE GROUNDS OF APPEAL FILED BY THE ESTATE OF LATE SHRI V.C. MEHTA AGAINST THE ASSESSMENT ORDER IN THE CASE OF LATE SHRI V.C. MEHTA, THE LD. A.R . ACCORDINGLY SUBMITTED THE COPY OF GROUNDS OF APPEAL IN THE CASE OF LATE SHRI V.C. MEHTA WHICH FOR THE SAKE OF CONVENIENCE IS REPRODUCED AS UNDER: GROUND NO.1: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO ERRED IN PASSING THE ASSESSMENT ORDER ARBITRARILY. THE APPELLANT SUBMITS THAT THE ORDER OF ASSESSMENT IS BAD IN LAW AND NEEDS TO BE STRUCK DOWN. G ROUND NO. 2 : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO ERRED IN OBSERVING THAT TH E LEGAL HEIR CLAIMED THE BENEFICIAL OWNER - SHIP OF THE HSBC BANK ACCOUNT. THE APPELLANT SUBMITS THAT THE SAID OBSERVATIONS OF LD. A.O. IS ARBITRARY AND WITHOUT APPRECIATING THE CORRECT FACTS AND CIRCUMSTANCES OF THE CASE. GROUND NO. 3 : ON THE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO ERRED IN OBSERVING THAT THE APPELLANT DID NOT CO - OPERATE BY NOT PROVIDING THE COPY OF HSBC BANK STATEMENT. THE APPELLANT SUBMITS THAT THE SAID OBSERVATIONS OF ID. A.O. IS ARBITRARY AND ANOOP VRAJLAL MEHTA 7 WITHOUT APPRECIATING THE CORRECT FACTS AND CIRCUMSTANCES OF THE CASE. G ROUND NO. 4: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO ERRED IN NOT GRANTING THE CREDIT OF RS.2,68,90,154 PAID BY THE APPELLANT ON 30.03.2012 ON ACCOUNT OF SELF ASSESSMENT TAX. THE APPELLANT PRAYS THAT THE ACTION OF LD.AO MAY KINDLY BE TREATED AS BAD IN LAW AND THE CREDIT OF SUCH PAID SELF ASSESSMENT TAX MAY KINDLY BE DIRECTED TO BE ALLOWED. ALTHOUGH SUCH PAYMENT WAS MADE FOR AY 2012 - 13, S INCE PART OF INCOME HAS BEEN ASSESSED TO TAX FOR ASSESSMENT YEAR UNDER APPEAL, IT IS IMPERATIVE THAT THE CORRESPONDING PART OF CREDIT FOR TAX IS ALSO ALLOWED THIS YEAR. GROUND NO. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO ERRED IN WRONGLY CALCULATING THE AMOUNT OF INTEREST PAYABLE ON ACCOUNT OF SECTION 234B OF THE INCOME TAX ACT, 1961. THE APPELLANT PRAYS THAT THE CALCULATION OF LD. AO MAY KINDLY BE DIRECTED TO BE REVISED. THE APPELLANT CRAVES, LEAVE TO ADD, AMEND, ALTER, OMIT ANY OF THE GROUNDS OF APPEAL BEFORE THE HEARING OF THE APPEAL, IF SO ADVISED. 5 . ON A PPRAISAL OF THE ABOVE MENTIONED ORDER , THE HONBLE TRIBUNAL IN ITA. NO. 3672/M/2016 IN THE CASE TITLE D AS SMT. DEVAUNSHI ANOOP MEHTA VS. PCIT CENTRAL - 2, MUMBAI DATED 14.12.2016 HAS ALREADY BEEN DECIDED THAT THE AMOUNT WHICH HAS BEEN SHOWN IN THE ORDER OF 263 OF THE ACT HAS ALREADY BEEN ASSESSED IN THE HANDS OF LATE SHRI. V.C. MEHTA. SINCE, THIS AMOUNT HAS AL READY BEEN ASSESSED IN THE HANDS OF LATE SHRI V.C. MEHTA THEREFORE, THE SAME IS NOT REQUIRED TO BE ASSESSED ON PROTECTIVE BASIS IN THE HANDS OF THE SMT. DEVAUNSHI ANOOP MEHTA AS WELL AS IN THE HANDS OF THE ASSESSEE ANOOP VRAJLAL MEHTA . I N VIEW OF THE SAID CIRCUMSTANCES WHEN THE ANOOP VRAJLAL MEHTA 8 FINDING HAS ALREADY BEEN GIVEN IN THE ITA. NO. 36 72/M/2016 MENTIONED IN THE CASE , NO DOUBT, THE ORDER DATED 14.12.2016 IS WRONG AGAINST LAW AND FACTS THEREFORE THE SAME IS HEREBY ORDERED TO BE SET ASIDE. 6 . IN THE RESULT , APPEAL OF THE ASSESSEE IS HEREBY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 17.07. 2017 SD/ - SD - ( RAJENDRA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 17.07. 201 7 V.P.SINGH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI