Shri Amitbhai Vasantlal Shah, Surat V. The Asstt. Commissioner of Income Tax, Central Circel-4, Surat

MA 14/SRT/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3323 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-03-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-02-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 16-02-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 132; 143(1); 139(4); 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER M.A. No. 14/Srt/2023 (Arising out of IT(SS)A No. 198/AHD/2017) (Assessment Year: 2011-12) (Physical hearing) Shri Amitbhai Vasantlal Shah, C, Ground Floor, Ravijyot Apartment, Opp. Lourdes Convent School, Athwalines, Surat. PAN: AAACV 8291 M Vs. A.C.I.T., Central Circle-4, Surat. APPELLANT RESPONDEDNT Assessee represented by Shri Hiren M. Diwan, C.A. Respondent represented by Shri Vinod Kumar, Sr. DR Date of hearing 02/02/2024 Date of pronouncement 22/03/2024 Order under section 254(2) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This Miscellaneous Application (MA) is filed by the assessee for seeking rectification in order of this Tribunal dated 11/01/2023 passed in IT(SS)A No. 198/Ahd/2017 for the Assessment Year (AY) 2011-12. In the Misc. application, the assessee has contended that while passing the order dated 11/01/2023, the Tribunal omitted to consider and adjudicate the written and oral submission made before the Bench with regard to additional ground No. 1, which relates to treatment of income from ‘other sources’ against the ‘business income’ declared by assessee. The learned Authorised Representative (ld AR) for the assessee submits that initially IT(SS)A No. 198/Ahd/2017 was adjudicated vide order dated 27/09/2021. Order dated 27/09/2021 was partially recalled in M.A. No. 6 to 8/Srt/2022 dated 21/11/2022 wherein the order dated 27/09/2021 MA No. 14/Srt/2023 Amitbhai Vasantlal Shah 2 was recalled to adjudicate the issues/ additions relating to unabated assessment. The ld. AR of the assessee submits that vide order dated 11/01/2023, the issue with regard to addition on account of payment to M.S. Fabrics, which was made in absence of incriminating material, was adjudicated and allowed in favour of assessee. However, at the same time, the issue raised in additional ground of appeal, with regard to treatment of ‘business income’ to ‘other source’, which was argued extensively on 04.01.2023, remained un- adjudicated. The ld. AR of the assessee submits that such additional ground of appeal was left un-adjudicated unintentionally, which is mistake apparent in the order dated 11/01/2023. The ld. AR of the assessee further The ld. AR of the assessee submits that there was no incriminating material was found during the search action on 27.12.2014 for treating the discloser of Rs. 5.35 crores as income from ‘other sources’ in place of ‘business income’, as declared by the assessee. The ld. AR of the assessee further submits that the said amount treatment of such income as income from ‘other sources’ in place of ‘business income’ is not based on any incriminating material. Therefore, the order dated 11/01/2023 and require rectification to treat the discloser of Rs. 5.35 crores as ‘business income’ as declared in the return of income. To support his submissions, the ld AR for the assessee relied on the decisions in CIT Vs Singhad Technical Education Society (2017) 387 ITR 344 (SC), Desai Construction (387 ITR 552), PCIT Vs Saumya Construction Private Limited (387 ITR 529-Guj) and PCIT Vs Abhisar Buildwell (P) Limited (2023) 149 taxmann.com 399(SC). MA No. 14/Srt/2023 Amitbhai Vasantlal Shah 3 2. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that the assessee is seeking additional relief which was not allowed at the time of passing the order dated 11/01/2023. The relief claimed by the assessee in the present application is beyond the scope of section 254(2) of Income Tax Act. 3. We have considered the submission of both the parties and perused the record carefully including the order of Tribunal dated 22.11.2022 in MA No. 06/Srt/2022 and subsequent order dated 11/01/2023. On careful perusal of record, we find that in para 7 of order dated 21/11/2022 passed in MA No. 6 /Srt/2022, order dated 27/09/2021 was recalled for limited purpose to adjudicate the issue relating to unabated assessment. However, while adjudication the issue of unabated assessment, the impugned issue with regard to treating the disclosed income of Rs. 5.35 Crore as income from ‘other sources’ in place of ‘business income’ was left un-adjudicated. We find that the issue left to be adjudicated being a part of additional ground of appeal, was not based on incriminating material found during the course of search. Thus, we find mistake apparent in the order dated 11.01.2023 in ITA No. 198/Srt/2017. As we find mistake in the order dated 11/01/2013, hence, we advert to adjudicate the additional ground of appeal. 4. We find that it is admitted fact that the assessee filed his return of income for AY 2011-12 on 31.03.2012. A search action under section 132 was carried on the premises of assessee on 27.12.2014. On the date of search, no assessment for AY 2011-12 was pending. The assessee filed his return of income under section 139(4) on 31.03.2012, was processed under section 143(1) on 19. MA No. 14/Srt/2023 Amitbhai Vasantlal Shah 4 04.2012 and refund was issued on 26.06.2012. Thus, no assessment was for AY 2011-12 was pending on the date of search on 27.12.2014, in other words, the assessment for this assessment year (AY 2011-12) remained unabated. The assessing officer treated the discloser income of Rs.5.35 Crore as income from other sources by taking view that onus was on the assessee to substantiate that the receipt is business receipt belongs to various income of business activities as claimed by the assessee from brokerage income or profit as mediator, is not substantiated by the assessee. 5. We find that the ld CIT(A) in para 7.2 of his order at page number 10 of his order by following the order of Desai Construction (387 ITR 552) held “Following the above judgement, it is held that the assessments, for AYs 2007-08 to 2011-12 have become final on the date of search (action 132(1) was carried on 27.12.2014). for these assessment years any addition can be made only on the basis of any incriminating evidence found/ received as the result of the search.”. The ld CIT(A) also held that this ground of appeal is only academic as it has no bearing on the determination of total tax and accordingly not adjudicated specifically. 6. We find that the assessing officer nowhere in the assessment order recorded that treatment of the income disclosed by the assessee from ‘business income’ to income from ‘other sources’ is based on incriminating material. Now, it is settled position under law that the assessing officer has no power to interference in the unabated assessment in absence of incriminating evidence on particular issue. Once, this fact was accepted by ld CIT(A), he ought to have direct the assessing officer not to disturb the treatment of income offered by MA No. 14/Srt/2023 Amitbhai Vasantlal Shah 5 assessee. In view of the aforesaid factual discussion and legal position, the result, additional ground of appeal raised by the assessee is allowed. 7. In the combined result, this Misc. application of assessee is allowed. Further, the additional ground of appeal raised by the assessee vide application dated 25.09.2018 (filed on 16/02/2021) is also allowed. Order was pronounced in the open court on 22 nd March, 2024. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 22/03/2024 *Ranjan Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard File By order Sr. Pvt. Secretary, ITAT, Surat