9911796707
TMI Blog2022 (11) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... mination of the director to test check the authenticity of the transactions. We considering the material information and the statements recorded do not find merit in this ground of appeal and up hold the decision of the CIT(A) on the validity of re assesseement and dismiss the grounds of appeal including the additional ground raised by the assessee. Addition of cash on the basis that it has been offered in the AOP - contentions of the Ld.AR are that though there is no mapping/ correlation of each entries with the A.O.P funds individually but the said money is part of the search proceedings and which has been taxed in the case of AOP - HELD THAT:- We find that the CIT(A) has passed an order considering the fact that the cash invested as contribution by the assessee in the capacity as partner is liable to taxed in the hands of the AOP but these facts are without any supporting evidences nor from the material information filed to explain how the transactions are routed. Basically the CIT (A) should have verified how the transactions have been reflected in the AOP on case to case basis but not on the general assumptions/ presumptions before granting the relief. Accordingly, we found th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequential assessment order. 3. The appellant company craves leave to add, to amend, alter, delete and/or modify the above grounds of cross-objections on or before the final hearing. 1.2 At the time of hearing, the Ld.AR has raised the additional grounds of appeal as under: 1. That the CIT(A) erred in facts and in law, in issuing reopening notice u/s 147 of the Act without appreciating the fact that in the case of search and seizure of third party, AO is duly bound to initiate proceedings u/s 153C in case of person relating to whom some material is found. Thus, action of the Ld. AO in initiating the proceedings u/s 148 instead of Sec. 153C is Null & void and deserves to be set aside. 1.3. The Ld. DR has no serious objections for admission of additional ground of appeal filed by the assessee. Accordingly we admit the additional ground of appeal and heard. 2. The brief facts of the case are that the assessee is an individual and proprietor of M/s Arkade Creations engaged in the business as real-estate developer. The assessee has filed the return of income for the A.Y 2009-10 on 25.09.2009 disclosing a total income of Rs. 26,24,185/-. Subsequently the case was selected f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot;As a result of Search and Survey action conducted by the Investigation Wing, Mumbai, information has been received from DDIT(Inv.) Unit 3(4), Mumbai that Shri Amit Mangilal Jain in the capacity of partner has introduced capital in cash amounting to Rs. 6,80,00,000/-. This capital introduction in cash is nothing but money generated out of undisclosed income of Shri Amit Mangilal Jain. As such, it is also failure on the part of the assessee to make full and true disclosure of these material facts in the relevant assessment year, as far as the above issue is concerned. Therefore, I have a reason to believe that the income of Rs. 6,80,00,000/- has escaped assessment within the meaning of Section 147 of the Income Tax Act." 4. The A.O. has received the details and information, were the search and survey action was carried at M/s Ekata & Bhoomi Group on 05.10.2015, and during the course of search action incriminating data of M/s Bhoomi group has been found relating to cash transactions executed by the Bhoomi Group with different parties and was in digital form. The data relating to cash transactions is maintained in journal and posted later in ledger and the transactions are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g assessments which were getting barred by limitation on 31.12.2016. Further, on the basis of this information passed, the DCIT Central Circle 6(2), Mumbai has arrived to a reasoning which is sufficient enough for her to reopen the assessment. During the course of reassessment proceedings, the assessing officer will reach to a finality whether the addition is required to be made in the hands of AOP or not. There is no need to jump to the conclusion that since, the assessment of the AOP has been reopened, the unaccounted cash does not belong to the assessee but belongs to the Joint Venture. In the foregoing paras, it has been clearly proved and a conclusion has been drawn that the unaccounted cash of Rs. 6,80,00,000/- belongs to the assessee only and not to any one else. 5. It is worth to mention here, that order U/s 143(3) of the I. T. Act, has been passed on 20.12.2011, assessing income at Rs. 32,05,523 /-. However, the assessee has filed income of Rs. 26,24,185/- on 21.07.2016, in response to notice U/s 148 of the Act. The total income for arriving income u/s 143(3) r.w.s. 147 is being taken at Rs. 32,05,523 /- as assessed on 20.12.2011 as against total income of Rs. 26,24,185 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rused the material on record in respect of validity of reassessment proceedings. The contention raised by the Ld. AR that the search and seizure operations took place and certain incriminating documents have been found and the A.O is bound to issue the notice u/s 153C of the Act and not U/sec147 of the Act therefore the proceedings are illegal and in valid. The Ld. DR submitted that the A.O. has dealt on the facts, law, objections filed by the assessee and followed the procedure and the CIT(A) has confirmed the action of the A.O. on the validity of reassessment at Page 7 Para 3.2 to 3.6 as under: 3.2 true that assessment was made in this case u/s 143(3) and the reopening is beyond 4 years and the proviso section 147 applies for reopening. However if he proviso to section 147 does not bar reopening if the condition is satisfied as laid down. This is not a case where some unverified information or tax evasion petition was forwarded to the AO. Search action was carried out in the case of Ekta & Bhoomi group of cases on 05.10.2015, during which certain digital data in the form of a ledger was found in a Sony laptop. Statement of one of the Director Shri Akshay Jayantilal Doshi was re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (1996) 217 ITR 597, 599 (SC) and Central Province Manganese Ore Company Ltd. vs. ITO (1991) ITR 662, 666 (SC).The action u/s.147 is possible despite complete disclosure of material facts if there is any escapement of assessment proceedings vide Praful Chunilal Patel, Vasant Chunilal Patel vs. ACIT (1999) 236 ITR 832, 840 (Guj), Stock Exchange vs. ACIT (1997) 227 ITR 906 (Guj) and ITO vs. LabjmaniMewal Das (1976) 103 ITR 437 (SC). Reliance is further placed on the following judgments: 1) Rohilkhand Educational Charitable Trust vs. CCIT and Others 365 ITR 233 (All.) wherein the Hon'ble High Court held AO should have relevant and credible material with him to form requisite reason to believe that income of assessee has escaped assessment. Material available on record has rational connection and relevant bearing on such formation of belief for issuing valid notices for re assessment - sufficiency or correctness of material was not to be considered at this stage. 2) Sun Pharmaceuticals Industries Ltd. Vs. DCIT 353 ITR 474 (Guj.) where the Hon'ble High Court held that formation of belief by AO is essentially within his subjective satisfaction - at the stage of issue of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfaction and has reason to believe. The Ld.DR submitted the relevant portion of statement of Shri Akshay Doshi recorded u/sec131 of the Act dated 2812-2015 & 4-01-2016 and the assessee was provided the opportunity of cross examination of Shri.Akshay doshi in the course of assesseement proceedings and complete statement recorded U/sec131 of the Act and cross examination statement made on 26-10-2016 placed at page 8 to 16 of the revenues factual paper book. We find the CIT(A) has considered the facts, provisions of law and judicial decisions and observed that in the case of search in Bhoomi group , the incriminating material was found, were the aassesee is one of the investor in the land and it was not disclosed by the Assessee in the original return of income or during original assesseement U/sec143(3) of the Act. We find the statement recorded above are linked with the assessee undisclosed income and these facts were not disclosed in the return of income filed u/sec148 of the Act. The A.O. found that the assessee is one of the investor/partner along with the others to acquire the land for TDR generation which cannot be disputed and was admitted in the post search statement by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no nexus is established or proved. Further, the CIT(A) is not clear to which assessment year the said amount has to be taxed and prayed for allowing the revenue appeal. Contra, the Ld. AR supported the order of the CIT(A) on the disputed issue and submitted that the CIT(A) has granted relief as the cash introduced was part of AOP transactions. 14. We heard the rival submissions and perused the material on record. The sole grievance of the revenue that the CIT(A) has erred in granting the relief by directing the A.O to delete the addition of cash on the basis that it has been offered in the AOP. The contentions of the Ld. DR that the there is no mapping/ nexus of the transaction with the AOP fund flow. At this juncture, we considered it appropriate to refer to the findings of the CIT(A) at page 19 Para 5.9 to 5.10 which is read as under: 5.9 A careful reading of the above replies shows that the amounts appearing in the said ledger can be divided in to two parts. Amounts received till 02.08.2006 and the amounts received from 29.06.2007. The amounts found received till 02.08.2006 are 'share of Amit Mangilal Jain towards capital contribution/expenses reimbursement for the said e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of AOPs, which has been accepted by the department in the assessments of the said AOPs. Therefore, the same amount cannot be taxed in the hands of the assessee, which amounts to double taxation. Further, the AO brushed aside the explanation given by the assessee without bringing any other corroborative document on record and without finding fault with the explanation and disproving the evidences filed by the assessee. Therefore, the addition does not stand the test of appeal and the AO is directed to delete the addition. Assessee gets relief, the Ground of appeal allowed. 15. The Ld. AR has been emphasizing that the CIT(A) has considered the facts that the amount of contribution of the assessee invested is land / project is part of the assessee share as a partner and has been taxed in the hands of the AOP and was accepted by the revenue. Whereas the Ld.DR submitted that there is no such acceptance by the revenue in respect of the transactions in the AOP and the A.O. has elaborately dealt on the statements of the directors recorded in search and survey operations and material information and the provisions of the Act and made addition in the current financial year. When a query w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
