Jayraj Estate Pvt. Ltd., Baroda V. The Dy.CIT.,Circle-5, Baroda

ITSSA 41/AHD/2008

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9072 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-08-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-08-2010
• Assessment Year: misc
• Appeal Filed On: 14-03-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AS WELL AS AGAINST OR
• Keywords: Block assessment
• Section: 142(1); 263; 63; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH A AA A BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N NN N. .. .S. SAINI S. SAINI S. SAINI S. SAINI, , , , ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER AND AND AND AND SHRI SHRI SHRI SHRI MAHAVIR SINGH, JUDICIAL MEMBER MAHAVIR SINGH, JUDICIAL MEMBER MAHAVIR SINGH, JUDICIAL MEMBER MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING :17 8 10 DRAFTED ON: 17-8-10 IT (SS)A. NO. 41 /AHD/ 2008 BLOCK PERIOD 1-4-1995 TO 19-12-2001 JAYRAJ ESTATE PVT. LTD., INDRAPRASTHA, 1 ST FLOOR OPP. ELLORA PARK VEGETABLE MARKET, ELLORA PARK, BARODA. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5, AAYAKAR BHAVAN, NR. RACE COURSE CIRCLE, BARODA. PAN/GIR NO. : AAACJ 5 505 E (A PPELLANT ) .. ( RESPONDENT ) AND IT (SS)A. NO. 48 /AHD/ 2008 BLOCK PERIOD 1-4-1995 TO 19-12-2001 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5, AAYAKAR BHAVAN, NR. RACE COURSE CIRCLE, BARODA. VS JAYRAJ ESTATE PVT. LTD., INDRAPRASTHA, 1 ST FLOOR OPP. ELLORA PARK VEGETABLE MARKET, ELLORA PARK, BARODA. BY ASSESSEE : SHRI P.M. MEHTA. B Y REVENUE : SHRI ANIL KUMAR, D.R. O R D E R O R D E R O R D E R O R D E R PER BENCH:- THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COM MISSIONER OF INCOME TAX (APPEALS)-V, BARODA DATED 28-1-2008. 2. GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UNDER : - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-V, BARODA HAS GROSSLY ERRED IN CONFIRMING ADDITION ON ACCOUNT OF ON-MONEY RECEIPT `.1,24,00,000/- MADE BY THE LEARNED ASSESSING OFFICER, IN RESPECT OF SALE O F UNIT NO.G-23, G-24 OF CONCORDE PROJECT RELYING ON THE DETAILS CONTAINED IN THE SEIZED PAPER BEARING PG. N O.12 - 2 - TO 18 OF ANNEXURE A/40 DATED 19-12-2001 AND PAGE NO.1 OF ANNEXURE Z-2 WITHOUT HAVING JURISDICTION OV ER THE SEIZED PAPERS. IN DOING SO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS IGNORED TH E FACTS THAT (I) THE DCIT, CC-1, BARODA HAD HANDED OVER THE SAID SEIZED PAPERS TO THE ASSESSING OFFICER OF SHRI HARESH N. SANGHAVI FOR TAKING NECESSARY ACTION U/S.158 BD OF THE ACT, AS PER DETAILS CONTAINED IN THE OFFICE NOTE IN THE BLOCK ASSESSMENT ORDER OF M/S. HINDUSTAN EARTH MOVERS PVT. LTD., DATED 30-1-2004 PASSED UNDER SECTION 158BC R.W.S. 158BG OF THE ACT. (II) SHRI HARESH N.SANGHAVI HAS MADE DISCLOSURE OF `.2,25,00,000/- IN RESPECT OF THE DETAILS CONTAINED IN THE SAID SEIZED MATERIAL AS PER LETTER DATED 11-2-2006 BEFORE THE ACIT, CIRCLE-4, THANE AND, (III) THE ACIT, CCIRCLE-4,THANE HAS PASSED THE ORDER UNDER SECTION 158BD OF THE ACT DATED 24-2- 2006 IN THE CASE OF SHRI HARESH N.SANGHAVI ASSESSING UNDISCLOSED INCOME AT `.3,86,97,000/- IN RESPECT OF THE DETAILS CONTAINED IN THE SAID SEIZED MATERIAL. THE ASSESSING OFFICER IS THEREFORE NOT HOLDING JURISDICTION ON SEIZED PAPERS HANDED OVER TO THE ASSESSING OFFICER OF HARESH N. SANGHAVI UNDER SECTI ON 158BD OF THE ACT. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS THEREFORE, ERRED IN LAW AN D FACT IN CONFIRMING THE ADDITION OF `.1,24,00,000/- MADE BY THE LEARNED ASSESSING OFFICER WITHOUT HAVING JURISDICTION, WHICH IS UNWARRANTED IN LAW AND IN FA CTS. (2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS GROSSLY ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION MADE BY LEARNED ASSESSING OFFICER HOLDING THAT, THE APPELLANT HAS RECEIVED ON-MONEY OF `.1,24,00,000/- IN RESPECT OF SALE OF SHOP NO.G-23 & G- 24 IN CONCORDE COMPLEX. THE SAME HAS BEEN CONSIDERED IN THE ASSESSMENT OF GROUP CONCERN M/S. HINDUSTAN EARTH MOVERS PVT. LTD. , AND SAME IS UNWARRANTED IN LAW AND IN FACTS. THE CONTENT OF SEIZED PAPER BEARING PAGE-1 OF ANNEXURE Z- 2 SEIZED ON 19-12-2001 FROM THE BUSINESS PREMISES O F JAYRAJ GROUP HAS BEEN ACCEPTED AS GENUINE IN THE CA SE OF SMT. SHRUTI R. DESAI. - 3 - (3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE OF THE EXPENSES MADE BY THE LEARNED ASSESSING OFFICER HOLDING THAT THE APPELLANT HAS CLAIMED AN EXPENDITURE OF `.3,46,77,755/- WHICH IS BOGUS AND DISALLOWABLE DISREGARDING THE FACTS THAT THIS ASPECT HAS BEEN CONSIDERED BY THE DCIT, CC-1, BAROD A WHILE PASSING ORDER UNDER SECTION 158BC R.W.S.158 BG OF THE ACT DATED 30-1-2004 ASSESSING UNDISCLOSED INCOME AT `.28,59,000/-. (4) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADD ITION MADE BY THE LEARNED ASSESSING OFFICER HOLDING THAT THE APPELLANT HAS RECEIVED ON MONEY OF `.28,59,000/ - IN RESPECT OF SALE TO SHRI ASHUMAL KESHWANI AND THA T THE ENTIRE ON-MONEY RECEIPT OUGHT TO HAVE BEEN OFFERED FOR TAXATION WHICH IS UNWARRANTED IN LAW AN D IN FACTS. (5) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADD ITION MADE BY THE LEARNED ASSESSING OFFICER HOLDING THAT THE APPELLANT HAS RECEIVED ON-MONEY OF `.13,50,00 0/- AS NOTED ON PAGE-77 OF ANNEXURE A/40 AND THAT THE ENTIRE ON-MONEY RECEIPT OUGHT TO HAVE BEEN OFFERE D FOR TAXATION WHICH IS UNWARRANTED IN LAW AND IN FAC TS DISREGARDING THE FACTS THAT ON MONEY RECEIPT BEFORE 31 ST DECEMBER,1997 RELATING TO G-18 AND G-19 IS PART OF THE DISCLOSURE `.75,00,000/- MADE INVDIS-1997. 3. WHEREAS THE REVENUES SOLE GROUND IS AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH RECEIPTS OF `.27,21,000/- AND UNACCOUNTED CASH RECEIPTS OF `.50,00,000/- CLAIMED BY THE ASSESSEE TO BE FROM ASHUMAL KESHWANI TO JAYRAJ GROUP. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN NOT APPRECIATING THE FACT THAT THESE ADDITIONS WERE MADE ON THE BASIS OF MATERIALS SEIZE D DURING THE COURSE OF SEARCH OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT. - 4 - 4. AT THE OUTSET THE LEARNED AUTHORISED REPRESENTAT IVE OF THE ASSESSEE FILED COPY OF THE ORDER OF THE TRIBUNAL PA SSED IN IT(SS)A NO.119/AHD/2006 FOR THE BLOCK PERIOD 1-4-19956 TO 1 9-12-2001 DATED 19-12-2008 IN THE APPEAL OF THE ASSESSEE AGAI NST THE ORDER UNDER SECTION 263 OF THE I. T. ACT DATED 16-3-2006 PASSED BY THE CIT-III, BARODA AND SUBMITTED THAT THE TRIBUNAL HAS QUASHED THE ORDER OF THE CIT U/S.263 OF THE ACT THEREFORE, THE ORDER PASSED BY THE LEARNED ASSESSING OFFICER ON 29-12-2006 UNDER SECTION 158BC PURSUANT TO THE ORDER OF THE C.I.T. UNDER SECTION 2 63 OF THE ACT DOES NOT SURVIVE. THEREFORE, THE PRESENT APPEALS O F THE ASSESSEE AND REVENUE HAS BECOME INFRUCTUOUS AND HENCE REQUIR ES TO BE DISMISSED. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE AGREED W ITH THE SUBMISSION OF THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE PRESENT APPEALS ARE ARISING OUT OF THE ORDER DATED 29.12.2006 PASSED BY THE LEARNED ASSESSING OFFICER IN PURSUANCE TO THE DIRECTION OF THE COMMIS SIONER OF INCOME TAX IN THE ORDER DATED 17.3.2006 PASSED UNDER SECTI ON 263 OF THE ACT. WE FIND THAT THE CIT-III, BARODA PASSED AN ORD ER DATED 16-3- 2006 UNDER SECTION 263 OF THE ACT HOLDING THE ORIGI NAL ORDER PASSED BY THE LEARNED ASSESSING OFFICER ON 30-1-2004 AS ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND SET ASIDE THE ASSESSMENT ORDER AND DIRECTED TO MAKE FRESH ASSESSM ENT IN ACCORDANCE WITH THE PROVISIONS OF LAW. THE ASSESSE E FILED APPEAL BEFORE THE TRIBUNAL AGAINST THE 263 ORDER OF THE C. I.T. AND THE TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE VIDE IT S ORDER DATED 19-12-2008 IN IT(SS)A.NO.119/AHD/2006 BY OBSERVING AS UNDER :- IN THE PRESENT CASE, WE ARE CALLED UPON TO CONSIDE R THE LEGAL VALIDITY OF AN ORDER PASSED BY THE CIT WHERE HE HAS SET ASIDE THE ASSESSMENT ORDER DATED 30-1-2004 FOR THE BLOCK PERIOD WITH A DIRECTION TO THE ASSESSING OFFICER TO MAKE A FRESH - 5 - ASSESSMENT OF UNDISCLOSED INCOME UNDER SECTION 158B C IN ACCORDANCE WITH LAW, WHILE DOING SO HE WILL TAKE IN TO CONSIDERATION THE OBSERVATION MADE BY HIM IN THE SA ID ORDER UNDER SECTION 263.THE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. (SUPRA) HAS SET OUT THE PARAMET ERS TO ASCERTAIN AS TO WHICH ORDERS CAN BE CONSIDERED AS E RRONEOUS AND, THEREFORE, OPEN TO REVISION UNDER SECTION 263 .IT HAS BEEN HELD THAT EVERY ORDER WHICH RESULTS IN LOSS OF REVENUE CANNOT BE REVISED BY THE CIT UNLESS THE ORDER OF TH E LEARNED ASSESSING OFFICER IS ERRONEOUS. THE COURT HAS HELD THAT ON ANY ISSUE WHERE MORE THAN ONE VIEWS OR COURSES ARE PERMISSIBLE AND THE LEARNED ASSESSING OFFICER FOLLO WS ONE OF THE PERMISSIBLE VIEWS THEN THE ORDER OF THE LEARNED ASSESSING OFFICER CANNOT BE HELD TO BE ERRONEOUS UN LESS THE VIEW OR COURSE ADOPTED BY THE LEARNED ASSESSING OFF ICER IS UNSUSTAINABLE IN LAW. THE APEX COURT IN THE CASE OF MAX INDIA LTD. (SUPRA) HAS HELD THAT WHEN THE CIT PASSED THE IMPUGNED ORDER UNDER SECTION 263, TWO VIEWS WERE INHERENTLY POSSIBLE. THEREFORE, SUBSEQUENT AMENDMENT MADE, THOUGH RETROSPECTIVE, DID NOT RENDER THE ORDER OF THE LEAR NED ASSESSING OFFICER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, AND CIT COULD NOT EXERCISE POWERS UNDE R SECTION 263. THE JURISDICTIONAL GUJARAT HIGH COURT IN THE CASE OF CIT VS. ARVIND JEWELLERS (SUPRA) HAS HELD THAT THE LEARNED ASSESSING OFFICER HAVING MADE THE ASSESSMENT AFTER CONSIDERING THE RELEVANT MATERIAL AND THE EXPLANATI ON OFFERED BY THE ASSESSEE IN PURSUANCE OF THE NOTICES ISSUED UNDER SECTION 142(1) AS WELL AS SECTION 143(2) ACT ION UNDER SECTION 263 WAS NOT JUSTIFIED MERELY BECAUSE A DIFF ERENT VIEW WAS POSSIBLE ON THE APPRAISAL OF THE MATERIAL PRODU CED BY THE ASSESSEE. IN OUR OPINION, THE RATIOS LAID DOWN IN THE ABOVE MENTIONED JUDICIAL DECISIONS ARE SQUARELY APP LICABLE IN THE PRESENT CASE. THE CONTENTION RAISED BY THE LD.CIT (LEARNED DEPARTMENTAL REPRESENTATIVE) REGARDING THE TAXING O F ASSESSEES INCOME IN THE HANDS OF HINDUSTAN EARTH M OVERS PVT. LTD., (HEMPL), IN OUR OPINION DO NOT SURVIVE, IN VIEW OF THE FACT THAT THE ORDER PASSED UNDER SECTION 263 IN THE CASE OF HEMPL HAS ALREADY BEEN QUASHED/ANNULLED IN APPEA L NO. IT(SS) A.120/AHD/2006, VIDE ORDER DATED 14-12-2007 AND THEREBY ADDITION MADE BY THE ASSESSING OFFICER OF H EMPL HAVE BEEN CONFIRMED. THUS, THE SAID ISSUE IS ALREAD Y DECIDED BY THE ITAT. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. 7. IN VIEW OF THE ABOVE DECISION OF THE TRIBUNAL TH E IMPUGNED ORDER PASSED BY THE LEARNED ASSESSING OFFICER IN PU RSUANCE TO ORDER PASSED BY COMMISSIONER OF INCOME TAX UNDER SE CTION 263 HAS BECOME INFRUCTUOUS AS THE VERY BASIS ON WHICH T HE SAID ORDER - 6 - WAS PASSED BECAME NON EXISTENT. WE THEREFORE, CANC EL THE IMPUGNED ORDER DATED 29-12-2006 AND ALLOW THE APPEA L OF THE ASSESSEE AND DISMISS THE APPEAL OF THE REVENUE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING IN THE PRESENCE OF THE PARTIES ON 17 TH AUGUST, 2010 SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNT ANT MEMBER AHMEDABAD: ON THIS 17 TH DAY OF AUGUST, 2010 COMPILED AND COMPARED BY: PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-V, BARODA. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 17-8-2010 -------------- ----- 2. DRAFT PLACED BEFORE AUTHORITY 17-8-2010 ---- --------------- 3. DRAFT PROPOSED & PLACED 17-8-2010 ----------- -------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 17-8-2010 ------------------- JM 5. APPROVED DRAFT COMES TO P.S 17-8-2010 --------- ----------- 6. KEPT FOR PRONOUNCEMENT ON 17-8-2010 ------- ------------- 7. FILE SENT TO THE BENCH CLERK 20-8-2010 ------- ------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- - 7 - 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------