Sri. H. Nagaraja, Bengaluru V. Deputy Commissioner Of Income Tax, Central Circle -2(2), Bengaluru

ITA 89/BANG/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2167 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-11-2018
• Assessment Year: misc
• Appeal Filed On: 16-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK JHA
• Assessee Lawyers: ARVIND CHAUHAN
• Keywords: Reopening of assessment; Peak credit; Deemed to accrue or arise in india; Block assessment
• Section: 147; 148; 143(3); 92; 56(2); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO S . 89 TO 92 /BANG/201 7 ASSESSMENT YEAR S : 20 05 - 06 TO 2008 - 09 SHRI H. NAGARAJA, PROP. M/S. SLV HOUSING DEVELOPMENT CORPORATION, NO. 6 & 7, 5 TH CROSS, CHUNCHAGHATTA MAIN ROAD, NEW BANK COLONY, KONANAKUNTE, BANGALORE 560 062. PAN: ABMPN7731L VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2 (2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI ARVIND CHAUHAN, ADVOCATE RESPONDENT BY : SHRI D.K. JHA, ADDL. CIT (DR) DATE OF HEARING : 13.11 .2018 DATE OF PRONOUNCEMENT : 16 .11 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER ALL THESE FOUR APPEALS ARE FILED BY THE ASSESSEE AN D THESE ARE DIRECTED AGAINST A COMBINED ORDER OF LD. CIT(A)-11, BANGALOR E DATED 29.10.2016 FOR ASSESSMENT YEARS 2005-06 TO 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2005-06 IN ITA NO. 89/BANG/2017 ARE AS UNDER. 1. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING DUMMY TALLY ENTRIES SEIZED IN THE PREMISES OF ADLENE KAGO O (MR. DAYANAND PAI) SHOWS CASH PAYMENT MADE TO THE ASSESSEE AND A PRESUMPTION HAS TO BE DRAWN THAT THE SAME WAS RECEIVED BY THE ASSES SEE AS DEEMED INCOME AND HAS TO BE BROUGHT TO TAX. 2. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN FAILING TO TAKE INTO CONSIDERATION THAT MR. DAYANAND PAI HAD DECLARED TH E AMOUNTS REFLECTED IN THE DUMMY TALLY ENTRIES AS PEAK CREDIT / DEBIT IN THE DECLARATION MADE BEFORE THE SETTLEMENT COMMISSION ( WHICH HAS BEEN ITA NOS. 89 TO 92/BANG/2017 PAGE 2 OF 10 ERRONEOUSLY REJECTED) AND SUBMITTED A LETTER TO THE DEPARTMENT THAT THESE AMOUNTS HAVE NOT BEEN PAID TO THE ASSESSEE. 3. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT A SUM OF RS.3,97,59,000/- REFLECTED IN THE DUMMY TALL Y LEDGER IN THE NAME OF SRI. KRISHNA PROPERTIES HAD BEEN ADMITTED B Y THE ASSESSEE AND THEREFORE AN ADVERSE INFERENCE HAS TO BE DRAWN THAT ALL THE OTHER DUMMY TALLY ACCOUNTS ARE DEEMED TO HAVE BEEN RECEIV ED BY THE ASSESSEE AS DEEMED INCOME. 4. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT PART OF THE INCOME WHICH HAS BEEN ACCEPTED IN THE SETTLE MENT COMMISSION REFLECTED IN THE DUMMY TALLY ENTRY BY MR. DAYANAND PAI AND M/S. CANARA HOUSING DEVELOPMENT COMPANY ONLY CAN BE EXEM PTED FROM TAX IN THE HANDS OF THE ASSESSEE AND THE REST SHOUL D BE BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE. 5. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN RELYING ON THE SURVEY PROCEEDINGS CONDUCTED IN THE CASE OF M/S. DU O ASSOCIATES AND SRI. SACHIN KAMATH TO HOLD THAT DUMMY TALLY ENTRIES SHOULD BE TREATED AS DEEMED INCOME OF THE ASSESSEE WITHOUT FURNISHING ANY COPY OF THESE SURVEY PROCEEDINGS OR EVIDENCE RECOVERED THEREIN. 6. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT RS.50,00,000/- RECEIVED ON BEHALF OF M/S. JEWEL ASS OCIATES WITH RESPECT TO MALLASANDRA PROPERTIES HAS BEEN AGREED T O BE DISCLOSED AS UNDISCLOSED INCOME FOR A.Y. 2005-06, PRESUMPTION SH OULD BE DRAWN IN RESPECT OF OTHER ENTRIES. 7. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN FAILING TO APPRECIATE THAT BOTH THE ORDERS IS BASED ON PRESUMP TION, ASSUMPTIONS AND INNUENDOS OF DUMMY TALLY ENTRIES WITHOUT FURNIS HING THE ENTIRE SET OF ACCOUNT OF DUMMY TALLY ENTRIES, THE SETTLEMENT W ORKED OUT BY MR. DAYANAND PAI BEFORE THE SETTLEMENT COMMISSION, THE CORRESPONDING REPLY GIVEN BY THE REVENUE WHICH WOULD ENABLE THE A SSESSEE TO GIVE A SUITABLE REPLY AND WITHOUT ANY EVIDENCE OF RECEIPT OF THE AMOUNTS REFLECTED IN THE DUMMY TALLY ENTRIES BY THE ASSESSE E. 8. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT ASSESSMENT HAS TO BE MADE U/S. 148 OF THE I T ACT A ND NOT U/S. 153C OF THE I T ACT. 9. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT THERE WAS REASONS RECORDED FOR REOPENING OF ASSESSMENTS A ND REQUISITE APPROVAL HAD BEEN OBTAINED WHICH IS INCORRECT AND C ONTRARY TO LAW. 3. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2006-07 IN ITA NO. 90/BANG/2017 ARE AS UNDER. 1. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING DUMMY TALLY ENTRIES SEIZED IN THE PREMISES OF ADLENE KAGO O (MR. DAYANAND PAI) SHOWS CASH PAYMENT MADE TO THE ASSESSEE AND A PRESU MPTION HAS TO BE DRAWN THAT THE SAME WAS RECEIVED BY THE ASSESSEE AS DEEMED INCOME AND HAS TO BE BROUGHT TO TAX. 2. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN FAILING TO TAKE INTO CONSIDERATION THAT MR. DAYANAND PAI HAD DECLARED TH E AMOUNTS REFLECTED IN THE DUMMY TALLY ENTRIES AS PEAK CREDIT / DEBIT I N THE DECLARATION MADE BEFORE THE SETTLEMENT COMMISSION (WHICH HAS BEEN ER RONEOUSLY REJECTED) ITA NOS. 89 TO 92/BANG/2017 PAGE 3 OF 10 AND SUBMITTED A LETTER TO THE DEPARTMENT THAT THESE AMOUNTS HAVE NOT BEEN PAID TO THE ASSESSEE. 3. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT A SUM OF RS. 3,97,59,000/- REFLECTED IN THE DUMMY TALLY LEDG ER IN THE NAME OF SRI. KRISHNA PROPERTIES HAD BEEN ADMITTED BY THE ASSESSE E AND THEREFORE AN ADVERSE INFERENCE HAS TO BE DRAWN THAT ALL THE OTHE R DUMMY TALLY ACCOUNTS ARE DEEMED TO HAVE BEEN RECEIVED BY THE AS SESSEE AS DEEMED INCOME. 4. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT PART OF THE INCOME WHICH HAS BEEN ACCEPTED IN THE SETTLEMEN T COMMISSION REFLECTED IN THE DUMMY TALLY ENTRY BY MR. DAYANAND PAI AND M/S. CANARA HOUSING DEVELOPMENT COMPANY ONLY CAN BE EXEMPTED FR OM TAX IN THE HANDS OF THE ASSESSEE AND THE REST SHOULD BE BROUGH T TO TAX IN THE HANDS OF THE ASSESSEE. 5. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN RELYING ON THE SURVEY PROCEEDINGS CONDUCTED IN THE CASE OF M/S. DUO ASSOC IATES AND SRI. SACHIN KAMATH TO HOLD THAT DUMMY TALLY ENTRIES SHOU LD BE TREATED AS DEEMED INCOME OF THE ASSESSEE WITHOUT FURNISHING AN Y COPY OF THESE SURVEY PROCEEDINGS OR EVIDENCE RECOVERED THEREIN. 6. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT RS. 50,00,000/- RECEIVED ON BEHALF OF M/S. JEWEL ASSOCI ATES WITH RESPECT TO MALLASANDRA PROPERTIES HAS BEEN AGREED TO BE DISCLO SED AS UNDISCLOSED INCOME FOR A.Y. 2005-06, PRESUMPTION SHOULD BE DRAW N RESPECT OF OTHER ENTRIES. 7. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN FAILING TO APPRECIATE THAT BOTH THE ORDERS IS BASED ON PRESUMPTION, ASSUM PTIONS AND INNUENDOS OF DUMMY TALLY ENTRIES WITHOUT FURNISHING THE ENTIR E SET OF ACCOUNT OF DUMMY TALLY ENTRIES, THE SETTLEMENT WORKED OUT BY M R. DAYANAND PAI BEFORE THE SETTLEMENT COMMISSION, THE CORRESPONDING REPLY GIVEN BY THE REVENUE WHICH WOULD ENABLE THE ASSESSEE TO GIVE A S UITABLE REPLY AND WITHOUT ANY EVIDENCE OF RECEIPT OF THE AMOUNTS REFL ECTED IN THE DUMMY TALLY ENTRIES BY THE ASSESSEE. 8. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT ASSESSMENT HAS TO BE MADE U/S. 148 OF THE I T ACT A ND NOT U/S. 153C OF THE I T ACT. 9. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT THERE WAS REASONS RECORDED FOR REOPENING OF ASSESSMENTS A ND REQUISITE APPROVAL HAD BEEN OBTAINED WHICH IS INCORRECT AND C ONTRARY TO LAW. 4. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2007-08 IN ITA NO. 91/BANG/2017 ARE AS UNDER. 1. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING DUMMY TALLY ENTRIES SEIZED IN THE PREMISES OF ADLENE KAGO O (MR. DAYANAND PAI) SHOWS CASH PAYMENT MADE TO THE ASSESSEE AND A PRESUMPTION HAS TO BE DRAWN THAT THE SAME WAS RECEIVED BY THE ASSES SEE AS DEEMED INCOME AND HAS TO BE BROUGHT TO TAX. 2. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN FAILING TO TAKE INTO CONSIDERATION THAT MR. DAYANAND PAI HAD DECLARED TH E AMOUNTS REFLECTED IN THE DUMMY TALLY ENTRIES AS PEAK CREDIT / DEBIT IN THE DECLARATION MADE BEFORE THE SETTLEMENT COMMISSION ( WHICH HAS BEEN ITA NOS. 89 TO 92/BANG/2017 PAGE 4 OF 10 ERRONEOUSLY REJECTED) AND SUBMITTED A LETTER TO THE DEPARTMENT THAT THESE AMOUNTS HAVE NOT BEEN PAID TO THE ASSESSEE. 3. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT A SUM OF RS.3,97,59,000/- REFLECTED IN THE DUMMY TALL Y LEDGER IN THE NAME OF SRI. KRISHNA PROPERTIES HAD BEEN ADMITTED B Y THE ASSESSEE AND THEREFORE AN ADVERSE INFERENCE HAS TO BE DRAWN THAT ALL THE OTHER DUMMY TALLY ACCOUNTS ARE DEEMED TO HAVE BEEN RECEIV ED BY THE ASSESSEE AS DEEMED INCOME. 4. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT PART OF THE INCOME WHICH HAS BEEN ACCEPTED IN THE SETTLE MENT COMMISSION REFLECTED IN THE DUMMY TALLY ENTRY BY MR. DAYANAND PAI AND M/S. CANARA HOUSING DEVELOPMENT COMPANY ONLY CAN BE EXEM PTED FROM TAX IN THE HANDS OF THE ASSESSEE AND THE REST SHOUL D BE BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE. 5. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN RELYING ON THE SURVEY PROCEEDINGS CONDUCTED IN THE CASE OF M/S. DU O ASSOCIATES AND SRI. SACHIN KAMATH TO HOLD THAT DUMMY TALLY ENTRIES SHOULD BE TREATED AS DEEMED INCOME OF THE ASSESSEE WITHOUT FURNISHING ANY COPY OF THESE SURVEY PROCEEDINGS OR EVIDENCE RECOVERED THEREIN. 6. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT RS.50,00,000/-RECEIVED ON BEHALF OF M/S. JEWEL ASSO CIATES WITH RESPECT TO MALLASANDRA PROPERTIES HAS BEEN AGREED T O BE DISCLOSED AS UNDISCLOSED INCOME FOR A.Y. 2005-06. PRESUMPTION SH OULD BE DRAWN IN RESPECT OF OTHER ENTRIES. 7. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN FAILING TO APPRECIATE THAT BOTH THE ORDERS IS BASED ON PRESUMP TION, ASSUMPTIONS AND INNUENDOS OF DUMMY TALLY ENTRIES WITHOUT FURNIS HING THE ENTIRE SET OF ACCOUNT OF DUMMY TALLY ENTRIES, THE SETTLEMENT W ORKED OUT BY MR. DAYANAND PAI BEFORE THE SETTLEMENT COMMISSION, THE CORRESPONDING REPLY GIVEN BY THE REVENUE WHICH WOULD ENABLE THE A SSESSEE TO GIVE A SUITABLE REPLY AND WITHOUT ANY EVIDENCE OF RECEIPT OF THE AMOUNTS REFLECTED IN THE DUMMY TALLY ENTRIES BY THE ASSESSE E. 8. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT ASSESSMENT HAS TO BE MADE U/S. 148 OF THE I T ACT A ND NOT U/S. 153C OF THE I T ACT. 9. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT THERE WAS REASONS RECORDED FOR REOPENING OF ASSESSMENTS A ND REQUISITE APPROVAL HAD BEEN OBTAINED WHICH IS INCORRECT AND C ONTRARY TO LAW. 5. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2008-09 IN ITA NO. 92/BANG/2017 ARE AS UNDER. 1. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING DUMMY TALLY ENTRIES SEIZED IN THE PREMISES OF ADLENE KAGO O (MR. DAYANAND PAI) SHOWS CASH PAYMENT MADE TO THE ASSESSEE AND A PRESUMPTION HAS TO BE DRAWN THAT THE SAME WAS RECEIVED BY THE ASSES SEE AS DEEMED INCOME AND HAS TO BE BROUGHT TO TAX. 2. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN FAILING TO TAKE INTO CONSIDERATION THAT MR. DAYANAND PAI HAD DECLARED TH E AMOUNTS REFLECTED IN THE DUMMY TALLY ENTRIES AS PEAK CREDIT / DEBIT IN THE DECLARATION MADE BEFORE THE SETTLEMENT COMMISSION ( WHICH HAS BEEN ITA NOS. 89 TO 92/BANG/2017 PAGE 5 OF 10 ERRONEOUSLY REJECTED) AND SUBMITTED A LETTER TO THE DEPARTMENT THAT THESE AMOUNTS HAVE NOT BEEN PAID TO THE ASSESSEE. 3. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT A SUM OF RS. 3,97,59,000/- REFLECTED IN THE DUMMY TAL LY LEDGER IN THE NAME OF SRI. KRISHNA PROPERTIES HAD BEEN ADMITTED B Y THE ASSESSEE AND THEREFORE AN ADVERSE INFERENCE HAS TO BE DRAWN THAT ALL THE OTHER DUMMY TALLY ACCOUNTS ARE DEEMED TO HAVE BEEN RECEIV ED BY THE ASSESSEE AS DEEMED INCOME. 4. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT PART OF THE INCOME WHICH HAS BEEN ACCEPTED IN THE SETTLE MENT COMMISSION REFLECTED IN THE DUMMY TALLY ENTRY BY MR. DAYANAND PAI AND M/S. CANARA HOUSING DEVELOPMENT COMPANY ONLY CAN BE EXEM PTED FROM TAX IN THE HANDS OF THE ASSESSEE AND THE REST SHOUL D BE BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE. 5. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN RELYING ON THE SURVEY PROCEEDINGS CONDUCTED IN THE CASE OF M/S. DU O ASSOCIATES AND SRI. SACHIN KAMATH TO HOLD THAT DUMMY TALLY ENTRIES SHOULD BE TREATED AS DEEMED INCOME OF THE ASSESSEE WITHOUT FURNISHING ANY COPY OF THESE SURVEY PROCEEDINGS OR EVIDENCE RECOVERED THEREIN. 6. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT RS.50,00,000/- RECEIVED ON BEHALF OF M/S. JEWEL ASS OCIATES WITH RESPECT TO MALLASANDRA PROPERTIES HAS BEEN AGREED T O BE DISCLOSED AS UNDISCLOSED INCOME FOR A.Y. 2005-06, PRESUMPTION SH OULD BE DRAWN IN RESPECT OF OTHER ENTRIES. 7. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN FAILING TO APPRECIATE THAT BOTH THE ORDERS IS BASED ON PRESUMP TION, ASSUMPTIONS AND INNUENDOS OF DUMMY TALLY ENTRIES WITHOUT FURNIS HING THE ENTIRE SET OF ACCOUNT OF DUMMY TALLY ENTRIES, THE SETTLEMENT W ORKED OUT BY MR. DAYANAND PAI BEFORE THE SETTLEMENT COMMISSION, THE CORRESPONDING REPLY GIVEN BY THE REVENUE WHICH WOULD ENABLE THE A SSESSEE TO GIVE A SUITABLE REPLY AND WITHOUT ANY EVIDENCE OF RECEIPT OF THE AMOUNTS REFLECTED IN THE DUMMY TALLY ENTRIES BY THE ASSESSE E. 8. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT ASSESSMENT HAS TO BE MADE U/S. 148 OF THE I T ACT A ND NOT U/S. 153C OF THE I T ACT. 9. BOTH THE AUTHORITIES BELOW COMMITTED AN ERROR IN HOLDING THAT THERE WAS REASONS RECORDED FOR REOPENING OF ASSESSMENTS A ND REQUISITE APPROVAL HAD BEEN OBTAINED WHICH IS INCORRECT AND C ONTRARY TO LAW. 6. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT IN THE CASE OF THE WIFE OF THE ASSESSEE ALSO, THE ASSESSMENT WAS R EOPENED BY THE AO BY RECORDING IDENTICAL REASONS AND IN HER CASE, THE IS SUE HAS BEEN DECIDED BY THE TRIBUNAL IN ITA NOS. 93 TO 96/BANG/2017 DATED 2 5.10.2017. HE SUBMITTED A COPY OF THIS TRIBUNAL ORDER AND DRAWN O UR ATTENTION TO THE RELEVANT PARA ON PAGE NOS. 12 AND 13 OF THIS TRIBUN AL ORDER AND POINTED OUT THAT IN THAT CASE, THE TRIBUNAL HAS HELD THAT REOPE NING U/S. 147 IS NOT VALID. HE SUBMITTED THAT ON PAGES 136 TO 139 OF PAPER BOOK ARE THE REASONS ITA NOS. 89 TO 92/BANG/2017 PAGE 6 OF 10 RECORDED BY THE AO FOR REOPENING IN THE PRESENT CAS E AND ON PAGES 140 TO 143 OF PAPER BOOK ARE THE REASONS RECORDED BY THE A O IN THE CASE OF THE WIFE OF THE ASSESSEE I.E. SMT. BHAGYA NAGARAJ. HE POINTED OUT THAT THE REASONS RECORDED BY THE AO IN BOTH THE CASES ARE ID ENTICAL AND THEREFORE, WHEN IN THE CASE OF THE WIFE OF THE ASSESSEE SMT. B HAGYA NAGARAJ, IT IS ALREADY HELD BY THE TRIBUNAL THAT THE REOPENING IS NOT VALID, IN THE PRESENT CASE ALSO, IT SHOULD BE HELD THAT THE REOPENING IS NOT VALID. THE BENCH WANTED TO SEE THE COPY OF ASSESSMENT ORDER AND THE ORDER OF LD. CIT(A) IN THE CASE OF THE WIFE OF THE SMT. BHAGYA NAGARAJ. T HE LD. AR OF ASSESSEE SUBMITTED THE SAME AND POINTED OUT THAT THERE IS NO DIFFERENCE IN FACTS IN THE PRESENT CASE AND IN THE CASE OF THE WIFE OF THE ASS ESSEE SMT. BHAGYA NAGARAJ. 7. THE LD. DR OF REVENUE SUPPORTED THE ASSESSMENT O RDERS. AT THIS JUNCTURE, A SPECIFIC QUERY WAS RAISED BY THE BENCH ASKING THE L D. DR OF REVENUE TO POINT OUT IF THERE IS ANY DIFFERENCE IN FACTS IN THE PRES ENT CASE AND IN THE CASE OF THE WIFE OF THE ASSESSEE SMT. BHAGYA NAGARAJ. IN R EPLY, HE COULD NOT POINT OUT ANY DIFFERENCE IN FACTS AND HE SIMPLY SUPPORTED THE ORDER OF AUTHORITIES BELOW IN THE PRESENT CASE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, WE REPRODUCE PARA NO. 7.2 FROM THE IMPUGNED ORDER OF CIT (A) AS PER W HICH HE HAS DECIDED THE ISSUE REGARDING THE VALIDITY OF REOPENING IN THE CA SE OF THE PRESENT ASSESSEE. THE SAME IS AS UNDER. 7.2 ALTERNATIVE SUBMISSIONS (REGARDING REOPENING OF IMP ASSESSMENTS) THE APPELLANT HAS QUESTIONED WHETHER REQUISITE COND ITIONS HAS BEEN SATISFIED BEFORE ISSUE OF NOTICE U/S 148? HE H AS ALSO STATED THAT AS HIS ASSESSMENTS HAS BEEN COMPLETED U/S 143(3) RW S 153A, THE SAME CANT BE REOPENED U/S 148. HE HAS ALSO STATED THAT THE DOCUMENTS FOUND IN THE PREMISE ONLY INDICATES SOME RECEIPT TO THE APPELLANT BY MR. DAYANAND PAI, BUT EACH PAYMENT CANT BE CONSTRU ED AS INCOME. THE AO HAS DEALT WITH THE ABOVE OBJECTION IN THE AS SESSMENT ORDER ITSELF AS UNDER: 'THE ASSESSEE IN PARA 1 OF HIS REPLY HAS GIVEN DETA ILS OF ASSESSMENT ORDERS PASSED CONSEQUENT TO SEARCH IN HIS OWN CASE. THE ASSESSEE HAS CHALLENGED THE ASSUMPTION OF JURISDICTION U/S. 147, TAKING A CLAIM THAT THE ASSESSMENT U/S. 153A R. W. S. 143(3) ARE CONCLUDED IN HIS CASE RELYING UPON THE JUDGMENT OF HON'BLE HIGH COURT OF ITA NOS. 89 TO 92/BANG/2017 PAGE 7 OF 10 KARNATAKA IN THE CASE OF SRI RINKU CHAKRAVARTHY. IT IS CLARIFIED THAT RE-OPENING HAS BEEN DONE IN THE ASSESSMENTS BA SED UPON FRESH MATERIAL UN-EARTHED DURING SEARCH PROCEEDINGS IN TH E CASE OF MR. P. DAYANANDA PAI & OTHERS. THE CASE LAW OF THE HON' BLE HIGH COURT OF KARNATAKA HAS LAID DOWN THAT 147 PROCEEDIN GS CAN ALSO BE INITIATED IN BLOCK ASSESSMENTS, BUT THIS DECISIO N OF HON'BLE COURT DOESN'T BAR THE ASSESSING OFFICER FROM RE-OPE NING ASSESSMENTS CONCLUDED U/S. 1534 R.W.S 143(3) OF IT ACT, THE ASSESSES HAS ALSO OBJECTED REGARDING THE RECORD ING OF REASONS AND ALSO REGARDING THE BEARING OF PAYMENTS MR. P. D AYANANDA PAI HAS MADE ON THE INCOME OF THE ASSESSEE. IT IS CLARI FIED THAT THE REASONS ARE RECORDED ON ORDER SHEET AND APPROVAL OF APPROPRIATE AUTHORITY FOR ISSUE OF NOTICE HAS BEEN TAKEN AND NO TICE DULY SERVED WITHIN STATUTORY TIME LIMITS. FURTHER, THE ASSESSEE HAS NOT REFLECTED THE PAYMENTS RECEIVED FROM MR. P. DAYANANDA PAI AND THERE IS ESCAPEMENT OF INCOME CONSEQUENT TO THIS BECAUSE OF THE ASSESSEE'S NON DISCLOSURE OF THIS RECEIPT DURING 153A PROCEEDI NGS. WHILE GOING THROUGH THE REPLY IT IS VERY CLEAR THAT THE A SSESSEE IS RAISING ISSUES WHICH ARE INCONSEQUENTIAL AND TRYING TO OBJE CT THE PROCEEDINGS WHICH ARE AS PER LAW. THE PROCEEDINGS I NITIATED ARE VALID AS PER IT ACT AND ALSO AS PER GUIDELINES SET BY HON'BLE COURTS W. R. T THIS ISSUE. THE REASONS ARE RECORDED ON THE ORDER SHEET ARE ALR EADY GIVEN TO THE ASSESSEE AND APPROVAL OF APPROPRIATE AUTHORITY IS TAKEN AND THE NOTICE IS DULY SERVED THE INITIATION OF THE PROCEED INGS ARE IN ORDER. THIS IS A NEW FACT BROUGHT ON RECORD TO THE ASSESSI NG OFFICER (CONSEQUENT TO SEARCH PROCEEDINGS) WHO HAS ISSUED A NOTICE U/S. 148 AFTER RECORDING REASONS AND TAKING APPROVAL OF APPROPRIATE AUTHORITY FOR ASSESSMENT YEAR 2005-06 AND 2006-07. AS, THE INCOME HAS ESCAPED ASSESSMENT BECAUSE OF THE REASON THAT THE ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY ALL MAT ER/AL FACTS NECESSARY FOR THE ASSESSMENT FOR A. Y. 2005-06 THE PROCEEDINGS WERE INITIATED. THE ASSESSEE IS REQUIRED TO COMPLY WITH ASSESSMENT PROCEEDINGS AND FILE THE DETAILS. AS THE PROCEEDINGS WERE INITIATED AS PER LAW, AND S PEAKING ORDER WAS PASSED AS PER LOW STATING THAT ASSUMPTION OF JU RISDICTION WAS CORRECT.' THEREFORE, IT IS CLEAR THAT THE OBJECTIONS OF THE A PPELLANT HAS ALREADY BEEN DEALT WITH BY THE AO. THE APPELLANT HAS NOT BR OUGHT ANYTHING ON RECORD TO THE CONTRARY OF THE ARGUMENTS MADE BY THE AO NOR HAS GIVEN ANY WRITTEN ARGUMENTS FINDING FAULT WITH THE REASON ING OF THE AO. IN THESE CIRCUMSTANCES, I AGREE WITH THE ARGUMENTS OF THE AO AND THIS GROUND OF APPEAL IS REJECTED. ITA NOS. 89 TO 92/BANG/2017 PAGE 8 OF 10 9. NOW WE ALSO REPRODUCE PARA 7.2 FROM THE ORDER OF CIT(A) IN THE CASE OF THE WIFE OF THE ASSESSEE SMT. BHAGYA NAGARAJ WHICH IS A VAILABLE ON PAGES 80 AND 81 OF PAPER BOOK. 7.2 ALTERNATIVE SUBMISSIONS (REGARDING REOPENING OF ASSESSMENTS) THE APPELLANT HAS QUESTIONED WHETHER REQUISITE COND ITIONS HAS BEEN SATISFIED BEFORE ISSUE OF NOTICE U/S 148? SHE HAS ALSO STATED THAT AS HIS ASSESSMENTS HAS BEEN COMPLETED U/S 143(3) RW S 153A, THE SAME CANT BE REOPENED U/S 148. SHE HAS ALSO STATED THAT THE DOCUMENTS FOUND IN THE PREMISE ONLY INDICATES SOME RECEIPT TO THE APPELLANT BY MR. DAYANAND PAI, BUT EACH PAYMENT CANT BE CONSTRU ED AS INCOME. THE AO HAS DEALT WITH THE ABOVE OBJECTION IN THE AS SESSMENT ORDER ITSELF AS UNDER: 'THE ASSESSEE IN PARA 1 OF HIS REPLY HAS GIVEN DETA ILS OF ASSESSMENT ORDERS PASSED CONSEQUENT TO SEARCH IN HIS OWN CASE. THE ASSESSEE HAS CHALLENGED THE ASSUMPTION OF JURISDICTION U/S. 147, TAKING A CLAIM THAT THE ASSESSMENT U/S. 153A R. W.S. 143(3) ARE CONCLUDED IN HIS CASE RELYING UPON THE JUDGMENT OF HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF SRI RINKU CHAKRAVARTHY. IT IS CLARIFIED THAT RE-OPENING HAS BEEN DONE IN THE ASSESSMENTS BA SED UPON FRESH MATERIAL UN-EARTHED DURING SEARCH PROCEEDINGS IN TH E CASE OF MR. P. DAYANANDA PAI & OTHERS. THE CASE LAW OF THE HON' BLE HIGH COURT OF KARNATAKA HAS LAID DOWN THAT 147 PROCEEDIN GS CAN ALSO BE INITIATED IN BLOCK ASSESSMENTS, BUT THIS DECISIO N OF HON'BLE COURT DOESN'T BAR THE ASSESSING OFFICER FROM RE-OPE NING ASSESSMENTS CONCLUDED U/S. 1534 R. W.S 143(3) OF IT ACT, THE ASSESSES HAS ALSO OBJECTED REGARDING THE RECORD ING OF REASONS AND ALSO REGARDING THE BEARING OF PAYMENTS MR. P. D AYANANDA PAI HAS MADE ON THE INCOME OF THE ASSESSEE. IT IS CLARI FIED THAT THE REASONS ARE RECORDED ON ORDER SHEET AND APPROVAL OF APPROPRIATE AUTHORITY FOR ISSUE OF NOTICE HAS BEEN TAKEN AND NO TICE DULY SERVED WITHIN STATUTORY TIME LIMITS. FURTHER, THE ASSESSEE HAS NOT REFLECTED THE PAYMENTS RECEIVED FROM MR. P. DAYANANDA PAI AND THERE IS ESCAPEMENT OF INCOME CONSEQUENT TO THIS BECAUSE OF THE ASSESSEE'S NON DISCLOSURE OF THIS RECEIPT DURING 153A PROCEEDI NGS. WHILE GOING THROUGH THE REPLY IT IS VERY CLEAR THAT THE A SSESSEE IS RAISING ISSUES WHICH ARE INCONSEQUENTIAL AND TRYING TO OBJE CT THE PROCEEDINGS WHICH ARE AS PER LAW. THE PROCEEDINGS I NITIATED ARE VALID AS PER IT ACT AND ALSO AS PER GUIDELINES SET BY HON'BLE COURTS W. R. T THIS ISSUE. THE REASONS ARE RECORDED ON THE ORDER SHEET ARE ALR EADY GIVEN TO THE ASSESSEE AND APPROVAL OF APPROPRIATE AUTHORITY IS TAKEN AND THE NOTICE IS DULY SERVED THE INITIATION OF THE PROCEED INGS ARE IN ORDER. ITA NOS. 89 TO 92/BANG/2017 PAGE 9 OF 10 THIS IS A NEW FACT BROUGHT ON RECORD TO THE ASSESSI NG OFFICER (CONSEQUENT TO SEARCH PROCEEDINGS) WHO HAS ISSUED A NOTICE U/S. 148 AFTER RECORDING REASONS AND TAKING APPROVAL OF APPROPRIATE AUTHORITY FOR ASSESSMENT YEAR 2005-06 AND 2006-07. AS, THE INCOME HAS ESCAPED ASSESSMENT BECAUSE OF THE REASON THAT THE ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY ALL MAT ERIAL FACTS NECESSARY FOR THE ASSESSMENT FOR A. Y. 2005-06 THE PROCEEDINGS WERE INITIATED. THE ASSESSEE IS REQUIRED TO COMPLY WITH ASSESSMENT PROCEEDINGS AND FILE THE DETAILS. AS THE PROCEEDINGS WERE INITIATED AS PER LAW, AND S PEAKING ORDER WAS PASSED AS PER LOW STATING THAT ASSUMPTION OF JU RISDICTION WAS CORRECT.' THEREFORE, IT IS CLEAR THAT THE OBJECTIONS OF THE A PPELLANT HAS ALREADY BEEN DEALT WITH BY THE AO. THE APPELLANT HAS NOT BR OUGHT ANYTHING ON RECORD TO THE CONTRARY OF THE ARGUMENTS MADE BY THE AO NOR HAS GIVEN ANY WRITTEN ARGUMENTS FINDING FAULT WITH THE REASON ING OF THE AO. IN THESE CIRCUMSTANCES, I AGREE WITH THE ARGUMENTS OF THE. AO AND THIS GROUND OF APPEAL IS REJECTED. 10. FROM THESE TWO PARAS REPRODUCED FROM THE ORDER OF CIT(A) IN THE PRESENT CASE AND IN THE CASE OF WIFE OF THE ASSESSEE SMT. B HAGYA NAGARAJ, IT IS SEEN THAT THERE IS NO DIFFERENCE IN THE DECISION OF CIT(A) IN BOTH THESE CASES. 11. NOW WE ALSO REPRODUCE THE RELEVANT PARA OF THE TRIBUNAL ORDER IN THE CASE OF THE WIFE OF THE ASSESSEE SMT. BHAGYA NAGARAJ IN ITA NOS. 93 TO 96/BANG/2017 DATED 25.10.2017. THE SAME IS REPRODU CED HEREINBELOW FROM PAGES 12 AND 13 OF THIS TRIBUNAL ORDER. EVEN OTHERWISE, FROM PERUSAL OF REASONS RECORDED, I T CANNOT BE INFERRED THAT THERE IS INCOME IN THE HANDS OF THE A PPELLANT, EVEN IF THERE IS PAYMENT TO APPELLANT, BUT THERE IS NOTHING ON RECORD SUGGESTING THAT IT CONSTITUTES INCOME IN THE HANDS OF THE APPELLANT. EVEN ASSUMING FOR A MOMENT THAT THE CONTENTION OF T HE AO THAT PAYMENTS WERE MADE TOWARDS CONSIDERATION FOR CANCEL LATION OF JOINT DEVELOPMENT AGREEMENT (JDA) WHICH THE ASSESSEE HAD ENTERED WITH IN RESPECT OF PROPERTY AT SURVEY NOS.3/3, 7, 8, 9/2A, 9/213, MALLASANDRA. IN THE ABSENCE OF EVIDENCE THAT THE APPELLANT IS TH E OWNER, HAD INTEREST OF ANY NATURE IN THE SAID PROPERTY, IT CANNOT BE SA ID THAT THE PAYMENTS CONSTITUTED TAXABLE INCOME IN THE HANDS OF THE APPE LLANT. ONE CANNOT COME TO CONCLUSION THAT THE PAYMENTS CONSTITUTED TA XABLE INCOME IN THE HANDS OF THE ASSESSEE. FURTHERMORE, EVEN ASSUMI NG THAT THESE PAYMENTS WERE MADE TOWARDS CONSIDERATION OF CANCELL ATION OF JDA, SAME DOES NOT REPRESENT TAXABLE INCOME FOR PERIOD U NDER CONSIDERATION. IT IS ONLY AFTER INSERTION OF CLAUSE (IX) TO SECTION 56(2) ITA NOS. 89 TO 92/BANG/2017 PAGE 10 OF 10 BY FINANCE (NO.2) ACT 2014 W.E.F. 01/04/2015 THAT P ROVISIONS OF THE ACT HAVE BEEN AMENDED TO TAX ANY CONSIDERATION RECE IVED ON CANCELLATION OF ANY AGREEMENT TO SELL OR JDA. THERE FORE, VIEWED FROM ANY ANGLE, WE CANNOT UPHOLD THE VALIDITY OF ASSUMPT ION OF JURISDICTION U/S 147 AND THEREFORE, WE HEREBY QUASH THE IMPUGNED ASSESSMENT ORDERS AS BAD IN LAW. 12. FROM THE ABOVE PARA REPRODUCED FROM THE TRIBUNA L ORDER, IT IS SEEN THAT IT WAS HELD IN THIS CASE THAT VIEWED FROM ANY ANGLE, T HE TRIBUNAL CANNOT UPHOLD THE VALIDITY OF ASSUMPTION OF JURISDICTION U /S. 147 AND ASSESSMENT ORDERS IN THAT CASE WERE QUASHED AS BAD IN LAW. SI NCE NO DIFFERENCE IN FACTS COULD BE POINTED OUT BY LD. DR OF REVENUE IN THE PR ESENT CASE AND IN THAT CASE I.E. IN THE CASE OF WIFE OF THE ASSESSEE SMT. BHAGYA NAGARAJ, WE FIND NO REASON TO TAKE A CONTRARY VIEW IN THE PRESENT CA SE AND HENCE, BY RESPECTFULLY FOLLOWING THIS TRIBUNAL ORDER, WE HOLD THAT IN THE PRESENT CASE ALSO, WE CANNOT UPHOLD THE VALIDITY OF ASSUMPTION O F JURISDICTION U/S. 147 AND THEREFORE, WE HEREBY QUASH THE IMPUGNED ASSESSMENT ORDERS AS BAD IN LAW. IN VIEW OF THIS DECISION, REMAINING GROUNDS RAISED BY ASSESSEE REQUIRE NO SEPARATE ADJUDICATION. 13. IN THE RESULT, ALL THE FOUR APPEALS FILED BY TH E ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 16 TH NOVEMBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.