Sri Satpal Singh Bagga, Hyderabad V. ACIT, Central Circle-1, Hyderabad

MA 114/HYD/2013

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3212 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Gift; Source of fund; Block assessment

Judgement Text

MA NOS 111 112 113 114 AND 60 OF 2013 BAGGA GROUP C ASES HYDERABAD PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER & SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER M.A. NOS. 111, 112 & 113/HYD/2013 (ARISING OUT OF ITA NOS. 710/HYD/2006 & 766/HYD/200 7 & 904/HYD/2008) ) (ASSESSMENT YEARS: 2002-03, 2003-04 & 2004-05) SHRI BALWINDER SINGH BAGGA H.NO.3-5-115 NARAYANGUDA HYDERABAD PAN-ABXPB 9331 K VS. ACIT, CENTRAL CIRCLE 1 HYDERABAD (APPELLANT) (RESPONDENT) M.A. NO.60/HYD/2013 (ARISING OUT OF ITA NO.709/HYD/2006) A.Y.1999-2000 SMT. INDERJEET KAUR BAGGA, H.NO.3-5-115 NARAYANGUDA HYDERABAD PAN-AHMPB 5258 J VS. ACIT, CENTRAL CIRCLE 1 HYDERABAD (APPELLANT) (RESPONDENT) M.A.NO.114/HYD/2013 (ARISING OUT OF IT(SS)A NO.50/HYD/2005) BLOCK PERIOD: 1996-97 TO 2001-02& 1.4.2001 TO 31.1. 2002 SHRI SATPAL SINGH BAGGA H.NO.3-5-115 NARAYANGUDA HYDERABAD PAN: ABXPB 9330 J VS. ACIT, CENTRAL CIRCLE 1 HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P. MU RALI MOHAN RAO FOR REVENUE : SHRI RAJAT MITRA, DR DATE OF HEARING : 3.7.2015 DATE OF PRONOUNCEMENT : 30. 7.2015 MA NOS 111 112 113 114 AND 60 OF 2013 BAGGA GROUP C ASES HYDERABAD PAGE 2 OF 6 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, J.M. THESE ARE THE MISCELLANEOUS PETITIONS PREFERRED BY THE ASSESSEES SEEKING MODIFICATION OF THE ORDER OF THE TRIBUNALS ORDER DATED 3.8.2012. M.A. NO.111/HYD/2013 (ITA NO.710/HYD/2006): 2. THE FACTS OF THE CASE ARE THAT ASSESSEE SHRI BAL WINDER SINGH BAGGA HAD FILED HIS RETURN OF INCOME FOR AY 2 002-03 DECLARING A TOTAL INCOME OF RS.47,62,667. ITAT HYDE RABAD B BENCH PASSED THE ORDER ON 3.8.2012 PARTLY ALLOWING THE ASSESSEES APPEAL IN ITA NO.710/HYD/2006. 3. BY THIS M.A, PETITIONER HAS POINTED OUT THAT WHI LE PASSING THE ORDER, ITAT DISALLOWED ASSESSEES CLAIM OF INTE REST PAYABLE TO INFRA PORT INDIA LTD, BASED ON WRONG ASSUMPTION OF FACTS. ITAT IN ITS ORDER IN PARA 102 HAVE STATED THAT THIS CLAIM OF INTEREST WAS MADE SUBSEQUENTLY AFTER THE COMPANY WAS TAKEN OVER BY THE ASSESSEE GROUP KNOWING FULLY WELL THAT THE COMPANY HAD HUGE BROUGHT FORWARD LOSSES AND PAYMENT OF INTEREST TO M / S INTRA PORT INDIA LTD WOULD NOT CAUSE ANY TAX LIABILITY' . ACCORDING TO THE ASSESSEE THIS IS FACTUALLY INCORRECT. THE PETITIONE R SUBMITS THAT THE COMPANY M/ S INTRA PORT INDIA LTD IS NOT A GROU P CONCERN OF THE ASSESSEE AND THE ASSESSEE IS NOT RELATED TO THE COMPANY EITHER DIRECTLY OR INDIRECTLY. THE COMPANY INTRA PO RT INDIA LTD WAS NOT TAKEN OVER BY THE ASSESSEE GROUP AS WRONGLY SAID IN THE ORDER AND THE PAYMENT OF INTEREST MADE TO THE COMPA NY WAS ONLY PURELY OUT OF BUSINESS DEALINGS AND ASSESSEE HAS NO T BENEFITTED IN HIS TAX LIABILITY BY THE SAID PAYMENT. MA NOS 111 112 113 114 AND 60 OF 2013 BAGGA GROUP C ASES HYDERABAD PAGE 3 OF 6 4. 4. IT IS FURTHER SUBMITTED BY THE PETITIONER THA T THE BALANCE SHEET AND P&L A/ C FOR M/ S INTRA PORT INDIA LTD FO R THE YEAR ENDING 31 ST MARCH, 2002 WHICH WERE ADMITTED FOR ADJUDICATION B Y THE ITAT AS PARA 93 OF ITS ORDER IN ITA NO.766/HYD/ 2007. THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT CLEARLY S HOWS THAT NO PERSON FROM BAGGA GROUP IS DIRECTOR OF M/ S. INTRA PORT INDIA LTD. FURTHER A COPY OF FORM NO.29 SUBMITTED BEFORE THE REGISTRAR OF COMPANIES WAS ALSO SUBMITTED WHICH CLEARLY INDIC ATES THAT SRI SATPAL SINGH BAGGA, BROTHER OF THE ASSESSEE WAS APP OINTED AS DIRECTOR OF THE COMPANY ONLY FROM 24TH APRIL, 2004, COPIES OF WHICH WERE ENCLOSED. THE PAYMENT OF INTEREST WAS MA DE ONLY AFTER SERIES OF NEGOTIATIONS AND WAS PURELY OUT OF BUSINESS ACTIVITIES. 5. WE FIND THAT A MISTAKE HAS OCCURRED WHICH IS APP ARENT ON RECORD AT PARA NO.102 OF THE TRIBUNALS ORDER IN TH E CASE OF BALWINDER SINGH BAGGA AND OTHERS DATED 3.8.2012. HE NCE WE RECALL THE ORDER OF TRIBUNAL IN ITA NO.710/HYD/2006 FOR LIMITED PURPOSE OF HEARING THE ISSUE IN PARA NO.102 AND DIR ECT THE REGISTRY TO RE-FIX THE HEARING. 6. IN THE RESULT M.A.NO.111/HYD/2013 FILED BY THE A SSESSEE IS ALLOWED. M.A. NO.112/HYD/2013 (ITA NO.766/HYD/2007) AND M.A. NO.113/ HYD/2013 (ITA NO.904/HYD/2008) 1. SINCE SIMILAR ISSUES ARE INVOLVED FOR A.Y 2003-0 4 AND 2004-05 IN ITA NOS.904/HYD/2008 AND 766/HYD/2007, A S THOSE IN M.A. NO.111/HYD/2013 OUT OF ITA NO.710/HYD/2006, WE MA NOS 111 112 113 114 AND 60 OF 2013 BAGGA GROUP C ASES HYDERABAD PAGE 4 OF 6 RECALL ITA NO.766/HYD/2007 AND 904/HYD/2008 FOR THE LIMITED PURPOSE OF HEARING ISSUE PARA NO.102 AND DIRECT THE REGISTRY TO RE-FIX THE HEARING. 2. IN THE RESULT M.A. NOS.112 & 113/HYD/203 ARE TRE ATED AS ALLOWED. M.A. NO.60/HYD/2013 (ITA NO.709/HYD/2006) 1. THE FACTS OF THE CASE ARE THAT ASSESSEE SMT. INDERJEET KAUR BAGGA HAD FILED HER RETURN OF INCOME FOR A.Y 1999-2 000 DECLARING A TOTAL INCOME OF RS.2,05,600. ITAT B BENCH HAS P ASSED ORDER ON 3.8.2012 DISMISSING THE ASSESSEES APPEAL IN ITA NO.709/HYD/2006. 2. WHILE PASSING THE ORDER, ITAT CONFIRMED THE ORDE R OF CIT (A) AND ENHANCED THE INCOME OF THE ASSESSEE BY RS.25,00 ,000 BY ADDING BACK THE GIFT RECEIVED BY THE ASSESSEE FROM HER MOTHER SMT. RAM PYARI BASED ON WRONG FACTS. IT WAS SUBMITT ED BY THE PETITIONER THAT ASSESSEE WAS IN RECEIPT OF RS.25.00 LAKHS FROM HER MOTHER AS GIFT. THE MONEY WAS RECEIVED BY THE ASSES SEE'S MOTHER FROM INTRA PORT INDIA LTD AND THE ITAT VIDE ORDER I N PARA 73 HAVE MENTIONED THAT M/S. INTRA PORT INDIA LTD IS A GROUP CONCERN OF BAGGA GROUP WHICH IS NOT CORRECT. THE PETITIONER SU BMITTED BALANCE SHEET AND P&L A/C OF M/S. INTRA PORT INDIA LTD FOR THE YEAR ENDING 31 ST MARCH, 2002 WHICH DEARLY SHOWS THAT NO PERSON FROM BAGGA GROUP IS DIRECTOR OF M/S INTRA PORT INDI A LTD AND ASSESSEE IS NOT RELATED TO INTRA PORT INDIA LTD., E ITHER DIRECTLY OR INDIRECTLY. ASSESSEE SUBMITTED ALL THE DETAILS REGA RDING THE SOURCE OF FUNDS RECEIVED. AMOUNT RECEIVED IS THROUG H PROPER BANKING CHANNEL, HENCE AS PER THE ESTABLISHED LAW, ASSESSEE IS NOT REQUIRED TO PROVE THE SOURCE. THE LD COUNSEL FO R THE ASSESSEE MA NOS 111 112 113 114 AND 60 OF 2013 BAGGA GROUP C ASES HYDERABAD PAGE 5 OF 6 SUBMITTED WITH ALL DETAILS OF THE SOURCES HAVE BEEN RECORDED AND THE ASSESSEE IS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE. THE LD COUNSEL HAS ALSO RELIED, ON THE DECISION OF THE DCI T VS. VISHWANATH PRATAP GUPTA (129 ITO 95 - 3RD MEMBER). 3. WE FIND THAT A MISTAKE APPARENT ON RECORD HAS OC CURRED IN THE TRIBUNALS ORDER IN ITA NO.709/HYD/2006 AT PARA S 73 AND 74. HENCE WE RECALL ITA NO.709/HYD/2006 FOR THE LIM ITED PURPOSE OF RE-HEARING ISSUE IN PARA NO.73 AND 74. R EGISTRY IS DIRECTED TO RE-FIX THE HEARING ACCORDINGLY. 4. IN THE RESULT M.A. NO.60/HYD/2013 IS TREATED AS ALLOWED. M.A. NO.114/HYD/2013 (IT (SS) A NO.50/HYD/2005): 1. BRIEFLY STATED, ASSESSEE SHRI SATPAL SINGH BAGGA FILED HIS BLOCK PERIOD RETURN OF INCOME U/S 158BC OF THE ACT ON 18.10.2002 DECLARING A TOTAL INCOME AS NIL. ITAT B BENCH PASSED ORDER ON 3.8.2012 PARTLY ALLOWING THE ASSESS EES APPEAL VIDE IT(SS)A NO.50/HYD/2005. 2. BY THIS PETITION, IT WAS ARGUED THAT AT THE TIME OF APPEAL BEFORE THE HON'BLE ITAT HYDERABAD, THAT THE TRANSACTIONS E NTERED INTO REGULAR BOOKS OF ACCOUNTS OF ASSESSEE AND WHICH IS REFLECTED IN THE BOOKS CANNOT BE THE SUBJECT MATTER FOR ADDITION IN BLOCK PERIOD ASSESSMENTS. HENCE, MISTAKE HAS OCCURRED IN THE ORDER OF THE TRIBUNAL. BY THIS PETITION IT IS STATED THAT WH ILE PASSING THE ORDER. ITAT HAS NOT CONSIDERED THE ESTABLISHED LAW THAT THE TRANSACTIONS ENTERED IN THE REGULAR BOOKS OF ACCOUN TS HAVE TO BE ENQUIRED INTO ONLY IN THE REGULAR ASSESSMENT (BUT N OT IN BLOCK ASSESSMENT), UNLESS THERE IS SOME INCRIMINATING MAT ERIAL FOUND AND SEIZED DURING THE SEARCH WHICH HAS BEARING ON T HE DISCLOSED MA NOS 111 112 113 114 AND 60 OF 2013 BAGGA GROUP C ASES HYDERABAD PAGE 6 OF 6 TRANSACTIONS. IT IS FURTHER SUBMITTED THAT THE AO H AD MADE ADDITIONS IN RESPECT OF THE CREDITS WHICH WERE ENTE RED IN THE BOOKS OF ACCOUNTS IN RESPECTIVE A.YS BEFORE SEARCH PROCEEDINGS WERE TAKEN UP AND WERE ALSO DONE THROUGH BANK CHEQU ES/DRAFTS. 3. AT PARA NO.22.1, WE FIND THAT THERE IS AN ERROR APPARENT ON RECORD IN THE ORDER OF THE TRIBUNAL. HENCE, WE RECA LL THE ORDER FOR THE LIMITED PURPOSE OF RE-HEARING ISSUE IN PARA NO. 22.1. REGISTRY IS DIRECTED TO RE-FIX THE HEARING ACCORDINGLY. 4. IN THE RESULT, M.A. NO.114/HYD/2013 FILED BY THE ASSESSEE IS ALLOWED. 5. TO SUM UP, MISCELLANEOUS APPLICATIONS FILED BY T HE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JULY, 2015. S D/ - S D/ - (B. RAMAKOTAIAH) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 30 TH JULY, 2015. VNODAN/SPS COPY TO: SHRI BALWINDER SINGH BAGGA SMT. INDERJEET KAUR BAGGA, SHRI SATPAL SINGH BAGGA C/O M/S. P. MURALI & CO. CAS 6-3- 655/2/3, IST FLOOR SOMAJIGUDA, HYDERABAD 500082 2. ACIT CENTRAL CIRCLE - 1 HYDERABAD 3. CIT (A) IV HYDERABAD 4. CIT (A)-I HYDERABAD 5. CIT (A)-V HYDERABAD 6. CIT-III HYDERABAD 7. CIT (CENTRAL) HYDERABAD 8. CIT IV HYDERABAD 9. DR ITAT HYDERABAD 10. GUARD FILE BY ORDER