SHAH THAKUR & SONS, MUMBAI V. ITO 12(2)(1), MUMBAI

ITSSA 20/MUM/2009

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 8948 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-08-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 13-07-2010
• Assessment Year: misc
• Appeal Filed On: 16-02-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HEMANT LAL
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, E BENCH, MUMBAI. BEFORE S/SHRI S.V.MEHROTRA, AM & VIJAY PAL RAO,JM I.T.(SS)A NO.20/MUM/2009 BLOCK PERIOD: 1987-88 TO 1997-98 SHAH THAKUR & SONS, V. THE I.T.O. 12(2)(1), 401, KSHAMALAYA, 37, NEW MARINE AAYAKAR BHAVAN, M .K. ROAD, LINES, MUMBAI-20. PA NO.AABFS 6090 F (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SAMEER DALAL RESPONDENT BY : SHRI HEMANT LAL O R D E R PER S.V.MEHROTRA, AM THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 20.11.2008 OF LD CIT (A)-XII, MUMBAI FOR THE BLOCK PERIOD 198 7-88 TO 1997-98. 2. THE EFFECTIVE GROUND OF APPEAL IS THAT LD CIT (A ) ERRED IN CONFIRMING IN CHARGING INTEREST U/S.220(2) OF THE I.T.ACT FOR THE PERIOD 9 .12.1997 TO 11.12.2007. 3. THE SHORT POINT FOR CONSIDERATION IN THE PRESENT APPEAL IS WHETHER INTEREST U/S.220(2) IS TO BE PAID FROM THE ORIGINAL DATE OF DEMAND TO THE DATE OF PAYMENT OR FROM THE DATE OF REVISED DEMAND TO THE DATE OF PAYM ENT. 4. THE FACTS OF THIS CASE ARE THAT THE ASSESSEE FIR M HAD STARTED A PROJECT OF CONSTRUCTION OF RESIDENTIAL AND COMMERCIAL COMPLEX AT M.G.ROAD, GHATKOPAR (EAST),MUMBAI. THERE WAS A SEARCH AND SEIZURE ACTI ON U/S.132 OF THE I.T.ACT, 1961 IN THE CASE OF C.D.SHAH GROUP ON 15 TH JULY, 1996 AND DURING THE SEARCH, CERTAIN PAPERS O F THE ASSESSEE FIRM WERE SEIZED. THE ASSESSMENT WAS COMPLETED U/S.143(3) UNDER CHAPTER XIV-B OF THE ACT. I.T.ACT AT A TOTAL INCOME OF RS.1,50,99,000/- BY TREATING THE ENTIRE ON-MONEY AS ASSESSEES UNDISCLOSED INCOME. THIS ORDER WAS PASSED ON 29.8.1997. LD CIT (A) DISMISSED THE ASSESSES APPE AL. HOWEVER, THE TRIBUNAL VIDE ITS I.T.(SS)A NO.19/MUM/2009 BLOCK PERIOD: 1987-88 TO 1997-98 2 ORDER DATED 27.11.2006 PARTLY ALLOWED THE ASSESSEE S APPEAL AND DIRECTED THE AO TO TREAT ONLY 15% OF THE ON-MONEY AS ASSESSEES UNDIS CLOSED INCOME FOR THE BLOCK PERIOD. ACCORDINGLY, THE AO REVISED THE UNDISCLOSED INCOME AT RS.22,64,850/- VIDE ORDER DATED 7.12.2007 AND DIRECTED FOR CHARGING OF INTEREST U/S .220(2), WHICH WAS DETERMINED FOR THE BLOCK PERIOD 9.10.1997 TO 4.12.2007 AS PER THE RATE OF INTEREST PREVAILING IN THE RESPECTIVE PERIODS. THE DETAILED CALCULATION IS GI VEN IN THE INCOME TAX COMPUTATION FORM AND THE AMOUNT WAS DETERMINED AT RS.24,78,652/-. T HE ASSESSEES CONTENTION IS THAT INTEREST IS LEVIABLE ONLY FROM THE DATE OF REVISED NOTICE OF DEMAND IN PURSUANCE TO THE ORDER OF THE TRIBUNAL AND NOT FROM 9.12.1997. 5. HAVING HEARD BOTH THE SIDES, WE DO NOT FIND ANY SUBSTANCE IN THE ASSESSEES PLEA IN VIEW OF THE SPECIFIC PROVISO TO SECTION 220(2), WHICH READS AS UNDER:- IF THE AMOUNT SPECIFIED IN ANY NOTICE OF DEMAND UN DER SECTION 156 IS NOT PAID WITHIN THE PERIOD LIMITED UNDER SUB-SECTION(1) , THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST(ONE) PER CENT FOR EVE RY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING FROM THE D AY IMMEDIATELY FOLLOWING THE END OF THE PERIOD MENTIONED IN SUB-SE CTION(1) AND ENDING WITH THE DAY ON WHICH THE AMOUNT IS PAID. PROVIDED THAT, WHERE AS A RESULT OF AN ORDER UNDER SECTION 1 54, OR SECTION 155 OR SECTION 250, OR SECTION 254, OR SECT ION 260, OR SECTION 262, OR SECTION 264 (OR AN ORDER OF THE SETTLEMENT COMMI SSION UNDER SUB- SECTION(4) OF SECTION 245D), THE AMOUNT ON WHICH IN TEREST WAS PAYABLE UNDER THIS SECTION HAD BEEN REDUCED, THE INTEREST S HALL BE REDUCED ACCORDINGLY AND THE EXCESS INTEREST PAID, IF ANY, S HALL BE REFUNDED. HENCE, IN VIEW OF THE SPECIFIC PROVISO TO SECTION 2 20(2), THE INTEREST HAD RIGHTLY BEEN COMPUTED BY THE AO. 6. LD COUNSEL FOR THE ASSESSEE HAS RELIED ON THE DE CISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF N.P.GUPTA & KISHAN SWAROO P CHAUDHARI, (2008) 15 DTR (RAJ) 182. HOWEVER, THE SAID DECISION HAS NO APPLICABILI TY TO THE FACTS OF THE CASE AS IN THE SAID DECISION, THE ASSESSMENT HAD BEEN SET ASIDE BY THE TRIBUNAL AND PURSUANT TO THAT, FRESH ASSESSMENT WAS FRAMED. WHEN AN ASSESSMENT IS SET ASIDE WITH THE DIRECTION TO FRAME FRESH ASSESSMENT DENOVO, THE ORIGINAL DEMAND ALSO GETS ERASED BUT IF THE ASSESSMENT ORDER PER SE HAS NOT BEEN SET ASIDE AND ONLY ON CERTAIN ISSUES, MATTER IS RESTORED TO THE AO WHILE RETAINING THE OTHER ISSUES DEALT IN THE ASSESSMENT ORDER, THE ORIGINAL DEMAND IS TO BE REVISED ACCORDINGLY. IN T HE PRESENT CASE, THE DEMAND HAS ONLY I.T.(SS)A NO.19/MUM/2009 BLOCK PERIOD: 1987-88 TO 1997-98 3 BEEN REVISED IN VIEW OF THE SUBSEQUENT DECISION OF THE TRIBUNAL. ACCORDINGLY, WE UPHOLD THE ORDER OF LD CIT (A). 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STAN DS DISMISSED. PRONOUNCED ON 6 TH AUGUST, 2010 SD/- (VIJAY PAL RAO) (JUDICIAL MEMBER) SD/- (S.V. MEHROTRA) (ACCOUNTANT MEMBER) MUMBAI, DATED 6 TH AUGUST, 2010 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-, MUMBAI 4. COMMISSIONER OF INCOME TAX, CITY-, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH E, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI I.T.(SS)A NO.19/MUM/2009 BLOCK PERIOD: 1987-88 TO 1997-98 4 DATE INITIALS 1. DRAFT DICTATED ON 15.7.2010 PS 2. DRAFT PLACED BEFORE AUTHOR 15.7.2010 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/J M 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER I.T.(SS)A NO.19/MUM/2009 BLOCK PERIOD: 1987-88 TO 1997-98 5