Shailesh Jaikumar Bhandari, Pune V. Deputy Commissioner of Income-Tax, Central Circle 2(4), Pune

ITSSA 1/PUN/2022

AI Insights

The case involves twin appeals by Shri Shailesh Jaikumar Bhandari against the orders of the CIT(A), Pune-12, concerning the assessment years 2013-14 and 2014-15. The appeals challenge the additions made under sections 153A and 143(3) of the Income Tax Act, 1961, following a search operation. The primary issues were the additions of unexplained payments and jewellery, and related interest disallowances. The Tribunal examined the arguments and evidence presented, including the claim of double addition and the valuation of seized jewellery, leading to the decisions mentioned in the outcome.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137302 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 08-02-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 16-01-2022
• Other Referred Cases: ITO vs. C. Atchaiah [1996] 218 ITR 239 (SC), CIT vs. Shapoorji Pallonji Mistry [1962] 44 ITR 891 (SC), CIT vs. Union Tyres [1999] 240 ITR 556 (Del.), CIT vs. Sardarilal& Co. [2001] 251 ITR 864 (Del.) (FB)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed dividend
• Section: 143(3); 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B” : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER I.T.(S.S).A.Nos.01 & 02/PUN./2022 Assessment Years 2013-2014 & 2014-2015 Shri Shailesh Jaikumar Bhandari, A3, Abhimanshree Society, Pashan Road, Pune – 411 003. Maharashtra. PAN AAQPB3892D vs. The DCIT, Central Circle-2(4), 6 th Floor, AaykarSadan, Bodhi Towers, Gultekdi, Pune – 411 037. Maharashtra. (Appellant) (Respondent) For Assessee : Shri V.L. Jain For Revenue : Shri Sardar Singh Meena and Shri M.G. Jasnani Date of Hearing : 19.02.2023 Date of Pronouncement : 20.02.2023 ORDER PER SATBEER SINGH GODARA, J.M. These assessee’s twin appealsI.T.(S.S).A.Nos.01 & 02/PUN./2022arise against CIT(A), Pune-12, Pune’s separate DIN & Order Nos.ITBA/APL/S/250/2021-22/1038040778(1) andITBA/APL/S/250/2021-22/1038040987(1), both dated 22.12.2021, for assessment years 2013-14 and 2014-15 respectively, in proceedings u/s.153A r.w.s. 143(3) of the of the Income Tax Act, 1961 (in short "the Act"). Heard both the parties. Case files perused. 2 I.T.(S.S.)A.Nos.1 &2/PUN./2022 Shri Shailesh Jaikumar Bhandari, Pune. 2. It emerges during the course of hearing that the assessee’s twin grounds each raised in both these appeals challenge correctness of unexplained payments addition of Rs.76,78,921/- followed by interest disallowance of Rs.19,68,543/- in I.T.(S.S).A.No.1/PUN./2022 for assessment year 2013-14 and seek to delete unexplained jewellery investment addition of Rs.1,68,278/- as well as interest disallowance of Rs.1,08,29,957/- in IT(SS)A.No.2/PUN./2022 for assessment year 2014-15, respectively. We thus proceed assessment year wise for the sake of convenience and brevity. 3. We first of all deal with the assessee’s first and foremost substantive ground regarding unexplained payment addition of Rs.76,78,921/- in issue. There is hardly any dispute between the parties that the search herein is dated 26.02.2014 which got finally concluded on 25.04.2014. The Assessing Officer thereafter initiated sec.153A proceedings against the assessee. All this followed his impugned assessment dated 23.03.2016 adding the alleged unexplained payment of Rs.76,78,921/- which stands upheld in the CIT(A)'s order. 4. Learned counsel vehemently argued during the course of hearing that both the lower authorities have made a double addition in assessee’s hands for the precise reason that 3 I.T.(S.S.)A.Nos.1 &2/PUN./2022 Shri Shailesh Jaikumar Bhandari, Pune. the very amount stood added in case of the company M/s. BU Bhandari Auto Pvt. Ltd. Mr. Jain invited our attention to page- 23 in the CIT(A)'s detailed discussion summarizing the undisputed receipt and payment summary of the assessee. His case in light thereof is that the above stated company had already declared the very payments sum in its post-search return(s). 5. We find no merit in the assessee’s instant submissions. We note at this stage that the CIT(A)'s detailed discussion itself refutes the assessee’s arguments. Learned counsel could not dispute that the CIT(A) had proposed to add the very sum as deemed dividend as well u/s.2(22)(e) of the Act wherein the assessee’s reply dated 13.10.2021 had contested the same inter alia on the ground that the company had not made any payment nor this amount ever reached its coffers. And also that the said amount was neither an advance nor a loan. It is in light of these clinching facts emerging from the assessee’s reply submitted before the CIT(A) itself [page-25 in the lower appellate discussion] that leads us to the conclusion that both the lower authorities have rightly added the impugned sum of Rs.76,78,921/- in his hands only. We further quote hon’ble apex court’s landmark decision in ITO vs. C. Atchaiah[1996] 218 ITR 239 (SC) that the purpose of the Income Tax Act is to assess the correct income in the right 4 I.T.(S.S.)A.Nos.1 &2/PUN./2022 Shri Shailesh Jaikumar Bhandari, Pune. hands only. Faced with the situation, we hold that even if the department has already assessed the very sum in the company’s hands, it is only the present assessee who rightly deserves to be taxed for these unexplained payments of Rs.76,78,921/- as the clear nexus of the money belonging to the former only is nowhere established in the given facts and circumstances of the case. We thus uphold both the learned lower authorities action to this effect. The assessee fails in its instant first and foremost substantive grievance therefore. 5. Next comes the assessee’s identical latter substantive ground in both these appeals challenging interest disallowance(s) of Rs.19,68,543/- and Rs.1,08,29,957/-, assessment year-wise, respectively. The Revenue could hardly dispute that the Assessing Officer had nowhere disallowed any of these interest amounts in his respective twin assessments. That being the case, we quote CIT vs. Shapoorji Pallonji Mistry [1962] 44 ITR 891 (SC), CIT vs. Union Tyres [1999] 240 ITR 556 (Del.) and CIT vs. Sardarilal& Co. [2001] 251 ITR 864 (Del.) (FB) to conclude that the CIT(A)'s lower appellate jurisdiction nowhere extends to add any other head of income than that considered in the concerned assessments. Both these interest disallowances stand deleted for this precise reason alone. The assessee’s corresponding grounds are accepted in very terms. 5 I.T.(S.S.)A.Nos.1 &2/PUN./2022 Shri Shailesh Jaikumar Bhandari, Pune. 5.1. The assessee’s former appeal I.T.(S.S).A.No.1/PUN./2022 is partly accepted in very terms. 6. This leaves us with the assessee’s former substantive ground in latter appeal IT(SS)A.No.2/PUN./2022 challenging correctness of both the lower authorities action adding unexplained jewellery of Rs.16,80,278/- found during the course of search. Suffice to say and to the precise enough, we find that the learned lower authorities have nowhere given credit of the foregoing sum of Rs.76,78,921/- (supra) against any other head of undisclosed income. This is further coupled with the fact that page-173 in assessee’s paper book/ containing annexure-C1[as inventory of the jewellery seized] makes it clear that the unexplained quantity of jewellery was 166cts having value of Rs.30,11,100/- only whereas the learned lower authorities have adopted different valuation for the same based on subsequent events. Faced with the situation, we delete the impugned addition of Rs.16,80,278/- by granting “telescoping” benefit as well as in light of the foregoing irregularity found in valuation. The assessee succeeds in the instant former substantive grievance therefore. This latter appeal I.T.(S.S).A.No.2/PUN./2022 succeeds in very terms. 6 I.T.(S.S.)A.Nos.1 &2/PUN./2022 Shri Shailesh Jaikumar Bhandari, Pune. 8. No other ground or argument has been pressed before us. 9. To sum-up, assessee’s former appeal I.T.(S.S).A.No.1/PUN./2022 is partly allowed and latter appeal I.T.(S.S).A.No.2/PUN./2022 is allowed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open Court on 20.02.2023. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 20 th February, 2023 VBP/- Copy to 1. The appellant 2. The respondent 3. The Ld. CIT(A) concerned. 4. The CIT concerned 5. D.R. ITAT, Pune “B” Bench, Pune 6. Guard File. //By Order// Assistant Registrar, ITAT, Pune Benches, Pune.