Asstt.CIT, Cir.2, Nashik, Nashik V. Shri Nilkanth Hiraman Patil, Nashik

ITA 454/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9970 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-09-2012
• Assessment Year: misc
• Appeal Filed On: 13-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIB JAIN
• Keywords: Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 454/PN/2011 (BLOCK PERIOD: 1-4-1996 TO 25-3-2003) ASSTT. CIT CIR. 2, NASIK .. APPELLANT VS. SHRI NILKANTH HIRAMAN PATIL RIDHI PARK, TILAK WADI CORNER SHARANPUR ROAD, NASIK 422 002 PAN ABKPP 4541 L RESPONDENT APPELLANT BY : SHRI RAJIB JAIN RESPONDENT BY : WRITTEN SUBMISSIONS ORDER PER G.S. PANNU, A.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II NASIK DATED 7-2-2011 WHICH, IN TURN, HAS ARISEN FROM ORDER DATED 29-11-2 007 PASSED BY THE ASSESSING OFFICER, UNDER SECTION 158BD R.W.S. 1 58BC OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAININ G TO THE BLOCK PERIOD 1-4-1996 TO 25-3-2003. 2. THE REVENUE IN ITS APPEAL HAS RAISED THE FOLLOWI NG GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 5,45,000/- MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) ERRED IN HOLDING THAT THERE WAS NO DISPU TE REGARDING AVAILABILITY OF FUNDS WITH THE ASSESSEE O N 20- 10-10997 FOR MAKING THE PAYMENT OF RS. 5,45,000/- O UT OF TOTAL PAYMENT OF HIS 50% SHARE TO SHRI KOLHE. 3. THE CIT(A) ERRED IN ACCEPTING THE FACTS THAT THE FUNDS WERE AVAILABLE WITH THE ASSESSEE ON 20-10-199 7 FOR MAKING THE SAID PAYMENT, HOWEVER, AS PER AGREEM ENT DATED 29-9-1997 THE AMOUNT WAS PAID ON 29-9-1997 AN D THE ASSESSEE HAD NO CASH AVAILABLE ON THAT DATE AS PER AGREEMENT DATED 28-3-2001. 2 ITA NO 454/PN/11 NILKAN TH H PATIL BLOCK PERIOD: 1-4- 1996 TO 25-3-2003 4. THE ORDER OF THE CIT(A) BE VACATED AND THAT OF T HE AO BE RESTORED. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN INDIVIDUAL CARRYING ON THE BUSINESS OF CONSTRUCTION AND LAND DEALING, ETC. THERE WAS SEARCH ACTION ON 2-3-2003 IN THE CAS E OF OTHER PARTY I.E. MR. BALASAHEB KOLHE. DURING THE COURSE OF SAI D SEARCH, IT WAS REVEALED THAT THE ASSESSEE ALONG WITH TWO OTHERS EN TERED INTO AN AGREEMENT WITH MR. KOLHE FOR PURCHASE OF PLOTS AT R S. 58,57,095/-. THE ASSESSEE AND TWO OTHERS PAID TOTAL ADVANCE OF R S. 43,06,000/- ON VARIOUS DATES TO SAID MR. BALASAHEB KOLHE AGAINS T THE PURCHASE OF CERTAIN PLOTS. THE SHARE OF THE ASSESSEE WAS 50 %. THE ASSESSING OFFICER ASSESSING MR. BALASAHEB KOLHE INT IMATED THE ASSESSING OFFICER OF THE ASSESSEE REGARDING IMPUGNE D TRANSACTION AND ALSO SUPPLIED THE COPY OF THE AGREEMENT BETWEEN THE PARTIES AND ACCOUNT EXTRACTS OF THE ASSESSEE AND TWO OTHERS . BASED ON THE SAID INTIMATION RECEIVED, NOTICE U/S 158BD OF THE A CT WAS ISSUED TO ASSESSEE ON 11-11-2005 IN RESPONSE TO WHICH ASSESSE E FILED RETURN OF INCOME FOR THE BLOCK PERIOD SHOWING UNDISCLOSED INCOME AT RS. NIL. THE ONLY ISSUE OF DIFFERENCE IS REGARDING DAT E OF PAYMENT OF RS. 10,90,000/- TO SHRI KOLHE BY THE ASSESSEE AND T WO OTHERS. AS PER THE AGREEMENT TO SELL DATED 29-9-1997 WITH MR. BALASAHEB KOLHE, RS. 12,35,000/- OF THE TOTAL AMOUNT OF RS. 43,06,00 0/- PAID TO MR. BALASAHEB KOLHE, WAS SHOWN TO HAVE BEEN PAID BY THE ASSESSEE AND TWO OTHERS ON 29-9-1997 IN CASH. THE ASSESSEE HOWE VER, CLAIMED THAT ON 29-9-1997 ONLY RS. 1,45,000/- WAS PAID TO M R. KOLHE AND THE BALANCE OF RS. 10,90,000/- WAS ACTUALLY PAID TO MR. KOLHE ON 20-10- 1997. ON THE BASIS OF AGREEMENT DATED 29-9-1997 TH E ASSESSING OFFICER HELD THAT RS. 12,35,000/- WERE PAID BY THE ASSESSEE AND TWO OTHERS TO MR. KOLHE ON 29-9-1997 AND ACCORDINGLY TA KING 50% SHARE OF THE ASSESSEE IN THE SAID TRANSACTION OF RS. 10, 90,000/- I.E. RS. 3 ITA NO 454/PN/11 NILKAN TH H PATIL BLOCK PERIOD: 1-4- 1996 TO 25-3-2003 5,45,000/- WAS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD. ON APPEAL, THE CIT(A) HELD THAT THE ADDITION OF RS. 5,45,000/- WAS NOT WARRANTED AND THE SAME WAS DIREC TED TO BE DELETED. 4. DURING THE PROCEEDINGS BEFORE US, THE LEARNED DR APPEARING FOR THE REVENUE VEHEMENTLY CONTENDED THAT THE CIT(A ) WAS NOT JUSTIFIED IN DELETING THE IMPUGNED ADDITION AND SUP PORTED THE ORDER OF THE ASSESSING OFFICER. ON THE OTHER HAND, THE ASSE SSEE VIDE WRITTEN SUBMISSIONS FILED ON 11-9-2012 CONTENDED THAT IN TH E PRESENT CASE, THE ASSESSMENT IS COMPLETED U/S 158BC R.W.S. 158BD OF THE ACT. THE PERSON ACTUAL SEARCHED WAS MR. BALASAHEB KOLHE AND WHOSE ASSESSMENT U/S 158BC OF THE ACT WAS COMPLETED IN M ARCH 2005. HOWEVER, IN THE PRESENT CASE THE NOTICE U/S 158BD O F THE ACT WAS ISSUED ON 11-11-2005 I.E. AFTER 7 MONTHS FROM THE D ATE OF PASSING OF ASSESSMENT ORDER FOR THE BLOCK PERIOD IN THE CASE O F PERSON WHO WAS SUBJECTED TO SEARCH ACTION. THEREFORE, THE NOTICE I SSUED U/S 158BD OF THE ACT IN THE PRESENT CASE IS BAD IN LAW. IN T HIS BEHALF, ASSESSEE PLACED RELIANCE ON THE DECISION OF CO-ORDINATE BENC H OF THIS TRIBUNAL IN THE CASE OF SHRI RAMCHANDRA MAHADEO PATIL VS. AS STT. CIT IN ITA NO. 583/PN/2006 FOR BLOCK PERIOD 19-1-1992 TO 2001- 02 DATED 31 ST DECEMBER 2008. IN THIS VIEW OF THE MATTER, IT WAS S UBMITTED THAT THE CIT(A) WAS JUSTIFIED IN DELETING THE IMPUGNED ADDIT ION. 5. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED DR APPEARING FOR THE REVENUE AND ALSO GONE THROUGH THE WRITTEN S UBMISSIONS FILED BY THE ASSESSEE. A PERUSAL OF THE RECORD REVEALS TH AT IN THE PRESENT CASE THE ASSESSMENT WAS COMPLETED U/S 158BC R.W.S. 158BD OF THE ACT. THE ASSESSMENT U/S 158BC IN THE CASE OF MR. B ALASAHEB KOLHE WHO WAS SEARCHED ON 25-3-2003, WAS COMPLETED IN MAR CH 2005 AND THEREAFTER ON 11-11-2005 THE ASSESSING OFFICER ISSU ED A NOTICE U/S 158BD OF THE ACT WHICH IS AFTER 7 MONTHS FROM THE D ATE OF PASSING OF 4 ITA NO 454/PN/11 NILKAN TH H PATIL BLOCK PERIOD: 1-4- 1996 TO 25-3-2003 ASSESSMENT ORDER FOR THE BLOCK PERIOD IN THE CASE O F PERSON SEARCHED. . IN THE CIRCUMSTANCES THEREFORE, THE CI T(A) WAS JUSTIFIED IN DELETING THE IMPUGNED ADDITION. SIMILAR SITUATI ON AROSE IN THE CASE OF SHRI RAMCHANDRA MAHADEO PATIL (SUPRA) WHERE IN CONSIDERING THE FACTS OF THE BEFORE IT, THE BLOCK ASSESSMENT WA S HELD TO BE LEGALLY INVALID. THIS VIEW WAS STRENGTHENED ON THE BASIS OF DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MANOJ AGGARWAL VS. DY. CIT CENTRAL CIR. 3, NEW DELHI (2008) 113 IT D 377 (DEL) (SB) WHEREIN IT HAS BEEN HELD THAT THE SATISFACTION FOR THE PURPOSE OF INITIATING PROCEEDINGS U/S 158BD OF THE ACT HAS TO BE RECORDED BEFORE COMPLETION OF THE RELEVANT ASSESSMENT OF THE PERSON SEARCHED. ADMITTEDLY, IN THE PRESENT CASE, THE NOT ICE U/S 158BD OF THE ACT HAS BEEN ISSUED BY THE ASSESSING OFFICER ON 11-11-2005 I.E. AFTER 7 MONTHS FROM THE DATE OF PASSING OF BLOCK AS SESSMENT ORDER IN THE CASE OF PERSON SEARCHED. IN THIS VIEW OF THE M ATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN DI RECTING THE ASSESSING OFFICER TO DELETE THE IMPUGNED ADDITION THOUGH FOR DIFFERENT REASONS. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER 2012. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 28 TH SEPTEMBER 2012 ANKAM COPY TO:- ASSESSEE DEPARTMENT THE CIT (A)-II NASIK THE CIT-II NASIK THE DEPARTMENTAL REPRESENTATIVE, B BENCH, I.T.A.T ., PUNE. BY ORDER //TRUE COPY// SR. P.S. I.T.A.T., PUNE 5 ITA NO 454/PN/11 NILKAN TH H PATIL BLOCK PERIOD: 1-4- 1996 TO 25-3-2003