ACIT Cir. 3(1), Dhule V. Shri Gopal B. Agarwal, Suresh H. Agarwal & Others, Dhule

ITA 881/PUN/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5245 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-11-2013
• Assessment Year: misc
• Appeal Filed On: 04-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI; S P WALIMBE
• Keywords: Unexplained cash credit; Unexplained investment; Benefit of exemption
• Section: 143(3); 133A; 68; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.879/PN/2012 (ASSESSMENT YEAR: 1999-2000) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SHRI SANTOSH SUBHSHCHANDRA AGRAWAL, 3082, J.B. ROAD, DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NO.880/PN/2012 (ASSESSMENT YEAR: 1999-2000) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SMT. MEENA MANOHAR AGRAWAL, PLOT NO. 6, AGRAWAL NAGAR, DIST.- DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NO.881/PN/2012 (ASSESSMENT YEAR: 1999-2000) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SHRI OMPRAKASH O. AGRAWAL & OTHERS, 3082, J.B. ROAD, DHULE, DIST.- DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NO.882/PN/2012 (ASSESSMENT YEAR: 1999-2000) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SHRI BASANTILAL S. AGRAWAL, ASHIRWAD, NEAR AGRAWAL NAGAR, DIST.- DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NOS.879 TO 885/PN/2012 ITA NOS.1738 TO 1744/PN/2013 ITA NO.883/PN/2012 (ASSESSMENT YEAR: 1999-2000) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SHRI SURESH HIRALAL AGRAWAL, TAL. SHIRPUR, DIST.- DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NO.884/PN/2012 (ASSESSMENT YEAR: 1999-2000) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SHRI SURESH B. BHATWAL, AGRAWAL NAGAR, DIST.- DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NO.885/PN/2012 (ASSESSMENT YEAR: 1999-2000) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SHRI GAURISHANKAR SITARAM PASARI, OPP. PAZRA POL, DIST.- DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NO.1738/PN/2013 (ASSESSMENT YEAR : 2000-01) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SHRI OMPRAKASH O. AGRAWAL & OTHERS, 3082, J.B. ROAD, DHULE, DIST.- DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NOS.879 TO 885/PN/2012 ITA NOS.1738 TO 1744/PN/2013 ITA NO.1739/PN/2013 (ASSESSMENT YEAR : 2000-01) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SHRI SANTOSH SUBHSHCHANDRA AGRAWAL, 3082, J.B. ROAD, DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NO.1740/PN/2013 (ASSESSMENT YEAR : 2000-01) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SMT. MEENA MANOHAR AGRAWAL, PLOT NO. 6, AGRAWAL NAGAR, DIST.- DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NO.1741/PN/2013 (ASSESSMENT YEAR : 2000-01) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SHRI BASANTILAL S. AGRAWAL, ASHIRWAD, NEAR AGRAWAL NAGAR, DIST.- DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NO.1742/PN/2013 (ASSESSMENT YEAR : 2000-01) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SHRI SURESH HIRALAL AGRAWAL, TAL. SHIRPUR, DIST.- DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NOS.879 TO 885/PN/2012 ITA NOS.1738 TO 1744/PN/2013 ITA NO.1743/PN/2013 (ASSESSMENT YEAR : 2000-01) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SHRI SURESH B. BHATWAL, AGRAWAL NAGAR, DIST.- DHULE. PAN : NOT AVAILABLE . RESPONDENT ITA NO.1744/PN/2013 (ASSESSMENT YEAR : 2000-01) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), DHULE. . APPELLANT VS. SHRI GOPAL BABANLAL AGRAWAL, SHRI SURESH HIRALAL AGRAWAL & OTHERS, C/O SHRI GAURISHANKAR SITARAM PASARI, OPP. PAZRA POL, DIST.- DHULE. PAN : NOT AVAILABLE . RESPONDENT DEPARTMENT BY : MR. A. K. MODI & MR. S. P. WALIMBE ASSESSEE BY (ITA NOS.879 TO 885/PN/2012) : MR. M. R. BHAGWAT (ITA NOS.1738 TO 1744/PN/2013) : NONE DATE OF HEARING : 22-11-2013 DATE OF PRONOUNCEMENT : 22-11-2013 ORDER PER G. S. PANNU, AM THE CAPTIONED 14 APPEALS PREFERRED BY THE REVENUE W ITH RESPECT TO ASSESSMENT YEARS 1999-2000 AND 2000-01 RELATE TO AN ASSOCIATION OF PERSONS (AOP) CONSTITUTED OF 19 DIRECTORS OF ONE AGRESAN SA HAKARI PAT SANSTHA LTD., AGRA ROAD, DHULE. ALL THE APPEALS RAISE A COMMON P OINT AND THEREFORE THEY HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLID ATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NOS.879 TO 885/PN/2012 ITA NOS.1738 TO 1744/PN/2013 2. THE AFORESAID APPEALS ARE DIRECTED AGAINST THE O RDER OF THE CIT(A) DATED 21.02.2012 WHICH HAS BEEN PASSED IN CONSEQUEN CE TO AN ORDER OF THE TRIBUNAL IN ITA NOS. 90 AND 91/PN/2006 VIDE ORDER D ATED 31.03.2011. INITIALLY SEPARATE ASSESSMENT ORDERS U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 24.03.2005 WERE PASSED B Y THE ASSESSING OFFICER FOR THE TWO CAPTIONED ASSESSMENT YEARS, WHICH WERE CARR IED IN APPEAL BEFORE THE CIT(A). BY WAY OF AN ORDER DATED 11.11.2005, CIT(A ) ALLOWED RELIEF AND THE SAME WAS CARRIED IN APPEAL BEFORE THE TRIBUNAL IN I TA NOS. 90 AND 91/PN/2006 (SUPRA) BY THE REVENUE. BY WAY OF ITS O RDER DATED 31.03.2011 (SUPRA), THE TRIBUNAL SET-ASIDE THE ISSUE OF TAXABI LITY OF FDRS IN THE HANDS OF THE ASSESSEE BACK TO THE FILE OF THE CIT(A). ACCOR DINGLY, BY WAY OF THE IMPUGNED ORDER DATED 20.02.2012, THE CIT(A) HAS HEL D THAT THE ADDITION OF FICTITIOUS FDRS IN THE HANDS OF THE AOP IS NOT SUST AINABLE AND ACCORDINGLY, HE DELETED THE IMPUGNED ADDITION OF RS.2,01,60,000 FOR ASSESSMENT YEAR 1999-2000 AND RS.1,06,02,000/- FOR ASSESSMENT YEAR 2000-01. THE CAPTIONED APPEALS ARE ARISING OUT FROM THE AFORESAI D ORDERS OF THE CIT(A). 3. BEFORE PROCEEDING TO APPRECIATE THE GRIEVANCE OF THE REVENUE IN THE PRESENT APPEAL, IT WOULD BE APPROPRIATE TO NOTICE T HE FOLLOWING BACKGROUND OF THE CASE. IN THE COURSE OF SURVEY ACTION U/S 133A OF THE ACT AGAINST AGRESAN SAHAKARI PAT SANSTHA LTD. ON 18.06.2001 CERTAIN DOC UMENTS WERE FOUND WHICH AS PER THE REVENUE CONSTITUTED FICTITIOUS FDR S. THE AMOUNTS REPRESENTED BY SUCH FDRS STANDING IN DIFFERENT NAME S IN THE ACCOUNT BOOKS OF THE PAT SANSTHA WERE ASSESSED AS UNEXPLAINED INCOME IN THE HANDS OF THE PAT SANSTHA BY INVOKING SECTION 68 OF THE ACT FOR A SSESSMENT YEAR 1999- 2000 RS.2,01,60,000/- AND ASSESSMENT YEAR 2000-01 RS.1,06,02,000/- VIDE ORDERS OF ASSESSMENT MADE BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT DATED 31.03.2004. THE PAT SANSTHA CARRIED THE MATT ER IN APPEAL BEFORE THE CIT(A) WHO, WHILE SUSTAINING THE INCOME ASSESSED U/ S 68 OF THE ACT ALLOWED THE BENEFIT OF EXEMPTION U/S 80P(2) OF THE ACT WITH RESPECT TO SUCH INCOME CONSIDERING THAT THE ASSESSEE WAS A CO-OPERATIVE SO CIETY AND THUS INCOME ITA NOS.879 TO 885/PN/2012 ITA NOS.1738 TO 1744/PN/2013 ASSESSABLE U/S 68 OF THE ACT WOULD CONSTITUTE BUSI NESS INCOME ELIGIBLE FOR DEDUCTION U/S 80P(2) OF THE ACT. THE AFORESAID DEC ISION OF THE CIT(A) HAS SINCE BEEN AFFIRMED BY THE TRIBUNAL VIDE ITA NOS. 1 459 1460/PN/2005 DATED 30.06.2011 FOLLOWING AN EARLIER DECISION OF THE TRI BUNAL IN THE CASE OF SHREE MAHAVEER NAGRI PAT SANSHTHA LTD. VS. DCIT, 74 TTJ 3 24 (PUNE). 4. IT TRANSPIRES THAT THE CASES OF INDIVIDUAL DIREC TORS OF THE PAT SANSHTHA FOR ASSESSMENT YEARS 1999-2000 AND 2000-01 WERE ALS O REOPENED BY ISSUANCE OF NOTICE U/S 148 OF THE ACT DATED 10.03.2 006 AND IN THE COURSE OF SUCH ASSESSMENTS AFORESTATED FICTITIOUS FDRS WERE H ELD ASSESSABLE IN THE HANDS OF SUCH INDIVIDUAL DIRECTORS U/S 69 OF THE AC T FOR ASSESSMENT YEARS 1999-2000 AND 2000-01. IN APPEAL THE CIT(A) DELETE D THE ADDITIONS ON TWO COUNTS. FIRSTLY, ACCORDING TO THE CIT(A), THE INIT IATION OF PROCEEDINGS U/S 147/148 OF THE ACT WAS BAD-IN-LAW AND SECONDLY, ACC ORDING TO THE CIT(A), THE ASSESSING OFFICER WAS NOT ABLE TO ESTABLISH THAT TH E ACTUAL INVESTMENT IN THE IMPUGNED FDRS WERE MADE BY THE ASSESSEE-INDIVIDUALS . ACCORDINGLY, THE ENTIRE ADDITION WAS DELETED BY THE CIT(A). THE AFO RESAID MATTER TRAVELLED TO THE TRIBUNAL VIDE ITA NOS. 620 TO 622/PN/2009 DATED 21.10.2011, THE ULTIMATE CONCLUSION OF THE CIT(A) WAS AFFIRMED ON THE GROUND THAT SUCH INCOME WAS ALREADY ASSESSED IN THE HANDS OF THE AGRESAN SAHAKA RI PAT SANSTHA LTD. FOR THE SAME ASSESSMENT YEARS AND THEREFORE, THE ADDITI ON IN THE HANDS OF THE INDIVIDUAL DIRECTORS U/S 69 OF THE ACT ON ACCOUNT O F UNEXPLAINED INVESTMENTS IN THE SAME FDRS, WAS NOT SUSTAINABLE. 5. NOW, WE MAY COME TO THE ASSESSMENTS OF THE AOP, WHICH ARE PRESENTLY BEFORE US. ON 27.02.2004, ASSESSING OFFI CER ISSUED NOTICE U/S 148 OF THE ACT ON THE GROUP OF 19 INDIVIDUAL DIRECTORS OF THE PAT SANSTHA ON THE BASIS THAT THEY CONSTITUTED AN AOP AND CERTAIN INCO ME HAD ESCAPED ASSESSMENT INASMUCH AS THE AFORESAID FDRS WERE ASSE SSABLE AS UNEXPLAINED INVESTMENTS U/S 69 OF THE ACT FOR ASSES SMENT YEARS 1999-2000 AND 2000-01. CONSEQUENTLY, ON 24.03.2005 THE ASSES SING OFFICER ASSESSED ITA NOS.879 TO 885/PN/2012 ITA NOS.1738 TO 1744/PN/2013 THE INCOME OF THE AOP U/S 69 OF THE ACT TREATING TH E AFORESAID AMOUNT OF FDRS AS UNEXPLAINED INVESTMENTS OF THE AOP U/S 69 OF THE ACT, THEREBY DETERMINING TOTAL INCOME FOR ASSESSMENT YEARS 1999-2000 AND 200 0-01 AT RS.2,01,60,000/- AND RS.1,06,02,000/- RESPECTIVELY ON A PROTECTIVE BASIS. IN APPEAL, THE CIT(A) VIDE ORDER DATED 11.11.2005 DELE TED THE ADDITION BY CONCLUDING THAT THE FDRS BEING QUESTION DID NOT BEL ONG TO THE AOP. HOWEVER, THE AFORESAID ORDER OF THE CIT(A) WAS SET-ASIDE BY THE TRIBUNAL VIDE ORDER DATED 31.03.2011 (SUPRA) AND THE CIT(A) WAS DIRECTE D TO PASS A FRESH ORDER AFTER OBTAINING COMMENTS OF THE ASSESSING OFFICER. IN THE IMPUGNED ORDER DATED 21.02.2012, THE CIT(A) HAS PASSED AN ORDER IN CONSEQUENCE TO THE DIRECTIONS OF THE TRIBUNAL AND HELD THAT ADDITION O F FIXED DEPOSITS IN THE HANDS OF THE AOP WAS NOT SUSTAINABLE AS ACCORDINGLY DELET ED THE ADDITION FOR BOTH THE ASSESSMENT YEARS. 6. IN THIS BACKGROUND, THE REVENUE IS IN APPEAL ON THE GROUND THAT THE CIT(A) ERRED IN HOLDING THAT THE ADDITION OF FIXED DEPOSITS IN THE HANDS OF THE AOP WAS NOT SUSTAINABLE AS THE AOP WAS NEITHER THE BENEFICIARY OF THE FIXED DEPOSITS AND NOR IT BELONGED TO THE AOP. 7. THE RIVAL COUNSELS HAVE MADE THEIR SUBMISSIONS I N THE ABOVE BACKGROUND. FACTUALLY SPEAKING, IT WAS A COMMON PO INT BETWEEN THE PARTIES THAT IN SO FAR AS THE IMPUGNED AMOUNTS TREATED AS U NEXPLAINED INVESTMENTS OF THE AOP FOR ASSESSMENT YEARS 1999-2000 AND 2000-01 ARE CONCERNED, THE SAME AMOUNTS HAVE BEEN ASSESSED IN THE HANDS OF AGR ESAN SAHAKARI PAT SANSTHA LTD. FOR THE VERY SAME ASSESSMENT YEARS AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. IN THIS VIEW OF THE MATTER, THE IMPUGNED ADDITIONS ARE UNSUSTAINABLE AS IT WOULD AMOUNT TO TAXING OF THE S AME INCOME TWICE I.E. IN SEPARATE HANDS FOR THE SAME ASSESSMENT YEARS. THE AFORESAID PARITY OF REASONING ALSO PREVAILED WITH THE TRIBUNAL IN ITA N O. 620 TO 622/PN/2009 DATED 21.10.2011 WHILE ADJUDICATING THE EFFICACY OF SIMILAR ADDITIONS MADE IN THE HANDS OF THE INDIVIDUAL DIRECTORS OF THE AGRESA N SAHAKARI PAT SANSTHA ITA NOS.879 TO 885/PN/2012 ITA NOS.1738 TO 1744/PN/2013 LTD. . THOUGH IN THE HANDS OF THE AGRESAN SAHAKARI PAT S ANSTHA LTD., THE INCOME ASSESSED U/S 68 OF THE ACT ON ACCOUNT OF FIC TITIOUS FDRS HAS BEEN FOUND TO BE ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT, SO HOWEVER THE SAME DOES DISTRACT FROM THE FACT THAT THE INCOME IN QUESTION BEFORE US IN THE CAPTIONED PROCEEDINGS, IS ALREADY ASSESSED IN THE H ANDS OF AGRESAN SAHAKARI PAT SANSTHA LTD. FOR THE ASSESSMENT YEARS 1999-2000 AND 2000-01 AMOUNTING TO RS.2,01,60,000/- AND RS.1,06,02,000/- RESPECTIVE LY. 8. THEREFORE, ON THE BASIS OF THE AFORESAID, WE ARE INCLINED TO UPHOLD THE ULTIMATE CONCLUSION OF THE CIT(A) IN DELETING THE I MPUGNED ADDITIONS. WE HOLD SO. 9. RESULTANTLY, ALL THE CAPTIONED APPEALS OF THE RE VENUE ARE DISMISSED. ABOVE DECISION WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING O N 22 ND NOVEMBER, 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G. S. PANNU) JUDICIAL MEMBER ACC OUNTANT MEMBER PUNE, DATED : 22 ND NOVEMBER, 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR, B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE