M/S INDRA PRASTH GRIH NIRMAN SAHKARI SANSTHA MYTD., v. THE ACIT 3 (1),

CO 11/IND/2008 | misc
Pronouncement Date: 04-05-2010 | Result: Dismissed

Appeal Details

RSA Number 1122723 RSA 2008
Bench Indore
Appeal Number CO 11/IND/2008
Duration Of Justice 2 year(s) 2 month(s) 27 day(s)
Appellant M/S INDRA PRASTH GRIH NIRMAN SAHKARI SANSTHA MYTD.,
Respondent THE ACIT 3 (1),
Appeal Type Cross Objection
Pronouncement Date 04-05-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 04-05-2010
Date Of Final Hearing 23-04-2010
Next Hearing Date 23-04-2010
Assessment Year misc
Appeal Filed On 07-02-2008
Judgment Text
PAGE 1 OF 11 - I.T.(SS)A.NO.201/IND/2007 AANCHAL GRIH NIRMAN SAHKARI SANSTHA MARYADIT AND OT HERS IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : N.A. I.T.(SS)A.NO.201/IND/2007 A.Y. : 01.04.1995 TO 27.02.2001 A.C.I.T. M/S. AANCHAL GRIH NIRMAN SAHKARI SANSTHA MYDT. 3(1) BHOPAL VS 21 ZONE II M.P.NAGAR BHOPAL. APPELLANT RESPONDENT PAN NO. : N.A. C.O.NO. 10/IND/2008 (ARISING OUT OF I.T(SS).A.NO.201/IND/2007) A.Y. : 01.04.1995 TO 27.02.2001 M/S. AANCHAL GRIH NIRMAN SAHKARI SANSTHA MYDT. A.C.I.T. 21 ZONE II M.P.NAGAR BHOPAL. VS 3(1) BHOPAL CROSS OBJECTOR RESPONDENT PAN NO. : N.A. I.T.(SS)A.NO.202/IND/2007 A.Y. : 01.04.1995 TO 27.02.2001 A.C.I.T. M/S. INDRAPRASTHA GRIH NIRMAN SAHKARI SANSTHA MYDT. 3(1) BHOPAL VS 21 ZONE II M.P.NAGAR BHOPAL. APPELLANT RESPONDENT PAGE 2 OF 11 - I.T.(SS)A.NO.201/IND/2007 AANCHAL GRIH NIRMAN SAHKARI SANSTHA MARYADIT AND OT HERS PAN NO. : N.A. C.O.NO.11/IND/2008 (ARISING OUT OF I.T.(SS)A.NO.202/IND/2007) A.Y. : 01.04.1995 TO 27.02.2001 M/S. INDRAPRASTHA GRIH NIRMAN SAHKARI SANSTHA MYDT. A.C.I.T. 21 ZONE II M.P.NAGAR BHOPAL. VS 3(1) BHOPAL CROSS OBJECTOR RESPONDENT PAN NO. : N.A. I.T.(SS)A.NO.203/IND/2007 A.Y. : 01.04.1995 TO 27.02.2001 A.C.I.T. M/S. VISHNUPURI GRIH NIRMAN SAHKARI SANSTHA MYDT. 3(1) BHOPAL VS 21 ZONE II M.P.NAGAR BHOPAL. APPELLANT RESPONDENT C.O.NO.12/IND/2008 (ARISING OUT OF I.T.(SS)A.NO.203/IND/2007) A.Y. : 01.04.1995 TO 27.02.2001 M/S.VISHNUPURI GRIH NIRMAN SAHKARI SANSTHA MYDT. A.C.I.T. 21 ZONE II M.P.NAGAR BHOPAL. VS 3(1) BHOPAL CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI K.K.SINGH CIT DR ASSESSEE BY : SHRI YESHWANT SHARMA C.A. DATE OF HEARING : 23.04.2010 PAGE 3 OF 11 - I.T.(SS)A.NO.201/IND/2007 AANCHAL GRIH NIRMAN SAHKARI SANSTHA MARYADIT AND OT HERS O R D E R PER BENCH THESE APPEALS FILED BY THE REVENUE AND CROSS OBJECT IONS FILED BY THE CONNECTED ASSESSEES INVOLVE COMMON ISSUES HENC E THESE WERE HEARD TOGETHER AND THESE ARE BEING DISPOSED OF THROUGH TH IS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. FIRST WE SHALL TAKE UP REVENUES APPEALS IN I.T.A. NO. 201/IND/2007 WHEREIN FOLLOWING TWO GROUNDS HAVE BE EN RAISED BY THE REVENUE :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 7 59 260/- MADE BY THE ASSESSING OFFICER TREATING THE CASH DEP OSIT AS UNACCOUNTED CASH CREDIT U/S 68. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE LEVY OF SURCHARGE @ 12 % ON THE TAX ON UNDISCLOSED INCOME MADE BY THE ASSESS ING OFFICER IN ACCORDANCE WITH THE AMENDMENT U/S 113 WI TH EFFECT FROM 1.6.2002. PAGE 4 OF 11 - I.T.(SS)A.NO.201/IND/2007 AANCHAL GRIH NIRMAN SAHKARI SANSTHA MARYADIT AND OT HERS 4. AS REGARD TO ISSUE RAISED IN GROUND NO.2 BOTH THE PARTIES FAIRLY AGREED THAT THIS ISSUE WAS COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F SURESH N. GUPTA AND OTHERS AND OTHER SUBSEQUENT DECISIONS OF THE HO N'BLE SUPREME COURT. HENCE THIS GROUND OF THE REVENUE IS ALLOWED IN ALL THE APPEALS FILED BY THE REVENUE. 5. AS REGARD TO ISSUE RAISED IN GROUND NO.1 THE LD. C IT DR SUBMITTED THAT THIS ISSUE WAS COMMON IN ALL THE APP EALS EXCEPT THE QUANTUM OF ADDITION HENCE HE WAS REFERRING TO THE PROCEEDINGS IN I.T.(SS)A.NO. 201/IND/2007. 6. THE FACTS IN BRIEF ARE THAT AS A CONSEQUENCE OF S EARCH IN THE CASE OF M/S. RAJ HOMES PRIVATE LIMITED AND OTHER CO NNECTED ASSESSEES THE RECORDS PERTAINING TO ASSESSEE SANSTHA WERE FOU ND. SUBSEQUENTLY NOTICE U/S 158BD WAS ISSUED REQUIRING THE ASSESSEE TO FILE THE BLOCK RETURN. THE A.O. DURING THE COURSE OF ASSESSMENT PR OCEEDINGS NOTED THAT THE ASSESSEE WAS A HOUSING SOCIETY AND HAD PURCHASE D DIFFERENT PIECES OF LAND AT DIFFERENT LOCATIONS IN BHOPAL ON DIFFERENT DATES. THE A.O. ALSO FOUND THAT THE ASSESSEE SOCIETY AFTER PART OF THE S AME GROUP AND ALLOTTED THE PLOTS TO THE RESPECTIVE MEMBERS WHO SUBSEQUENT LY ENTERED INTO AN ARRANGEMENT WITH M/S. RAJ HOMES PRIVATE LIMITED FOR CONSTRUCTION OF RESIDENCE. THE A.O. FURTHER FOUND THAT AS PER THE B OOKS OF ACCOUNT FOUND PAGE 5 OF 11 - I.T.(SS)A.NO.201/IND/2007 AANCHAL GRIH NIRMAN SAHKARI SANSTHA MARYADIT AND OT HERS IN THE COURSE OF SEARCH AND SEIZED BY THE DEPARTME NT THERE WERE CASH DEPOSIT IN THE DEPOSIT OF VARIOUS PERSONS TO WHOM S AME PLOT NUMBER HAD BEEN ALLOTTED HENCE HE FORMED AN OPINION THAT SUC H DEPOSITS WERE FICTITIOUS. THE ASSESSEE HOWEVER EXPLAINED THAT S INCE TILL THE TIME NO SPECIFIC PLOT WAS ALLOTTED SUCH METHODOLOGY WAS ADO PTED TO INDICATE THE TRANSACTION. THE A.O. HOWEVER REJECTED THIS PLEA OF THE ASSESSEE FOR THE REASON THAT SUCH PERSONS WERE EITHER REFUNDED FROM MONEY IN CASH OR THEIR DEPOSITS WAS STILL OUTSTANDING WITHOUT ANY ALLOTMEN T OF PLOT. THE A.O. FURTHER ANALYZED THE CASES WHERE DEPOSITS HAD BEEN ACCEPTED IN CASH AND REFUNDED THEREAFTER. THE A.O. ALSO ANALYZED THE SIT UATION WHERE CASH HAD BEEN ACCEPTED NO REFUND WAS MADE. THE A.O. ALSO AN ALYZED THE TRANSACTION WHERE THE CASH HAD BEEN DEPOSITED AND P LOT WAS ALLOTTED BUT EXCESS DEPOSIT HAD BEEN REFUNDED IN CASH. THE A.O. REQUIRED THE ASSESSEE TO EXPLAIN THE GENUINENESS OF SUCH TRANSACTION SO A S THE SAME WAS NOT ADDED U/S 68 OF THE INCOME-TAX ACT 1961. THE ASSES SEE GAVE EXPLANATIONS. HOWEVER THE A.O. FORMED AN OPINION T HAT SUCH EXPLANATIONS WERE NOT SATISFACTORY AND WHEN THE COS T OF THE PLOT WAS FIXED THERE WAS NO LOGIC TO ACCEPT THE EXCESS CASH . THE A.O. ALSO FOUND THAT IN RESPECT OF THE PERSONS MAKING ONLY DEPOSITS AND NOT BEING ALLOTTED IN PLOT OR CASH BEING REFUNDED SUBSEQUENTLY ONLY TO FURNISH THE DETAILS SO AS TO PROVE THE GENUINENESS OF THE TRANSACTION CAPA CITY OF SUCH PERSONS. PAGE 6 OF 11 - I.T.(SS)A.NO.201/IND/2007 AANCHAL GRIH NIRMAN SAHKARI SANSTHA MARYADIT AND OT HERS HENCE HE REACHED TO A CONCLUSION THAT SUCH MODUS O PERANDI HAD BEEN ADOPTED BY THE ASSESSEE TO INTRODUCE ITS OWN CASH I N THE NAME OF SUCH PERSONS AS AND WHEN THE CASH WAS REQUIRED IN THE BO OKS OF ACCOUNT. ACCORDINGLY HE MADE AN ADDITION OF RS. 7 59 260/-. AGGRIEVED BY THIS THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A). IT WAS VEHEMENTLY ARGUED THAT NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH WHICH COULD INDICATE UNDISCLOSED INCOME SO AS TO ENABLE HIM TO ASSUME THE JURISDICTION U/S 158BD. IT WAS ALSO STRO NGLY ARGUED THAT THE SALE PURPOSE TO INITIATE PROCEEDINGS U/S 158BD WAS TO CARRY OUT THE INVESTIGATION OR TO VERIFY WHETHER CASH DEPOSIT REC ORDED IN THE BOOKS OF ACCOUNT WERE GENUINE OR NOT. HENCE SUCH ACTION OF THE A.O. WAS AGAINST THE SCHEME OF THE ACT. IT WAS ALSO CONTENDED THAT N O SATISFACTION HAD BEEN RECORDED BY THE ASSESSING OFFICER WHICH WAS MANDAT ORY TO INITIATE THE PROCEEDINGS U/S 158BD. THEREAFTER THE ASSESSEE MAD E DETAILED SUBMISSIONS IN RESPECT OF EACH CATEGORY OF DEPOSITS FROM THE MEMBERS/PROSPECTIVE BUYERS AND WAS SUBMITTED THAT D ESPITE CATEGORICAL REQUEST OF THE ASSESSEE THE A.O. DID NOT SUMMON EV EN A SINGLE MEMBER/DEPOSITOR TO VERIFY THE FACT HENCE NO ADVE RSE VIEW COULD BE TAKEN AGAINST THE ASSESSEE AS PER THE ESTABLISHED L AW. THE ASSESSEE ALSO SUBMITTED THAT THE CASH CREDITS RECORDED IN THE BOO KS OF ACCOUNT COULD NOT BE TREATED AS UNDISCLOSED INCOME AND THE A.O. WAS N OT ENTITLED TO PAGE 7 OF 11 - I.T.(SS)A.NO.201/IND/2007 AANCHAL GRIH NIRMAN SAHKARI SANSTHA MARYADIT AND OT HERS QUESTION IN BLOCK ASSESSMENT THE LOSS WHICH WAS SU BJECT MATTER OF REGULAR ASSESSMENT. UNLESS SOME INFORMATION OR MATERIAL WAS FOUND BY THE ASSESSING OFFICER TO SHOW THAT SUCH CASH CREDIT WAS NOT GENUINE. THE ASSESSEE PLACED RELIANCE ON VARIOUS JUDICIAL DECISI ONS IN THIS REGARD. THE LD. CIT(A) AGREEING WITH THE SUBMISSIONS OF THE ASS ESSEE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER U/S 68. THE RELEVANT FINDINGS OF THE LD. CIT(A) ARE AS UNDER :- I HAVE SEEN THE MANNER IN WHICH THE ADDITION HAS B EEN MADE BY THE ASSESSING OFFICER. I HAVE ALSO CONSIDERED TH E OBSERVATIONS AND FINDINGS OF THE A.O. AND THE OBJEC TIONS RAISED BY THE LD. AR. SOME OF THE FACTUAL MISTAKES IN THE ORDER OF THE A.O. POINTED OUT BY THE LD. AUTHORIZED REPRESENTATIVE ARE ALSO FOUND TO BE CORRECT AND OPP OSED TO FACTS ON RECORDS. THE AR HAS TAKEN AN ADDITIONAL GROUND THAT ASSUMPTI ON OF JURISDICTION BY THE A.O. U/S 158BD IS BAD IN LAW. B EING A LEGAL GROUND NOT REQUIRING ANY INVESTIGATION OF FAC TS THE SAME IS ADMITTED FOR ADJUDICATION. I FIND THAT IN THE PRESENT CASE THERE IS NO DISPUTE REGARDING FACTS OF THE CASE. THE ONLY DISPUTE IS AS TO WHETHE R CASH DEPOSITS FROM MEMBERS RECORDED IN THE REGULAR BOOKS OF PAGE 8 OF 11 - I.T.(SS)A.NO.201/IND/2007 AANCHAL GRIH NIRMAN SAHKARI SANSTHA MARYADIT AND OT HERS ACCOUNT BEFORE THE DATE OF SEARCH CAN BE TREATED AS UNDISCLOSED INCOME OF THE APPELLANT SOCIETY IN TH E BLOCK ASSESSMENT OR NOT BECAUSE INTER ALIA AS PER THE A .O. THE IDENTITY PAYING CAPACITY AND GENUINENESS OF THESE DEPOSITS HAVE NOT BEEN PROVED BY THE ASSESSEE. UNDISPUTEDLY NO SEARCH WAS CARRIED OUT ON THE ASSESSEE-SOCIETY. SEA RCH WAS IN FACT UNDERTAKEN ON RAJ HOMES GROUP AND CERTAIN DOCU MENTS WERE FOUND RELATED TO ASSESSEE DURING THE SAID SEAR CH. ON THE BASIS OF THESE DOCUMENTS THE A.O. ASSUMED JURISDIC TION U/S 158BD AND SERVED NOTICE UPON THE ASSESSEE SOCIETY. THE LD.AUTHORIZED REPRESENTATIVE HAS VEHEMENTLY OBJECTE D TO THE VERY ASSUMPTION OF JURISDICTION STATING IT TO B E BAD IN LAW. IN MY OPINION THE CONTENTIONS OF THE AR HAVE FORCE. THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH ON RAJ HOMES GROUP THOUGH BELONGED TO ASSESSEE-SOCIETY BUT NO UNDISCLOSED INCOME SURFACED OUT OF IT. AS REGARDS T HE CASH DEPOSITS FROM MEMBERS OF THE SOCIETY IT IS UNDISPU TED THAT THESE DEPOSITS WERE FOUND RECORDED IN THE REGULAR B OOKS OF ACCOUNT OF SOCIETY WHOSE AUDIT IS DONE BY THE ASSES SEE GOVERNMENT AGENCY NAMELY DY. REGISTRAR COOP. SOC IETIES GOVT. OF M.P. ON REGULAR BASIS. I FIND THAT THE A. O. HIMSELF PAGE 9 OF 11 - I.T.(SS)A.NO.201/IND/2007 AANCHAL GRIH NIRMAN SAHKARI SANSTHA MARYADIT AND OT HERS HAS STARTED THIS FACT OF CASH DEPOSITS HAVING BEEN RECORDED/DISCLOSED IN THE REGULAR BOOKS OF ACCOUNT IN HIS ORDER. I HOWEVER AGREE WITH THIS CONTENTION OF TH E A.O. THAT PROVISIONS OF SECTION 68 OF THE INCOME-TAX ACT 196 1 MAY BE INVOKED IN BLOCK ASSESSMENT. BUT AS RIGHTLY SUB MITTED BY THE LD.AUTHORIZED REPRESENTATIVE SOME EVIDENCE OR M ATERIAL MUST HAVE BEEN FOUND DURING THE COURSE OF SEARCH TO HOLD THESE DEPOSITS AS NON-GENUINE OR BOGUS FOR TREATING IT AS UNDISCLOSED INCOME OF THE ASSESSEE. HERE NO INCRIM INATING MATERIAL WORTH THE NAME WAS FOUND DURING THE COURSE OF SEARCH OR EVEN THEREAFTER PROVING THESE DEPOSITS AS BOGUS OR NON-GENUINE; NEITHER THE A.O. HAS BROUGHT ON RECORD ANY CORROBORATIVE EVIDENCE THAT THESE DEPOSITS AS NON-G ENUINE OR BOGUS FOR TREATING IT AS UNDISCLOSED INCOME OF THE ASSESSEE. HERE NO INCRIMINATING MATERIAL WORTH THE NAME WAS FOUND DURING THE COURSE OF SEARCH OR EVEN THEREAFTER PROV ING THESE DEPOSITS AS BOGUS OR NON-GENUINE; NEITHER THE AOO H AS BROUGHT ON RECORD ANY CORROBORATIVE EVIDENCE THAT T HESE DEPOSITS ARE NON-GENUINE OR BOGUS. JBY NOW IT IS S ETTLED LAW THAT IN THE BLOCK ASSESSMENT THE ASSESSMENT OF UND ISCLOSED INCOME CAN BE MADE ONLY ON THE BASIS OF MATERIAL OR PAGE 10 OF 11 - I.T.(SS)A.NO.201/IND/2007 AANCHAL GRIH NIRMAN SAHKARI SANSTHA MARYADIT AND OT HERS EVIDENCE FOUND AS A RESULT OF SEARCH OR SOMETHING R ELATABLE TO MATERIAL FOUND AS A RESULT OF SEARCH. BUT IN THIS CASE THE DOCUMENTS RELATING TO THE ASSESSEE FOUND DURING THE COURSE OF SEARCH ON RAJ HOMES GROUP DO NOT SURFACE ANY INC OME AT ALL MUCH LESS UNDISCLOSED INCOME. MOREOVER SINCE IT IS UNDISPUTED THAT NO MATERIAL OR EVIDENCE HAS BEEN FO UND DURING THE COURSE OF SEARCH PROVING THAT THESE CASH DEPOSITS WERE NON-GENUINE OR BOGUS THE ADDITION CANNOT BE S USTAINED ON SOME OTHER IRRELEVANT OR EXTRANEOUS CONSIDERATIO NS AS DONE BY A.O. THIS IS IN CONSONANCE WITH THE DECISIO N OF JURISDICTIONAL HIGH COURT OF M.P. IN THE CASE OF CI T VS. KHUSHALCHAND NIRMAL KUMAR (2003) 183 CTR 503 (MP) AND SO MANY OTHER CASES RELIED UPON BY AR. IT IS AL SO NOTED THAT DESPITE THE REQUEST OF THE ASSESSEE THE A.O. DID NOT SUMMON ANY MEMBER WHO HAD DEPOSITED CASH GIVEN BY THE ASSESSEE TO A.O.; NOR HAS THE A.O. BROUGHT ANY OTHE R CORROBORATIVE EVIDENCE TO SUPPORT HIS CASE. UNDER T HESE CIRCUMSTANCES I HAVE NO ALTERNATIVE BUT TO DELETE THE ADDITION MADE BY THE ASSESSING OFFICER ON THE STREN GTH OF SETTLED POSITION OF LAW. THE APPELLANT WILL THEREF ORE GET PAGE 11 OF 11 - I.T.(SS)A.NO.201/IND/2007 AANCHAL GRIH NIRMAN SAHKARI SANSTHA MARYADIT AND OT HERS RELIEF OF RS. 7 59 260/-. THUS THE APPEAL ON THIS POINT IS ALLOWED. 7. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 4 TH MAY 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 4 TH MAY 2010. CPU*