ACIT CEN CIR 14, MUMBAI V. JALPA B. MEHTA, MUMBAI

ITA 9060/MUM/2010

• Counselvise Citation: 906019914 RSA 2010
• Duration Of Justice: 3 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 26-08-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 27-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRITAM SINGH
• Assessee Lawyers: FIROZE ANDHYARUJINA
• Keywords: Search and seizure
• Section: 143(3); 153A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI , , , BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMB ER . / ITA NO. 9060/ MUM./ 201 0 ( / ASSESSMENT YEAR : 20 0 2 - 03 ) . / ITA NO. 9061/MUM./2010 ( / ASSESSMENT YEAR : 2003 - 04 ) ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 14, OLD CGO ANNEX BLDG. 101, M.K. R OAD, MUMBAI 400 020 .. / APPELLANT V/S SMT. JALPA B. MEHTA 708 , GOLDEN CHAMBERS 7 TH FLOOR, ANDHERI LINK ROAD ANDHERI (W), MUMBAI 400 058 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMB ER AEVPM0565P / REV E NUE BY : SHRI P RITAM SINGH / ASSESSEE BY : SHRI FIROZE ANDHYARUJINA / DATE OF HEARING 26 . 0 8 .2014 / DATE OF ORDE R 28.08.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE SE APPEAL S HAVE BEEN PREFERRED BY THE REVENUE CHALLENGING THE COMMON IMPUGNED ORDER DATED 29 TH OCTOBER 2010 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) X XXVII , MUMBAI, FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) R/W SECTION 153A , OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) , FOR THE ASSESSMENT YEAR SMT. JALPA B. MEHT A 2 20 0 2 - 03 AND 2003 - 04 . SINCE THE ISSUE RAISED IN BOTH THESE APPEALS IS COMMON, THEREFORE, WE PROCEED TO DECIDE THE SE APPEALS TOGETHER BY WAY OF PASSING THIS CONSOLIDATED ORDER. THE SOLE COMMON GROUND RAISED BY THE REVENUE , FOR BOTH THE YEARS UNDER ASSESSMENT , READS AS UNDER: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN A LLOWING RELIEF TO THE ASSESSEE ON THE GROUNDS OF DISCLOSURE OF THE AMOUNTS OF ADDITION ON PROTECTIVE BASIS BY SHRI BIMAL N. MEHTA, THE ASSESSEES HUSBAND, WITHOUT CONSIDERING THE FACT THAT THE ASSM IN THE CASE OF SHRI BIMAL N. MEHTA, WAS NOT COMPLETED FOLL OWING STAY OF THE HON'BLE JURISDICTIONAL HIGH COURT ON A WRIT PETITION FILED BY THE ASSESSEE FOR REFERRING HIS CASE FOR SPECIAL AUDIT UNDER SECTION 142(2A) OF THE INCOME TAX ACT, 1961 . 2. IN THIS CASE, A SEARCH AND SEIZURE OPERATION UNDER SECTION 132(1) OF THE ACT, WAS CONDUCTED IN CASE OF SHRI BIMAL NATWARLAL MEHTA AND HIS ASSOCIATES ON 24 TH JUNE 2004. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE ALONG WITH HER HUSBAND SHRI BIMAL NATWARLAL MEHTA, HAS CARRIED OUT RENOVATION EXPENSES ON THE RESIDENTIAL P REMISE ON THE BASIS OF EVIDENCES FOUND DURING THE SEARCH AND SEIZURE OPERATION. 3. BEFORE THE ASSESSING OFFICER, THE ASSESSEE SUBMITTED THAT HER HUSBAND SHRI BIMAL NATWARLAL MEHTA, HAS INCURRED THE ENTIRE RENOVATION EXPENDITURE AND THE SAME HAS BEEN SHOWN IN HIS RETURN OF INCOME. THE ASSESSEE ALSO ENCLOSED THE DETAILS OF RENOVATION EXPENSES FOR THE FLAT AND THE OFFICE. HOWEVER, T HE ASSESSING OFFICER PROCEEDED TO MAKE PROTECTIVE ASSESSMENT IN CASE OF THE ASSESSEE AND ALSO HELD THAT THE ASSESSMENT UNDER SECTION 143(3) R/W SECTION 153A, IS STILL PENDING SMT. JALPA B. MEHT A 3 AS THE MATTER HAS BEEN REFERRED TO SPECIAL AUDIT UNDER SECTION 142(2A). ACCORDINGLY, HE MADE THE FOLLOWING ADDITIONS ON ACCOUNT OF RENOVATION EXPENSES IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS FOR THE FOLLO WING ASSESSMENT YEARS: - S.NO. A.Y. RENOVATION EXPENSES 1. 2002 - 03 ` 13,97,936 2. 2003 - 04 ` 27,62,502 3. 2004 - 05 ` 69,700 4. BEFORE THE LEARNED COMMISSIONER (APPEALS), DETAILS OF RENOVATION WERE FURNISHED FOR VARIOUS ASSESSMENT YEARS WHICH HAVE BEEN INCO RPORATED IN PAGE 4 AND 5 OF THE APPELLATE ORDER. AFTER CONSIDERING ASSESSEES SUBMISSIONS AND THE MATERIAL PLACED ON RECORD, THE LEARNED COMMISSIONER (APPEALS) HELD THAT THE EXPENDITURE TO THE EXTENT SHOWN IN THE RETURN OF INCOME OF THE ASSESSEES HUSBAND , SHRI BIMAL NATWARLAL MEHTA, SHOULD BE EXCLUDED AND THE BALANCE AMOUNT SHOULD BE ADDED IN THE HANDS OF THE ASSESSEE. THE RELEVANT OBSERVATIONS OF THE LEARNED COMMISSIONER (APPEALS) FOR THE ASSESSMENT YEAR 2002 03 AND 2003 04, IS AS UNDER: ASSESSMENT YEA R 2002 - 03 2.3.2 IN A.Y. 2002 - 03, APPELLANTS HUSBAND HAD INCURRED EXPENDITURE OF ` 9,68,896, ON THE RENOVATION OF THE SAID RESIDENTIAL HOUSE WHICH IS INCLUDED IN HIS RETURN OF INCOME PENDING BEFORE THE AO. SUBJECT TO VERIFICATION OF THE SAME, THE APPELLANT GETS A RELIEF OF ` 9,68,896, IN A.Y. 2002 - 03. THEREFORE, THE A.O. IS DIRECTED TO TAX ` 4,29,040 ( ` 13,97,936 ` 9,68,896) AND ALLOW RELIEF OF ` 9,68,896 WHICH HAS ALREADY BEEN SPENT AND SMT. JALPA B. MEHT A 4 DISCLOSED BY THE APPELLANTS HUSBAND THROUGH A/C PAYEE CHEQUES FROM DISCLOSED BANK ACCOUNTS. HOWEVER, THE A.O. IS DIRECTED TO BE VIGILANT AND ALLOW THE RELIEF ONLY AFTER PROPER VERIFICATION OF THE AFORESAID EXPENSES. THE APPEAL FOR A.Y. 2002 - 03 IS PARTLY ALLOWED. ASSESSMENT YEAR 200 3 - 04 2.3. 3 LEARNED AR HAS VEHEMENTLY AR GUED THAT THE APPELLANTS HUSBAND BIMAL MEHTA HAS SPENT ` 22,98,540 BY A/C PAYEE CHEQUES OF DISCLOSED BANK ACCOUNTS. IN VIEW OF THE ABOVE, THE APPELLANT IS ENTITLED TO A RELIEF OF ` 22,98,540. THE A.O. IS DIRECTED TO TAX ` 4,63,962 ( ` 27,62,502 ` 22,98,5 40). HOWEVER, THE A.O. IS DIRECTED TO VERIFY THE FACTS AT THE TIME OF GIVING APPEAL EFFECT AND SHOULD ALLOW RELIEF AFTER PROPER VERIFICATION OF THE FACTS AS CLAIMED BY THE APPELLANT. THE APPELLANT GETS A RELIEF OF ` 22,98,540 FOR A.Y. 2004 - 05. THE APPEAL F OR A.Y. 2004 - 05 IS PARTLY ALLOWED. 5. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT SINCE THE ASSESSMENT ORDER OF SHRI BIMAL NATWARLAL MEHTA, HAS NOT BEEN FINALISED AS THE PROCEEDINGS OF SPECIAL AUDIT UNDER SECTION 142(2A), HAS BEEN STAY ED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE WRIT PETITION FILED BY THE ASSESSEE, THEREFORE, THIS MATTER SHOULD BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. 6. THE LEARNED COUNSEL, SHRI FIROZE ANDHYARUJINA , ON BEHALF OF THE ASSESSEE, SUBMITTED T HAT THE LEARNED COMMISSIONER (APPEALS) HAS MERELY DIRECTED THE ASSESSING OFFICER TO VERIFY THE AMOUNT OF EXPENDITURE ALREADY DECLARED IN THE RETURN OF INCOME FILED BY HER HUSBAND SHRI BIMAL NATWARLAL MEHTA, AND THE BALANCE HAS BEEN CONFIRMED ON SUBSTANTIVE BASIS. THERE SHOULD BE NO GRIEVANCE TO THE DEPARTMENT. SMT. JALPA B. MEHT A 5 7. AFTER HEARING THE RIVAL SUBMISSIONS AND ON A PERUSAL OF THE FINDINGS OF THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER (APPEALS), WE FIND THAT THE ASSESSING OFFICER HAS MADE PROTECTIVE ADDITION I N THE HANDS OF THE ASSESSEE. THE LEARNED COMMISSIONER (APPEALS), ON A PERUSAL OF THE ENTIRE MATERIAL PLACED ON RECORD, HAS DIRECTED THE ASSESSING OFFICER TO VERIFY THE RETURN OF INCOME IN THE CASE OF THE ASSESSEES HUSBAND SHRI BIMAL NATWARLAL MEHTA, AND T O THE EXTENT THE AMOUNT OF EXPENDITURE SHOWN THERE, THE SAME SHOULD BE EXCLUDED FROM THE HANDS OF THE ASSESSEE AND THE BALANCE HAS BEEN CONFIRMED. E DO NOT FIND ANY INFIRMITY IN THE FINDING OF THE LEARNED COMMISSIONER (APPEALS) AND THE SAME IS CONFIRMED. T HUS, THE GROUND RAISED BY THE DEPARTMENT IN BOTH THE YEARS UNDER APPEAL IS TREATED AS DISMISSED. 8. 8. IN THE RESULT, REVENUES APPEAL IS TREATED AS DISMISSED. 28 TH AUGUST 2014 ORDER PRONOUNCED IN THE OPEN COURT O N 28 TH AUGUST 2014 SD/ - SANJAY ARORA ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 28 TH AUGUST 2014 SMT. JALPA B. MEHT A 6 / COPY OF THE ORDER FORWARDED TO : (1) / THE ASSESSEE ; (2) / THE REVENUE; (3) ( ) / THE CIT(A ) ; (4) / THE CIT, MUMBAI CITY CONCERNED ; (5) , , / THE DR, ITAT, MUMBAI ; (6) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI