Ashok Bathla, Bangalore V. Pr.C.I.T., Bangalore

ITA 512/BANG/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9053 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 30-07-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 22-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KUMAR CIT BENGALURU
• Assessee Lawyers: G S PRASHANTH
• Keywords: Business income; Revision of order
• Section: 143(3); 153A; 13; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B R BASKARAN , ACCOUNTANT MEMBER IT A NO. 512/BANG/2016 ASSESSMENT YEAR: 2012 - 13 SMT. MALA BATHLA, L/R OF LATE ASHOK BATHLA, NO.361, 7 TH MAIN, HAL 2 ND STAGE, INDIRANAGAR, BENGALURU 560 008. PAN: ACAPB 5672K VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI G.S. P RASHANTH , CA RESPONDENT BY : S HRI P RADEEP KUMAR, C IT(DR)(ITAT ), BENGALURU. DATE OF HEARING : 30.07.2020 DATE OF PRONOUNCEMENT : 05 .0 8 .2020 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 27.1.2016 OF THE CIT PASSED U/S. 263 OF THE INCOME-TAX ACT, 1961 [THE ACT] IN RELATION TO ASSESSMENT YEAR 2012-13. 2. THE ASSESSEE IS AN INDIVIDUAL. THERE WAS A SEAR CH & SEIZURE OPERATION U/S 132 OF THE ACT ON 6.2.2012 IN THE CAS E OF ASSESSEE. AN ORDER OF ASSESSMENT U/S. 153A OF THE ACT FOR AY 2012-13 W AS PASSED U/S. 143(3) R.W.S. 153A OF THE ACT. ITA NO.512/BANG/2016 PAGE 2 OF 4 3. THE ASSESSEE IS A LICENSED BOOK MAKER IN BANGALO RE TRUST CLUB SINCE 1982. A SHOW CAUSE NOTICE WAS ISSUED BY THE CIT ON THE FOLLOWING THREE GROUNDS:- (A) THE ASSESSING OFFICER HAD NOT ASSESSED CASH S EIZURE OF RS.15.91 LAKHS MADE DURING THE COURSE OF SEARCH OPE RATION. (B) THE ASSESSING OFFICER HAD ADDED AN AMOUNT OF RS.1,19,25,000 DISCUSSED AT PARA 12 OF THE ASSESSME NT ORDER. (C) THE ASSESSING OFFICER ASSESSED THE INCOME DERI VED BY THE ASSESSEE FROM BOOK MAKING (LICENSED BOOK MAKER OF B ANGALORE TRUST CLUB) UNDER THE HEAD INCOME FROM OTHER SOURC ES INSTEAD OF INCOME FROM BUSINESS. 4. THERE IS NO DISPUTE INSOFAR AS ITEM (B) OF THE S HOW CAUSE NOTICE U/S. 263 IS CONCERNED THAT NO DIRECTIONS WERE GIVEN IN T HE ORDER U/S 263 OF THE ACT. 5. AS FAR AS POINT (A) OF THE SHOW CAUSE NOTICE IS CONCERNED, A SUM OF RS.15.91 LAKHS IN CASH WAS FOUND AT THE TIME OF SEA RCH. IN THE ORDER OF ASSESSMENT PASSED BY THE AO THE CASH FOUND AND SEIZ ED AT THE TIME OF SEARCH WAS CONSIDERED AS ONE BELONGING TO THE ASSES SEE AND WAS DIRECTED TO BE ADDED ON A PROTECTIVE BASIS IN THE ORDER OF A SSESSMENT. HOWEVER, IN THE FINAL COMPUTATION OF TOTAL INCOME, A SUM OF RS. 15.91 LAKHS HAS NOT BEEN ADDED. IT IS THE PLEA OF ASSESSEE THAT CASH FOUND WAS OUT OF DISCLOSED CASH AVAILABLE IN THE BOOKS. THE CIT, HOWEVER, IN THE O RDER U/S. 263 OF THE ACT CAME TO THE CONCLUSION THAT FAILURE TO ADD THE AFOR ESAID AMOUNT TO THE TOTAL INCOME OF ASSESSEE WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND THEREFORE DIRECTED THE REVENUE TO ADD T HE AFORESAID SUM TO THE TOTAL INCOME OF THE ASSESSEE. 6. AS FAR AS THE AFORESAID ISSUE IS CONCERNED, WE F IND THAT THOUGH THE ADDITION WAS MADE ON A PROTECTIVE BASIS, THE AMOUNT SHOULD HAVE BEEN ITA NO.512/BANG/2016 PAGE 3 OF 4 ADDED TO THE TOTAL INCOME OF THE ASSESSEE AND FAILU RE TO DO SO RENDERED THE ORDER OF ASSESSMENT ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF REVENUE. EVEN THOUGH THE AMOUNT HAS BEEN ADDED ON A PROTECTI VE BASIS, YET THE AMOUNT SHOULD HAVE BEEN ADDED TO THE TOTAL INCOME A ND IT CANNOT BE SAID THAT BECAUSE ADDITION IS ON A PROTECTIVE BASIS, THE ORDER OF AO THOUGH IT MAY BE ERRONEOUS, BUT WAS NOT PREJUDICIAL TO THE IN TEREST OF REVENUE. WE THEREFORE CONFIRM THE ORDER U/S. 263 OF THE ACT TO THIS EXTENT. 7. AS FAR AS THE ISSUE (C) RAISED BY THE CIT IN THE SHOW CAUSE NOTICE U/S. 263 IS CONCERNED, THE QUESTION IS WHETHER INCO ME DERIVED BY THE ASSESSEE FROM BOOK MAKING OUGHT TO HAVE BEEN ASSESS ED UNDER THE HEAD INCOME FROM OTHER SOURCES OR BUSINESS. AT THE T IME OF HEARING, IT WAS ADMITTED THAT THE FACT THAT INCOME IS ASSESSED UNDE R INCOME FROM OTHER SOURCES AS AGAINST BUSINESS INCOME WOULD NOT RESULT IN ANY LOSS TO THE REVENUE. IN THESE CIRCUMSTANCES, WE ARE OF THE VIE W THAT INVOKING JURISDICTION U/S. 263 OF THE ACT INSOFAR AS THIS IS SUE IS CONCERNED WAS NOT WARRANTED AS THERE WAS NO LOSS OF REVENUE. TO THIS EXTENT, THE ORDER U/S. 263 OF THE ACT IS QUASHED. 8. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS PAR TLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 05 TH DAY OF AUGUST, 2020. SD/- SD/- ( B R BASKARAN ) ( N V VASUDEVAN ) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 05 TH AUGUST, 2020. / DESAI S MURTHY / ITA NO.512/BANG/2016 PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.