ASHOK KASHINATH BELHEKAR, NAVI MUMBAI V. CIT 22, NAVI MUMBAI

ITA 5590/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83964 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 02-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIMATI S PADMAJA
• Assessee Lawyers: RITIKA AGARWAL
• Keywords: Revision of order
• Section: 263; 143(3); 142(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND VIVEK VARMA, (JM) . . , , ./I.T.A. NO.5590/MUM/2013 ( / ASSESSMENT YEAR : 2009-10) ASHOK KASHINATH BELHEKAR GALA NO.E-701, APMC VEGETABLES MARKET, SECTOR NO.19, TURBHE, NAVI MUMBAI-400703 / VS. COMMISSIONER OF INCOME TAX -22, ROOM NO.301, 3RD FLOOR, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI-400703 ( / APPELLANT) .. ( / RESPONDENT) ./ ! ./PAN/GIR NO. :AABPB5404E ' / APPELLANT BY MS.RITIKA AGARWAL # ' /RESPONDENT BY SHRIMATI S PADMAJA $ % # &' / DATE OF HEARING : 6.08.2014 () # &' /DATE OF PRONOUNCEMENT : 29.10.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 29.7.2013 PASSED BY LD COMMISSIONER OF INCOME TAX-2 2, MUMBAI U/S 263 OF THE INCOME TAX ACT, 1961 (THE ACT) AND IT RELATES TO TH E ASSESSMENT YEAR 2009-10. THE ASSESSEE, IN THIS APPEAL, IS CHALLENGING THE VA LIDITY OF THE REVISION ORDER PASSED BY THE LD. CIT. 2. THE FACTS RELATING TO THE CASE ARE DISCUSSED IN BRIEF. THE ASSESSMENT IN THE HANDS OF THE ASSESSEE FOR THE YEAR UNDER CONSID ERATION WAS COMPLETED BY THE AO ON 24.04.2011 U/S 143(3) OF THE ACT. ON EX AMINATION OF THE RECORD, THE LD.COMMISSIOER OF INCOME TAX NOTICED THAT THE ASSES SEE IS A COMMISSION AGENT IN VEGETABLES AT THE APMC MARKET. DURING THE YEA R UNDER CONSIDERATION, THE ASSESSEE HAS FOUND TO HAVE DEPOSITED A SUM OF RS.10 0 LAKHS IN THE SAVING BANK I.T.A. NO.5590/MUM/2013 2 ACCOUNT MAINTAINED BY HIM WITH JANATA SAHAKARI BANK LTD. PUNE. THE LD. COMMISSIONER NOTICED THAT THE ASSESSEE HAS EXPLAINE D THE SOURCE OF ABOVE SAID DEPOSIT AS THE AMOUNTS COLLECTED FROM THE AGRICULTU RISTS FOR FORMING A CO- OPERATIVE SOCIETY. THE LD. COMMISSIONER TOOK THE V IEW THAT THE AO HAS NOT CONDUCTED PROPER INQUIRY TO FIND OUT THE ACTUAL TRU TH OF THE TRANSACTION. ACCORDINGLY, HE TOOK THE VIEW THAT THE IMPUGNED ASS ESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. HENCE HE INITIATED REVISION PROCEEDINGS UNDER SECTION 263 OF THE ACT AND AFTER HEARING THE ASSESSEE, THE LD. COMMISSIONER SET ASIDE THE ORDER OF THE ASSESSING O FFICER AND DIRECTED THE AO TO EXAMINE THE ISSUE IN DETAIL AFTER GIVING PROPER OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. AGGRIEVED BY THE REVISION ORDER PASSED B Y THE LD.COMMISSIONER, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE MAIN CONTENTION OF THE ASSESSEE IS THAT THE AO HAS CONDU CTED PROPER INQUIRY WITH REGARD TO DEPOSIT OF RS.100 LAKHS FOUND TO HAVE BEE N MADE IN THE BANK ACCOUNT OF THE ASSESSEE AND ON BEING SATISFIED WITH THE EXP LANATION FURNISHED BY THE ASSESSEE, THE AO DID NOT MAKE ANY ADDITION. THE LD . AR SUBMITTED THAT THE ASSESSEE HAD COLLECTED THE MONEY FROM VARIOUS AGRIC ULTURISTS FOR THE PURPOSE OF FORMING OF A CO-OPERATIVE SOCIETY AND THIS FACT WAS PROPERLY EXAMINED BY THE AO. THE LD. AR INVITED OUR ATTENTION TO THE PARA 4.1 OF THE ASSESSMENT ORDER TO SHOW THAT THE AO HAS CONDUCTED NECESSARY ENQUIRY BY DEPU TING A WARD INSPECTOR, BY ISSUING SUMMONS TO THE PERSONS WHO HAVE CONTRIBUTED MONEY ETC. ACCORDINGLY, THE LD. AR SUBMITTED THAT THE ASSESSEE HAD HELD THE AMOUNT OF RS.100 LAKHS IN FIDUCIARY CAPACITY. ACCORDINGLY, THE LD A.R SUBMIT TED THAT THE VIEW TAKEN BY LD. CIT(A) THAT THE AO DID NOT CONDUCT PROPER INQUIRY WAS ERRONEOUS. THE LD. AR FURTHER SUBMITTED THAT THE LD. COMMISSIONER HAS OMI TTED TO MAKE ANY REFERENCE TO ANY OF THE INQUIRIES CONDUCTED BY THE AO. THE LD.A R FURTHER SUBMITTED THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T V/S DEVELOPMENT CREDIT BANK LTD (2010) 323 ITR 206 (BOM) HAS HELD THAT THE REVISION ORDER IS LIABLE TO BE SET ASIDE IN CASE WHERE IT WAS FOUND THE FINDING S OF THE LD. COMMISSIONER ITSELF WAS ERRONEOUS. IN THE ALTERNATIVE, THE LD. AR SUBM ITTED THAT THE VIEW TAKEN BY THE ASSESSING OFFICER WITH REGARD TO THE SOURCES FOR TH E AMOUNT OF RS.100 LAKHS IS ONE OF THE POSSIBLE VIEWS AND HENCE THE SAME CANNOT BE CONSIDERED AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVEN UE. FOR THIS PROPOSITION, THE LD I.T.A. NO.5590/MUM/2013 3 A.R PLACED RELIANCE ON THE FOLLOWING DECISIONS REND ERED BY HONBLE SUPREME COURT. A) MALABAR INDUSTRIES CO.LIMITED V/S CIT (2000)243 ITR 83(SC); B) CIT V/S MAX INDIA (2007) 295 ITR 281 (SC); ACCORDINGLY, HE SUBMITTED THAT THE REVISION ORDER P ASSED BY THE LD. COMMISSIONER IS LIABLE TO BE SET ASIDE. 4. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE A O DID NOT MAKE FULL AND COMPLETE INQUIRY TO FIND OUT THE TRUTH WITH REGARD TO THE CLAIM OF THE ASSESSEE THAT HE HAD COLLECTED FUNDS FROM THE AGRICULTURISTS FOR FORMING A CO-OPERATIVE SOCIETY. THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE HAS CLAIMED THAT HE HAS ADVANCED A SUM OF RS.1 CRORE FOR PURCHASE OF LAND. HOWEVER, THE AO DID NOT MAKE ANY INQUIRY WITH THE PERSONS TO WHOM THE ABOV E SAID AMOUNT WAS CLAIMED TO HAVE BEEN GIVEN AS AN ADVANCE FOR PURCHASE OF LA ND. THE LD. DR FURTHER SUBMITTED THAT THE AO HAS ACCEPTED THE VERSION OF F ORMING OF SOCIETY AND PURCHASE OF LAND ON THE FACE OF IT AND HENCE THE LD . COMMISSIONER WAS JUSTIFIED IN PASSING THE IMPUGNED REVISION ORDER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. WE NOTICE FROM THE ASSESSMENT ORDER THAT THE AO HAS CO NDUCTED INQUIRIES WITH REGARD TO DEPOSIT OF RS.100 LAKHS FOUND TO HAVE BEE N MADE IN THE BANK ACCOUNT MAINTAINED BY THE ASSESSEE. THE AO HAS ALSO DISCUS SED ABOUT THE SAME IN THE ASSESSMENT ORDER. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW RELEVANT OBSERVATIONS MADE BY THE ASSESSING OFFICER IN THE A SSESSMENT ORDER : 4.1 AS PER AIR INFORMATION RECEIVED THE ASSESSEE H AS DEPOSITED CASH AMOUNTING TO RS. 100.00 LAKHS/- TO HIS SAVINGS BANK ACCOUNT AT JANATA SAHAKARI BANK LTD PUNE ON 7.4.2008. THE ASSE SSEE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSIT. IN RESPONSE , THE ASSESSEE VIDE LETTER DATED 5.3.2011 EXPLAINED AS UNDER: 'AS WE EXPLAINED EARLIER, YOUR ASSESSEE BASED ON A POLITICAL AND FARMER FAMILY. AND ESPECIALLY HE IS ENGAGED IN THE BUSINES S OF WHOLE SALE TRADING AND AGRICULTURAL PRODUCTS IN VEGETABLE MARKET, APMC VASHI FOR LAST APPROXIMATELY 15 YEARS. HE TAKES INITIAL STEPS TO P ROMOTE AN AGRICULTURAL CREDIT SOCIETY FOR THE WELFARE OF AGRICULTURISTS FR OM HIS VILLAGE AT BARAMATHI MAHARASHTRA. HE COLLECTED A SUM OF RS. 11000000/- RUPEES ONE CRO RE TEN LAKHS) DURING THE PERIOD FROM 1.12.2007 TO 31.3.2008 FROM VILLAGE RS AS PRIMARY I.T.A. NO.5590/MUM/2013 4 CONTRIBUTION OF THE PROPOSED SOCIETY. AND DURING TH E FINANCIAL YEAR ENDED ON 31.3.2008 HE DEPOSITED A SUM OF RS. 10,00,000/-L AKHS AND RETAINED AMOUNT OF RS. 100,00,000/- IN THE SAME ACCOUNT DURI NG THE FINANCIAL YEAR 2008-09. THIS AMOUNT COLLECTED BY YOUR ASSESSEE AS CHIEF PRO MOTER OF THE PROPOSED SOCIETY AND WE ALREADY SUBMITTED COPY OF R ESOLUTIONS AND DETAILS OF THE ABOVE SAID CREDIT SOCIETY, AS THE EXPLANATIO N OF YOUR NOTICE U/S. 142(1) FOR THE ASSESSMENT YEAR 2008-09. THE FOLLOWING ARE THE NAMES AND ADDRESS OF THE MEMB ERS WHO WAS OFFERED AND PAID TO THE PROPOSED SOCIETY. WE HEREWI TH ENCLOSED THE AFFIDAVIT ALONG WITH THE PROOF OF LAND OWNERSHIP AS THE PROOF OF THEIR INCOME FROM AGRICULTURE INCOME. (LIST OF MEMBERS AND THEIR CONTRIBUTIONS ATTACHED FOR YOUR KIND PERUSAL) PURPOSE FOR WHICH MONEY WAS RAISED: THE FUNDS RAISED FROM THE ABOVE VILLAGERS ARE FOR THE PURPOSE OF THE PROPOSED SOCIETY AS: A) TO ACQUIRE AGRICULTURE LAND FOR COLLECTIVE CULTI VATION B) TO GIVE FINANCIAL ASSISTANCE TO THE MEMBERS AND NON MEMBERS FOR THEIR AGRICULTURE PURPOSE C) TO AVOID MEDIATORS FOR MARKETING OF THE AGRICULT URE PRODUCTS OF THE MEMBERS. AND IT IS NOTABLE THAT THE PROPOSED SOCIETY PAID TH E FULL AMOUNT (11000000) TO THE LAND LORDS AS ADVANCE FOR LAND FOR THE SOCIE TY' SIMILAR ISSUE WAS INVOLVED IN THE A.Y. 2008-09 ALSO . FROM THE RECORDS OF THAT YEAR IT IS SEEN THAT THE ASSESSEE FILED COPY O F MINUTES PASSED IN THE MEETING OF THE VILLAGERS DATED 28.2.2007. AS PER TH E COPY OF MINUTES FILED, 14 MEMBERS WERE ELECTED A PROMOTERS AND THEY HAVE C ONTRIBUTED A SUM OF RS,1050000/- IN CASH TOWARDS THE CORPUS OF THE P ROPOSED SOCIETY CALLED JAI KISAN AGRO PROMOTING SOCIETY (PROPOSED) THE MINUTES INDICATES THAT LATER ON OTHER MEMBERS W ERE ALSO CONTRIBUTED CASH. AND NOW THE ASSESSEE CONFIRMS THAT THE BALANC E CASH WAS DEPOSITED IN THE FINANCIAL YEAR 2008-09. LAST YEAR, SUMMONS WAS ISSUED TO ALL THE FOURTEEN M EMBERS AND THE WARD INSPECTOR WAS DEPUTED TO VISIT THE VILLAGE AND VERI FY THE GENUINENESS OF THE CLAIM. AS PER ENQUIRY REPORT SUBMITTED, THE IDENTIT Y OF ALL THE FOURTEEN MEMBERS WERE VERIFIED SUMMONS WERE SERVED ON THEM. DURING THE ENQUIRY, SEVERAL MEMBERS OF THE PROPOSED SOCIETY WE RE ASSEMBLED AT A VILLAGE AND CONFIRMED THAT A RESOLUTION WAS PASSED IN THE MEETING. TWO MEMBERS, AND THE ASSESSEE IN HIS CAPACITY OF HUF AS ONE MEMBER, ATTENDED AND THEIR STATEMENTS WERE RECORDED. SOME M EMBERS EXPRESSED THEIR INABILITY TO COME TO MUMBAI AND IN LIEU OF ST ATEMENT, THEY HAVE FILED AFFIDAVITS. FROM THE AFFIDAVITS, THE CONTENTION OF THE ASSESSEE APPEARS TO I.T.A. NO.5590/MUM/2013 5 BE CORRECT AS EACH AFFIDAVIT IS SUPPORTED BY THEIR IDENTITY AND 7/12 EXTRACT OF THE AGRICULTURAL LAND OWNED BY THEM. THE MINUTES OF THE SAID MEETING ALSO AUTHORIZED THE ASSESSEE TO OPEN A BANK ACCOUNT IN HIS NAME AND DEPOSIT THE MONEY DURI NG THE TRANSIT PERIOD OF THE REGISTRATION OF THE PROPOSED SOCIETY. ACCORD INGLY, THE ASSESSEE HAS CONTENTED THAT THE ENTIRE CASH COLLECTED, WAS DEPOS ITED TO HIS SAVINGS BANK ACCOUNT WITH JANATA SAHKARI BANK LTD, PUNE BHO R BRANCH. SINCE THE MEMBERS ARE MANY, THIS YEAR AGAIN THE WAR D INSPECTOR WAS DEPUTED TO THE VILLAGE FOR SERVICE OF SUMMONS ON RA NDOM BASIS. ALL THE MEMBERS APPEARED AND THEIR STATEMENTS WERE RECORDED AND KEPT ON RECORD. VIDE NOTICE U/S. 142(1) DATED 8.3.2011 THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS FOR THE PERSONS TO WHOM THE PAYMENTS WE RE PAID. THE ASSESSEE HAS STATED THAT THE PAYMENTS WERE MADE TO SHRI. KHOPADE DHAIRYRASALI BHAGWAL AND SHRI. SHINDE, SANJAY BHAUS EB ON 7.4.2008 BY AT 50.00 LAKHS EACH BY CHEQUE FOR THE PURPOSE OF ACQUI SITION OF LANDED PROPERTY FOR THE PROPOSED SOCIETY. NOTICE U/S. 133( 6) WAS ACCORDINGLY ISSUED TO THESE PARTIES WHO CONFIRMED THE RECEIPT O F MONEY AND ITS PURPOSE THROUGH AFFIDAVITS: FROM THE ABOVE, AND THE ENQUIRY REPORT OF THE WARD INSPECTOR, IT IS SEEN THAT THE MONEY WAS COLLECTED BY THE ASSESSEE IN HIS CAPACITY AS CHIEF PROMOTER OF THE PROPOSED SOCIETY AND THE SAME WAS D EPOSITED IN A SAVINGS BANK ACCOUNT OPENED IN THE NAME OF THE ASSE SSEE FOR THIS PURPOSE, AS AUTHORIZED BY THE MEETING OF PROPOSED S OCIETY. ALSO IT IS SEEN THAT THIS ACCOUNT IS NOT USED BY THE ASSESSEE FOR H IS DAY TO DAY BUSINESS ACTIVITIES. HENCE, IT HAS BEEN PROVED THAT THE ENTI RE CASH PERTAINS TO THE FARMERS AND NOT OF THE ASSESSEE. THE AFFIDAVITS AND DOCUMENTARY EVIDENCES WERE FILED IN RESPECT OF ALL THE MEMBERS. 6. ON PERUSAL OR THE ABOVE SAID OBSERVATIONS MADE B Y THE AO, WE NOTICE THAT THE ISSUE RELATING TO COLLECTION OF AMOUNT, FO RMATION OF SOCIETY ETC WERE ALSO AVAILABLE IN THE IMMEDIATELY IN THE PRECEDING ASSES SMENT YEAR (AY 2008-09) AND THEY APPEAR TO HAVE BEEN EXAMINED IN THAT YEAR, SIN CE THE ASSESSING OFFICER IS MAKING A REFERENCE TO THE COPY OF MINUTES PASSED IN MEETING OF THE VILLAGERS CONDUCTED ON 28.8.2007. THUS IT IS SEEN THAT THE I MPUGNED ISSUE IS NOT A NEW ISSUE ARISING DURING THE YEAR UNDER CONSIDERATION. IT IS ALSO A FACT THAT THE LD CIT DID NOT INITIATE ANY REVISION PROCEEDING FOR AY 200 8-09. FURTHER, IT IS SEEN THAT THE AO HAS ISSUED SUMMONS TO THE PROPOSED PROMOTERS OF THE CO-OPERATIVE SOCIETY AND THE AO HAS ALSO DEPUTED WARD INSPECT OR TO THE VILLAGE IN ORDER TO VERIFY THE GENUINENESS OF THE CLAIM. THOUGH THE SU MMONS WERE ISSUED ONLY TO THE PROPOSED PROMOTERS OF THE SOCIETY, IT IS NOTICE D THAT THE SEVERAL PEOPLE WHO HAD CONSENTED TO BECOME THE MEMBERS OF THE PROPOSED SOCIETY HAVE CONFIRMED I.T.A. NO.5590/MUM/2013 6 THE PROPOSAL TO START A CO-OPERATIVE SOCIETY. FROM THE PAPER BOOK, IT IS SEEN THAT THE ASSESSEE HAS FURNISHED THE NAMES AND ADDRESSES OF THE PERSONS WHO HAVE CONTRIBUTED THE AMOUNT OF RS.100 LAKHS ALONG WITH T HE CONFIRMATION LETTER. THE ASSESSEE HAS FURNISHED THE ABOVE SAID DETAILS TO TH E ASSESSING OFFICER IN RESPONSE TO THE NOTICE DATED 08.3.2011 ISSUED BY TH E AO U/S 142(1) OF THE ACT. 7. IT IS FURTHER NOTICED THAT THE ASSESSEE HAD GIVEN ADVANCE TO SOME PERSONS NAMELY S/SHRI KHOPADE DHAIRYASHALI BHAGWAL AND SHRI SHINDEY AND SANJAY BHAUSAHEB BY WAY OF CHEQUES FOR ACQUISITION OF LAND FOR THE PROPOSED SOCIETY. THE ASSESSEE HAS FURNISHED THE COPIES OF THEIR RESP ECTIVE BANK ACCOUNTS. THUS, IT IS SEEN THAT THE AO HAS EXAMINED ALL THESE DOCUM ENTS, CONDUCTED NECESSARY INQUIRIES AND HAS ACCEPTED THE SOURCE EXPLAINED BY THE ASSESSEE FOR THE DEPOSIT OF RS.100 LAKHS REFERRED ABOVE. 8. IN VIEW OF THE FOREGOING, WE AGREE WITH THE SUBMISSION OF THE ASSESSEE THAT THE AO HAS TAKEN A PLAUSIBLE VIEW OF THE MATTER. U NDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE LD. CIT WAS NOT JUSTIFIED IN P ASSING THE IMPUGNED REVISION ORDER IN VIEW OF THE DECISION RENDERED BY HONBLE S UPREME COURT IN THE CASE OF MALABAR INDUSTRIAL COMPANY (SUPRA). ACCORDINGLY, W E SET ASIDE THE ORDER OF LD. COMMISSIONER. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 29TH OCT , 2014. () $ * +, 29TH OCT, 2014 ) # -% . SD SD ( / VIVEK VARMA) ( . . / B.R. BASKARAN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER $ % MUMBAI: 29TH OCT,2014. . . ./ SRL , SR. PS I.T.A. NO.5590/MUM/2013 7 !'#$ %$&' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ /& ( ) / THE CIT(A)- CONCERNED 4. $ /& / CIT CONCERNED 5. 0- &1 , ' 1 , $ % / DR, ITAT, MUMBAI CONCERNED 6. -2 3% / GUARD FILE. 4 $ / BY ORDER, TRUE COPY 5 (ASSTT. REGISTRAR) ' 1 , $ % /ITAT, MUMBAI