ACIT, Jamshedpur V. Sri Binod Kumar Sinha, Chaibasa

ITSSA 11/RAN/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3794 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-05-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 13-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER IT (SS) A NO S . 11 & 12 /RAN/201 6 ASSESSMENT YEA RS : 2005 - 06 & 2007 - 08 ACIT, CIRCLE, JAM SHEDPUR VS. SRI BINOD KUMAR SINHA, NEW COLONY, CHAIBASA - 833201 PAN/GIR NO. ACKPK 6974 H (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY: NONE REVENUE BY : SHRI DEEPAK KR. S U TARIYA, CIT(A), JAMSHEDPUR DATE OF HEARING : 21/05 / 201 8 DATE OF PRONOUNCEMENT : 24 /05/ 2018 O R D E R PER N.S.SAINI, AM THESE A RE APPEALS FILED BY THE REVENUE AGAINST THE SEPARATE ORDERS OF CIT(A) - 3 PATNA, DATED 18.2.2016 , F OR THE ASSESSMENT YEAR S 2005 - 06 & 2007 - 08 , RESPECTIVELY. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 2005 - 06 2 IT(SS)A NOS.11 & 12/RAN/2016 ASSESSMENT YEARS: 2005 - 06 & 2007 - 08 1. THAT THE CIT(A) HAS ERRED ON FACT AS WELL AS IN LAW IN DELETING THE PROTECTIVE ADDITION OF RS.1,54,32,000/ - WITHOUT APPRECIATING THE FACTS OF THE CASE AND MATERIAL AVAILABLE ON RECORD. 2. THAT THE CIT(A) HAS ERRED ON FACT AS WELL AS IN LAW IN D ELETING THE PROTECTIVE ADDITION OF RS.1,54,32,000/ - WITHOUT CONSIDERING THE FACT THAT SUBSTANTIVE ADDITIO N IN THE HAND OF SRI MADHU KODA IS STILL PENDING BEFORE THE IT(A) FOR ADJUDICATION. 3. THAT THE CIT(A) HAS ERRED ON FACT AS WELL AS IN LAW IN DELETING THE ADDITION OF RS.21,04,052/ - WITHOUT CONSIDERING THE FACT THAT IN COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF ITS CREDIT IN HIS BOOKS OF ACCOUNT. 200 7 - 0 8 1. THAT THE CIT(A) HAS ERRED ON FACT AS WELL AS IN LAW IN DELETING THE PROTECTIVE ADDITION OF RS.7,21,80,383/ - WITHOUT APPRECIATING THE FACTS OF THE CASE AND MATERIAL AVAILABLE ON RECORD. 2. THAT THE CIT(A) HAS ERRED ON FACT AS WELL AS IN LAW IN DELETIN G THE PROTECTIVE ADDITION OF RS.7,21,80383/ - WITHOUT CONSIDERING THE FACT THAT SUBSTANTIVE ADDITIO N IN THE HAND OF SRI MADHU KODA IS STILL PENDING BEFORE THE IT(A) FOR ADJUDICATION. 3. THAT THE CIT(A) HAS ERRED ON FACT AS WELL AS IN LAW IN DELETING THE PR OTECTIVE ADDITION OF RS.4,64,880/ - WITHOUT APPRECIATING THE FACTS OF THE CASE AND MATERIALS AVAILABLE ON RECORD. 3. THAT THE CIT(A) HAS ERRED ON FACT AS WELL AS IN LAW IN DELETING THE ADDITION OF RS.4,64,880/ - WITHOUT CONSIDERING THE FACT THAT IN COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF ITS CREDIT IN HIS BOOKS OF ACCOUNT. 3. THE LD A.R. OF THE ASSESSEE SRI MIHIR BANDYOPADHYAY, HAS FILED ADJOURNMENT PETITION AND THE REASONS FOR SEEKING ADJOURNMENT OF HEARING WAS NOT FOUND TO BE A PLAUSIBLE ONE AND, THEREFORE, THE ADJOURNMENT PETITION WAS REJECTED AND THE BENCH PROCEED TO HEAR AND DISPOSE OF THE APPEALS OF 3 IT(SS)A NOS.11 & 12/RAN/2016 ASSESSMENT YEARS: 2005 - 06 & 2007 - 08 THE REVENUE ON THE BASIS OF MATERIALS AVAILABLE ON RECORD AND THE SUBMISSION OF LD D.R. 4. THE FACTS OF THE CASE F OR THE ASSESSMENT YEAR 2005 - 06 THAT THE ASSESSING OFFICER FOUND THAT A COMPANY NAMED M/S. SHIVA RAMA SPONGE IRON PVT LTD., ORIGINALLY FORMED BY MR SANJAY PALSANIYA AND HIS FAMILY MEMBERS WAS TAKEN OVER BY THE ASSESSEE IN 2007 AND THE NAME OF THE COMPANY WA S CHANGED TO E MMAR ALLOYS LTD. THE AO STATED THAT THE INVESTMENT IN LAND WAS MADE IN THE NAME OF M/S. EMMAR ALLOYS PVT LTD., AND DETAILS ARE GIVEN IN THE TABULATED FORM IN THE ASSESSMENT ORDER. THIS TABULATED DESCRIPTION OF LAND PURCHASE INDICATE THAT TH E PURCHASES OF LAND IN THE ASSESSMENT YEAR UNDER CONSIDERATION WAS MADE IN THE NAME OF M/S. SHIVA RAMA SPONGE IRON PVT LTD., WHEREAS PURCHASES FOR THE ASSESSMENT YEARS 2007 - 08 AND 2009 - 2010 WAS MADE IN THE NAME OF M/S. EMMAR ALLOYS PVT LTD., THE ASSESSING OFFICER HAS GIVEN REFERENCE TO THE STATEMENT OF SHRI VIKAR KR SINHA, ONE OF THE DIRECTORS OF M/S. EMMAR ALLOYS PVT LTD., WHO STATED DURING THE STATEMENT U/S.131(1A) ON 5.11.2009 THAT THE LAND IN THE NAME OF M/S. EMMAR ALLOYS PVT LTD., WERE PURCHASED FOR C OST MORE THAN THE ONE MENTIONED IN THE REGISTERED DEEDS. SH VIKAR KR SINHA ELABORATED IN HIS STATEMENT THAT CASH PAYMENT TO THE TUNE OF RS.10 TO 12 LAKH PER ACRE WAS MADE. BASED ON THIS STATEMENT, THE ASSESSING OFFICER CALCULATED THAT RS.1,54,32,000/ - WAS CASH PAYMENT IN ACQUISITION OF LAND @ 12 LAKH PER ACRE UTILISED BY SHRI BINOD KR SINHA IN PURCHASE FOR LAND IN M /S. EMMAR 4 IT(SS)A NOS.11 & 12/RAN/2016 ASSESSMENT YEARS: 2005 - 06 & 2007 - 08 ALLOYS PVT LTD., FOR ASSESSMENT YEAR 2005 - 06. IN VIEW OF ABOVE, THE ASSESSING OFFICER TREATED RS.1,54,32,000/ - AS UNDISCLOSED INVES TMENT OF SHRI MADHU KODA, WHICH HAD BEEN INVESTED BY THE ASSESSEE ON HIS BEHALF TO ACQUIRE LAND FOR M/S. EMMAR ALLOYS PVT LTD., AND AS SUCH SAME WAS ADDED TO THE INCOME OF THE ASSESSEE ON SUBSTANTIVE BASIS. 4.1 SINCE, THE INVESTMENT IN THE LAND WAS FACILITATED BY SRI BINOD SINHA ON THE BEHALF OF SRI MADHU KODA, THE SAME SHALL ALSO BE TREATED AS HIS UNDISPUTED INVESTMENT TO PROTECT THE INTEREST OF REVENUE AND SHALL BE ADDED TO HIS TOTAL INCOME ON PROTECTIVE BASIS FOR A.Y. 2005 - 06 KEEPING IN VIEW THE F ACT THAT THE SAME INCOME HAS ALREADY BEEN INCLUDED IN THE TOTAL INCOME OF SHRI MADHU KODA ON SUBSTANTIVE BASIS ALREADY FOR A.Y. 2005 - 06. 5. FOR THE ASSESSMENT YEAR 2007 - 08, THE ASSESSING OFFI CER OBSERVED THAT SHRI MADHU KOD A WITH THE HELP OF HIS ASSOCIATES LIKE BINOD SINHA, VIKASH SINHA, VIJAY JOSHI, ETC INVESTED UNACCOUNTED MONEY IN M/S. LEMOS CEMENT LTD.,. DURING FINANCIAL YEAR 2006 - 07 AS BELOW: SL. NO. FIN. YEAR HEADS OF ADDITION AMOUNT(RS) AMOUNT (RS.) 1. 2006 - 07 UNEXPLAINED SHARE APPLICATION MONEY THROUGH BINOD SINHA GROUP M/S. BHOLE BABA ROADWAYS PVT LTD. M/S. EKANTA EMPORIUM PVT LTD. 48,00,000 1,75,00,00 5 IT(SS)A NOS.11 & 12/RAN/2016 ASSESSMENT YEARS: 2005 - 06 & 2007 - 08 M/S. HITECH DESIGN PVT LTD. M/S. SEVEN SEA VINIVOM P LTD. M/S. SUNKISSED AGENCIES PTD LTD. M/S. BHOLE BABA ROADWAYS P LTD. 15,00,000 25,00,000 35,00,000 46,00,000 2. 2006 - 07 UNDISCLOSED LOAN GIVEN BY SRI VIKAS SINHA 2,46,00,000 3. 2006 - 07 UNEXPLAINED SHARE APPLICATION MONEY THROUGH JOSHI GROUP 1,79,80,383 M/S. LACKY PROJECT PVT LTD. 1,79,80,383 TOTAL: 7,21,80,383 THEREFORE, THE ENTIRE INVESTMENT OF RS.7,21,383/ - WAS TREATED AS UNEXPLAINED INVESTMENT OF SHRI MADHU KODA AND ADDED BACK TO HIS TOTAL INCOME ON SUBSTANTIVE BASIS. SINCE THE INVESTMENT IN THE COMPANY WAS FACILITATED BY SRI BINOD SINHA ON THE BEHALF OF SRI MADHU KODA, THE SAME SHALL ALSO BE TREATED AS HIS UNDISCLOSED INVESTMENT TO PROTECT THE INTEREST OF REVENUE AND SHALL BE ADDED TO HIS TOTAL INCOME ON PROTECTIVE BASIS FOR A.Y. 2007 - 08 KEEPING IN VIEW THE FACT THAT THE SAME INCOME HAS ALREADY BEEN INCLUDE D IN THE TOTAL INCOME OF SRI MADHU KODA ON SUBSTANTIVE BASIS ALREADY FOR R.Y. 2007 - 08. 6. ON APPEAL, THE CIT(A) DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER FOR BOTH THE ASSESSMENT YEARS. 6 IT(SS)A NOS.11 & 12/RAN/2016 ASSESSMENT YEARS: 2005 - 06 & 2007 - 08 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. WE FIND THAT SIMILAR ISSUE HAD COME UP FOR CONSIDERATION IN THE CASE OF SHRI MANOHAR LAL PAUL IN IT(SS) A NO.23/RAN/2016 FOR A.Y. 2008 - 09 AND THE TRIBUNAL VIDE ORDER DATED 23.5.2018 HAS HELD AS UNDER: 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. LD D.R. SUBMITTED THAT THE SOLE ISSUE INVOLVED IN THIS APPEAL RELATES TO ADDITI ON OF RS.4.80 CRORES TO THE INCOME OF THE ASSESSEE. HE SUBMITTED THAT THE ADDITION OF THE SAID AMOUNT WAS MADE IN THE HANDS OF THE ASSESSEE BY THE ASSESSING OFFICER ON PROTECTIVE BASIS AND SUBSTANTIVE ADDITION OF THE SAME AMOUNT WAS MADE IN THE HANDS OF SHRI MADHU KODA, EX. CHIEF MINISTER. HE FURTHER SUBMITTED THAT THE APPEAL OF SHRI MADHU KODA IS PENDING BEFORE THE CIT(A). HE ARGUED THAT TILL THE APPEAL IN THE CASE IN WHICH SUBSTANTIVE ADDITION WAS MADE IS NOT DECIDED BY THE CIT(A), THE CIT(A) SHOULD NOT HAVE DECIDED THE APPEAL WHERE THE ADDITION WAS MADE ON PROTECTIVE BASIS. HE PRAYED FOR RESTORATION OF THIS APPEAL BACK TO THE FILE OF THE CIT(A). 4. LD A.R. DID NOT DISPUTE THE ABOVE PROPOSITION OF LD D.R. AND AGREED TO THE SAME. 5. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THIS APPEAL BACK TO HIS FILE TO BE DECIDED AFRESH AFTER DISPOSAL OF APPEAL BY THE CIT(A) IN THE CASE WHERE SUBSTANTIVE ADDITION HAS BEEN MADE. 6 . NEEDLESS TO MENTION HERE THAT REASONABLE OPPORTUNITY OF HEARING SHALL BE PROVIDED TO BOTH THE PARTIES BEFORE DECIDING THE APPEAL AFRESH IN ACCORDANCE WITH LAW. THUS, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 8 . RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNA L QUOTED ABOVE, WE SET ASIDE THE ORDERS OF THE CIT(A) AND RESTORE BOTH APPEALS BACK TO HIS FILE TO BE DECIDED AFRESH AFTER DISPOSAL OF APPEAL BY THE CIT(A) IN THE CASE WHERE 7 IT(SS)A NOS.11 & 12/RAN/2016 ASSESSMENT YEARS: 2005 - 06 & 2007 - 08 SUBSTANTIVE ADDITION HAS BEEN MADE AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARIN G TO BOTH THE PARTIES IN ACCORDANCE WITH LAW. 9 . SINCE WE HAVE RESTORED THE APPEALS BACK TO THE FILE OF THE CIT(A) TO DECIDE THE ADDITION MADE ON PROTECTIVE BASIS, OTHER GROUNDS TAKEN BY THE ASSESSEE ARE ALSO RESTORED TO HIS FILE FOR FRESH ADJUDICATION. 1 0 . IN THE RESUL T, APPEALS FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 /05 /201 8 S D / - S D / - (PAVAN KUMAR GADALE) (N.S SAINI) JUDICIAL MEMBER A CCOUNTANT MEMBER RANCHI; DATED 24 /05 /201 8 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, C A M P , R A N C H I 1. THE APPELLANT : ACIT, CIRCLE, JAMSHEDPUR 2. THE RESPONDENT: SRI BINOD KUMAR SINHA, NEW COLONY, CHAIBASA - 833201 3. THE CIT(A), PATNA 4. PR. CIT , 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//