ACIT 25(3), MUMBAI V. DAYABEN L. RATHOD, MUMBAI

ITSSA 12/MUM/2010

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7599 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 21-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-03-2012
• Assessment Year: misc
• Appeal Filed On: 18-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Keywords: Search and seizure; Block assessment
• Section: 69C; 147; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI B.R.MITTAL, JUDICIAL MEMBER & SHRI T.R.SOOD, ACCOUNTANT MEMBER I.T.(SS)A.NO.12 /MUM/2010 BLOCK PERIOD 1-4-1994 TO 31-3-2005 ASST. COMMISSIONER OF I.T. 25(3), MUMBAI . VS. SMT. DAYABEN L. RATHOD, B 701, VASANT SARITA, KANDIVALI (E), MUMBAI 400 001. PAN: AHHPR 3666 H AND C.O.NO.177/MUM/2010 (ARISING OUT OF I.T.(SS)A.NO.12 /MUM/2010) BLOCK PERIOD 1-4-1994 TO 31-3-2005 SMT. DAYABEN L. RATHOD, MUMBAI. VS. ASST. C.I.T. 25(3), MUMBAI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI C.G.K.NAIR. ASSESSEE BY : SHRI PRAMOD KUMAR PARIDA. DATE OF HEARING: 21-03-2012.. DATE OF PRONOUNCEMENT:- 21-03-2012. O R D E R T.R.SOOD, AM: IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GR OUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(A) ERRED CANCELLING THE ORDER U/S I 58BD OF THE L.T.ACT-1 961 WITHOUT APPRECIATING THE FACT THAT NOTICE U/S 158BD OF THE L.T.ACT-1961 WAS ISSUED ONLY AFTER AN INTIMATION WAS RECEIVED FR OM THE AO OF THE SEARCHED PARTY WHICH MEANS THAT THE VERY PRE CONDIT ION FOR ISSUE OF NOTICE U/S I 58BD OF THE LT. ACT WAS S ATISFIED I.E. THE AO OF THE SEARCHED PARTY HAD SENT AN INTIMATION ONLY WHEN HE WAS SATISFIED THAT THERE WAS UNDISCLOSED INCOME PERTAINING TO THE ASSE SSEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION WITHOUT APPRECIATING THE FACT THAT AS PER IT[SS]A 12 & CO 177 OF 2010 SMT. DAYABEN L. RATHOD. 2 SECTION 69C OF THE L.T.ACT-1961 WHEN THE ASSESSEE I NCURS EXPENDITURE AND OFFERS NO SATISFACTORY EXPLANATION, IS DEEMED T O BE THE INCOME OF THE ASSESSEE AND FURTHER, IT CANNOT BE ADDED IN THE HAN DS OF THE HUSBAND WHEN THE ASSESSEE IS ALSO SHOWING INCOME IN HER OWN CASE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION WITHOUT APPRECIATING THE FACT THAT IT WAS CLEARLY BROUGHT ON RECORD IN ASSESSMENT ORDER THAT IT IS FAIRLY DIFFICULT TO ASSUME THAT OUT OF THE INCOME OF MRS. LAKHS PER YEA R, THE ASSESSEE CAN SAVE MONEY TO SUCH AN EXTENT SO AS TO PAY RS. 19.66 LAKHS FOR PURCHASE OF FLAT. 2. I.T.(S.S.)A.NO.12/M/10 : AT THE OUTSET LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUES RAISED IN THIS A PPEAL BY THE REVENUE ARE SQUARELY COVERED AGAINST THE REVENUE BY THE ORD ER OF THE TRIBUNAL IN THE CASE OF OTHER FAMILY MEMBER. 3. ON THE OTHER HAND, LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT THE LD. CIT(A) HAS GIVEN THE RELIEF MAINLY ON THE BASIS THA T ASSESSMENT IS BAD BECAUSE NO SATISFACTION HAS BEEN RECORDED. THE BACK GROUND OF THE CASE AND INTIMATION HAS BEEN GIVEN IN PARA-3 OF THE IMPUGNED ORDER WHICH IS AS UNDER: BACKGROUND OF THE CASE: THE APPELLANT IS PREVIOUSLY NOT ASSESSED TO INCOME- TAX. THERE WAS A SEARCH AND SEIZURE ACTION ON 21.02.2002 N THE CASE OF M/SYSTEM DEVELOPERS PVT. LTD DURING THE COURSE OF WHICH BOOK S OF ACCOUNTS INCLUDING CASH BOOK WERE SEIZED. AS PER THE CASH BO OK SEIZED DURING THE COURSE OF 5EARCH, THE APPELLANT IS STATED TO HAVE P AID RS.19,66,OCO/- FOR PURCHASE OF FLAT ON VARIOUS DATES. BASED ON THIS IN FORMATION THE A.O. OF M/SASHES DEVELOPERS PVT. LTD. SENT A LETTER DATED 1 8.03.005 TO THE A.Q. OF THE APPELLANT TO INITIATE PROCEEDINGS U/S.158BD OF THE INCOME-TAX ACT. THE ABOVE LETTER READS AS UNDER: TO, THE ADDL. COMMISSIONER OF INCOME-TAX, DATED: 18.03. 2005 RANGE.25(3) MUM8AI IT[SS]A 12 & CO 177 OF 2010 SMT. DAYABEN L. RATHOD. 3 SIR. SUB: FORWARDING INFORMATION FOR CASH PAYMENT MADE F OR PURCHASE OF FLAT FROM M/S.SHETH DEVELOPERS PVT. LTD. - REGARDING - SEARCH & SEIZURE ACTION TOOK PLACE N 21.02.2002 IN THE CASE OF SHETH DEVELOPERS LTD. DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS O F SHETH GROUP, IT IS FOUND FROM THE CASH BOOK SEIZED DURING THE SEARCH, MRS.DAYABEN LAXMON RATHOD, SHIVOM APARTMENT, BLOCK NO.302, GORC SWADI, NEAR MILAP TALKIES, KANDIVALI(W), MUMBAI-.4 00007 HAS PA ID CASH OF RS. 19,66,000/- FOR PURCHASE OF FLATS IN SHIVAM BUILDIN G FROM M/S.SHETH DEVELOPERS PVT. LTD. THEREFORE, YOU ARE REQUESTED T O ASSIGN THE CASE TO THE CONCERNED OFFICER OF YOUR CHARGE, WHO MAY AFTER EXAMINING THE ISSUE AND OTHER DETAILS FOR PURCHASE OF FLATS, ISSUE NOTI CE U/S. 1588C R.W.S. 15880 OF THE ACT AND ASSESS ACCORDINGLY. ACTION TAKEN MAY BE INTIMATED TO THE UNDERSIGNED. YOURS FAITHFULLY, ( P.C.MAURYA) DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE,24, MUMBAI. ON THE BASIS OF THE ABOVE, LD. CIT(A) HELD THAT INI TIATION OF THE PROCEEDINGS U/S.158BD ARE VOID AB INITIO. 5. AN IDENTICAL ISSUE CAME UP FOR CONSIDERATION OF THE TRIBUNAL IN THE CASE OF ANOTHER FAMILY MEMBER IN ACIT VS. SMT. MUKTABEN B. RATHOD, I.T.[S.S.]A NOS.13 & 14/MUM/2010. THE TRIBU NAL ADJUDICATED THE ISSUE VIDE PARA-4 WHICH IS AS UNDER: 4. WE HAVE HEARD THE ARGUMENTS OF THE RIVAL PARTIES AND EXAMINED THE ISSUE. AS RIGHTLY HELD BY THE CIT(A) T HERE IS NO SATISFACTION FOR INITIATING THE PROCEEDINGS UNDER SECTION 1 58BD AND THE MERE INTIMATION OF ACCOUNT ,COPY FROM THE BOOKS OF ACCOUNT DOES NOT ESTABLISH THAT THE TRANSACTIONS ARE UNACCOUNTED . THE PROCEEDINGS UNDER SECTION 147 COULD HAVE BEEN INITIATED BUT NOT UNDER SECTION 1588D OF THE ACT. BE THAT AS IT MAY, THE ISSUE ON M ERITS WAS ALSO ELABORATELY CONSIDERED BY THE CIT(A) AND HELD THAT THERE IS NO NECESSITY TO ADD THE INVESTMENT. THERE WAS ADMISSIO N BY THE ASSESSEE HUSBAND THAT THE INVESTMENT WAS MADE BY HIM IN HIS WIFE NAME AND THE SOURCE WAS AGRICULTURAL INCOME. THE AO DID NOT EVEN VERIFY THE AMOUNT INVESTED IN THE SAID FLAT LEAVE ALONE ITS SO URCES. THE REPORT OF IT[SS]A 12 & CO 177 OF 2010 SMT. DAYABEN L. RATHOD. 4 ITI CONSIDERED BY THE CIT(A) ALSO CONFIRMS THAT THE ASSESSEES HUSBAND HAS AGRICULTURAL INCOME. THIS FINDING COULD NOT BE CONTROVERTED. THE ORDER OF THE CIT(A) IS UPHELD AS IT CONSIDERED THE FACTS AS WELL AS LEGAL PRINCIPLES CORRECTLY WITH WHICH WE AGREE. THE GROUN DS RAISED ARE THEREFORE DISMISSED. SINCE THE ISSUE ON QUANTUM ADD ITION WAS HELD AGAINST REVENUE, THE CANCELLATION OF PENALTY UNDER SECTION 158BFA(2) CONTESTED IN IT(SS) 13/MUM/ 2010, IS ALSO UPHELD. T HE APPEAL ON PENALTY IS ALSO DISMISSED HUSBAND THAT THE INVESTME NT WAS MADE BY HIM IN HIS WIFE NAME AND THE SOURCE WAS AGRICULTURA L INCOME. THE AO DID NOT EVEN VERIFY THE AMOUNT INVESTED IN THE SAID FLAT LEAVE ALONE ITS SOURCES. THE REPORT OF ITI CONSIDERED BY THE CIT(A) ALSO CONFIRMS THAT THE ASSESSEES HUSBAND HAS AGRICULTURAL INCOME. THI S FINDING COULD NOT BE CONTROVERTED. THE ORDER OF THE CIT(A) IS UPHELD AS IT CONSIDERED THE FACTS AS WELL AS LEGAL PRINCIPLES CORRECTLY WITH WH ICH WE AGREE. THE GROUNDS RAISED ARE THEREFORE DISMISSED. SINCE THE I SSUE ON QUANTUM ADDITION WAS HELD AGAINST REVENUE, THE CANCELLATION OF PENALTY UNDER SECTION 158BFA(2) CONTESTED IN IT(SS) 13/MUM/ 2010, IS ALSO UPHELD. THE APPEAL ON PENALTY IS ALSO DISMISSED. FOLLOWING THE ABOVE ORDER, WE DECIDE THE ISSUE AGAI NST THE REVENUE. 6. THE CROSS OBJECTIONS WERE NOT PRESSED BEFORE US, THEREFORE, SAME ARE DISMISSED AS NOT PRESSED. 7. IN THE RESULT REVENUES APPEAL AS WELL AS ASSESS EES CROSS OBJECTION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 21/03/2012. SD/- SD/- (B.R.MITTAL) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 21/03/2012. P/-* IT[SS]A 12 & CO 177 OF 2010 SMT. DAYABEN L. RATHOD. 5