KAILASH JAISWAL,GORAKHPUR V. PR. CIT, LUCKNOW

ITA 63/ALLD/2017

AI Insights

The case involves Kailash Jaiswal, a real estate businessman, who appealed against the revision orders passed by the PCIT, Lucknow, concerning the assessments for the years 2007-08 to 2013-14. The PCIT's revision was based on the grounds that the AO had not properly examined certain transactions involving commission payments and receipts amounting to Rs.9.78 crores from Dr. A K Bansal, which were linked to property transactions. The Tribunal examined whether the AO had conducted a sufficient inquiry into these transactions during the assessment proceedings. The Tribunal concluded that the AO had indeed examined the transactions and taken a possible view, thus allowing the appeals and quashing the revision orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 31143 (ITAT-VARANASI)
• Duration Of Justice: 7 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-09-2024
• Assessment Year: misc
• Appeal Filed On: 30-03-2017
• Other Referred Cases: Malabar Industrial Co Ltd vs. CIT (2000)(243 ITR 83)(SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMALENDU NATH MISHRA
• Assessee Lawyers: PRAVEEN GODBOLE
• Keywords: Set aside; Document seized; Documents seized; Search and seizure; Assessment record; Revision of order
• Section: 143(3); 263; 132; 153A; 101

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH, VARANASI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No. A.Y. Appellant Respondent 63/ALLD/2017 2007-08 Kailash Jaiswal, C-123/387, Purdilpur, Kotwali, Gorakhpur [PAN: ABNPJ6934C] Principal Commissioner of Income Tax, Central Circle, Lucknow 21 to 26/VNS/2022 2008-09 to 2013-14 For Assessee : Shri Praveen Godbole and Shri A.S. Srivastava, CAs For Revenue : Shri Amalendu Nath Mishra, CIT-DR Date of Hearing : 09-09-2024 Date of Pronouncement : 02-12-2024 O R D E R PER BENCH : The Asseesee has filed these appeals challenging the common revision order dated 08-03-2017 passed by the Ld.PCIT (Central), Lucknow for the Assessment Years (AYs.) 2007-08 to 2013-14 u/s. 263 of the Income Tax Act, 1961 (‘the Act’). The assessee is challenging validity of the above said revision orders. 2 Kailash Jaiswal batch 2. The facts relating to the issue are discussed in brief. The assessee is engaged in real estate business. The Ld A.R submitted that the assessee maintains regular books of account and is assessed to income tax for last several years. The Revenue carried out search and seizure operations in the hands of the assessee on 29-05-2012 u/s 132 of the Act. Consequently, the assessments of AYs. 2007-08 to 2013-14 were completed u/s. 143(3) 153A of the Act. 3. Upon examination of assessment records, the Ld.PCIT took the view that the assessment orders passed for AYs.2007-08 to 2013-14 are erroneous and prejudicial to the interests of Revenue. Accordingly, Ld.PCIT initiated revision proceedings u/s 263 of the Act. 4. The case of the Ld.PCIT is that the assessee had business dealings with a person named Dr. A K Bansal and other persons of M/s. Jeevan Jyoti Group. The AO made additions on the issue of commission payments amounting to Rs.2.99 crores relatable to the transactions with the above said persons. The Ld.PCIT noticed that the assessee had accepted before Investigation Wing that a sum of Rs.9.78 crores is receivable from Dr. A K Bansal as commission payments in connection with property transactions. According to Ld.PCIT, the AO has not conducted proper enquiries with regard to this issue. The Ld.PCIT noticed from the seized documents (Annexure LP-9 @ pages 101 – 109) that the search team seized certain blank cheques signed by Dr. A K Bansal. Besides the above, the search team also seized a cheque in favour of assessee for Rs.2.99 crores and another cheque in the name of the assessee for Rs.3,00,25,000/-. The seized documents also contained copy of a complaint lodged by the assessee against Dr. A K Bansal before the Police, wherein it is stated that the assessee herein had given Rs.9.78 crores to him. It was further noticed that the assessee had also filed an application u/s.138 of N.I. Act for 3 Kailash Jaiswal batch return of the cheque given to the assessee for a sum of Rs.3,00,25,000/-. However, the said petition was withdrawn after three months after the date of search. The Ld.PCIT noticed that the AO has recorded statement from the assessee during the course of assessment proceedings, wherein the replies given by the assessee were contradictory to the replies given in the statement taken during the course of search. In the statement given before search authorities, the assessee stated that a sum of Rs.9.78 crores is receivable from Dr. A K Bansal. However, before the AO, the assessee had denied having made any payment to Dr. A K Bansal and further stated that the statement from was forcibly taken by police authorities. However, the search team had seized blank cheques signed by Dr. A K Bansal. In the statement before the AO, the assessee accepted that the cheques were received, but they were dishonoured. 5. The Ld.PCIT noticed that the AO has finalized the assessment assessing the amount of Rs.2.99 crores as income of the assessee, but did not make properly examine the transactions relating to Rs.9.78 crores. The Ld.PCIT took the view that the assessee had received several cheques from Dr.A K Bansal and other companies for arranging land deals between the years 2005–2009, which is evidenced by documents seized during the course of search. Accordingly, he took the view that the assessee had business dealings with Dr.A K Bansal and hence the transactions pertaining to Rs.9.78 crores should have been examined by the AO in the light of various documents seized from the premises of the assessee. In this regard, the Ld.PCIT drew inference as under:- “10. As a result the assessing officer finalized the assessment proceedings considering only Rs.2.99 crores and completely overlooking rest of the amount. The fact that the assessee had filed a complaint in Civil Lines Police Station on 13.12.2011, wherein he 4 Kailash Jaiswal batch alleged that he had goven Rs.9.78 crores to Dr A K Bansal was also ignored and the source of Rs.9.78 crores was also not enquired by the AO. It was also evident that there were two versions regarding transaction of Rs.9.78 crores from Dr A K Bansal and Others, it was to be either by the way of commission receipt in lieu of purchase of 170 acre of Land or by the way of return of loan given by him to Dr A K Bansal. During assessment, the assessee could not give any detail of land made available to Dr A K Bansal and Others. The assessee also could not explain the source of Rs.9.78 crore, given as loan given to Dr A K Bansal (as claimed by him before the police authorities). Thus, there was no enquiry on the part of the AO to verify the nature of transactions involving Rs.9.78 crores between assessee and Dr A K Bansal.” Since the AO has failed to properly examine the transactions pertaining to Rs.9.78 crores, the Ld.PCIT held that the assessment orders passed for AYs.2007-08 and 2013-14 are erroneous and prejudicial to the interests of Revenue. Accordingly, he set aside those assessment orders and directed the AO to frame assessment orders of the above said years afresh. The assessee is aggrieved. 6. The Ld A.R submitted that the assessee did not receive the above said sum of Rs.9.78 crores from Dr. A K Bansal and also did not pay the above said amount to him, i.e., the transactions as per the documents seized from the assessee did not take place. Accordingly, he submitted that there is no question of assessing the above said amount of Rs.9.78 crores in the hands of the assessee. He submitted that the AO has examined this transaction during the course of assessment proceedings. The AO issued notice dated 26-09-2014 u/s.142(1) of the Act during the course of assessment proceedings raising a specific query about the amount of 5 Kailash Jaiswal batch Rs.9.78 crores and the assessee has also furnished a detailed explanation with documentary evidences before the AO. The assessee also filed an affidavit in this regard. Hence, the AO also recorded statement from the assessee, wherein the assessee has confirmed that he has not received any money out of Rs.9.78 crores from Dr.A K Bansal. Accordingly, the AO has accepted the explanations of the assessee with regard to the above said amount of Rs.9.78 crores. Accordingly, he submitted that the AO has taken one of the possible views in this matter and hence the Ld.PCIT was not right in law in passing the impugned revision order. The Ld A.R placed his reliance on host of case laws. 7. The Ld D.R, on the contrary, contended that the AO has not carried our proper enquiry with regard to the transactions of Rs.9.78 crores, even though the blank cheques signed by Dr.A K Bansal, which were seized from the assessee, copy of police complaint and other documents show that there were business dealings between the assessee and Dr.A K Bansal. Further, the amount of Rs.9.78 crores was either the commission receivable by the assessee or the loan given by the assessee to Dr.A K Bansal and in both the circumstances, the above said amount is liable to be taxed in the hands of the assessee. Accordingly, the Ld D.R submitted that the AO has failed to examine this transaction properly and hence the assessment order was rightly held by Ld.PCIT as erroneous and prejudicial to the interests of the Revenue. 8. We heard rival contentions and perused the record. On a careful reading of the revision order passed by Ld.PCIT, we notice that the Ld.PCIT is also not sure about the nature of transaction that happened between the assessee and Dr.A K Bansal. The seized documents show that there was some understanding between both the parties about the payment/receipt of Rs.9.78 crores. 6 Kailash Jaiswal batch 9. The first inference of Ld.PCIT is that the said amount may represent commission receivable by the assessee from Dr. A K Bansal in connection with the land transactions entered during the years 2005 to 2009. However, there is no material was available with the PCIT to come to the conclusion that the land deals had actually happened. Even if it is considered to be commission payment, there is no evidence available to prove that the assessee had received the commission payment. On the contrary, we notice that all the blank cheques were seized by the department and hence those cheques could not have been encashed. The cheque for an amount of Rs.3.00 crores were returned unpaid. The remaining cheque amount of Rs.2.99 crores has been assessed by the AO. 10. The alternative inference drawn by Ld.PCIT is that the same may represent money given by the assessee to Dr.A K Bansal for purchase of land. However, the said evidence is also not supported by any evidence. 11. On the contrary, we notice that the AO has raised a specific query with the assessee with regard to the transactions pertaining to Rs.9.78 crores during the course of assessment proceedings. The assessee also furnished a detailed reply along with an affidavit. Hence, the AO also recorded a statement from the assessee. Thereafter, the AO has come to the conclusion that there is no requirement of making any addition of Rs.9.78 crores in the hands of the assessee. Thus, we notice that the AO has taken a possible view in this matter and hence, merely because the Ld. PCIT has got different view, the same would not entitle him to revise the assessment order. We derive support for this proposition from the decision rendered by the Hon’ble Supreme Court in the case of Malabar Industrial Co Ltd vs. CIT (2000)(243 ITR 83)(SC). 7 Kailash Jaiswal batch 12. Accordingly, we are of the view that the impugned revision orders passed by Ld.PCIT for AYs.2007-08 to 2013-14 cannot be sustained. Accordingly, we quash them. 13. In the result, all the appeals of the assessee are allowed. Order pronounced on 02-12-2024 by way of proper mentioning in the Notice Board. Sd/- Sd/- [AMIT SHUKLA] [B.R. BASKARAN] JUDICIAL MEMBER ACCOUNTANT MEMBER Varanasi, Dated: 02-12-2024 TNMM Copy to : 1. The Appellant 2. The Respondent 3. The Pr. CIT, concerned 4. D.R. ITAT, Varanasi 5. Guard File. //By Order// //True Copy // Dy./Asst. Registrar, ITAT, Varanasi "