H B Nataraj , Hassan V. Income Tax Officer Ward-1 , Hassan

ITA 953/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5899 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 28-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABDUL HAKEEM M
• Assessee Lawyers: SHARATH KUMAR
• Keywords: Search and seizure
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORESHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 953 / BANG/201 8 ASSESSMENT YEAR : 20 1 2 - 1 3 SHRI H.B. NATARAJ, NO. 17-30/02, BEHIND HOSALINE ROAD, NEAR MEGHANA CONVENT, EDIGA CIRCLE, HASSSAN 573 201. PAN: AVOPN7646J VS. THE INCOME TAX OFFICER, WARD 1, HASSAN. APPELLANT RESPONDENT APPELLANT BY : SHRI SHARATH KUMAR, ADVOCATE RESPONDENT BY : SHRI ABDUL HAKEEM .M, JCIT (DR) DATE OF HEARING : 2 7 . 0 4 .2018 DATE OF PRONOUNCEMENT : 04 . 0 5 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT(A), MYSORE DATED 28.09.2017 FOR ASSESSME NT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED CIT(A), MYSURU IS OPPOS ED TO LAW AND FACTS OF THE CASE. 2. THE LEARNED CIT (A), MYSURU ERRED IN UPHOLDING T HE IMPUGNED ORDER PASSED BY THE LEARNED ASSESSING OFFICER WITHO UT APPRECIATING THE FACTS CORRECTLY. 3. THE LEARNED CIT (A), MYSURU OUT TO HAVE CONSIDER ED THE FACT THAT THE APPELLANT, THROUGHOUT HIS DEPOSITION BEFORE THE DDIT (INV) MAINTAINED THAT THE AMOUNT FOUND IN HIS BAG DOES NO T BELONG TO HIM AND THE SAME BELONGS TO HIS WIFE, SMT.C.B.RANI, THE PROPRIETRIX, M'S SRI BABA TRADERS, HASSAN. 4. THE LEARNED CIT(A), MYSURU FAILED TO CONSIDER TH E FACT THAT IN SPITE OF REPEATED RIBMISSIONS OF THE APPELLANT THAT THE S EIZED AMOUNT ITA NO.953/BANG/2018 PAGE 2 OF 4 BELONGTO HIS WIFE, THE LEARNED ASSESSING OFFICER, W ENT ON TO ASSESS THE SAID AMOUNT IN THE HANDS OF THE ASSESSEE WHICH IS A GAINST THE LAW AND FACTS OF THE CASE. 5. THE LEARNED CIT (A), MYSURU OUGHT TO HAVE APPREC IATED THE FACT THAT THE AMOUNT OF RS. 18,75,000/- SEIZED FROM THE APPELLANT REPRESENTED THE SALE PROCEEDS OF LOBIA SUPPLIED BY SMT.C.B.RANI, PROPTX. OF SRI BABA TRADERS, HASSAN TO M/S RAJAT& C O., NEW DELHI AND AS SUCH THE LEARNED CIT(A), MYSURU SHOULD HAVE HELD THAT SAID AMOUNT WAS ASSESSABLE IN THE HANDS OF SMT.C.B.RANI, PROPRIETRIX OF SRI BABA TRADERS, HASSAN. 6. THE LEARNED CIT(A), MYSURU FAILED TO CONSIDER TH E FACT THAT THE APPELLANT HAS STATED ON OATH THAT THE APPELLANT IS NOT ASSESSED TO TAX AND THE AMOUNT SEIZED REPRESENTS THE SALE PROCEEDS RECEIVED BY THE APPELLANT FROM RAJAT & CO ON BEHALF OF HIS WIFE SMT . C.B. RANI PROPRIETRIX OF M.'S SRI BABA TRADERS, HASSAN. 7. THE LEARNED CIT(A), MYSURU ERRED IN COMING TO TH E CONCLUSION THAT THE SEIZED AMOUNT BELONGS TO THE APPELLANT WITHOUT VERIFYING THE FACTS. 8. THE LEARNED CIT(A), MYSURU OUGHT TO HAVE CROSS V ERIFIED THE STATEMENT OF THE APPELLANT WITH THE STATEMENT OF SM T. C.B. RANI PROPTX. OF SRI BABA TRADERS, HASSAN BEFORE WRONGLY AMCLUDIN G THAT THE AMOUNT BELONGS TO THE APPELLANT. 9. THE LEARNED CIT(A), MYSURU FAILED TO CONSIDER TH E FACT THAT WHEN THE APPELLANT DISCHARGES HIS PRIMARY BURDEN TO PROV E, THE ONUS IS ON THE ASSESSING OFFICER TO SHOW THAT THE EXPLANATION OFFERED BY THE APPELLANT IS NOT UP TO HIS SATISFACTION. 10. THE LEARNED CIT(A), MYSURU FAILED TO CONSIDER T HE FACT THAT THE SWORN STATEMENT OBTAINED FROMTHE APPELLANT WAS OBTA INED BY DURESS AND PRESSURE. 11. THE LEARNED CIT(A), MYSURU OUGHT TO HAVE CONSID ERED THE FACT THAT THE LEARNED OFFICER WAS PRESSURING THE APPELLANT TO STATE ON OATH THAT THE AMOUNT BELONGS TO HIM AND IN VIEW OF REPEATED P RESSURE FROM THE LEARNED OFFICER THE APPELLANT WAS FORCED TO STATE O N OATH THAT THE AMOUNT IS UNDISCLOSED INCOME OF THE APPELLANT. 12. THE LEARNED CIT(A), MYSURU, ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER PASSED ON THE BASIS OF SWORN STAT EMENT OF THE APPELLANT WHICH WAS TAKEN UNDER PRESSURE, AGAINST L AW, EQUITY AND JUSTICE AND FACTS OF THE CASE. 13. THE LEARNED CIT(A), MYSURU OUGHT TO HAVE CONSID ERED THE FACT THAT THE CASH OF RS.18,75,000/- WAS SEIZED ON 25/07/2012 IN THE PREVIOUS YEAR 2012-13 RELEVANT TO ASSESSMENT YEAR 2013-14. A S SUCH, THE SEIZED ITA NO.953/BANG/2018 PAGE 3 OF 4 AMOUNT SHOULD HAVE BEEN BROUGHT TO TAX FOR THE ASSE SSMENT YEAR 2013- 14, THAT TOO IN THE HANDS OF SMT.C.B.RANI, WIFE OF THE ASSESSEE. 14. THE LEARNED CIT(A), MYSURU FAILED TO CONSIDER T HE FACT THAT WHERE IN ANY FINANCIAL YEAR, AN ASSESSEE IS FOUND TO BE T HE OWNER OF ANY MONEY, THE SOURCE OF WHICH HAS NOT BEEN PROPERLY EX PLAINED SUCH MONEY MAY BE TREATED AS THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. IN VIEW OF THIS FACT, THE AMOUNT SEIZED ON 25 /07/2012 IS ASSESSABLE ONLY FOR THE ASSESSMENT YEAR 2013-14 AND NOT FOR ASSESSMENT YEAR 2012-13. 15. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT (A) FAILED TO CONSIDER THAT THE SEIZED AMOUNT OF RS.18,75,000/- B ELONGS TO SMT.C.B.RANI INSTEAD OF SRI H.B.NATARAJ AS THE SAID AMOUNT OF RS.18,75,000/- WAS ALREADY SUFFERED TAX IN THE HAND S OF SMT.C.B.RANI FOR THE ASSESSMENT YEAR 2013-14 AND AGAIN TAXED IN THE HANDS OF SRI H.B.NATARAJ AMOUNTS TO DOUBLE TAXATION. 16. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING IT IS PRAYED THAT THE ORDER OF THE LEARNED ASSESSING OFFICER AND LEARNED CIT(A), MYSURU MAY BE QUASHED IN CONFOR MITY WITH EQUITY AND JUSTICE. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT AS PER THE ASSESSMENT ORDER, THE SEARCH AND SEIZURE ACTION HA S TAKEN PLACE U/S. 132 OF IT ACT ON 25.07.2012 AND IN COURSE OF SEARCH, CASH AMO UNTING TO RS. 18.75 LAKHS WAS SEIZED FROM THE POSSESSION OF ASSESSEE WHO WAS TRAVELLING FROM NEW DELHI TO BANGALORE. HE SUBMITTED THAT AS PER THE I MPUGNED ASSESSMENT ORDER, ONLY THIS AMOUNT WAS ADDED BY HOLDING THAT THIS IS UNDISCLOSED INCOME OF THE ASSESSEE. HE SUBMITTED THAT SINCE THE DATE OF SEAR CH IS 25.07.2012, NO ADDITION CAN BE MADE ON ACCOUNT OF SUCH DISCOVERY O F SEARCH IN THE PRESENT ASSESSMENT YEAR I.E. 2012-13 AND EVEN IF ANY ADDITI ON HAS TO BE MADE, THE SAME MAY BE MADE IN ASSESSMENT YEAR 2013-14 BUT NOT IN THE PRESENT YEAR. IN REPLY, THE LD. DR OF REVENUE HAD NOTHING TO SAY. 4. I HAVE CONSIDERED THE FACTS OF THE PRESENT CASE AND THE SUBMISSION OF LD. AR OF ASSESSEE. I FIND THAT IT IS CLEAR FROM THE ASSESSME NT ORDER THAT SEARCH WAS CARRIED OUT ON 25.07.2012 AND THEREFORE, IF ANY UND ISCLOSED INCOME IS FOUND IN COURSE OF SEARCH, ADDITION CAN BE MADE IN THE RELEV ANT ASSESSMENT YEAR I.E. 2013-14 BUT THE ADDITION IS MADE BY THE AO IN THE P RESENT CASE I.E. ITA NO.953/BANG/2018 PAGE 4 OF 4 ASSESSMENT YEAR 2012-13 AND THEREFORE, THE ADDITION MADE IN THE PRESENT YEAR CANNOT BE SUSTAINED AND I THEREFORE, DELETE THE SAM E. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 04 TH MAY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.