Appeal Details
Counselvise Citation
[2022] 106 COUNSELVISE.COM (IT) 9097 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 6 month(s) 16 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
07-08-2022
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
D
Assessment Year
2009-2010
Appeal Filed On
21-01-2018
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER ITA NOs. 458, 459 & 460/MUM/2018 (A.Y: 2007-08, 2008-09 & 2009-10) DCIT, Central Circle – 5(1) Room No. 1928, 19 th Floor Air India Building, Nariman Point Mumbai – 400 021 v. M/s. Reva Properties Ltd., 324, Master Mind – IV Royal palms, Aarey Milk Colony Goregaon (E), Mumbai - 400065 PAN: AABCR9185P (Appellant) (Respondent) C.O. Nos. 182, 183 & 184/Mum/2018 [ARISING OUT OF ITA NOs. 458, 459 & 460/MUM/2018 (A.Y: 2007-08, 2008-09 & 2009-10)] M/s. Reva Properties Ltd., 324, Building No. F Master Mind – IV, 3 rd Floor Royal palms, Aarey Milk Colony Goregaon (E), Mumbai - 400065 PAN: AABCR9185P v. DCIT, Central Circle – 5(1) Room No. 1928, 19 th Floor Air India Building, Nariman Point Mumbai – 400 021 (Appellant) (Respondent) ITA NOs. 464 & 465/MUM/2018 (A.Y: 2009-10 & 2010-11) DCIT, Central Circle – 5(1) Room No. 1928, 19 th Floor Air India Building Nariman Point, Mumbai – 400 021 v. M/s. Martand Properties Ltd., 324, Master Mind – IV Royal palms, Aarey Milk Colony Goregaon (E), Mumbai - 400065 PAN: AAFCM8856N (Appellant) (Respondent) 2 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., C.O. Nos. 188, & 189/MUM/2018 [ARISING OUT OF ITA NOs. 464 & 465/MUM/2018 (A.Y: 2009-10 & 2010-11) M/s. Martand Properties Ltd., 324, Building No. F Master Mind – IV, 3 rd Floor Royal palms, Aarey Milk Colony Goregaon (E), Mumbai - 400065 PAN: AAFCM8856N v. DCIT, Central Circle – 5(1) Room No. 1928, 19 th Floor Air India Building, Nariman Point Mumbai – 400 021 (Appellant) (Respondent) Assessee by : Shri Vijay Mehta Department by : Shri T. Shankar & Smt Mahita Nair Date of Hearing : 11.07.2022 Date of Pronouncement : 08.08.2022 O R D E R PER BENCH 1. The above appeals are filed by the Department and Cross Objections filed by the assessee. The Department has filed the appeals for A.Ys.2007-08, 2008-09 and 2009-10 in the case of Reva Properties Ltd. The assessee has filed the respective cross-objections in each of the three years. Similarly, the Department has filed appeals for A.Ys. 2009-10 and 2010-11 in the case of Martand Properties Ltd. and the assessee has filed the respective cross-objections. 3 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., 2. The ground raised by the Department in all the appeals are common. As per the solitary grounds of appeal raised by the Department in all the appeals, the Department has challenged the action of the Ld.CIT(A) in deleting the protective addition in the case of the assessee. It is the contention of the revenue that the substantive addition in the case of Shree Global Tradefin Ltd. has not reached the finality. 3. The facts of the case briefly are, for the sake of convenience, the facts of the case of Reva Properties for A.Y. 2007-08 is considered as lead case. 4. The assessee has filed the return of income on 22.10.2007 declaring the total income at ₹.NIL. Subsequently, an action u/s. 132(1) of the Income-tax Act, 1961 (in short ‘Act’) was conducted by the investigation wing in Jogia group on 04.03.2010. Pursuant to the search action, notice u/s. 153A r.w.s. 153C of the Act was issued to the assessee. The return of income was filed by the assessee in response to the notice u/s. 153A r.ws. 153C of the Act on 26.02.2011 declaring the total income of ₹.NIL. The assessment was completed u/s. 143(3) r.w.s. 153C of the Act on 26.12.2011 determining the total income at ₹.6,00,00,000/-. Subsequently, notice u/s. 147 of the Act was issued to the assessee on 4 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., the basis of the information received by the Assessing Officer from the investigation wing. The information received from the investigation wing has been described by the Assessing Officer in Para No. 2 of the assessment order as the reason for reopening the assessment. The assessee has filed the return of income in response to the notice u/s. 148 of the Act on 02.04.2014 along with the letter requesting the Assessing Officer to treat the return filed in response to the notice u/s. 153A r.w.s. 153C of the Act as having been filed in response to the notice u/s. 148 of the Act. 5. In the assessment order, the Assessing Officer observed that the assessee has given advance to Shree Global Tradefin Ltd. During the course of the above referred survey, the source of such advance was examined and it was found that the assessee has in turn received share application money of ₹.6,00,00,000/- from one company. The assessment order contains the details about the share application money received by the assessee. Following are the specific finding of the Assessing Officer in respect of genuineness of share application money received by the assessee. The finding of the Assessing Officer on this issue has been given which is extracted below: - 5 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., “5.6.3 It is also pertinent to mention here the flow of funds as explained in the survey report which is as follows: Money from different proprietorship concerns were transferred to some of the 53 investor companies. These 53 investor companies further invested as share application money into the 14 companies of the Jogia group including the assessee who further invested into the Shree Global Tradefin Ltd. as share application money. On verification of the bank details of the assessee it is seen that the assessee has transferred or withdrawn from its bank account immediately after deposits were made into its account. Immediate withdrawal of money after deposits almost each and every time, speaks of the sinister motives of the assessee whether it is for not coming into the eyes of the regulatory authorities or to not show funds with unexplainable sources in its bank accounts, etc. However no details have been mentioned in the survey report regarding the source of funds in those proprietorship concerns or of some of the assessee’s investor companies. Also in absence of any details filed by the assessee regarding the source of funds of these concerns or how the unaccounted income of the Lloyds Steel Industries reached into their hands as asserted by the assessee, it is almost impossible to come to the conclusion that the source of the investments is actually of M/s Lloyds Steel Industries.” 6. On the basis of these findings, the Assessing Officer has added ₹.6,00,00,000/- u/s. 68 of the Act. Further, the Assessing Officer held that the assessee must have earned commission at the rate of 3% from Shree Global Tradefin Ltd. Accordingly, an amount of ₹.18,00,000/- has been added as commission income. At this stage, it is relevant to note that the similar addition on account of share application money received has been made in the hands of Shree Global Tradefin Ltd also. 7. When the matter travelled before the CIT(A), the addition made by the Assessing Officer in the hands of the assessee as well as in the hands 6 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., of Shree Global Tradefin Ltd. was challenged by the respective assessees. In case of Shree Global Tradefin Ltd., the CIT(A) has given a finding that the transaction of receipt of share application money was not genuine. Accordingly, the CIT(A) has confirmed the order passed by the Assessing Officer. 8. The assessee filed an appeal before the Ld.CIT(A) on legal issue as well as on merit. The Ld.CIT(A) upheld the reopening of assessment as the same was done on the basis of survey proceedings in which department has come to know certain information concerning the share application money received by the assessee and accordingly held that the reopening was based upon the prima-facie belief that the income has escaped assessment and thus dismissed the legal issue raised by the assessee. 9. On the merit, the Ld.CIT (A) allowed the appeal of the assessee by observing that after receiving share application money, the assessee gave the same amount to Shree Global Tradefin Ltd., and found that the funds were having one-to-one nexus between the amount received and paid by the assessee. The Ld. CIT(A) also reproduced the detailed chart showing movement of funds on Page nos. 127 to 161 of the appellate order and 7 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., on the said basis came to the conclusion in Para Nos. 8.9 on Page Nos. 176, 177 of appellate order that the conduit Jogia Group entities have no financials to elicit or draw out any genuine investments, much less investment at huge premium of crores of rupees. He further held that these entities are merely conduit for transferring money to Shree Global Tradefin Ltd., immediately after receiving the same from investing companies. As stated above, the Ld.CIT(A) has also disposed of the appeal in the case of Shree Global Tradefin Ltd. simultaneously, in whose hand the same amount was added by the Assessing Officer on the ground that the ultimate destination of money has not been established as genuine. The Ld.CIT(A) gave a finding that the conclusion of the Assessing Officer to the effect that the source of money has not been established is correct. According to the Ld.CIT(A), the amount received from 53 companies were not genuine. However, the Ld.CIT(A) was of the view that the said amount is to be taxed in the hands of the entity who is the ultimate destination of the money. Consequently, he held the amount is to be taxed in the hands of Shree Global Tradefin Ltd. The Ld.CIT(A) was of the view that the present assessee being the conduit, has transferred the money from various entities to Shree Global Tradefin Ltd. and, hence, 8 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., the addition cannot be made in the hands of the present assessee. The finding of the CIT(A) is reproduced below: “8.29 The AR has also contended that similar addition u/s. 68 is made in the cases of Shree Global Tradefin Ltd. (‘SGTL) whose appeals are pending before me. While the amounts received through these entities are not genuine and creditworthiness is not there of the 54 entities, there is almost one-to-one correlation between amount received by 14 entities and amount received through them by SGTL. SGTL is the ultimate beneficiary who has received the money. Hence, it is only logical that the amount is assessed in the hands of SGTL. The assessing officer was queried on this and he has reported that the additions in the case of Jogia Group of cases be treated as protective addition. I am of the view that the additions must be made only in the hands of Shree Global Tradefin Ltd. since the Jogia Group entities are merely conduit entities and the money was raised and brought in for Shree Global Tradefin Pvt. Ltd. Simultaneously, appellate orders are passed in those appeals also holding the same. The same view has been taken in the appellate orders of even date in the case of the appeals in SGTL before me.” 10. Based on the above, the Ld.CIT(A) held that the amount received as share application money at a premium during the year fails the test of creditworthiness and genuineness. The addition u/s. 68 of the Act was, accordingly, sustained in the hands of Shree Global Tradefin Ltd. and the same was deleted in the case of the assessee. The Ld.CIT(A) also deleted the consequential addition made by the Assessing Officer in the assessee’s case under the head income from other sources. 11. At the time of hearing, Ld. DR submitted that the addition has been correctly made in the hands of the assessee. The Ld. DR has basically 9 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., relied upon the finding given in the assessment order. Since the genuineness of the transaction with 54 group companies has not been established, the addition has been made correctly. 12. Apart from this, the Ld. DR has filed the revised grounds of appeal wherein the deletion has been challenged on merit. The said revised grounds of appeal are reproduced as under: “i. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has justified in deleting the additions without appreciating the facts that the assessee, during assessment proceedings, failed to provide any documents, agreements or any other evidences any time during the re-assessment proceedings even though being given sufficient time and opportunities that could establish the identity, genuineness and creditworthiness of the investor companies. ii. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has justified in deleting the additions without appreciating the facts that the assessee, during assessment proceedings, failed to explain as to why any investor will agree to invest at a premium of Rs. 240/- per share in a company which does not conduct any business activity and has no significant assets. iii. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has justified in deleting the additions without appreciating the facts that the assessee used colourable device to defraud the revenue in the manner that so-called offered income in the form of share application money by Lloyds Steel Industries Ltd. which was set off against the loss of approximately 1000 crores, and Lloyds Steel Industries Ltd. had not paid any penny in taxes. iv. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has justified in deleting the additions without appreciating the facts that information was received from DGIT(Inv.), Mumbai that the assessee had taken accommodation entries for the year concerned and also during survey proceedings the directors of the Group were confronted that they generated 10 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., unaccounted income and the same has been invested in Shree Global Tradefin Ltd.” 13. The Ld.AR has objected to the admission of the revised grounds of appeal. The detailed objection of the Ld.AR to the admission of the revised grounds are as under: - 1. The Revenue has filed the revised grounds during the course of the hearing on 11.07.2022. The assessee vehemently objects to filing of such additional grounds of appeal on the following reasonings; (i) The additional ground of appeal has been submitted upon the commencement of the hearing and the same is not accompanied by any authorization of the PCIT. (ii) There is no prayer for admission of the revised ground of appeal. (iii) Most importantly, the so-called revised grounds of appeal are not only contrary to the original ground of appeal but it completely changes the subject-matter of dispute before the Hon’ble Tribunal. In the original ground of appeal, the revenue has merely objected to the deletion of the protective addition. However, in the revised grounds of appeal, the revenue seeks to argue the entire matter afresh on merit. (iv) It is an admitted fact that the Assessing Officer has conveyed to the CIT(A) during the course of appellate proceedings that the impugned addition may be treated as protective addition. Once, the Assessing Officer has taken a position, the ground of appeal cannot be raised before the Hon’ble Tribunal which is contrary to the position taken by the Assessing Officer. Reliance in this regard is placed upon the decisions in the cases of ACIT Prakash L. Shah [115 ITD 167 (Mum) (SB)], Mahindra and Mahindra Ltd. v. DCIT [313 ITR 263 (Mum) (SB)] and ACIT v. DHL Operations BV [108 TTJ 152 (Mum) (SB)]. 11 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., 2. The so-called revised grounds of appeal are in effect additional ground of appeal and the same cannot be admitted as no prayer has been made or no reasoning has been cited as to why the additional grounds have been raised. The additional grounds of appeal are misconceived and needs to be dismissed.” 14. The Ld.AR has also argued that the issue under consideration is squarely covered by the decision of the Hon’ble Tribunal in the case of Cikura Properties Ltd., which is also one of the 14 group of companies. It was submitted that the grounds of appeal raised by the Department in the case of Cikura Properties Ltd. is identical to that of the assessee. Further, the order of the CIT(A) in the case of Cikura Properties Ltd. is also identical to that of the assessee. He brought the attention of the Tribunal to the relevant portion of the order of the Ld.CIT(A) reproduced by the Tribunal on Page No. 9 and 10 of the order. It is submitted that the issue is squarely covered in favour of the assessee. 15. From the proceedings on the record, we observe that it seems on earlier occasion the Ld.DR had asked for adjournment on the ground that revised ground of appeal needs to be filed in the present case. It seems that the Ld.DR has advised the Assessing Officer to file the improved version of the grounds taken before the Tribunal. The revised grounds has been filed at the time of hearing and the same has been objected by 12 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., the assessee herein. It is observed that the revised grounds have not been authorized by the PCIT. In the present case, it is seen that the revised grounds were merely put up before the PCIT but there is no record to suggest that the PCIT had directed the Assessing Officer to file the said grounds of appeal. Any revised ground or additional ground to be filed by the revenue has to be authorised by the PCIT. This is the mandate of S.253(2) of the Act. Thus, the revised ground filed by the revenue is not in accordance with the provisions of the law. Apart from this, there is no explanation or prayer for admission of the revised grounds, which is materially different from original ground of appeal. The reason as to why the revised grounds of appeal has been filed has to be brought on record before the same can be adjudicated by the Bench. 16. Apart from this, it is seen that the original ground of appeal is in consonance with submission made by the Assessing Officer before the Ld.CIT(A). The Assessing Officer had asked the Ld.CIT(A) to treat the addition in the case of the assessee as a protective addition. Keeping in line with this action of the Assessing Officer, the original ground of appeal raised by the revenue on the issue of deletion of protective addition. However, the revenue has now filed a revised ground which effectively 13 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., treats the addition as substantive addition and it wants the Tribunal to decide the issue on merit of the case. Therefore, the revised grounds are nothing but an additional ground and in light of the fact that it changes the whole character of the appeal the same cannot be admitted. Further, in absence of any authorization by the PCIT and without any prayer for admission of these grounds of appeal, the revised ground all the more reasons not to be admitted. 17. So far as the original ground of appeal is concerned, we notice that the identical issue has been decided by the coordinate bench in the case of Cikura Properties Ltd. wherein it has been held by the coordinate bench as under: - “9. We have heard the rival contentions and perused the materials placed before us including the written submissions by both the sides and impugned order passed by ld. CIT(A). The undisputed facts are that the assessee is a group company of Jogia Group and invested a sum of Rs. 43.50 Crores in M/s. Shree Global Tradefin Ltd. The assessee received the equivalent sum from 25 companies as share application money and passed on the same to M/s. Shree Global Tradefin Ltd. immediately as advance which was later on converted into share capital. The A.O. as well as CIT(A) recorded a findings that 25 companies who invested in the assessee company are included in the list of said 53 investor companies which have advanced money to 14 companies including the assessee and same amount has been transferred by all 14 companies including the assessee to one company M/s. Shree Global Tradefin Ltd. Thus, the amounts have been transferred by 14 companies including assessee to M/s. Shree Global Tradefin Ltd., and the flow of funds are clearly evident and discernible. As such, there is no doubt as to the source of money. The AO added 43,50,00,000/- u/s. 68 of the Act on protective basis in the hands of the assessee and simultaneously 14 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., similar addition of Rs. 43,50,00,000/- was made to the income of Shree Global Tradefin Ltd. on substantive basis on the ground that source of money was not proved. The A.O. also added to the income of the assessee, commission @ 3% on the total investments in Shree Global Tradein Ltd., and accordingly addition of Rs. 1,30,50,000/- was also made. Both these additions were deleted by ld. CIT(A) by holding that the assessee is a pass through entity whereas the addition was confirmed in the hands of M/s. Shree Global Tradefin Ltd. Pertinent to note that in the appellate proceeding, the Tribunal deleted the addition in the case of Shree Global Tradefin Ltd., in ITA No. 7310 to 7313/Mum/2017, vide order dated 15.10.2019 and there is no finding by the Coordinate Bench that the said amount of Rs. 43.50 Cr belongs to the present assessee. We note from the perusal of the order of coordinate bench that the addition in the case of M/s. Shree Global Tradefin Ltd. has been deleted on merit. Thus, the coordinate bench has not given any finding that the money belongs to the assessee. We also note that both the authorities below have recorded a finding of fact that there is one to one nexus between the funds received from 25 companies and advanced to M/s. Shree Global Tradefin Ltd. and the assessee is merely a conduit. As stated elsewhere in this order that in the case of the assessee, the addition was made on protective basis. The protective addition is always made whenever there is a doubt about the correct entity or correct assessment year. Thus, where there is a doubt as to whom the income belongs to, the addition is made in the hands of two persons, i.e. on substantive basis in the hands of one person and on protective basis in the hands of the other person. The protective addition would become substantive, only and only if substantive addition is deleted by the appellate authority on the ground that the income belonged to the person in whose hands protective addition has been made. The protective addition does not survive if the substantive addition has been confirmed or substantive addition has been deleted on merits. In the present case before us the addition was made on protective basis while on substantive basis it was made in the case of M/s. Shree Global Tradefin Ltd. The said substantive addition was deleted by the coordinate bench vide order dated 15.10.2015 passed in ITA No. 7310 to 7313/Mum/2017 dated 15.10.2018 on merits. In our considered opinion the protective addition has to go as the substantive addition was deleted on merits. We do not find any force in the arguments/written submissions of the ld. DR that where substantive addition is deleted the protective has to restored to the A.O. as in the case of M/s. Shree Global Tradefin Ltd., assessment has not attained finality. We are therefore inclined to dismiss the appeal of the revenue by upholding the order of CIT(A).” 15 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., 18. Since the issue involved in the present appeal filed by the Department are identical, therefore, respectfully following the above decision, the appeal filed by the Department is dismissed. 19. The facts in the other appeals filed by the revenue are mutandis mutatis, therefore, the all the appeals filed by the department in the other AY and other sister concerns are accordingly dismissed. 20. So far as the cross-objections filed by the assessees are concerned, the assessee made the following submissions: 21. Vide the Cross Objection, the assessee has challenged the validity of reopening u/s 148 of the Act. It has been contended vide Ground No.2 of the cross objection that the notice issued u/s. 148 of the Act is bad in law and the conditions of S. 147 of the Act are not satisfied. Reliance is placed upon the documents at paper book no. 3, which contains letter filed by the assessee to the Assessing Officer requesting for supplying the documents in connection with reassessment and the approval of the higher authority for initiating the reassessment proceedings. Vide letter dated 12.07.2018, addressed by the Assessing Officer to the assessee group, the said correspondence has been forwarded and the same is part 16 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., of paper book no. 3. Vide letter dated 13.03.2014, the Assessing Officer has forwarded proposal for reopening to the Commissioner of Income tax (CIT). The same has been forwarded by the Addl. CIT to the CIT vide letter dated 18.03.2014. Finally, the Ld.CIT has granted approval on 20.03.2014, copy of which is available on Page No. 5 of the above referred Paper Book. 22. Before us, it was submitted that the above correspondences, which are part of paper book no. 3, are filed before the bench as an additional evidence. The assessee has made a prayer for admission of the same vide the covering letter of paper book no. 3. It is submitted that the documents contained in the paper book no. 3 are on the Departmental record, which the assessee came to possess upon making request for the same to the Assessing Officer. As such, these documents may not be considered as an additional evidence and in any case since it is a part of the Departmental record, the same needs to be admitted by the bench. It is also contended that the documents are very crucial, and affects the very validity of assessment proceedings and, hence, in the interest of justice, these documents are admitted. 17 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., 23. On merit of the validity of the approval granted by Ld.CIT, it has been contended that the Ld.CIT has given the approval in respect of the reassessment proceedings in the case of the assessee and few other entities by merely putting his initial on the above document, which is a proceeding sheet. There is no valid satisfaction as contemplated u/s. 151 of the Act. It is further contended that the Ld.CIT has not applied his mind before granting the approval. 24. Reliance in this regard is placed upon several decisions. It was held by the Hon'ble Madhya Pradesh High Court in the case of S. Goenka Lime & Chemicals Ltd. (56 taxmann.com 390) that where the approval is given by recording 'yes, I am satisfied', it cannot be said that the approving authority has applied his mind. The Hon'ble High Court relied upon the decision of the co-ordinate bench of the High Court in the case of Arjun Singh v. ADIT (246 ITR 363). It was held that the approval was given mechanically and, hence, the same is unsustainable. Further it was submitted that the Special Leave Petition against the said decision of the Hon'ble Madhya Pradesh High Court was dismissed by the Hon'ble Supreme Court in the case of S. Goenka Lime & Chemicals Ltd. (64 taxmann.com 313). 18 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., 25. Further, reliance is also placed upon the decision of the jurisdictional High Court in the case of Svitzer Hasira P. Ltd. v. ACIT (441 ITR 19). In the above case also, the Jt. CIT had given approval by recording 'yes, I am satisfied’. Relying upon the above referred decision of the Hon'ble Madhya Pradesh High Court in the case of CIT v. S. Goenka Lime & Chemicals Ltd., the Hon'ble Bombay High Court held that there is complete non-application of mind on the part of Jt. CIT while grating the sanction u/s. 151 of the Act. It was held that the jurisdictional condition of compliance to Sec. 151 of the Act was not satisfied. While arriving at the above conclusion, the Hon'ble Bombay High Court also placed reliance upon the decision of the Hon'ble Supreme Court in the case of Chhugamal Rajpal v. S.P. Chaliha (79 ITR 603). 26. It is further contended that the Department has not produced any material other than the above referred document which is part of paper book no. 3 to demonstrate the application of mind by the Ld.CIT. The Department has relied upon the above referred proceeding sheet, which only contains the initial of the Ld.CIT. Thus, in the present case, the Ld.CIT has not mentioned even the phrase 'yes I am satisfied' and, hence, the facts of the present case are on a much stronger footing than that 19 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., before the Hon'ble High Courts. In light of this, in our considered view also, the reopening is bad in law and hence the consequential reassessment order also quashed. 27. Ld AR clarified that the issue of mechanical approval by PCIT arises only in the case of Reva Properties Ltd. for A.Y. 2007-08 and 2008-09, i.e. C.O. Nos. 182/Mum/2018 and 183/Mum/2018. For other years, although the assessee has filed cross-objections, the issue of approval does not arise as the reopening has been initiated within a period of 4 years and the approval of the Commissioner is not required. 28. Ld.DR objected to the above submissions and submitted that the approval process is standard, PCIT has discussed and deliberated the issues with the Assessing Officer. In this regard he relied on the case of Hon’ble Delhi High Court in the case of CIT v. N. Tarika Properties Investment (P.) Ltd., (2013) 40 taxmann.com 525 (Delhi). 29. Considered the rival submissions and material placed on record. The assessee has made submissions on the above jurisdictional issues in particular C.O. Nos. 182/Mum/2018 and 183/Mum/2018, however, we already considered the issue of protective addition and substantive 20 ITA NOs. 458, 459, 460, 464 & 465/MUM/2018 C.O. Nos. 182, 183, 184, 188 & 189/Mum/2018 M/s. Reva Properties Ltd., & M/s. Martand Properties Ltd., addition and adjudicated in favour of the assessee and against the revenue. In our view, the issues raised by the assessee in the cross objections become infructuous at this stage. Therefore, we are inclined to dismiss the grounds raised in the cross objections by the assessee. 30. In the result, all the appeals filed by the department are dismissed and all the Cross objections filed by the assessee are also dismissed. Order pronounced in the open court on 08 th August, 2022. Sd/- Sd/- (AMIT SHUKLA) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 08.08.2022 Giridhar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum
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