OZONE INFRA PROJECTS, MUMBAI V. DCIT CEN CIR 2, THANE

ITA 98/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4219 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 05-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H N SINGH
• Assessee Lawyers: DHARAN V GANDHI
• Keywords: Retraction
• Section: 142(1); 153A; 132; 11; 15

Judgement Text

1 ITA 98/MUM/2017 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI G MANJUNATHA (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) I.T.A NO.98 /MUM/2017 (ASSESSMENT YEAR: 2012-13) M/S OZONE INFRA PROJECTS A-1/103, ORCHID PLAZA RK THAKU ROAD, DAHISAR MUMBAI-400 068 PAN :AACFO3777E VS DY.CIT, CENT.CIR.2, THANE APPELLANT RESPONDENT APPELLANT BY SHRI DHARAN V GANDHI RESPONDENT BY SHRI HN SINGH DATE OF HEARING 04 -07-2018 DATE OF PRONOUNCEMENT 14-08-2018 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST ORDER OF THE CIT(A)-11, THANE DATED 27-10-2016 AND IT PERTAINS T O AY 2012-13. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) 11 ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW ERRED IN C ONFIRMING RS.50,00,000/- WHICH WAS ON ACCOUNT OF DECLARATION OF CASH ON HAND AT THE TIME OF SEARCH PROCEEDINGS, HOWEVER THE SAID AMOUNT HAD ALREADY BE EN OFFERED IN THE INCOME TAX RETURN OF AY 2013-2014. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP 2 ITA 98/MUM/2017 FIRM ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOP MENT. A SEARCH ACTION U/S 132 OF THE AC,T WAS CONDUCTED ON THE SMC GROUP ON 23-05- 2012. THE ASSESSEE BEING PART OF SMC GROUP WAS ALS O COVERED UNDER SEARCH ACTION. DURING THE COURSE OF SEARCH, INCRIM INATING MATERIAL FOUND IN THE PREMISES OF M/S ROHIT INFRA PROJECTS PVT LTD SHOWED THAT THE ASSESSEE HAS MADE VARIOUS CASH PAYMENTS IN RESPECT OF ITS PURCHASES WHICH WERE OUTSIDE THE BOOKS OF ACCOUNT. WHEN SUCH INCRIMINATING MATERIAL WAS CONFRONTED TO THE ASSESSEE, SHRI BHULE SHWAR MISHRA, PARTNER OF THE ASSESSEE FIRM, IN THE STATEMENT RECO RDED U/S 132(4) OF THE ACT ADMITTED TO HAVE INCURRED VARIOUS EXPENDITURE I N CASH OUTSIDE THE BOOKS OF ACCOUNT AND ACCORDINGLY, ADMITTED UNDISCLO SED INCOME OF RS.50 LAKHS FOR THE AY 2012-13. CONSEQUENT TO SEAR CH, NOTICE U/S 153A OF THE ACT WAS ISSUED ON 31-07-2013. IN RESPONSE T O THE NOTICE, THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 24-03-20 14. THE CASE HAS BEEN SELECTED FOR SCRUTINY AND NOTICES U/S 143(2) A ND 142(1) OF THE ACT WERE ISSUED. IN RESPONSE TO NOTICES, THE AUTHORIZE D REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED V ARIOUS DETAILS, AS CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, AO NOTICED THAT THOUGH ASSESSEE HAS ADMITTED UNDISCLOSED INCOM E OF RS.50 LAKHS DURING SEARCH PROCEEDINGS, FAILED TO ADMIT SUCH UND ISCLOSED INCOME IN RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 15 3A, THEREFORE, CALLED 3 ITA 98/MUM/2017 UPON THE ASSESSEE TO EXPLAIN AS TO WHY ADDITION SHO ULD NOT BE MADE IN RESPECT OF UNDISCLOSED INCOME DECLARED IN STATEMENT U/S 132(4) OF THE ACT. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE , VIDE IT LETTER SUBMITTED THAT DURING THE COURSE OF SEARCH, BY MIST AKEN OF FACTS, IT HAS ADMITTED UNDISCLOSED INCOME OF RS.50 LAKHS FOR THE AY 2012-13 ON ACCOUNT OF CASH TRANSACTIONS FROM ALIBAUG PROJECT, WHEREAS THE SAID UNDISCLOSED INCOME PERTAINS TO AY 2013-14 AND ACCOR DINGLY, THE ASSESSEE HAS DISCLOSED UNDISCLOSED INCOME OF RS.50 LAKHS IN THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2013-14. F OR THIS, FILED NECESSARY DETAILS INCLUDING COPIES OF INCOME-TAX RE TURN TO PROVE ADMISSION OF INCOME FOR THE AY 2013-14. THE AO, AF TER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE OBSERVED THAT ALTHOUGH THE ASSESSEE HAS ADMITTED UNDISCLOSED INCOME FOR AY 201 2-13, WITHOUT ANY VALID RETRACTION, FAILED TO ADMIT SUCH UNDISCLOSED INCOME EVEN THOUGH THE INCRIMINATING MATERIAL CLEARLY ESTABLISHES THAT SUC H UNDISCLOSED INCOME PERTAINS TO AY 2012-13. ACCORDINGLY MADE ADDITION OF RS.50 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE HAS REITERATED ITS SUBMISSIONS MADE BEFORE THE AO TO ARGUE THAT THE UN DISCLOSED INCOME ADMITTED DURING THE COURSE OF SEARCH, IN FACT , PER TAINS TO AY 2013-14, 4 ITA 98/MUM/2017 BUT BY MISTAKEN UNDERSTANDING OF THE FACTS, THE SAM E HAS BEEN ADMITTED FOR AY 2012-13. ASSESSEE FURTHER SUBMITTED THAT IT HAS DISCLOSED UNDISCLOSED INCOME OF RS.50 LAKHS IN THE RETURN OF INCOME FILED FOR AY 2013-14, THEREFORE, THE AO WAS ERRED IN MAKING FURT HER ADDITION OF RS.50 LAKHS FOR THE YEAR UNDER CONSIDERATION ONLY ON THE BASIS OF SEARCH STATEMENT. THE LD.CIT(A), AFTER CONSIDERING RELEVA NT SUBMISSIONS OF THE ASSESSEE AND ALSO TAKING INTO ACCOUNT STATEMENT REC ORDED DURING THE COURSE OF SEARCH OBSERVED THAT INCRIMINATING MATERI AL FOUND DURING THE COURSE OF SEARCH CLEARLY ESTABLISHES UNDISCLOSED IN COME PERTAINING TO AY 2012-13 AND THIS FACT HAS BEEN CATEGORICALLY ADM ITTED BY THE PARTNER IN THE STATEMENT RECORDED U/S 132(4). THEREFORE, T HERE IS NO MERIT IN THE ARGUMENTS OF THE ASSESSEE THAT IT HAS ADMITTED UNDI SCLOSED INCOME FOR AY 2012-13 BY MISTAKE UNDERSTANDING OF FACTS. ACCO RDINGLY, CONFIRMED ADDITION MADE BY THE AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT THE L D.CIT(A) FAILED TO APPRECIATE THE FACT IN THE LIGHT OF EVIDENCES FILED BY THE ASSESSEE THAT ADDITION CANNOT BE MADE TWICE ON ANY INCOME WHEN AS SESSEE HAS FILED NECESSARY EVIDENCE BEFORE THE AO TO PROVE THT SUCH INCOME HAS BEEN ADMITTED FOR AY 2013-14 AND ALSO EXPLAINED THE REAS ONS FOR NOT ADMITTING UNDISCLOSED INCOME FOR AY 2012-13. THE L D.AR REFERRING TO 5 ITA 98/MUM/2017 THE COPY OF ITR FILED FOR AY 2013-14 SUBMITTED THAT THE ASSESSEE HAS ADMITTED UNDISCLOSED INCOME OF RS.50 LAKHS AND ALSO PAID TAXES AND HENCE, ANY FURTHER ADDITION FOR THE SAME AMOUNT DUR ING THE CURRENT YEAR AMOUNTS TO DOUBLE ADDITION AND, THEREFORE, THE ADDI TION MADE BY THE AO SHOULD BE DELETED. 5. ON THE OTHER HAND, THE LD.DR STRONGLY SUPPORTED ORDER OF THE CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATER IAL AVAILABLE ON RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FAC T OF ADMISSION OF ADDITIONAL INCOME OF RS.50 LAKHS IN THE STATEMENT R ECORDED U/S 132(4) OF THE INCOME-TAX ACT, 1961. THE ASSESSEE HAS ADMITTE D UNDISCLOSED INCOME OF RS.50 LAKHS FOR AY 2012-13. ALTHOUGH, TH E ASSESSEE HAS ADMITTED UNDISCLOSED INCOME FOR AY 2012-13, FAILED TO DISCLOSE SUCH INCOME IN THE RETURN OF INCOME; HOWEVER, DISCLOSED THE SAME IN THE ASSESSMENT YEAR 2013-14. ACCORDING TO THE ASSESSEE , IT HAS ADMITTED UNDISCLOSED INCOME FOR AY 2012-13 BY MISTAKEN UNDER STANDING OF FACTS, WHEREAS THE SAID INCOME, IN FACT, PERTAINS TO AY 20 13-14. THE AO HAS MADE ADDITION ONLY ON THE BASIS OF STATEMENT RECORD ED DURING THE COURSE OF SEARCH IGNORING THE FACT THAT THE ASSESSEE HAS A DMITTED SUCH UNDISCLOSED INCOME FOR AY 2013-14. THE DISCLOSURE OF UNDISCLOSED INCOME FOR AY 2013-14 HAS NOT BEEN DISPUTED BY THE AO. THE AO HAS 6 ITA 98/MUM/2017 MADE ADDITION ONLY ON THE BASIS OF DECLARATION IN T HE STATEMENT RECORDED U/S 132(4). EXCEPT THIS, THE AO HAS NOT GIVEN ANY REASONS FOR NOT ACCEPTING RETURN FILED BY THE ASSESSEE FOR AY 2013- 14 ADMITTING UNDISCLOSED INCOME OF RS.50 LAKHS. NO DOUBT, THE A SSESSEE HAS NOT FILED ANY RETRACTION NOT TO ADMIT UNDISCLOSED INCOM E FOR AY 2012-13, BUT THAT BY ITSELF WOULD NOT BE A GROUND FOR THE AO TO MAKE ADDITION TOWARDS UNDISCLOSED INCOME IN THE CURRENT ASSESSMENT YEAR, WHEN HE HAS NOT DISPUTED THE FACT THAT THE ASSESEE HAS DISCLOSED UN DISCLOSED INCOME IN THE ASSESSMENT YEAR 2013-14. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT WHEN THERE IS NO DIFFERENCE IN RATE OF TAX FOR BOTH THE ASSESSMENT YEARS, I.E. AYS 2012-13 AND 2013-14, THERE IS NO RE ASON FOR THE AO TO MAKE FURTHER ADDITION OF RS.50 LAKHS IN THE CURRENT ASSESSMENT YEAR WHEN THE ASSESSEE HAS ALREADY DISCLOSED UNDISCLOSED INCOME FOR AY 2013-14. MOREOVER, IT IS TAX NEUTRAL AS INCOME IS LIABLE FOR SAME RATE OF TAX FOR BOTH THE ASSESSMENT YEARS. THEREFORE, WE AR E OF THE CONSIDERED VIEW THAT ONCE, A PARTICULAR INCOME IS OFFERED TO T AX IN ONE YEAR, FURTHER ADDITION CANNOT BE MADE FOR SAME IN ANOTHER YEAR. IN THIS CASE, THE ASSESSEE CLAIMS THAT IT HAS DISCLOSED RS.50 LAKHS I N AY 2013-14. TO THIS EFFECT FILED ITR COPY FOR AY 2013-14. WE DO N OT KNOW, WHETHER THESE DOCUMENTS ARE FILED BEFORE AO OR NOT. HENCE, WE SET ASIDE THE ISSUE TO THE FILE OF AO TO VERIFY THE CLAIM OF ASSE SSEE AND IF AO FOUND 7 ITA 98/MUM/2017 THAT UNDISCLOSED INCOME OF RS.50 LAKHS IS OFFERED I N AY 2013-14, THEN THE AO IS DIRECTED TO DELETE ADDITION MADE FOR THIS YEAR. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUGUST , 2018. SD/- SD/- (RAVISH SOOD) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 14 TH AUGUST, 2018 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER SR.PS, ITAT, MUMBAI