Assistant Commissioner of Income Tax Central Circle-1(4), Bangalore V. Sri L Manju , Bangalore

ITA 919/BANG/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3375 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 23-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISHRA
• Assessee Lawyers: HARISH V S
• Keywords: Business income; Salary income; Document seized; Opportunity of being heard; Non compliance; Documents seized; TDS
• Section: 40A(3); 201; 13; 153C; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES B BENCH: BANGALORE BEFORE SHRI B.R. BASKARAN , ACCOUNTANT MEMBER AND S MT BEENA PILLAI, JUDICIAL MEMBER ITA NO. 918 /BANG/20 18 ASSESSMENT YEAR: 20 1 1 - 1 2 THE ASSISTANT COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 1 (4), BANGALORE. VS. SRI K. MANJU, NO. 1241/1, 28 TH MAIN, 32 ND G CROSS, 4 TH T BLOCK, JAYANAGAR, BANGALORE. PAN: AJXPK1430E (APPELLANT) (RESPONDENT) & ITA NO. 919 /BANG/20 18 ASSESSMENT YEAR: 201 1 - 1 2 THE ASSISTANT COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 1 (4), BANGALORE. VS. S MT. L. MANJU, NO. 1241/1, 28 TH MAIN, 32 ND G CROSS, 4 TH T BLOCK, JAYANAGAR, BANGALORE. PAN: AHOPM6734C (APPELLANT) (RESPONDENT) A SSESSEE BY : SHRI HARISH V.S., ADVOCATE REVENUE BY : SHRI PRIYADARSHI MIS H RA, ADDL. CIT (DR) DATE OF HEARING : 02 .0 9 .2021 DATE OF PRONOUNCEMENT : 14. 10.2021 ORDER PER BEENA PILLAI , J UDICIAL M EMBER PRESENT APPEALS ARE BEEN FILED BY REVENUE AGAINST ORDER DATED 29.12.2017 IN CASE OF SMT.LAKSHMI MANJU AND ORDER DATED PAGE 2 OF 7 IT A NOS. 918 & 919/ BANG/20 18 29/12/2017 IN CAS E OF SRI K MANJU PASSED BY THE LD. CIT(A) - 11 FOR ASSESSMENT YEAR 2011 - 12 ON FOLLOWING G ROUNDS OF APPEAL : ITA NO. 918/BANG/2018 : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.50,95,000/ - , BASED MERELY ON THE WRITTEN SUBMISSION OF THE ASSESSEE AND ACCEPTING THAT THE ASSESSEE HAD SUFFICIENT CASH BALANCE TO DEPOSIT IN THE BANKS, DISREGARDING THE FACT THAT THE ASSESSEE FAILED TO EXPLAIN THE SOURCES OF CASH DEPOSITS IN THE BANK ACCOUNT, WITH SUPPORTING DETAILS/EVIDENCES AND PREPARING A CASH FLOW STATEMENT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ADMITTING AND CONSIDERING FRESH SUBMISSIONS AS STATED IN PARA 7.3 OF LD.CIT(A) ORDER, WHICH WERE NOT PRODUCED BY THE ASSESSEE, BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS, WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER, IN CONTRAVENTION TO RULE 46A OF THE INCOME TAX RULES? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.22, 49,000/ - OUT OF THE TOTAL ADDITION OF RS.1,34,61,000/ - ON ACCOUNT OF NON COMPLIANCE OF PROVISIONS OF SECTION 40A(3)/40(A)(IA) BASED MERELY ON THE WRITTEN SUBMISSION OF THE ASSESSEE THAT PAYMENTS MADE ON DAILY BASIS TO TECHNICIANS AND SUPPORT STAFF HAS BEEN RECORDED ON SUMMARY BASIS FOR THE EASE OF RECORDING AND ACCEPTING THAT THERE IS NO SINGLE PAYMENT EXCEEDING RS.20,000/ - , DISREGARDING THE FACT THAT THE ASSESSEE FAILED TO EXPLAIN THE DETAILS OF PAYMENTS, WITH SUPPORTING DETAILS/EVIDENCES AND CASH FLOW STA TEMENT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS? 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ORDERING THE ADDITIONS TO BE REDUCED TO RS.1,04,12,000/ - VIDE PARA 10 OF THE APPELLA TE ORDER AND THEREBY DELETING THE ADDITION OF RS. 1,36,61,000/ - BEING ADDITIONS MADE ON UNEXPLAINED CASH PAYMENTS BASED ON THE EVIDENCE OF SEIZED MATERIAL, WITHOUT EVEN ADJUDICATING THE ISSUE IN THE APPELLATE ORDER? 5. WHETHER ON THE FACTS AND IN THE CIRC UMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ORDERING THE ADDITIONS TO BE REDUCED TO RS.1,04,12,000/ - VIDE PARA 10 OF THE APPELLATE ORDER AND THEREBY DELETING THE ADDITION OF RS.1,36,61,000/ - BEING ADDITIONS MADE ON UNEXPLAINED CASH PAYMENTS BASED ON THE EVIDENCE OF SEIZED PAGE 3 OF 7 IT A NOS. 918 & 919/ BANG/20 18 MATERIAL, DISREGARDING THE FACT THAT THE ASSESSEE FAILED TO EXPLAIN THE SOURCES OF CASH PAYMENTS WITH SUPPORTING DETAILS/EVIDENCES AND PREPARING A CASH FLOW STATEMENT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROC EEDINGS? 6. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1,36,61,000/ - BEING ADDITIONS MADE ON UNEXPLAINED CASH PAYMENTS BASED ON THE EVIDENCE OF SEIZED MATERIAL, WHEREIN, AS PER THE PROVI SIONS OF SECTION 132(4A) OF THE INCOME TAX ACT, THE ASSESSING OFFICER HAS THE RIGHT TO CONSIDER THE SEIZED DOCUMENTS REFERRED TO EARLIER AS TRUE AND ONUS IS ON THE ASSESSEE TO PROVE IT OTHERWISE? 7. ANY OTHER GROUNDS THAT MAY ARISE AT THE TIME OF HEARING. ITA NO. 919/BANG/2018: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT( A) ERRED IN DELETING THE ADDITION OF RS.2,04,28,268/ - , BASED MERELY ON THE WRITTEN SUBMISSION OF THE ASSESSEE AND ACCEPTING THAT THE ASSESSEE HAD SUFFICIENT FUNDS TO PURCHASE THE PROPERTIES AT KENGERI AND HOSAKEREHALLI, DISREGARDING THE FACT THAT THE ASSE SSEE FAILED TO EXPLAIN THE SOURCES OF INVESTMENTS, WITH SUPPORTING DETAILS/EVIDENCES DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ADMITT ING AND CONSIDERING FRESH SUBMISSIONS AS STATED IN PARA 7.2 86 7.3 OF LD.CIT(A) ORDER, WHICH WERE NOT PRODUCED BY THE ASSESSEE, BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS, WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER, IN CONTRAVENTION TO RULE 46A OF THE INCOME TAX RULES? 3. ANY OTHER GROUNDS THAT MAY ARISE AT THE TIME OF HEARING. 2. THE BOTH ASSESSEE ARE INDIVIDUAL WAS SUBJECTED TO PROVISIONS OF SECTION 153C CONSEQUENT TO A SECTION THAT TOOK PLACE ON 8/07/2011 ON BASHA GROUP. DURING THE COURSE OF SEARCH ON BASHA GROUP, CERTAIN DOCUMENTS BELONGING TO K. MANJU WERE FOUND. SUBSEQUENTLY , NOTICE UNDER SECTION 153C WAS ISSUED TO ASSESS EE. ASSESSEE FILED RETURN DISCLOSING TAXABLE INCOME AT 10,19,690/ - ON 4/04/2013 . THE LD.AO OBSERVED THAT, ASSESSEE AND HIS WIFE ARE ENGAGED IN THE PROVISION OF FILM PRODUCTION FOR PAGE 4 OF 7 IT A NOS. 918 & 919/ BANG/20 18 SEVERAL YEARS AND ARE PARTNERS IN M/S.LAKSHMISHREE COMBINES. THE LD.AO OBSERVED THAT L. MANJU IS DRAWING SALARY INCOME FROM THE PARTNERSHIP FIRM, INCOME FROM HOUSE PRO PERTY AND ALSO BUSINESS INCOME FROM OTHER SOURCES. LD.AO CALLED FOR VARIOUS DETAILS IN RESPECT OF PURCHASE AND SALE OF PROPERTIES. 3. THE LD.AO WAS OF THE OPINION THAT THE PROPERTIES PURCHASED BY L.MANJU AT KENGERI AND HOSKEREHALLI WERE OUT OF UNDISCLOSED INCOME. THE LD.AO TREATED THE SAME AS INVESTMENT OUT OF UNDISCLOSED INCOME AND ADDED 2,04,20,268/ - IN THE HANDS OF LAKSHMI MANJU. 4. IN CASE OF K. MANJU THE LD.AO OBSERVED THAT HE HAD A PROPRIETARY CONCERN WITH THIS STYLE AND NAME , K. MANJU FILMS AND M/S. BINDUSHREE FILMS, APART FROM THE PARTNERSHIP FIRM THAT HE HAD WITH HIS WIFE. A SURVEY OPERATION WAS CARRIED OUT IN THE OFFICE PROMISE OF K.MANJU. 5. THE LD.AO OBSERVED THAT , RETURNS OF INCOME WERE FILED IN THE NAME OF K.MANJU AND HIS PROPRIETORSHIP CONCERNS AND SHRI LAKSHMISHREE COMBINES, HOWEVER FROM THE SEIZED MATERIALS LD.AO WAS OF THE OPINION THAT THE RETURNS OF INCOME DID NO T REFLECT THE TRUE AND CORRECT VOLUME OF CASH TRANSACTION BY ASSESSEE. 6. DURING THE ASSESSMENT PR OCEEDINGS K. MANJU WAS CONFRONTED WITH THE SEIZED MATERIALS AND STATEMENTS WERE RECORDED WHEREIN HE ADMITTED PURCHASE OF AGRICULTURAL LAND WORTH 6.30 LAKHS IN CASH THAT WAS UNEXPLAINED. THE ASSESSEE OF THE WORLDS 13 LAKHS V IDE LETTER DATED 29/07/2011 O N ACCOUNT OF PURCHASE OF PROPERTY BEING SITE AT NUMBER 26 JALAHALLI VILLAGE THAT WAS UNEXPLAINED. K. MANJU, ON 8/08/2011 DECLARED AN AMOUNT OF 3 PAGE 5 OF 7 IT A NOS. 918 & 919/ BANG/20 18 CRORES TOWARDS THE UNDISCL OSED INCOME FOR ENTIRE BLOCK OF 2006 - 07 TO 2012 - 13. HE REQUESTED FOR TELESCOPING OF THE ENTIRE BLOCK. HOWEVER THE LD.AO INVOKED PROVISIONS OF SECTION 69 AND 40A (3)/40A(IA) OF THE ACT AND MADE ADDITION OF 2,26,61,000/ - REJECTING SUBMISSIONS OF ASSESS. THE ADDITION INCLUDED 50,95,000/ - DEPOSITED INTO BANK ACCOUNT, CASH EXPENDITURE OF 1, 26,61,000/ - MADE TO VARIOUS PEOPLE WITHOUT DEDUCTING TDS, 49,05,000/ - WAS ADDED AS ASSESSEE COULD NOT PROVIDE ANY EXPLANATION. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE PREFERRED APPEALS BEFORE THE LD.CIT(A). 7. THE LD.CIT(A) IN CASE OF K.MANJU OBSERVED THAT ASSESSEE HAD SUFFICIENT CASH BALANCE TO FUND DEPOSITS INTO THE BANK AND MEET THE PRODUCTION EXPENSES. THE LD.CIT(A) WAS OF THE OPINION THAT PROVISIONS OF SECTION 68/69 IS NOT ENFORCEABLE AND SIMILARLY PROVISIONS OF SECTION 40A(3) ARE ALSO NO T ENFORCEABLE TO THE EXTENT OF PAYMENTS MADE TO VARIOUS TECHN ICIANS. THE LD.CIT(A) DELETED THE ADDITION BASED ON SUBMISSIONS MADE BY ASSESSEE. IN CASE OF LA KSHMISHREE MANJU, THE LD.CIT(A) HAS REPRODUCED THE SUBMISSIONS OF ASSESSEE AND PASSED A CRYPTIC ORD ER DELETING THE ADDITION. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUES AND APPEAL BEFORE US NOW. 8. AT THE OUTSET THE LD.SR.DR SUBMITTED THAT THE ORDER PASSED BY THE LD.CIT(A) IS CRYPTIC AND DOES NOT DEAL WITH THE ISSUES WITH PROPER REASONING. I T WAS SUB MITTED THAT , DETAILS FILED BEFORE THE LD.CIT(A) HAS NOT BEEN REMANDED TO THE LD.AO FOR VERIFICATION. HE THUS SUBMITTED THAT BOTH THE APPEALS BE REMANDED IN ORDER TO PAGE 6 OF 7 IT A NOS. 918 & 919/ BANG/20 18 CARRY OUT VERIFICATION IN THE LIGHT OF VARIOUS DOCUMENTS AND SUBMISSIONS OF ASSESSEE . 9. ON THE CONTRARY THE LD.AR PLACED RELIANCE ON ORDERS PASSED BY AUTHORITIES BELOW. 10. WE HAVE PERUSED SUBMISSIONS ABOVE BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 11. WE AGREE WITH THE LD.SR.DR T HAT THE ORDER S OF LD.CIT(A) ARE CRYPTIC AND IS PASSED WITH OUT RECORDING PROPER REASONING. THE LD.CIT(A) REPRODUCED THE SUBMISSIONS FILED BY ASSESSEE AND DECIDED THE ISSUE WITHOUT GIVING REASONS. IN THE INTEREST OF JUSTICE WE REMAND THIS ISSUE BACK TO THE LD.AO TO VERIFY THE CLAIMS IN BOTH THE APPEALS B ASED ON EV IDENCES/SUBMISSIONS FILED BY ASSESSEE AND IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT PROPER OPPORTUNITY OF BEING HEARD MUST BE GRANTED TO ASSESSEE IN ACCORDANCE WITH LAW. ACCORDINGLY GROUNDS RAISED BY REVENUE IN BOTH THESE APPEALS STANDS ALLOWED FOR STAT ISTICAL PURPOSES. IN THE RESULT APPEALS FILED BY REVENUE IN THESE APPEALS STAND ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 14 TH OCTOBER, 2021. SD/ - SD/ - ( B.R. BASKARAN ) ( BEENA PILLAI ) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED: 14 TH OCTOBER, 2021. /MS/ PAGE 7 OF 7 IT A NOS. 918 & 919/ BANG/20 18 COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE