Income Tax Appellate Tribunal - Mumbai
Shrenik J. Shah, Mumbai vs Department Of Income Tax on 2 September, 2013
आयकर अपीलीय अिधकरण, डȣ" खंडपीठ मुंबई अिधकरण "डȣ INCOME TAX APPELLATE TRIBUNAL,MUMBAI - 'D' BENCH.
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डȣ.मुमोहन,उपाÚय¢ मुमोहन उपाÚय¢ एवं राजेÛि,ले ि लेखा सदःय Before S/Sh.D.Manmohan,Vice-President & Rajendra,Accountant Member आयकर त.ज./IT(SS)08/Mum/2003, Block period-1991 - 23.9.1999 Dy.CIT CC-31, Cent. Range-7, Shri Shrenik J.Shah, Old C.G.O. Building, Annexe, 7th 1017-B, P.J.Towers, Dalal Street, Floor, M.K.Marg,Mumbai-20 Vs. Fort, Mumbai-400023 PAN:ABSPS3090H (अपीलाथȸ /Appellant) (ू×यथȸ / Respondent) आयकर त.ज./IT(SS)38/Mum/2003,Block period-1990-91 to 23.9.1999 Shri Shrenik J.Shah, Dy.CIT CC-31, Cent. Range-7, 1017-B, P.J.Towers, Dalal Street, Old C.G.O. Building, Annexe, 7th Fort, Mumbai-400023 Vs. Floor, M.K.Marg,Mumbai-20 PAN: ABSPS3090H (अपीलाथȸ /Appellant) (ू×यथȸ / Respondent) अपीलाथȸ ओर से / Appellant by :Shri Santosh Kumar (CIT-DR) ू×यथȸ कȧ ओर से/Respondent by :Shri Nishit Gandhi सुनवाई कȧ तारȣख / Date of Hearing : 02-09-2013 घोषणा कȧ तारȣख / Date of Pronouncement : 06-09-2013 आ य क र अ िधिन यम ,1 9 6 1 कȧ धा रा 2 5 4( 1) के अ Ûतग[ त आ दे श Or d er u/ s. 2 5 4( 1) of t he I nc o me - t a x Ac t , 1 9 6 1( Ac t ) Per Rajendra,AM:
Cross appeals have been filed by the Assessing Officer (AO) and the assessee against the order dated 30.10.2002 of the CIT(A)-Central IV, Mumbai for the block period from 1991 to 23.09. 1999 raising the following grounds of appeal.
IT(SS)08/Mum/2003:
(i)On the facts and in the circumstances of the case and in law the Ld.CIT(A) erred in deleting the addition of Rs.20,803/- made by the AO on account of unexplained cash found during search.
(ii)On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in failing to appreciate that during the course of search the assessee could not explain the cash balance with the help of entries recorded in any cash book.
(iii) On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in relying on the Balance sheets as on 23.9.99 prepared by the assessee subsequent to search failing to appreciate that the same was not produced even during the block assessment proceedings.
2 IT(SS) 08/Mum/2003 Shri Shrenik J.Shah.
(iv) In the facts and circumstances of the case, the Ld.CIT(A) erred in law in admitting a copy of the Balance sheet as on 23-9-99 as additional evidence without even referring to Rule 46A of Income Tax Rules.
2(i)On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition of Rs.3,43,626/ made by the AO on account unexplained jewellery found during search.
(ii)On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in failing to appreciate that the assessee could not offer any explanation/evidence in respect of the said jewellery during the search and even during the course of block assessment proceedings.
(iii)On the facts and in the circumstances of the case and in law the Ld, CIT(A) erred in placing reliance on the Balance sheet as on 23.9.99 prepared by the assessee subsequent to search failing to appreciate that the same was not produced even during the block assessment proceedings.
(iv)In the facts and circumstances of the case, the Ld.CIT(A) erred in law in admitting a copy of the Balance sheet as on 23-9-99 as additional evidence without even referring to Rule 46A of Income Tax Rules.
3(i)On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition of Rs. 18,50,000/- made by the AO on account of unexplained investment in the property, "Hotel Alexander" accepting the explanation that the investment was made by assessee's HUF..
(ii)On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in failing to appreciate that the assessee's explanation that the investment was made by HUF was not accepted by the AO as this explanation could not be substantiated by the assessee with evidence for source of funds.
(iii)On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in observing that the addition was made on the basis of presumption whereas the addition has been made on the basis of entries in seized papers which could not be explained properly by the assessee. 4 (i)On the facts and in the circumstances of the case and in law the Ld. CIT(A,) erred in deleting the addition of Rs.9,68,l07/- made by the AO on account of unexplained renovation expenses incurred by the assessee in respect of Hotel Alexander accepting the explanation that the expenditure was incurred by the assessee's HUF.
(ii) On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in failing to appreciate that the assessee's explanation that the investment was made by his HUE was not accepted by the AO as this explanation could not be substantiated by the assessee with evidence for source of funds.
(iii) On the facts and in the circumstances of the case and in law the Ld. C'IT(A) erred in observing that the addition was made on the basis of presumption whereas the addition has been made on the basis of entries in seized papers which could not be explained, properly by the assessee.
5 (i) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the additions of Rs.5,67,900/- and its. 11,41,089/- made by the AO on account of expenses incurred on renovation of the flat accepting the explanation that the same was met by his wife.
(ii) On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in failing to appreciate that such explanation was rejected by the AO in the Block assessment as the assessee could not substantiate the explanation with evidence for the source of funds.
(i) On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the additions otRs.25,00,000/-, Rs. 36,95,505/- and Rs. 14,00,000/- made by the AO on account of investments made on the basis of three Memorandums of understanding with M/s. Forefront Investment & Trading P. Ltd.
(ii) On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in accepting the copy of account of M/s. Forefront Investment & Trading P. Ltd. failing to appreciate that the same was rejected by the AO as the assessee could not explain the above transactions with reference to the said copy of account.
7 (i) On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition of Rs 1O,90,000/- made by the AO on account of investment made in Mahal Mira property.
(ii) On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in failing to appreciate the fact that the assessee's explanation that the investments in the said properties were made by assessee's minor sons was rejected by the AO for want of evidence for the source of funds.
3 IT(SS) 08/Mum/2003 Shri Shrenik J.Shah.
(iii) On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in relying on the Balance sheets filed in respect of Shri Shripal S. Shah and Shreyas S. Shah failing to appreciate the finding of the AO in the assessment order that no investment is reflected in the Balance Sheet for A.Yr. 92-93 in the case of Shri Shreyas S. Shah and no return of income was filed after A.Yr. 92-93 in the case of Shri Shripal S.Shah.
IT(SS)38/Mum/2003:
1. The Learned CIT has erred in confirming the addition made by the AO in respect of expenses incurred during Varshitam amounting to Rs. 1,13,809/-. The CIT (Appeals) has erred in observing "that the assessee has admitted before the AO that the expenditure was incurred." The CIT has erred in not considering the explanation and cash book submitted explaining the transactions in question.
2. The Learned CIT has erred in confirming the addition made on account in interest received to the extent of Rs. 84,535/- for A.Y. 1997-1998 and Rs. 1,29,266/- for A.Y. 1998-1999. The Learned CIT has erred in stating in his order that "The Assessee had first explained before the A.O. that these transaction did not pertain to him". The Learned CIT has erred in saying that the assessee has failed to provide the details / break-up of the Interest Account.
3. The Learned CIT has erred in confirming the addition of Rs. 1,71,331/-on account of purchase of electronic gadgets; The Learned CIT has erred in stating that the assessee did not furnish any details to show how the said amount was reflected in the books of account and in not considering the submissions made in this regard.
4. The Learned CIT has erred in confirming the addition of Rs.1,00,500/-on account of M/s.
Roopshri Finvest Private Limited, The Learned CIT has not considered the submission made in this regard.
5. The learned CIT has erred in confirming the addition of Rs.13,21,380/- on account of investment in Mahal Mira Plots. The Learned CIT has failed to explore the submissions made in this regard.
6. The appellant craves to add, amend, and delete any grounds of appeal.
Assessee has also filed following additional Grounds of appeal vide his application dated 1.1 The learned Commissioner of Income - tax (Appeals) ["CIT (A)"] erred in confirming the block assessment order which was passed by the Assessing Officer after the completion of the limitation period prescribed in the Act for the completion of the block assessment. 1.2 The Appellant prays that the order passed beyond the limitation period deserves to be held bad, illegal and void and is liable to be quashed.
Facts of the case :
2.An action u/s. 132 of the Act was taken in the case of the assessee on 02.07.1999.During the search proceedings Books of accounts,Cash, Jewellery and shares were found at the residential premises of the assessee, but no seizure was made. Block return was filed on 10.08.2001 declaring Nil undisclosed income.Assessment was finalised by the AO on 27.09.2001 u/s.158BC of the Act, determining the undisclosed income of the assessee at Rs.5,05,63,678/-.
2.1.Assessee preferred an appeal before the First Appellate Authority (FAA) raising 18 grounds of appeal.The first ground of appeal was about passing of the assessment order by the AO on 27. 09.2001-as per the assessee assessment was time barred.FAA partly allowed the appeal filed by the assessee.As stated earlier,assessee has filed additional ground of appeals vide his application dated 24.10.2008 and the Additional ground of appeal is about the validity of block assessment - as per the assessee assessment was passed beyond prescribed time-limit. 2.2.During the course of hearing before us,Departmental Representative (DR) submitted that additional ground raised by the assessee was same as the ground no.1 of the appeal filed by the assessee before the FAA,that assessee had not made any submissions before the FAA about assessment getting time barred.Authorised Representative (AR) submitted that additional ground 4 IT(SS) 08/Mum/2003 Shri Shrenik J.Shah.
filed by the assessee goes to the root of the matter,that it was pure legal in nature and should be admitted.
3.We have heard the rival submissions and perused the material before us.We find that the issue of block assessment getting time barred was raised by the assessee before the FAA and he has dealt the said issue as under:
"Ground no.1 is regarded the validity of assessment.Though this ground was listed in form no. 35 yet, neither this ground was argued by the AR of the assessee, nor was any mention made in the written submissions which leads me to believe that assessee was not interested in pressing the ground. Consequential this ground of appeal is dismissed".
On a query made by the bench,AR admitted that in the statements of facts,filed by the assessee before the FAA,assessee had not mentioned as how the assessment got time barred.In these circumstances we are of the opinion that the basic issue of validity of block assessment has to be decided first before the matter can be decided on merits.From the records it is clear that the assessee had not pressed the ground of appeal regarding the validity of the assessment before the FAA and raised the issue before us as an additional ground.Therefore,we are of the opinion that,in the interest of justice,matter should be restored back to the file of the FAA for fresh adjudication. He is directed to hear both the parties, after affording reasonable opportunity of hearing, to decide the issue of validity of block assessment.
As a result, appeals filed by the AO and the assessee are allowed for statistical purposes.
पǐरणामतः िनधा[ǐरती अिधकारȣ और िनधा[ǐरती Ʈारा दाǔखल अपीलɅ सांÉयकȧय उƧे ँय के िलए मंजूर कȧ जाती हɇ .
Order pronounced in the open court on 06th September,2013. आदे श कȧ घोषणा खुले Ûयायालय मɅ Ǒदनांक 6 िसतंबर, र 2013 को कȧ गई ।
Sd/- Sd/-
डȣ.मुमोहन
डȣ मुमोहन/
(डȣ मुमोहन D. Manmohan) राजेÛि/Rajendra)
(राजे ि
उपाÚय¢ /Vice-President लेखा सदःय /Accountant Member
th
मुंबई/Mumbai,Ǒदनांक/Date: 6 September,2013
SK
आदे श कȧ ूितिलǒप अमेǒषत/Copy
षत of the Order forwarded to :
1. Assessee /अपीलाथȸ 2. Respondent /ू×यथȸ
3. The concerned CIT (A) /संबƨ अपीलीय आयकर आयुƠ, 4. The concerned CIT /संबƨ आयकर आयुƠ
5. DR "D" Bench, ITAT, Mumbai /ǒवभागीय ूितिनिध डȣ खंडपीठ,आ.अ.Ûयाया.मुब ं ई
6. Guard File/गाड[ फाईल स×याǒपत ूित //True Copy// आदे शानुस ार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst. Registrar आयकर अपीलीय अिधकरण, मुंबई /ITAT, Mumbai