SANJAY JHUNJHUNWALA HUF, MUMBAI V. ACIT CEN CIR 11, MUMBAI

ITA 8280/MUM/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5645 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 03-03-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 30-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Search and seizure; Opportunity of being heard; Additional evidence; Reasonable cause
• Section: 153A; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM ./ I.T.A. NOS. 8280 & 8281/MUM/2010 ( / ASSESSMENT YEARS: 2002-03 & 2003-04) SANJAY JHUNJHUNWALA HUF A/1001, RUSHI TOWER, SWAMI SAMARTH NAGAR, ANDHERI (W), MUMBAI-400 053 / VS. ASST. CIT, CENTRAL CIRCLE 11, OLD CGO BLDG., 8 TH FLOOR, M. K. ROAD, CHURCHGATE, MUMBAI-400 020 ' ./# ./PAN/GIR NO. AAGHS 6574 M ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) '$ ' ( / APPELLANT BY : SHRI PRAKASH JHUNJHUNWALA %&'$ ' ( / RESPONDENT BY : SHRI GIRIJA DAYAL )* + ' , / DATE OF HEARING : 03.03.2014 -./ ' , / DATE OF PRONOUNCEMENT : 03.03.2014 / O R D E R PER SANJAY ARORA, A. M.: THESE ARE A SET OF TWO APPEALS BY THE ASSESSEE DIRE CTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-37, MUMBAI (C IT(A) FOR SHORT) DATED 23.09.2010, DISMISSING THE ASSESSEES APPEAL CONTES TING ITS ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR TH E ASSESSMENT YEAR (A.Y.) 2002-03 & 2003-04 VIDE ORDER DATED 30.12.2009. THE APPEALS RA ISING COMMON ISSUES, WERE POSTED FOR HEARING TOGETHER, AND ARE BEING, ACCORDINGLY, D ISPOSED OF VIDE A COMMON, CONSOLIDATED ORDER. 2 ITA NOS. 8280 & 8281/MUM/2010 (A.YS. 2002-03 & 2003-04) SANJAY JHUNJHUNWALA HUF VS. ASST. CIT 2. AT THE VERY OUTSET, IT WAS CLAIMED BY THE LD. AU THORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, THAT THE ISSUES ARISING IN THE INSTANT APPEALS ARE THE SAME AS THAT IN THE OTHER GROUP CASES, AS FOR EXAMPLE IN THE CASE OF SANGEETA SANJAY JHUNJHUNWALA VS. ASST. CIT (IN ITA NOS. 7929 TO 7934/MUM/2010 FOR THE A.Y. 20 02-03 TO 2008-09 DATED 20.02.2013/PB PGS.1-12). THE CASES OF BOTH THE PART IES (TO THE LITIGATION) BEING THE SAME, THE ASSESSEES APPEAL MAY BE, FOLLOWING THE SAID DE CISIONS (THREE IN NUMBER, PLACED AT PGS.1-28 OF THE PAPER-BOOK), CONSIDERED AS COVERED THEREBY. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3.1 THE APPEALS RAISES TWO ISSUES; THE FIRST BEING IN RESPECT OF ADDITION QUA UNSECURED LOANS U/S.68 OF THE ACT. THE SAME STANDS CONSIDERED BY THE TRIBUNAL IN THE CASE OF SANGEETA SANJAY JHUNJHUNWALA (SUPRA). THE TRIBUNAL TAKING COGNIZANCE OF THE STRI NGENT CONDITIONS AND THE ACUTE HARDSHIP UNDER WHICH THE A SSESSEE AND HIS FAMILY WERE PLACED AT THE RELEVANT TIME, RESTORED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER (A.O.) TO ALLOW THE ASSESSEE AN OPPORTUNITY TO PROVE ITS CASE . FOR THE PURPOSE, WE MAY REFER TO PARAS 6 TO 9 OF THE TRIBUNALS ORDER IN THE CASE OF SANGEETA SANJAY JHUNJHUNWALA (SUPRA), RELEVANT PARTS OF WHICH, TO WHICH OUR ATTENTION WAS DRAWN DURING HEARING, ARE AS UNDER: 6. IN VIEW OF THESE FACTS AND CIRCUMSTANCES OF THE CASE, THIS ISSUES REQUIRED TO BE PROPERLY EXAMINED AND VERIFIED BY TH E ASSESSING OFFICER. 6.1 THERE IS ONE MORE REASON FOR CONSIDERATION OF THE ISSUE BECAUSE THE ASSESSEE STATED TO HAD BEEN FACING CRIMINAL PROCEED INGS IN THE VARIOUS COURTS OF LAW AND SOME OF THE FAMILY MEMBERS OF THE ASSESSEE WERE ARRESTED BY THE POLICE AND EVEN ARREST WARRANT WERE ISSUED A GAINST THE ASSESSEE, HER HUSBAND AND OTHER FAMILY MEMBERS, WHICH CLEARLY SHO WS THAT THE ASSESSEE WAS FACING ABNORMAL CIRCUMSTANCES AND THEREFORE, WA S NOT ABLE TO PROPERLY DEFEND HER CASE DURING THE ASSESSMENT PROCEEDINGS. 7. FOR THE ASSESSMENT YEAR 2007-08 AND 2008-09, THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE AND PLEADED THAT DUE TO T HE CRIMINAL PROCEEDINGS PENDING AGAINST THE ASSESSEE AS WELL AS OTHER FAMIL Y MEMBERS OF THE ASSESSEE, THE ASSESSEE COULD NOT OBTAIN THE RELEVAN T DOCUMENTS TO JUSTIFY THE CREDITWORTHINESS OF THE LOAN TRANSACTIONS. 3 ITA NOS. 8280 & 8281/MUM/2010 (A.YS. 2002-03 & 2003-04) SANJAY JHUNJHUNWALA HUF VS. ASST. CIT 7.1 AS WE HAVE DISCUSSED IN THE FORGOING PARAGRAPH S THAT THE ASSESSEE WAS FACING THE APPREHENSION OF THE ARREST AS ARREST WARRANTS WERE ISSUED AGAINST THE ASSESSEE, HER HUSBAND AND OTHER FAMILY MEMBERS AND THEREFORE, THE ASSESSEE WAS FACING ABNORMAL CIRCUMSTANCES, IN OUR VIEW, THE ASSESSEE HAS MADE OUT A BONAFIDE CASE AND REASONABLE CAUSE F OR NOT PRODUCING THE DOCUMENTARY EVIDENCE TO ESTABLISH THE CREDITWORTHIN ESS OF THE LOAN TRANSACTIONS. ACCORDINGLY, IN THE INTEREST OF JUSTI CE, WE ALLOW THE REQUEST OF THE ASSESSEE FOR FILING THE ADDITIONAL EVIDENCE AND THE SAME IS TAKEN ON RECORD. 7.2 SINCE THE EVIDENCE FILED BY THE ASSESSEE IS RE QUIRED TO BE EXAMINED AND VERIFIED AT THE LEVEL OF THE ASSESSING OFFICER; THEREFORE, THE ISSUE OF ADDITION U/S. 68 IS REQUIRED TO BE RECONSIDERED AFT ER EXAMINING ALL THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. 8. THE REMAINING ISSUES ARE REGARDING ADDITION U/S . 69 IN RESPECT OF SHARE INVESTMENT FOR THE ASSESSMENT YEAR 2003-03; A DDITION U/S. 68 IN RESPECT OF GIFT RECEIVED FOR THE ASSESSMENT YEAR 20 03-04; ADDITION U/S. 69 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN DIAMOND JEW ELLERY FOR THE ASSESSMENT YEAR 2008-09. SINCE THE MAJOR ISSUE IS R EQUIRED TO BE RECONSIDERED AS THE ASSESSEE WAS FACING SOME DIFFIC ULTIES DUE TO THE CRIMINAL PROCEEDINGS AND WARRANT ISSUED AGAINST THE ASSESSEE, HER HUSBAND AND OTHER FAMILY MEMBERS OF THE ASSESSEE; THEREFORE , IN THE INTEREST OF JUSTICE, ALL THESE ISSUES, WHICH ARE ALSO REQUIRED TO BE RECONSIDERED AT THE LEVEL OF THE ASSESSING OFFICER FOR GIVING ONE MORE OPPORTUNITY TO THE ASSESSEE TO PROVE HER CLAIM. 9. IN VIEW OF THE ABOVE DISCUSSION AND FACTS AND C IRCUMSTANCES OF THE CASE, WE SET SIDE ALL THE ISSUES INVOLVED IN THESE SIX APPEALS TO THE RECORD OF THE ASSESSING OFFICER FOR RECONSIDERATION, EXAMINAT ION, VERIFICATION AND THEN DECIDE THE SAME AFTER CONSIDERING THE ADDITION AL EVIDENCE FILED BY THE ASSESSEE INCLUDING THE EVIDENCE (STATEMENT RECORDED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS OF THE HU SBAND OF THE ASSESSEE) AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE A SSESSEE TO PROVE HER CASE. FACTS AND CIRCUMSTANCES OF THE ASSESSEES CASE BEIN G THE SAME, WE HAVE NO REASON NOT TO ADOPT THE SAME VIEW. WE DECIDE ACCORDINGLY, RESTORING THE MATTER BACK TO THE FILE OF THE A.O. WITH LIKE DIRECTIONS. 3.2 THE SECOND VIEW ARISING IN BOTH THE APPEALS IS THE VALIDITY OF THE ASSESSMENT/S FRAMED U/S.153A OF THE ACT. THE SAME BEING A LEGAL GROUND, STOOD ADMITTED BY THE 4 ITA NOS. 8280 & 8281/MUM/2010 (A.YS. 2002-03 & 2003-04) SANJAY JHUNJHUNWALA HUF VS. ASST. CIT TRIBUNAL IN VIEW OF THE DECISION BY THE APEX COURT IN NATIONAL THERMAL POWER CO. LTD. VS. CIT [1998] 229 ITR 383 (SC); ITS RELEVANT FINDING BEING CONTAINED AT PARAS 11 & 12 OF THE ORDER IN THE CASE OF SANGEETA SANJAY JHUNJHUNWALA (SUPRA), REPRODUCED AS UNDER: 11. WE HAVE HEARD THE LD AR AS WELL AS THE LD DR ON THE QUESTION OF ADMISSIBILITY OF THE ADDITIONAL GROUND AND CONSIDER ED THE RELEVANT MATERIAL ON RECORD. THE LD AR HAS SUBMITTED THAT FOR THESE Y EARS, THE ASSESSMENTS WERE COMPLETED PRIOR TO THE DATE OF SEARCH AND NO I NCRIMINATING MATERIAL WAS FOUND OR SEIZED DURING THE COURSE OF SEARCH AND SEIZURE ACTION. THEREFORE, THE ASSESSMENT U/S 153A IS NOT VALID WHE N THE ASSESSMENT WAS COMPLETED AND NO INCRIMINATING MATERIAL WAS FOUND D URING THE COURSE OF SEARCH. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE VARIOUS DECISIONS OF THE TRIBUNAL AS UNDER: I) GURUPRENA ENTERPRISES V ACIT 57 DTR 465(MUM) II) ANIL KR BHATIA & ORS V ACIT 1 ITR 484(DEL) III) ACIT V SRJ PETTY STEELS P LTD 137 TTJ 627(PUN E) IV) ANIL P KHIMANI V DCIT ITA NO.2855/M/2008 TO 28 60/M/2008 V) SINHGAD TECH EDUCATION SOC V ACIT 140 TTJ 233(P UNE) VI) LKN INTERNATIONAL V DCIT 22 SOT 315(KOL) VII) MEGHMANI ORGANICS LTD V DCIT 129 TTJ 255 (AHD ) 11.1 ON THE OTHER HAND, THE LD DR HAS SUBMITTED TH AT THE ASSESSMENT WAS NOT COMPLETED; BUT THE RETURN OF INCOME WAS PROCESS ED U/S 143(1) AND THEREFORE, IT CANNOT BE CONSIDERED AS REGULAR ASSES SMENT. HE HAS FURTHER SUBMITTED THAT EVEN OTHERWISE, IN THE CASE OF SEARC H, THE ASSESSING OFFICER HAS JURISDICTION TO FRAME THE ASSESSMENT U/S 153A W ITH RESPECT TO 6 ASSESSMENT YEARS AS PROVIDED U/S 153A AND 153C. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF THE HYDERABAD BENCHES OF THE TRIBUNAL IN THE CASE OF SH GOPAL LAL BADRUKA IN ITA NOS 354 TO 357/HYD/2010 AND 583 TO 585/HYD/2010 VIDE ORDER DAT ED 26.11.2010. THE LD. DR HAS ALSO OBJECTED THE ADMISSIBILITY OF THE A DDITIONAL GROUNDS AT THIS STAGE WHEN THE ASSESSEE HAS NOT RAISED THIS ISSUE B EFORE THE LOWER AUTHORITIES. 11.2 HAVING CONSIDERED THE RIVAL SUBMISSIONS AND OT HER RELEVANT MATERIAL ON RECORD, WE NOTE THAT THE ADDITIONAL GROUND RAISE D BY THE ASSESSEE FOR THESE FOUR YEARS IS PURELY A LEGAL GROUND IN NATURE AND THE FACTS RELEVANT FOR ADJUDICATING THE GROUND ARE NOT IN DISPUTE. ACCORDI NGLY, IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F NTPC REPORTED IN 229 ITR 383(SC) THE ADDITIONAL GROUND RAISED BY THE ASS ESSEE, WHICH IS PURELY A 5 ITA NOS. 8280 & 8281/MUM/2010 (A.YS. 2002-03 & 2003-04) SANJAY JHUNJHUNWALA HUF VS. ASST. CIT LEGAL ISSUE IN NATURE, BEING VALIDITY OF THE ASSESS MENT FRAMED U/S 153A, IS ADMITTED. 12. SINCE THIS ISSUE HAS BEEN RAISED FOR THE FIRST TIME BY THE ASSESSEE BEFORE US, AND THE OTHER GROUNDS RAISED BY THE ASSE SSEE HAVE BEEN SET ASIDE TO THE RECORD OF THE ASSESSING OFFICER ; THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THIS ISSUE TO THE RECORD TO THE ASSESS ING OFFICER TO ADJUDICATE THE SAME AS PER LAW. FOR THE SAME REASONS AS FOUND FAVOUR WITH THE TRIB UNAL, WE HAVE NO HESITATION IN, LIKEWISE, ADMITTING THE ASSESSEES LEGAL PLEA, AND DIRECTING LIKEWISE. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEES APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 0/ 1 )2 30 ' 4 5' 678 9 * : ' ;< ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 03, 201 4 SD/- SD/- (AMIT SHUKLA) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER =+ MUMBAI; >) DATED : 03.03.2014 *.)../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. A*B C %)D2 , , D2/ , =+ / DR, ITAT, MUMBAI 6. C E3 F + / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , =+ / ITAT, MUMBAI