Lalchand Prasaram Chhabriya, Kolhapur V. Deputy Commissioner of Income-tax, Central Circle , Kolhapur

ITSSA 8/PUN/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3714 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 31-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Loose papers

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER IT(SS)A No.8/PUN/2018 निर्धारण वषा / Assessment Year : 2004-05 Shri Lalchand Parasaram Chhabriya “Om Sai”, 235/4 B, Tarabai Park, Dist. Kolhapur – 416003 PAN : AALPC1122C Vs. DCIT, Central Circle, Kolhapur Appellant Respondent आदेश / ORDER PER S.S. GODARA, JM : This assessee‟s appeal for AY 2004-05 arises against the CIT(A), Pune- 11‟s order dated 31-05-2016 passed in case No. Pn/CIT(A)- 11/ITO(Cen)Kolhapur/514/2015-16 involving proceedings under Section 143(3) r.w.s. 153A(b) of the Income Tax Act, 1961, in short „the Act‟. Case called twice. None appears at the assessee‟s behest. He is accordingly proceeded ex-parte. 2. Coming to assessee‟s sole substantive grievance that both the learned lower authorities have erred in law and on facts in making unexplained investment addition in construction of factory building amounting to Rs.4,60,983/- on “protective” basis in furtherance to the search action dated Assessee by None Revenue by Shri S.P. Walimbe Date of hearing 27-06-2022 Date of pronouncement 30-06-2022 IT(SS)A No.8/PUN/2018 Shri Lalchand Parasaram Chhabriya 2 18 to 24, April, 2007, we find that the CIT(A) has affirmed the impugned addition as follows: “2. The brief facts of the case are that there was a search in the case of the appellant on 18.04.2007. During the course of the search certain loose papers were found regarding construction of a factory building of M/s. Sai Agro, a partnership firm in which the appellant is having 50 share. The seized papers revealed that the Factory building of M/s. Sai Agro had been constructed for Rs.20,97,113/- as against Rs.11,75,147/- recorded in the Books of the firm. The Assessing Officer therefore, held that the investment of Rs 9,71,966/- had been incurred by the partners of the Firm M/s. Sai Agro out of their unexplained sources. It was held so because M/s. Sai Agro was yet to start its business. The amount of Rs 9,21,966/- was added on protective basis in the case of the Firm M/s. Sai Agro and was divided equally between the two partners i.e. the Appellant and one Shri Gopichand Lalwani in the case of the Appellant and Shri Gopichand Lalwani each an addition of Rs 4,60,983/- was made on substantive basis. 3. In the grounds of appeal, the appellant has mentioned various facts as to how the addition is not required. Shri Sushant Phadnis, C.A. however, explained that the appeals in the case of M/s. Sai Agro & Shri. Gopichand Lalwani have already been disposed off by the CIT(A) Kolhapur confirming the additions made in the case of Shri. Gopichand Lalwani. 4. On going through the CIT(A) Kolhapur's order dated 15.03.2012 in Appeal No. KOP/492/2009-10 in the case of M/s. Sai Agro I find that the impugned seized material and the addition on account of unexplained investment in the construction of factory building were discussed at length by the CIT(A) Kolhapur. Finally, in para 10 of his order, the CIT(A) concluded that the valuation adopted by the Assessing Officer taking into account the details of expenditure mentioned in the seized material was correct and therefore, the addition of Rs.9,21,966/- in equal parts in the hands of partners had to be confirmed. In fact the CIT(A) Kolhapur mentioned that he had already confirmed the said addition in the hands of the partners. However, it is seen that the CIT(A) Kolhapur passed the order only in the case of other partner Shri. Gopichand Lalwani. The appellant’s appeal has remained pending. As the issue of unexplained investment in the factory building has already been decided by the C1T(A) Kolhapur while deciding the appeal in the case of M/s. Sai Agro and Shri Gopichand Lalwani, his findings have to be followed in the present case. Following the above mentioned order of the CIT(A) Kolhapur, the addition of Rs.4,60,983/- made in the case of appellant is confirmed and therefore Ground No.1 & 2 are dismissed.” 3. A perusal of case file reveals that this tribunal has already passed various orders pertaining to the very search action in M/s. Lalwani group. One of such order is dated 25.06.2014 in Shri Gopichand B. Lalwani vs. IT(SS)A No.8/PUN/2018 Shri Lalchand Parasaram Chhabriya 3 DCIT for assessment years 2007-08 and 2008-09 granting part relief to the connected assessee. We, therefore, deem it proper to restore the assessee‟s instant sole substantive issue back to the Assessing Officer for his afresh adjudication in light of the finality of corresponding proceedings upto this tribunal as per law within three effective opportunities of hearing in consequential proceedings. Ordered accordingly. 4. This assessee‟s appeal is allowed for statistical purposes in above terms. Order pronounced in the Open Court on 30 th June, 2022. Sd/- Sd/- (DIPAK P. RIPOTE) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER प ु णे Pune; ददिधांक Dated : 30 th June, 2022 GCVSR आदेश की प्रतिलिपि अग्रेपिि/Copy of the Order is forwarded to: 1. अपीऱधर्थी / The Appellant; 2. प्रत्यर्थी / The Respondent; 3. The CIT(A), Pune-11 4. 5. The Pr.CIT(Central), Pune विभागीय प्रविविवि, आयकर अपीलीय अविकरण, पुणे “A” / DR „A‟, ITAT, Pune 6. गार्ड फाईल / Guard file आदेशान ु सार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अविकरण ,पुणे / ITAT, Pune IT(SS)A No.8/PUN/2018 Shri Lalchand Parasaram Chhabriya 4 Date 1. Draft dictated on 27-06-2022 Sr.PS 2. Draft placed before author 28-06-2022 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.