MILAN B. DALAL, MUMBAI V. ACIT (OSD-II) CIR 7, MUMBAI

ITA 425/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8090 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1993-1994
• Appeal Filed On: 20-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 425/MUM/2014 ASSESSMENT YEAR: 1993 - 94 MILAN B. DALAL BHUPEN CHAMBERS, GROUND FLOOR, DALAL STREET MUMBAI - 400023 VS. ACIT (OSD - II) - 7 AAYAKAR BHAVAN, 4 TH FLOOR, 101, M.K. ROAD, MUMBAI - 400020. PAN NO. AAUPD0935H APPELLANT RESPONDENT ASSESSEE BY : MR. VIPUL JOSHI , AR REVENUE BY : MR. SUMAN KUMAR , DR DATE OF HEARING : 21/09/2017 DATE OF PRONOUNCEMENT : 15/12/2017 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 1993 - 94 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 40 , MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER: 1. THE LD. CIT(A) - 40, MUMBAI FAILED TO APPRECIATE IN FACTS AND IN LAW THAT THE ORDER GIVING EFFECT TO THE ORDER OF THE CIT(A) U/S 250 OF THE INCOME MILAN B. DALAL ITA NO. 425/MUM/2014 2 TAX ACT, 1961 (THE ACT) PASSED BY THE ASSESSING OFFICER WAS BAD IN LAW AND THEREBY ERRED IN NOT DIRECTING THE AO TO CANCEL THE ORDER PASSED. 2. A. THE CIT(A) ERRED IN FACTS AND IN LAW IN CONFIRMING ADDITION OF RS.1,73,290/ - IN RESPECT OF SHARES BELONGING TO THE THIRD PARTIES. B. WHILE DOING SO THE CIT(A) ERRED IN NOT CONSIDERING THE DETAILED WRITTEN SUBMISSION MADE BEFORE HIM. 3. BRIEFLY STATED, THE FACTS OF THE CA SE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY 1993 - 94 ON 19.04.1994 DECLARING TOTAL INCOME OF RS.10,72,000/ - . THE ASSESSING OFFICER (AO) COMPLETED THE ASSESSMENT U/S 143(3) VIDE ORDER DATED 29.03.1996 DETERMINING THE TOTAL INCOME OF RS.27, 83,680/ - . THE CIT(A) VIDE ORDER DATED 08.12.1997 SET ASIDE THE TWO ADDITIONS MADE BY THE AO AS MENTIONED BELOW FOR AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE TO PROVE THE OWNERSHIP OF SHARES. (A) ADDITION OF RS.4,13,502/ - BEING MARKET VALUE OF SHARES ON 16.10.1992 AS LISTED IN PAGE 2 OF THE ASSESSMENT ORDER, WHICH WERE SEIZED FROM THE ASSESSEES PREMISES, (B) ADDITION OF RS.1,48,166/ - REPRESENTING VALUE OF SHARES FOUND IN THE POSSESSION OF THE ASSESSEE DURING THE COURSE OF SEARCH AND CLAIMED BY THE A SSESSEE AS BELONGING TO OTHER PERSONS. THE AO COMPUTED THE TOTAL INCOME AT RS. 23,95,300/ - VIDE ORDER DATED 09.03.2006. 4 . AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). THE 1 ST GROUND RAISED BY THE ASSESSEE IN APPEAL BEFORE THE LD. CIT(A) WAS THAT THE AO ERRED IN FACT AS WELL AS IN LAW IN MILAN B. DALAL ITA NO. 425/MUM/2014 3 PASSING THE ORDER GIVING EFFECT TO THE APPELLATE ORDER BEYOND THE TIME PRESCRIBED UNDER THE ACT. THEREFORE, IT WAS STATED THAT THE ORDER, BEIN G BAD IN LAW BE SET ASIDE. HOWEVER, THE LD. CIT(A) WAS NOT CONVINCED WITH THE SUBMISSION OF THE ASSESSEE AND HELD THAT (I) THE LD. CIT(A) HAD NOT SET ASIDE OR CANCELLED THE ORIGINAL ASSESSMENT MADE IN THE CASE OF THE ASSESSEE ON 29.03.1996, BUT HAD ONLY RESTORED THE ABOVEMENTIONED TWO ISSUES [ (I) RELATING TO ADDITIONS OF RS.4,13,502/ - AND RS.1,48,616/ - ] TO THE FILE OF THE AO, WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AFTER MAKING PROPER INQUIRIES AND AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE , (II) THE IMPUGNED ORDER WAS PASSED BY THE AO FOR GIVING EFFECT TO SUCH DIRECTION ISSUED BY THE LD. CIT(A) AND IT WAS NOT AN ORDER MAKING AN ASSESSMENT DE NOVO, (III) THEREFORE, THE PROVISIONS OF SUB - SECTION (2A) OF SECTION 153 ARE NOT APPLICABLE IN THIS CASE A ND (IV) INSTEAD, THE ASSESSEES CASE IS COVERED BY THE PROVISIONS OF SUB - SECTION (3) OF SECTION 153 OF THE ACT. THE LD. CIT(A) THUS HELD THAT, SINCE THE CIT(A) HAD NOT SET ASIDE OR CANCELLED THE ORIGINAL ASSESSMENT, THE SAID PROVISIONS ARE NOT APPLICABLE TO THE ASSESSEES CASE AND ACCORDINGLY THE PROVISIONS OF SUB - SECTION (3) ARE SQUARELY APPLICABLE AND AS PER THIS SUB - SECTION, THERE IS NO TIME LIMIT PRESCRIBED FOR MAKING A FRESH ASSESSMENT. 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMITS THAT THE PROVISIONS OF SUB - SECTION (2A) OF SECTION 153 ARE APPLICABLE IN THE INSTANT CASE. ON THE OTHER HAND, THE LD. DR SUBMITS THAT THE PROVISIONS OF SUB - SECTION (3) OF SECTION 153 ARE APPLICABLE. MILAN B. DALAL ITA NO. 425/MUM/2014 4 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT M ATERIALS ON RECORD. WE FIND THAT THE CONTENTIOUS ISSUE COULD BE RESOLVED BY GOING THROUGH THE ORDER OF THE ITAT E BENCH, MUMBAI IN ASSESSEES OWN CASE FOR THE IMPUGNED ASSESSMENT YE AR (ITA NO. 1096/MUM/1998). THE GROUNDS RAISED BY THE REVENUE IN THAT APPEAL WERE (I) THE LD. CIT(A) ERRED IN SETTING ASIDE THE ASSESSMENT ON ADDITION OF RS.4,13,000/ - BEING THE VALUE OF SHARES BELONGING TO THE THIRD PARTY WITHOUT ANY REASONABLE BASE, AND (II) THE LD. CIT(A) ERRED IN SETTING ASIDE THE ASSESSMENT ON ADDITION OF RS.1,48,166/ - BEING THE AMOUNT OF VALUE OF SHARES BELONGING TO JHAVERI FAMILY WITHOUT ANY REASONABLE BASIS. IN THE ABOVE CASE, BEFORE THE TRIBUNAL THE LD. DR SUBMITTED THAT THE LD. CIT(A) SHOULD HAVE DECIDED THE ISSUE INSTEAD OF SETTING ASIDE THE SAME. THE TRIBUNAL IN THE ABOVE CASE HELD THE ORDER OF LD. CIT(A) SETTING ASIDE THE ORDER AS PROPER. 6.1 IN VIEW OF THE GROUNDS OF APPEAL FILED BY THE REVENUE BEFORE THE TRIBUNAL, THE SUB MISSION OF THE LD. DR BEFORE THE TRIBUNAL AND THE ORDER OF THE TRIBUNAL, IT BECOMES CRYSTAL CLEAR THAT THE LD. CIT(A) HAS SET ASIDE THE ORDER OF THE AO. THUS THE INSTANT CASE IS COVERED BY PROVISIONS OF SECTION 153(2A). A BARE PERUSAL OF THE PROVISIONS O F SECTION 153 (2A) REVEALS THAT NOTWITHSTANDING ANYTHING CONTAINED IN SUB - SECTIONS (1), (1A), (1B) AND (2) OF SECTION 153, AN ORDER OF FRESH ASSESSMENT IN PURSUANCE OF AN ORDER MILAN B. DALAL ITA NO. 425/MUM/2014 5 U/S 250 CAN BE MADE AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF T HE FINANCIAL YEAR IN WHICH THE ORDER U/S 250 WAS PASSED. IN THE PRESENT CASE THE LD. CIT(A) PASSED THE APPELLATE ORDER ON 08.12.1997. THE AO PASSED THE ORDER GIVING EFFECT TO THE SAID ORDER OF THE LD. CIT(A) ON 09.03.2006. THUS THE ORDER PASSED BY THE A O BEING FAR BEYOND THE TIME LIMIT PRESCRIBED IN THE ACT IN SECTION 153(2A) IS BARRED BY LIMITATION AND THUS BAD IN LAW . IN VIEW OF THE ABOVE, THE ORDER OF THE LD. CIT(A) IS SET ASIDE. 7. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/12/2017. SD/ - SD/ - ( MAHAVIR SINGH ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 15/12/2017 RAHUL SHARMA, SR. P.S. 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