P. BHARATKUMAR & CO, MUMBAI V. ACIT (OSD)-I CR 7, MUMBAI

ITA 8149/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9364 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 05-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIJAY KOTHARI
• Section: 132; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C , MUMBAI BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 8150/MUM/2011 ASSESSMENT YEAR : 2005-06 ITA NO. 8149/MUM/2011 ASSESSMENT YEAR : 2006-07 M/S. P. BHARATKUMAR & CO. MOHANLAL JAIN & CO. CHARTERED ACCOUNTANTS 10, CHARTERED HOUSE GROUND FLOOR DR. C.H. STREET, MARINE LINES MUMBAI-400 002. PAN NO. AAAFP 2301 B VS. DCIT (OSD)-I CR-7, ROOM NO.413 AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIJAY KOTHARI RESPONDENT BY : SHRI RAJARSHI DWIVEDY DATE OF HEARING : 21.11.2012 DATE OF PRONOUNCEMENT : 21.11.2012 O R D E R PER RAJENDRA SINGH, AM: THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMM ON ORDER DATED 22.9.2011 OF CIT(A) FOR THE ASSESSMENT YEAR S 2005-06 AND 2006-07. THE DISPUTE RAISED IN THESE APPEALS RELATE TO ORDER OF RECTIFICATION PASSED BY AO UNDER SECTION 154 OF THE ACT. A S THE DISPUTE ITA NO.8150 & 8149/M/11 A.Y. 05-06 & 06-07 2 RAISED IS IDENTICAL IN BOTH THE APPEALS, THESE ARE BEING DISPOSED OFF BY A SINGLE CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE FACTS IN BRIEF ARE THAT THERE WAS A SEARCH CONDUCTE D UNDER SECTION 132 OF THE ACT IN CASE OF THE ASSESSEE UNDER REFEREN CE ON 26.5.2005. THERE WAS ALSO A SEARCH CONDUCTED BY DIRECTOR OF ENFORCEMENT DURING THE COURSE OF WHICH CASH OF RS.27.50 LA CS HAD BEEN SEIZED. THE ASSESSEE VIDE LETTER DATED 5.8.2005 SUB MITTED TO THE AO THAT THE CASH SEIZED BY THE DIRECTORATE OF ENFORCEME NT AMOUNTING TO RS.27.30 LACS MAY BE REQUISITIONED UNDER CLAUSE (C) OF SECTION 132A(1) AND OUT OF THE SAID CASH A SUN OF RS.16,95,000/ - MAY BE ADJUSTED TOWARDS SELF ASSESSMENT TAX LIABILITY FOR ASSESSMENT YEAR 2005-06 AND A SUM OF RS.10.35 MAY BE ADJUSTED AGAINST A DVANCE TAX LIABILITY FOR ASSESSMENT YEAR 2006-07. THE AO HOWEVER A T THE TIME OF PASSING ASSESSMENT ORDER DID NOT GIVE ANY CREDIT TOWARDS SEL F ASSESSMENT TAX AND ADVANCE TAX IN RELATION TO CASH SEIZED. THE ASSESSEE THEREFORE FILED PETITION UNDER SECTION 154 OF TH E ACT IN BOTH THE YEARS ON 3.2.2010 ENCLOSING THEREWITH COPY OF LETTE R DATED 5.8.2005 REQUESTING AO TO RECTIFY THE COMPUTATION OF I NTEREST UNDER SECTION 234B, 234C AND 220(2) AFTER TREATING CASH SEIZED AS SELF ASSESSMENT TAX AND ADVANCE TAX IN TERMS OF REQUEST MADE VI DE LETTER DATED 5.8.2005. THE AO HOWEVER DID NOT ACCEPT THE REQ UEST OF THE ASSESSEE. IT WAS OBSERVED BY HIM THAT THE SEIZED CASH COULD N OT BE ITA NO.8150 & 8149/M/11 A.Y. 05-06 & 06-07 3 TREATED AS ADVANCE TAX AS PER STANDING CBDT INSTRUCTIONS. THE CASH SEIZED HAD THEREFORE BEEN TREATED AS REGULAR PAYMENT. THE AO ACCORDINGLY REJECTED THE RECTIFICATION APPLICATION OF THE ASSESSEE IN BOTH THE YEARS. IN APPEAL CIT(A) CONFIRMED THE ORDER OF AO AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL I N BOTH THE YEARS. 3. BEFORE US, THE LD. AR SUBMITTED THAT THE ISSUE WAS COV ERED IN FAVOUR OF THE ASSESSEE BY SEVERAL DECISIONS OF THE TRIBUNA L IN WHICH IN IDENTICAL SITUATIONS WHEN THE CREDIT FOR SEIZED CASH HAD N OT BEEN GIVEN, THE CLAIM HAS BEEN ALLOWED UNDER SECTION 154 BY THE TRI BUNAL. RELIANCE WAS PLACED ON THE DECISION OF THE KOLKATTA BENCH OF THE TRIBUNAL IN THE CASE OF SIDDARTH JAIN VS. ACIT IN IT A NO.2166/KOL./09 AND ON THE DECISION OF AHMEDABAD BENCH OF THE TRIBUNAL IN CASE OF ACIT VS. MEGHMANI INDUSTRIES IN IT(SS) NO.570/AHD./201 1. IT WAS ACCORDINGLY REQUESTED THAT THE ORDERS OF CIT(A) BE SET A SIDE AND CLAIM OF THE ASSESSEE ALLOWED. THE LD. DR PLACED RELIANCE ON TH E ORDERS OF AUTHORITIES BELOW. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THERE IS NO DISPUTE ABOUT THE FA CT THAT THE ASSESSEE VIDE LETTER DATED 5.8.2005 HAD REQUESTED THE AO TO APPROPRIATE THE CASH SEIZED OF RS.27.30 LACS AGAINST TAX LIABILITY I.E. ITA NO.8150 & 8149/M/11 A.Y. 05-06 & 06-07 4 RS.16,95,000/- AS SELF ASSESSMENT TAX FOR ASSESSMENT YEAR 200 5-06 AND RS.10,35,000/- AS ADVANCE TAX FOR ASSESSMENT YEAR 2006 -07. THE CLAIM OF THE ASSESSEE HAD NOT BEEN ALLOWED IN THE ASSESSMEN T AND THEREFORE ASSESSEE HAD FILED PETITION UNDER SECTION 154 FOR RECTIFICATION OF THE ORDERS SO AS TO ALLOW CREDIT FOR SEIZED CASH WHILE COMPUTING INTEREST UNDER SECTION 234B, 234C AND SECTION 220(2). ON CAREFUL CONSIDERATION, WE FIND THAT THE CLAIM OF THE ASSESSEE IS MA INTAINABLE UNDER SECTION 154 IN VIEW OF SEVERAL DECISIONS OF THE TRI BUNAL ALLOWING THE CLAIM UNDER SECTION 154. IN CASE OF SIDDHARTH JAIN VS. ACIT (SUPRA), SIMILAR CLAIM FOR ADJUSTMENT OF SEIZED CASH HAD B EEN MADE BY THE ASSESSEE UNDER SECTION 154 OF THE ACT WHICH HAD BEEN RE JECTED BY THE AO AND THE ORDER HAD BEEN CONFIRMED BY CIT(A). T HE TRIBUNAL HOWEVER FOLLOWING THE JUDGMENT OF HON'BLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT VS. ARUN KAPOOR (334 ITR 35 1) IN WHICH IT WAS HELD THAT THE ASSESSEE WAS ENTITLED FOR BENEFIT OF PA YMENT OF SEIZED CASH FROM THE DATE OF APPLICATION, ALLOWED THE CL AIM UNDER SECTION 154. SIMILAR CLAIM HAD BEEN MADE IN CASE OF ACIT VS. MEGHMANI INDUSTRIES (SUPRA), IN WHICH THE AO HAD REJECT ED THE CLAIM UNDER SECTION 154 FOR ADJUSTMENT OF SEIZED CASH BUT THE SA ME HAD BEEN ALLOWED BY CIT(A) AND IN FURTHER APPEAL BY THE DEPARTMENT, THE TRIBUNAL HAD CONFIRMED THE ORDER OF CIT(A). THE SITUA TION IN THE PRESENT CASE IS IDENTICAL. WE, THEREFORE, RESPECTFULLY FO LLOWING THE ITA NO.8150 & 8149/M/11 A.Y. 05-06 & 06-07 5 DECISIONS OF THE TRIBUNAL (SUPRA), SET ASIDE THE ORDERS OF CIT(A) AND ALLOW THE CLAIM OF THE ASSESSEE. 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.11.2012. SD/- SD/- (VIVEK VARMA ) JUDICIAL MEMBER (RAJENDRA SINGH) ACCOUNTANT MEMBER MUMBAI, DATED: 21.11.2012. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.