SHRI. AMIT R. MITTAL, MUMBAI V. ASSTT. CIT.-14(1), MUMBAI

ITSSA 97/MUM/2008

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 7944 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 02-11-2011
• Assessment Year: misc
• Appeal Filed On: 05-09-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: USHA NAIR
• Assessee Lawyers: R S SAMRIA
• Keywords: Document seized; Corroborative evidences; Block assessment; Documents seized
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A : MUMBAI BEFORE SHRI D. K. AGARWAL, (JUDICIAL MEMEBER) AND SHRI RAJENDRA SINGH,(ACCOUNTANT MEMBER) IT(SS)A NO.97/MUM/2008 ASSESSMENT YEAR : BP:1.4.1996 TO 21.1.2003 SHRI AMIT R. MITTAL C/O., SAMRIA & CO. CHARTERED ACCOUNTANTS 2E, COURT CHAMBERS 35, NEW MARINE LINES MUMBAI-400 020. ..( APPELLANT ) P.A. NO. (AADPM 3061 A) VS. ASSTT. COMMISSIONER OF INCOME TAX -14(1) EARNEST HOUSE NARIMAN POINT MUMBAI-400 021. ..( RESPONDENT ) APPELLANT BY : SHRI R.S. SAMRIA RESPONDENT BY : MS. USH A NAIR DATE OF HEARING : 2.11.11. DATE OF PRONOUNCEMENT : . NOVEMBER, 2011 O R D E R PER RAJENDRA SINGH (AM). THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER D ATED 23.6.2008 OF CIT(A) FOR THE BLOCK PERIOD 1.4.1996 TO 21.1.2003. THE ASSESSEE IN THIS APPEAL, IN ADDITION TO CHALLENGING THE A DDITION ON MERIT, HAS ALSO CHALLENGED THE JURISDICTION OF AO UNDER SECTION 158 BD OF THE INCOME TAX ACT. IT(SS)A NO. 97/MUM/2008 A.Y:BP 2 2. THE LD. AR FOR THE ASSESSEE AT THE TIME OF HEARING O F THE APPEAL DID NOT PRESS THE LEGAL GROUND RELATING TO JURISDICTION UNDER SECTION 158BD AND, THEREFORE, THIS GROUND IS DISMISSED AS NOT PR ESSED. 3. WE, NOW, TAKE UP THE DISPUTE RAISED ON THE MERITS O F THE CASE. THE FACTS IN BRIEF ARE THAT THERE WAS A SEARCH CONDUCTED IN CASE OF GOPAL FABRIC MILLS GROUP ON 22.1.2003. THEREAFTER, P ROCEEDINGS UNDER SECTION 158BD WERE INITIATED IN CASE OF THE ASSESSEE ON 6.1 1.2004. DURING THE COURSE OF SEARCH, CERTAIN PAPERS WERE SEIZED AS ANNEXURE A-2, PAGE-30 OF WHICH SHOWED THE FOLLOWING ENTRIES: 1) TOOK FROM DADDY RS.5,70,000/- 2) TOOK FROM ANUPAM RS. 20,000/- RS. 60,000/- TOTAL RS.6,50,000/- 3.1 THE AO DURING THE BLOCK ASSESSMENT PROCEEDINGS ASKED TH E ASSESSEE TO EXPLAIN THE ABOVE ENTRY. IT MAY BE NOTED T HAT PAGE-30 ALSO CONTAINED DETAILS OF VARIOUS EXPENSES TOTALING TO RS. 5,90,619/- THE ASSESSEE EXPLAINED THAT SUM OF RS.5.70 LACS HAD BEEN TA KEN FROM HIS UNCLE SHRI M.L. MITTAL WHO WAS ADDRESSED AS DADDY AN D RS.20,000/- FROM ANUPAM MITTAL. THE SUM HAD BEEN TAK EN FOR THE REPAIR WORK BUT SINCE THE PAYMENT FOR REPAIR HAD BEEN MADE BY THE COMPANY, THE ASSESSEE HAD RETURNED THE AMOUNTS TAKEN. TH E ASSESSEE ALSO STATED ON OATH UNDER SECTION 131 THAT, TO TH E BEST OF HIS IT(SS)A NO. 97/MUM/2008 A.Y:BP 3 KNOWLEDGE, THE AMOUNT OF RS.5.70 LACS RETURNED TO SHR I M.L. MITTAL HAD BEEN OFFERED FOR TAX IN THE BLOCK ASSESSMENT AND SAME WAS PART OF CASH OF RS.11,49,950/- SEIZED WHICH HAD BEEN ASSESSED AS UNACCOUNTED CASH BY THE AO OF SHRI M.L. MITTAL. THE AO , HOWEVER, OBSERVED THAT HE HAD WRITTEN A LETTER TO THE AO OF S HRI M.L. MITTAL REGARDING TREATMENT OF RS.5.70 LACS BUT THE AO HAD NOT GIVEN ANY SPECIFIC FINDING THAT THE SAID AMOUNT HAD BEEN CONSIDERED FOR ADDITION IN THE BLOCK ASSESSMENT ORDER OF SHRI M.L. MITTAL. THE AO ALSO OBSERVED THAT THE ASSESSEE WAS SILENT ABOUT THE TREATMENT GIVEN TO THE SUM OF RS.20,000/- WHICH IS CLAIMED TO HAVE BEEN RET URNED TO SHRI A. MITTAL. THE AO, THEREFORE, ASSESSED THE SUM OF RS.5.9 0 LACS AS UNDISCLOSED INCOME OF THE ASSESSEE. IN APPEAL CIT(A) CONF IRMED THE ORDER OF AO ON THE GROUND THAT THE ASSESSEE FAILED TO F ILE ANY SUPPORTING EVIDENCE TO PROVE THE CLAIM THAT THE MONEY FOUND WAS ADVANCE TAKEN FROM UNCLE AND SHRI ANUPAM MITTAL WHICH HAD BEEN RETURNED. AGGRIEVED BY THE SAID DECISION ASSESSEE IS IN AP PEAL BEFORE THE TRIBUNAL. 4. BEFORE US, THE LD. AR FOR THE ASSESSEE REITERATED T HE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES THAT THE AMOUNTS HA D BEEN TAKEN IN CONNECTION WITH THE REPAIR WHICH WAS ALSO CLEAR FROM THE ENTRY ON PAGE-30 ITSELF WHICH SHOWED EXPENSES INCURRED ON REPAIR T O THE TUNE OF RS.5,90,619/-. THE LD. AR REFERRED TO THE LETTER DA TED 23.1.2004 OF IT(SS)A NO. 97/MUM/2008 A.Y:BP 4 THE C.A. OF SHRI M.L. MITTAL ADDRESSED TO HIS AO IN W HICH IT WAS EXPLAINED THAT THE CASH SEIZED OF RS.11,49,950/- INCLUDE D CASH OF RS.5.70 LACS RETURNED FROM ANUPAM R. MITTAL, THE ASSESSEE . THE AO HAS NOT GIVEN ANY ADVERSE FINDING ON THIS AND THE ENTI RE SEIZED CASH HAS BEEN ASSESSED IN CASE OF SHIR M.L. MITTAL. THE LD. AR ALSO REFERRED TO THE RELEVANT PORTION OF THE APPRAISAL REPORT PREP ARED BY THE INVESTIGATING WING AND PLACED AT PAGE 139 OF THE PAPE R BOOK IN WHICH IN RELATION TO PAGE-30, IT WAS MENTIONED THAT THE R EPAIR EXPENSES WERE CLAIMED TO HAVE BEEN FINANCED BY SHRI M.L. MITTAL TO THE EXTENT OF RS.5.70 LACS AND ANUPAM MITTAL TO THE EXTENT OF RS.20,0 00/- WHICH SHOWED THAT EVEN AT THE TIME OF SEARCH THE SAME STAND HA D BEEN TAKEN. IT WAS ALSO POINTED OUT THAT IN THE APPRAISAL REPORT THERE WAS NO REFERENCE TO THE NAME OF THE ASSESSEE. THE LD. AR FU RTHER SUBMITTED THAT THE LETTER DATED 23.1.2004 OF THE C.A WAS AVAILABLE BEFORE THE AO OF SHRI M.L. MITTAL WHICH WAS CLEAR FRO M THE CERTIFICATE DATED 21.2.2011 OF ACIT, CIRCLE-14(1) IN WHICH IT I S STATED THAT THE LETTER FORMED PART OF THE BLOCK ASSESSMENT ORDER IN CASE OF SHRI M.L. MITTAL. IT WAS ACCORDINGLY SUBMITTED THAT THE ADDITION MADE IN CASE OF THE ASSESSEE SHOULD BE DELETED. THE LD. D.R ON THE OTHE R HAND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND PLACE D RELIANCE ON THE FINDINGS GIVEN IN THE RESPECTIVE ORDERS. IT(SS)A NO. 97/MUM/2008 A.Y:BP 5 5. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING ADDITION OF RS.5 .70 LACS AND RS.20,000/- MADE IN CASE OF THE ASSESSEE ON THE BASIS OF ENT RIES AT PAGE 30 OF THE SEIZED DOCUMENTS ANNEXURE A2. THE ASSE SSEE HAD EXPLAINED THAT THE SAID AMOUNTS WERE ADVANCE RECEIVED FROM SHRI M.L. MITTAL AND ANUPAM MITTAL RESPECTIVELY IN CONNECTION WIT H REPAIR WORK WHICH WERE LATER RETURNED AS THE PAYMENT FOR REPAIR H AD BEEN MADE BY THE COMPANY. THE CLAIM THAT REPAIR WORK WAS BEING DON E IS SUPPORTED BY THE ENTRIES AT PAGE 30 ITSELF WHICH SHOWED THE REPAI R EXPENSES OF RS. 5,90,619/-. THE CLAIM MADE BY THE ASSESSEE WAS SUPPOR TED BY SHRI M.L. MITTAL ALSO AS HIS C.A DURING THE BLOCK PROCE EDINGS IN HIS CASE HAD WRITTEN LETTER DATED 23.1.2004 TO HIS AO IN WHIC H IT WAS MENTIONED THAT THE CASH SEIZED INCLUDED A SUM OF RS.5.70 LACS RECEIV ED FROM SHRI AMIT R. MITTAL. THE ENTIRE AMOUNT OF CASH OF RS.11,4 9,950/- HAS BEEN ASSESSED IN CASE OF SHRI M.L. MITTAL AS HIS UNDISCLOSED INCOME . THEREFORE, IN CASE THE SAID CASH INCLUDED THE SUM OF RS. 5 .70 LACS ALSO, MAKING ADDITION IN CASE OF THE ASSESSEE WOULD AMOUNT TO D OUBLE ADDITION. THE ASSESSMENT ORDER IN CASE OF SHRI M.L. MITT AL DATED 23.6.2004 HAS BEEN PLACED ON RECORD IN WHICH ALSO THERE IS NO ADVERSE FINDING BY THE AO REGARDING THE CLAIM MADE BY THE ASSE SSEE IN RELATION TO THE SUM OF RS.5.70 LACS. HOWEVER, IT IS REQUIRED TO B E VERIFIED WHETHER LETTER DATED 23.1.2004 OF THE C.A OF SHRI M .L. MITTAL WAS IT(SS)A NO. 97/MUM/2008 A.Y:BP 6 AVAILABLE BEFORE THE AO OF SHRI M.L. MITTAL AT THE TIME OF BLOCK ASSESSMENT PROCEEDINGS. THE LD. A.R HAS PLACED A COPY OF L ETTER DATED 23.1.2004 ON RECORD IN WHICH THE ACIT, CIR. 14(1) HAS GIVEN CERTIFICATE DATED 21.2.2011 STATING THAT THE LETTER DATED 23.1.2 004 WAS PART OF BLOCK ASSESSMENT PROCEEDINGS IN CASE OF SHRI M.L.MITTAL. T HIS CERTIFICATE WAS OBVIOUSLY NOT AVAILABLE EITHER BEFORE A O OR CIT(A). THEREFORE, IN OUR VIEW MATTER REQUIRES VERIFICATION. IN CASE ON VERIFICATION THE CLAIM OF THE ASSESSEE IS FOUND TO BE COR RECT, NO ADDITION IS REQUIRED TO BE MADE IN CASE OF THE ASSESSEE. WE, THEREFORE, RESTORE THE MATTER TO THE FILE OF AO FOR PASSING A FRESH ORDER AFTER VERIFICATION AND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18.11.2011. SD/- SD/- (D. K. AGARWAL) (RAJENDRA SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 18.11.2011. JV. IT(SS)A NO. 97/MUM/2008 A.Y:BP 7 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.