TaxTMI 
TaxTMI 
2023 (9) TMI 979
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....reby has erred in confirming the action of A.O of taxing alleged undisclosed income of Rs. 5,94,96,000/- in the hands of the appellant. 2. The Ld. CIT(A) has also erred in confirming the action of A.O of not following the principle of natural justice and not granting the opportunity of cross examination to the appellant. The Appellant craves leave to add, amend, supplement, alter and/or delete any of the above Grounds of Appeal." 03. Brief facts of the case shows that assessee is a partnership firm, who filed its return of income for A.Y. 2008-09 on 26th September, 2008 declaring total income of Rs.6,316,295/-. The assessment under section 143 (3) of the Act was made on 16th December, 2010 determining the total income of the assessee at Rs.7,106,560/-. Subsequently, the case of the assessee was reopened for the impugned assessment year by issue of notice u/s 148 of the Act on 25 March 2015. In response to the above notice the assessee submitted as per letter dated 25th April, 2015 that the original return filed maybe treated as a return filed in response to notice. Thereafter, the respective notices under section 143 (2) of the Act was issued and served on the ....
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....ation an order u/s 144 r.ws. 147 of the Income-tax Act, 1961 was passed on 24.03.2014 by this charge assessing an income of Ra 8,16,26,625/-IRs 5,94,96,000/- cash receipt Rs 2,21,30,625/ agreement value) against the Jai Ganesh CHS which resulted in demand raised to the tune of Rs 6,05.26,838/- However, this demand could not be recovered as the avid CHS in not in existence. On further enquiry it was found that the members of the CHS are all farmers and they are illiterate. They do not know much about the transaction While going through the sale of the agreement of the assessee society, it was noticed that the Jai Ganesh CHS has assigned all the right, title, interest and benefits to M/s Om Developers a partnership firm, through its partners 11 Mr. Pramod D. More and 2) Mr. Gajanan R. Kanade. In fact it was Om Developers who executed the whole transaction. Further on going through the sale agreement it is found that the sale consideration was to the tune of Rs 2,22,00,000/-. This amount was received by Om Developers on behalf of Jai Ganesh CHS It was OM Developers who executed the whole transaction in the name of the Jai Ganesh Cooperative Housing Society. Based on this finding a sum....
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.... A.Y. 2003-09 was at Rs. 8,16,26,625/-. Thus, I have reasons to believe that the income to the extent of Rs. 5,91,37,940/- chargeable to tax had escaped the assessment within the meaning of provisions of Section 147 of the Act. Hence, this is a fit case for reopening the assessment by issue of notice u/s 148 of the Act. Accordingly, if approved notice u/s 148 of the Act will be issued." Sd/- (Sudha Ramachandran) Dy. Commissioner of Income Tax-28(2) Mumbai. 06. The approval under section 151 was granted on 24/3/2015. Accordingly, under section 148 of the act was issued on 25/3/2015. 07. Fact shows that:- i. An agreement to sale was executed between the assessee and three individuals Mr. Sadanand G Mahatre, Mrs. Sunanda Mahatre and Mr Satyavrat G Mahatre on 29/5/2006 and measuring 650 m² of a plot allotted by CIDCO against the acquisition of land under 12.5% scheme at the Mathe, Naigaon, Panvel, Dist Raigad at the rate of Rs. 3000 per square meter. Accordingly and advance of Rs. 10 lakhs was also paid. ii. On 13/7/2006 according to the Maharashtra cooperative societies act 1960, a cooperative society was incorp....
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....rch under section 132 of the Act was conducted on 9th February, 2009 in case of Pathik construction group of assessee. The documents seized during the search included a sheet of paper with handwritten notes identified as page number 92. The above paper was seized from the business premises of Pathik constructions. The above seized paper shows that the Pathik construction has purchased the said land which is situated at plot number 31, sector 47, Dronagiri from the cooperative society for a consideration of Rs. 59,496,000/- by way of a tripartite agreement on 24/4/2007. In this transaction, the cooperative society has received the consideration of Rs. 59,496,000 in cash. This was the report given by the joint Commissioner of income tax (OSD), Mumbai as per letter dated 2/2/2012 for necessary action against the cooperative society. 09. The assessee has disclosed the consideration of Rs. 2.2 crores received by it in its return of income. Therefore, the learned assessing officer issued a notice dated 12/2/2016 to the assessee stating that the cooperative society, assessee and Pathik construction enter into assignment cum Sale deed dated 23/4/2007. The above agreement shows that a pu....
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....AND G. KANADE (hereinafter referred to as the ASSIGNOR) for proper consideration and had upon receipt of the Agreed consideration for the same, handed over possession of the plot to the Assignor. 6.2. It is abundantly clear from the above that the appellant was the effective owner of the said property as on the date of sale of the same to M/s Pathik Constructions on 23.04.2007. The property has also been shown by the appellant as part of its opening stock as on 01.04.2007 and the cheque receipts of Rs. 2,22,00,000/- on account of sale of the property has also been reflected in its Profit and Loss account. The total sales consideration received including the cash component, therefore, has to be taxed in the hands of the appellant. 6.3. The appellant has submitted that the cheque as well as the cash component of Rs. 5,94,96,000/- has been taxed in the hands of Jai Ganesh Co-op Society Ltd. which has been confirmed by the CIT(A) against which further appeal was pending before the Hon'ble ITAT. The appellant has, therefore, contended that the cash component of Rs. 5.94,96,000/- in any case cannot be taxed in its hands as it would amount to double taxation of the s....
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....operty sold by the appellant to M/s Pathik Constructions. Though the appellant's name is not mentioned therein, the logical conclusion to be drawn is that the payments noted therein pertain to the appellant and more so as the cheque component of the payment matches with the consideration received shown by the appellant. 6.5. As regards the actual consideration received on account of sale of the aforementioned property to M/s Pathik Constructions, it would be relevant to consider the notings in the sheet of paper seized under annexure O-2 at the premises of M/s Pathik Constructions. For the sake of ease and clarity, the legible contents written on the sheet are being typed out below: Annexure O-2 DCO File No-5550 Sqm Plot No.31, sect-47, Dronagiri Rate 14720/- sqm Payment Details Paid to Jai ganesh co-op.. members a) Cheque 2,22,00,000/- b) ca 5,94,96,000/- Sold to(not legible) -Rate 25600/- sqmt 6.6. It is evident from the above notings that M/s Pathik Constructions had purchased the property from the appellant @ of Rs. 14,720/- per sq. mtr. which works out to Rs. 8,16,96,000/- ou....
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....hemently opposed this additional grounds against reopening of assessment stating that same were not raised before CIT (A). 014. We find that challenge to reopening of reassessment can be made at any time during the appellate proceedings, as it is purely legal ground going to jurisdiction of reassessment. No further facts are required to be investigated, hence it is admitted. 015. The assessee also raised the issue before us that coordinate bench in ITA No. 1498 and 1499/Mum/2012 dated 13th February 2015 in case of society has categorically stated that the above sum has been received by the society and not by the assessee. 016. Before us, the learned authorized representative challenge the reopening of the assessment. He referred to the notice of reopening placed at page number 33 of the paper book wherein the notice issued under section 148 of the IT Act was placed. He further referred to page No. 31, wherein the original assessment order passed under section 143 (3) of the Act, dated 16th December 2010 is also placed. He referred to the reasons of reopening placed at page No. 37 to 38 of the Paper Book supplied by the learned assessing officer vide letter dated 12th March....
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.... the whole sale agreement it was found that the sale consideration was to the tune of Rs. 2.2 crores this amount was received by the assessee on behalf of "Jai Ganesh Cooperative Housing Society". The assessee executed the whole transaction in the name of that cooperative society. Therefore, summon under section 131 of the Act was issued to Shri Manohar Desai, who is an office assistant in OM Developers. In view of this discussion, it appears that the income is taxable in the case of Om Developers based on the information received from by the joint Commissioner of income tax (OSD) Mumbai. Therefore, this letter is the basis of reopening of the assessment and therefore, the information received did not have any link with the income is kept in the hands of the assessee. He further stated by submitting the list of dates and events stating that there is no live link between the reasons recorded and escapement of income in the hands of the assessee. iii. He further challenged the reopening of the assessment is bad because of the satisfaction/approval granted by the Commissioner of income tax - 28 Mumbai holding that "yes I am satisfied that it is a fit case for issue of notice ....
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....the consideration of Rs. 222 lakhs was paid assessee has shown the above consideration for the year ended on 31/3/2008 as income. The cooperative society on behalf of its individual members entered into a tripartite agreement among itself, CIDCO and Pathik construction on 24/4/2007 for transfer of the rights in the said leasehold land to Pathik construction. During search on Pathik construction on 18/2/2009 a loose paper was seized where the mention of cheque payment of Rs. 222 lakhs and cash payment of Rs. 59,496,000 was found. Based on that paper the AO inferred that above payment was made to the assessee and therefore it resulted into the addition. Accordingly reopening of the assessment took place and the addition was made. Assessee has challenged the reopening of the assessment. The reasons for reopening were triggered based on the letter dated 23/2/2015 from the income tax officer, Ward - 3, New Panvel wherein it was specifically mentioned that the cooperative society has received the consideration of Rs. 59,496,000 in cash as per the report of the joint Commissioner of income tax, Mumbai as per letter dated 2/2/2012 for necessary action against the cooperative society. The c....
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....ear 2008 - 09 in case of Jai Ganesh cooperative housing society Ltd and appeal of the learned AO were decided on 8/6/2022. The above appeal was heard in absence of the assessee and an ex parte order was passed. As per paragraph number 3 of that order where the assessee in cross appeal challenge the correctness of addition of cash component of Rs. 59,496,000, the coordinate bench held in paragraph number 4 as under:- "4. We find no substance in revenue's foregoing arguments supporting the impugned addition. This is for the precise reason that the alleged seized document itself rebut the presumption in assessee's favour once it"s members only had received the payment who are separately assessable in their individual capacities. We further make it clear that the learned lower authorities have nowhere quoted any other cogent evidence since they have only gone by the above seized document. We accordingly accept the assessee soul substance in grievance as well as its cross appeal ITA number 2921/M/2016 in very terms." Accordingly, appeal of the assessee was allowed and appeal of the revenue was dismissed. Therefore by that order it has been conclusively held by the coordinate....
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.... part of the assessee to truly and fully disclose material fact. We would say that even in the reasons recorded, there is not even a finding that there was any such failure." Further honourable Bombay High Court in case of Godrej & Boyce Mfg. Co. Ltd. versus ACIT [2022] 140 taxmann.com 345 (Bombay) has also taken on identical view is under:- 7. Mr. Pinto relied upon a judgment of this Court in Crompton Greaves Ltd. v. Asstt. CIT [2015] 55 taxmann.com 59/229 Taxman 545 to submit that even if the reason for reopening does not specifically state that there was any failure on the part of petitioner to disclose fully and truly all material facts necessary for its assessment for the relevant assessment year, it will not be fatal to the assumption of jurisdiction under sections 147 and 148 of the Act. We would certainly agree with Mr. Pinto but as held in Crompton Greaves Ltd. (supra), this is subject to the rider that there must be cogent and clear indication in the reasons supplied, that in fact there was failure on the part of the assessee to disclose fully and truly all the material facts necessary for its assessment. If the factum of failure to disclose can be culled from....