PIEDADE PERINCHERY, KALYAN V. ASST CIT CEN CIR 18 & 19, MUMBAI

ITA 6385/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79542 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 30-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 30-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYAS
• Assessee Lawyers: NEELKANT KHANDELW AL
• Keywords: Search and seizure; Additional evidence; Revised return
• Section: 234B; 139(5); 154

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.6385/MUM/2013, A.Y. 2009-10 MRS. PIEDADE PERINCHERY, A-2, GODREJ RIVER SIDE, FLAT 303, GODREJ HILL BAR-WAY, OFF. BHIWANDI MURBAD ROAD, KALYAN (W), PAN: AQMPP4927B (APPELLANT ) VS. ASSTT.COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-18 & 19, MUMBAI. (RESPONDENT) APPELLANT BY : SHRI NEELKANT KHANDELW AL RESPONDENT BY : SHRI KI SHAN VYAS DATE OF HEARING : 30/06/2014 DATE OF PRONOUNCEMENT : 3 1/07/2014 ORDER PER I.P.BANSAL, J.M, THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS D IRECTED AGAINST THE ORDER PASSED BY CIT(A)-39, MUMBAI DATED 19/08/2013 FOR ASSESS MENT YEAR 2009-10. GROUNDS OF APPEAL READ AS UNDER: THE FOLLOWING GROUNDS OF APPEAL ARE INDEPENDENT OF, AND WITHOUT PREJUDICE TO, ONE ANOTHER: 1. THE COMMISSIONER OF INCOME-TAX (APPEALS) - 39, M UMBAI (HEREINAFTER REFERRED TO AS THE CIT(A)) ERRED IN UPHOLDING THE ACTION OF THE ASSISTANT COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE 18 AND 19, MUMBAI (HEREINAFTER REFERRED TO AS THE ASSESSING OFFICER) IN CHARGING INTEREST OF RS. 2,90,205/- UND ER SECTION 234B OF THE ACT. THE APPELLANT CONTENDS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) OUGHT NOT TO HAVE UPHELD THE ACTION OF THE ASSESSING OFFICER IN CHARGING INTEREST UNDER SECTION 234B FOR THE PERIOD AFTER THE LETTER DATED MAY 29, ITA NO.6385/MUM/2013, A.Y. 2009-10 2 2009 REQUESTING THE ASSESSING OFFICER TO REALISE TH E SEIZED ASSETS TOWARDS THE SELF- ASSESSMENT TAX LIABILITY PER RETURN OF INCOME FILED 2. THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN CONSIDERING AS INCOME A SUM OF RS 1,75,526/- BEING EXCESS INTEREST OFFERED ON KISAN VIKAS PATRAS. THE APPELLANT CONTENDS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) OUGHT NOT TO HAVE UPHELD THE ACTION OF THE ASSESSING OFFICER IN CONSIDERING THE EXCESS INTEREST INCOME. 3. THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN CONSIDERING AS INCOME A SUM OF RS 2,97,000/- BEING REFUND OF PREMI UM RECEIVED FROM INSURANCE COMPANY. THE APPELLANT CONTENDS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) OUGHT NOT TO HAVE UPHELD THE ACTION OF THE ASSESSING OFFICER IN CONSIDERING AS INCOME THE REFUND OF PREMIUM RECEIVE D FROM THE INSURANCE COMPANY. THE APPELLANT FURTHER, CONTENDS THAT THE CIT(A) OUG HT NOT TO HAVE REJECTED THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT INASMUCH AS THE ADDITIONAL EVIDENCE ARE FURNISHED WITHIN THE AMBIT OF RULE 46A OF THE INCOM E-TAX RULES, 1962 AND? OR THE PROVISIONS OF SECTION 250 OF THE ACT. 2. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT O N 18/12/2008 ON THE SAMSON GROUP OF CASES. THE ASSESSEE IS ONE OF GR OUP CASES AND SHE FILED RETURN OF INCOME ON 29/5/2009 AT AN INCOME OF RS.43,42,360 /-. AS THERE WAS DEFAULT IN MAKING ADVANCE TAX PAYMENT INTEREST UNDER SECTION 2 34B OF THE INCOME TAX ACT 1961(THE ACT) WAS LEVIED FOR THE PERIOD FROM 1/4/20 09 TO 29/12/2010 BEING DATE OF THE ASSESSMENT ORDER. A SUM OF RS.2,90,205/- WA S CHARGED AS INTEREST UNDER SECTION 234B OF THE ACT. IT IS THE CASE OF THE ASS ESSEE THAT SHE COULD NOT PAY THE INCOME TAX AND INTEREST PAYABLE AS PER RETURN OF IN COME AS ALL THE ASSETS OF THE ASSESSEE WERE PUT UNDER SEIZURE PURSUANT TO THE SEA RCH ACTION. IT IS ALSO THE CASE OF THE ASSESSEE THAT ALONG WITH RETURN OF INCOME SH E HAD FILED A LETTER DATED 29/05/2009 REQUESTING THE AO TO ENCASH AND UTILIZE THE SEIZED ASSETS IN THE SHAPE OF KISSAN VIKAS PATRAS (KVPS) TO MEET THE O BLIGATION OF PAYMENT OF INCOME TAX AND INTEREST AS PER RETURN OF INCOME FOR THE YE AR UNDER CONSIDERATION. IT WAS SUBMITTED THAT SINCE ALL THE ASSETS WERE SEIZED AN D ASSESSEE DID NOT HAVE FUNDS TO PAY TAX AND INTEREST THE ASSESSEE HAD ALL THE IN TENTION, INCLINATION AND ITA NO.6385/MUM/2013, A.Y. 2009-10 3 WILLINGNESS TO PAY THE TAX AND INTEREST, THEREFORE, AS PER AFOREMENTIONED LETTER DATED 29/05/2009 A REQUEST WAS MADE TO THE AO TO EN CASH THE KVPS. RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS TO CONTEND TH AT IN VIEW OF THE REQUEST MADE BY THE ASSESSEE, SINCE THE DEPARTMENT DID NOT REALI ZE THE TAX AND INTEREST BY ENCASHING KVPS, THE ASSESSEE CANNOT BE SADDLED WITH THE LIABILITY OF INTEREST UNDER SECTION 234B OF THE ACT. 1. NITIN M. JADIA, 107 TAXMAN 203 (MUM TRIB) 2. SHRI RAM S. SARDA, 50 SOT 121 2.1 THIS CONTENTION OF THE ASSESSEE HAS BEEN REJECT ED BY LD. CIT(A) ON THE GROUND THAT IN THE INSTANT CASE SEIZED ASSETS ARE I N THE NATURE OF KVPS WHICH CAN BE ENCASHED ONLY ON MATURITY. THESE ASSETS ARE NO T LIKE SEIZED GOLD WHICH CAN BE SOLD AT ANY TIME FOR MAKING THE ADJUSTMENT AGAIN ST OUTSTANDING PAYMENT OF TAX. LD. CIT(A) HAS ALSO FOUND THAT ASSESSEE DID N OT SUBMIT ANY DETAILS IN ORDER TO ENABLE THE AUTHORITIES TO ASCERTAIN WHETHER ANY OF THE KVPS HAD MATURED BY THE RELEVANT DATE AND COULD BE ENCASHED BY THE AO F OR ADJUSTMENT THEREOF AGAINST STATUTORY OBLIGATIONS. IN THIS MANNER LD. CIT(A) H AS DECLINED TO ENTERTAIN THE CLAIM OF THE ASSESSEE, WHICH IS SUBJECT MATTER OF G ROUND NO.1 IN THE PRESENT APPEAL. 3. SUBMISSIONS MADE BEFORE LD. CIT(A) WERE REITERAT ED BEFORE US. IN ADDITION THERETO, IT WAS ALSO SUBMITTED THAT IN THE CASE OF HUSBAND OF THE ASSESSEE SIMILAR LETTER WAS FILED ALONGWITH RETURN OF INCOME AND I NTEREST WAS LEVIED UNDER SECTION 234B, WHICH WAS LATER ON RECTIFIED BY THE AO VIDE O RDER DATED 9/8/2011, WHEREIN INTEREST LEVIED UNDER SECTION 234B WAS RECALCULATED AFTER GIVING AN ADJUSTMENT THEREOF. 4. AS AGAINST THE ABOVE SUBMISSIONS OF LD. AR, LD. DR RELIED UPON THE ORDER PASSED BY LD. CIT(A). ITA NO.6385/MUM/2013, A.Y. 2009-10 4 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. AFTER CAREFUL CONSIDERATION, WE DO NOT FIND ANY ERROR IN THE FINDINGS RECORDED BY LD. CIT(A). NO MATERIAL HAS BEEN BROUG HT ON RECORD TO SUGGEST THAT EITHER OF THE KVPS HAD MATURED BY THE RELEVANT DATE SO THAT AO COULD ENCASH THE SAME. IT HAS ALSO NOT BEEN SHOWN THAT KVPS COULD B E ENCASHED BEFORE MATURITY DATE. IN ABSENCE OF ALL THESE FACTS, WE FIND NO MERIT IN THE CONTENTION OF LD.AR THAT IN VIEW OF THE REQUEST MADE BY THE ASSESSEE BY WAY OF LETTER DATED 29/5/2009, FILED ALONGWITH THE RETURN OF INCOME, N O INTEREST SHOULD BE CHARGED TO THE ASSESSEE UNDER SECTION 234B OF THE ACT. THE REFORE, WE UPHOLD THE FINDINGS OF LD. CIT(A). 5.1 NOW COMING TO THE ALTERNATIVE SUBMISSION OF THE ASSESSEE REGARDING ACCEPTANCE OF CLAIM IN THE CASE OF HUSBAND OF THE A SSESSEE BY THE AO VIDE AFOREMENTIONED ORDER DATED 9/8/2011, WE HAVE CAREFU LLY GONE THROUGH THE SAID ORDER AND FOUND THAT IN THE SAID CASE THERE WAS NOT ONLY KVPS BUT THERE WERE SEIZED FDRS ALSO. THE ASSESSEE DID NOT SUBMIT ANY DETAILS OF THE SEIZED ASSETS IN THE CASE OF THE HUSBAND OF THE ASSESSEE, WHICH APAR T FROM KVPS ARE IN THE SHAPE OF FDRS. FDRS CAN BE WITHDRAWN PREMATURELY UNLIKE OF KVPS WHICH CAN BE ENCASHED ONLY ON MATURITY. IN ABSENCE OF ANY DETAI LS FILED IN RESPECT OF SEIZED ASSETS OF HUSBAND OF THE ASSESSEE, THE CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED SIMPLY ON THE GROUND THAT IN THE CASE OF HUSBAND OF THE ASSESSEE LEVY OF INTEREST UNDER SECTION 234B WAS RECTIFIED BY THE AO. MOREOV ER, ORDER PASSED BY AO UNDER SECTION 154 OF THE ACT CANNOT HAVE JUDICIAL PRECEDE NCE AS THE MATTER HAS TO BE DECIDED IN ACCORDANCE WITH LAW. THEREFORE, WE FIND NO MERIT IN GROUND NO.1 AND THE SAME IS DISMISSED. 6. APROPOS GROUND NO.2 &3, THESE TWO GROUNDS HAVE B EEN DEALT WITH BY LD. CIT(A) SIMULTANEOUSLY. THESE RELATE TO EXCESS OFF ER OF INTEREST ON KVPS AMOUNTING TO RS.1,75,526/- AND NON-TAXABILITY OF A SUM OF RS.2,97,000/- BEING AMOUNT RECEIVED FROM BIRLA SUNLIFE INSURANCE. BOTH THESE AMOUNTS WERE INCLUDED BY THE ASSESSEE IN THE RETURN OF INCOME AN D LATER ON IT WAS THE CLAIM OF ITA NO.6385/MUM/2013, A.Y. 2009-10 5 THE ASSESSEE THAT THE INTEREST ON KVPS HAS BEEN EXC ESSIVELY OFFERED TO TAX TO THE EXTENT OF RS.1,75,526/- AND SIMILARLY IT WAS THE CL AIM OF THE ASSESSEE THAT AMOUNT RECEIVED FROM BIRLA SUNLIFE INSURANCE AMOUNT ING TO RS.2,97,000/- WAS NOT ASSESSABLE AS INCOME. BOTH THESE CLAIMS HAVE B EEN REJECTED BY LD. CIT(A) ON THE GROUND THAT SINCE ASSESSEE HAD OFFERED BOTH THE SE INCOMES IN THE RETURN OF INCOME FILED BY HER AND THESE CLAIMS CANNOT BE CO NSIDERED BY THE AO IN ABSENCE OF REVISED RETURN, WHICH WAS REQUIRED TO BE FILED U NDER SECTION 139(5) OF THE ACT IF ASSESSEE WANTS TO GET REVISED CLAIM. THE CIT(A) HA S ALSO REJECTED THE ADMISSION OF THE ADDITIONAL EVIDENCE WHICH WAS SOUGHT TO BE F URNISHED BY THE ASSESSEE IN RESPECT OF A SUM OF RS.2,97,000/-. 7. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. A S PER TRITE LAW NO AMOUNT CAN BE ASSESSED AS INCOME UNLESS IT CAN BE VALIDLY ASSESSED AS PER THE PROVISIONS OF THE ACT. IF ASSESSEE CLAIMS THAT CERTAIN RECEIP TS ARE NOT TAXABLE THEN SUCH CONTENTION OF THE ASSESSEE HAS TO BE CONSIDERED AS PER PROVISIONS OF LAW. HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PRITHVI BR OKERS & SHARE HOLDERS PVT. LTD., 349 ITR 336(BOM) HAS HELD THAT ASSESSEE IS EN TITLED TO RAISE NOT MERELY ADDITIONAL LEGAL SUBMISSIONS BEFORE THE AUTHORITIES BELOW, BUT IS ALSO ENTITLED TO RAISE ADDITIONAL CLAIM BEFORE THEM. THE APPELLATE AUTHORITIES HAVE JURISDICTION TO DEAL NOT MERELY WITH ADDITIONALS GROUND, WHICH BECA ME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW BUT WITH ADDITIONAL GROUNDS WHICH WERE AVAILABLE WHEN THE RETURN WAS FILED. IN VIEW OF SUCH PROPOSI TION OF LAW LAID DOWN BY JURISDICTIONAL HIGH COURT, WE ARE OF THE OPINION TH AT THESE CLAIMS OF THE ASSESSEE CANNOT BE OUT-RIGHTLY REJECTED BY LD. CIT(A). THER EFORE, IN THE INTEREST OF JUSTICE WE RESTORE BOTH THESE ISSUES BEFORE LD. CIT(A) WITH A DIRECTION TO PERMIT THE ASSESSEE TO RAISE SUCH CLAIMS AND AFTER SUCH PERMIS SION THE CLAIMS OF THE ASSESSEE ARE TO BE DECIDED AS PER PROVISIONS OF LAW ON MERITS. WITH THESE DIRECTIONS WE RESTORE GROUND NO.2 & 3 TO THE FILE O F LD. CIT(A) AND THESE GROUNDS ARE CONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOS ES IN THE MANNER AFORESAID. ITA NO.6385/MUM/2013, A.Y. 2009-10 6 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 31/07/2014 ! ' #$ % &'( 31 /07/2014 ' ) SD/- SD/- ( /SANJAY ARORA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; &' DATED 31 /07/2014 ! ! ! ! ' '' ' *+, *+, *+, *+, -,$+ -,$+ -,$+ -,$+ / COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. *0./ / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 4. 1 / CIT 5. ,2) *+' , , / DR, ITAT, MUMBAI 6. )3 4 / GUARD FILE. !' !' !' !' / BY ORDER, 0,+ *+ //TRUE COPY// 5 55 5 / 6 6 6 6 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . ./ VM , SR. PS