URMILA M GALA, MUMBAI V. DCIT CEN CIR 12, MUMBAI

ITA 905/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0080 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2004-2005
• Appeal Filed On: 23-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT PATANKARDR
• Assessee Lawyers: HARI S RAHEJA
• Keywords: Unexplained cash credit; Search and seizure; Salary income; Document seized; Documents seized
• Section: 153A; 68; 145; 132

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -GBENCH MUMBAI , , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND AMARJIT SINGH,JUDICIAL MEMBER ./I.T.A./905/MUM/2016, / ASSESSMENT YEAR: 2004-05 ./I.T.A./906/MUM/2016, / ASSESSMENT YEAR: 2005-06 ./I.T.A./4681/MUM/2016, / ASSESSMENT YEAR:2006-07 SMT. URMILA M. GALA 93, DADISETH AGIARY LANE KALBADEVI, MUMBAI-400 002. PAN:AAFPG 3176 J VS. DCIT, CENTRAL CIRCLE-12 MUMBAI. ( /APPELLANT ) ( / RESPONDENT) / REVENUE BY: SHRI ABHIJIT PATANKAR-DR /ASSESSEE BY: SHRI HARI S. RAHEJA / DATE OF HEARING: 14/12/2017 / DATE OF PRONOUNCEMENT: 01.03.2018 , / PER RAJENDRA, AM - CHALLENGING THE ORDERS OF THE CIT(A)- 48,MUMBAI,THE ASSESSEE HAS FILED THE APPEALS FOR THE ABOVE MENTIONED ASSESSMENT YEARS (AY.S).THE ASSESSE E,AN INDIVIDUAL, DERIVES INCOME FROM SALARY, BUSINESS/PROFESSION AND OTHER SOURCES.THE D ETAILS OF THE DATE OF FILING OF RETURN OF INCOME,RETURNED INCOME, INCOME ASSESSED, ETC. ARE T ABULATED BELOW:- AY. ROI FILED ON RETURNED INCOME ASSESSMENT DT. ASSESSED INCOME CIT( A)ORDER DT 2004-05 30.03.2011 RS.8,29,210/- 20.03.2013 (RS.1. 16 CRORES) 23/12/2015 2005-06 30.03.2011 RS.9,52,770/- 20.03.2013 (RS.38 .36 LAKHS) 24/12/2015 2006-07 30.03.2011 RS.7,85,840/- 20.3.2013 (RS.10. 77 LAKHS) 25/04/2016 2. AN ACTION U/S. 132(1) WAS CARRIED OUT IN THE CASE O F THE M/S. RELIABLE PAPER GROUP ON 23/2/2010.THE RESIDENTIAL PREMISES OF THE ASSESSEE WERE ALSO COVERED.DURING THE ASSESSMENT PROCEEDINGS, AS PER THE AO NONE APPEARED ON BEHALF OF THE ASSESSEE. INVOKING THE PROVISIONS OF SECTION 145 (3) OF THE ACT, HE REJECTED THE BOOK S OF ACCOUNT OF THE ASSESSEE AND COMPLETED THE ASSESSMENT U/S.144 OF THE ACT.SO,WHILE COMPLETI NG THE ASSESSMENT, HE MADE AN ADDITION OF RS.1.04 CRORES(I. RS.3.36 LAKHS-EXPENSES DISALLO WED +II.RS.74.13 LAKHS-UNEXPLAINED CREDITS+III.RS.30.80 LAKHS-UNEXPLAINED LOAN RECEIVE D BY THE ASSESSEE) TO THE TOTAL INCOME OF THE ASSESSEE. 3. AGGRIEVED BY ORDER OF THE AO, THE ASSESSEE PREFERRE D AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA)AND MADE ELABORATE SUBMISSIONS.HE CA LLED FOR REMAND REPORT AFTER CONSIDERING THE AVAILABLE,MATERIAL HE UPHELD THE AD DITIONS OF RS.3.34 LAKHS(ON ACCOUNT OF ITA/905&ITA/906/MUM/2016, ( 04-05) / &( 05-06) AND ITA/4681/MUM/2016, ( 06-07) SMT. URMILA M. GALA 2 INTEREST PAID ON LOANS),RS.1.07 LAKHS (FOR LOAN REC EIVED FROM M/S.MARU CORPORATION) AND RS.17,000/-(INTEREST PAID ON LOAN AND PROFESSIONAL TAX). 4. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORIS ED REPRESENTATIVE(AR) STATED THAT NO INCRIMINATING MATERIAL WAS FOUND OR SEIZED DURING T HE SEARCH OR SEIZURE PROCEEDINGS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE,THA T THE ADDITION MADE IN ABSENCE OF SEIZED MATERIAL HAD TO BE DELETED.HE REFERRED TO THE CASE OF ALLCARGO GLOBAL LOGISTICS LTD. (18 ITR (TRIB) 106) AND STATED THAT IN THE CASE OF DARSHAK GALA, A FAMILY MEMBER OF THE ASSESSEE,THE TRIBUNAL HAD (ITA NO.4143/M/16-A.Y.2008-09,DATED.19 /6/2017)ALLOWED THE APPEAL OF THE ASSESSEE.THE DEPARTMENTAL REPRESENTATIVE (DR) LEFT THE ISSUE TO THE DISCRETION OF THE BENCH. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS.WE FIND THAT SE ARCH AND SEIZURE PROCEEDINGS WERE CARRIED OUT IN THE CASE OF THE ASSESSEE. THE ORDER OF THE AO IS NOT BASED ON ANY OF THE SEIZED MATERIAL, THAT IN THE CASE OF SHRI DARSHAK GALA (SU PRA), THE TRIBUNAL ON SIMILAR FACTS HAD ALLOWED THE APPEAL. WE WOULD LIKE TO REPRODUCE THE RELEVANT PORTION OF THE ORDER OF THE SHRI DARSHAK GALA (SUPRA ), AND IT READS AS UNDER :- 2. THE EFFECTIVE GROUND OF APPEAL TAKEN BY THE AS SESSEE IS IN RELATION TO THE CONFIRMATION OF ADDITION OF RS.2,04,264/-. THE SHORT FACTS OF THE C ASE ARE THAT THE ASSESSEE WAS COVERED UNDER SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF T HE ACT. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) HAS MADE ADDITION OF RS.2,04 ,264/- ON ACCOUNT OF OPENING BALANCE CAPITAL BY INVOKING PROVISIONS OF SECTION 68 OF THE ACT. THE AO, ON PERUSAL OF THE BALANCE SHEET, OBSERVED THAT ASSESSEE HAD CAPITAL BALANCE O F RS.2,04,264/- AND ACCORDINGLY, ASKED THE ASSESSEE TO GIVE THE DETAILS AND EVIDENCES FROM WHE RE THE OPENING CAPITAL WAS ARRIVED. SINCE THE ASSESSEE DID NOT PROVIDE THE DETAILS AND COULD NOT CORRELATE THE FIGURES APPEARING IN THE BALANCE SHEET WITH THE BOOKS OF ACCOUNTS, THE AO AD DED THE AMOUNT OF RS.2,04,264/- UNDER SECTION 68 OF THE ACT. 3. MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CIT (A) DISMISSED THE SAME. 4. DURING THE COURSE OF HEARING, THE LD. A.R. SUBMI TTED THAT DURING THE SEARCH AND SEIZURE ACTION NO INCRIMINATING EVIDENCE RELATING TO THE AS SESSEE MORE PARTICULARLY RELATED TO CAPITAL AMOUNT WAS FOUND FOR THE YEAR UNDER CONSIDERATION. THE AO HAS NOT MENTIONED ANY INCRIMINATING EVIDENCE RELATING TO THE ASSESSEE AND MORE PARTICULARLY RELATED TO CAPITAL ACCOUNTS WAS FOUND IN THE YEAR UNDER CONSIDERATION. THE AO HAS NOT MENTIONED ANY SUCH INCRIMINATING EVIDENCE IN THE ASSESSMENT ORDER BASE D ON WHICH HE HAS ARRIVED AT ADDITION ON ACCOUNT OF OPENING BALANCE CAPITAL. THE ASSESSEE HA S RELIED UPON THE DECISION OF SPECIAL BENCH OF MUMBAI ITAT IN THE CASE OF ALL CARGO GLOBA L LOGISTICS LTD. AND HE HAS ALSO RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN T HE CASE OF CIT VS. MURLI AGRO PRODUCTS LTD. AND PRAYED FOR DELETION OF ADDITION. 5. THE LD. D.R. HAS RELIED UPON THE ORDER OF THE RE VENUE AUTHORITIES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING INTO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND FROM THE LD. CIT (A)S ORDER THAT THE ASSESSEE WAS COVERED SEARCH AND SEIZURE OPERATION CONDUCTED ON 22.03.201 0. THE ASSESSEE WAS SERVED WITH THE NOTICE AND ASSESSEE FILED THE RETURN FOR A.Y. 2008- 09 AND AO HAS MADE THE ADDITION ON ACCOUNT OF OPENING BALANCE OF RS.2,04,264/- BEING A N OPENING CAPITAL FROM EARLIER YEARS CAPITAL. IT WAS SHOWN IN THE BALANCE SHEET BUT ASSE SSEE WAS UNABLE TO PRODUCE ANY EVIDENCE, THEREFORE ADDITION WAS MADE. WE FIND THAT THE ASSES SEE WAS COVERED UNDER SECTION 153A AND ASSESSEE HAS FILED THE RETURN AS PER THE PROVISIONS OF SECTION 153A AND ASSESSMENT WAS MADE. ITA/905&ITA/906/MUM/2016, ( 04-05) / &( 05-06) AND ITA/4681/MUM/2016, ( 06-07) SMT. URMILA M. GALA 3 AS PER THE PROVISIONS OF SECTION 153A ONLY ASSESSME NTS WHICH ARE PENDING AS ON DATE OF SEARCH ARE ABATED AND AO IS THERE TO MAKE THE ASSES SMENT OF SUCH YEARS BASED ON INFORMATION AVAILABLE ON RECORD AND MATERIAL FOUND AS A RESULT OF SEARCH. WE FIND THAT ASSESSEE WAS NOT HAVING ANY MATERIAL OR EVIDENCE WHICH SHOWS THAT AS SESSEE HAS UNDISCLOSED INCOME AND AO HAS ACCEPTED THE RETURN FILED BY THE ASSESSEE. WE F IND THAT THE SIMILAR ISSUE HAD COME UP BEFORE ITAT AND THE SPECIAL BENCH OF THE ITAT IN TH E CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT [2012] 18 ITR (TRIB) 106 HAS DECIDED AS UN DER: (I) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS THE JURISDICTION CONFERRED ON HIM BY S. 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE 6 ASSESSMENT YEARS SEPARATELY: (II) IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MAT ERIAL I.E. (A) THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS FOUND IN THE COURSE OF THE SEARCH B UT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND (B) UNDISCLOSED INCOME OR PROPERTY D ISCLOSED IN THE COURSE OF SEARCH. 7. RESPECTFULLY FOLLOWING THE DECISION OF THE SPECI AL BENCH OF ITAT IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT (SUPRA), WE ALLOW TH E APPEAL OF THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. CONSIDERING THE ABOVE WE DECIDE THE APPEAL IN FAVOU R OF THE ASSESSEE. ITA.S/960/M/16 &4681/M/16-AY.S 2005-06 AND 2006-07: 6. FACTS OF THE ABOVE TWO APPEALS ARE ALMOST SIMILAR T O THE FACTS OF THE APPEAL FILED FOR THE AY. 2004-05,EXCEPT THE DIFFERENCE IN THE AMOUNTS IN VOLVED OR THE HEADS OF INCOME FOR WHICH ADDITIONS HAVE BEEN MADE. IT IS FOUND THAT THE ORDERS FOR THESE TWO YEARS ARE NOT BASED ON ANY SEIZED DOCUMENTS OR MATERIALS.THEREFORE, RESPECTFULLY FOLLOWING THE O RDER OF THE TRIBUNAL IN THE CASE OF ALLCARGO GLOBAL LOGISTICS LTD. (SUPRA), WE ALLOW GROUNDS OF APPEAL RAISED BY THE ASSESSEE, FOR BOTH THE AY.S. AS A RESULT, APPEALS FILED BY THE ASSESSEE FOR ALL THE THREE AY.S STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST MARCH, 2018. 01 , 2018 SD/- SD/- ( / AMARJIT SINGH ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; / DATED : 01 .03.2018 . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR G BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.