SHRI PANKAJ KALANI, Indore V. THE DCIT, (CENTRAL)-1, Indore

MA 1/Ind/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9454 (ITAT-INDORE)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-01-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 20-01-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 254(2)

Judgement Text

आयकर अपीलȣय अͬधकरण, इंदौर Ûयायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON’BLE MANISH BORAD, ACCOUNTANT MEMBER AND HON’BLE MADHUMITA ROY, JUDICIAL MEMBER VIRTUAL HEARING MA Nos. 1 to 3/Ind/2021 (Arising out ofIT(SS)A Nos.99 to 101/Ind/2016) & MA No.7/Ind/2021 (Arising out of ITA No.1044/Ind/2016 & CO No.25/Ind/2017) Assessment Years 2008-09 to 2010-11 & 2012-13 Pankaj Kalani, Indore PAN – ADUPK 6103 B : Appellant V/s DCIT, Central-1, Indore : Respondent MA Nos. 4 to 6/Ind/2021 (Arising out ofIT(SS)A Nos.104 to 106/Ind/2016) & MA No.8/Ind/2021 (Arising out of ITA No.1045/Ind/2016 & CO No.26/Ind/2017) Assessment Years 2008-09 to 2010-11 & 2012-13 Dipak Kalani, Indore PAN – ADUPK 6102 A : Appellant V/s DCIT, Central-1, Indore : Respondent Pankaj Kalani and Deepak Kalani - MAs 2 Revenue by Shri Harshit Bari, Sr. DR Assessees by Shri S.N. Agrawal, CA Date of Hearing 10.12.2021 Date of Pronouncement 06.01.2022 O R D E R PER MANISH BORAD, A.M These misc. applications u/s 254(2) of the I.T. Act have been filed by the aforesaid assessees against the order dated 13.3.2020 passed by the Tribunal. Through these MAs, the assessees have requested for recalling of the order dated 13.3.2020 passed by this Tribunal. 2. Learned Counsel for the assessees pointed out that the Tribunal in Para No. 3 of the order (supra) noted that the Ld. CIT- DR submitted that Ld CIT (A) while deciding the appeals relating to protective assessments had concluded that additions should be made in the substantive proceedings initiated in case of M/s. Kalani Industries Pvt. Ltd. and Flexituff International Ltd. However, in appeals related to substantive proceedings, the Ld. CIT(A) had not taken into consideration of the above fact in respect of appeals relating to protective assessments. In this Pankaj Kalani and Deepak Kalani - MAs 3 regard, the learned Counsel for the assessees submitted that submission of the Ld CIT-DR before the Hon’ble Bench was factually incorrect. The Ld CIT (A) did not record the finding that additions should be made in the substantive proceedings initiated in case of M/s. Kalani Industries Pvt. Ltd. and Flexituff International Ltd, rather the Ld CIT (A) while deciding the appeals in the case of present assessees held that there was no justification for adding the amounts found noted in the cash sheets to the total income of the present assessees. The Ld CIT (A) deleted the additions made by the Assessing Officer by observing that there was no justification for making any addition to the total income of the present assessees on protective basis. Thus, the appeals in the case of the present assessees were decided on merits by the Ld CIT (A), therefore, there was no justification for setting-aside the appeals in the case of the present assessees to the file of the Ld CIT (A). Further, learned Counsel for the assessees also submitted that for the assessment year 2012-13 in the departmental appeals and Cross-objections filed in cases of both the present assessees, the Tribunal did not decide ground nos.1, 2, 3 & 5 raised in departmental appeals and Pankaj Kalani and Deepak Kalani - MAs 4 all the grounds raised in Cross-objections, which being mistake apparent from record also requires to be decided. 3. Per contra, ld. Sr. DR relied on the order of the Tribunal. 4. We have considered the rival submissions of both the parties and gone through the material available on the file. We find that the ld. CIT(A) in para 4.3 & 4.4 observed as under: “4.3 I have gone through the assessment order and the appellants contentions. The key points to be considered are as under:- a. In Para 12.1 of the assessment order the Assessing Officer has observed that the details appearing in the loose paper i.e LPS-10 and LPS-11 exactly match with the details appearing on the page 254 of LPS 2/14. Page No. 254 of LPS-2/ 14 had been taken from the file A/3, seized during the search by the Excise Department on Signet Group. LPS-2/14 was found and seized during the Income Tax search at the office of M/s signet Industries Ltd., Dewas Naka, Indore. Page no. 254 of LPS-2/14 contains details of transaction with Shri Pankaj Kalani and prepared by Shri Mukesh Sangla. b. The Assessing Officer has accepted the transactions as executed with M/s Signet Industries Ltd. noted in the Cash Sheet found from the system of the staff and no addition has been made in the hands of the appellant and his brother on protective basis on the basis of these entries. c. The Hon'ble ITAT, Indore Bench, Indore in the case of M/s Signet Industries Limited [Appeal No IT(SS)A Nos 115 to 120/ Ind/ 2015 & ITA No 400/Ind/2015 for the Asst Years 2006- 07 to 2011-12 and 2012-13 had an occasion to discuss the amount as found recorded in the Cash Sheet of the assessee and also papers as found from the possession of Signet Group. The Hon'ble ITAT has accepted that the amount as shown received in the Cash sheet relates to the group whose name is mentioned in the Cash Sheet and does not relate to the appellant. d. The Assessing officer in the assessment order has clearly stated that the amounts in column 3 of LPS-11 denote the amounts in lacs received by the appellant in cash from M/s Kalani Industries Ltd and M/s Flexituff International Limited e. LPS-10 and LPS-11 are print outs taken at the time of the revocation of the Prohibitory Order which contain the details Pankaj Kalani and Deepak Kalani - MAs 5 of cash as received from different clients of the appellant and his brother which is returned back to them as per their instructions. The staff members of the appellant and his brother had for their record noted the name of the person from whom the cash was received and to whom the cash was given. f. The Assessing officer has made the addition on protective basis in the hands of the appellant and his brother holding that the appellant had failed to explain the nature of the entries recorded in LPS-10 and LPS-11. The appellant in a statement dated 23-12-2011 recorded during the post search proceedings had stated that the various transactions with the name “ Flexituff”, “KIL”, “KIL (EWDPL)”, “ Sharmaji”, “Chousya”, “Kalani T/I”, “Matkewalaji”, “Pawan Jain” in respect of which the Assessing Officer has made the protective additions are persons or companies related to M/s Kalani Industries Ltd/ M/s Flexituff International Ltd. belonging to Shri Manish Kalani and P.S. Kalani Group. g. During the assessment proceedings the appellant had furnished an Affidavit from Manish Kalani Group of Companies where in it was categorically accepted that no amount of cash was received on account of loans or investments from the appellant. 4.4 The Assessing officer has himself categorically accepted in Paras 13.2, 14.2, 15.2, 16.2,17.2 and 18.2 that the amount of cash as shown in the cash Sheet which has been added on protective basis in the hands of the appellant actually belongs to M/s Kalani Industries Ltd or M/s Flexituff International Ltd. The protective addition can be made when the Assessing officer is not in a position to confirm whether a particular income belongs to A or B and therefore , the amount is added to the income of both the persons, in one hand on substantive basis and in the other on protective basis. In this case when the Assessing Officer is of the view that the amount as found recorded in the Cash Sheet belongs to M/s Kalani Industries Ltd or M/s Flexituff International Ltd there is no justification in adding the same on protective basis in the hands of the appellant and his brother. It is also pertinent to note that on basis of identical entries in the said Cash Sheets pertaining to the Signet Group no addition has been made on protective basis in the case of the appellant and his brother. In view of the facts and circumstances of the case, Ground No 2 for A.Ys 2007-08 to 2010-11 and Ground No 3 for A.Y 2011-12 is decided as under:- A.Y. 2008-09 Amount of Rs 1,67,63,500/- [ ½ the share of Rs 3,35,27,000/- ] , Rs 1,43,000/- [ 1/2th share of Rs 2,86,000/- ], Rs 5,01,500/- [ 1/2th Share of Rs 10,03,000/-] Pankaj Kalani and Deepak Kalani - MAs 6 totalling to Rs 1,74,08,000/- added to the total income of the appellant on protective basis is deleted. Ground No 2 is allowed. A.Y. 2009-10 Amount of Rs 3,47,41,500/- [ ½ the share of Rs 6,94,83,000/- ] , Rs 3,33,70,000/- [ 1/2th share of Rs 6,67,40,000/- ], Rs 18,000/- [ 1/2th Share of Rs 36,000/-] , Rs 12,50,500/- [ ½ th share of Rs 25,00,000/- ] and Rs 12,71,500/- [ 1/2th share of Rs 25,43,000/- ] totalling to Rs 7,06,51,000/- added to the total income of the appellant on protective basis is deleted. Ground No 2 is allowed. A.Y.2010-11 Amount of Rs 35,00,000/- [ ½th share of Rs 70,00,000/- ], Rs 15,75,000/- [1/2th share of Rs 31,50,000/-], Rs 3,75,79,500/- [ ½th share of Rs 7,51,59,000/-], Rs 6,76,500/- [1/2th share of Rs 13,53,000/-] and Rs 80,68,000/- [ 1/2th share of Rs 1,61,36,000/- ] totaling to Rs 5,13,99,000/- added to the total income of the appellant on protective basis is deleted. Ground No 2 is allowed.” 5. From perusal of the above, we find force in the contention made by the learned Counsel for the assessees. A reading of para 4.3 & 4.4 of the order of ld. CIT(A) clears that ld. CIT-DR was factually not correct before this Tribunal in contending that “Ld CIT (A) while deciding the appeals relating to protective assessments had concluded that additions should be made in the substantive proceedings initiated in case of M/s. Kalani Industries Pvt. Ltd. and Flexituff International Ltd but in appeals related to substantive proceedings, the Ld. CIT(A) had not taken into consideration of the above fact in respect of appeals relating to protective assessments” because the Ld CIT (A) never gave a finding that additions should be made in the substantive Pankaj Kalani and Deepak Kalani - MAs 7 proceedings initiated in case of M/s. Kalani Industries Pvt. Ltd. and Flexituff International Ltd. Rather, the Ld CIT (A) while deciding the appeals in the case of present assessees re-iterated the findings of the Assessing Officer in the assessment order wherein the Assessing Officer himself observed that cash sheets found during the course of search belonged to M/s Kalani Industries Ltd. or M/s Flexituff International Ltd. Thus, it was in this backdrop that the Ld CIT (A) held that there was no justification for adding the amounts found noted in the cash sheets to the total income of the present assessees as the Assessing Officer himself gave a finding that the cash sheets belonged to M/s Kalani Industries Ltd or M/s Flexituff International Ltd. We find that ld. CIT(A) had also observed that no addition was made to the total income of the present assessees in respect of identical entries in the said cash sheets pertaining to the Signet Group and entries as found in the name of various other groups. In view of these facts, it is apparent that the Ld CIT (A) deleted the additions made by the Assessing Officer by observing that there was no justification for making any addition to the total income of the assessees on protective basis. Accordingly, we are of the view that appeals in the case of the Pankaj Kalani and Deepak Kalani - MAs 8 assessees were decided on merits by the Ld CIT (A) and were not decided by giving a mere finding that additions should be made in the substantive proceedings initiated in case of M/s. Kalani Industries Pvt. Ltd. and Flexituff International Ltd. Therefore, there was no justification for setting-aside the appeals in the case of the assessees to the file of the Ld CIT (A). We also find force in the submission of the learned Counsel for the assessee that for the assessment year 2012-13 in the departmental appeals and Cross-objections filed in cases of both the present assessees, the Tribunal did not decide ground nos.1, 2, 3 & 5 raised in departmental appeals and all the grounds raised in Cross- objections. Therefore, it is mistake apparent from record and as such, the same also requires to be rectified. Before us, the Revenue could not controvert these material facts by bringing any contrary material on record. Accordingly, we recall our order dated 13.3.2020 (supra). Resultantly, the relevant appeals and Cross-objections are reinstated in their original numbers i.e. IT(SS)A Nos.99 to 101/Ind/2916, ITA No.1044/Ind/2016 & CO No.25/Ind/2017 in case of Mr. Pankaj Kalani and IT(SS)A Nos.104 to 106/Ind/2916, ITA No.1045/Ind/2016 & CO Pankaj Kalani and Deepak Kalani - MAs 9 No.26/Ind/2017 in case of Mr. Deepak Kalani. The Registry is directed to re-fix the same for hearing on merit. 6. In the result, MA Nos.1 to 3 & 7/Ind/2021 and MA Nos.4 to 6 & 8/Ind/2021 filed by the assessees are allowed. Order pronounced as per Rule 34 of ITAT Rules, 1963 on 06.01.2022. Sd/- Sd/- (MADHUMITA ROY) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Ǒदनांक /Dated : 06.01.2022 !vyas! Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By Order, Asstt.Registrar, I.T.A.T., Indore