The ACIT, Circle-8, Surat V. Shri Prakash T.Patel, Mumbai

ITSSA 517/AHD/2011

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1620 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-03-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 30-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift
• Section: 143(3); 153A; 234B; 132; 15

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA/IT(SS)A/CO NO. AY APPELLANT RESPONDENT ITA NO. 674/AHD/2009 2003-04 SHRI TULSIBHAI K. PATEL, 52, NARAYANMUNI NAGAR SOCIETY, NANI VED, VED ROAD, SURAT PAN : ABLPP 4844 K ACIT, CENTRAL CIRCLE-3, SURAT ITA NO. 675/AHD/2009 2003-04 SHRI DAYALBHAI K. PATEL, 56, NARAYANMUNI NAGAR SOCIETY, NANI VED, VED ROAD, SURAT PAN : ABCPP 1172 H ACIT, CENTRAL CIRCLE-3, SURAT ITA NO. 676/AHD/2009 2003-04 SHRI LALJIBHAI T. PATEL, 57, NARAYANMUNI NAGAR SOCIETY, NANI VED, VED ROAD, SURAT PAN : ABLPP 4845 J ACIT, CENTRAL CIRCLE-3, SURAT ITA NO. 677/AHD/2009 2003-04 SHRI PRAKASH T. PATEL, 12-A, RAMESH NIWAS, OPP. BREACH CANDY HOSPITAL, MUMBAI PAN : ABJPP 3476 D ACIT, CENTRAL CIRCLE-3, SURAT ITA NO. 1062/AHD/2009 2003-04 ACIT, CENTRAL CIRCLE-3, SURAT SHRI PRAKASH T. PATEL, 12-A, RAMESH NIWAS, OPP. BREACH CANDY HOSPITAL, MUMBAI PAN : ABJPP 3476 D IT(SS)A NO. 517/AHD/2011 2003-04 ACIT, CIRCLE-8, SURAT SHRI PRAKASH T. PATEL, 12-A, RAMESH NIWAS, OPP. BREACH CANDY HOSPITAL, MUMBAI PAN : ABJPP 3476 D ASSESSEE(S) BY : SHRI VARTIK CHOKSI, AR REVENUE BY : SHRI SANJAY AGRAWAL, CIT-DR / DATE OF HEARING : 02/03/2016 / DATE OF PRONOUNCEMENT: 11/03/2016 / O R D E R PER BENCH :- ITA NOS. 674 TO 677/AHD/2009 ARE THE APPEALS FILED BY FOUR DIFFERENT ASSESSEES AGAINST SEPARATE ORDERS OF THE COMMISSION ER OF INCOME TAX (APPEALS)-II, AHMEDABAD PASSED FOR ASSESSMENT YEAR 2003-04; WHEREAS ITA ITA NOS. 674 TO 677, 1062/AHD/2009 & IT(SS)A NO. 517/ AHD/2011 - SHRI TULSIBHAI K PATEL & OTHERS : AY 2003-2004 2 NO. 1063/AHD/2009 AND IT(SS)A NO. 517/AHD/2011 ARE THE APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONE R OF INCOME TAX (APPEALS)-II, AHMEDABAD FOR ASSESSMENT YEARS 2003-0 4 IN THE CASE OF ASSESSEE SHRI PRAKASH T. PATEL. SINCE ALL THESE AP PEALS INVOLVE IDENTICAL ISSUES, THESE WERE HEARD TOGETHER AND ARE BEING DIS POSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE REGARDING LEGALITY OF THE PROCEEDING S MAY BE DECIDED FIRST AS ADMITTEDLY THE ASSESSMENT FRAMED IS NOT ON THE BASI S OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IN ALL THESE APPEALS, THE ASSESSEE HAS RAISED THE GROUND AGAINST THE LEGALITY OF THE ASSESSMENT FRAMED U/S 143(3) R.W.S. 153A OF THE ACT. FOR THE PURPOS E OF NARRATING THE FACTS, ITA NO.674/AHD/2009 IS BEING TAKEN AS A LEAD CASE. IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- ITA NO.674/AHD/2009: AY 2003-04 : ASSESSEE - SHRI T ULSIBHAI K. PATEL 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) SHOULD HAVE UPHELD THE ASSESSEES CONTENTION THAT IT WAS NOT AT ALL A FIT CASE FOR INVOKING THE PROVISIONS OF SECTION 153A FOR ANY OF T HE YEARS INVOLVED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) SHOULD HAVE APPRECIATED THAT NO INCRIMINATING MATERIAL OR ANY U NDISCLOSED ASSET WAS FOUND AT ALL AND HENCE THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REOPENING THE ASSESSMENTS OF THESE YEARS BY INVOKIN G THE PROVISIONS OF SECTION 153A. 3. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE THE CIT(A) SHOULD HAVE REALIZED THAT SINCE NO INCRIMINAT ING MATERIAL WAS FOUND AT ALL AND NO UNDISCLOSED ASSET HAD SURFACED THE ASSESSING OFFICER SHOULD HAVE NOT FRAMED THE ASSESSMENT ORDERS U/S 15 3A FOR ANY OF THE YEARS. 4. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE THE CIT(A) SHOULD HAVE REALIZED THAT THE ASSESSING OFFICE R WAS NOT JUSTIFIED IN EMBARKING UPON THE PROCESSING AND SCRUTINY OF TH E ASSESSMENT IN A FASHION WHICH WAS PERMISSIBLE IN A REGULAR ASSESSME NT U/S 143(3) BUT IN THIS PARTICULAR CASE IT WAS NOT PERMISSIBLE U/S 153 A. ITA NOS. 674 TO 677, 1062/AHD/2009 & IT(SS)A NO. 517/ AHD/2011 - SHRI TULSIBHAI K PATEL & OTHERS : AY 2003-2004 3 5. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE, THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.5, 73,000/- IN RESPECT OF THREE GIFTS RECEIVED BY THE ASSESSEE. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN NOT ACCEPTING THE ASSESSEES PLEA THAT IT WAS NOT A T ALL A FIT CASE FOR LEVY OF INTEREST U/S 234A, 234B AND 234C OF THE I.T. ACT. 7. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, AMEND AND/ OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 3. BRIEFLY STATED FACTS ARE THAT SEARCH PROCEEDINGS U/S 132 WERE CARRIED OUT ON 21.10.2005 AND ACCORDINGLY PROVISIONS OF SEC TION 153A OF THE ACT WERE INVOKED AND THE ASSESSMENT WAS FRAMED U/S 143( 3) R.W.S. 153A OF THE ACT, THEREBY THE ASSESSING OFFICER MADE ADDITION OF RS.5,73,000/- ON ACCOUNT OF GIFT RECEIVED AND RS.53,000/- ON ACCOUNT OF LOW HOUSEHOLD EXPENDITURE. THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, PARTLY ALLOWED THE APPEAL. THE LEARNE D CIT(A) REJECTED THE GROUNDS RELATED TO THE LEGALITY OF THE PROCEEDINGS AND ALSO UPHELD THE ADDITION MADE IN RESPECT OF GIFTS. THE LEARNED CO UNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT HAS BEEN FRAMED U/S 1 53A R.W.S. 143(3) OF THE ACT AND NO ASSESSMENT PROCEEDINGS WERE PENDING ON T HE DATE OF SEARCH. HE SUBMITTED THAT THE ASSESSMENT OUGHT TO HAVE BEEN FR AMED IF ANY INCRIMINATING MATERIAL WERE FOUND DURING THE COURSE OF SEARCH. HE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT BROUGH T ANY MATERIAL ON RECORD SUGGESTING THAT THE ASSESSMENT WAS FRAMED ON THE BA SIS OF THE MATERIAL FOUND DURING THE COURSE OF SEARCH. LEARNED COUNSEL FOR THE ASSESSEE, IN SUPPORT OF HIS CONTENTION, PLACED RELIANCE ON THE D ECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF KUSUM GUPTA V S. DCIT IN ITA NO.4873/DEL/2009 AND ALSO IN THE CASE OF ACIT VS. P ACL INDIA LTD IN ITA NO.2637/DEL/2010. THE LEARNED COUNSEL FOR THE ASSE SSEE ALSO PLACED ITA NOS. 674 TO 677, 1062/AHD/2009 & IT(SS)A NO. 517/ AHD/2011 - SHRI TULSIBHAI K PATEL & OTHERS : AY 2003-2004 4 RELIANCE ON THE JUDGMENT OF HONBLE BOMBAY HIGH COU RT IN THE CASE CIT VS. CONTINENTAL WAREHOUSING CORPORATION, REPORTED IN 58 TAXMANN.COM 78 (BOMBAY) TO BUTTRESS THE CONTENTION THAT THE ASSESS MENT SO FRAMED IS BAD IN LAW. 4. ON THE CONTRARY, LEARNED CIT-DR OPPOSED THE SUBM ISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE; HOWEVER, HE FAIRL Y CONCEDED THAT THERE IS NO MATERIAL SUGGESTING THAT ANY INCRIMINATING MATER IAL WAS FOUND AND ANY UNDISCLOSED ASSETS WERE DISCOVERED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORDED. UNDISPUTEDLY, THERE IS NO MENTION IN THE ASSESSMENT ORDER ABOUT ANY SEIZED MATERIAL OR UNDISCLOSED ASSETS OR STATEM ENTS WERE RECORDED DURING THE COURSE OF SEARCH. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF KUSUM GUPTA VS. DCIT (SUPRA), IN PARAGRAPH NO.8 OF THE ORDER, HAS OBSERVED THAT IN VIEW OF THE DECISION OF BOMBAY BEN CH OF THE TRIBUNAL IN THE CASE OF ACIT VS. PRATIBHA INDUSTRIES LTD, WHERE SEARCH HAS BEEN CONDUCTED ISSUANCE OF NOTICE U/S 153A FOR FILING RE TURN IS VALID ACTION BUT IN SUCH ASSESSMENT NO FRESH ADDITION THAN THOSE MADE I N THE ASSESSMENT ATTAINS FINALITY, CAN BE MADE IN ABSENCE OF MATERIA L FOUND AND SEIZED IN SEARCH. IT IS ALSO OBSERVED THAT THE DECISION OF T HE CO-ORDINATE BENCH WAS APPROVED BY THE HONBLE HIGH COURT, AFTER TAKEN INT O CONSIDERATION VARIOUS JUDICIAL PRONOUNCEMENTS. THE CO-ORDINATE BENCH IN PARAGRAPH 15 OF ITS ORDER DECIDED THE ISSUE AS UNDER:- 15. SINCE THERE IS NO CHANGE ON THIS MATERIAL FACT THAT DURING ALL THESE ASSESSMENT YEARS NO INCRIMINATING MATERIAL WAS RECO VERED OR STATEMENT WAS RECORDED DURING THE COURSE OF SEARCH SUGGESTING NON- GENUINENESS OF THE CLAIMED GIFTS OR EXPENSES ETC. A ND NO SUCH ADDITION/DISALLOWANCE WAS MADE IN THE ORIGINAL ASSE SSMENT WHICH REMAINED UNABATED, WE FOLLOWING THE DECISION ON THE ISSUE HEREINABOVE IN THE APPEAL PREFERRED BY THE REVENUE FOR A. A 2002-03, ITA NOS. 674 TO 677, 1062/AHD/2009 & IT(SS)A NO. 517/ AHD/2011 - SHRI TULSIBHAI K PATEL & OTHERS : AY 2003-2004 5 HOLD THAT SUCH ADDITION/DISALLOWANCE CANNOT BE MADE IN THE ASSESSMENT FRAMED U/S 153A OF THE ACT IN THESE A. Y S. IN APPEALS. IN RESULT THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESS EE AND AGAINST THE REVENUE. IN VIEW OF THIS FINDING THE REMAINING GROU NDS QUESTIONING THE MERITS OF ADDITIONS/DISALLOWANCES DO NOT NEED A DJUDICATION AS THEY HAVE BECOME INFRUCTUOUS AND ACADEMIC ONLY . CO NSEQUENTLY APPEALS PREFERRED BY THE ASSESSEE FOR THE A.YS. 200 3-04, 2004-05, 2005- 06 AND 2006-07 ARE ALLOWED AND APPEALS PREFERRED BY THE REVENUE IN THE A.YS. 2002-03, 2005-06, 2006-07 ARE DISMISSED. 6. SIMILAR VIEW HAS BEEN ADOPTED BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SAUMYA CONSTRUCTION PVT LTD VS. ACIT IN IT(SS)A NO.3/AHD/2014. THE REVENUE HAS NOT POINTED OUT THA T ANY MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. THEREFORE, TAKIN G A CONSISTENT VIEW, WE HOLD THAT THE ASSESSMENT FRAMED U/S 143(3) R.WS. 15 3A OF THE INCOME-TAX ACT, 1961 FOR THE ASSESSMENT YEAR UNDER CONSIDERATI ON IS NOT VALID AND THE SAME IS ACCORDINGLY HELD AS NULL AND VOID. THUS, TH E APPEAL FILED BY THE ASSESSEE IS ALLOWED. ITA NO. 675/AHD/2009: AY : 2003-04 : ASSESSEE- SHR I DAYALBHAI K. PATEL ITA NO. 676/AHD/2009 : AY : 2003-04: ASSESSEE -SHR I LALJIBHAI T. PATEL, ITA NO. 677/AHD/2009 : AY : 2003-04: ASSESSEE -SHR I SHRI PRAKASH T. PATEL, 7. IN ALL THE ABOVE APPEALS BY THE ASSESSEE, THE GR OUNDS RAISED INVOLVE AROUND THE LEGALITY OF THE ASSESSMENT FRAMED U/S 14 3(3) R.W.S. 153A OF THE ACT. BOTH THE PARTIES FAIRLY AGREED THAT THE FACT S IN THE CASE OF ALL THE ABOVE ASSESSEES FOR AY 2003-04 ARE IDENTICAL TO THE FACT S IN THE CASE OF SHRI TULSIBHAI K. PATEL IN ITA NO.674/AHD/2009. THEREF ORE, FOR THE DETAILED DISCUSSION IN THE CASE OF SHRI TULSIBHAI K. PATEL A BOVE, WE QUASH THE ASSESSMENT ORDERS COMPLETED U/S 143(3) R.WS. 153A O F THE INCOME-TAX ACT AS DISCUSSED ABOVE. 8. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEE ARE ALLOWED. ITA NOS. 674 TO 677, 1062/AHD/2009 & IT(SS)A NO. 517/ AHD/2011 - SHRI TULSIBHAI K PATEL & OTHERS : AY 2003-2004 6 ITA NO. 1062/AHD/2009: AY : 2003-04 : BY REVENUE IT(SS)A NO. 517/AHD/2011: AY: 2003-04: BY REVENUE NAME OF ASSESSEE -SHRI SHRI P RAKASH T. PATEL 9. SINCE WE HAVE QUASHED THE ASSESSMENT ORDER, THE ADDITIONS MADE BY THE ASSESSING OFFICER IN THE SAID ASSESSMENT ORDER AND THE SUBSEQUENT PENALTY IMPOSED, WHICH IS CHALLENGED ON MERIT IN TH E REVENUES APPEALS ABOVE, DO NOT SURVIVE FOR ADJUDICATION, BECAUSE THE ASSESSMENT ITSELF HAS BEEN QUASHED. ACCORDINGLY, REVENUES APPEALS ARE R EJECTED. 10. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE ALLOWED AND THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 11 TH MARCH, 2016 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (KUL BHARAT) JUDICIAL MEMBER AHMEDABAD; DATED 11/03/2016 *BIJU T. ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A) 5. $%&'' , , / DR, ITAT, AHMEDABAD 6. &,-. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD