Shri Kailashchand Agrawal L/H Late Leeladevi Agrawal, Indore V. The ACIT, 3(1), Indore

ITSSA 217/IND/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9141 (ITAT-INDORE)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 22-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRIDULA BAJPAI
• Assessee Lawyers: KAMLESH JAIN
• Keywords: Unexplained investment
• Section: 133A; 132

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER IT(SS)A NO. 217/IND/2012 BLOCK PERIOD - 1.4.1996 TO 13.11.2002 KAILASH AGRAWAL L/H OF LATE LEELA DEVI AGRAWAL, INDORE PAN ABDPA 8656 Q :: APPELLANT VS ACIT-3(1), INDORE :: RESPONDENT ASSESSEE BY SHRI KAMLESH JAIN REVENUE BY SMT. MRIDULA BAJPAI DATE OF HEARING 0 3 .4.2013 DATE OF PRONOUNCEMENT 0 3 .4.2013 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 6.2.2012 OF THE LEARNED CIT(A)-II, INDORE. GROUND NO S.1 TO 3 2 PERTAINS TO CHALLENGING THE JURISDICTION AS WARRANT OF AUTHORISATION WAS ISSUED IN THE NAME OF THE ASSESSEE WHO DIED BEFORE AUTHORISATION. 2. DURING HEARING, SHRI KAMLESH JAIN, LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT SMT. LEELA DEVI AGRAWAL HAD ALREADY DIED BEFORE THE WARRANT OF AUTHORISATION FOR SEARCH. THIS CONTENTION WAS STRONGLY OPPOSED BY THE L D. CIT/DR FIRSTLY, ON THE GROUND THAT IT WAS A JOINT AUTHORISATION AND SECONDLY, ON THE BASIS OF SEC. 159 O F THE ACT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT A SEARCH & SEIZURE OPERATION WAS CARRIED OUT U/S 132 OF THE ACT AT THE RESIDENTIAL AS WELL AS BUSINESS PREMISES OF MAHESH NIRANJAN GROUP OF INDORE ON 13.11.2002 AND WAS CONCLUDED ON 15.11.2002. SIMULTANEOUSLY, SURVEY U/S 133A WAS CARRIED OUT AT THE GODOWN OF THE ASSESSEE AT 3 PALDA. THE DETAILS OF PREMISES SEARCHED AND SURVEYED AR E SUMMARISED AS UNDER: S.NO. PREMISES OCCUPIED BY ACTION U/S COMMENCED ON CONCLUDED ON 1 147/47, BHAGWANDEEN NAGAR, INDORE SHRI KAILASHCHAND AGRAWAL SHRI MAHESH AGRAWAL SHRI MUKESH AGRAWAL SHRI NIRANJAN AGRAWAL & OTHERS 132 OF THE IT ACT, 1961 13.11.2002 14.11.2002 2 8/2, NEW ANAJ MANDI, INDORE M/S. AGRAWAL JUTE BAG IND. M/S. KAILASH TRADERS M/S. KAILASHCHANDRA & CO. M/S. AGRAWAL ASSOCIATES MAHESH NIRANJAN JUTE P. LTD. 132 OF THE IT ACT, 1961 13.11.2002 15.11.2002 3 NEMAWAR ROAD, NEAR TISCO DEPOT, PALDA M/S. AGRAWAL JUTE BAG IND. M/S. KAILASH TRADERS M/S. KAILASHCHANDRA & CO. M/S. AGRAWAL ASSOCIATES MAHESH NIRANJAN JUTE P. LTD. 133 OF THE IT ACT, 1961 13.11.2002 15.11.2002 DURING THE COURSE OF THE SEARCH, INCRIMINATING DOCUMENTS/VALUABLES INCLUDING CASH AND OTHER VALUABLES WERE SEIZED. BEFORE US, THE ASSESSEE HAS CHALLENGED TH E VALIDITY OF THE SEARCH PROCEEDINGS ON THE GROUND THAT THE ASSESSEE EXPIRED BEFORE THE DATE OF THE SEARCH BY PLACI NG RELIANCE UPON THE DECISION OF CIT VS. RAKESH KUMAR; 31 3 ITR 305 (P & H). WITHOUT ADVERTING FURTHER, THE FACT REMAINS THAT FIRSTLY, IT WAS NOT A SINGLE AUTHORISATION I N THE 4 NAME OF SMT. LEELA DEVI AGRAWAL RATHER IT WAS A JOINT AUTHORISATION. SECONDLY, THE HONBLE JURISDICTIONAL HI GH COURT IN CASE OF GAYAPRASAD PATHAK; 290 ITR 128 (MP) HAS HELD THAT TRIBUNAL HAS NO POWER TO CONSIDER THE VALIDIT Y OF AUTHORISATION U/S 132A OF THE ACT. WHILE COMING TO TH IS CONCLUSION, THE HON'BLE HIGH COURT DULY CONSIDERED VARIOUS DECISIONS, SOME OF WHICH ARE AS UNDER: AMANDEEP SINGH VS. DIT; 252 ITR 139 (P & H) A & Z GRINDLAYS BANK VS. CIT; 241 ITR 269 (CAL) BHARAT COMMERCE & IND. LTD. VS. UOI; 188 ITR 277 (D EL) ORIENT PAPER MILLS LTD. (AIR) 1969 (SC) 48 PRINCESS USHA TRUST VS. CIT; 176 ITR 277 (MP) RAJESH KUMAR VS. DCIT; 287 ITR 91 (SC). IDENTICAL VIEW WAS TAKEN BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF PROMAIN LTD. VS. DCIT; 95 ITD 489 (DEL) (SB) WHEREIN IT WAS HELD THAT THE TRIBUNAL CANNOT DECIDE THE VALIDITY OF THE SEARCH AND REMEDY LIES ONLY BY WAY OF SEEKING ISSUE OF WRIT. CHAPTER XV DEALS WITH L IABILITY 5 IN SPECIAL CASES I.E. LIABILITY OF LEGAL REPRESENTATIVE S. IN VIEW OF THESE FACTS, WE FIND NO JUSTIFICATION TO INTERFERE WITH THE CONCLUSION DRAWN IN THE IMPUGNED ORDER ON THE INSTAN T ISSUE. 4. THE GROUND NO.4 WAS NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE, BEING GENERAL IN NATURE, THEREFORE, DISMISSED AS NOT PRESSED. 5. THE ONLY EFFECTIVE GROUND ARGUED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS GROUND NO.5 WHEREIN FIRS T ADDITION OF RS.6,250/- PERTAINS TO UNEXPLAINED INVESTM ENT IN SHARES OF A BANK AND DIVIDEND. AFTER HEARING THE RIVAL SUBMISSIONS, WE FIND THAT THE IMPUGNED ADDITION WAS M ADE ON THE BASIS OF DIVIDEND WARRANT DATED 14.1.2002 (DIVID END OF RS.1250) ON 50 SHARES OF VYAPARIK AUDYOGIK SAHAKARI BANK LTD. THE ASSESSEE DULY PRODUCED A CERTIFICATE FROM THE BANK EVIDENCING PAYMENT OF RS.5000/- ON 19.8.199 4. SINCE THE SHARES WERE PURCHASED BEFORE THE BLOCK PERI OD 6 AND THE CORROBORATIVE CERTIFICATE FROM THE BANK, THERE IS NO JUSTIFICATION TO MAKE THE ADDITION, THEREFORE, ON THIS ISSUE, THE ASSESSEE SUCCEEDS. THE ADDITION IS DELETED. 5.1 THE NEXT ADDITION IS OF RS.1,48,000/- AS UNEXPLAI NED SOURCE OF CASH DEPOSITED IN THE BANK. AFTER HEARING TH E RIVAL SUBMISSIONS, WE FIND THAT THE ADDITION WAS MADE AS A SUM OF RS.48,000/- WAS DEPOSITED ON 6.8.1997 AND RS.1 LAC ON 25.9.1997 IN THE BANK. THE ASSESSEE DID NOT EXP LAIN THE SOURCE OF SUCH DEPOSITS. EVEN BEFORE US, NO EV IDENCE WAS PRODUCED BY THE ASSESSEE EXPLAINING THE SOURCE OF SUCH DEPOSITS, THEREFORE, THE CONCLUSION DRAWN IN T HE IMPUGNED ORDER IS AFFIRMED. 5.2 THE NEXT PART OF THE GROUND PERTAINS TO THE AMOUNT OF RS.4,30,000/- TOWARDS UNEXPLAINED INVESTMENT IN LAND SITUATED AT PALDA. THE CRUX OF ARGUMENTS ON BEHALF ON BEHALF OF THE ASSESSEE IS THAT IT IS A SAME LAND OUT OF KHASRA BEARING NO.335/1/1 FOR WHICH OUR ATTENTION WAS 7 INVITED TO REGISTERED SALE DEED DATED 26.3.1994. WE H AVE PERUSED THE SALE DEED AND OTHER RELEVANT RECORD. AT PAG E 18 OF THE PAPER BOOK, THE DESCRIPTION OF THE LAND (SALE D EED) HAS BEEN GIVEN. WE FIND THAT THE CLAIMED LAND IS SURROUNDED BY THE LAND MENTIONED IN SURVEY NO.335/2 AND 335/1/2 (IN THE EAST), SURVEY NO.332 (WEST), SURVEY NO.333 (NORTH) AND THE LAND OF SURVEY NO. 336 (IN THE SOUTH) , THEREFORE, IT CAN BE SAID IT IS NOT THE SAME LAND RATHER IT IS A DISTINCT LAND. ANOTHER POINT RAISED BY THE LEARNED CO UNSEL FOR THE ASSESSEE IS THAT ONUS IS ON THE REVENUE TO PR OVE THAT IT IS A DIFFERENT LAND. WE ARE NOT CONVINCED WITH THIS REASONING BECAUSE ONUS IS ON THE ASSESSEE WHO IS CLAIMI NG TO BE THE SAME LAND, THEREFORE, ON THIS PART OF THE GR OUND, WE ARE AGREEING WITH THE CONCLUSION DRAWN IN THE IMPUGNED ORDER. 5.3 THE LAST PART OF THE GROUND IS OF RS.1,94,000/- W HICH WAS ADDED AS UNEXPLAINED INCOME. AFTER HEARING THE RIVAL 8 SUBMISSIONS, WE FIND THAT IN RESPONSE TO NOTICE ISSU ED U/S 158 BC, THE LEGAL REPRESENTATIVE OF THE DECEASED ASSESS EE FILED RETURN IN FORM 2B DECLARING THE INCOME OF SIX PREVIOUS YEARS FROM 1997-98 TO 2002-03. THE IMPUGNED ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE GROUND THAT RETURNS WERE NOT FILED, THUS TREATED AS UNDISCLOSED INCOME. THE STAND OF THE ASSESSEE IS THAT SINCE THE INCOME WAS BELOW TAXABLE LIMIT, THEREFORE, RETURNS WERE NOT FIL ED. IT IS FURTHER NOTED THAT NO MATERIAL WAS FOUND DURING SEARCH AGAINST THE ASSESSEE, ON THE BASIS OF WHICH, THE ADDITIO N CAN BE MADE. SINCE THE INCOME WAS BELOW TAXABLE LIMIT DURING THE SIX PREVIOUS YEARS, THEREFORE, THERE IS N O JUSTIFICATION TO MAKE THE ADDITION. THIS STAND IS FURTH ER FORTIFIED THAT IDENTICALLY, IN THE GROUP CASE OF SMT. KAMLA AGRAWAL, THE ADDITION WAS DELETED. THEREFORE, ON THIS PART OF THE GROUND, WE REVERSE THE CONCLUSION DRAWN IN T HE 9 IMPUGNED ORDER. CONSEQUENTLY, GROUND NO.5 IS PARTLY ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT TH E CONCLUSION OF THE HEARING ON 3.4.2013. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3.4.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE !VYS!