Shri Radhey Shyam Bansal, Patna V. ACIT, Patna

ITSSA 59/PAT/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3485 (ITAT-PATNA)
• Duration Of Justice: 4 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 09-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARCHANA SINHA SR S C
• Keywords: Gift; Search and seizure; Opportunity of being heard; Corroborative evidences
• Section: 153A; 234B; 147; 131; 68; 56; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH, PATNA BEFORE SHRI SAND E EP GOSAIN (JM) & SHRI M BALAGNESH ( AM) I T (SS) NO S . 53 TO55 / PAT /20 1 3 ASSESSMENT YEAR S : 200 3 - 04 TO 2005 - 06 SHRI SANDEEP BANSAL, VS. ACIT, PATNA , CENTRAL CIRCLE - 2 , PATNA. ( APP ELLANT) (RESPONDENT) AND IT (SS) NO S . 56 TO 62 /PAT/201 3 ASSESSMENT YEARS: 2001 - 02 TO 2005 - 06 SHRI RADHE SHYAM BANSAL, VS. ACIT, PATNA, CENTRAL CIRCLE - 2,PATNA. (APPELLANT) (RESPONDENT) AND IT (SS) NO S . 63 TO 67 /PAT/201 3 ASSESSMENT Y EARS: 2001 - 02 TO 2005 - 06 SHRI MAYA DEVI BANSAL, VS. ACIT, PATNA, CENTRAL CIRCLE - 2,PATNA. (APPELLANT) (RESPONDENT) DEPARTMENT BY : S MT. ARCHANA SINHA, SR. S. C . ASSESSEE BY : SHRI D. V. PATHY WITH D. V. GUPTA A DV . DATE OF HEARING: - 11 /1 0 /201 7 DATE OF PRONOUNCEMENT: - 13 / 1 0 /201 7 ORDER PER BENCH : I T (SS ) NO S . - 53 TO 67 / PAT /20 1 3 2 ALL T HESE APPEALS BY THE ASSESSEE ARE FILED AGAINST THE ORDER OF THE CIT (APPEALS) DATED 26.03.2013 FOR THE ASSESSMENT YEARS , 2001 - 0 2 TO 2005 - 06 AND SINCE COMMON ISSUES INVOLVED THEREIN, THE SAME ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE EFFECTIVE ISSUE RAISED IN GROUNDS OF APPEAL READ AS UNDER: 1. FOR THAT THE GROUNDS OF APPEAL HERETO ARE WITHOUT PREJUDICE TO EACH OTHER. 2. FOR THAT THE LD. CIT(A) HAS ERRED IN LAW IN CONFIRMING THE PROCEEDING INITIATD U/S 153A IN THE FACTS AND CIRCUMSTANCES OF THIS CASE. 3. FOR THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.22,30 0/ - ON ACCOUNT OF GIFTS RECEIVED FROM SHRI SATYOGATI RS. 21,000/ - , SHRI U. N. JHA, RS.1,3000/ - DULY EVIDENCED BY DECLARATION OF GIFTS FOUND IN COURSE OF SEARCH AND SEIZURE OPERATION AND AS SUCH THE PRESUMPTION U/S 132(4)A IS IN FAVOUR OF THE ASSESSE AND TH E ADDITION THEREFORE IS FIT TO BE SET ASIDE. 4. FOR TH AT THE LD . CIT(A) HAS ALSO FAILED TO APPRECIATE THAT THE DONOR ARE ASSESSED TO TAX AND ALSO THE GIFTS WERE MADE THROUGH BANKING CHANNELS AND ALL RELEVANT PAPERS AND DOCUMENTS INCLUDING ACKNOWLEDGEMENT O F INCOME - TAX RETURNS FILED AND STATEMENT OF BANK ACCOUNT WERE DULY SUBMITTED ASN AS SUCH CONFIRMATION OF ADDITION ON THIS ACCOUNT IS UNWARRANTED IN THE FACTS AND CIRCUMSTANCES OF THIS CASE. 5. FOR THAT THE LD. CIT(A) HAS ALSO FAILED TO APPRECIATE THAT IN SEARCH AND SEIZURE OPERATION NOTHING INCRIMINATION WAS FOUND WHICH COULD SUGGESTS OR PRESUME THAT THE AFORESAID GIFTS ARE UNEXPLAINED. 6. FOR THAT THE LD. CIT(A) HAS ERRED IN LAW IN CONFIRMING THE LEVY OF INTEREST U/S 234A AND 234B IN THE FACTS AND CIRCUM STANCES OF THIS CASE. 7. FOR THAT THE APPELLANT CRAVES LEAVE TO URGE, ADD OR ALTER ANY OTHER GROUND OR GROUNDS AT THE TIME OF HEARING. 3 . ITA NO. 57/PAT/ 2013 FOR ASSESSMENT YEAR 2001 - 02 IS TAKEN AS LEAD CASE . 4 . BRIEF FACTS OF THE CASE ARE THAT THE ASSE SSE, SHRI RADHEY SHYAM BANSAL BELONGS TO RADHEY SHYAM BANSAL GROUP OF CASES OF MEDI - SHARE GROUP. SHRI I T (SS ) NO S . - 53 TO 67 / PAT /20 1 3 3 RADHEY SHYAM BANSAL IS DOING WHOLESALE BUSINESS IN MEDICINE. HE IS ALSO A C & F AGENT OF M/S INTAS PHARMACEUTICALS LTD. AHMADABAD FOR BIHAR, CONSIGNEE OF M/S MANKIN PHARMA (P) LTD. MEERUT AND OTHER PHARMACEUTICAL COMPANIES. A SEARCH AND SEIZURE OPERATION U/S 132(1) AND SURVEY U/S133A OF THE INCOME - TAX ACT, 1961 WERE CONDUCTED IN THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSE. DURING THE COURSE OF SEA RCH, APART FROM THAT GOLD JEWELRY , COPIES OF GIFT DEED/ AFFIDAVIT AND PERTAINING TO GIFTS AND PAPERS RELATING TO INVESTMENT IN MOVABLE AND IMMOVABLE PROPERTIES WERE FOUND AND SEIZED BY THE DEPARTMENT. A NOTICE U/S153A ALSO ISSUED TO THE ASSESSE REQUIRING H IM TO FURNISH THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION AND IN COMPLIANCE TO THE SAID NOTICE, THE ASSESSE FURNISHED THE RETURN OF INCOME ON 29.12.2006 DECLARING TOTAL INCOME OF RS.2,49,230/ - . THE AO BESIDES MAKING OTHER ADDITIO NS HAD ALSO PASSE D ORDER OF ASSESSMENT THEREBY MAKING ADDITIONS ON ACCOUNT OF UNEXPLAINED GIFTS BY MENTIONING THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSE HAS CREDITED RS.2,02,000/ - IN HIS ACCOUNT ON ACCOUNT OF GIFT RECEIVED AND, THEREFORE, THE AO HELD THAT ASSESSE COULD NOT PROVE THE IDENTITY AND CREDITWORTHINESS AND THUS, FAIL TO PRODUCE SUPPORTING EVIDENCE REGARDING GENUINENESS OF TRANSACTION. KEEPING IN VIEW THE AFOREMENTIONED CIRCUMSTANCES, THE ADDITION U/S 68 OF THE INCOME TAX ACT WAS MADE . I T (SS ) NO S . - 53 TO 67 / PAT /20 1 3 4 5 . AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) AND THE LD. CIT(A) A LSO UPHELD THE ORDER OF THE AO . 6 . AGGRIEVED BY THE ORDER OF LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US ON THE GROUND MENTIONED HEREINABOVE. 7 . ALTHOUGH, ASSESSE HAS RAISED MANY GROUNDS OF APPEAL BEFORE US. HOWEVER, THE ONLY EFFECTIVE GROUND NO.5 IS EXPLAINING THE ASSESSMENT COMPLETED AND PASSED U/S 153A OF THE ACT IS BAD IN LAW AND, T HEREFORE, TAKING INTO CONSIDERATION THE SAID GROUND AS PRELIMINARY ISSUE, SINCE T HIS ISSUE IS LEGAL ONE AND GOES TO THE ROOT O F THE CASE SO WE HAVE DECIDED TO ADJUDICATE THIS GROUND FIRSTLY. 8 . WE HAVE HEARD THE COUNSEL FOR BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS OF THE AUTHORITIES BELOW. 9 . TH E LD. AR SUBMITTED BEFORE US THAT THE ADDITIONS MADE BY THE AO U/S 153A. PROCEEDINGS BEING NOT MADE ON THE BASIS OF INCRIMINATING MATERIAL WHICH S AID TO HAVE BEEN FOUND BY THE RESPONDENT REVENUE DURING SEARCH PROCEEDING. THE LD. AR FURTHER SUBMITTED THAT DURING THE COURSE OF SEARCH NO INCRIMINATING MATERIAL WAS FOUND ( ASSESSMENT U/S 153 IS REPLY OF INCRIMINATING MATERIAL ) . IT WAS FURTHER SUBMITTED THAT EITHER LD. DR APPEARING ON BEHALF OF THE REVENUE AND AFTER HAVING HEARD THE COUNSELS AT LENGTH AND AFTER PERUSAL OF THE MATERIAL PLACED ON RECORD, WE FIND THAT THE I T (SS ) NO S . - 53 TO 67 / PAT /20 1 3 5 PRESENT GROUND RAISED BY THE ASSESSE IS REGARDING LEGAL VALIDITY OF THE ADDITIONS MADE BY THE AO U/S 153 A PROCEEDINGS OF THE ACT UNDER THE PROVISIONS OF SECTION 153A IN ALL CASES, WHERE SEARCH I S CONDUCTED U/S132 OF THE ACT, AO IS EMPOWERED TO ASSESS OR REASSESS TOTAL I N COME OF SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH WAS CONDUCTED. THE SECTION ALSO PROVIDES THAT ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN PERIOD OF SIX ASSESSMENT YEARS IF PENDING ON THE DATE OF INITIATION OF SE ARCH SHALL ABATE. THERE HAVE BEEN DIVERGENT V IEWS REGARDING SCOPE OF APPLICATION OF SECTION 153A IN CASES WHERE NO INCRIMINATING MATERIAL WAS FOUND INDICATING UNDISCLO SED INCOME. THE COORDINATE BENCHES OF TRIBUNAL HAD TAKEN THE VIEW THAT IN CASE NO INCRIMINATING MATERIAL WAS FOUND , AO HAD NO JURISDICTION TO MAKE ASSESSMENT OR REASSESSMENT U/S 153A WHILE SOME OTHER BENCHES HELD THAT JURISDICTION U/S 153A WAS AUTOMATIC TO REASSESS SIX IMMEDIATE PRECEDING ASSESSMENT YEARS IRRESPECTIVE OF THE FACT WHETHER A N Y INCRIMINATING MATERIAL WAS FOUND OR NOT. ANOTHER ASPECT ON WHICH THERE HAD BEEN DIVERGENT VIEWS WAS WHETHER EVEN IF AO HAD JURISDICTION U/S153A, ADDITION CAN BE MADE IN ASSESSMENT/ REASSESSMENT ONLY WHEN SOME INCRIMINATING MATERIAL HAS BEEN FOUND. ALL THESE ASPECTS HAD BEEN REFERRED TO THE SPECIAL BENCH OF THE TRIBUNAL IN CASE OF ALCARGO GLOBAL LOGISTICS LTD. V. DY. CIT REPORTED IN[ I T (SS ) NO S . - 53 TO 67 / PAT /20 1 3 6 2012] 137 ITD 287/23 TAXMANN.COM 103 ( MUM) AND ORDER OF SPECIAL BENCH DATED 6.7.2012, WHICH HAS BEEN HELD IN FAVOUR OF ASSESEE. 10. HOWEVER, AS PER THE FACTS OF THE PRESENT CASE, DURING THE COURSE OF SEARCH AT THE PREMISES THE ASSESSEE, THE GIFT DEEDS AND AFFIDAVITS WERE FOUND FOR THE FIRST TIME BY THE INVESTIGATION WING AND THE SAME WERE SEIZED. THE AO ISSUED NOTICES WHILE COMPLYING WITH THE PROVISIONS OF SECTION 153A OF THE INCOME TAX ACT. AS PER THE MANDATE OF SECTION 153A, THE AO WAS COMPETENT TO ISSUE NOTICES THEREON IRRESPECTIVE OF ANY DOCUMENTS FOUN D IN THE COURSE OF SEARCH OR NO . FOR THE SAKE OF CONVENIENCE, THE RELEVANT PROVISION OF SECTION 153A IS REPRODUCED BELOW: - 153A. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AN D SECTION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31 ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL - (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS (AND FOR THE RELEVANT ASSESSMENT YEAR OF YEARS) REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE RETURN REQUIRED TO BE FURNISHED UNDER SEC TION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE (AND FOR THE RELEVANT ASSESSMENT YEAR OR YEARS) I T (SS ) NO S . - 53 TO 67 / PAT /20 1 3 7 11. FROM THE PERUSAL OF THE POSITION OF SECTION 153A, WE FIND THAT NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, 147 ETC, THE AO IS COMPETENT TO ISSUE NOTICE TO THE PERSON SEARCHED REQUIRING HIM TO FURNISH THE RETURN OF INCOME FOR EACH ASS ESSME NT YEARS FALLIN G WITHIN 6 ASS ESSMENT YEARS. AS PER THE FACTS OF THE PRESENT CASE, THE AO WHILE COMPLYING WITH THE PROVISIONS OF SECTION 153A , HAD ISSUED NOTICES UPON THE ASSESSEE AND IN TURN THEREOF, ASSESSEE HAD FILED A REPLY STATING THAT THE RETURN ALREADY FILED MAY BE TREATED AS A RETURN IN RESPONSE TO NOTICE U/S 153A. ALTHOUGH AT NO STAGE, THE ASSESSEE HAD RAISED ANY OBJECTION BEFORE THE AO OR THE CIT(A) THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, BUT THE SAME WAS RAISED ONLY BEFORE US. WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAD FILED THE REGULAR RETURNS PRIOR TO THE SEARCH WHICH WERE PROCESSED U/S 143(1) AND THERE WERE NO SCRUTINY ASSESSMENTS THAT WERE MADE BY THE AO. THE ENTRY OF GIFTS ALTHOUGH FIND MENTION IN THE RETURN O F INCOME BY THE ASSESSEE, BUT THE REVENUE HAD NO OCCASION TO VERIFY THE SAME. PURSUANT TO THE SEARCH, THE GIFT DEEDS AND AFFIDAVITS WERE FOUND AND SEIZED AND THEREBY BECAME THE SUBJECT MATTER OF VERIFICATION BY THE AO FOR THE FIRST TIME. WE FIND THAT TH E PROVISIONS OF SECTION 153A CATEGORIZED THAT THE AO IS COMPETENT TO ASSESS OR REASSESS THE TOTAL INCOME OF 6 ASS ESSME NT YEARS IMMEDIATELY PRECEDING THE ASS ESSME NT YEARS RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH WAS CONDUCTED. AS PER THE FACTS OF T HE PRESENT CASE, AFTER SEIZING THE DOCUMENTS AND WHILE COMPLYING WITH THE PROVISIONS OF SECTION 153A (B) , THE AO HAD PROCEEDED TO ASSESS / REASSESS THE TOTAL INCOME OF 6 ASS ESSMENT YEARS IMMEDIATELY PRECEDING THE ASS ESSME NT YEAR RELEVANT TO THE PREVIOUS Y EAR OF THE ASSESSEE. AND WHILE DOING SO, THE AO HAD NOTICED THAT THOUGH THE ASSESSEE WAS IN RECEIPT OF GIFTS FROM VARIOUS PARTIES, BUT HAD FAILED TO SUBSTANTIATE ITS VERACITY BY PROVING THE GENUINENESS OF THE GIFT AND I T (SS ) NO S . - 53 TO 67 / PAT /20 1 3 8 CREDITWORTHINESS OF THE DONORS. AT TH E SAME TIME, THE REVENUE HAS NOT ADOPTED THE DUE PROCESS OF LAW BY ISSUING SUMMONS U/S 131 FOR CARRYING OUT DETAILED INVESTIGATION FROM THE DONORS , MORE PARTICULARLY WHEN THE AO WAS ALREADY HAVING THE INFORMATION REGARDING THE PAN OF THE DONORS, BANK ACCO UNTS OF THE DONORS AND OTHER RELATED DETAILS. IT IS NOT IN DISPUTE THAT THE EARLIER ASS ESSMEN TS WERE COMPLETED ONLY U/S 143(1) WHEREIN THE REVENUE COULD NOT GET ANY OPPORTUNITY TO VERIFY THE VERACITY OF THESE GIFTS WHICH WERE OTHERWISE DISCLOSED IN THE R EGULAR RETURNS. THE PURPOSE BEHIND THE UNDERLYING INTENTION AND SCHEME OF THE ACT AND PROVISIONS THERETO IS ONLY TO DETERMINE THE TRUE AND CORRECT INCOME OF AN ASSESSEE. HAVING THIS IN MIND, IF THE AO RESORTS TO VERIFY THE VERACITY OF THE GIFTS IN SECTI ON 153A PROCEEDINGS, THEN IN THAT EVENT, NO PREJUDICE WOULD BE CAUSED TO THE RIGHTS OF THE ASSESSEE , AS THE PROVISIONS OF SECTION 153A TALKS ABOUT ASSESSMENT / REASSESSMENT OF TOTAL INCOME ONLY. HENCE CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES O F THESE CASES, WE ARE OF THE CONSIDERED VIEW THAT THE ACTION OF THE AO IN RESORTING TO VERIFICATION OF VERACITY OF GIFTS IN SECTION 153A PROCEEDINGS CANNOT BE QUESTIONED AND IS HEREBY UPHELD. 12. NOW COMING TO THE MERITS OF THE ADDITION MADE TOWARDS GIFT S RECEIVED BY THE ASSESSEE, IT IS TRUE THAT THE AO HAD NOT RESORTED TO VERIFICATION OF THE DONORS BY ISSUING SUMMONS U/S 131 OF THE ACT. IT CANNOT BE BRUSHED ASIDE THAT THE ASSESSEE ALSO AT THE SAME TIME HAD NOT DISCHARGED HIS ONUS COMPLETELY BY PRODUCING THE DONORS BEFORE THE AO OR ANY OTHER DOCUMENTARY EVIDENCE TO PROVE THE CREDITWORTHINESS OF THE DONORS AND PROVING THE GENUINITY OF THE GIFTS. HENCE WE DEEM IT FIT AND APPROPRIATE, IN THE INTEREST OF JUSTICE AND FAIR - PLAY, AND WHILE SETTING ASIDE THE ORD ER OF THE LD. CIT ( A ) , WE REMAND THE ISSUE OF VERIFICATION OF GIFTS TO THE FILE OF THE AO I T (SS ) NO S . - 53 TO 67 / PAT /20 1 3 9 , TO DECIDE THE SAME AFRESH, IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT REASONABLE OPPORTUNITY OF BEING HEARD BE PROVIDED TO THE ASSESSEE. THE ASSESSEE IS ALSO D IRECTED TO CO - OPERATE WITH THE AO FOR EXPEDITIOUS DISPOSAL OF THESE SET ASIDE ASSESSMENT PROCEEDINGS. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 14. SINCE WE HAVE ALREADY DECIDED THE ISSUE ON QUESTION OF LA W AND ALSO ON MERITS IN ITA NO. 57/PAT/2013 HEREINABOVE AND REMANDED THE MATTER BACK TO THE FILE OF THE AO , THE ISSUES INVOLVED IN THE REMAINING APPEALS ARE ALSO PARIMATERIA TO THOSE CONSIDERED BY US IN THE ABOVE APPEAL AND THEREFORE, OUR DECISION THEREON WOULD APPLY MUTATIS MUTANDIS TO OTHER APPEALS ALSO. 15. IN THE NET RESULT, ALL THE APPEALS FILED BY THE RESPECTIVE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. 1 4 . I N THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . O RDER IS PRONOUNCED IN THE OPEN COURT ON 13 TH OCTOBER , 201 7 . SD/ - SD/ - ( M BALAGANESH ) ( SANDEEP GOSAIN ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE OF ORDER: 13 TH OCTOBER , 201 7 . S . S INH A (PS) COPY OF THE ORDER FORWARDED TO : I T (SS ) NO S . - 53 TO 67 / PAT /20 1 3 10 1. THE APPELLANT . 2. THE R ESPONDENT.: 3. THE CIT(A) - PATNA 4. CIT , PATNA 5. INCOME TAX APPELLATE TRIBUNAL,PATNA 6. GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY