Smt. Hassena B.N., V. ACIT,

ITA 49/BANG/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0171 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-02-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 10-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Recovery proceedings
• Section: 153A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.49 & 50/BANG/2014 ASSESSMENT YEARS : 2004-05 & 2007-08 SMT. HASSENA B.N., PROPX. M/S. ORIENTAL GRANITES & MARBLES, NO.30, KIADB INDUSTRIAL AREA, KATERNAHALLI, HASSAN. PAN: AAPPH 9893P VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : MS. NEERA MALHOTRA, CIT(DR) DATE OF HEARING : 27.07.2016 DATE OF PRONOUNCEMENT : 29.07.2016 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINS T THE COMMON ORDER DATED 07.10.2013 OF THE CIT(APPEALS)-VI, BANG ALORE FOR THE ASSESSMENT YEARS 2004-05 & 2007-08 INTER ALIA ON THE FOLLOWING GROUNDS:- ITA NOS.49 & 50/BANG/2014 PAGE 2 OF 7 A.Y. 2004-05 1. THE ORDER OF THE LEARNED AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES AND THE FACTS AND CIRCUMSTANCES IN TH E APPELLANT'S CASE. 2. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSE D UNDER SECTION 153C R.W.S. 143[3] OF THE ACT UNDER THE IMPUGNED OR DER ON THE GROUND THAT:- I. THE SEARCH INITIATED IN THE CASE OF THE APPELLA NT IS ILLEGAL AND ULTRA VIRES THE PROVISIONS OF SECTION 132[1][A], [B ] & [C] OF THE ACT; II. THAT THE SEARCH IS CONDUCTED NOT ON THE BASIS OF ANY PRIOR INFORMATION OR MATERIAL INDUCING ANY BELIEF BUT PUR ELY ON THE SUSPICION AND THEREFORE, THE ACTION UNDER SECTION 1 32[2] IS BAD IN LAW [ 224 ITR 19 [SC] ] AND CONSEQUENT ASSES SMENT UNDER SECTION 153A IS NULL AND VOID- AB-INITO ON TH E PARITY OF THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF AJITH JAIN, REPORTED IN 260 ITR 80. III. THE LEARNED AUTHORITIES BELOW HAS NOT DISCHAR GED THE BURDEN, OF PROVING THAT THERE IS A VALID INITIATION OF SEAR CH UNDER SECTION 132[1][A], [B] & [C] OF THE ACT, ITS EXECUT ION AND ITS COMPLETION IN ACCORDANCE WITH LAW TO RENDER THE PRO CEEDINGS VALID AND TO' ASSUME JURISDICTION TO MAKE AN ASSESS MENT UNDER SECTION 153A OF THE ACT. 3. THE LEARNED ASSESSING OFFICER FAILED TO APPRECIA TE THAT A VALID SEARCH IS A SINE QUA NON FOR MAKING A VALID ASSESSM ENT UNDER SECTION 153C OF THE ACT ON THE PARITY OF THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF AJIT JAIN, REPORTED IN 260 ITR 80 AND ALSO RELIANCE IS PLACED ON THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF C. RAMAIAH REDD Y VS. DCIT, REPORTED IN 339 ITR 210. 4. THUS THE ORDER OF ASSESSMENT PASSED BY THE LEARN ED ASSESSING OFFICER IS BAD IN LAW AS THE MANDATORY CONDITIONS T O INVOKE THE JURISDICTION U/S. 153C OF THE INCOME-TAX ACT, 1961 DID NOT EXIST OR HAVING NOT BEEN COMPLIED WITH AND CONSEQUENTLY T HE ASSESSMENT MADE IS BAD IN LAW FOR WANT OF REQUISITE JURISDICTION. ITA NOS.49 & 50/BANG/2014 PAGE 3 OF 7 5. WITHOUT PREJUDICE THE APPELLANT DENIES HERSELF L IABLE TO BE ASSESSED ON A TOTAL INCOME OF RS. 28,77,910/- AS DETERMINED BY THE LEARNED ASSESSING OFFICER AS AGAINST THE INCOME REPORTED OF RS. 19,77,910/- BY THE APPELLANT, UNDER THE FACTS AND C IRCUMSTANCES OF THE CASE. 6. THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED I N LAW IN MAKING AN ADDITION OF RS.9,00,000/- AS UNEXPLAINED INVESTMENT S UNDER THE PROVISIONS OF SECTION 69 OF THE ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. THE LEARNED ASSESSING OFFICER FAILED TO APPRECIA TE THE FACT THAT THE APPELLANT HAS NOT MADE ANY PAYMENTS TO M/S. TOO L MASTERS TOWARDS ADVANCE OF PURCHASE OF SAWING MACHINERIES O F RS.9,00,000/- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE LEARNED ASSESSING OFFICER FAILED TO APPRECIA TE THE FACT THAT THE SUPPLIER I.E. M/S. TOOL MASTER AND ALSO THE APP ELLANT HAS CATEGORICALLY DENIED ANY SUCH RECEIPT OR PAYMENT OF CASH UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST UNDER SECTION 234 B & C OF THE INCOME TAX ACT UNDER THE F ACTS AND CIRCUMSTANCES OF THE CASE. THE CALCULATION OF INTE REST UNDER SECTION 234 B & C OF THE ACT IS NOT IN ACCORDANCE W ITH LAW AS THE RATE, AMOUNT, PERIOD AND METHOD OF CALCULATING INTE REST IS NOT DISCERNABLE FROM THE ORDER OF ASSESSMENT. 10. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBST ITUTE, AMEND OR DELETE ANY OR ALL OF THE GROUNDS OF APPEAL URGED AB OVE. 11. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DUR ING THE HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL BE A LLOWED IN THE INTEREST OF EQUITY AND JUSTICE. A.Y. 2007-08 1. THE ORDER OF THE LEARNED AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW , EQUITY , WEIGHT OF EVIDENCE , PROBABILITIES AND THE FACTS AND CIRCUMSTANCES IN TH E APPELLANT'S CASE . ITA NOS.49 & 50/BANG/2014 PAGE 4 OF 7 2. THE APPELLANT DENIES HERSELF LIABLE TO BE ASSESS ED UNDER SECTION 153C R.W.S. 143[3] OF THE ACT UNDER THE IMPUGNED OR DER ON THE GROUND THAT:- I. THE SEARCH INITIATED IN THE CASE OF THE APPELLA NT IS ILLEGAL AND ULTRA VIRES THE PROVISIONS OF SECTION 132[1][A], [B ] & [C] OF THE ACT; II. THAT THE SEARCH IS CONDUCTED NOT ON THE BASIS OF ANY PRIOR INFORMATION OR MATERIAL INDUCING ANY BELIEF BUT PUR ELY ON THE SUSPICION AND THEREFORE, THE ACTION UNDER SECTION 1 32[2] IS BAD IN LAW [ 224 ITR 19 [SC] ] AND CONSEQUENT ASSES SMENT UNDER SECTION 153A IS NULL AND VOID- AB-INITO ON TH E PARITY OF THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF AJITH JAIN, REPORTED IN 260 ITR 80. III. THE LEARNED AUTHORITIES BELOW HAS NOT DISCHAR GED THE BURDEN, OF PROVING THAT THERE IS A VALID INITIATION OF SEAR CH UNDER SECTION 132[1][A], [B] & [C] OF THE ACT, ITS EXECUT ION AND ITS COMPLETION IN ACCORDANCE WITH LAW TO RENDER THE PRO CEEDINGS VALID AND TO' ASSUME JURISDICTION TO MAKE AN ASSESS MENT UNDER SECTION 153A OF THE ACT AND CONSEQUENTLY NO PROCEED INGS MORE SO THE PROCEEDINGS UNDER SECTION 153C DO NOT H AVE LEGS TO STAND. 3. THE LEARNED ASSESSING OFFICER FAILED TO APPRECIA TE THAT A VALID SEARCH IS A SINE QUA NON FOR MAKING A VALID ASSESSM ENT UNDER SECTION 153C OF THE ACT ON THE PARITY OF THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF AJIT JAIN, REPORTED IN 260 ITR 80 AND ALSO RELIANCE IS PLACED ON THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF C. RAMAIAH REDD Y VS. DCIT, REPORTED IN 339 ITR 210. 4. THUS THE ORDER OF ASSESSMENT PASSED BY THE LEARN ED ASSESSING OFFICER IS BAD IN LAW AS THE MANDATORY CONDITIONS T O INVOKE THE JURISDICTION U/S. 153C OF THE INCOME-TAX ACT, 1961 DID NOT EXIST OR HAVING NOT BEEN COMPLIED WITH AND CONSEQUENTLY T HE ASSESSMENT MADE IS BAD IN LAW FOR WANT OF REQUISITE JURISDICTION. 5. WITHOUT PREJUDICE THE APPELLANT DENIES HERSELF LIABLE TO BE ASSESSED ON A TOTAL INCOME OF RS. 26,30,410/- AS DETERMINED BY THE LEARNED ASSESSING OFFICER AS AGAINST THE TOTAL INCOME REPORTED BY THE APPELLANT OF RS. 15,30,410/- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS.49 & 50/BANG/2014 PAGE 5 OF 7 6. WITHOUT PREJUDICE THE LEARNED CIT[A] IS NOT JUST IFIED IN LAW IN CONFIRMING THE DISALLOWANCE OF A SUM OF RS. 11,00,0 00/- MADE BY THE LEARNED ASSESSING OFFICER UNDER THE PROVISIONS OF SECTION 40[A][IA] OF THE ACT, BEING THE PAYMENTS MADE BY TH E APPELLANT TOWARDS LEASE RENTALS TO M/S . ORIENTAL GRANITES, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. THE LEARNED AUTHORITIES FAILED TO APPRECIATE THE FA CT THAT THE PROVISIONS OF SECTION 40[A][IA] OF THE ACT IS NOT A PPLICABLE TO THE FACTS OF THE INSTANT CASE SINCE THE RECIPIENT/PAYEE I.E. M/S. ORIENTAL GRANITES HAVE ALREADY DECLARED THE PAYMENT S MADE BY THE APPELLANT IN THEIR RESPECTIVE RETURNS AND ALSO IT IS MAINTAINING ITS BOOKS OF ACCOUNTS AS PER THE SCHEME OF THE ACT AND IS FURTHER SUBJECT TO AUDIT UNDER THE PROVISIONS OF SECTION 44 -AB OF THE ACT AND HENCE NO DISALLOWANCE IS WARRANTED UNDER THE PR OVISIONS OF SECTION 40[A][IA] OF THE ACT UNDER THE FACTS AND CI RCUMSTANCES OF THE CASE. 8. THE LEARNED AUTHORITIES BELOW ARE NOT JUSTIFIED IN LAW IN NOT APPRECIATING THAT THE DEDUCTION OF TAX IS ONLY ONE MODE OF RECOVERY OF TAX AND ONCE THE TAX IS RECOVERED BY AN Y OTHER MODE AND THE RECOVERY OF TAX ON THE AMOUNT WHICH HAS SUF FERED TAX IN THE HANDS OF PAYEE IS NOT PERMISSIBLE SINCE THE SAM E WILL AMOUNT TO TAXING THE SAME INCOME TWICE I.E. ONCE DISALLOWA NCE OF EXPENDITURE IN THE HANDS OF THE PAYER AND ONCE AGAI N THE AMOUNTS BEING TAXED IN THE HANDS OF THE PAYEE UNDER THE FAC TS AND CIRCUMSTANCES OF THE CASE. 9. WITHOUT PREJUDICE THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 40[A][IA] OF THE ACT IS ATTRACTED ONLY TO THE AMOUNTS WHICH ARE PAYABLE AT THE END OF THE YEAR AND NOT TO THE ENTIRE ACTUAL PAYMENTS MADE/PAI D DURING THE YEAR UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 10. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER A S PER THE PARITY OF REASONING OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF KARANVIR SINGH 349 ITR 692, THE APPELLANT DENIES HE RSELF LIABLE TO BE CHARGED TO INTEREST UNDER SECTION 234 B & 234 C OF THE INCOME TAX ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. FURTHER THE LEVY OF INTEREST UNDER SECTION 234 B & 234 C OF THE ACT IS ALSO BAD IN LAW AS THE PERIOD, RATE, QUANTUM AND METHOD OF CALCULATION ADOPTED ON WHICH INTEREST IS LEVIED ARE ALL NOT DISCERNABLE AND ARE WRONG ON THE FACTS OF THE CASE. ITA NOS.49 & 50/BANG/2014 PAGE 6 OF 7 11. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBS TITUTE, AMEND OR DELETE ANY OR ALL OF THE GROUNDS OF APPEAL URGED AB OVE. 12. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DU RING THE HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL BE A LLOWED IN THE INTEREST OF EQUITY AND JUSTICE. 2. THESE APPEALS WERE LISTED FOR HEARING ON 27.07.2 016, BUT NONE APPEARED ON BEHALF OF THE ASSESSEE, DESPITE SERVICE OF NOTICE OF HEARING. SINCE NONE APPEARED ON BEHALF OF THE ASSESSEE, WE H AVE NO OTHER OPTION, EXCEPT TO HEAR THE APPEALS EX PARTE , QUA THE ASSESSEE. 3. WE HAVE CAREFULLY EXAMINED THE ORDERS OF THE CIT (APPEALS) ON ALL THE GROUNDS RAISED BEFORE ME AND WE FIND THAT THE C IT(APPEALS) HAS ADJUDICATED ALL THE GROUNDS IN DETAIL IN HIS ORDER. SINCE NO DEFECT HAS BEEN POINTED OUT IN THE ORDER OF THE CIT(APPEALS), WE CONFIRM THE SAME. 4. IN THE RESULT, THE APPEALS BY THE ASSESSEE ARE D ISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF JULY, 2016. SD/- SD/- ( A.K. GARODIA ) (SUNIL KUMAR YA DAV ) ACCOUNTANT MEMBER JUDIC IAL MEMBER BANGALORE, DATED, THE 29 TH JULY, 2016. /D S/ ITA NOS.49 & 50/BANG/2014 PAGE 7 OF 7 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.