DCIT CEN CIR 8(4), MUMBAI V. NATHMAL M. SHARMA, MUMBAI

ITA 7060/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5225 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 05-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATISH CHANDRA RAJORE LD DR
• Assessee Lawyers: S C TIWARI; RUTUJA PAWAR LD ARS
• Keywords: Search and seizure; Surrender of tenancy right; Reassessment proceedings
• Section: 69C; 143(3); 147; 148; 132

Judgement Text

ITA NO.7060-61/MUM/2016 ASSESSMENT YEAR :2007-08 1 INTHEINCOMETAXAPPELLATETRIBUNAL ABENCH,MUMBAI , , BEFOREHONBLESHRIMAHAVIRSINGH,JMAND HONBLESHRIMANOJKUMARAGGARWAL,AM ./ ITA NO.7060/MUM/2016 ( 6 7 87 / ASSESSMENT YEAR: 2007-08) DCIT - CENTRAL CIRCLE - 8(4) 6TH FLOOR. ROOM NO. 658 AAYKAR BHAWAN M.K.ROAD MUMBAI 400 020 / VS. SHRI NATHAMAL M.SHARMA (PROP. OF SHREE MARUTI MISHTHAN BHANDAR) BABA BHAGWANDAS KA AKHADA BANGANGA, WALKESHWAR ROAD MUMBAI 400 006 9:;<= ./ = ./PAN/GIR NO. APMPS-2091-E ( ! /APPELLANT ) : ( '# ! / RESPONDENT ) & ./ ITA NO.7061/MUM/2016 ( 6 7 87 / ASSESSMENT YEAR: 2007-08) DCIT - CENTRAL CIRCLE - 8(4) 6TH FLOOR. ROOM NO. 658 AAYKAR BHAWAN M.K.ROAD MUMBAI 400 020 / VS. AMRUT HOTELS PRIVATE LIMITED C/O HANUMAN MISHTHAN BHANDAR BABA BHAGWANDAS KA AKHADA BANGANGA, WALKESHWAR ROAD MUMBAI 400 006 9:;<= ./ = ./PAN/GIR NO. AAACA-4801-G ( ! /APPELLANT ) : ( '# ! / RESPONDENT ) ASSESSEE BY : SHRI S.C.TIWARI & MS. RUTUJA PAWAR-LD. ARS REVENUE BY : SHRI SATISH CHANDRA RAJORE- LD. DR $%&' / DATE OF HEARING : 06/08/2019 ()*%&' / DATE OF PRONOUNCEMENT : 21/08/2019 ITA NO.7060-61/MUM/2016 ASSESSMENT YEAR :2007-08 2 ; / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEALS BY REVENUE FOR ASSESSMENT YEAR [AY] 2007-08 WITH RESPECT TO DIFFERENT ASSESSEES CONTEST SEPARAT E ORDERS OF LD. FIRST APPELLATE AUTHORITY ON CERTAIN COMMON GROUNDS OF AP PEAL. SINCE THE GRIEVANCE OF THE REVENUE ARISES OUT OF COMMON SET O F FACTS AND CIRCUMSTANCES, BOTH THE APPEALS ARE DISPOSED-OFF TO GETHER BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVI TY. ITA NO.7060/MUM/2016 2.1 AGGRIEVED BY THE ORDER OF LD. COMMISSIONER OF I NCOME TAX (APPEALS)-50, MUMBAI [CIT(A)], THE REVENUE IS UNDER APPEAL WITH FOLLOWING GROUNDS OF APPEAL: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD CIT(A) ERRED IN DELETING THE ADDITION OF RS.2,00,00,000/- ON ACCOUN T OF SURRENDER OF TENANCY RIGHTS WITHOUT APPRECIATING THE FACT THAT DURING THE COURS E OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO ESTABLIS H THAT THE CONTENTS OF THE E- MAIL WERE NOT TRUE. 2.2 FACTS IN BRIEF ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS ASSESSED FOR IMPUGNED AY U/S 143(3) READ WITH SECTI ON 147 ON 27/01/2015 WHEREIN THE INCOME FOR THE ASSESSEE WAS DETERMINED AT RS.405.99 LACS AFTER CERTAIN ADDITIONS OF RS.2 CROR ES UNDER THE HEAD CAPITAL GAINS ON ACCOUNT OF SURRENDER OF TENANCY RI GHT IN A CERTAIN PROPERTY. 2.3 THE REASSESSMENT PROCEEDINGS GOT TRIGGERED PURS UANT TO SEARCH AND SEIZURE ACTION U/S 132 OF THE INCOME TAX ACT, 1 961 ON PHOENIX GROUP ON 20/02/2008 WHEREIN AN EMAIL PRINT-OUT WAS FOUND WHICH WAS SEIZED AND INVENTORIZED AS PAGE NO. 145 OF ANNEXURE -1 OF PANCHNAMA DATED 21/02/2008. AS PER THE DOCUMENT, THE ASSESSEE ALONG WITH ITA NO.7060-61/MUM/2016 ASSESSMENT YEAR :2007-08 3 ANOTHER ENTITY NAMELY M/S AMRUT HOTEL PRIVATE LTD. AGREED TO SURRENDER TENANCY RIGHTS IN FAVOUR OF M/S PHOENIX MILLS LIMIT ED FOR CONSIDERATION OF RS.8 CRORES AND AGREED TO VACATE THE PREMISE ON OR BEFORE 30/06/2006 UNDER CERTAIN TERMS. HOWEVER, THE SAID TRANSACTION WAS RECORDED IN THE BOOKS OF THE TWO ENTITIES AT RS.4 CRORES. THE SAID FACT LED THE LEARNED AO TO TRIGGER REASSESSMENT PROCEEDINGS AGAINST THE ASSESSEE AS PER DUE PROCESS OF LAW BY ISSUANCE OF NOTICE U/S 148 ON 25/07/2014. 2.4 DURING REASSESSMENT PROCEEDINGS, THE ASSESSEE D EFENDED ITS STAND BY SUBMITTING THAT THE EMAIL DOCUMENT DID NOT PERTAIN TO HIM AND AT THE SAME TIME, PLEADED FOR EXAMINATION OF THE PERSO NS ON WHOM THE DEPARTMENT WAS RELYING UPON TO MAKE THE ADDITION OF RS.2 CRORE. HOWEVER, NOT CONVINCED WITH ASSESSEES SUBMISSIONS, LD. AO INVOKING THE PRESUMPTION OF SECTION 132(4A) AGAINST THE ASSE SSEE, REJECTED THE PLEA OF CROSS-EXAMINATION AS RAISED BY THE ASSESSEE . FINALLY, THE DIFFERENTIAL AMOUNT OF RS.2 CRORE, BEING ALLEGED CA SH COMPONENT PERTAINING TO ASSESSEE, WAS ADDED TO THE INCOME OF THE ASSESSEE FOR SURRENDER OF TENANCY RIGHTS UNDER THE HEAD CAPITAL GAINS. 3. AGGRIEVED, THE ASSESSEE, WHILE CHALLENGING THE L EGALITY OF REASSESSMENT PROCEEDINGS, CONTESTED THE ADDITIONS O N MERITS BEFORE LD. FIRST APPELLATE AUTHORITY VIDE IMPUGNED ORDER DATED 24/08/2016. ALTHOUGH LD. CIT(A) UPHELD THE REASSESSMENT PROCEEDINGS, HOW EVER, DELETED THE QUANTUM ADDITIONS BY FOLLOWING THE DECISION OF TRIB UNAL IN THE CASE OF M/S PHOENIX MILLS LIMITED DELETING THE ADDITION OF RS.4 CRORES MADE U/S 69C, BY OBSERVING AS UNDER: - 6.4.1 IT CAN BE SEEN FROM THE ORDER OF THE HONBLE ITAT IN ITA NO.7271/M/2012 IN THE CASE OF PML THAT THE HONBLE ITAT HAS HELD THAT THE ASSESSING OFFICER IN THE CASE OF PML COULD NOT BRING SUFFICIENT MATERIAL ON RECORD TO JUSTIFY THE ADDITION IN THE ITA NO.7060-61/MUM/2016 ASSESSMENT YEAR :2007-08 4 CASE OF PML AND THEREFORE, THE ADDITION MADE IN THE CASE OF PML WAS NOT SUSTAINABLE. 6.4.2 I FIND THAT THE ASSESSING OFFICER IN THE CASE OF THE APPELLANT RELIED ON EXACTLY THE SAME PIECE OF EVIDENCE AND THE SAME REASONING F OR MAKING THE ADDITION WHICH IS THE SUBJECT MATTER OF THIS APPEAL. I ALSO FIND T HAT THE AO HAS NOT EVEN BROUGHT ON RECORD WHO WAS THE SENDER OF THE E-MAIL AND TO WHOM IT WAS SENT. FURTHER, THE E- MAIL WAS FOUND IN THE PREMISES OF PML AND THEREFORE , ITS EVIDENTIARY VALUE IS MUCH MORE WHEN USED AGAINST PML THAN ITS EVIDENTIARY VAL UE WHEN USED AGAINST A THIRD PARTY (APPELLANT). 6.4.3 IN VIEW OF THE FINDING OF THE HONBLE ITAT IN THE CASE OF PML, I HOLD THAT THE ADDITION MADE IN THE CASE OF THE APPELLANT IS NOT S USTAINABLE. ACCORDINGLY, I DELETE THE ADDITION OF RS.2,00,00,000/-. IN THE RESULT, TH E 2 ND GROUND OF APPEAL IS ALLOWED. THE OPERATIVE PART OF THE TRIBUNALS DECISION IN TH E CASE OF M/S PHOENIX MILLS LIMITED HAS ALREADY BEEN EXTRACTED IN THE IMP UGNED ORDER AND THEREFORE, NOT EXTRACTED HERE TO AVOID DUPLICATION AND REPETITION. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. AFTER HEARING RIVAL SUBMISSIONS, THE UNDISPUTED POSITION THAT EMERGES IS THE FACT THAT ADDITION OF RS.4 CRORES MA DE U/S 69C IN THE HANDS OF PAYER I.E. M/S PHOENIX MILLS LIMITED STOOD DELETED BY THE TRIBUNAL FOR WANT OF REQUISITE EVIDENCES / MATERIAL VIDE ITA NO. 7271/MUM/2012 ORDER DATED 19/08/2015. THIS BEING TH E CASE, THE ADDITION IN THE HANDS OF THE PAYEE ALSO COULD NOT B E SUSTAINED. NOTHING ON RECORD WOULD SUGGEST THAT THE AFORESAID RULING I S NOT APPLICABLE OR THE SAME HAS BEEN REVERSED IN ANY MANNER, BY ANY HIGHER JUDICIAL AUTHORITY. THEREFORE, THE STAND OF LD. FIRST APPELLATE AUTHORI TY, IN OUR CONSIDERED OPINION, WAS QUITE LOGICAL ONE AND WE FIND NO REASO N TO INTERFERE WITH THE SAME. IN THE RESULT, WE DISMISS THE APPEAL. ITA NO. 7061/MUM/2016 5. FACTS ARE PARI-MATERIA THE SAME FOR THIS ASSESSEE WHEREIN SIMILAR ADDITION OF RS.2 CRORES HAS BEEN MADE IN AN ASSESSM ENT FRAMED U/S 143(3) READ WITH SECTION 147 ON 28/01/2015. THE LEA RNED FIRST APPELLATE ITA NO.7060-61/MUM/2016 ASSESSMENT YEAR :2007-08 5 AUTHORITY HAS DELETED THE ADDITION, INTER-ALIA , BY RELYING UPON THE DECISION OF THIS TRIBUNAL IN THE CASE OF THE PAYER. THEREFOR E, FACTS AND CIRCUMSTANCES BEING IDENTICAL, OUR FINDING AND CONC LUSION, SHALL MUTATIS MUTANDIS APPLY TO THIS APPEAL ALSO. ACCORDINGLY, BY CONFIRMI NG THE STAND OF LEARNED CIT(A) IN THE IMPUGNED ORDER, WE DISMISS THE APPEAL. CONCLUSION 6. BOTH THE APPEALS STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST AUGUST, 2019. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21/08/2019 SR.PS, JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. ! , ! , / DR, ITAT, MUMBAI 6. #$% / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.