SAVITA J PUROHIT, MUMBAI v. ACIT 25(20, MUMBAI

ITA 1081/MUM/2009 | 2005-2006
Pronouncement Date: 30-04-2014 | Result: Allowed

Appeal Details

RSA Number 108119914 RSA 2009
Assessee PAN AGUPP5547R
Bench Mumbai
Appeal Number ITA 1081/MUM/2009
Duration Of Justice 5 year(s) 2 month(s) 11 day(s)
Appellant SAVITA J PUROHIT, MUMBAI
Respondent ACIT 25(20, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 30-04-2014
Date Of Final Hearing 05-03-2014
Next Hearing Date 05-03-2014
Assessment Year 2005-2006
Appeal Filed On 17-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI . BEFORE SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA JUDI CIAL MEMBER . / ITA NO. 1081 / MUM./ 2009 ( / ASSESSMENT YEAR : 20 0 5 06 ) . / ITA NO. 5514 / MUM./ 2013 ( / ASSESSMENT YEAR : 2005 06 ) MRS. SAVIA J. PUROHIT 3/35 RAJENDRA NAGAR CHSL DATA PADA RIOAD BORIVALI (E) MUMBAI 400 066 .. / APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 22 AAYAKAR BHAVAN 101 M.K. ROAD MUMBAI 400 020 .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AGUPP5547R / ASSESSEE BY : MR. R.K. GURWALA (AGARWAL) A/W MR. SHIRISH GURWALA (AGARWAL) / REV ENUE BY : MR. GIRISH DAYAL / DATE OF HEARING 24 . 0 3 .201 4 / DATE OF ORDER 30.04.2014 / ORDER / PER AMIT SHUKLA J.M. THE AFORESAID APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE CHALLENGING THE IMPUGNED SEPARATE ORDER DATED 9 TH JULY 2008 PASSED BY 2 THE LEARNED COMMISSIONER (A PPEALS) XXV MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (FOR SHORT 'THE ACT' ) AND THE IMPUGNED ORDER DATED 4 TH JULY 2013 PASSED BY THE LEARNED COMMISSIONER (APPEALS) XXXIX MUMBAI FOR THE QUANTUM OF ASSE SSMENT PASSED UNDER SECTION 153C R/W SECTION 153A BOTH FOR THE ASSESSMENT YEAR 2005 06. 2 . WE FIRST TAKE UP ASSESSEES APPEAL IN ITA NO.1081/MUM./ 2009 FOR THE ASSESSMENT YEAR 2005 06 . SINCE THIS APPEAL IS AGAINST THE REGULAR ASSESSMENT ORDER UNDER SECTION 143(3) THEREFORE THE SAME IS BEING TAKEN UP FIRST FOR ADJUDICATION. AT THE OUTSET THIS APPEAL IS BARRED BY LIMITATION BY 157 DAYS. 3 . ALONG WITH THE APPEAL T HE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY WHEREIN THE ASSESSEE HAD SUBMITTED THAT THOUGH THE IMPUGNED ORDER DATED 9 TH JULY 2008 PASSED THE LEARNED COMMISSIONER (APPEALS) XXV MUMBAI WAS RECEIVED ON 15 TH JULY 2008 BY THE ASSESSEES AUTHORISED REPRESENTATIVE H OWEVER NEITHER THE RECEIPT OF THE SAID ORDER WAS COMMUNICATED TO THE ASSESSEE NOR ANY ACTION WAS TAKEN BY THE ASSESSEES AUTHORIZED COUNSEL . IN SUPPORT OF THIS CONTENTION TWO AFFIDAVITS SWORN BY THE THEN ASSESSEES AUTHORISED REPRESENTATIVE MR. SURENDRA R. DESAI ITP HAVE BEEN FILED STATING THAT THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) WAS SERVED UPON HIM PERSONALLY AND WAS HANDED OVER TO HIS CLERK FOR FURTHER ACTION WHICH WAS MISPLACED BY HIM. I T WAS ONLY WHEN THE ATTACHMENT PROCEEDINGS OF THE BANK ACCOUNT OF THE ASSESSEE WAS UNDERTAKEN BY THE DEPARTMENT THE ASS ESSEE ENQUIRED ABOUT THE FATE OF THE APPEAL AND ACCORDINGLY IT CAME TO THE KNOWLEDGE OF THE LEARNED COUNSEL AS WELL AS THE ASSESSEE THAT THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) HAS BEEN MISPLACED. LATER ON THE SAID ORDER WAS PROCURED AND THE APP EAL WAS FILED ON 10 TH FEBRUARY 2009. THE CONTENTS OF THE SECOND AFFIDAVIT SWORN 3 ON 5 TH MARCH 2014 BY THE THEN AUTHORISED REPRESENTATIVE MR. SURENDRA R. DESAI IS REPRODUCED HEREIN BELOW : I SURENDRA R. DESAI AGED ABOUT 56 YEARS S/O. SHRI RAMANLAL DESA I RESIDENT OF C/10 MADHUBAN CO. OP. HSG. SOC. SIMPOLI CROSS ROAD BORIVALI (WEST) MUMBAI - 400092 DO HEREBY SOLEMNLY DECLARE AND AFFIRM ON OATH AS UNDER: 1. THAT I AM AN INCOME TAX PRACTITIONER AND I HAD BEEN APPOINTED AS AUTHORIZED REPRESENTATIVE TO APPEAR AND PRESENT THE CASE OF MRS. SAVITA J. PUROHIT BEFORE THE ACIT - 25(2) MUMBAI AND CIT(A) - 25 MUMBAI FOR THE PROCEEDINGS PENDING FOR A.Y. 2005 - 06 UNDER THE INCOME TAX ACT 1961. 2. THAT THE APPELLATE ORDER DATED 09 - 07 - 2008 PASSED BY THE LD. CIT(A) - 25 MUMBAI FOR A.Y. 2005 - 06 IN THE CASE OF MRS. SAVITA J. PUROHIT WAS DIRECTLY RECEIVED BY ME FROM THE I. T. DEPARTMENT ON 15 - 07 - 2008 WHICH WAS GIVEN TO MY OFFICE CLERK FOR THE PREPARATION OF FURTHER APPEAL BEFORE THE HON'BLE ITAT. 3. THAT I OMITTED TO INF ORM MRS. SAVITA J. PUROHIT ABOUT THE PASSING AND RECEIPT OF THE APPELLATE ORDER DATED 09 - 07 - 2008 PASSED BY THE LD. C IT(A) - 25 MUMBAI FOR A.Y. 2005 - 06. 4. THAT ALL THE NOTICES AND COMMUNICATIONS FROM INCOME TAX DEPARTMENT WHATEVER SERVED ON MRS. SAVITA J . PUROHIT WERE IMMEDIATELY GIVEN TO MY OFFICE BY HER MOSTLY WITHOUT OPENING THE ENVELOPE. 5. THAT I HAD RECEIVED THE DEMAND NOTICE AND APPEAL EFFECT ORDER ON 4 - 0CT - 2008 IN UNOPENED ENVELOPE FROM MRS. SAVITA J. PUROHIT WHICH WAS GIVEN TO MY OFFICE CLERK FO R THE PREPARATION OF STAY APPLICATION. 6. THAT AFTER THE BANK ACCOUNT OF MRS. SAVITA J. PUROHIT WAS ATTACHED BY THE INCOME TAX DEPARTMENT; SHE REPETITIVELY DEMANDED HER CASE FILE FOR THE A.Y. 2005 - 06 FROM ME. 7. T HAT MRS. SAVITA J. PUROHIT WAS CONTINUOU SLY UNDER BONA - FIDE BELIEF THAT HER BANK ACCOUNT HAS BEEN ATTACHED BY THE I.T. DEPARTMENT DUE TO DEMAND RAISED BECAUSE OF ASSESSMENT ORDER DATED 26 - 12 - 2007. 8. THAT THE CASE FILE OF MRS. SAVITA J. PUROHIT WAS SOMEWHERE MISPLACED BY MY OFFICE CLERK IN MY O FFICE AND ON MY REPETITIVE DEMAND OF THE SAME FROM HIM HE KEPT ON SAYING THAT HE IS BRINGING THE FILE. BUT ONLY ON 10 - FEB - 2009 HE COULD TRACE THE FILE AND PRODUCE THE SAME BEFORE ME WHICH IN TURN I PROVIDED TO MRS. SAVITA J. PUROHIT ALONG WITH CIT(A) - 25 MUMBAI'S ORDER FOR THE A.Y. 2005 - 06 DATED 09 - 07 - 2008 ON 10 - FEB - 2009. 4 9. THAT DUE TO OVERSIGHT OF MY OFFICE CLERK THE SAID APPEAL COULD NOT BE FILED BEFORE THE HON'BLE ITAT WITHIN THE STIPULATED TIME PERIOD. 10. THAT THE DELAY IN FILING OF APPEAL IS D UE TO THE IMPROPER ATTENDANCE ON THE PART OF MY OFFICE. 11. THAT THIS AFFIDAVIT IS SUBMITTED IN CONFIRMATION OF THE FACTS STATED IN THE APPLICATION FILED BEFORE THE HON'BLEBLE ITAT FOR THE CONDONATION OF DELAY IN FILING THE APPEAL. 4 . AT THE TIME OF HEARI NG BEFORE THE TRIBUNAL ON 6 TH MARCH 2014 THE LEARNED DEPARTMENTAL REPRESENTATIVE WAS REQUIRED TO ASCERTAIN FROM THE RECORDS AS TO WHETHER THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) XXV MUMBAI WAS SERVED UPON THE THEN ASSESSEES AUTHORISED REPRESEN TATIVE MR. SURENDRA R. DESAI OR TO THE ASSESSEE. IN RESPONSE THE LEARNED DEPARTMENTAL REPRESENTATIVE PRESENTED THE RECORDS AND ALSO SUBMITTED A LETTER THAT THE ORDER DATED 9 TH JULY 2008 PASSED BY THE LEARNED COMMISSIONER (APPEALS) WAS ACTUALLY SERVED U PON THE ASSESSEES AUTHORISED REPRESENTATIVE MR. SURENDRA R. DESAI BY HAND . THE COPY OF ACKNOWLEDGEMENT OF RECEIPT OF MR. SURENDRA R. DESAI HAS ALSO BEEN FILED. FROM THE RECORDS PRODUCED BEFORE US IT IS EVIDENT THAT THE ORDER OF THE LEARNED COMMISSIO NER (APPEALS) XXV MUMBAI WAS SERVED UPON THE ASSESSEES AUTHORISED REPRESENTATIVE AND NOT UPON THE ASSESSEE. ONCE THAT IS SO THEN THE AVERMENTS MADE BY MR. SURENDRA R. DESAI IN HIS TWO AFFIDAVITS THAT THE FATE OF THE ORDER WAS NOT COMMUNICATED TO THE ASSESSEE AND IT GOT MISPLACED AT HIS OFFICE BY HIS CLERK CAN BE PRESUMED TO BE TRUE . UNDER THESE CIRCUMSTANCES THERE CAN BE PRESUMPTION IN FAVOUR OF THE ASSESSEE AND IN THE INTEREST OF SUBSTANTIAL JUSTICE WE HOLD THAT THE ASSESSEE WAS PREVENTED BY SUFFIC IENT AND REASONABLE CAUSE FROM FILING THE APPEAL ON TIME . C ONSEQUENTLY WE CONDONE THE DELAY OF 157 DAYS IN FILING OF THE APPEAL AS THE ASSESSEES AUTHORISED REPRESENTATIVE HAS ACCEPTED HIS MISTAKE OF FILING THE APPEAL BELATEDLY FOR THE FACTS DEPOSED TO I N HIS AFFIDAVIT . WE NOW PROCEED TO DISPOSE OFF THE APPEAL ON MERIT. 5 5 . THE SOLE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL IS THAT THE LEARNED COMMISSIONER (APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF SUMS AGGREGATING TO ` 92 59 530 ON ACCOUNT OF LOAN RECEIVED FROM VARIOUS PERSONS WHICH HAS BEEN ADDED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 6 . THE FACTS IN BRIEF QUA THE AFORESAID ISSUE ARE THAT THE ASSESSEE IS AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS OF CIVIL CONTRACTOR THROUGH HER PROPRIETORSHIP CONCERN M/S. SAVITA ENTERPRISES. FOR THE ASSESSMENT YEAR 2005 06 THE ASSESSEE HAS FILED HER RETURN OF INCOME ON 31 ST OCTOBER 2006 DECLARING TOTAL INCOME OF ` 10 47 173 AND HAS ALSO SHOWN AGRICULTURAL INCOME OF ` 24 57 633 WHICH WAS CLAIMED AS EXEMPT. THE ASSESSING OFFICER IN THE COURSE OF SCRUTINY PROCEEDINGS ON A PERUSAL OF THE BALANCE SHEET OBSERVED THAT THE ASSESSEE HAS RECEIVED UNSECURED LOANS TO THE TUNE OF ` 1 32 93 000. HE REQUIRED THE ASSESSEE TO GIVE FU LL ADDRESS OF THE CREDITORS PAN LOAN CONFIRMATION ETC. . THE ASSESSEE HOWEVER COULD ONLY PRODUCE LOAN CONFIRMATION IN FEW CASES. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE HAS ALSO ADVANCED SUM OF ` 1 36 00 000 TO ONE M/S. M.R. CONSTRUCTION CO. OUT OF WHICH A SUM OF ` 43.36 LAKHS WERE MADE THROUGH ACCOUNT PAYEE CHEQUE S AND BALANCE SUM OF ` 92.64 LAKHS WAS GIVEN IN CASH. THE ASSESSING OFFICER IN PARA 6.5 HAS NOTED THE DETAILS OF 75 PERSONS WHO HAVE ADVANCED LOANS OUT OF WHICH FROM 47 P ERSONS HAVE GIVEN LOAN IN CASH FOR SUMS AGGREGATING TO ` 92 59 530 DURING THE RELEVANT ASSESSMENT YEAR. HE FURTHER NOTED THAT THE ASSESSEE COULD NOT FILE LOAN CONFIRMATION & PROVIDE FULL ADDRESS AND HENCE THE FINANCIAL CAPACITY OF THESE CREDITORS COULD NOT BE PROVED. THE ASSESSEE EXPLAINING THE GENUINENESS OF THE LOANS VIDE LETTER DATED 24 TH DECEMBER 2007 HAS GIVEN THE EXPLANATION THAT THESE LOANS HAVE BEEN TAKEN FROM FAMILY MEMBERS RELATIVES AND FRIENDS FROM NATIVE PLACE JALORE IN RAJASTHAN WHO ARE MOSTLY FARMARS. 6 THE SAID EXPLANATION HAS BEEN INCORPORATED IN PARA 7 OF THE ASSESSMENT ORDER. HOWEVER THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THE IDENTITY AND THE CREDITWORTHINESS OF THE CONTRACTS AND THEREFORE THE S AME WAS ADDED AS UNEXPLAINED CASH CRE DIT UNDER SECTION 68. HE ALSO REFERRED AND RELIED UPON VARIOUS JUDICIAL DECISIONS. 7 . BEFORE THE LEARNED COMMISSIONER (APPEALS) THE LEARNED COUNSEL FOR THE ASSESSEE MR. SURENDRA R. DESAI HAD SUBMITTED A LETTER DATED 7 T H JULY 2008 WHEREBY IT WAS OFFERED THAT THE LOAN TAKEN CAN BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE SO AS TO BUY PIECE PROVIDED NO PENALTY PROCEEDINGS SHOULD BE INITIATED. THE CONTENTS OF THE SAID LETTER AS REPRODUCED IN PAGE 4 OF THE IMPUGNED ORDER READ AS UNDER: TO DATE: 7 TH JULY 2008 THE CIT APPEAL XXV BANDRA KURLA COMPEX MUMBAI - 51 REF: SAVITA PUROHIT PAN NO. A GUPP5547R WITH REGARDS TO THE ABOVE MENTIONED ASSESSEE/ IRRESPECTIVE OF THE SUBMISSION REGARDING ADDITIO N MADE IN OUR ASSESSMENT FOR ASS. YEAR 2005 - 2006 FOR LOAN ULS.68 FOR RS.92 59 530 / - . WE WOULD LIKE TO INFORM YOU THAT THE ASSESSEE WAS /17 PRIMA FACIE BELIEF AT THE TIME OF ACCEPTING THE LOAN THAT BY ACCEPTING THE LOAN SHE IS NOT BREACHING ANY OF THE INCO ME - TAX PROVISIONS. IN THIS CONTEXT WE WOULD LIKE TO SUBMIT THAT ALL THE LOANS HAVE BEEN ACCEPTED FROM CLOSE RELATIVES OF SAVITA PUROHIT. ALL THE RELATIVES ARE STAYING IN DISTRICT SEVADIA / RAJASHAN. AS ALL THE RELATIVES ARE AGRICULTURIST INTER ALIA ALL OF THEM ARE ILLITERATE OR VERY LESS QUALIFIED. SECONDLY AS MY RELATIVES ARE OLD AGE PEOPLE INCLUDING FATHER AND FATHER IN LAW IT IS VERY DIFFICULT TO BRING THEM TO MUMBAI AND BRING THEM TO THE INCOME TAX DEPARTMENT. IN VIEW OF THE ABOVE FACTS AND IN ORDER TO BUY PEACE WITH THE DEPARTMENT/ WE ACCEPT THE LOANS TAKEN BY US TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE ULS.68. THIS SUOMOTO DECLARATION IS ALSO MADE ON THE UNDERSTANDING THAT NO PENALTY PROCEEDINGS UNDER ANY SECTION SHALL BE INITIATED O N THE ASSE SSEE ON THIS GROUND . THANKING YOU SD/ S.R. DESAI S A/R 7 8 . THE LEARNED COMMISSIONER (APPEALS) THOUGH ACCEPTED THE SAID OFFER LETTER HOWEVER THE CONDITION FOR NON INITIATION OF PENALTY PROCEEDINGS WAS REJECTED . AP ART FROM ACCEPTING THE OFFER LETTER PARTIALLY HE ALSO HELD THAT THE ASSESSEE WAS UNABLE TO DISCHARGE HER BURDEN OF PROVING CASH CREDIT AND AFFIRM THE FINDING OF THE ASSESSING OFFICER.THUS T HE ADDITION OF ` 92 59 530 GOT CONFIRMED. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 9 . BEFORE US THE LEARNED COUNSEL MR. R.K. GURWALA ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE OFFER LETTER GIVEN BY THE THEN AUTHORISED REPRESENTATIVE WAS WITHOUT ANY INTIMATION O R INFORMATION TO THE ASSESSEE. HE SUBM ITTED THAT THE ASSESSEE HAS FILED AN AFFIDAVIT WHEREIN SHE HAS CATEGORICALLY DENIED THE CONTENTS OF THE LETTER WHICH HAS BEEN SUBMITTED BY HER THE N AUTHORISED REPRESENTATIVE. FURTHER HE SUBMITTED THAT THE ASSESSEE DID NOT HAD ANY INTIMATION OR INFORMATIO N AND WAS ALSO NOT MADE AWARE OF THE LEGAL IMPLICATION OF SUCH AN OFFER LETTER. THEREFORE WITHOUT ANY CONSENT OF THE ASSESSEE SUCH A LETTER SHOULD NOT BE TAKEN INTO COGNIZANCE BECAUSE PART OF THE OFFER WHICH WAS MADE I.E. NO PENALTY PROCEEDINGS SHOULD BE INITIATED HAS NOT BEEN ACCEPTED BY THE LEARNED COMMISSIONER (APPEALS) THEREFORE WITHOUT GOING INTO OTHER PART OF THE OFFER GIVEN IN THE SAID LETTER ALSO CANNOT BE ACCEPTED. MR. GURWALA STATED THAT A SEARCH AND SEIZURE ACTION WAS CONDUCTED ON 16 TH NOV EMBER 2009 UNDER SECTION 132 (1) IN THE CASE OF ASSESSEES HUSBAND MR. JAWAHAR B. PUROHIT AND ACCORDINGLY ACTION UNDER SECTION 153C WAS ALSO INITIATED IN CASE OF THE ASSESSEE. DURING THE COURSE OF THE SAID ASSESSMENT PROCEEDINGS WITH REGARD TO THE SAME ADDITION MADE UNDER SECTION 68 THE ASSESSEE HAS FILED ALL THE RELEVANT DETAILS AND EVIDENCE OF EACH AND EVERY CREDITORS LIKE DOCUMENTS RELATING TO THEIR IDENTITY THE LAND REVENUE RECORDS TO SHOW THEIR CREDITWORTHINESS FAMILY TREE CONFIRMATION LETTERS ALONG WITH THE COMPLETE ADDRESS ETC. 8 THE SAME VERY DOCUMENTS WHICH ARE RUNNING INTO MORE THAN 300 PAGES HAVE ALSO BEEN FILED BEFORE US IN THE FORM OF ADDITION AL EVIDENCE. FOR THIS PURPOSE THE LEARNED COUNSEL HAS FILED A SEPARATE APPLICATION UNDER R ULE 29 OF THE INCOME TAX APPELLATE TRIBUNAL RULES 1962 FOR ADMISSION OF THESE ADDITIONAL EVIDENCES STATING VARIOUS REASONS AS TO WHY THESE DOCUMENTS COULD NOT BE FILED EARLIER IN THE REGULAR ASSESSMENT PROCEEDINGS. IN ANY CASE HE SUBMITTED THAT THE SAME V ERY DOCUMENTS ARE ALREADY ON RECORD OF THE DEPARTMENT DURING THE COURSE OF PROCEEDINGS UNDER SECTION 153C WHICH W ERE S PECIFICALLY SUBMITTED BEFORE THE SPECIAL AUDITORS. ON THE BASIS OF THESE ADDITIONAL EVIDENCES HE SUBMITTED THAT THESE DOCUMENTS / EVIDEN CES SHOULD BE TAKEN INTO CONSIDERATION WHILE ADJUDICATING THE ISSUE INVOLVED ON MERITS. 10 . ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT ONCE THE ASSESSEE THROUGH HER AUTHORISED REPRESENTATIVE HAS ACCEPTED THE SAID ADDITION THA T IS MADE AN OFFER TO INCLUDE THE CASH LOAN AS HER INCOME THEN THE SAME CANNOT BE AGITATED HERE BEFORE THE TRIBUNAL . THE AFFIDAVIT WHICH HAS BEEN FILED BY THE ASSESSEE DENYING THE CONTENTS OF THE LETTER FILED BY THE AUTHORISED REPRESENTATIVE IS A SELF SE RVING AND DOES NOT SUPPORT THE ASSESSEES CASE. H E SUBMITTED THAT THE THEN AUTHORISED REPRESENTATIVE WAS ACTING ON BEHALF OF THE ASSESSEE THEREFORE THE ASSESSEE CANNOT BACK TRACK FROM SUCH A LETTER. AS AN ALTERNATIVE HE SUBMITTED THAT IN CASE THESE ADDI TION AL EVIDENCES ARE TO BE ACCEPTED THEN THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY SUCH DOCUMENTS AND TO CARRY OUT ANY SUCH ENQUIRY AS T HE ASSESSING OFFICER MAY DEEM FIT FOR ADJUDICATION OF THE AD DITION MADE UNDER S ECTION 68. 11 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS RECEIVED LOANS FROM 47 PERSONS IN CASH DURING THE RELEVANT FINANCIAL YEAR THE 9 DETAILS OF WHICH HAVE BEEN INCORPORATED IN PAR A 3.1 OF THE APPELLATE ORDER. THESE CASH LOANS AGGREGAT ED TO ` 92 59 530. HOWEVER THERE WERE OTHER LOANS ALSO WHICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. BEFORE THE ASSESSING OFFICER THE ASSESSEE WITH REGARD TO THESE LOANS TAKEN FROM 47 PERSONS C OULD NEITHER FURNISH ANY CONFIRMATION LETTER NOR ANY DOCUMENTS RELATING TO THE CREDITWORTHINESS OF SUCH PERSONS IN MOST OF THE CASES. IT WAS ONLY EXPLAINED THAT THESE LOANS HAVE BEEN TAKEN FROM FAMILY MEMBERS RELATIVES AND FRIENDS WHO ARE MOSTLY AGRICUL TURIST BELONGING TO HER NATIVE PLACE JALORE RAJASTHAN. SINCE THESE PEOPLE ARE FROM VILLAGE THEREFORE THE SAME COULD NOT COME TO MUMBAI TO GIVE THE ENTIRE DETAILS. THE ASSESSING OFFICER HAD ADDED THE SAID LOANS UNDER SECTION 68 ON THE GROUND THAT NEITHE R THE IDENTITY NOR THE CREDITWORTHINESS COULD BE ESTABLISHED. BEFORE THE LEARNED COMMISSIONER (APPEALS) WITHOUT GOING ON TO THE MERIT THE THEN AUTHORISED REPRESENTATIVE MR. SURENDRA R. DESAI SUBMITTED A LETTER DATED 8 TH JULY 2008 STATING THAT THE ASSE SSEE WAS UNABLE TO PRODUCE ALL THE CREDITORS BECAUSE MOST OF THEM ARE ILLITERATE AND ARE OF OLD AGE AND THEREFORE CANNOT COME TO MUMBAI TO PRODUCE DETAILS AND CONFIRM THE SAID LOANS. THEREFORE IN ORDER TO BUY PEACE THE SAID LOAN AMOUNT WAS OFFERED TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE . THE SECOND PART OF THE OFFER WAS THAT NO PENALTY PROCEEDING SHOULD BE INITIATED. BASED ON THIS LETTER THE LEARNED COMMISSIONER (APPEALS) HAS CONFIRMED THE SAID ADDITIONS. APART FROM THIS HE ALSO HELD THAT THE FINDING OF THE ASSESSING OFFICER IN THIS REGARD IS UPHELD. NOW AT THIS STAGE THE CONTENTS OF THE SAID LETTER HAS BEEN STATED TO BE WITHOUT ANY INTIMATION OR KNOWLEDGE OF THE ASSESSEE AND THEREFORE SUCH AN OFFER MADE BY THE THEN AUTHORISED REPRESENTATIVE HAS BEEN DENIED BY THE ASSESSEE BEFORE US . IN SUPPORT OF THIS DENIAL AN AFFIDAVIT OF THE ASSESSEE HAS ALSO BEEN FILED BEFORE US . U NDER THESE CIRCUMSTANCES IT IS VERY DIFFICULT EITHER TO ACCEPT THE CONTENTS OF THE SAID OFFER LETTER FILED BEFORE THE LEAR NED COMMISSIONER (APPEALS) WHICH HAS BEEN SIGNED BY THE THEN AUTHORISED 10 REPRESENTATIVE OR TO ACCEPT THE ASSESSEES AFFIDAVIT DENYING SUCH LETTER AS IT IS MERE SELF SERVING STATEMENT. THE ACT DONE BY AN AUTHORIZED REPRESENTATIVE UNDER A POWER OF ATTORNEY GIVEN BY THE ASSESSEE IS BINDING UNLESS THE AUTHORIZED PERSON HIMSELF ACCEPTS HIS MISTAKE ON HIS OWN ACCOUNT WHILE ACTING ON BEHALF OF THE ASSESSEE. NOW WHETHER THE OFFER LETTER AS FILED BEFORE THE LEARNED COMMISSIONER (APPEALS) CAN BE SAID TO BE CONCL USIVE AGAINST THE ASSESSEE QUA THESE ADDITIONS. ON A PERUSAL OF THE LETTER IT CAN BE SEEN THAT TWO OFFERS WERE MADE ; FIRST IN ORDER TO BUY PE A CE THE LOANS HAVE BEEN ACCEPTED TO BE ADDED AS INCOME ; AND SECOND SUCH AN OFFER IS BEING MADE WITH A CONDITION THAT NO PENALTY PROCEEDINGS SHOULD BE INITIATED. THE LEARNED COMMISSIONER (APPEALS) O N SUCH CONDITIONS OUGHT TO HAVE REJECTED THE ENTIRE OFFER BECAUSE ADDITION OR PENALTY THEREOF CAN BE CONFIRMED OR LEVIED ONLY IN ACCORDANCE WITH THE PROVISIONS OF LAW AN D MATERIAL ON RECORD. IF SUCH AN OFFER IS TO BE ACCEPTED THEN IT HAS TO BE IN FULL NOT IN PART. IN ANY CASE THE LEARNED COMMISSIONER (APPEALS) HAS ALSO AFFIRMED THE ORDER OF THE ASSESSING OFFICER ON MERITS ALSO. HENCE THE ALLEGED OFFER LETTER FILED BY T HE THEN AUTHORIZED REPRESENTATIVE SHOULD BE IGNORED AND THE MERITS OF THE ADDITION SHOULD BE EXAMINED. 12 . NOW FOR ADJUDICATION ON MERITS BEFORE US A HUGE COMPILATION OF ADDITION AL EVIDENCE S WITH REGARD TO EACH AND EVERY CREDITORS HAVE BEEN FILED WHEREIN DOCUMENTS RELATING TO PROOF OF THE IDENTITY OF THE PERSONS CONFIRMATION OF THE ACCOUNT LAND REVENUE RECORDS AND FAMILY TREE TO PROVE THE CREDITWORTHINESS HAVE BEEN FILED. THESE VERY DOCUMENTS HAVE ALSO BEEN STATED TO HAVE BEEN FILED BEFORE THE DEPARTMEN T DURING THE COURSE OF ASSESSMENT PROCEEDINGS UNDER SECTION 153C. ON A PERUSAL OF THESE DOCUMENTS IT IS SEEN THAT THEY ARE QUITE RELEVANT FOR THE ADJUDICATION OF THE CASH CREDIT AND HENCE ARE ADMITTED FIRSTLY THESE ADDITIONAL EVIDENCES HAVE ALREADY BE EN FILED BEFORE THE DEPARTMENT IN THE PROCEEDINGS UNDER SECTION 153C; AND SECONDLY THESE ADDITIONAL 11 EVIDENCES GO TO THE VERY ROOT OF THE ADDITION MADE WHICH NEEDS TO BE CONSIDERED FOR ADJUDICATION OF THIS ISSUE. THEREFORE IN THE INTEREST OF SUBSTANTIAL JUSTICE WE FEEL THAT THESE DOCUMENTS SHOULD BE CONSIDERED FOR DECIDING THE ISSUE AFRESH ON MERITS. SINCE THESE DOCUMENTS HAVE NOT BEEN EXAMINED BY ANY OF THE DEPARTMENTAL AUTHORITIES THEREFORE IN THE INTEREST OF JUSTICE WE ARE OF THE CONSIDERED OPINION THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. CONSEQUENTLY WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND RESTORE THE ENTIRE ISSUE OF ADDITION MADE UNDER SECTION 68 BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THESE ADDITIONAL EVIDENCES AND CARRY OUT ANY ENQUIRIES AS HE MAY DEEM FIT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN ACCORDANCE WITH LAW ONLY AFTER PROVIDING DUE AND EFFECTIVE OPPORTUNITY OF H EARING TO THE ASSESSEE TO PRESENT HER CASE. THUS THE GROUND RAISED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 13 . . 1081/MUM./2009 13. IN THE RESULT ASSESSE E S APPEAL IN IT A NO.1081/MUM./2009 IS ALLOWED FOR STATISTICAL PURPOSES. WE NOW TAKE UP ASSESSEES APPEAL IN ITA NO.5514/MUM./2013 FOR THE ASSESSMENT YEAR 2005 06 V IDE WHICH FOLLOWING GROUND HAS BEEN RAISED: THAT THE LEARNED ASSESSING AUTHORITY (ASS ISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 22 MUMBAI) AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 39 MUMBAI HAVE GROSSLY ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN MAKING AND CONFIRMING THE ADDITION TO THE INCOME OF TH E APPELLANT TO THE EXTENT OF RS.92 82 500/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/ S. 68 OF THE INCOME TAX ACT 12 1961 INSPITE OF THE FACT THAT ALL RELEVANT DOCUMENTS TO PROVE IDENTITY CREDIT WORTHINESS AND GENUINENESS OF TRANSACTION WERE PRODUCED BEFORE THE LD. A.O AS WELL AS BEFORE THE LD. CIT(A). IT IS MENTIONED THAT THE SAID DOCUMENTS / EVIDENCES HAVE NOT BEEN EXAMINED / VERIFIED / SCRUTINIZED BY THE LD. A.O. OR THE LD. CIT(A) UNDER THE GARB THAT THE MATTER IS ALREADY PENDING AT THE LEVEL OF HON'BLE I TAT MUMBAI. 14 . THE ISSUE ARISING OUT OF THE AFORESAID GROUND RELATES TO THE PROCEEDINGS UNDER SECTION 153C R/W SECTION 153A. IN THIS CASE ALSO SIMILAR ADDITION UNDER SECTION 68 ON ACCOUNT OF S A ME CREDITORS HAS BEEN MADE THE ASSESSING OFFICER HAS TAKEN NOTE OF ALL THE FACTS FROM THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) AND ALSO FROM THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) AND SOLELY ON THE FINDINGS GIVEN UNDER REGULAR ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) HAS CONFIRMED THE SAID ADDITION. EVEN THE LEARNED COMMISSIONER (APPEALS) TOO RELYING ON THE O R DER OF THE LEARNED COMMISSIONER (APPEALS) IN THE REGULAR ASSESSMENT PROCEEDINGS HAS CONFIRMED THE SAID ADDITION. 15 . AFTER HEARING BOTH THE PARTIES WE FIND THAT IN THIS CASE A SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) HAS TAKEN IN THE CASE OF THE ASSESSEES HUSBAND MR. JAWAHAR B. PUROHIT ON 16 TH NOVEMBER 2009. C ONSEQUEN T TO THAT PROCEEDING PROVISION OF SECTION 153C HAS BEEN INITIATED IN THE CASE OF THE ASSESSEE. IN TH ESE PROCEEDING THE ASSESSEE HAD SUBMITTED ALL THE RELEVANT DOCUMENTS IN RELATION TO THE ADDITION MADE UNDER SECTION 68 IN RESPECT OF ALL THE 47 CREDITORS BEFORE THE SPECIAL AUDITORS AND BEFORE THE ASSESSING OFFICER. HOWEVER THE ASSESSING OFFICER HAS SIMPLY RELIED UPON THE FINDINGS GIVEN IN THE REGULAR ASSESSMENT PROCEEDINGS PASSED EARLIER AS DISCUSSED ABOVE. AT THE TIME OF SEARCH THE REGULAR ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005 06 WAS DECIDED BY THE LEARNED COMMISSIONER (APP EALS) AND THE APPEAL WAS PENDING BEFORE THE 13 TRIBUNAL . IN SUCH A SITUATION IT CANNOT BE HELD THAT THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2005 06 W ERE PENDING ON THE DATE OF THE SEARCH. THUS THE ORIGINAL ASSESSMENT ORDER IN THIS CASE DOES NOT G ET ABATED. ONCE THE ORIGINAL ORDER DOES NOT ABATE THEN WHATEVER IS THE FATE OF THE ADDITION MADE UNDER SECTION 68 IN THE REGULAR PROCEEDINGS UNDER SECTION 143(3) THE SAME WOULD BE APPLICABLE IN THAT PROCEEDING S ONLY AND THAT WOULD BE FINAL QUA THE ASSES SMENT YEAR 2005 06. NO FURTHER ADDITION ON THIS COUNT I.E. SAME ADDITION UNDER SECTION 68 PERTAINING TO SAME CREDITORS CAN BE MADE AGAIN UNDER SECTION 153C / 153A PROCEEDINGS . THE HONBLE ALLAHABAD HIGH COURT IN CIT V/S SHAILA AGARWAL [2012] 346 ITR 130 (ALL.) HAS CLEARLY OPINED THAT ONLY THE ASSESSMENT PROCEEDINGS AND THE RE ASSESSMENT PENDING ON THE DATE OF INITIATION OF SEARCH SHALL ABATE UNDER THE SECOND PROVISIO TO SECTION 153A AND IF AN APPEAL IS PENDING AGAINST A COMPLETED ASSESSMENT BEFORE THE T RIBUNAL ON THE DATE OF SEARCH THEN SUCH COMPLETED PROCEEDING DO NOT ABATE. THIS INTER ALIA MEANS THAT IF ANY ADDITION ON ACCOUNT OF PROVISIONS OF SECTION 68 IS CALLED FOR IN THIS CASE THE SAME SHOULD BE EXAMINED IN THE REGULAR ASSESSMENT PROCEEDINGS UN DER SECTION 143(3) AND NOT UNDER SECTION 153C R/W SECTION 153A. S INCE WE HAVE ALREADY ADMITTED THE ADDITIONAL EVIDENCES AND RESTORED THE ISSUE OF ADDITION UNDER SECTION 68 TO THE FILE OF THE ASSESSING OFFICER FOR DENOVO ADJUDICATION IN THE REGULAR ASSESSME NT PROCEEDINGS UNDER SECTION 143(3) AS HELD IN ASSESSEES APPEAL IN ITA NO.1081/MUM./2009 THEREFORE NO ADDITION IS WARRANTED IN THIS PROCEEDING UNDER SECTION 153C R/W SECTION 154A. CONSEQUENTLY WE HOLD THAT N O ADDITION IS CALLED FOR HERE IN THESE PROCEE DINGS. THUS THE GROUND RAISED BY THE ASSESSEE IS TREATED AS ALLOWED AS INDICATED ABOVE. 16 . . 5514 /MUM./20 13 16. IN THE RESULT ASSESSEES APPEAL IN ITA NO.5514/MUM./2013 IS ALLOWED. 14 17 . . 1081/MUM./2009 . 5514 /MUM./20 13 17. IN THE RESULT ASSESSEES APPEAL IN ITA NO.1081/MUM./2009 IS ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL IN ITA NO.5514/MUM./ 2013 IS ALLOWED. 30 TH APRIL 2014 ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL 2014 SD / - . D. KARUNAKARA RAO ACCOUNTANT MEMBER SD / - AMIT SHUKLA JUDICIAL MEMBER MUMBAI DATED : 30 TH APRIL 2014 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT MUMBAI CITY CONCERNED ; ( 5 ) / THE DR ITAT MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REG ISTRAR) / ITAT MUMBAI