ACIT CC 47, MUMBAI V. HARRESH N MEHTA, MUMBAI

ITA 6025/MUM/2012

• Counselvise Citation: 602519914 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 29-01-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 04-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Bogus loan
• Section: 143(3); 153A

Judgement Text

H IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI .. , . ... BEFORE SHRI P.M. JAGTAP, AM AND DR. S.T.M. PAVALAN, JM ./ I.T.A. NO. 6025/MUM/2012 ( / ASSESSMENT YEAR : 2004-05 ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 47, ROOM NO. 658, 6 TH FL., AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. / VS. SHRI HARRESH N. MEHTA, 2601, SHIV TAPI, 26 TH FLOOR, HARISHCHANDRA GOREGAONKAR MARG, GAMDEVI, MUMBAI -400 007. . / PAN : AALPM3811G ( % / APPELLANT ) .. ( &'% / RESPONDENT ) APPELLANT BY SHRI K.C. P. PATNAIK RESPONDENT B Y : S HRI VIJAY MEHTA * / DATE OF HEARING : 29-1-2014 * / DATE OF PRONOUNCEMENT : 07-02-2014 [ / O R D E R PER P.M. JAGTAP, A.M . : .. , THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) 36, MUMBAI DATED 5-7-2012 AND THE GROUNDS RAISED BY THE REVENUE THEREIN READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DELETE ADDITION OF RS.66,00,000/- ON ACCOUNT OF BOGUS LOAN IF THE SETT LEMENT COMMISSION DECIDES THE ISSUE IN CASE OF FIRM M/S SILVER ARCH B UILDERS & PROMOTERS, THAT THE ON MONEY RECEIPTS OFFERED BY THE FIRM IS U TILIZED FOR OBTAINING BOGUS LOANS BY THE PARTNER SHRI HARRESH N. MEHTA. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD CIT(A) ERRED IN IGNORING THE FACT THAT THE ADDITION ON ACC OUNT OF BOGUS LOAN IS ITA 6025/M/12 2 ENTIRELY DIFFERENT FROM THE INCOME OFFERED FOR TAXA TION DURING THE SEARCH IN THE NAME OF THE FIRM AND THE FATE OF THIS ADDITI ON IS NOT CO-RELATED WITH THE ORDER OF SETTLEMENT COMMISSION IN CASE OF THE FIRM. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) ERRED IN GIVING A DECISION ON GROUND NO.3 CONTAININ G TWO OPPOSITE FINDINGS BASED UPON TWO SETS OF CIRCUMSTANCES. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO BELONGS TO ROHAN GROUP. A SEARCH AND SEIZURE ACTION U/S 132(1) OF TH E INCOME TAX ACT, 1961 WAS CONDUCTED ON 10-8-2006 IN THE CASES BELONGING T O ROHAN GROUP INCLUDING THE CASE OF THE ASSESSEE. PURSUANT TO TH E SAID ACTION, A NOTICE U/S 153-A OF THE ACT WAS ISSUED BY THE A.O. ON 17-1-200 7 IN RESPONSE TO WHICH THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 2 9-03-2007 DECLARING TOTAL INCOME OF RS. 1,00,10,914/-. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD SHOWN TO HAVE RECEIVED A LOAN OF RS. 6 6 LACS FROM A CONCERN NAMELY M/S JAI MATAJI WHICH WAS FOUND TO BE A TAINT ED PARTY DURING THE COURSE OF SEARCH PROVIDING BOGUS LOANS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS CALLED UPON BY THE A. O. TO EXPLAIN AS TO WHY THIS AMOUNT OF RS. 66 LACS SHOULD NOT BE BROUGHT TO TAX IN HIS HANDS. IN REPLY, IT WAS EXPLAINED BY THE ASSESSEE THAT HE WAS MANAGING PARTNER OF THE FIRM M/S SILVER ARCH BUILDER & PROMOTERS AND CONSEQ UENT TO THE SEARCH, THE SAID FIRM HAD OFFERED UNDISCLOSED INCOME OF RS. 7.6 0 CRORES BY WAY OF RECEIPT OF ON-MONEY ON SALE OF FLATS FOR THE RELEVANT YEARS . IT WAS SUBMITTED THAT THE SAID AMOUNT WAS DULY CREDITED IN THE BOOKS OF ACCOU NT OF THE FIRM IN THE RESPECTIVE YEARS AND THE SOURCE OF THE BOGUS LOAN R ECEIVED FROM M/S JAI MATAJI WAS THE WITHDRAWAL OF THE AMOUNT BY THE ASSE SSEE FROM THE FIRM WHICH HAD ALREADY BEEN OFFERED TO TAX. IT WAS POINTED OU T THAT THE SAID PARTNERSHIP FIRM HAD ALREADY FILED AN APPLICATION BEFORE THE SE TTLEMENT COMMISSION AND THE SAME WAS ADMITTED ON 5-12-2007. IT WAS CONTENDE D THAT THE BOGUS LOAN RECEIVED BY THE ASSESSEE FROM M/S JAI MATAJI THUS W AS NOTHING BUT APPLICATION OF INCOME WHICH HAD ALREADY BEEN OFFERE D TO TAX IN THE HANDS OF THE PARTNERSHIP FIRM AND NO SEPARATE ADDITION ON AC COUNT OF SUCH LOAN COULD ITA 6025/M/12 3 BE MADE IN THE HANDS OF THE ASSESSEE SINCE IT WOULD AMOUNT TO DOUBLE ADDITION OF THE SAME ACCOUNT. THE A.O. DID NOT FIN D THIS EXPLANATION OF THE ASSESSEE TO BE ACCEPTABLE AND MADE ADDITION OF RS. 66 LACS TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED U/S 143 (3) R.W.S. 153A OF THE INCOME TAX ACT, 1961. 3. AGAINST THE ORDER PASSED BY THE A.O. U/S 143(3) R.W.S. 153A OF THE ACT, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A) AND THE SUBMISSIONS MADE BEFORE THE A.O. WERE REITERATED ON ITS BEFORE THE LD. CIT(A). THE LD. CIT(A) FOUND MERIT IN THE SAID SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE AND ACCORDINGLY DIRECTED THE A.O. THAT IF THE SETTL EMENT COMMISSION HOLDS IN THE CASE OF THE FIRM THAT THE INCOME OFFERED BY THE FIRM IS UTILIZED FOR OBTAINING BOGUS LOANS BY THE ASSESSEE BEING THE PAR TNER, THE ADDITION IN THE HANDS OF THE ASSESSEE WOULD BE DELETED AND IN CASE IF THERE IS NO SUCH DIRECTION FROM THE SETTLEMENT COMMISSION, THE ADDIT ION IN THE CASE OF THE ASSESSEE WOULD STAND CONFIRMED. AGGRIEVED BY THE O RDER OF THE LD. CIT(A), THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL . 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT A SIMILAR ISSUE WAS INVOLVED IN THE ASSESSEES CASE FOR A.Y. 2007-08 WH EREIN A SIMILAR DIRECTION WAS GIVEN BY THE LD. CIT(A) TO THE A.O. WHILE DECID ING THE ISSUE AS GIVEN IN THE YEAR UNDER CONSIDERATION AND THE TRIBUNAL VIDE ITS ORDER DATED 27-11-2013 PASSED IN ITA NO. 4552/MUM/2012 FOUND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) GIVING SUCH DIRECTION KEEPING IN VIEW ALL TH E FACTS OF THE CASE INVOLVED IN A.Y. 2007-08 WHICH ARE SIMILAR TO THE YEAR UNDER CONSIDERATION. THE ISSUE INVOLVED IN THIS APPEAL OF THE REVENUE THUS IS SQUA RELY COVERED BY THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEE S OWN CASE FOR A.Y. 2007- 08 AND RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD T HE IMPUGNED ORDER OF THE LD. CIT(A) GIVING THE SPECIFIC DIRECTION TO THE A.O . TO DECIDE THE ISSUE ITA 6025/M/12 4 DEPENDING ON THE FINAL ORDER OF THE SETTLEMENT COMM ISSION WHICH HAS A DIRECT BEARING ON THE ISSUE. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH FEBRUARY, 2014. . * 0 1 07-02-2014 * SD/- AS/- (DR. S.T.M. PAVALAN) (P.M. JAGTAP ) JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 1 DATED 07-02-2014 .../ RK , SR. PS ' #%& '& / COPY OF THE ORDER FORWARDED TO : 1. % / THE APPELLANT 2. &'% / THE RESPONDENT. 3. 4 () / THE CIT(A)36, MUMBAI. 4. 4 / CIT CENTRAL -IV,, MUMBAI 5. 7 &9 , 9 , / DR, ITAT, MUMBAI H BENCH 6. ; / GUARD FILE. / BY ORDER, '7 & //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI