M/s. Shyam Corporation, Ahmedabad V. The ACIT.,(OSD),Circle-9, Ahmedabad

ITSSA 673/AHD/2011

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3693 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-06-2017
• Assessment Year: misc
• Appeal Filed On: 20-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VASUNDRA UPMANYU
• Keywords: Unexplained investment; Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH , ACCOUNTANT MEMBER IT(SS)A NO. 673/AHD/2011 (BLOCK PERIOD : 1.4.89 TO 21.1.97) M/S. SHYAM CORPORATIONS 57, MAYUR PARK SOCIETY, BAPUNAGAR, AHMEDABAD 380024 APPELLANT VS. THE ASSTT. COMM. OF INCOME TAX, (OSD), CIRCLE-9, AHMEDABAD RESPONDENT PAN: AAHFS1691J & IT(SS)A NOS. 259 & 252/AHD/2012 (BLOCK PERIOD : 1.4.89 TO 21.1.97) M/S. SHYAM DEVELOPERS 1/1, SATTADHAR NAGAR, NATIONAL HIGHWAY NO.8, BAPUNAGAR CHAR RASTA, AHMEDABAD APPE LLANT VS. THE ASSTT. COMM. OF INCOME TAX, (OSD), CIRCLE-9, AHMEDABAD RESPONDENT/CROSS APPE LLANT PAN: AAEFS4739D & IT(SS)A NOS. 673/AHD/11 & 4 ORS. (M/S. SHYAM CORPORATION & 2 ORS.) - 2 - IT(SS)A NOS. 433 & 435/AHD/2012 (BLOCK PERIOD : 1.4.89 TO 21.1.97) SHRI ARVINDBHAI P. PATEL 57, MAYUR PARK SOCIETY, BAPUNAGAR, AHMEDABAD APPELLANT VS. THE ASSTT. COMM. OF INCOME TAX, (OSD), CIRCLE-9, AHMEDABAD RESPONDENT/CROSS APPE LLANT PAN: AAEFS4739D /BY ASSESSEE : SHRI ASEEM THAKKAR, A.R. /BY REVENUE : SMT. VASUNDRA UPMANYU, CIT.D.R. /DATE OF HEARING : 27.03.2018 /DATE OF PRONOUNCEMENT : 18.04.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THE INSTANT BATCH OF FIVE CASES FOR BLOCK PERIOD 1- 4-89 TO 21-1-97 PERTAINS TO THREE DIFFERENT ASSESSEES. THE CIT(A)- XV, AHMEDABAD IS LOWER APPELLATE AUTHORITY IN ALL THESE CASES. RELEVANT P ROCEEDINGS IN THESE FIVE APPEALS ARE U/S.158BFA(2) OF THE INCOME TAX ACT, 19 61; IN SHORT THE ACT. FIRST ASSESSEE M/S. SHYAM CORPORATION HAS FILED APP EAL IT(SS)A NO.673/AHD/2011 AGAINST THE CIT(A)S ORDER DATED 17 .10.2011 IN CASE NO. CIT(A)-XV/ACIT(OSD)/CIR-9/42/10-11, CONFIRMING PENA LTY OF RS.1,96,72,484/- IMPOSED BY THE ASSESSING OFFICER. THE SECOND ASSESSEE M/S. SHYAM DEVELOPERS AND REVENUE HAVE FILED THEIR RESPECTIVE CROSS APPEALS IT(SS)A NOS. 259 & 252/AHD/2012 AGAINST THE CIT(A)S ORDER DATED IT(SS)A NOS. 673/AHD/11 & 4 ORS. (M/S. SHYAM CORPORATION & 2 ORS.) - 3 - 24.02.2012 IN CASE NO. CIT(A)-XV/ACIT(OSD)/CIR-9/45 /10-11, PARTLY AFFIRMING THE PENALTY IN QUESTION OF RS.39,29,509/- . THIRD ASSESSEE SHRI ARVINDBHAI P. PATEL AND REVENUE HAVE PREFERRED IT(S S)A NOS. 433 & 435/AHD/2012 AGAINST THE CIT(A)S ORDER DATED 21.06 .2012, PARTLY AFFIRMING PENALTY IN QUESTION OF RS.84,28,608/-. 2. WE HAVE HEARD BOTH THE LEARNED REPRESENTATIVES. CASE FILES PERUSED. WE PROPOSE TO TAKE UP ALL THESE APPEALS TOGETHER SI NCE ARISING FROM THE SEARCH IN QUESTION DATED 21.01.1997 IN M/S. SHYAM GROUP OF CASES (INCLUDING INDIVIDUALS, KEY PERSONS, COMPANIES, FIRMS AND PART NERS ETC.). THE SAID SEARCH CULMINATED IN THE QUANTUM BLOCK ASSESSMENTS U/S.158BC/158BD OF THE ACT REACHING UP TO THIS TRIBUNAL AND HONBLE JU RISDICTIONAL HIGH COURT. 3. LEARNED COUNSEL REPRESENTING ASSESSEE FILES BEFO RE US A DETAILED COMPILATION CHART IN ALL THE INSTANT FIVE CASES. I T EMERGES THEREFROM THAT THESE FIVE APPEALS RAISE THREE SUBSTANTIVE ISSUES. THE F IRST ONE IS THAT OF PENALTY IN CASE OF QUANTUM ADDITIONS WHICH ALREADY STANDS DELE TED. WE NOTICE QUA THIS FIRST ASPECT THAT M/S. SHYAM CORPORATIONS APPEAL IT (SS)A NO. 673/AHD/2011 CONTAINS TWO OF SUCH ISSUES UNDER THE HEAD NET SUR PLUS OF RS.35,31,530/- AND RS. 62,49,885/- TOTALING TO RS.88,99,750/- IN A SSESSMENT YEARS 1995-96 & 1996-97 AS PER SPECIAL AUDIT REPORT U/S.142(2A) OF THE ACT AND DISALLOWANCE OF DEDUCTION OF EXPENSES/INVESTMENTS AGAINST THE CO RRESPONDING UNDISCLOSED INCOME. THESE TWO ADDITIONS ARE STATED TO HAVE BEE N DELETED IN QUANTUM PROCEEDINGS. SECOND ASSESSEE M/S. SHYAM DEVELOPER S CROSS APPEALS (SUPRA) ALSO COMPRISED OF SUCH QUANTUM ADDITIONS DELETED. T HERE IS SIMILAR NET SURPLUS ADDITION OF RS.1.51LACS AND RS.49,06,108/- IN ASSESSMENT YEARS 1996- 97 AND 1-4-96 TO 21-1-97 IN ASSESSEES APPEAL IT(SS )A NO.259/AHD/2012. REVENUES CROSS APPEAL PERTAINS TO EIGHT OF SUCH QU ANTUM ADDITIONS ON UNDISCLOSED INCOME ON ACCOUNT OF NET SURPLUS, UNEXP LAINED CASH CREDITS, IT(SS)A NOS. 673/AHD/11 & 4 ORS. (M/S. SHYAM CORPORATION & 2 ORS.) - 4 - UNEXPLAINED INVESTMENT, NEGATIVE CASH BALANCE, MISC ELLANEOUS EXPENSES AND UNDISCLOSED DALALI RECEIPTS OF RS.7.5LACS, RS. 5,63 ,037/-, RS.2,48,000/-, RS.10,03,250/-, RS.88,16,303/-, RS.1,15,961/-, RS.2 ,19,269/- AND RS.1LAC (HEADWISE) AS ALREADY DELETED IN CORRESPONDING QUAN TUM PROCEEDINGS. THIRD ASSESSEE MR. ARVINDBHAI P. PATELS CROSS APPEALS IT (SS)A NOS. 433 & 435/AHD/2012 CONTAIN SUCH ISSUES OF UNEXPLAINED CAP ITAL CONTRIBUTION IN FIRMS OF RS.65,07,846/- AND UNEXPLAINED INVESTMENT/ EXPENDITURE OF RS.23LACS; RESPECTIVELY ALONGWITH REVENUES CROSS A PPEAL IT(SS)A NO. 435/AHD/2012 COMPRISING OF TWO IDENTICAL ISSUES OF UNEXPLAINED CAPITAL CONTRIBUTION IN FIRMS AND UNEXPLAINED INVESTMENT IN NARODA LAND OF RS.11,02,078/-. THERE IS NO DISPUTE THAT THESE ASS ESSEES HAVE ALREADY SUCCEEDED IN CORRESPONDING QUANTUM PROCEEDINGS WHER EIN THE ADDITIONS IN QUESTION STAND DELETED. WE THUS ARE OF THE VIEW TH AT THE IMPUGNED PENALTIES PERTAINING TO THESE QUANTUM ISSUES HAVE NO LEGS TO STAND. WE THEREFORE UPHOLD THE CIT(A)S FINDINGS DELETING THE IMPUGNED PENALTIES FOR THIS PRECISE REASON; WHEREVER NECESSARY. WE FURTHER ACCEPT ASSE SSEES CONTENTIONS CHALLENGING CORRECTNESS OF THE IMPUGNED PENALTIES S INCE QUANTUM ADDITIONS TO THE ABOVE EFFECT STAND DELETED. 4. THE SECOND ARGUMENT BETWEEN THE PARTIES IS QUA V ARIOUS HEADS WHEREIN THESE ASSESSEES HAD PREFERRED THEIR RESPECTIVE SETT LEMENT PETITIONS BEFORE THE INCOME TAX SETTLEMENT COMMISSION. THE REVENUE VEHE MENTLY ARGUES DURING THE COURSE OF HEARING THAT THE INCOME TAX SE TTLEMENT COMMISSION HAD ABATED THESE ASSESSEES SETTLEMENT PETITIONS ON ACC OUNT OF NON PAYMENT OF TAXES. WE FIND NO MERIT IN THE INSTANT ARGUMENT SU PPORTING THE CIT(A)S ACTION IN ALL THESE CASES. IT RATHER EMERGES THAT THESE ASSESSEES HAD PAID THEIR RESPECTIVE TAX AND INTEREST PAYMENTS U/S.158BFA(2) (PROVISO) QUA ADDITIONAL INCOME OFFERED TO TAX IN THE CORRESPONDING SETTLEME NT PETITION. THE INCOME TAX SETTLEMENT COMMISSION ADMITTEDLY ABATED ALL THE SAID PETITIONS ON IT(SS)A NOS. 673/AHD/11 & 4 ORS. (M/S. SHYAM CORPORATION & 2 ORS.) - 5 - 14.05.1999 FOR THE SOLE REASON THAT INTEREST ON DEL AYED PAYMENT OF TAXES AS PER SECTION 245D(2D) HAD NOT BEEN PAID. LEARNED DEP ARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THAT THESE ASSESSEE S HAD ALREADY PAID THE TAX AND INTEREST AS PER SECTION 158BFA(2) PROVISO. WE ACCORDINGLY SEE NO REASON TO SUSTAIN THE IMPUGNED PENALTIES. OUR INST ANT DISCUSSION WOULD COVER FIRST ASSESSEES M/S. SHYAM CORPORATIONS APPEAL IT (SS)A NO.673/AHD/2011 RAISING CORRESPONDING ISSUES OF UNACCOUNTED WITHDRA WAL OF RS.1,23,200/-, RS.3,70,000/-, RS.3,21,775/- IN ASSESSMENT YEARS 19 95-96 TO 1996-97 AND FROM 1-4-96 TO 21-1-97 ALONGWITH UNEXPLAINED INVEST MENT IN LANDS OF RS.11,34,092/-; RESPECTIVELY. M/S. SHYAM DEVELOPER S APPEAL IT(SS)A NO. 259/AHD/2012 ALSO CONTAIN THE SIMILAR ISSUES OF UNA CCOUNTED WITHDRAWALS OF RS.5000/- AND RS.99,250/- IN ASSESSMENT YEARS 1996- 97 AND FROM 1-4-96 TO 21-1-97, UNACCOUNTED DONATIONS OF RS.44,875/- AND U NEXPLAINED LAND INVESTMENT OF RS.10,99,160/-; RESPECTIVELY. REVENU ES APPEAL IT(SS)A NO. 435/AHD/2012 CONTAINS SECOND ISSUE OF UNEXPLAINED I NVESTMENT IN NARODA LAND AMOUNTING TO RS.29,82,497/- OUT OF WHICH THE A SSESSEE HAD DECLARED RS.28LACS IN HIS SETTLEMENT PETITION. CORRESPONDIN G ADDITION OF RS.28LACS ALSO STANDS DELETED IN QUANTUM PROCEEDINGS UNDER TH IS HEAD. WE THEREFORE RELY ON OUR PRECEDING DISCUSSION TO CONCLUDE THAT T HE IMPUGNED CORRESPONDING PENALTY QUA THIS QUANTUM ISSUE DESERV ES TO BE DELETED SINCE THESE ASSESSEES HAD ALREADY DECLARED THE SAME IN TH EIR RESPECTIVE SETTLEMENT PETITION FOLLOWED BY PAYMENT OF TAXES AND INTEREST U/S.158BFA(2) (PROVISO). 5. THIS LEAVES US WITH THE ISSUE OF CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION IMPOSING IMPUGNED PENALTIES ON VARIOUS QUANTUM ISSUES WHEREIN THE BLOCK ASSESSMENTS IN QUESTION HAD RESUL TED IN UNDISCLOSED INCOME ADDITIONS MADE IN ASSESSEES CASES. M/S. SH YAM CORPORATIONS APPEAL IT(SS)A NO. 673/AHD/2011 INVOLVES SUCH AN IS SUE OF UNACCOUNTED WITHDRAWALS OF RS.43,000/- & RS.44,000/- IN ASSESSM ENT YEARS 1996-97 AND IT(SS)A NOS. 673/AHD/11 & 4 ORS. (M/S. SHYAM CORPORATION & 2 ORS.) - 6 - 1-4-96 TO 21-1-97; RESPECTIVELY. THEN COMES THIRD ASSESSEES APPEAL IT(SS)A NO.433/AHD/2012 INVOLVING UNEXPLAINED LAND INVESTME NT ISSUES OF RS.2,64,000/- AND RS.8,54,704/- IN NIKOL LANDS AS W ELL AS REVENUES GROUNDS IN ITS CROSS APPEAL IT(SS)A NO.435/AHD/2012 RAISING THE ISSUE OF PENALTY PERTAINING TO CASH FOUND DURING SEARCH OF RS.36,465 /-. THESE ASSESSEES DID NOT PRESS THE SAID GROUNDS IN QUANTUM AND SECOND AP PELLATE PROCEEDINGS ON THE GROUND OF SMALLNESS OF THE AMOUNTS INVOLVED. H ONBLE JURISDICTIONAL HIGH COURTS DECISION IN CIT V. BECHARBHAI P. PARMAR 20 TAXMANN.COM 644 (GUJ) HOLDS THAT AN ASSESSING OFFICERS DISCRETION IMPOSI NG SECTION 158BFA(2) PENALTY BASED ON SEIZED MATERIALS DURING SEARCH IS NOT TO BE INTERFERED WITH. THEIR LORDSHIPS THEN CONCLUDE THAT THE IMPUGNED PEN ALTY PROCEEDINGS DO NOT AUTOMATICALLY FLOW FROM QUANTUM ADDITIONS. WE KEEP IN MIND THE SAID PROPOSITION TO OBSERVE THAT ALL THE QUANTUM ADDITIO NS HEAD APART FROM UNEXPLAINED INVESTMENT IN NIKOL LANDS HEREINABOVE(S UPRA) ARE MERE A FAILURE OF FIRST AND THIRD ASSESSEES PART IN NOT BEING ABL E TO CO-RELATE THE RESPECTIVE UNACCOUNTED WITHDRAWALS AND CASH FOUND DURING SEARC H WITH THEIR PAST SAVINGS. WE REITERATE THAT THE AMOUNTS IN QUESTION IN THESE TWO ASSESSEES CASES ARE RS.87,000/- & RS.36,465/- ONLY (SUPRA). WE THEREFORE EXERCISE OUR SECOND APPELLATE JURISDICTION TO DELETE THE IMPUGNE D PENALTIES PERTAINING TO THESE TWO ISSUES. COMING TO THIRD ASSESSEE SEEKING TO REVERSE THE IMPUGNED PENALTY RELEVANT TO UNEXPLAINED INVESTMENT IN NIKOL LANDS OF RS.2,64,000/- AND RS.8,54,704/- (SUPRA), WE FIND THAT THE SAME AR E VERY MUCH BASED ON INCRIMINATING MATERIAL SINCE DURING SEARCH. WE THU S APPLY HONBLE JURISDICTIONAL HIGH COURTS RATIO HEREINABOVE TO CONFIRM THE IMPUGNED PENALTY PERTAINING TO UNEXPLAINED INVESTMENT MADE IN NIKOL LAND AMOUNTING TO RS.11,18,704/- AS ADDED IN QUANTUM BLOCK ASSESSMENT PROCEEDINGS. WE ACCORDINGLY REJECT REVENUES APPEALS IT(SS)A NOS. 252 & 435/AHD/2012 I N CASE OF M/S. SHYAM DEVELOPERS AND SHRI ARVINDBHAI P. PATEL. FIRST ASSESSEES APPEAL IT(SS)A NOS. 673/AHD/11 & 4 ORS. (M/S. SHYAM CORPORATION & 2 ORS.) - 7 - IT(SS)A NO.673/AHD/2011 IS ALLOWED SO IS THE OUTCOM E OF SECOND ASSESSEE M/S. SHYAM DEVELOPERS APPEAL IT(SS)A NO. 259/AHD/20 12. THIRD ASSESSEE SHRI ARVINDBHAI P. PATELS APPEAL IT(SS)A NO.433/AH D/2012 IS PARTLY ACCEPTED. ORDERED ACCORDINGLY. 6. WE QUOTE OUR ABOVE DETAILED DISCUSSION TO DISMIS S THE REVENUES APPEALS IT(SS)A NOS. 252 & 435/AHD/2012 IN CASE OF M/S. SHYAM DEVELOPERS AND SHRI ARVINDBHAI P. PATEL AND ALLOW A SSESSEES APPEALS IT(SS)A NOS.673/AHD/2011 & 259/AHD/2012 IN CASE OF M/S. SHYAM CORPORATION AND M/S. SHYAM DEVELOPERS. THIRD ASSES SEE SHRI ARVINDBHAI P. PATELS APPEAL IT(SS)A NO.433/AHD/2012 IS PARTLY AL LOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 18 TH DAY OF APRIL, 2018.] SD/- SD/- ( AMARJIT SINGH ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 18/04/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0