DHRUV N. PHOPHALIA, MUMBAI V. DY.C.I.T. RANGE-17(2), MUMBAI

ITSSA 78/MUM/2007

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8477 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-03-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 05-07-2010
• Assessment Year: misc
• Appeal Filed On: 11-05-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI D BENCH BEFORE SHRI N. VASUDEVAN, JUDICIAL MEMBER * SHRI T.R.SOOD, ACCOUNTANT MEMBER I.T.(SS)A.NO.78/MUM/2007 BLOCK PERIOD 1.4.1987 TO 6.8.1997 DHRUV N. PHOPHALIA, B 12, CHINAR, R.A.KIDWAI ROAD, WADALA, MUMBAI 400 031. PAN: AGJPP 8026 L VS. DY. COMMISSIONER OF INCOME TAX, RANGE 17 (2), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NIRMAL H. PHOPHALIA (FATHER OF THE ASSESSEE CONSTITUTED ATTRONEY COPY OF POWER OF ATTORNEY FILED) RESPONDENT BY : SHRI JITENDRA YADAV. O R D E R PER T.R.SOOD, AM: IN THIS APPEAL, ASSESSEE HAS RAISED AN ADDITIONAL GROUND WHICH WAS NOT RESSED BEFORE US, THEREFORE, SAME IS DISMIS SED AS NOT PRESSED. 2. FURTHER, DETAILED GROUNDS HAVE BEEN RAISED BUT S HRI NIRMAL H. PHOPHALIA POINTED OUT THAT THE ONLY DISPUTE INVOLVE D IS REGARDING AN ADDITION OF ` `` ` .17,68,322/- IN RESPECT OF UNDISCLOSED INCOME ON AC COUNT OF SHARES, WHICH HAVE BEEN ASSESSED ON PROTECTIVE B ASIS. 3. AFTER HEARING BOTH THE PARTIES, WE FIND THAT A S EARCH WAS CONDUCTED IN THE PREMISES OF THE PARENTS OF THE ASS ESSEE DURING WHICH SHARES WORTH ` `` ` .19,20,234/- WERE FOUND, OUT OF WHICH SHARES AMOUNT ING ` `` ` .17,68,822/- BELONGED TO THE ASSESSEE. SINCE THE SO URCE WAS NOT SATISFACTORILY EXPLAINED, THIS AMOUNT WAS ADDED AS UNDISCLOSED INCOME ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE. S UBSTANTIVE ADDITION 2 WAS MADE IN THE CASE OF MOTHER OF THE ASSESSEE SMT. JYOTI PHOPHALIA. THE MATTER ULTIMATELY TRAVELLED UPTO THE TRIBUNAL A ND WAS SET ASIDE BY THE TRIBUNAL TO THE FILE OF THE AO TO BE CONSIDERED ALONG WITH THE RETURN OF THE MOTHER. IN THE SET ASIDE PROCEEDINGS, ASSESSEE DID NOT APPEAR BEFORE THE AO AND ULTIMATELY AN EX PARTE ORD ER WAS PASSED THROUGH WHICH THE SUM OF ` `` ` .17,68,822/- WAS AGAIN ASSESSED ON PROTECTIVE BASIS. 4. ON APPEAL, THE ACTION OF THE AO WAS CONFIRMED BY THE LD. CIT[A]. 5. BEFORE US, SHRI NIRMAL PHOPHALIA FILED A COPY OF THE SETTLEMENT ORDER FROM THE INCOME TAX SETTLEMENT COMMISSION, AD DL. BENCH CHENNAI IN THE CASE OF SMT. JYOTI PHOPHALIA AND REA D OUT VARIOUS PARAS TO SHOW THAT THIS AMOUNT HAS ALREADY BEEN CONSIDERE D AND EXPLAINED BEFORE THE SETTLEMENT COMMISSION. 6. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDER OF THE CIT[A]. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT THE SETTLEMENT COMMISSION HAS ALREADY ACCEPTED THE DECL ARATION MADE BY THE ASSESSEE. THE ISSUE REGARDING INVESTMENT IN SHA RES HAS BEEN CONSIDERED BY THE SETTLEMENT COMMISSION IN THE FOLL OWING PARA AT PAGE 7 WHICH READS AS UNDER: THE AO HAS ALSO MADE ADDITION OF ` `` ` .17,68,822/- ON ACCOUNT OF SEIZED SHARES AS MENTIONED IN THE PANCHNAMA, BEING SHARES BELONGING TO MS. JYOTI PHOPHALIA. THE SOURCE THEREOF STANDS EXPLAINE D BY MS. JYOTI PHOPHALIA. 3 FROM THE ABOVE, IT IS CLEAR THAT SETTLEMENT COMMISS ION HAS ALREADY ACCEPTED THE SOURCE IN RESPECT OF SHARES IN THE HAN DS OF MS. JYOTI PHOPHALIA WHEREIN THE ADDITION HAS BEEN MADE ON SUB STANTIVE BASIS. THEREFORE, THE PROTECTIVE ADDITION WOULD NOT SURVIV E. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT[A] AND DELETE TH E ADDITION. 7. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 3/3/2011. SD/- SD/- (N.VASUDEVAN) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 23/3/2011. P/-*