ITO WD 22(3)-4, NAVI MUMBAI V. SHARDA P. JAGTAP, NAVI MUMBAI

ITA 872/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8197 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 26-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 31-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Assessee Lawyers: V D PARMAR
• Keywords: Reassessment proceedings
• Section: 143(3)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - H BENCH. . .. . . .. . , ,, , !'# !'# !'# !'# , ' ' ' ' BEFORE S/SH. I.P. BANSAL,JUDICIAL MEMBER & RAJEN DRA,ACCOUNTANT MEMBER /. ITA NO.872/MUM/2011, $ $ $ $ % % % % / ASSESSMENT YEAR-2006-07 ITO WD.22(3)-4, 3 RD FLOOR, TOWER NO.6, VASHI RLY. STATION COMPLEX, VASHI,NAVI MUMBAI. VS. SHARDA P. JAGTAP SHOP NO.1, PLOT NO.213, SECTOR -1, NERUL, NAVI MUMBAI PAN: AARPJ2952K ( &' / APPELLANT) ( ()&' / RESPONDENT) &' * ' &' * ' &' * ' &' * ' / / / / APPELLANT BY :SHRI. PITAMBAR DAS ()&' , * ' / RESPONDENT BY :SHRI. V.D. PARMAR $ , -. $ , -. $ , -. $ , -. / // / DATE OF HEARING : 26/08/2014 /0% , -. / DATE OF PRONOUNCEMENT : 26/08/2014 PER RAJENDRA,AM ' ' ' ' !'# !'# !'# !'# ' '' ' $ $ $ $ : CHALLENGING THE ORDER DATED 29.10.2010 OF THE CIT(A )-33,MUMBAI ASSESSING OFFICER(AO) HAS RAISED FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN GRANTING RELIEF OF RS.20,80,045/- OUT OF THE UNDISCLOSED TURNOVER BY G IVING THE REASONING THAT IT HAS BEEN OWNED BY OTHER PERSON. 2.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONCLUDING THAT THE TURNOVER RELATED TO BUILDING MATERIAL SUPPLY HA S BEEN OWNED BY OTHER PERSON WHO IS NOT IN THE BUSINESS OF SUPPLY OF BUILDING MATERIAL BUT IN TRANSPORT BUSINESS OF BUILDING MATERIAL WHEN BOTH THE BUSINESS ARE COMPLIMENTARY TO EACH OTHER. 3.THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4.THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. ASSESSEE VIDE ITS LATTER DATED 20.05.2013 HAS RAISE D ADDITIONAL GROUNDS OF APPEAL UNDER RULE 27 OF THE APPELLATE TRIBUNAL RULES,1963(RULES). (1)ON FACTS AND CIRCUMSTANCES OF CASE AND IN LAW L D AO ERRED IN REOPENING CASE US 147 OF I T ACT MERELY ON ASSUMPTION AND PRESUMPTION BASE ON IM POUNDED MATERIAL AL, A4, AND AS WHICH CONTAINED TRANSACTIONS OF A THIRD PARTY AND WERE AS SESSED THERE IN US 143(3) OF I T ACT. (2)ON FACTS AND CIRCUMSTANCES OF CASE AND IN LAW TH E LD AO ERRED IN REOPENING THE CASE AS NO MATERIAL FACT WAS EITHER HIDDEN OR NOT DISCLOSED BY APPELLANT IN HER RETURN OF INCOME SO AS TO WARRANT REOPENING OF CASE. WE ARE OF THE OPINION THAT UNDER RULE 27 OF THE RUL ES,THE TRIBUNAL IS EMPOWERED TO ADMIT ADDITIONAL GROUND OF APPEAL IF, IT IS BASED ON ALL MATERIAL AVAILABLE ON RECORD AND IT DOES NOT INVOLVE ANY INVESTIGATION AND THAT AN OPPORTUNITY I S PROVIDED TO OTHER SIDE TO MEET THE CONTENTION. IN THE CASE OF DEEP CHAND KOTHARI,THE H ONBLE RAJASTHAN HIGH COURT(171ITR381)HAS HELD THAT RULE 27, ITAT RULES, 1963, PROVIDES THAT THE RESPONDENT THOUGH HE MAY NOT HAVE APPEALED, MAY SUPPORT THE ORDER APP EALED AGAINST ON ANY OF THE GROUNDS 2 ITA NO.872/M/2011 SHARDA P. JAGTAP DECIDED AGAINST HIM.IN THAT MATTER THE ASSESSEE HAD RAISED OBJECTION TO JURISDICTION OF AO TO INITIATE REASSESSMENT PROCEEDINGS AND SAME WAS REJE CTED BY AO.BUT,APPEAL WAS DECIDED BY FAA IN ASSESSEE'S FAVOUR.MATTER TRAVELLED UP TO THE HIG H COURT AND IT WAS HELD BY THE COURT THAT THE ASSESSEE COULD, IN THE APPEAL FILED BY REVENUE BEFO RE TRIBUNAL, RAISE THE PLEA OF JURISDICTIONIT IS WELL-SETTLED LAW THAT THE OBJEC TION REGARDING LACK OF JURISDICTION IS DECIDED FIRST. ONLY AFTER ITS DECISION HOLDING THAT THE COU RT OR THE TRIBUNAL HAS JURISDICTION, OTHER QUESTIONS RELATING TO THE MERITS OF THE CASE ARISE FOR DECISION, OTHERWISE NOT.IN THE CASE OF DAHOD SAHAKARI KHARID-VECHAN SANGH LTD.(282 ITR 321 )THE HONBLE GUJARAT HAS HELD THAT THE POSITION IN LAW IS WELL SETTLED THAT A CROSS-OBJECT ION, FOR ALL INTENTS AND PURPOSES, WOULD AMOUNT TO AN APPEAL AND THE CROSS-OBJECTOR WOULD HAVE THE SAME RIGHTS WHICH AN APPELLANT HAS BEFORE THE TRIBUNALIN CASE A PARTY HAVING SUCCEEDED BEFORE C IT(A) OPTS NOT TO FILE CROSS-OBJECTION EVEN WHEN AN APPEAL HAS BEEN PREFERRED BY THE OTHER PARTY, FROM THAT IT IS NOT POSSIBLE TO INFER THAT THE SAID PARTY HAS ACCEPTED THE ORDER OR THE P ART THEREOF WHICH WAS AGAINST THE RESPONDENT. CONSIDERING THE ABOVE LEGAL POSITION,WE ADMIT THE A DDITIONAL GROUNDS RAISED BY THE ASSESSEE ,U/R.27 OF THE RULES. 2. THE ASSESSEE,AN INDIVIDUAL,ENGAGED IN THE BUSINESS OF SUPPLYING BUILDING MATERIAL,FILED HER RETURN OF INCOME ON 30.3.2009 DECLARING TOTAL INCOM E AT RS.1,21,250/-. THE AO REOPENED THE ASSESSMENT U/S.147 OF THE ACT BY ISSUING NOTICE U/S .148 OF THE ACT,AFTER RECORDING REASONS FOR REOPENING. THE ASSESSEE VIDE HER LETTER DATED 09.04 .2009 INFORMED THE AO THAT THE ORIGINAL RETURN OF INCOME SHOULD BE TREATED AS RETURN IN RES PONSE TO NOTICE ISSUED U/S.148 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS THE AO FOUND THAT A SURVEY ACTION U/S.133A OF THE ACT, 1961 WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASS ESSEE ON 14.08.2006, THAT INCRIMINATING DOCUMENTS WERE FOUND AND IMPOUNDED BY THE OFFICERS OF THE DEPARTMENT, THAT THE BUSINESS OF THE ASSESSEE WAS ACTUALLY LOOKED BY PRAKASH SHANKAR JAG TAP. STATEMENT FOR PRAKASH SHANKAR JAGTAP WAS RECORDED AND HE ADMITTED THAT PART OF THE SALES WERE NOT REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS, THAT EVERY MONTH UNACCOUNTED SALE OF RS.2 LAKHS (APPROXIMATELY) WERE NOT RECORDED, THAT THIS PRACTICE WAS BEING FOLLOWED FOR LAST 5 YE ARS, THAT DURING THE YEAR DISCLOSED UNRECORDED SALE OF RS.25.89 LAKHS.THE AO COMPLETED THE ASSESS MENT U/S.143(3) R.W.S. 147 OF THE ACT ON 30.12.2009 DETERMI -NING THE INCOME OF THE ASSESSEE AT RS. 22,01,300/-. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREF ERRED AN APPEAL BEFORE FIRST APPELLATE AUTHORITY(FAA).BEFORE HER THE ASSESSEE RAISED 7 GRO UNDS OF APPEALS. THE FIRST TWO GROUNDS WERE ABOUT REOPENING OF THE ASSESSMENT,WHEREAS THE OTHER GROUNDS DEALT WITH THE MERITS OF THE CASE. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSE SSEE AND THE ASSESSMENT ORDER,THE FAA DECIDED THE APPEAL ON MERITS. SHE HELD THAT ADDITIO N MADE BY THE AO COULD NOT BE SUSTAINED AND ADDITION MADE BY THE AO,AMOUNTING TO RS.20.80 LAKHS ,WAS DELETED BY HER. 4. DURING THE COURSE OF HEARING BEFORE US, THE AUTHORI SED REPRESENTATIVE(AR)OF THE ASSESSEE STATED THAT THE FAA HAVE NOT DECIDED THE ISSUE OF R EOPENING I.E., THE GROUND OF APPEAL NOS. 1&2, THAT THE GROUNDS RAISED BY THE ASSESSEE VIDE ITS LE TTER DATED 20.05.2013 SHOULD BE ADMITTED. DEPARTMENTAL REPRESENTATIVE (DR) LEFT THE MATTER TO DISCUSSION TO BENCH. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE REL EVANT MATERIAL BEFORE US.WE FIND THAT THE ASSESSEE HAD ACTUALLY RAISED GROUND ABOUT THE REOPE NING OF THE ASSESSMENT BEFORE FAA AND SHE 3 ITA NO.872/M/2011 SHARDA P. JAGTAP HAD NOT DECIDED GROUNDS NO.1&2,THOUGH THE APPEAL HA S BEEN DECIDED ON MERITS. IN OUR OPINION THE ISSUE OF JURISDICTION HAS TO BE DECIDED FIRST B EFORE DECIDING THE MERITS OF CASE. HOWEVER, IN THE CASE UNDER CONSIDERATION JURISDICTIONAL ISSUE H AS REMAINED UN-ADJUDICATED.THEREFORE, IN THE INTEREST OF JUSTICE WE REMITTING BACK TO THE MATTER TO FILE OF THE FAA FOR FRESH ADJUDICATING GROUNDS NO.1&2 RAISED BY THE ASSESSEE BEFORE HER. AS A RESULT,APPEAL FILED B Y THE AO STANDS ALLOWED FOR STATISTICAL PURPOSES. 1-2$3- . 4 5 56, (0!$ ' !7 , !- 89. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH ,AUGUST,2014 . ': , /0% ' ; <$ 26 VXLRK VXLRK VXLRK VXLRK ,2014 0 , = > SD/- SD/- ( . .. . . .. . / I.P.BANSAL ) ( !'# !'# !'# !'# / RAJENDRA) / JUDICIAL MEMBER ' ' ' ' /ACCOUNTANT MEMBER / MUMBAI, <$ /DATE: 26.08.2014 PS- A.K.PATEL ': ': ': ': , ,, , (-? (-? (-? (-? @'?%- @'?%- @'?%- @'?%- / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / &' 2. RESPONDENT / ()&' 3. THE CONCERNED CIT(A)/ A B , 4. THE CONCERNED CIT / A B 5. DR H BENCH, ITAT, MUMBAI / ?C= (-$ ' ' , . . . 6. GUARD FILE/ = 1 )?- (- //TRUE COPY// ':$ / BY ORDER, D / 8 ! DY./ASST. REGISTRAR , /ITAT, MUMBAI