M/s Himanshu Developers(Bhagwan H.Soungar)(HUF), Pune V. DCIT,C.C.1(2),Pune, Pune

ITA 441/PUN/2007

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7519 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 28-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S SINGH
• Assessee Lawyers: K SRINIVASAN
• Keywords: Unexplained investment; Document seized; Block assessment; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR J UDICIAL MEMBER AND SHRI D. KARUNAKARA RAO A CCOUNTANT M EMBER ITA NO. 441 /PN/ 20 0 7 ( BLOCK PERIOD 1990 - 91 TO 2000 - 01 ) M/S. HIMANSHU DEVELOPERS (BHAGWAN H. SOUNGAR)(HUF ) , APPELLANT 781/782, RAVIWAR PETH, PUNE , PAN : AABHH8481B VS. DCIT, CENTRAL CIRCLE 1(2), PUNE RESPONDENT APP ELLANT BY : SHRI K. SRINIVASAN RESPONDENT BY : SHRI A.S. SINGH ORDER PER D KARUNAKARA RAO AM THIS IS A N APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF CIT(A) - I, PUNE, DATED 13.03.2007. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN NOT APPRECIATING AND ACCEPTING THE CONTENTION OF THE APPELLANT THAT UNEXPLAINED INVESTMENT OF RS. 429360/ - MADE IN PURCHASE OF PROPERTY AT KONDHVA IS OUT OF THE SUPPRESSED SALES AND UNDISCLOSED INCOME SHOULD HAVE BEEN TAKEN OF AN AMOUNT OF GROSS PROFIT ON THESE SUPPRESSED SALES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN NOT APPRECIATING AND ACCEPTING THE CONTENTION OF THE APPELLANT THAT UNEXPLAINED INVESTMENT OF RS. 7,00,000/ - MADE IN PURCHASE OF PROPER TY AT RAVIWAR PETH IS OUT OF THE SUPPRESSED SALES AND UNDISCLOSED INCOME SHOULD HAVE BEEN TAKEN OF AN AMOUNT OF GROSS PROFIT ON THESE SUPPRESSED SALES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION M ADE ON ACCOUNT OF WORK IN PROGRESS OF A PROPERTY CALLED HIRA COMPLEX ON THE BASIS OF REPORT OF THE DVO OBTAINED IN THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS AND REJECTING THE APPELLANTS CONTENTION THAT THIS IS A DISCLOSED TRANSACTION AS THE SAME IS REFLE CTED IN THE BOOKS OF ACCOUNTS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN CONFIRMING THE LEVY OF INTEREST MADE U/S. 158 BFA (I) ITA 441 /PN/ 07 M/S. HIMANSHU DEVELOPERS (BHAGWAN H. SOUNGAR (HUF) ( BLOCK PERIOD 1990 - 91 TO 2000 - 01 ) . 2 2. IN ADDITION TO THE ABOVE, ASSESSEE ALSO RAISED THE FOLLOWING ADDITIONAL GROUND : 5. O N FACTS & CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER ERRED IN ASSUMING JURISDICTION U/S 158BD WITHOUT FOLLOWING DUE PROCESS OF LAW,. THE APPELLANT PLEADS THAT THE ASSESSMENT IS BAD IN LAW. 3. IN SUPPORT OF HIS PRAYER FOR ADMISSION OF ADDITIONAL GR OUND, TH E LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE RAISED IN THE ADDITIONAL GROUND IS PURELY LEGAL IN NATURE AND GOES TO THE ROOT OF THE MATTER AND SHOULD THEREFORE BE ADMITTED FOR ADJUDICATION. IN THIS REGARD, MR. K. SRINIVASAN, COUNSEL FOR THE ASSES SEE MENTIONED THAT THIS APPEAL IS FILED IN 2007 AND AT NUMBER OF OCCASIONS, THE CASE WAS ADJOURN ED FOR WANT OF DOCUMENTS SHOWING REASONS RECORDED BY THE A.O OF THE SEARCHED PERSONS WHO TRANSFERRED THE DOCUMENT TO THE A.O OF THE ASSESSEE BEFORE NOT ICE U/S. 158 BD WAS ISSUED. EVEN AFTER LAPSE OF MANY YEARS, DEPARTMENT HAS NOT COMPLIED WITH THE REQUIREMENTS. FURTHER, HE MENTIONED THAT THE REVENUE FAILED TO DEMONSTRATE WHETHER, THE A.O OF THE SEARCHED PERSONS AND THE ASSESSEE IS ONE AND THE SAME. REF ERRING TO ORDER OF THE TRIBUNAL (A BENCH) IN THE CASE OF M/S. B.G. FOODS PVT. LTD. ITA NO. 70/PN/2009, ORDER DT. 30/7/10, THE COUNSEL ARGUED THAT THE ISSUE ON THE MAIN AS WELL AS THE ADDITIONAL GROUNDS MAY BE SET ASIDE TO THE FILES OF THE A.O. FOR DECIDI NG THE GROUNDS AFRESH. 4. PER CONTRA, THE LD. DR OPPOSED THE ADMISSION OF ADDITIONAL GROUND AND HOWEVER, HE DOES NOT REFUTE THE FACT OF NON FURNISHING OF THE REASONS RECORDED FOR ISSUE OF NOTICE U/S 158BD OF THE ACT BEFORE THE TRIBUNAL TILL THE DATE OF H EARING BEFORE THE TRIBUNAL . HOWEVER, H E MENTIONED THAT IT IS LIKELY THAT THE ASSESSING OFFICER IN BOTH THE CASES WAS THE SAME AND HENCE NO OCCASION OF TRANSFERRING OF SEIZED DOCUMENTS TO THE PRESENT AO. EVEN THIS FACT WAS ALSO NOT SUBSTANTIATED BY THE DR. DURING THE REBUTTAL TIME, THE AR FOR THE ASSESSEE HOWEVER PLEADED THAT THE ASSESSING OFFICER WAS NOT COMPETENT TO INITIATE THE PROCEEDINGS UNDER SECTION 158BD OF THE INCOME - TAX ACT, 1961 WITHOUT RECORDING SATISFACTION IN TERMS OF THE JUDGMENT OF THE HONB LE SUPREME COURT IN MANISH MAHESHWARI V. ACIT AND ANOTHER, 289 ITR 341 (SC). 5. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE. WE HAVE ALSO PERUSED THE CITED DECISION OF THE TRIBUNAL IN THE CASE OF B.G. FOODS ITA 441 /PN/ 07 M/S. HIMANSHU DEVELOPERS (BHAGWAN H. SOUNGAR (HUF) ( BLOCK PERIOD 1990 - 91 TO 2000 - 01 ) . 3 PVT. LTD AND CITED JUDGME NT OF THE APEX COURT . AT THE REQUEST OF THE LD COUNSEL, WITHOUT GOING INTO THE MERITS OF THE ADDITIONS, WE FIND IT IS APPROPRIATE TO EXAMINE THE ADMISSIBILITY OF THE ADDITIONAL GROUND AND THE NEED FOR SETTING ASIDE THIS ISSUE TO THE FILES OF THE AO FOR WAN T OF THE SUPPLY OF THE REASONS TO THE ASSESSEE. THERE IS NO DISPUTED ON THE ISSUE IF THE ADDITIONAL GROUND CONSTITUTE LEGAL ON IN NATURE AND WE ARE OF THE OPINION, THAT THE SAID ADDITIONAL GROUND IS NOT ONLY LEGAL BUT GOES TO THE ROOT OF THE MATTER AND THE REFORE IT SHOULD BE ADMITTED BY US IN VIEW OF THE SETTLED ISSUE IN THIS REGARD AT THE LEVEL OF THE APEX COURT IN THE CASE OF NTPC LTD . IT IS A FACT THAT THE REVENUE WAS GIVEN NUMBER OF CHANCES TO DEMONSTRATE THAT THERE EXISTS REASONS RECORDED BY THE AO BEF ORE THE ISSUE OF NOTICE U/S 158BD OF THE ACT AND THE REVENUE HAS FAILED TO DO THE NEEDFUL IN THIS REGARD. WE, THEREFORE, ADMIT THE ADDITIONAL GROUND OF APPEAL AND SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF A.O ALONG WITH O RIGINAL GROUNDS FOR FRESH ADJUDICAT ION AS WANTED BY THE ASSESSEES COUNSEL. THE A.O IS REQUESTED TO GIVE REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND SUPPLY THE SAID REASONS TO THE ASSESSEE AND CONSIDER ALL THE OBJECTIONS TO BE RAISED DURING THE SET ASIDE PROCEEDINGS. WE HAVE ALSO CONSIDERED THE DECISION OF THIS TRIBUNAL IN THE CASE OF BGFOODS (SUSPRA) WHERE ON IDENTICAL FACTS, THE MATTER WAS SET ASIDE TO THE FILES OF THE AO FOR WANT OF THE REASONS RECORDED BY THE AO FOR THE PURPOSE OF ISSUE OF NO TICE U/S 158BD OF THE ACT. IN RESULT, THE GROUNDS AS WELL AS THE ADDITIONAL GROUNDS ARE SET ASIDE . 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 28TH FEBRUARY , 201 1 SD/ - SD/ - ( I.C. SUDHIR ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED THE 28TH FEBRUARY , 201 1 US COPY OF THE ORDER IS FORWARDED TO : 1. THE A PP ELLANT 2. THE RESPONDENT 3. THE CIT(A) - I, PUNE 4. THE CIT - (CENTRAL), PUNE 5. THE D.R. ITAT B BENCH 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITA 441 /PN/ 07 M/S. HIMANSHU DEVELOPERS (BHAGWAN H. SOUNGAR (HUF) ( BLOCK PERIOD 1990 - 91 TO 2000 - 01 ) . 4 INCOME TA X APPELLATE TRIBUNAL PUNE