Shri Navin Malde, Indore V. Assistant Commissioner of Income Tax, Central, Indore

ITA 694/Ind/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0723 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S MANTRI
• Assessee Lawyers: R K VORA; CHETAN KHANDELWAL CAS
• Keywords: Search and seizure; Document seized; Opportunity of being heard; Documents seized
• Section: 143(3); 153A; 143(2); 139(1); 132; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER ITA.NO.694/IND/2017 ASSESSMENT YEAR 2009-10 SHRI NAVIN MALDE, 402, SUKH SAGAR APARTMENTS, GOYAL NAGAR, INDORE PAN : ABUPM8035E : APPELLANT V/S ACIT, CENTRAL CIRCLE-2 INDORE : REVENUE ASSESSEE BY S/ SHRI R.K. VORA & CHETAN KHANDELWAL, CAS REVENUE BY S HRI S.S. MANTRI, CIT DATE OF HEARING 11 .02.2021 DATE OF PRONOUNCEMENT 18 .02.2021 O R D E R PER MANISH BORAD, A.M THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 2009-10 IS D IRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX-III ( IN SHORT LD. CIT], NAVIN MALOD ITA NO.694/IND/2017 2 INDORE DATED 29.08.2017 WHICH IS ARISING OUT OF TH E ORDER U/S 143(3) R.W.S. 153A OF THE INCOME TAX ACT 1961(IN S HORT THE ACT) DATED 23.03.2016 FRAMED BY ACIT (CENTRAL)-2, INDORE . 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WEL L AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNE D ASSESSING OFFICER IN SUSTAINING THE ADDITION OF RS.17,00,000/- ON ACCOUN T OF BROKERAGE, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE . 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE THE SAID GROUNDS OF APPEAL. ADDITIONAL GROUNDS: 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WEL L AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNE D ASSESSING OFFICER IN SUSTAINING THE ADDITION OF RS.17,00,000/- ON ACCOUN T OF BROKERAGE, WITHOUT CONSIDERING THE FACTS THAT NO INCRIMINATING MATERIA L WAS FOUND DURING THE COURSE OF SEARCH IN RESPECT OF A.Y. 2009-10. THERE FORE, NO ADDITION COULD HAVE BEEN MADE IN THE ASSESSMENT ORDER UNDER SECTIO N 153A OF THE I.T. ACT 1961, AS THE ASSESSMENT OF 2009-10 IS ALREADY CONCL UDED. 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE THE SAID GROUNDS OF APPEAL. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BROKERAG E AND NAVIN MALOD ITA NO.694/IND/2017 3 COMMISSION FROM PROPERTY DEALING. ASSESSEE FILED IT S RETURN OF INCOME ON 31.3.2010 U/S 139(1) DECLARING TOTAL INCO ME OF RS.4,25,650/-. A SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CONDUCTED ON THE DOSHI GROUP OF INDORE ON 28.02.201 4. SINCE THE ASSESSEE HAD BUSINESS RELATIONS WITH DOSHI GROUP, H E WAS ALSO SUBJECTED TO SEARCH AND VARIOUS DOCUMENTS WERE SEIZ ED FROM HIS RESIDENTIAL PREMISES. A NOTICE U/S 153A WAS ISSUED TO THE ASSESSEE TO FILE RETURN OF INCOME BUT THE ASSESSEE DID NOT F ILE THE RETURN STATING THAT NO ADDITIONAL INCOME HAS BEEN OFFERED IN THIS YEAR AND THE RETURN FILED U/S 139(1) MAY BE TREATED AS THE R ETURN FILED U/S 153A. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS LD. A.O CONFRONTED THE ASSESSEE WITH THE SEIZED DOCUMENTS F OUND DURING THE COURSE OF SEARCH AND THE STATEMENTS GIVEN U/S 1 32(4) OF THE ACT WITH REGARD TO THE LAND DEAL MATERIALISED DURING FI NANCIAL YEAR 2008-09 RELEVANT TO ASSESSMENT YEAR 2009-10 BETWEEN M/S D.S. ENTERPRISES (A FIRM OF DOSHI GROUP) AND LATE MAHARA NI LAXMI KUMARI. THE ASSESSEE STATED THAT FOR THIS LAND DEA L HE WAS TO RECEIVE A BROKERAGE OF RS.27,00,000/-. HE FURTHER STATED THAT OUT OF NAVIN MALOD ITA NO.694/IND/2017 4 THIS RS.27,00,000/-, RS.5,00,000/- HAS BEEN RECEIVE D THROUGH CHEQUE DURING FINANCIAL YEAR 2008-09, RS.5,00,000/- WAS FURTHER RECEIVED THROUGH CHEQUE DURING FINANCIAL YEAR 2009- 10 AND RS.10,00,000/- WAS RECEIVED IN CASH DURING FINANCIA L YEAR 2013-14 AND ALL THESE RECEIPTS HAVE BEEN OFFERED TO TAX. T HE BALANCE OF RS.7,00,000/- HAS NOT BEEN RECEIVED TILL DATE. THO UGH IT WAS CONTENDED THAT THE ASSESSEE SHOWS INCOME ON CASH BA SIS BUT LD. A.O WAS NOT SATISFIED AND HE AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE CONCLUDED THAT RS.17,00,000/- HAS NOT BEEN OFFERED TO TAX BY THE ASSESSEE DURING THE YEAR. ACC ORDINGLY THE INCOME WAS ASSESSED AT RS.21,25,650/- U/S 143(3) R. W.S. 153A OF THE ACT BY ADDING RS.17,00,000/- ON ACCOUNT OF UNDI SCLOSED BROKERAGE INCOME. 5. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. C IT(A) BUT FAILED TO SUCCEED. 6. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL. 7. WITH REGARD TO THE ADDITIONAL LEGAL GROUND RAISE D BY THE ASSESSEE IN VIEW OF THE JUDGMENT OF HONBLE APEX C OURT IN THE CASE NAVIN MALOD ITA NO.694/IND/2017 5 OF NATIONAL THERMAL POWER CO. LTD V/S CIT 229 ITR 383 LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE NO INCRIMINAT ING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH WITH REGARD TO TH E IMPUGNED ADDITION AND THE ASSESSEES CASE WAS NOT SELECTED F OR SCRUTINY BY WAY OF ISSUANCE OF NOTICE U/S 143(2) OF THE ACT FOR THE RETURN FILED U/S 139 OF THE ACT ON 31.03.2010, THE ASSESSMENT YE AR UNDER APPEAL IS NON ABATED/CONCLUDED ASSESSMENT. THE LD. COUNSEL FOR THE ASSESSEE PLACING RELIANCE ON THE DECISION OF TH IS TRIBUNAL IN THE CASE OF DCIT V/S M/S MCS TRADING COMPANY PVT. LTD IT(SS) A NO.141/IND/2016 ORDER DATED 09.04.2019 SUBMITTED THAT SUCH NON ABATED/CONCLUDED ASSESSMENTS CANNOT BE DISTURBED BY THE LD. A.O WITHOUT REFERRING TO ANY INCRIMINATING MATERIAL FOU ND DURING THE COURSE OF SEARCH. 8. AS REGARDS THE MERITS OF THE CASE LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE DISCLOSES THE INCOME IN THE INCOME TAX RETURN ON CASH BASIS. RS.20,00,000/- HAVE ALREADY BEEN OFFERED IN RESPECTIVE ASSESSMENT YEARS WHEN THEY WERE RECEIVED . RS.7,00,000/- IS STILL OUTSTANDING AND IN CASE IF I T IS RECEIVED THE SAME WOULD BE OFFERED TO TAX. NAVIN MALOD ITA NO.694/IND/2017 6 9. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEM ENTLY ARGUED SUPPORTING THE ORDER OF BOTH THE LOWER AUTHO RITIES. 10. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. AS REGARDS THE LEGAL GROUND RAISE D BY THE ASSESSEE WHICH WE HAVE ADMITTED FOR ADJUDICATION IN VIEW OF THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD V/S CIT 229 ITR 383 ( SUPRA), WE ON EXAMINATION OF THE RECORDS OBSERVE THAT DURING THE COURSE OF SEARCH CERTAIN D OCUMENTS WERE BEEN SEIZED WHICH HAVE BEEN REFERRED BY THE LD. A.O IN PARA 8 OF THE ASSESSMENT ORDER. DURING THE COURSE OF SEARCH ITSELF ASSESSEE WAS ASKED THE QUESTIONS ABOUT THE BROKERAGE INCOME RECEIVED ON THE LAND TRANSACTION BETWEEN THE TWO PARTIES, THE P ROOF OF WHICH WAS FOUND DURING THE COURSE OF SEARCH. IT IS NOT T HE CASE THAT THE LD. A.O HAS INITIATED FRESH ENQUIRY DURING THE ASSE SSMENT PROCEEDINGS CARRIED OUT U/S 143(3) R.W.S. 153A OF T HE ACT. HAD THERE BEEN NO REFERENCE TO ANY SEIZED MATERIAL QUA THE STATEMENT GIVEN DURING THE COURSE OF SEARCH THE ASSESSEE HAD A STRONG CASE ON LEGAL GROUND BUT IT IS NOT SO IN THE INSTANT CASE. THEREFORE SINCE THERE IS A SPECIFIC REFERENCE IN THE ASSESSMENT ORD ER OF THE NAVIN MALOD ITA NO.694/IND/2017 7 INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH WHICH INSTIGATED THE SEARCH TEAM TO ASK VARIOUS QUESTIONS REGARDING THE ACTUAL INCOME EARNED BY THE ASSESSEE, IT CANNOT BE SAID THAT THE ALLEGED ADDITION IS MADE WITHOUT REFERRING TO ANY I NCRIMINATING MATERIAL. THEREFORE THE ASSESSEE FAILS TO SUCCEED ON THIS LEGAL GROUND WHICH IN OUR CONSIDERED VIEW DESERVES TO BE DISMISSED. ACCORDINGLY THE ADDITIONAL GROUND RAISED BY THE ASS ESSEE IS DISMISSED. 11. NOW WE TAKE UP GROUND RAISED ON MERITS. REGARD ING THE ADDITION OF RS.17,00,000/- FOR UNACCOUNTED BROKERAG E INCOME MADE BY THE LD. A.O AND SUSTAINED BY LD. CIT(A), WE FIND THAT DURING THE COURSE OF SEARCH ASSESSEE WAS ASKED SPEC IFIC QUESTION REGARDING THE ALLEGED UNACCOUNTED BROKERAGE INCOME WHICH WAS SUBSEQUENTLY CONFRONTED TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS ALSO BY RAISING FOLLOWING QUESTION:- 1. DURING THE SEARCH & SEIZURE OPERATION U/S 132 OF THE ACT IN YOUR CASE IT WAS NOTICED THAT YOU ALONG WITH ONE SANJAY BADJATYA HAD BROKERED THE LAND DEALING AT NARSINGH KOTHI, KANADIA ROAD, INDOR E BETWEEN LATE MAHARANI SMT. LAXMI KURNARI AND M/S D.S. ENTERPRISES, A FIRM OF DOSHI GROUP. IN REPLY TO Q. NO. 4,5,6,7 OF YOUR STATEMENT RECORDED ON 28/2/2014 U/S 132(4) OF THE ACT, YOU HAVE STATED THAT AN AMOUNT O F RS. 27, 00,000/- NAVIN MALOD ITA NO.694/IND/2017 8 WAS RECEIVED BY YOU AS BROKERAGE. YOU ARE REQUESTED TO EXPLAIN AS TO WHY THIS AMOUNT OF RS. 27, 00,000/- SHOULD NOT BE TREAT ED AS YOUR INCOME AND WHY ADDITION OF RS. 27,00,000/- SHOULD NOT BE MADE FOR THE F.Y. 2008-09 (A.Y. 2009-10). 12. THE ASSESSEE GAVE FOLLOWING REPLY TO THE ABOVE SAID QUERY:- REPLY: IT IS CORRECT TO SAY THAT, I ALONG WITH SHRI SANJAY BADJATYA BROKERED THE LAND DEAL OF NARSINGH KOTHI BETWEEN LATE MAHARA NI SMT. LAXMI KUMARI & M/S D. S ENTERPRISES, A FIRM OF DOSHI GROUP. I ALSO CONFIRM THAT SHRI SANJAY BADJATYA USED TO INTERACT WITH LATE MAH ARANI IN RESPECT OF THIS DEAL. IT IS ALSO CORRECT TO STATE THAT IN THIS DEAL I WAS TO GET AN AMOUNT OF RS. 27 LAKH BY WAY OF BROKERAGE. HOWEVER, OWING TO DEATH OF SANJAY BADJATYA I HAD RECEIVED RS. 20 LAKH AS UNDER I. 5,00,000/- (THROUGH CHEQUE OF BOR DRAWN ON B01 19.01.2009) CREDITED IN MY ACCOUNT ON 2. 5,00,000/- (THROUGH CHEQUE OF BOR DRAWN ON BOI CRE DITED IN MY ACCOUNT ON 21.04.2009) 3. 10,00,000/- (RS. 10 LAKH CASH IN AUGUST 2013) IT IS PERTINENT TO MENTION THAT BROKERAGE OF RS. 5 LAK H EACH WAS RECEIVED BY ME BY WAY OF CHEQUE IN MARCH 2009 & APRIL 2009 RESPECTIVELY. CONSEQUENTLY, I HAVE OFFERED THIS INCOME IN RETURN OF INCOME FILLED FOR A.Y 2009-10 & 2010-11. FOR THE, CASH BROKERAGE OF RS. 10 LAKH WAS RECEIVED BY ME IN AUGUST 2013 & HENCE THE SAME HAS BEEN OFFERED FOR TAX FOR A.Y- 2014- 15. HOWEVER, REGARDING THE RECEIPT OF CASH BR OKERAGE OF RS. 10 LAKH, I WOULD LIKE TO MENTION THAT THERE WAS INORDI NATE DELAY TO RECEIVE THE SAME FROM LATE MAHARANI AS MY, CO BROKER SHRI S ANJAY BADJATYA WHO USED TO INTERACT WITH LATE MAHARANI, DIED IN A ROAD ACCIDENT ON NAVIN MALOD ITA NO.694/IND/2017 9 14.11.2011. EVEN TILL THE DEATH OF SHRI SANJAY, I H AVE NOT RECEIVED THE CASH BROKERAGE OF RS. 10 LAKH & IN HIS ABSENCE I HAD TO PERSONALLY PURSUE THIS MATTER WITH THE LATE MAHARANI & ULTIMATELY I COULD RECEIVED RS. 10 LAKH OUT OF RS, BALANCE RS. 17 LAKH IN AUGUST 20\3. J MAY ADD THAT THE BALANCE RS. 7 LAKH HAS NOT BEEN RECEIVED BY ME HITHER TO; H ENCE THERE IS NO QUESTION OF TAXING THE RECEIPT OF RS, 7 LAKH IN MY HAND, AS J AM OFFERING INCOME BY WAY OF BROKERAGE & COMMISSION ON CASH BASIS SINCE LAST MORE THAN 25 YEARS. IN NUTSHELL, I MAY STATE THAT J WAS TO GET BROKERAGE OF RS. 27 LAKH BUT OUT OF THIS AMOUNT I HAVE RECEIVED RS. 20 LAKH TILL NOW & SAME HAS BEEN OFFERED FOR TAXATION AS UNDER 1. 5,00,0001- (A.Y-2009-10) 2. 5,00,000/- (A.Y-2010-11) 3. 10,00,000/- (A.Y-2014-15) AS THE BALANCE RS. 7 LAKH HAS NOT BEEN RECEIVED BY ME SO FAR, THEREFORE, THE SAME HAS NOT BEEN OFFERED FOR TAX. AS & WHEN THIS BALANCE 7 LAKH IS RECEIVED BY ME, THE SAM E WILL BE OFFERED FOR TAX 13. FROM GOING THROUGH THE ABOVE REPLY AS WELL AS T HE OBSERVATION OF THE LOWER AUTHORITIES AND FACTS PLACED BEFORE US WE FIND THAT THERE IS NO ISSUE WITH REGARD TO THE INCOME OFFERED AT RS.5,00,000/- EACH FOR ASSESSMENT YEAR 2009-10 AND 2010-11. OUT O F THE BROKERAGE OF RS.27,00,000/-, THE FACT THAT RS.10,0 0,000/- HAS BEEN OFFERED TO TAX IS ACCEPTED BY THE LD. A.O. REGARDING THE NAVIN MALOD ITA NO.694/IND/2017 10 REMAINING AMOUNT OF RS.17,00,000/-, SUM OF RS.7,00, 000/- IS CLAIMED BY THE ASSESSEE TO HAVE NOT BEEN RECEIVED T ILL DATE. REVENUE HAS FAILED TO DISCHARGE ITS ONUS BY BRINGIN G ANY MATERIAL ON RECORD FOUND DURING THE COURSE OF SEARCH OR POST SEARCH BY WAY OF GATHERING INFORMATION FROM THE PARTIES WHO AGREE D TO GIVE BROKERAGE TO ASSESSEE THAT THE ASSESSEE HAS ACTUALL Y RECEIVED THE BROKERAGE OF RS.7,00,000/-. LD. DEPARTMENTAL REPRE SENTATIVE COULD NOT CONTROVERT THE FACT THAT THE ASSESSEE IS SHOWIN G THE INCOME ON CASH BASIS AND IN ABSENCE OF ANY MATERIAL AGAINST T HE ASSESSEE WE FIND NO JUSTIFICATION IN THE ADDITION OF RS.7,00,00 0/- FOR THE INCOME WHICH THE ASSESSEE HAS NOT RECEIVED YET. HOWEVER L D. COUNSEL FOR THE ASSESSEE HAS STATED THAT IN CASE IT IS RECEIVED IN SUBSEQUENT YEAR/YEARS THE SAME SHALL BE OFFERED TO TAX. 14. AS REGARDS THE REMAINING AMOUNT OF RS.10,00,000 /- WHICH THE ASSESSEE HAS ACCEPTED TO HAVE RECEIVED IN CASH DURI NG FINANCIAL YEAR 2013-14 RELEVANT TO ASSESSMENT YEAR 2014-15 AN D DULY CLAIMED TO HAVE BEEN OFFERED TO TAX, THE SAME CAN B E EXAMINED BY LD. A.O BY CALLING NECESSARY DETAILS RELEVANT TO ASSESSMENT YEAR NAVIN MALOD ITA NO.694/IND/2017 11 2014-15 IN ORDER TO ASCERTAIN THE CORRECTNESS OF T HE ASSESSEES CLAIM. IN CASE IT IS FOUND CORRECT THEN THE LD. A.O WILL DELETE THE ADDITION OF RS.10,00,000/- . THE LD. A.O IS DIRECT ED TO EXTEND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE TO PLACE NECESSARY SUBMISSION AND DOCUMENTS ON RECORD. 15. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANC ES OF THE CASE ARE OF THE CONSIDERED VIEW THAT OUT OF THE IMPUGNED ADDITION OF RS.17,00,000/-, THE ADDITION OF RS.7,00,000/- STAND S DELETED AND THE REMAINING ADDITION OF RS.10,00,000/- SHALL STAN D DELETED IF THE ASSESSEE IS ABLE TO PROVE TO THE SATISFACTION OF LD . A.O THAT SUM OF RS.10,00,000/- TOWARDS BROKERAGE INCOME EARNED FROM THE TRANSACTION OF IMMOVEABLE PROPERTY BETWEEN M/S D.S. ENTERPRISES AND LATE MAHARANI LAXMI KUMARI (CONCLUDED DURING AS SESSMENT YEAR 2009-10) HAVE BEEN OFFERED TO TAX IN THE INCOM E TAX RETURN FILED FOR ASSESSMENT YEAR 2014-15. 16. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. NAVIN MALOD ITA NO.694/IND/2017 12 ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18.02.20 21 SD/- SD/- ( KUL BHARAT) (MANI SH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 18 FEBRUARY, 2021 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE