Mr. Mohammed Ali, Bangalore V. ACIT, Bangalore

ITSSA 15/BANG/2011

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2521 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-06-2016
• Assessment Year: misc
• Appeal Filed On: 01-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S SUNDAR RAJAN
• Keywords: Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SMT ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER IT(SS)A NOS.15 TO 17/BANG/2011 ASSESSMENT YEARS : BLOCK PERIOD FROM 1.4.1991 TO 2 9.5.2001 MR. MOHAMMED ALI, NO. 217/55, 11 TH CROSS, 11 TH MAIN, WILSON GARDEN, BANGALORE. SMT. NASEEMUNNISA, NO.217/55, 11 TH CROSS, 11 TH MAIN, WILSON GARDEN, BANGALORE. MS. SHABANA TAJ, NO.217/55, 11 TH CROSS, 11 TH MAIN, WILSON GARDEN, BANGALORE. VS. ACIT, CENTRAL CIRCLE 2(2), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SMT. SHEETHAL BORKAR, ADVOCATE REVENUE BY : SHRI. S. SUNDAR RAJAN, JCIT DATE OF HEARING : 17.10.2016 DATE OF PRONOUNCEMENT : 26 .10.2016 O R D E R PER ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER THE FACTS OF THE CASE ARE THAT MR. MOHD. KHASIM ALO NG WITH HIS WIFE MRS. NASEEMUNNISA, SONS MR. TIPPU SULTAN, MR. CHAND PASHA, MR. IMTIAZ PASHA & MR. MOHD. ALI (THE APPELLANT) & DAUGHTER MS . SHABANA TAJ HAVE PURCHASED LAND SEPARATELY IN INDIVIDUAL NAMES DURIN G THE F.Y. 1994-95 FOR A IT(SS)A NOS.15 TO 17/BANG/2011 PAGE 2 OF 5 CONSIDERATION OF RS.18 LAKHS. THE TOTAL LAND MEASU RING ABOUT 3 ACRES AND 7 GUNTAS IS SITUATED IN # 181 & 182, BILEKANAHALLY, B EGUR HOBLI, BANGALORE SOUTH TALUK. SUBSEQUENTLY EACH OF THESE FAMILY MEM BERS HAVE ENTERED INTO A SEPARATE SALE AGREEMENT WITH M/S. DOMICILE DEVELO PERS FOR SALE OF THEIR RESPECTIVE LAND. DURING THE COURSE OF SEARCH A NUM BER OF DOCUMENTS WHICH HAVE BEEN DULY SIGNED BY BOTH THE PURCHASERS AND VE NDORS WERE FOUND AND EACH OF THESE DOCUMENTS SHOW DIFFERENT SALE CONSIDE RATION. ACCORDING TO THE ORIGINAL AGREEMENTS THE TOTAL SALE CONSIDERATION AG REED TO BE PAID TO THE VENDORS BY M/S. DOMICILE DEVELOPERS WAS RS.5,53,21, 000/-. HOWEVER ACCORDING TO THE SUPPLEMENTARY AGREEMENT DATED 22.1 1.1999 THE SALE CONSIDERATION WAS ONLY RS.4,65,50,000/-. IN THE BOOKS OF ACCOUNTS OF M/S. DOMICILE DEVELOPERS ONLY AN AMOUNT OF RS.2,83, 01,868/- HAS BEEN DEBITED IN THE NAME OF MOHD. KHASIM. MR. MOHD. KHA SIM IN HIS STATEMENT OF OATH RECORDED ON 29.05.2001 HAD STATED THAT TOTA L CONSIDERATION RECEIVABLE WAS RS.1.27 CRORES BUT AS ON THAT DATE T HEY RECEIVED ONLY RS.67 LAKHS. 1.1 AFTER CONSIDERING THE FACTS OF THE CASE THE A.O HAD ADOPTED THE TOTAL CONSIDERATION AT RS.2,83,01,868/- AND AFTER MAKING ALLOWANCES FOR COST OF LAND AND OTHER PAYMENTS FOR EVICTION AND BROKERAGE ETC., THE A.O HAD ARRIVED THE SHORT TERM CAPITAL GAINS AT RS.2,08,45, 277/- AND APPORTIONED THE SAME ON A PROPORTIONATE BASIS AMONG THE FAMILY MEMB ERS OF MR. MOHD. KHASIM AS PER THEIR LAND HOLDINGS. AS THE APPELLAN T OWNED 17 GUNTAS OF LAND THE A.O DETERMINED THE UNDISCLOSED INCOME OF T HE APPELLANT AT RS.27,90,310/-. 2. THE CIT(A) HELD AS FOLLOWS: IN THE CASES OF FOUR OTHER FAMILY MEMBERS OF THE A PPELLANT I.E., SHRI. CHAND PASHA, SRI. TIPPU SULTAN, SRI. MOHD. KH ASIM & SRI. IMTIAZ PASHA THE CIT(A) HAD CONFIRMED THE BLOCK ASSESSMENT S MADE BY THE A.O. IT(SS)A NOS.15 TO 17/BANG/2011 PAGE 3 OF 5 ON FURTHER APPEAL BY THESE FAMILY MEMBERS OF THE AP PELLANT THE HONBLE ITAT BANGALORE B-BENCH IN THEIR CONSOLIDATED ORDERS IN IT(SS)A NOS. 3,4,5&6(BNG)/06 DATED 26.06.2009 HAD AGREED WI TH THE ORDERS OF THE CIT(A) AND DISMISSED THE APPEALS OF THESE FAMILY ME MBERS OF THE APPELLANT. AGGRIEVED BY THE ORDERS OF THE HONBLE ITAT, THESE FAMILY MEMBERS OF THE APPELLANT FILED MISCELLANEOUS PETITIONS BEFORE THE HONBLE ITAT. VIDE THEIR ORDERS IN MP NOS. 86 TO 89/BNG/2009 DATED 24.01.201 1 HONBLE ITAT BANGALORE B-BENCH HAVE DISMISSED THESE MISCELLANEOU S PETITIONS. AS THE FACTS OF THE CASE ARE IDENTICAL FOR ALL THES E CASES, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ITAT BANGALOR E B-BENCH AS MENTIONED ABOVE, I CONFIRM THE ACTION OF THE A.O IN DETERMINING THE UNDISCLOSED INCOME OF THE APPELLANT AT RS.27,90,310 /- AND ACCORDINGLY THE APPEAL IS DISMISSED. 3. SINCE COMMON ISSUES AROSE FROM ORDER OF A.O. IN THE CASE OF MOHD. ALI AND OTHERS, THE CIT(A) PASSED A COMMON ORDER. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE LEARNE D COUNSEL FOR THE ASSESSEES SUBMITTED AS FOLLOWS BEFORE US: THAT THE ASSESSMENT IS A BLOCK ASSESSMENT AND ACCO RDINGLY HAS BEEN MADE UNDER SECTION 158BC READ WITH SECTION 158BD OF THE ACT. THERE BEING WARRANT OF SEARCH ON THE APPELLANT, THE ASSESSMENT HAD BEEN CONCLUDED ONLY UNDER SECTION 158BD READ WITH S ECTION 158BC OF THE ACT. WHILE INVOKING THE PROVISIONS OF SECTI ON 158BD OF THE ACT, A SATISFACTION WAS REQUIRED TO BE RECORDED IN THE ASSESSMENT OF THE SAID PARTY THAT THE UNDISCLOSED INCOME IN THE C ASE OF THE APPELLANT WAS FOUND WHICH WAS REQUIRED TO BE ASSESSED ACCORDI NGLY. SUCH SATISFACTION IN THE CASE OF THE APPELLANT HAS NOT B EEN MADE. IT(SS)A NOS.15 TO 17/BANG/2011 PAGE 4 OF 5 CONSEQUENTLY, AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT (2007) 289 ITR 341 (SC), THE ASSESSMENT AS MADE IS OPPOSED TO LAW AND LIABLE TO BE CANCELLED. THIS VIEW IS ALSO SUPPORTED BY THE JUDGMENT OF THE HONB LE HIGH COURT OF KARNATAKA IN THE CASE OF DCIT VS. BEEFATHIMA IN ITA NO.2407/2005 DATED 05.04.2010. IN THE CIRCUMSTANCES, THE ASSESS MENT AS MADE UNDER SECTION 158BC READ WITH SECTION 158BD OF THE ACT IS LIABLE TO BE CANCELLED. 5. WE FIND MERIT IN THE ARGUMENT OF THE ASSESSEE TH AT SATISFACTION IS OF PRIMARY IMPORTANCE IN DECIDING THE CASES OF BLOCK A SSESSMENT MADE UNDER SECTION 158BC R.W.S. 158BD OF THE ACT. 6. HENCE WE SEND BACK THE MATTER TO CIT(A) TO EXAMI NE WHETHER SATISFACTION HAS BEEN RECORDED AND TO DECIDE THE IS SUE IN ACCORDANCE WITH THE LAW. 7. IN THE RESULT, THE APPEALS ARE ALLOWED FOR STATI STICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF OCTOBER, 2016. SD/- SD/- (A. K. GARODIA) (ASHA VIJAYARAGHAV AN) ACCOUNTANT MEMBER JUDI CIAL MEMBER BANGALORE. DATED: 26 TH OCTOBER, 2016. /NS/ IT(SS)A NOS.15 TO 17/BANG/2011 PAGE 5 OF 5 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASS ISTANT REGISTRAR, ITAT, BANGALORE.