Shri Unnat Bharatbhai Shah, HUF, Ahmedabad V. The Income Tax Officer, Ward-5(2)(4), (Old Ward-10(4)), Ahmedabad

ITA 470/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1774 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 26-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 29-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Reopening of assessment; Competent authority
• Section: 131; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA YADAV, JUDICIAL MEMBER 1. ./ I.T.A. NO.470/AHD/2016 AY 2009-10 2. ./ I.T.A. NO.471/AHD/2016 AY 2009-10 1.UNNAT BHARATBHAI SHAH HUF 3, MILAP APARTMENT 56-B SWASTIK SOCIETY NAVRANGPURA, AHMEDABAD PAN: AAHHS9829N 2.SMT.DIXA UNNAT SHAH -ADDRESS-SAME- PAN: AQSPS 1178D / VS. 1.THE ITO WARD-5(2)(4) (OLD ITO WARD 10(4) AHMEDABAD 2.THE TO WARD-5(2)(2) AHMEDABAD ( / APPELLANTS ) .. ( / RESPONDENTS ) / APPELLANTS BY : SHRI M.K. PATEL, AR / RESPONDENTS BY : SHRI MUKESH SHARMA, SR.DR / DATE OF HEARING 26/04/2016 / DATE OF PRONOUNCEMENT 28/04/2016 PER SHAILENDRA YADAV, JUDICIAL MEMBER : BOTH THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS)- 5, AHMEDABAD IDENTICALLY DATED 15.12.2015 FOR ASSES SMENT YEAR 2009- ITA NOS.470 & 471/A HD/2016 UNNAT BHARATBHAI SHAH HUF VS. ITO & SMT.DIXA UNNAT SHAH VS. ITO RESPECTIVELY ASST.YEAR 2009-10 - 2 - 10. SINCE THE FACTS AND ISSUES ARE INVOLVED IDEN TICAL, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE APPEAL, I.E. UNNAT BHARATB HAI SHAH, HUF FOR AY 2009-10 AS A LEAD CASE. THE MAIN ISSUE READS AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A)-V, AHMEDABAD HAS ERRED BY NOT CONSIDERING THE APPELLANTS PLEA THAT THE REOPENING OF ASSESSMENT U /S.147 AND PASSING THE ASSESSMENT ORDER U/S.143(3) RWS 1478 OF THE INCOME TAX ACT 1961, BY THE LD.ASSESSING OFFICER ITO WARD 5(2)(4), AHMEDABAD, FOR THE ASSESSMENT YEAR 2009-10, IS BAD ON FACTS AND IN LAW AND THEREFORE, THE ASSESSMENT ORDER PASSED N EEDS TO BE QUASHED BY TREATING IT AS INVALID. 2.1. AT THE OUTSET, LD.COUNSEL FOR THE ASSESSEE POI NTED OUT THAT THE ISSUE OF RE-OPENING IS NOT VALID. THE LD.COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN HIS ACTION AND IT IS AGAINST THE SETTLED PRINCIPLES OF LAW. 2.2. ON THE CONTRARY, LD.SR.DR HAS NOT CONTROVERTE D THE SUBMISSIONS MADE BY THE LD.COUNSEL FOR THE ASSESSEE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ITA NOS.470 & 471/A HD/2016 UNNAT BHARATBHAI SHAH HUF VS. ITO & SMT.DIXA UNNAT SHAH VS. ITO RESPECTIVELY ASST.YEAR 2009-10 - 3 - WE FIND THAT ON IDENTICAL ISSUE, THE COORDINATE BEN CH (ITAT D BENCH AHMEDABAD) IN ITA NO.366/AHD/2015 FOR AY 2006-07, D ATED 21/10/2015, IN THE CASE OF SONAL ARPIT DOSHI VS. I TO HAS BEEN ALLOWED BY OBSERVING AS UNDER:- WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIAL PLACED BEFORE US. THE COPY OF REASONS RECORDED FOR RE-OPENING OF ASSE SSMENT IS AT PAGE NO.5 OF THE ASSESSEE'S PAPER-BOOK, WHICH READS AS UNDER: NO. ITO. WD.-10(4)/REASON U/S 148/2013-14 DT . 26.09.2013 TO SMT. SONAZ ARPIT DOSHI, 5/A, VAISHALI APPARTMENT, 43, PRITAM NAGAR, ELLISBRIDGE, AHMEDABAD. MADAM, SUB: REASON OF REOPENING THE ASSESSMENT U/S. 148 O F THE IT ACT FOR THE A.Y. 2006-07 - REGARDING. PLEASE REFER TO THE ABOVE. 2. IT IS TO INTIMATE THAT BEFORE RE-OPENING OF THE ASSESSMENT PROCEEDINGS FOR THE A.Y. 2006-07 IN YOUR CASE THE REASONS WERE RECORDED BY THE ASSESSING OFFICER IN WRITING AND THE CASE WAS RE-OPENED AFTER TAKING PRIOR APPROVAL OF THE COMPETENT AUTHORITY. HOWEVER, CONSIDERING YOUR REQU EST, THE GIST OF; THE REASONS AS RECORDED BY. THE ASSESSING OFFICER REGAR DING REOPENING THE CASE U/S. 148 OF THE IT. ACT IS MENTIONED HERE UNDER:- ' THE SEARCH & SEIZURE ACTION, CARRIED OUT BY THE D EPARTMENT ON 25.11.2009 IN THE GROUP CASE OF M/S. MAHASAGAR SECU RITIES LTD., AND ALSO COVERED ITS ALL GROUP COMPANIES WHICH WERE CON TROLLED BY SHRI MUKESH M. CHOKSI, AT MUMBAI. SHRI MUKESH M. CHOKSI HIMSELF ITA NOS.470 & 471/A HD/2016 UNNAT BHARATBHAI SHAH HUF VS. ITO & SMT.DIXA UNNAT SHAH VS. ITO RESPECTIVELY ASST.YEAR 2009-10 - 4 - ADMITTED THAT MY ALL GROUP COMPANIES ARE PROVIDING ENTRY FOR TAKING PROFIT OR LOSS BY SHOWING PURCHASE OR SALE OF THE S HARES AND SECURITIES TO VARIOUS PARTIES ACROSS INDIA ON WHICH I WAS CHAR GED CERTAIN COMMISSION FROM THE BENEFICIARY PARTIES. THE SAME I NFORMATION RECEIVED BY; THIS OFFICE SUPPLIED BY THE DIRECTOR OF INCOME- TAX (I & C.I.), NEIV DELHI, VIDE LETTER DATED 07.03.2013 ALONGWITH COPY OF STATEMENT OF SHRI MUKESH M. CHOKSHI RECORDED BY THE DEPARTMENT ON OAT H U/S. 131 OF THE IT. ACT. ACCORDINGLY, ALL THE PURCHASE AND SALE TRA NSACTIONS REGARDING SHARES AND SECURITIES MADE BY YOU THROUGH GROUP COM PANIES BELONGING TO SHRI MUKESH M. CHOKSHI WHICH WAS KNOWN AS MAHASA GAR SECURITIES LTD. WHICH IS TOTALLY UNVERIFIABLE TRANSACTION AS T HE CONTROLLING PERSON NAMELY SHRI MUKESH M. CHOKSHI HIMSELF ADMITTED IN H IS STATEMENT RECORDED ON OATH U/S. 131 ON 16.01.2013 BY SHRI P. S. NAIK, CIT, CENTRAL-46, MUMBAI RECORDED. ON DEEP SCRUTINIZED OF THE DATA/DETAILS RECEIVED IN THIS OFFICE IT IS ASCERTAIN THAT YOU HA VE ALSO INVOLVED FOR TAKING UNVERIFIABLE/BOGUS BENEFICIAL ENTRIES FROM T HE GROUP COMPANIES BELONGS TO SHRI MUKESN CHOKSI DURING THE F.Y. 2005- 06. ACCORDINGLY, ALL THE TRANSACTIONS MADE BY YOU WERE UNVERIFIABLE. HENCE, SAME TRANSACTIONS ALSO SHOULD BE REQUIRED FOR DETAILED V ERIFICATION FROM VARIOUS ASPECTS FOR GENUINENESS OF THE SAID TRANSAC TION AS PER THE INFORMATION SUPPLIED BY THE DIRECTOR OF INCOME-TAX (I & C.L), NEW DELHI IN YOUR CASE BY REASSESSMENT'. 3. THE ABOVE REASONS ARE PROVIDED ON EXPRESS REQUES T MADE BY YOU VIDE ABOVE REFERRED APPLICATION. AS SUCH, YOUR APPLICATI ON STAND DISPOSED OFF, WHICH MAY PLEASE BE NOTED. YOURS FAITHFULLY, SD/- (R.NMEENA) INCOME TAX OFFICE, WARD-10(4) AHMEDABAD' 4. FROM THE ABOVE, IT IS EVIDENT THAT THE ASS ESSING OFFICER HAS SIMPLY REOPENED THE ASSESSMENT FOR THE PURPOSE OF VERIFICA TION OF THE CERTAIN TRANSACTIONS. IN OUR OPINION, WHEN THE REVENUE WANT ED TO VERIFY THE CORRECTNESS OF CERTAIN TRANSACTIONS, THE PROPER COU RSE IS TO ISSUE THE NOTICE U/S 143(2) WITHIN TIME. IF THE REVENUE FAILED TO ISSUE NOTICE U/S 143(2), IT CANNOT ITA NOS.470 & 471/A HD/2016 UNNAT BHARATBHAI SHAH HUF VS. ITO & SMT.DIXA UNNAT SHAH VS. ITO RESPECTIVELY ASST.YEAR 2009-10 - 5 - RESORT TO SECTION 148 FOR THE PURPOSE OF VERIFICATI ON OF CERTAIN TRANSACTIONS. NOTICE U/S 148 CAN BE ISSUED ONLY WHEN THE ASSESSIN G OFFICER RECORDS HIS SATISFACTION WITH REGARD TO ESCAPEMENT OF INCOME. I N THE REASONS RECORDED, THERE IS NO MENTION OF THE ESCAPEMENT OF INCOME; T HEREFORE, IN OUR OPINION, REOPENING OF ASSESSMENT IS NOT VALID AND THE SAME I S QUASHED AND CONSEQUENTIALLY, THE ASSESSMENT ORDER PASSED IN PUR SUANCE TO SUCH NOTICE IS ALSO QUASHED. 4. SINCE THE REVENUE HAS NOT POINTED OUT ANY CONTRA RY MATERIAL ON RECORD, RESPECTFULLY FOLLOWING THE AFORESAID DECISI ON OF THE COORDINATE BENCH OF THIS TRIBUNAL AND TAKING A CONSISTENT VIEW , REOPENING OF THE ASSESSMENT ORDER IS NOT VALID AND THE SAME IS QUASH ED IN BOTH THE APPEALS AND, CONSEQUENTIALLY, THE ASSESSMENT ORDER(S) PASSE D IN PURSUANCE TO SUCH NOTICE IS ALSO QUASHED. SINCE I HAVE QUASHED THE A SSESSMENT ORDERS IN BOTH THE APPEALS, THE ADDITIONS MADE BY THE ASSESSI NG OFFICER IN THE SAID ASSESSMENT ORDERS WHICH ARE CHALLENGED ON MERIT IN THE ASSESSEES TWO APPEALS DO NOT SURVIVE FOR ADJUDICATION BECAUSE THE ASSESSMENTS ITSELF HAVE BEEN QUASHED. 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 28 TH APRIL, 2016 AT AHMEDABAD. SD/- ( SHAILENDRA YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 28/ 04 /2016 !.., .#../ T.C. NAIR, SR. PS ITA NOS.470 & 471/A HD/2016 UNNAT BHARATBHAI SHAH HUF VS. ITO & SMT.DIXA UNNAT SHAH VS. ITO RESPECTIVELY ASST.YEAR 2009-10 - 6 - ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $%& ' / CONCERNED CIT 4. ' ( ) / THE CIT(A)-5,, AHMEDABAD 5. *+, ##%& , %& , $ / DR, ITAT, AHMEDABAD 6. ,01 2 / GUARD FILE. / BY ORDER, * # //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 26.4.16 (1 PAGE DICTATION) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 28.4.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28.4.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER