ITO-12(3)(1), MUMBAI, MUMBAI V. JOGIA PROPERTIES LIMITED, MUMBAI

MA 525/MUM/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 5603 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-11-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 26-10-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 24-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRAKASH D CHOUGULE
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE AMIT SHUKLA, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER MA No. 525/Mum/2023 (Arising out of ITA No. 471/Mum/2018) (A.Y. 2009-10) ITO-12(3)(1) Room No. 145, 1 st Floor, Aaakar Bhavan, M. K. Road, Mumbai-400020 Vs. Jogia Properties Ltd. 324, Master Mind-IV, 3 rd Floor, Royal Palms, Aarey Milk Colony, Goregaon(E), Mumbai-400065 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACJ9910H Appellant .. Respondent Appellant by : None. Respondent by : Shri. Prakash D Chougule Date of Hearing 27.10.2023 Date of Pronouncement 06.11.2023 आदेश / O R D E R PER AMARJIT SINGH :- 1. This miscellaneous application filed by the revenue is directed against the order of ITAT vide ITA No. 471/Mum/2018. Vide miscellaneous application the revenue has submitted that in assessee’s own case for A.Y. 2007-08 and 2008-09, similar issue has been set aside by the ITAT to the file of the AO. However, in the present case the ITAT has dismissed the appeal of the P a g e | 2 MA No. 525/Mum/2023 AY 2009-10 Jogia Properties Ltd. revenue without considering the decisions for A.Y. 2007-08 and 2008-09. 2. Heard both the Ld. DR and perused the material on record. We find that vide order dated 30.11.2023 ITA No. 471/Mum/2018 the ITAT has dismissed the appeal of the revenue following the decisions of the ITAT on similar issues and identical facts in its group of cases holding that substantive addition on the similar issue has been deleted on merit as in the case of the M/s Shree Global Tradefin Ltd. as discussed at Para No. 5 of the ITAT order. 3. The relevant extract of the findings of the ITAT as mentioned in the ITAT order is reproduced as under: DCIT vs Archieve Reality Development ITA No. 456/Mum/2018 date 06.07.2022 22. Coming to the grounds raised by the revenue, considered the rival submissions and material placed on record, we observe that the assessee is a group company of Jogia Group and invested a sum of 43.5 Crores. The assessee received the equivalent sum from 25 companies as share application money and passed on the same to M/s. Shree Global Tradefin Ltd. immediately as advance which was later on converted into share capital. The Assessing Officer as well as CIT(A) recorded a finding that 25 companies who invested in the assessee company are included in the list of said 53 investor P a g e | 3 MA No. 525/Mum/2023 AY 2009-10 Jogia Properties Ltd. companies which have advanced money to 14 companies including the assessee and same amount has been transferred by all 14 companies including the assessee to one company namely M/s.Shree Global Tradefin Ltd. Thus, the amounts have been transferred by 14 companies including assessee to M/s. Shree Global Tradefin Ltd, and the flow of funds are clearly evident and discernible. As such, there is no doubt as to the source of money. The Assessing Officer added .43,50,00,000/- u/s 68 of the Act on protective basis in the hands of the assessee and simultaneously similar addition of *.43,50,00,000/- was made to the income of Shree Global Tradefin Ltd. on substantive basis on the ground that source of money was not proved. The Assessing Officer also added to the income of the assessee, commission @ 3% on the total investments in Shree Global Tradefin Ltd., and accordingly addition of .1,30,50,000/- was also made. Both these additions were deleted by ld.CIT(A) by holding that the assessee is a pass through entity whereas the addition was confirmed in the hands of M/s. Shree Global Tradefin Ltd. Pertinent to note that in the appellate proceeding, the Tribunal deleted the addition in the case of Shree Global Tradefin Ltd., in ITA No. 7310 to 7313/Mum/2017, vide order dated 15.10.2019 and there is no finding by the Coordinate Bench that the said amount of 1.43.50 Cr belongs to the present P a g e | 4 MA No. 525/Mum/2023 AY 2009-10 Jogia Properties Ltd. assessee. We note from the perusal of the order of coordinate bench that the addition in the case of M/s. Shree Global Tradefin Ltd. has been deleted on merit. We observe form the submissions that the Coordinate Bench has considered the similar issue in the case of Chikura Properties ltd., in ITA.No. 457/Mum/2018 dated 06.08.2020 adjudicated as under: - "......Thus, the coordinate bench has not given any finding that the money belongs to the assessee. We also note that both the authorities below have recorded a findings of fact that there is one to one nexus between the funds received from 25 companies and advanced to M/S Shree Global Tradefin Ltd and the assessee is merely a conduit. As stated elsewhere in this order that in the case of the assessee, the addition was made on protective basis. The protective addition is always made whenever there is a doubt about the correct entity or correct assessment year. Thus, where there is a doubt as to whom the income belongs to, the addition is made in the hands of two persons, i.e. on substantive basis in the hands of one person and on protective basis in the hands of the other person. The protective addition would become substantive, only and only if substantive addition is deleted by the appellate authority on the ground that the income belonged to the person in whose P a g e | 5 MA No. 525/Mum/2023 AY 2009-10 Jogia Properties Ltd. hands protective addition has been made. The protective addition does not survive if the substantive addition has been confirmed or substantive addition has been deleted on merits. In the present case before us the addition was made on protective basis while on substantive basis it was made in the case of M/S Shree Global Tradefin Ltd. The said substantive addition was deleted by the coordinate bench vide order dated 15.10.2015 passed in ITA No. 7310 to 7313/Mum/2017 dated 15.10.2018 on merits. In our considered opinion the protective addition has to go as the substantive addition was deleted on merits. We do not find any force in the arguments/written submissions of the ld. DR that where substantive addition is deleted the protective has to restored to the AO as in the case of M/S Shree Global Tradefin Ltd assessment has not attained finality. We are therefore inclined to dismiss the appeal of the revenue by upholding the order of CIT(A)." 23. Respectfully following the above said decision, we are also inclined to decide the issue in favour of the assessee and against the revenue Accordingly, the ground raised by the revenue is dismissed." DCIT vs Reva Properties ltd. ITA No. 458-460/Mum/2018 dated 08.08.2022 P a g e | 6 MA No. 525/Mum/2023 AY 2009-10 Jogia Properties Ltd. 17. So far as the original ground of appeal is concerned, we ntice that the identical issue has been decided by the coordinate bench in the case of Cikura Properties Ltd. wherein it has been held by the coordinate bench as under: 9. We have heard the rival contentions and perused the materials placed before us including the written submissions by both the sides and impugned order passed by ld. CIT(A) The undisputed facts are that the assessee is a group company of Jogia Group and invested a sum of Rs. 43.50 Crores in M/s. Shree Global Tradefin Ltd. The assessee received the equivalent sum from 25 companies as share application money and passed on the same to M/s. Shree Global Tradefin Ltd. immediately as advance which was later on converted into share capital. The A.O. as well as CIT(A) recorded a findings that 25 companies who invested in the assessee company are included in the list of said 53 investor companies which have advanced money to 14 companies including the assessee and same amount has been transferred by all 14 companies including the assessee to one company M/s. Shree Global Tradefin Ltd. Thus, the amounts have been transferred by 14 companies including assessee to M/s. Shree Global Tradefin Ltd, and the flow of funds are clearly evident and discernible. As such, there is no doubt as to the source of money, The AO added 43,50,00,000/- u/s. 68 P a g e | 7 MA No. 525/Mum/2023 AY 2009-10 Jogia Properties Ltd. of the Act on protective basis in the hands of the assessee and simultaneously similar addition of Rs. 43,50,00,000/- was made to the income of Shree Global Tradefin Ltd. on substantive basis on the ground that source of money was not proved. The A.O. also added to the income of the assessee, commission @3% on the total investments in Shree Global Tradein Ltd, and accordingly addition of R 1,30,50,000/- was also made. Both these additions were deleted by Id CITA) by holding that the assessee is a pass through entity whereas the addition was confirmed in the hands of M/s. Shree Global Tradefin Ltd Pertinent to note that in the appellate proceeding, the Tribunal deleted the addition in the case of Shree Global Tradefin Ltd., in ITA No. 7310 to 7313/Mum/2017, vide order dated 15.10.2019 and there is no finding by the Coordinate Bench that the said amount of Rs. 43.50 Cr belongs to the present assessee. We note from the perusal of the order of coordinate bench that the addition in the case of M/s. Shree Global Tradefin Ltd. has been deleted on merit. Thus, the coordinate bench has not given any finding that the money belongs to the assessee. We also note that both the authorities below have recorded a finding of fact that there is one to one nexus between the funds received from 25 companies and advanced to M/s. Shree Global Tradefin Ltd and the assessee is merely a conduit. As stated elsewhere in this order that in P a g e | 8 MA No. 525/Mum/2023 AY 2009-10 Jogia Properties Ltd. the case of the assessee, the addition was made on protective basis. The protective addition is always made whenever there is a doubt about the correct entity or correct assessment year. Thus, where there is a doubt as to whom the income belongs to, the addition is made in the hands of two persons, Le. on substantive basis in the hands of one person and on protective basis in the hands of the other person. The protective addition would become substantive, only and only if substantive addition is deleted by the appellate authority on the ground that the income belonged to the person in whose hands protective addition has been made. The protective addition does not survive if the substantive addition has been confirmed or substantive addition has been deleted on merits. In the present case before us the addition was made on protective basis while on substantive basis it was made in the case of M/s. Shree Global Tradefin Ltd. The said substantive addition was deleted by the coordinate bench vide order dated 15.10.2015 passed in ITA No. 7310 to 7313/Mum/2017 dated 15.10.2018 on merits. In our considered opinion the protective addition has to go as the substantive addition was deleted on merits. We do not find any force in the arguments/written submissions of the Id. DR that where substantive addition is deleted the protective has to restored to the A.O. as in the case of M/s. Shree Global Tradefin Ltd., P a g e | 9 MA No. 525/Mum/2023 AY 2009-10 Jogia Properties Ltd. assessment has not attained finality. We are therefore inclined to dismiss the appeal of the revenue by upholding the order of CIT(A)." 18. Since the issue involved in the present appeal filed by the Department are identical, therefore, respectfully following the above decision, the appeal filed by the Department is dismissed." 4. Neither in the miscellaneous application nor before us the revenue has demonstrated the existence of any patent mistake apparent from record, therefore, no merit is found in the miscellaneous application filed by the revenue. Accordingly, this miscellaneous application of the revenue is dismissed. 5. In the result this miscellaneous application of the revenue is dismissed. Order Pronounced in Open Court on 06.11.2023 Sd/- Sd/- (AMIT SHUKLA) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Place: Mumbai Date 06.11.2023 ANIKET SINGH RAJPUT/STENO आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. P a g e | 10 MA No. 525/Mum/2023 AY 2009-10 Jogia Properties Ltd. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अतधकरण/ ITAT, Bench, Mumbai.