ARUNKUMAR R, MEHTA, MUMBAI V. DCIT CEN CIR 1, MUMBAI

ITA 4620/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3764 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 07-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIPUL MODY
• Keywords: Income from undisclosed sources
• Section: 143(3); 147; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , !' , # , $ BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO.4620/MUM/2014 ( # % &% / ASSESSMENT YEAR: 2005-06) SHRI ARUNKUMAR R. MEHTA 7 TH FLOOR, MEHTA MAHAL, 15 TH MATHEW ROAD, OPERA HOUSE, MUMBAI - 400004 / VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1 9 TH FLOOR, OLD CGO BUILDING, M.K.ROAD, NEW MARINE LINES, MUMBAI - 400020 ./ ./ PAN/GIR NO. : AABPM3327M ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI NITESH JOSHI & VIPUL MODY DEPARTMENT BY: SHRI GANESH BARE / DATE OF HEARING: 13.01.2016 /DATE OF PRONOUNCEMENT: 11.05.2016 ! / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 05.05.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-36, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RE LEVANT TO THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE RE-OPENING OF ASSESSMENT ITA NO.4620/MUM/2014 ASSESSMENT YEAR: 2005-06 2 TAKING RECOURSE TO THE PROVISIONS OF SECTION 147 AN D 148 OF THE INCOME TAX ACT, 1961. IT IS SUBMITTED THAT THE LEARNED ASSESSING OFFICER HAS FAILED TO BRING ANY MATERIAL ON RECORD TO SUGGEST T HAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED THE ASSESSMENT. THE NOTICE ISSUED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 148 OF THE ACT AND THE ASSESSMENT MADE UNDER SECTION 147 R.W.S. 143(3) ARE BAD IN LAW AND OUGHT TO BE CANCELLED. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING ADDITION OF RS.80,192/- AS UNACCOUNTED INCOME FOR THE YEAR. THE CONCLUSION ARRIVED AT BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) AND BY THE LEARNED ASSESSING OFFICER IS BASED ON CONJECTURES A ND SURMISES AND IS CONTRARY TO THE FACTS. THE ADDITIO N MADE IS BAD IN LAW AN OUGHT TO BE DELETED. 3. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE A.Y.205-06 ON 31.08.2005 DECLARING TOTAL INCOME OF RS.23,06,695/- . THE CASE WAS REOPENED U/S.147 OF THE INCOME TAX ACT, 1961( IN SH ORT THE ACT) AFTER DULY RECORDING THE REASONS FOR REOPENING. NOTICE U /S. 148 OF THE ACT DATED 27.03.2012 WAS ISSUED AND SERVED UPON THE ASS ESSEE ON 27.03.2012. IN RESPONSE TO THE NOTICE ISSUED U/S.1 48 OF THE ACT, THE ASSESSEE FILED RETURN OF INCOME ON 11.04.2012 DECLA RING THE INCOME RETURNED EARLIER U/S. 139 OF THE ACT. THE ASSESSEE REQUESTED FOR REASONS FOR REOPENING WHICH WAS SUPPLIED ON 27.03.2012. TH E ASSESSEE ALSO FILED AN OBJECTION VIDE LETTER DATED 16.04.2012 AND ALSO ATTENDED THE PROCEEDING IN RESPONSE TO THE NOTICE U/S. 143(2) AN D 143(1) OF THE ACT. INFACT THE INFORMATION WAS RECEIVED FROM THE CBDT T HAT THE ASSESSEE ALONG WITH OTHER FAMILY MEMBERS WAS BENEFICIARY OF ONE DRYADE STIFTUNG AND DIANESE STIFTUNG TRUST, VADUZ HAVING A CCOUNT IN LGT ITA NO.4620/MUM/2014 ASSESSMENT YEAR: 2005-06 3 BANK LIECHTENSTEIN. THE BANK STATEMENT WAS ALSO RE CEIVED ON 19.04.2002. THE BALANCE TO THE TUNE OF US $ 438714 6 INCLUDING INTEREST WAS STANDING WITH THE SAME NAME. THE SAID INFORM ATION WAS NOT MENTIONED IN THE RETURN. THEREAFTER THE NOTICE U/S . 148 OF THE ACT WAS GIVEN AND THE ASSESSEES SHARE WAS ASSESSED TO THE TUNE OF RS.5,35,23,181/- I.E. 25% OF THE SAID AMOUNT. ACCO RDINGLY THE ASSESSMENT FOR THE YEAR 2003-04 WAS COMPLETED. ON 30.12.2009 ASSESSING THE INCOME TO THE TUNE OF RS.5,37,78,070/ - FOR A.Y.2003-04. THE ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y.200 5-06 DECLARING RETURNED INCOME TO THE TUNE OF RS.23,06,695/- ON 31 .08.2005. IN THE RELEVANT A.Y.2005-06 THE MATTER WAS TAKEN UP AFTER ISSUANCE OF NOTICE U/S.148 OF THE ACT ON ACCOUNT OF UNDISCLOSED INCOME OF INTEREST OF ABOVE SAID TRANSACTION WHICH HAS BEEN CHALLENGED BEFORE T HE ASSESSING OFFICER AND THE ASSESSING OFFICER DECLINED THE CONTENTION O F THE ASSESSEE AND THE LEARNED CIT(A) CONFIRMED THE SAME. THEREFORE T HE ASSESSEE IS BEFORE US. ISSUE NO.1 & 2:- 4. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE RECORD CAR EFULLY. IT IS NOT DISPUTED THAT THE PROVISION U/S. 147 OF THE ACT CAN BE INVOKED WHEN THE INCOME OF THE ASSESSEE IS ESCAPED INCOME OF ASSESSM ENT. HOWEVER THE PROCEDURE HAS ALSO BEEN MENTIONED IN THE SECTION 14 7 OF THE ACT. NO DOUBT BASICALLY IT IS REQUIRED TO BE SEEN WHETHER T HE INCOME OF THE ASSESSEE IS THE INCOME ESCAPED ASSESSMENT OR NOT. THE PRESENT CASE IS IN CONNECTION WITH THE ASSESSMENT YEAR OF 2005-06. TH E CASE OF THE ITA NO.4620/MUM/2014 ASSESSMENT YEAR: 2005-06 4 ASSESSEE WAS REOPENED FOR THE YEAR 2003-04 ON RECEI PT OF THE INFORMATION FROM CBDT WHEN THE ASSESSEE AND HIS FAM ILY MEMBERS WERE FOUND BENEFICIARY OF ONE DRYADE STIFTUNG AND D IANESE STIFTUNG TRUST, VADUZ. THEREAFTER THE SHARES OF THE ASSESSE E TO THE TUNE OF RS.5,35,23,181/- ALONG WITH INTEREST WAS ADDED TO T HE INCOME. IT ALSO CAME INTO NOTICE THAT SUBSEQUENTLY THE ASSESSMENT O F THE ASSESSEE FOR THE A.Y.2004-05 WAS REOPENED ON THE GROUND OF THAT THE INTEREST OF THE SAID INCOME / AMOUNT WAS NOT SHOWN IN THE RELEVANT RETUR N OF INCOME FOR THE A.Y.2004-05. NO DOUBT AT THAT TIME THERE WAS NO IN FORMATION WITH THE ASSESSING OFFICER TO WHICH IT CAN BE ASSUMED THAT T HE INCOME OF THE ASSESSEE IS THE ESCAPED INCOME. ASSESSEE CHALLENGE D THE SAME AND THE LEARNED CIT(A) HAS HELD THAT THE REOPENING OF THE A SSESSMENT FOR THE ASSESSMENT YEAR 2004-05 IS BAD IN LAW BY VIRTUE OF ORDER DATED 11.03.2013. IT WAS STATED THAT THIS ORDER OF LEAR NED CIT(A) WAS NOT CHALLENGED BY THE REVENUE. NO DOUBT THE PRESENT AS SESSMENT IS FOR THE YEAR 2005-06 WHICH HAS ALSO BEEN CHALLENGED BY THE ASSESSEE ON THE SAME GROUND. SINCE THE REOPENING WAS ALSO ON IDENT ICAL REASON. ON APPRAISAL OF THE ORDER IN QUESTION NO NEW GROUND HA S BEEN RAISED OR CAME INTO THE NOTICE OF THE ASSESSING OFFICER FOR R EOPENING OF THE CASE. THE ONLY GROUND WHICH HAS BEEN TAKEN BY THE ASSESSI NG OFFICER IS THAT IN THE PREVIOUS YEAR THE INTEREST INCOME WAS RECEIV ED BY THE ASSESSEE BUT THE SAME HAS BEEN SHOWN IN THE ASSESSMENT YEAR OF T HE A.Y.2005-06 IN QUESTION. THE INTEREST HAS BEEN ADDED TO THE INCOM E OF THE ASSESSEE ON THE BASIS OF PRESUMPTION THAT THE ASSESSEE HAVE REC EIVED CERTAIN INTEREST ON THE AMOUNT LYING IN THE BANK IN GERMANY. NO DO UBT THERE IS NO REASON ON RECORD TO WHICH IT CAN BE ASSUMED THAT AN Y SPECIFIC INTEREST OF ITA NO.4620/MUM/2014 ASSESSMENT YEAR: 2005-06 5 THE ASSESSEE IS THE ESCAPED INCOME. THEREFORE IN THE SAID CIRCUMSTANCES WE ARE OF THE VIEW THAT THE LEARNED CIT(A) HAS WRON GLY UPHELD THE REOPENING U/S. 147/148 OF THE ACT. HENCE THE ORDER IN QUESTION DATED 05.05.2014 IS HEREBY HELD BAD IN LAW THEREFORE THE SAME IS HEREBY ORDERED TO BE SET ASIDE. SINCE THE ISSUE HAS BEEN D ECIDED IN FAVOUR OF ASSESSEE AND REOPENING HAS BEEN ORDERED TO BE SET A SIDE THEREFORE THERE IS NO NEED TO DECIDE THE ISSUE NO.2 BECAUSE THEREON WOULD BE IN ACADEMIC IN NATURE. ACCORDINGLY THESE ISSUES ARE D ECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 5. IN RESULT THE APPEAL OF THE ASSESSEE IS HEREBY A LLOWED ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MAY, 2016 SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) / ACCOUNTANT MEMBER #$ /JUDICIAL MEMBER % & MUMBAI; ' DATED : 11 TH MAY, 2016 MP MP MP MP ' ( )# !* +*& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ( ) / THE CIT(A)- 4. ( / CIT 5. )*+ $$,- , ,- , % & / DR, ITAT, MUMBAI 6. +./ 0 / GUARD FILE. ' / BY ORDER, ) $ //TRUE COPY// , / ' (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI