The ACIT, Patan Circle, Patan V. Shri Hariram Devram Thakkar, Patan

ITSSA 33/AHD/2006

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9646 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 19-12-2012
• Assessment Year: misc
• Appeal Filed On: 08-02-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C PATWARI; SHANKARLAL MEENA
• Assessee Lawyers: S N SOPARKAR
• Keywords: Peak credit; Block assessment
• Section: 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER IT(SS)A NO.33/AHD/2006 THE ACIT, PATAN CIRCLE, PATAN. V/S. HARIBHAI DEVRAM THAKKAR, LAL BAUG, RADHANPUR, DIST. PATAN PAN: ABHPT 6887E (APPELLANT) (RESPONDENT) IT(SS)A NO.34/AHD/2006 THE ACIT, PATAN CIRCLE, PATAN. V/S. SHRI PIYUSH T. THAKKAR, 119/2, KABUTARK KHANA, KALUPUR, AHMEDABAD. PAN: AABBT 2781C (APPELLANT) (RESPONDENT) REVENUE BY : S/SHRI D.C. PATWARI AND SHANKARLAL MEENA, D.R. ASSESSEE(S) BY : SHRI S.N. SOPARKAR, A.R. / DATE OF HEARING : 19/09/2013 / DATE OF PRONOUNCEMENT: 17/12/2013 / O R D E R PER BENCH BOTH THESE APPEALS HAVE BEEN FILED BY THE REVENUE A ND BEING CONNECTED; HENCE CONSOLIDATED, THEREFORE DECI DED BY THIS COMMON ORDER. B. IT(SS)A NOS.33 & 34/AHD/2006 (REVENUES APPEAL) 2. REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING TO DELETE THE ADDITION OF RS.35,21,260/- MADE BY THE A.O. U/S .158BD. IT(SS)A NOS.33 & 34/AHD/2006 ACIT, PATAN CIRCLE, PATAN VS. HARIBHAI D. THAKKAR P ATAN, ACIT CENTRAL CIRCLE 1(1), AHMEDABAD VS. PIYUSH THAK KAR AHMEDABAD. - 2 - 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 2.1 ON ACCOUNT OF SEARCH U/S. 132 IN THE CASE OF M ASTER GROUP ON 20 TH OF OCTOBER, 2000 A NOTEBOOK WAS SEIZED FROM THE RE SIDENCE OF SRI ARVIND A. SHAH. ON THE SAID NOTE BOOK, THERE WAS AN ACCOUNT AT PAGE NO.35, WHICH WAS TITLED AS HARIBHAI AAROHI . THE FACSIMILE OF THE SAID ACCOUNT HAS ALSO BEEN ANNEXED WITH THE ASSESSMENT ORDER. ON THE BASIS OF THOSE EVIDENCES V IDE PARAGRAPH 2.1, THE AO HAD NOTED THAT A SATISFACTION WAS RECOR DED AND THE PROCEEDINGS AGAINST THE ASSESSEE, NAMELY, HARIBHAI DEVRAM THAKKAR WERE INITIATED. IN COMPLIANCE OF THE NOTICE U/S. 158BD, HOWEVER, THE ASSESSEE HAD FILED NIL RETURN. THE AO HAD COMPUTED A PEAK AMOUNT IN HIS CREDIT IN THE ACCOUNT OF THE S AID DIARY AT RS.35 LACS WHICH WAS TAXED U/S. 69 OF IT ACT ON PROTECTIV E BASIS. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHO RITY. 3. THE OBJECTION OF THE ASSESSEE WAS THAT THE NAME WRITTEN AT PAGE 35 OF THE DIARY WAS HARIBHAI AAROHI WHICH WA S NOT THE NAME OF THE ASSESSEE. HOWEVER, IT WAS SIMPLY INFORM ED THAT THE ASSESSEE HAD PURCHASED AN APARTMENT IN AAROHI BUILD ING WHICH WAS ALSO RENTED OUT BY THE ASSESSEE BUT NO OTHER EV IDENCE WAS MENTIONED. MERELY ON THAT BASIS, IT WAS WRONG TO AS SESS ON PROTECTIVE BASIS AN AMOUNT OF RS.35 LACS AS PEAK CR EDIT U/S. 69 OF IT ACT BECAUSE THE SAID ACCOUNT DID NOT PERTAIN TO THE ASSESSEE. LEARNED CIT(A) WAS OF THE VIEW AS FOLLOWS: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND PERUSED THE FACTS OF THE CASE. AS MENTIONED BY THE ASSESSING OF FICER HIMSELF IT IS CLEAR THAT THE ASSESSMENT WAS MADE IN THE CASE OF T HE APPELLANT ON IT(SS)A NOS.33 & 34/AHD/2006 ACIT, PATAN CIRCLE, PATAN VS. HARIBHAI D. THAKKAR P ATAN, ACIT CENTRAL CIRCLE 1(1), AHMEDABAD VS. PIYUSH THAK KAR AHMEDABAD. - 3 - PROTECTIVE BASIS AND IN THE CASE OF OTHER ASSESSEE SHRI JIVRAJBHAI V. DESAI ON SUBSTANTIVE BASIS. AS IN THE CASE OF SHRI JIVRAJBHAI V. DESAI THE ADDITION MADE BY THE CONCERNED ASSESSING OFFICE R HAS ALREADY BEEN CONFIRMED BY THE CIT(A)-I VIDE ORDER NO.CIT(A) /CC-1(1)24/02- 03 DATED. 19.1.2004. I HOLD THAT THE ADDITION MADE IN THE CASE OF THE APPELLANT TO RS.35,21,260/- U/S. 158BD OF THE IT AC T ON PROTECTIVE BASIS IS NOT JUSTIFIED. HENCE, THE ADDITION MADE OF RS.35,21,260/- IS DELETED. 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, THE PRESENT POSITION IS THAT THE APPEAL OF SRI JIVRAJ V. DESAI HAS NOW BEEN DECIDED BY US BEARING IT(SS)A NOS.99 & 106/AHD/2004 , ORDER DATED 13.12.2013, WHEREIN, THE IMPUGNED PEAK CREDIT HAD ALREADY BEEN UPHELD. ONCE THE IMPUGNED AMOUNT HAS HELD AS B ELONGING TO JIVRAJ V. DESAI BEING PART OF HIS FINANCE BUSINESS, THEREFORE, UNDER THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE SAME OUGHT NOT TO BE TAXED IN THE HANDS OF THIS ASSESSEE . WE FIND NO FORCE IN THIS GROUND OF THE REVENUE; HENCE HEREBY D ISMISSED. B. IT(SS)A NO.34/AHD/2006 (REVENUES APPEAL) 5. REVENUE IS IN APPEAL AGAINST THE ORDER OF LEARNE D CIT(A)-1, AHMEDABAD, VIDE ORDER DATED 9.11.2005 AND THE MAIN GROUND IS REPRODUCED BELOW: THE CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN D IRECTING TO DELETE THE ADDITION OF RS.1,56,63,650/- MADE ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF UNDISCLOSED INCOME WO RKED OUT ON THE BASIS OF NEGATIVE PEAK BALANCE FROM THE ENTRIES FOU ND RECORDED IN A SEIZED DIARY (ANNEXURE A-1) HOLDING THAT THE SUBSTA NTIVE ADDITION IN THIS REGARD MADE BY THE ASSESSING OFFICER IN THE CA SE OF SHRI JIVRAJ V. DESAI HAS BEEN CONFIRMED BY LEARNED CIT(A)-1, AHMED ABAD WITHOUT APPRECIATING THE FACT THAT THE ISSUE REGARDING SUBS TANTIVE ADDITION IN THE CASE OF SHRI JIVRAJ V. DESAI HAS YET NOT BECOME FINAL IN THE ITAT. 6. CONSEQUENCE UPON A SEARCH U/S. 132 CARRIED OUT O N MASTER GROUP ON 20 TH OF OCTOBER, 2000 THE CASE OF THIS ASSESSEE WAS IT(SS)A NOS.33 & 34/AHD/2006 ACIT, PATAN CIRCLE, PATAN VS. HARIBHAI D. THAKKAR P ATAN, ACIT CENTRAL CIRCLE 1(1), AHMEDABAD VS. PIYUSH THAK KAR AHMEDABAD. - 4 - PROCEEDED U/S. 158BD OF IT ACT AND VIDE AN ORDER DA TED 29.10.2004, IT WAS HELD THAT THE PEAK OF RS.1,56,63 ,650/- WAS TO BE TAXED ON PROTECTIVE BASIS IN THE HANDS OF THE ASSES SEE. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 7. WHILE DECIDING THE APPEAL, IT WAS NOTED BY LEARN ED CIT(A) THAT AT PAGES 47 AND 48 OF THE DIARY MARKED AS ANNE XURE A-1 SEIZED FROM THE RESIDENCE OF SRI ARVIND A. SHAH, IT WAS FOUND THAT THERE WAS AN ACCOUNT IN THE NAME OF SRI PIYUSHBHAI THAKKAR. APART FROM THE SAID ACCOUNT, THERE WAS NO CHIT OR ANY LET TER OR ANY AGREEMENT OR DOCUMENT TO SUPPORT THAT THE ACCOUNT B ELONGED TO THE ASSESSEE. FURTHER, IT WAS DECIDED THAT THERE WAS NO REASON TO ASSESS A NEGATIVE PEAK OF RS.1,56,63,650/- IN THE HANDS OF THE ASSESSEE. LEARNED CIT(A) HAS ALSO MENTIONED A REPLY OF ADDITI ONAL COMMISSIONER OF INCOME TAX, CR.-1, AHMEDABAD, WHERE IN IT WAS MENTIONED THAT THE INITIAL CREDIT WAS TAXED IN THE HANDS OF SRI JIVRAJ V. DESAI AND THE TRANSACTION OF THIS ASSESSEE WAS I NCLUDED IN THE WORKING OF THE PEAK. THE RELEVANT PORTION IS REPROD UCED BELOW: IN THIS REGARD, THE REPORT IN COMPLIANCE TO YOUR OF FICE LETTER DATED 06.10.2005 IS SUBMITTED HEREWITH. DURING THE SEARCH OPERATION FROM THE RESIDENTIAL PREMISES OF SHRI ARVINDBHAI A. SHAH RESIDING AT B-3, SULABH FLAT, NR. MIRAMBICA HIGH SCHOOL, NARANPURA, AHMEDABAD-13, IT HAD BEEN FOUND THAT THERE WAS AN ACCOUNT OF SHRI PIYUSHBHAI THAKKAR IN A DIARY FOUND FROM HIS PREMISE AND SEIZE D AS ANN. A-1. THE BLOCK ASSESSMENT IN CASE OF SHRI PIYUSH J. THAKKAR, I.E. THE ASSESSEE WAS DONE BASED ON THIS ACCOUNT. NOW YOU HAVE ASKED ABOUT THE ADDITIONS IN CASE OF SHRI JIVRAJ V. DESAI RELATING TO THE ACCOUNTS FOUND IN THIS DIARY SEIZED AS ANN. A-1. IN THIS REGARD, I T IS BROUGHT TO YOUR KIND NOTICE THAT THE DIFFERENCE OF OPENING DEBIT BA LANCES AND CREDIT BALANCES FROM THIS DIARY OF JIVRAJ V. DESAI WAS CON SIDERED AS UNACCOUNTED MONEY OF JIVRAJ V. DESAI, PARKED WITH V ARIOUS PERSONS. THIS AMOUNT WAS FOUND TO BE RS.27.32 CRORE. THE CAS H RECEIPTS AND PAYMENTS RECORDED IN THIS DIARY OF SHRI JIVRAJ V. D ESAI WERE ARRANGED IT(SS)A NOS.33 & 34/AHD/2006 ACIT, PATAN CIRCLE, PATAN VS. HARIBHAI D. THAKKAR P ATAN, ACIT CENTRAL CIRCLE 1(1), AHMEDABAD VS. PIYUSH THAK KAR AHMEDABAD. - 5 - DATED WISE AND A PEAK OF RS.1.84 CRORE WAS WORKED O UT. THE INITIAL AMOUNT OF RS.27.32 CRORE PARKED WITH VARIOUS PERSON S ALSO INCLUDED THE NAME OF SHRI PIYUSH T. THAKKAR, I.E., THE ASSES SEE, ALSO WITH THE OPENING DEBIT BALANCE OF RS.40 LACS. THE FURTHER TR ANSACTIONS OF SHRI PIYUSH T. THAKKAR WITH SHRI JIVRAJ V. DESAI FROM TH E DATE OF OPENING BALANCE HAVE BEEN INCLUDED IN THE WORKING OF PEAK O F RS.1.84 CRORE IN CASE OF SHRI JIVRAJ V. DESAI. 8. AFTER HEARING THE SUBMISSION OF BOTH THE SIDES, THE PRESENT POSITION IS THAT THE APPEAL OF SRI J.V. DESAI HAS B EEN DECIDED BY THIS TRIBUNAL, VIDE ORDER DATED 13 TH OF DECEMBER, 2013 IN IT(SS)A NO.99 & 106/AHD/2004, WHEREIN THE INITIAL CAPITAL A S WELL AS THE PEAK WAS CONFIRMED IN HIS HANDS. DUE TO THIS REASON AND ALSO IN THE LIGHT OF THE DISCUSSION MADE HEREINABOVE, WE FIND N O FORCE IN THIS GROUND OF THE REVENUE; HENCE DISMISSED. 9. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. SD/- SD/- (T.R. MEENA) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 17/12/2013 PRABHAT KR. KESARWANI, SR. P.S. TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD