M/s. Hotel Sanman, V. The ACIT., Bharuch Circle, Bharuch

ITSSA 225/AHD/2006

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9084 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-09-2010
• Assessment Year: misc
• Appeal Filed On: 26-10-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANIL R SHAH; S N SOPARKAR
• Keywords: Opportunity of being heard; Assessment record; Block assessment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABA D (BEFORE HON'BLE SHRI G.D. AGRAWAL, V.P.(AZ) & HON BLE SHRI T.K. SHARMA, J.M. ) I.T.(S.S.)A. NO. 225/AHD./2006 ASSESSMENT YEAR : BLOCK PERIOD 01.04.1990 TO 09.01. 2001 M/S. HOTEL SANMAN, BHARUCH -VS.- ASSISTANT COMMISSIONER OF INCOME TAX, (PAN : AACFH 0525 P) BHARUCH CIRCLE, BHARUCH (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI S.N. SOPARKAR, SR. ADV. & ANIL R. SHAH RESPONDENT BY : SHRI K. MADHUSUDAN, SR . D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 11.08.2006 OF LEARNED COMMISSIONER OF INCOME TAX-XIX, AHMEDABAD FOR THE B LOCK ASSESSMENT PERIOD 01.04.1990 TO 09.01.2001. 2. VARIOUS GROUNDS RAISED BY THE ASSESSEE IN ITS AP PEAL READ AS UNDER :- I. ON POINT OF LAW 1. THE CIT(A.) HAS ERRED BOTH IN LAW AND IN FACT IN HOLDING THAT ASSESSMENT ORDER DATED 28.10.2005 PASSED BY ACIT WA S VALID. YOUR APPELLANT SUBMITS THAT CIT(A.) HAS ERRED IN HO LDING THAT THE ISSUE OF NOTICE U/S. 158BD R.W.S. 158BC DATED 21.10.03 WA S NOT BAD IN LAW AND VOID AND WAS NOT CONTRARY TO THE FACTS OF THE C ASE AND AS PER PROVISIONS OF LAW. 2. YOUR APPELLANT ALSO SUBMITS THAT HE HAS NOT CONC EALED ANY PARTICULARS OF INCOME AND PROCEEDINGS U/S. 132 OF T HE ACT AS WELL AS STATEMENT RECORDED OF SHRI RASHID I. NANDOLIA CANNO T BE MADE THE BASIS OF INITIATING PROCEEDINGS AND COMPUTING INCOM E OF BLOCK ASSESSMENT OF YOUR APPELLANT. II. ON MERITS OF THE CASE 1. THE CIT(A.) HAS ERRED IN GIVING HALF-HEARTED RELIEF AND UPHOLDING ADDITION OF RS.39,89,875/- AND GIVING RELIEF OF RS. 1 LAC ONLY INSTEAD OF FULLY DELETING ADDITION OF RS.40,89,875/- MADE B Y THE ASSESSING OFFICER BASED ON GUESS WORK AND PRESUMPTION. 2. THE CIT(A.) HAS ALSO ERRED IN HOLDING THAT THE ASSE SSMENT ORDER PASSED BASED ON DIARIES FOUND AT THE PLACE OF THIR D PARTYS AND 2 IT(S.S. )A NO. 225/AHD/2006 STATEMENT RECORDED OF SHRI RASHID I. NANDOLIA WAS V ALID. IT IS SUBMITTED THAT SINCE THE PROCEEDING AND THE MATERIA L WAS NOT INITIATED OR FOUND FROM THE APPELLANT THE ADDITION CANNOT BE MADE PARTICULARLY IN ABSENCE OF SUPPLY OF THAT MATERIAL & CHANCE OF CROSS EXAM. PARTICULARLY BECAUSE THE STATEMENT WAS RETRACTED BY SHRI RASHID I. NANDOLIA. 3. YOUR APPELLANT FURTHER SUBMITS THAT THE SUM OF RS.4 0,89,875/- ADDED AS INCOME IS ALSO ADDED IN THE HANDS OF M/S. NANDOSAL INDUSTRIES RESULTING THE SAME IN DOUBLE TAXATION WH ICH IS AGAINST PRINCIPAL OF JUSTICE. 4. THE CIT(A.) HAS ERRED IN CONFIRMING LEVY OF INTERES T U/S. 158BFA WHICH IS NOT LEVIABLE ON FACTS OF THE CASE AND AS P ER PROVISIONS OF LAW. IT IS THEREFORE, SUBMITTED THAT RELIEFS CLAIMED ABO VE BE ALLOWED AND THE ORDER OF THE ASSESSING OFFICER BE MODIFIED ACCO RDINGLY. 3. AT THE TIME OF HEARING, SHRI S.N. SOPARKAR, LD. SR. ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE POINTED OUT THAT NOTICE UNDER SECTION 158B D WAS ISSUED TO THE ASSESSEE ON 21.10.2003 ON THE BASIS OF SEARCH CONDUCTED IN NANDOLIA GROUP ON 09.01.2001. IN NANDOLIA GROUP OF CASES, THE ASSESSING OFFICER WAS REQUIRED TO FRAME THE ASS ESSMENT ON OR BEFORE 31.01.2003. AS PER PARA 3 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER, C ENTRAL CIRCLE 1(4), AHMEDABAD HAVING JURISDICTION OVER THE GROUP CASES OF NANDOLIA GROUP , INTIMATED VIDE HIS CONFIDENTIAL LETTER NO. ACIT/CC-1(4) UNDER SECTION 158BD/02-03 DATED 10.03. 2003 THAT SOME DIARIES CONTAINED THE DETAILS OF PARTNERSHIP SHARING RATIO AND DISTRIBUTI ON OF UNDISCLOSED PROFIT OF M/S. HOTEL SANMAN (MAZDA) AMONG THE PARTNERS VIZ. SHRI RASHID I. NAND OLIA, USMAN NANDOLIA AND RAFIK NANDOLIA AS MENTIONED IN THE SAID LETTER. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT SINCE THIS SATISFACTION WAS REACHED ON 10.03.2003, THEREFORE, IN VIEW OF THE DECISION OF THE ITAT, DELHI BENCH A (SPECIAL BENCH) IN THE CASE OF MANOJ AGGA RWAL VS.- DCIT, CENTRAL CIRCLE-3, NEW DELHI REPORTED IN [2008] 113 ITD 377 (DELHI) (SB), THE ASSESSMENT ORDER BE QUASHED. 4. ON THE OTHER HAND, SHRI K. MADHUSUDAN, LD. SR. D .R. APPEARING ON BEHALF OF THE REVENUE OBJECTED TO THE SUBMISSIONS MADE BY THE LD. COUNSEL OF THE ASSESSEE ON THE GROUND THAT IT NEEDS VERIFICATION FROM THE ASSESSMENT RECORD WHETHER THE SATISFACTION WAS RECORDED WITHIN TIME OR NOT. HE ACCORDINGLY SUBMITTED THAT WHETHER THE RATIO OF JUDGMENT OF THE ITAT, DELHI BENCH A 3 IT(S.S. )A NO. 225/AHD/2006 (SPECIAL BENCH) IN THE CASE OF MANOJ AGGARWAL VS.- DCIT, CENTRAL CIRCLE-3, NEW DELHI REPORTED IN [2008] 113 ITD 377 (DELHI) (SB) IS APPL ICABLE TO THE FACTS OF THE ASSESSEES CASE OR NOT NEEDS VERIFICATION AT THE END OF LEARNED COMMIS SIONER OF INCOME TAX(APPEALS). 5. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT WHEN THE LEARNE D COMMISSIONER OF INCOME TAX(APPEALS) PASSED THE IMPUGNED ORDER, THE DECISION OF ITAT, DE LHI BENCH A SPECIAL BENCH IN THE CASE OF DCIT, CENTRAL CIRCLE-3, NEW DELHI REPORTED IN [2008 ] 113 ITD 377 (DELHI) (SB) (SUPRA) WAS NOT AVAILABLE. WE FOUND CONSIDERABLE FORCE IN THE SUBMI SSIONS MADE BY THE LD. D.R. THAT WHEN THE SATISFACTION WAS RECORDED BY ASSESSING OFFICER, CEN TRAL CIRCLE 1(4), AHMEDABAD, WHO WAS HAVING JURISDICTION OVER THE GROUP CASES OF NANDOLI A GROUP, NEEDS VERIFICATION FROM THE ASSESSMENT RECORD OF NANDOLIA GROUP OF CASES. WE, T HEREFORE, SET ASIDE THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AND RESTORE THI S ISSUE TO HIS FILE, WHO WILL CALL THE ASSESSMENT RECORD OF NANDOLIA GROUP OF CASES, ASCER TAIN WHEN SATISFACTION WAS RECORDED TO ISSUE NOTICE UNDER SECTION 158BD AND RE-ADJUDICATE THIS I SSUE INVOLVED IN THE GROUND NO. 1 AFTER GIVING OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES . 5.1. AFTER DECIDING THE AFORESAID GROUND NO. 1 (SUP RA), IF REQUIRED, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WILL RE-ADJUDIC ATE THE REMAINING GROUNDS OF APPEAL AFRESH IN ACCORDANCE WITH LAW. 6. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL FILED BY THE ASSESSEE IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 03.09.201 0 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 03/ 09 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A.) CONCERNED, (4) CIT CONCERNED, (5) D.R. , ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGIS TRAR, ITAT, AHMEDABAD LAHA/SR.P.S.