TaxTMI 
TaxTMI 
2020 (12) TMI 1188
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....bmitted that as per the ordinance/notification, the time period to file the appeal extended up to June 30, since the assessee filed the appeal on 09.06.2020 within the period extended by the notification and such delay may be condoned. 4. On the other hand, Ld. DR has not objected to the above submission, accordingly we condone the delay for filing the appeal belatedly. 5. Ld. AR brought to our notice that assessee has filed the present appeals i.e. ITA No. 1577 to 1579/Mum/2020 and assessee has remitted the appeal fees of Rs. 30,000/-. The issue involved in the present appeals are relating to section 263 of the Act and assessee is required to pay only a fee of Rs. 500 per appeal. Therefore, the assessee has remitted excess appeal fees to the extent of Rs. 28,500/- and he brought to our notice decision of Coordinate Bench of ITAT, Amritsar in the case of Kiranjeet Singh MANU/IS/5007/2006 : (2006) 101 TTJ (Amritsar). 6. We notice that assessee is required to pay fees of Rs. 500 per appeal u/s 253(6)(b) of the Act, therefore, the assessee is required to pay only Rs. 1500 for filing the appeal against the order u/s 263 whereas, he has remitted Rs. 30,000/- instead of Rs. 1,500/-. I....
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....uja Group, wherein the cash loan given by him was supposed to have been adjusted on money. However, he acknowledged that the addition was deleted by Ld. CIT(A) for the reason that it was not plausible that cash loan given by the assessee could have been returned by cheque. He further observed that revenue did not file appeal against the order of Ld. CIT(A) as it was proposed that the cash loan given by the assessee would be added in the year in which the loan was given. He further observed that from the ledger account produced above, no further cash has been given by the assessee during the FY 2015-16. However, the balance was outstanding even as on 28.06.18 as mentioned in the ITSC order in the case of M/s. Ahuja Group. Further, the interest of Rs. 46,32,534/- was accrued on the advance outstanding in the beginning of financial year relevant to Assessment Year 2016-17. This issue was not examined by the AO for Assessment Year 2016-17. Considering the above facts, Ld. PCIT issued notice u/s 263 of the Act with reference to above facts recorded in the notice. 9. In response to the above notice, assessee submitted that reply filed on 20.05.2019 and 09.10.2019 may be taken on record....
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.... during search and AO has not enquired into the issue of payment of unsecured cash loan and earning of interest thereon from M/s. Ahuja Group in A.Y. 2014-15. 12. Based on the above facts on records and ledger account found for Assessment Year 2016-17, Ld. PCIT set aside the assessment order passed by the AO as erroneous and prejudicial to the interest of revenue. 13. Aggrieved with the above order, assessee is in appeal before us raising the following grounds of appeal:- The Principal Commissioner of Income-tax, Central-3, Mumbai (hereinafter referred to as the Pr. CIT) erred in framing an order dated 16.03.2020 under section 263 of the Act to set aside the order of the Deputy Commissioner of Income-tax, Central Circle 6(2), Mumbai (hereinafter referred to as the Assessing Officer), by holding that the assessment order dated 11.12.2017 passed by the Assessing Officer under section 153C r.w.s. 143(3) of the Act is erroneous and prejudicial to the interest of the Revenue. Consequently, the Pr. CIT has erred in directing the Assessing Officer to pass a fresh assessment order. The appellant contends that the Pr. CIT has not appreciated the facts of the case, inasmuch as the basi....
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....iction to pass the impugned order, inasmuch, as the Assessing Officer on the basis of the same documents had made an addition in income-tax assessment year 2016-17 for the block year 2014-15, 2015-16 and 2016-17. This was the subject matter of the Appeal to the CIT(A) who deleted the addition, and thus, the order of the Assessing Officer stands merged by the order of the CIT(A) on the same subject matter. The Appellant submits that apart from technical reasons as submitted above, all documents, agreements, letters, records, corresponding bank entries that tally with the Appellant's statement, reconciliations and corroborative evidences, and statement on oath by the Developer's staff, all consistently and conclusively prove that the Appellant's stand is correct. The appellant craves leave to add to, alter and/or amend the aforestated ground of appeal. 14. Before us Ld. AR appearing on behalf of the assessee submitted written submission and for the sake of convenience, it is reproduced below:- 2.1 The assessee is a salaried person and has declared income from salary, long-term capital gains, and interest income. The return of income was e-filed on 28th July 2016 de....
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....of various persons were recorded by the search party; and the relevant ones amongst them are of Mr. Jagdish Ahuja and Ms Merlin Fernandes, working as a personal secretary and assistant to key persons of the Ahuja group handling post-sales activities. 2.10. The statement on oath of Ms Merlin Fernandes was recorded by the search party on 26.06.2015 and 28.06.2015-refer page nos. 144-145 and 146 to 150 of the paper book-relevant question is Q. 11 on page no 145 of the paper book and Qs. 5 to 8 on page no 147 to 150 of the paper book 2.11. The statement on oath of Mr. Jagdish Ahuja recorded by the search party on 28.06.2015-refer page nos. 151-152 and 153 to 156 of the paper book 2.12. During assessment proceedings- 2.12.1. The Assessing Officer issued a notice dated 12.10.2017 requiring the assessee to submit his response in respect of the ledger account found in the parallel books of account maintained by the Ahuja group which contained some cash loan transactions with the assessee-refer page nos. 138 to 141 of the paper book-relevant points are point nos. 10 to 15 (a) Point no 10 of the said notice-refer page no 139 of the paper book-"During the search and seizure action c....
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....payment was received in cheque....." As you can see, the statement that the Ahuja Group were "planning" to take any payment by cash is neither of any meaning, nor of any relevance to our clients. That may have or may not have been their plan we do not know. As far as our client is concerned, the entire bill as per the agreement of Rs. 27.50 cr been settled by our client by cheque, our client's bank statement reflect the same entries, and this tallies with the statement of Ms. Merlin. Our client being a salaried employee, has no source of such income............ Hence the statement from Merlin that Mr. Vaidyanathan has paid the full consideration of Rs. 27.50 cr. by cheque for the flat at B-48, exactly tallies with the payments made from our client's side as per our bank statement. Again, of the Rs. 27.50 Crores, Rs. 7.00 crore as margin money has been paid from his bank account, and Rs. 20.50 crore has been paid by taking loan from ICICI Bank, and hence it is clear that the entire payment of Rs. 27.50 crore paid to the Ahuja Group has been made from fully accounted sources." From the above- As per the response of Ms Merlin of Ahuja group quoted above in verbatim a....
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....e statement, Ms. Fernandez has said that Mr. Vaidyanathan had booked a flat in A-41 and paid Rs. 2.01 crores at the time of booking and the company paid Rs. 10.0 crores to Mr. Vaidyanathan. This statement is correct and the explanation for the same is as follows:..............." (Entire facts of the case as mentioned in point no 2 above is stated (hence, for the sake of brevity, the assessee is not reproducing the same here; though the letter is enclosed in the paper book at page nos. 157 to 170-relevant portion being at page nos. 162 and 163). From the above- It will be appreciated that- i. the entire amount on booking of first flat A 41 has been paid by cheque. ii. the amount of Rs. 10 crore on cancellation of A 41 has been received by cheque. iii. the down payment for the new booking of Rs. 7 crore has been paid by cheque. iv. and the balance of Rs. 20.5 cr has been paid by obtaining loan from a bank and hence, has been paid by cheque/bank transfer, and v. the corpus charges of Rs. 1.58 cr has been paid by cheque. Thus, the statement made by Merlin with regard to payments made by our client to them by cheque is accurate. In her statement. Merlin has confirmed tha....
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....he 27 years and his credentials as a taxpayer are established beyond doubt. Analysis of his Bank Account for last 6 years clearly show that there was normal withdrawal of day to day expenses over that period. Most of his expenses are paid by cheques and credit card which are charged to his bank account. Details of all expenses and withdrawals have been provided in F1 to F8. Apart from general household expenses, EMI payments, payments to drivers, maids and charity, there are no other significant withdrawals from his bank account. In fact, during the entire period of FY 10 to FY 16, only Rs. 17,29,4471/- has been withdrawn from his bank account. It is not logically possible for our client to generate and pay cash to Ahuja developers. Their statement is baseless and not true." Errors in the Statement of Mr. Jagdish Ahuja-The assessee points out that there are material errors of fact in the statement of Mr. Ahuja vis a vis the actual documented transactions- 1. In his statement, he has stated that the new property is purchased in the name of Mrs. Vaidyanathan whereas the new booking has been made in the name of the assessee and not in the name of his wife. Thus, he has got the nam....
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....Assessing Officer to make the addition in his assessment order for income-tax assessment year 2016-17. Thus, the subject matter of revision is already considered by the Assessing Officer. As such, to make the same matter a subject matter of revision on the basis of same set of information is bad in law and hence, the impugned order of the Pr. CIT needs to be vacated for this reason alone. 3.2. "Erroneous"-The date of the order of the Assessing Officer is 11.12.2017; and the date of the order of ITSC is 28.06.2018 which is subsequent to the date of the assessment order, and the basis of the Pr. CIT to conclude that the order of the Assessing Officer is erroneous is the said order of the ITSC-inasmuch as only on that basis the Pr CIT in para 9 on page no 9 of his impugned order states "Further, the Ahuja Group has admitted before the Settlement Commission about the correctness of these documents and has offered undisclosed income on the basis of these documents before the Commission also. It is seen that the A.O. has not inquired into the issue of payment of unsecured cash loan and earning of interest thereon from M/s. Ahuja Group in assessment proceedings for A.Y. 2016-17, making ....
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.... Pr. CIT in the month of October, 2018, and the period of 60 days to file appeal to the Tribunal elapsed by December, 2018; the notice of the Pr. CIT is dated 11.04.2019. Thus, the decision of the CIT(A) that was accepted by the Revenue and had attained finality on the subject matter, is now sought to be disturbed by the Pr CIT by invoking the provisions of section 263-this cannot be done inasmuch as the merger theory would apply and the order of the Assessing Officer is merged with the order of the CIT(A). 3.5. Refer Notice of the Pr CIT u/s 263 There are contradictions in the said notice 3.5.1. read 2nd para of the notice which states that "Wherein it is seen that Ahuja Group had taken cash loans from you during FY 2015-16, relevant to AY 2016-17" with 4th para which states that 'Wo further cash has been given by you during FY 2015-16"-non-application of mind by the Pr. CIT 3.5.2. read 3rd para which states that "During the course of assessment proceedings, addition of Rs. 3,76,50,000/- was made on the grounds that the cash loan given by you was converted into on money on 13.4.2015..." with 4th para which states that "..... However, the balance was outstanding even as o....
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....statement of Ms Merlin. Such entries thus, have no evidentiary value. 3.8.2. Further, Mr. Ahuja in his statement on oath-response to Q. 46 has stated that "........ Since the flat was cancelled, we paid him back the sum of approximately Rs. 6 crore in cheque inclining interest amount........." 3.9. Explanation 2 to section 263-not applicable-clause (a)-the assessment order could be deemed to be erroneous if an order was passed by the Assessing Officer in favour of the assessee without making enquiries. However, in the case on hand, the Assessing Officer has done detailed enquiries during the course of assessment proceedings; and no relief was provided to the appellant. The other clauses namely, clause (b) to (d), on facts, are not applicable. As such, none of the clauses are applicable to deem the order of the Assessing Office as erroneous. In fact, during the course of assessment proceedings, the Assessing Officer issued a notice for AYs 2010-11 to 2016-17 dated 31st Oct 2017 requiring the assessee to show cause why cash loan of Rs. 3,76,50,000/- given by the assessee to the developer be not added to the total income of the assessee-refer page nos. 171-172 of the paper book. T....
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........." 3.13.1. The Officer is not stating the true facts of the question and the response of Ms Merlin to Mr. Ahuja-please refer the statement on oath of Ms Merlin-Q. 11 (on page 145 of the paper book)-the figure mentioned is Rs. 3.73 crores. Thus, really, the loose paper mentions the figure of Rs. 3.73 crore, the Officer says Rs. 3.50 crore and Mr. Ahuja tows the line of the Officer and says that he has received approximately Rs. 3.50 crore. Thus, there is no truth in the averment of receipt of cash by Ahuja group from the appellant. 3.14. It is well settled law that an order cannot be termed as erroneous unless it is not in accordance with law. The Assessing Officer had exercised his quasi-judicial power vested in him and in accordance with law passed the assessment order by making an addition under section 69 of the Act as unexplained investment. This opinion was formed on the basis of enquires and verification of materials available with him. As such, the assessment order cannot be branded as erroneous simply because the Pr. CIT is of a different view. Further, the CIT(A) has decided the issue in favour of the appellant. 3.15. The CIT(A) in her order dated 21st Septembe....
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....s. Ahuja Group will disclose before the Settlement Commission. Further, AO completed this assessment when all the cases relevant for this search and seizure action was centralized and all the transactions under consideration were investigated under coordination basis for all the issues relating to M/s. Ahuja Group and assessee. Based on the information available at the time of assessment proceedings alone was considered by the AO to complete the assessment. It is not humanly possible for the AO to project/expect what M/s. Ahuja Group will disclose before the Settlement Commission and the proceedings before Settlement Commission was subsequent event and subsequent developments. From the assessment order, we observe that AO came to the conclusion based on the information available before him or submissions made before him and he concluded that assessee has purchased flat by converting the alleged cash transaction with 'on money' and he made the additions. Now the same issue was reviewed by Ld. PCIT u/s 263 of the Act and expect the AO to consider the event i.e. M/s. Ahuja Group has accepted the unaccounted nature of the transaction before Settlement Commission. This future ev....
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....er for all the assessments including Assessment Year 2016-17 were passed on the same date 11.12.17. Therefore, in our considered view, AO has considered the facts on records and taken a view on the transactions with M/s. Ahuja Group in Assessment Year 2016-17 and also made the additions in Assessment Year 2016-17 after analyzing the same sets of documents which was reviewed by Ld. PCIT now. Therefore, Ld. PCIT cannot review the order which was already verified and investigated by AO at the time of assessment and the same order which was investigated on coordinated basis, Ld. PCIT cannot review and cannot take a different view. Moreover, he reviewed this assessment orders passed by the AO after forming an opinion on 11.12.17 and Ld. PCIT has reviewed the assessment order with the subsequent development which was never part of assessment records. Even otherwise, Ld. PCIT intended to initiate proceedings u/s 263 of the Act on the facts on record that M/s. Ahuja Group has accepted some cash transactions undertaken with the Assessee. If that is the case, he should have investigated the issue by himself and not directed the same issue to be investigated by AO again. When he initiate the ....