SRI. D. K SHIVAKUMAR ,BANGALORE V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(4), BENGALURU

SA 63/BANG/2024

AI Insights

The case involves Shri D.K. Shivakumar, who filed a stay petition against an outstanding demand of Rs. 108,00,67,443 for the assessment year 2018-19, following a search and seizure operation by the Income Tax Department. The initial assessment was based on suspicions and conjectures, leading to a significant tax demand. After partial payments and an appeal to the CIT(Appeals), which was dismissed, the assessee approached the ITAT for a stay on the remaining demand. The Tribunal considered the merits of the case, the payments already made, and the potential for substantial relief in the appeal, leading to the decision to grant a stay.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 25123 (ITAT-BANGALORE)
• Duration Of Justice: 28 day(s)
• Appeal Type: Others
• Pronouncement Date: 04-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-10-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 07-10-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DILIP KUMAR; JR. STANDING COUNSEL
• Assessee Lawyers: V. CHANDRASHEKAR
• Keywords: Capital Gains; Rectification of order
• Section: 143(3); 154

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER SP No.63/Bang/2024 [in ITA No.1064/Bang/2024] Assessment year : 2018-19 Shri D.K. Shivakumar, No.252, “Kenkkeri”, 18th Cross Road, Upper Palace Orchards, Sadashivanagar, Bengaluru – 560 080. PAN : AKKPS 1306F Vs. The Deputy Commissioner of Income Tax, Central Circle 1(4), Bangalore. APPELLANT RESPONDENT Appellant by : Shri V. Chandrashekar, Advocate Respondent by : Shri Dilip Kumar, Jr. Standing Counsel, on behalf of Shri Arvind Kamath, ASG & Shri Submramanian, Jt.CIT(DR) Date of hearing : 25.10.2024 Date of Pronouncement : 04.11.2024 O R D E R Per Laxmi Prasad Sahu, Accountant Member This stay petition is filed by the assessee seeking stay against the outstanding demand of Rs.108,00,67,443 for assessment year 2018-19. 2. The ld. AR submitted that a search was conducted in the premises of the assessee by the Income Tax Department on 02.08.2017. The ld. AO, in pursuant of search conducted without SP No.63/Bang/2024 Page 2 of 6 properly appreciating the details filed by the assessee, based on suspicion and surmises and conjectures arbitrarily concluded the assessment by passing an order u/s. 143(3) r.w.s. 153D of the Act dated 31.03.2019 determining total income at Rs.323,49,76,572. Further the ld. AO considering the rectification application filed by the assessee passed order u/s. 154 arrived at total assessed income of Rs.218,52,20,684 raising a revised demand of Rs.134,40,75,777. During the pendency of appeal before the CIT(Appeals), the assessee filed a stay petition before the AO on 22.11.2021. The assessee had paid 20% of the disputed demand amounting to Rs. 25,99,07,734/- and being satisfied, the AO granted stay vide order u/s. 220(6) dated 30.12.2021 on the balance amount. Consequent to disposal of appeal by the ld. CIT(Appeals) by order dated 27.03.2024, the AO sought payment of the balance disputed demand. The assessee has filed an appeal against the impugned order of the CIT(Appeals) before the ITAT on 24.05.2024. 3. It was further submitted that during the pendency of appeal before the ITAT, the ld. AO has vide letter dated 26.09.2024 called for the payment of balance demand amounting to Rs.108,00,67,443 before 09.10.2024, otherwise recovery action will be taken. Hence stay petition is filed before the ITAT. 4. The ld. AR has filed synopsis giving the prima facie reasons/grounds under which stay is requested which is as under:- SP No.63/Bang/2024 Page 3 of 6 Sl. No. Particulars of Additions / Disallowances Amount in Rs. Submissions [i]. Alleged Unaccounted money seized at B-2, Safdarjang Enclave. 41,03,600 /- Belongs to HUF which admittedly has huge tracts of cultivated agricultural lands for generations & declared before tax authorities over the past several years & accepted by the Department. [ii]. Alleged Unaccounted money seized at B-4, Safdarjang Enclave 1,37,36,500/- The amount which was seized in the premises of one Zeus Constructions Pvt Ltd has been owned up by its major shareholder Sri.Sachin Narayan [iii]. Alleged Unaccounted money seized at B-5, Safdarjang Enclave. 6,61,26,000/- The cash belonging to one Sunil Sharma in his residence has been owned up by him in his return of income. [iv]. Alleged Unaccounted money seized from residence of Mr. Anjaneya. 15,00,000/- This amount has been owned up by Sri. Sachin Narayan as the same belongs to him. [v]. Alleged Unexplained money based on material seized from residence of Mr. K Rajendran. 2,30,00,000/- These represent entries in a diary maintained by one Mr. Rajendra, an employee of Sri. Sunil Sharma and the same is not supported by any corroborative evidence [vi]. Alleged Unexplained investment towards Late Mrs. Vishalakshi Devi Property. 4,00,00,000/- This amount has been owned by Sri. Sachin Narayan & reflected in his books of accounts [vii]. Alleged Unexplained money based on material seized from residence of the Petitioner. 43,18,00,000/- These are entries found in some slips of loose paper, not supported by any corroborative evidence. [viii].Alleged Unexplained money based on material seized from residence of the Petitioner. 28,00,00,000/- These are entries found in some slips of loose paper, not supported by any corroborative evidence. [ix]. Alleged Unexplained money based on material seized from residence of the 9,26,00,000/- These are entries found in some slips of loose paper, not supported by any corroborative evidence. SP No.63/Bang/2024 Page 4 of 6 Petitioner. [x]. Alleged Unexplained money based on material seized from residence of the Petitioner. 3,28,00,000/- These are entries found in some slips of loose paper, not supported by any corroborative evidence. [xi]. Alleged Unexplained money based on material seized from residence of the Petitioner. 6,51,53,000/- These are entries found in some slips of loose paper, not supported by any corroborative evidence. [xii]. Alleged Unexplained money based on material seized from residence of the Petitioner. 4,50,00,000/- These are entries found in some slips of loose paper, not supported by any corroborative evidence. [xiii].Unexplained jewellery based on material seized from residence of the Petitioner. 1,85,00,000/- The assessee had obtained estimates for certain jewelry with total value amounting to Rs.1,85,00,000/-, out of which the assessee purchased Jewelry worth about only 1,26,25,000/-, the same being paid for through banking channels. [xiv].Alleged Unexplained investment made by Mr. Chandrashekhar Sukhapuri on behalf of the Petitioner. 50,00,000/- The amount represents investment made by one H.P. Kantharaj, who is also assessed to tax & the transaction does not pertain to the assessee. [xv]. Capital Gains on transaction with M/s. Davanam Constructions Private Limited. 103,36,94,904/- The amount of income arising by way of Capital Gains arises in the A.Y. 2020-21 & 2021-22 & the same has been declared by the assessee in his return of income filed for those respective assessment years & applicable taxes paid. Taxing the same in A.Y.2018-19 amounts to a double addition. [xvi].Income from other sources on account of transaction with M/s. Davanam Constructions. 104,97,55,888/- This addition is made protectively & needs to be cancelled. TOTAL ADDITIONS 320,27,69,892/- SP No.63/Bang/2024 Page 5 of 6 5. It is submitted that having regard to the merits of the case, the assessee has a very good prima facie case and is confident of substantial relief before the Tribunal. Out of the outstanding disputed taxes of Rs. 134,40,75,777/-, the Petitioner has as on date paid 20% of the disputed demands amounting to Rs. 26,88,15,155/-. 6. Wherefore in view of the above facts & circumstances & more particularly in view of the fact 20% of the Disputed Demand Outstanding has been paid, the assessee has balance of convenience in his favour, hence stay against the collection of balance outstanding Demand may be granted in the interest of justice & equity. 7. The ld. DR strongly opposed the submissions of the assessee for grant of stay. 8. Considering the rival submissions, we note that pursuant to search u/s. 132, the assessment was completed u/s. 143(3) r.w.s. 153D of the Act on 31.12.2019. Rectification order u/s. 154 was passed on 12.02.2020 revising the assessed income at Rs.218,52,20,684 raising a demand of Rs.134,40,75,777. During the pendency of appeal before the CIT(Appeals), the AO noted that the assessee had paid 20% of the substantial demand amounting to Rs.25,99,04,734 and in view of CBDT Instruction No.1914 dated 21.3.1996 and OM dated 29.02.2016 & 31.07.2017, granted stay of balance outstanding demand vide order dated 30.12.2021. Pursuant to dismissal of appeal of assessee by the ld. CIT(Appeals), the AO vide letter dated 26.09.2024 called for the payment of outstanding demand of Rs.108,00,67,443 before 9.10.2024, SP No.63/Bang/2024 Page 6 of 6 failing which, initiating recovery action under the Act. Further the assessee has paid Rs.89,10,241 on 26.09.2024 (challan filed on record). We note that the assessee has paid Rs.26,88,15,155 (25,99,04,734 + 89,10,421) which is 20% of the total demand satisfying the condition of CBDT Instruction noted above. Accordingly we grant stay against outstanding balance demand for a period of six months or till the disposal of the appeal, whichever is earlier. The assessee is directed to cooperate with the appeal proceedings. If the assessee seeks unnecessary adjournment of the hearing of appeal, the stay granted will get automatically vacated. 9. In the result, the stay petition is allowed in the above terms. Pronounced in the open court on this 04th day of November, 2024. Sd/- Sd/- ( SOUNDARARAJAN K.) (LAXMI PRASAD SAHU ) JUDICIAL MEMBER ACCOUNTANT MEMBER Bangalore, Dated, the 04th November, 2024. /Desai S Murthy / Copy to: 1. Appellant 2. Respondent 3. Pr.CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. "