TaxTMI 
TaxTMI 
2020 (12) TMI 1188
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....appeal before the specified date. He further submitted 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, h....
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....er observed that assessee had purchased a flat from M/s. Ahuja 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 ....
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....nd offered undisclosed income on the basis of these documents found 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 cont....
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....sessment. The appellant further contends that on the facts and circumstances of the case and in law, the Pr. CIT lacks jurisdiction 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 ....
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....uja group on 25.06.2015 by the Investigation Whig and it was found that they have maintained parallel books of account which contained some cash loan transactions with the appellant. During the course of such operations, statement on oath 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....
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....nt paid anything by cash. In fact, she has clearly said and confirmed in her statement given on 26th June 2015 that the consideration amount of Rs. 27.50 Crore has been received by way of cheque by them from our client. To quote her specifically "....we finalized the value at Rs. 27.50 cores for which the 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 a....
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....mount paid by Shri V Vaidyanathan. And also explain why only Rs. 7 crores received back from Shri V. Vaidyanathan. Ans. Sir, I am unable to prove any explanation for the same. Shri Gautam Ahuja will be able to provide the details of this transaction." Assessee response The assessee during the course of assessment proceedings by letter dated 27.10.2017 (refer page nos. 160-161 of the paper book) has stated that "In the above 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 cance....
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....atement of Mr. Ahuja because it is not backed by any basis whatsoever, and does not tally with our bank statement. No such transaction has been entered into with the Ahuja Group. On the contrary, the statement of the other party in Ahuja Group, Ms Merlin, exactly tallies with the actual transaction, as well as tallies with our bank statement as explained in the previous annexure N2. We therefore establish that her statement is correct and tallies with us. 2. Our assessee has been regularly filing his return and paying taxes for over the 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....
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....0 for the reasons given in para 5.7 on page nos. 11 and 12 of the assessment order 3. CONTENTIONS 3.1. The same matter as raised by Pr. CIT was raised by the Assessing Officer in his show cause notice dated 31.10.2017 during the assessment proceedings for income-tax assessment year 2016-17, post-search on the Ahuja group in section 153C proceedings and a sum of Rs. 3,76,50,000 was added by him. There is no new information that has come to the notice of the Revenue for which a show-cause notice issued by the Pr. CIT under section 263; the basis of his conclusion is the same seized document which has been considered by the 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 th....
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....e or after the 1st day of June, 1988, the powers of the Principal Commissioner or] Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal" Reliance is placed on the decision of the Honourable jurisdictional High Court in the case of Ranka Jewellers v. Addl. CIT reported in MANU/MH/0364/2010 : 328 ITR 148 (Bom) (b) The order of the CIT(A) deleting the addition made by the Assessing Officer is accepted by the Revenue as no appeal has been preferred to the Tribunal on this issue. The order of the CIT(A) is dated 21.09.2018 which would have been received in the office of the 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....
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....f same facts, deleted the addition, and then the Pr. CIT, again on the basis of absolutely same facts (no new information) is of an opinion to set aside the order of the Assessing Officer-this is thus, a case where two opinions on same facts are possible and the Assessing Officer has taken one plausible view-thus, the Pr. CIT is precluded to invoke the provisions of section 263 of the Act. 3.8. Refer Notice under section 263-4th para re taxability of interest Rs. 46,32,534/- on outstanding balance as at 28.06.2018 3.8.1. The said entries have no basis as the same are at Ahuja group, that too in parallel books of account, not acknowledged by the appellant, unreconciled with the transactions entered with the assessee and also at variance with the 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 i....
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....ement of Ms. Merlin is accurate and tallies with the records and documents-both of the assessee and of the Ahuja group 3.12. The assessee has booked the Flat No B-48 for Rs. 27.50 crores, which is 30% higher that the ready reckoner value of Rs. ____ which is the basis for payment of stamp duty; the value is government recognised. Thus, there can be no on-money in such a situation. 3.13. Refer statement on oath of Mr. Jagdish Ahuja-Q. 46 "Q-46. In the Statement on oath of Miss Merlin Fernances (sic Fernandes) under section 132(4) of the Income-tax Act 1961, recorded on 26/06/2015, it was stated that there were talks of receiving Rs. 3.5 crores in cash from Shri V. Vaidyanathan. the noting of which is also made by her on page no. 4 of loose papers folder (Annexure A-l) found and seized from the present premises........" 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 cro....
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....investment u/s 69 of the Act by treating the cash loan given by the assessee which was converted into "On Money" on 30.04.15. The AO treated the cash loan given by the assessee as 'On Money' given to the builder (M/s. Ahuja Group) for the purchase of flat and accordingly, AO made the additions. We notice that the assessment order passed by the AO on 11.12.17 and the Ld. PCIT heavily relied on the orders of ITSC passed u/s 245D(4) of the Act dated 26.06.18. It is a facts on record that Ld. PCIT initiated the proceedings u/s 263 of the Act only on 11.04.19 by issuing notice and ITSC has passed the order on 26.06.18, therefore Ld. PCIT observed his findings from the order of ITSC only after 26.06.18 and initiated the proceedings subsequently. It is relevant to note that this assessment order was passed on 11.12.17, therefore the AO was never aware of the fact that what M/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 G....
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.... the submission of assessee and we quash the order passed u/s 263 of the Act without going into any merits of the case since Ld. CIT(A) has already considered the merits of this case and passed an order in this regard. Accordingly, the grounds raised by the assessee in this regard are allowed. 19. We further notice that Ld. PCIT has initiated the proceedings u/s 263 of the Act and treated the order passed by AO u/s 153C r.w.s. 143(3) of the Act for the AY 2014-15 and 2015-16. We notice that the issue under consideration is exactly similar to the issue raised in Assessment Year 2016-17. In our considered view, Ld. PCIT has reviewed the assessment order which was passed on 11.12.17. It is fact on record that search and seizure operation was initiated on 25.06.15 and assessment orders under consideration for Assessment Year 2014-15 and 2015-16 were assessed u/s 153C and combined order 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 Yea....