Income Tax Officer,, Hyderabad v. Shri Avadesh Badruka,, Hyderabad

ITA 1177/HYD/2013 | 2004-2005
Pronouncement Date: 23-04-2014 | Result: Allowed

Appeal Details

RSA Number 117722514 RSA 2013
Assessee PAN AFWPB2296R
Bench Hyderabad
Appeal Number ITA 1177/HYD/2013
Duration Of Justice 8 month(s) 17 day(s)
Appellant Income Tax Officer,, Hyderabad
Respondent Shri Avadesh Badruka,, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 23-04-2014
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 23-04-2014
Assessment Year 2004-2005
Appeal Filed On 05-08-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY JUDICIAL MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 1177/HYD/2013 2004 - 05 THE ITO WARD-6(3) HYDERABAD SHRI AVADESH BADRUKA HYDERABAD PAN: AFWPB2296R 1178/HYD/2013 2005 - 06 1179/HYD/2013 2007 - 08 1180/HYD/2013 2004 - 05 SHRI GOPAL LAL BADRUKA HYDERABAD PAN: AFWPB2297R 1181/HYD/2013 2005 - 06 1182/HYD/2013 2007 - 08 APPELLANT BY: SRI SOLGY JOSE T. KOTTARAM RESPONDENT BY: SRI SAMUEL NAGADESI DATE OF HEARING: 04 .0 4 .2014 DATE OF PRONOUNCEMENT: 23.04.2014 ORDER PER CHANDRA POOJARI A.M.: ALL THE ABOVE APPEALS BY THE REVENUE IN RESPECT O F THE ABOVE TWO ASSESSEE FOR ASSESSMENT YEARS 2004-05 2 005-06 AND 2007-08 ARE DIRECTED AGAINST DIFFERENT ORDER OF THE CIT(A)-IV HYDERABAD DATED 15.5.2013. SINCE BOTH THE ASSESSEES BELONG TO ONE GROUP AND THE ISSUES RAISED IN THESE APPEALS AR E IDENTICAL ALL THESE APPEALS ARE CLUBBED AND HEARD TOGETHER AND AR E BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE. 2. THERE WAS A DELAY OF 1 DAY IN FILING THESE APPEALS. AS THE DR SUBMITTED THAT THE DELAY IS DUE TO ADMINISTRATIVE R EASONS THE SAME IS CONDONED AND THE APPEALS ARE ADMITTED FOR ADJUDI CATION. 3. COMMON GROUNDS IN ALL THESE APPEALS ARE AS UNDER: 1. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ISSUE OF ADMITTED INCOME WAS ALREADY ADJUDICATED BY THE ITAT AND THE ITAT HAD ALREADY DELIVERED THE DECISION. 2 ITA NO. 1177/HYD/2013 & ORS. SHRI AVADESH BADRUKA & ANR. ======================== 2. THE LEARNED CIT(A) OUGHT TO HAVE DISMISSED THE APPEAL AS THE ISSUE WAS ALREADY ADJUDICATED BY THE ITAT. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ORDER UNDER APPEAL WAS THE LETTER OF REJECTION OF PETITION OF THE ASSESSEE U/S. 154 OF THE IT ACT; DA TED 12.09.2012 AND NOT THE ORDER U/S. 143(3) R.W.S. 153BC; DATED 29.12.2008. 4. AS FACTS IN ALL THE APPEALS ARE COMMON WE ARE NARR ATING THE FACTS AS PER ITA NO. 1177/HYD/2013. A SEARCH AND SEIZURE ACTION U/S 132 OF INCOME-TAX ACT 1961 WAS CONDUCTED IN THE CASE OF SRI GOPAL LAL B ADRUKA AND HIS SON SRI AVADESH BADRUKA AND THE FI RM M/S AHURA HOLDINGS IN WHICH THEY WERE PARTNERS ALONG WITH CERTAIN OTHER PERSONS ON 27.6.2006. IN THE COURSE OF THE SEARCH EVIDENCE WAS FOUND WITH REGARD TO THE DEVELOPMENT OF A PROPE RTY AT 205 TARBUND SECUNDERABAD THAT ESTABLISHED THE RECEIPT OF ON-MONEY FOR SALE OF PLOTS DEVELOPED BY THE FIRM AHURA HOLD INGS. STATEMENT U/S 132 WAS RECORDED FROM SRI GOPAL LAL BADRUKA WH EREIN HE STATED AS FOLLOWS: 'Q.9 IN SEARCH AND SEIZURE OPERATIONS VARIOUS AGREEMENTS AND DOCUMENTS WERE FOUND AND SEIZED FROM YOUR RESIDENCE AS WELL AS BUSINESS PREMISES. ON THE BASIS OF THOSE EVIDENCES IT IS FOUND THAT THE FIRM AHURA HOLDINGS HAS RECEIVED OVER AND ABOVE THE REGISTERED VALUE AS ON-MONEY CONSIDERATION FOR SEVERAL PLOTS. HOWEVER WHILE FILING RETURN OF INCOME THE FIRM AHU RA HOLDINGS HAS NOT OFFERED THE SAME INTO TAX. WHAT IS YOUR REPLY? ANS.: THE ON-MONEY RECEIVED WAS OFFERED IN THE HAND S OF MYSELF AND MY SON SRI AVADESH BADRUKA WHO IS THE OTHER PARTNER. SINCE SRI BIMAL PODDAR AND ABHIESHIK PODDAR WERE NOT A WORKING PARTNERS WE HAVE DECIDED TO OFFER THE UNDISCLOSED INCOME IN THE HANDS OF MYS ELF AND MY SON INSTEAD OF IN THE HANDS OF FIRM. 5. SUBSEQUENTLY THE FOLLOWING RETURNS OF INCOME WERE FILED BY THE THREE PERSONS: A. M/S AHURA HOLDINGS: THE FIRM DID NOT ADMIT TO ANY UNDISCLOSED INCOME FROM THE BUSINESS ACTIVITY OF 3 ITA NO. 1177/HYD/2013 & ORS. SHRI AVADESH BADRUKA & ANR. ======================== DEVELOPMENT OF THE PROPERTY AT TARBUND FOR ANY OF T HE YEARS RELEVANT FOR THE PROCEEDINGS U/S 153C VIZ. A.YS. 2004-05 TO 2007-08. B. SRI GOPAL LAL BADRUKA: HE ADMITTED THE FOLLOWING SU MS AS UNDISCLOSED INCOME FROM THE BUSINESS OF SALE OF PROPERTIES BELONGING TO M/S AHURA HOLDINGS: SL. NO. A.Y. TOTAL INCOME AS PER ORIGINAL RETURN ON-MONEY RECEIPTS DISCLOSED AD-HOC EXPENDITURE CLAIMED @ 40% TOTAL INCOME ADMITTED IN THE RETURN FILED U/S. 153A 1. 2004-05 185834 3725000 1490000 2420834 2. 2005-06 159449 5200000 2080000 3279449 3. 2007-08 NA 10916328 4366531 *6636755 TOTAL 19841328 * THE TOTAL INCOME INCLUDES RS. 36 000 FROM SALARY R S. 50 958 AS INCOME FROM OTHER SOURCES C. SRI AVADESH BADRUKA: HE ADMITTED THE FOLLOWING SUMS AS UNDISCLOSED INCOME FROM THE BUSINESS OF SALE OF PROPERTIES BELONGING TO M/S AHURA HOLDINGS: SL. NO. A.Y. TOTAL INCOME AS PER ORIGINAL RETURN ON-MONEY RECEIPTS DISCLOSED AD-HOC EXPENDITURE CLAIMED @ 40% TOTAL INCOME ADMITTED IN THE RETURN FILED U/S. 153A 1. 2004-05 183085 3725000 1490000 2418085 2. 2005-06 157560 5200000 2080000 3277560 3. 2007-08 NA 10916328 4366531 *6674403 TOTAL 19841328 * THE TOTAL INCOME INCLUDES RS. 1 20 000 FROM SALAR Y RS. 4 606 AS INCOME FROM OTHER SOURCES 6. THE ASSESSING OFFICER HELD IN HIS ASSESSMENT ORDERS U/S 153C DATED 29.12.2008 IN THE CASE OF M/S AHURA HOLDINGS FOR AY 2004-05 TO AY 2007-08 THAT THE ON-MONEY COMPONENT W AS REQUIRED TO BE TAXED IN THE HANDS OF THE FIRM THOU GH THE TWO PARTNERS S/SRI GOPAL LAL BADRUKA AND AVADESH BADRU KA HAD ADMITTED PART OF THE ON-MONEY RECEIPTS IN THEIR IND IVIDUAL HANDS IN RESPECT OF THE PLOTS SOLD TO SRI M. SUBRAMANYAM AND HIS WIFE SMT. M. SANDHYA RANI SMT. KOKILABEN KADAKIA SRI T. ANA ND SINGH SRI K.B. RAMESH KUMAR AND RAJ KUMAR JAIN. IN PARA 14 OF HIS ORDER 4 ITA NO. 1177/HYD/2013 & ORS. SHRI AVADESH BADRUKA & ANR. ======================== THE ASSESSING OFFICER ALSO QUANTIFIED THE UNDISCLOS ED INCOME OF THE FIRM WHICH INCLUDED THE UNDISCLOSED INCOME ON ACCOU NT OF ON- MONEY RECEIPTS FROM THESE PERSONS AS FOLLOWS:- FY 2003-04 (AY 2004-05) SL. NO. PLOT NO. NAME OF THE PURCHASER RATE/ SQY AS PER SALE DEED (RS.) REF TO SEIZED DOCUMENT TOTAL CONSIDE RATION AS PER REGISTER RED SALE DEED VALUE AS PER THE AGREEMENT/ SEIZED DOCUMENT DIFFEREN CE RATIO UN ACCOUNTED RECEIPTS TO ACCOUNTED RECEIPTS. 1. 8 AKULA SREENIVAS 2500 A/GLB/684/A 2 PAGE 154 750000 2100000 1350000 1.80:1.00 2. 9 KANDAY RAMESH 2500 A/GLB/684/A 2 PAGE 193 750000 2100000 1350000 1.80:1.00 KANDAY SHOBA RANI 11 205/ 3 K.B. RAMESH KUMAR 3531 A/GLB/684/A 2 PAGE 24 & 23 1901000 *6070000 4169000 2.31:1.00 19 205/ 3 RAJ KUMAR JAIN 4000 A/GLB/684/A 2 PAGE 205 5620000 **16508750 10888750 2.19:1.00 * AS PER THE RECEIPT IT WAS MENTIONED TOTAL CONSIDER ATION WAS RS. 63 00 000 FOR THE PLOT SIZE OF 558.33 SQ.YDS. FINALLY ONLY 538.33 SQ.YDS WAS SOLD FOR RS . 60 70 000. ** AGREEMENT ENTERED FOR SALE OF 1529 SQ.YDS. FOR A CONSIDERATION OF RS. 1 79 65 750. HOWEVER ONLY 14 05 SQ.YDS WAS SOLD @RS. 11 750 PER SQ. YD. ACCORDINGLY TOTAL CONSIDERATION WAS RS. 1 65 08 750. FY 2004-05 (AY 2005-06) 24 KOKILABEN KADAKIA 4824 A/GLB/684/ A/S PAGE 16 5400000 *14600000 9200000 1.94:1.00 27 & 28 SRI T. ANAND SINGH & SMT. MAHATI SINGH 4500 A/SG/1 PAGE 2 3118500 3240000 17502900 11144400 1.75:1.00 * AGREEMENT ENTERED FOR SALE OF 1220 SQ.YDS. FOR A CONSIDERATION OF RS. 1 59 00 000. FINALLY ONLY 1119 SQ. YDS. WAS SOLD FOR A CONSIDERATION OF RS. 1 46 00 00 0 AND THE DIFFERENCE WAS RS. 92 00 000. FY 2005-06 (AY 2006-07) 1 P. SUBHADRA/ P. INDIRA 4997 A/SG/ PAGE 1 3755000 10600000 6845000 1.82:1.00 FY 2006-07 (AY 2007-08) 1 M. SANDHYA RANI/ M. SUBRAHMANYAM 7600 A/GLB/684 A/2 PAGE 130 12467344 34300000 21832656 1.75:1.00 7. IT IS THUS CLEAR THAT THE UNDISCLOSED INCOME ADMI TTED BY SRI GOPAL LAL BADRUKA AND SRI AVADESH BADRUKA WAS ASSES SED TO TAX ON SUBSTANTIVE BASIS IN THE HANDS OF M/S AHURA HOLD INGS. THE ASSESSING OFFICER ALSO BROUGHT THE ENTIRE UNDISCLOS ED INCOME FROM THE PROJECT AT TARBUND TO TAX IN THE HANDS OF THESE TWO PARTNERS ON PROTECTIVE BASIS AFTER DISALLOWING THE CLAIM OF AD -HOC EXPENDITURE AGAINST THIS INCOME IN THE ABSENCE OF ANY DOCUMENTA RY EVIDENCE. 5 ITA NO. 1177/HYD/2013 & ORS. SHRI AVADESH BADRUKA & ANR. ======================== APPEALS HAD BEEN FILED AGAINST THESE ASSESSMENTS BO TH BY THE FIRM M/S AHURA HOLDINGS AND BY THE TWO PARTNERS S/SRI GOPAL LAL BADRUKA AND AVADESH BADRUKA. IN A COMBINED ORDER I N ITA NO.3S4-366 AND 580-585/HYD/2010-11 DATED 26.11.201 0 FOR ALL THREE ENTITIES FOR ALL THE YEARS IN QUESTION V IZ. AYS 2004-05 TO 2007-08 THE ITAT HELD THAT THE UNACCOUNTED INCOME FROM ON- MONEY RECEIPTS FROM THE SAID PROJECT WAS ASSESSABLE IN THE HANDS OF THE FIRM M/S AHURA HOLDINGS AND NOT IN THE HAN DS OF ITS PARTNERS. THE ITAT MADE THE FOLLOWING OBSERVATIONS IN THIS REGARD: '21. THEREFORE THE ASSESSING OFFICER IS JUSTIFIED IN MAKING THE ASSESSMENT IN THE HANDS OF THE FIRM ON T HE BASIS OF MATERIAL AVAILABLE ON RECORD. THE ON-MONEY RECEIPT TO BE ASSESSED IN THE HANDS OF THE FIRM SIN CE THE FIRM IS ENGAGED IN THE BUSINESS OF LAND TRANSACTION S AND ALSO SINCE REGULAR INCOME GENERATED FROM DISCLOSED BUSINESS OF SALE OF PLOTS HAS BEEN OFFERED FOR ASSE SSMENT IN THE HANDS OF THE FIRM. THE ON-MONEY RECEIPTS TH OUGH RECEIVED BY THE PARTNERS THE PARTNERS HAVE RECEIVE D ON BEHALF OF THE FIRM IN THEIR REPRESENTATIVE CAPACITY AND AS ITS AGENTS AND THEY HAVE NOTHING TO DO WITH THE BU SINESS OF THE ASSESSEE FIRM OTHER THAN AS A PARTNER. THE ON- MONEY IS HAVING DIRECT NEXUS WITH THE LAND BUSINESS TRANSACTIONS OF THE ASSESSEE FIRM. IT LEADS TO ABSU RD RESULTS IF THE REGULAR INCOME FROM THE SALE OF PLO TS IS ASSESSED IN THE HANDS OF THE FIRM AND THE ON-MONEY IN THE RELATION TO THE VERY SAME TRANSACTIONS OF THE F IRM WAS ASSESSED IN THE HANDS OF THE PARTNERS FIRM DIRE CTLY. THUS THERE IS NO MERIT IN THE ARGUMENTS OF THE LEA RNED COUNSEL FOR THE ASSESSEE THAT THE ON-MONEY RECEIPT IS TO BE ASSESSED IN THE HANDS OF THE PARTNERS. MORE SO IT IS AN ADMITTED FACT THAT ON-MONEY RECEIPT WAS SIGNED B Y THE PARTNERS OF THE FIRM ON BEHALF OF THE ASSESSEE FIRM AS A REPRESENTATIVE OF THE FIRM. AS SUCH IT IS ONL Y THE FIRM WHICH HAS TO BE ASSESSED EVEN IN RESPECT OF IN COME BY WAY OF ON-MONEY. ' 8. IN ITS DECISION IN GOPAL LAL BADRUKA & OTHERS V DCI T [2012] 346 ITR 106(AP) AGAINST THIS DECISION OF THE ITAT THE COURT HELD AS FOLLOWS: 'IN OUR OPINION ON AN APPRECIATION OF THE EVIDENCE THE ASSESSING OFFICER THE COMMISSIONER OF INCOME TAX (APPEALS) AS WELL AS THE TRIBUNAL HAVE ALL COME TO THE SAME CONCLUSION NAMELY THAT THE UNDISCLOSED INCOM E 6 ITA NO. 1177/HYD/2013 & ORS. SHRI AVADESH BADRUKA & ANR. ======================== WAS THAT OF AHURA HOLDINGS. THERE IS NO PERVERSITY POINTED OUT IN THE VIEW THAT ALL OF THEM HAVE CONCURRENTLY TAKEN. WE DO NOT THINK THAT ANY SUBSTA NTIAL QUESTION OF LAW ARISES IN THIS REGARD NOR IS THERE IS ANY OCCASION FOR US TO INTERFERE WITH THE VIEW TAKEN CONCURRENTLY BY ALL THE AUTHORITIES.' 9. THE QUESTION WHETHER THE UNDISCLOSED INCOME FROM RE CEIPT OF ON-MONEY FROM THE SALE OF PLOTS IN THE TARBUND P ROJECT DEVELOPED BY M/S AHURA HOLDINGS WAS ASSESSABLE IN THE HANDS O F THE FIRM OR ITS TWO PARTNERS HAS THUS BEEN CONCLUDED BY THE D ECISION OF THE HIGH COURT. IN HIS ORDER IN THE CASE OF SRI AVADES H BADRUKA (ITA NO. 442 395 TO 397/08-09 DATED 22.12.2009) THE CIT(A ) HAD GIVEN THE FOLLOWING DIRECTIONS: ' ... 1 HAVE ALREADY HELD THAT THE ON MONEY RECEIPT S ON ACCOUNT OF SALE OF LAND BELONGS TO THE FIRM AND SHO ULD BE ASSESSED IN THE HAND OF THE FIRM ONLY. THUS THE AO WHILE GIVING EFFECT TO THIS APPELLATE ORDER SHOULD ENSURE THAT ADDITIONS/DISALLOWANCES IN RESPECT OF ON MONEY RECEIPTS WHICH HAVE ALREADY BEEN CONSIDERED SUBSTANTIVE/Y IN THE HANDS OF THE FIRM SHOULD NOT B E MADE AGAIN IN THE HANDS OF THE PARTNERS INCLUDING T HE ASSESSEE. THIS GROUND OF APPEAL IS DISMISSED IN PRINCIPLE SUBJECT TO MY OBSERVATION AS ABOVE.' 10. IN THE CASE OF SRI GOPAL BADRUKA IN ITA NO. 398-401 /2008- 09 DATED 22.12.2009 THE CIT(A) DIRECTED THE ASSES SING OFFICER TO FOLLOW THE DIRECTIONS IN HIS ORDER IN THE CASE OF S RI AVADESH BADRUKA. WHILE GIVING EFFECT TO THE ORDER OF THE C IT(A) THE ASSESSING OFFICER REDUCED THE ADDITIONS MADE BY HIM IN HIS ASSESSMENT ORDER FROM THE TOTAL INCOME BUT DID NOT REDUCE THE INCOME FROM ON-MONEY RECEIPTS RETURNED BY THE ASSES SEE. THE ASSESSEE FILED A PETITION FOR RECTIFICATION U/S 154 CLAIMING THAT THE INCOME FROM ON-MONEY RECEIPTS RETURNED BY HIM SHOUL D ALSO BE REDUCED FROM THE ASSESSED INCOME CONSEQUENT TO THE ORDER OF THE CIT(A). THE ASSESSING OFFICER REJECTED THIS CLAIM W ITH THE FOLLOWING REMARKS: 'REGARDING THE INCOME RETURNED THE INCOME WAS SUBSTANTIALLY ASSESSED IN YOUR HANDS. FURTHER THE ISSUE 7 ITA NO. 1177/HYD/2013 & ORS. SHRI AVADESH BADRUKA & ANR. ======================== INVOLVED IS NOT MISTAKE APPARENT FROM RECORD. HENCE YOUR REQUEST TO PASS MODIFICATION ORDER CANNOT BE RECTIFIED U/S. 154 OF THE I. T. ACT 1961.' 11. THE ASSESSEE'S CLAIM IN THESE APPEALS FLOW FROM THE ABOVE FACTS. THE ASSESSEE HAS CLAIMED THAT HE HAD VOLUNTA RILY RETURNED CERTAIN SUMS RECEIVED AS ON-MONEY FROM SALE OF PLO TS PERTAINING TO THE TARBUND PROJECT OF THE FIRM M/S AHURA HOLDINGS AS HIS INCOME FOR THE VARIOUS YEARS IN APPEAL THAT THIS INCOME W AS HELD IN APPEAL TO BE BELONGING TO THE FIRM AND NOT TO THE ASSESSEE THAT THE INCOME RETURNED BY THE ASSESSEE HAVING BEEN ASSESS ED SUBSTANTIVELY IN THE HANDS OF THE FIRM AND PROTECTI VELY IN THE HANDS OF THE PARTNERS AND SUCH ASSESSMENT HAVING BEEN UPH ELD BY THE HIGH COURT THE RETURNED INCOME FROM RECEIPT OF ON- MONEY SHOULD NOT BE ASSESSED IN HIS HANDS. 12. ON APPEAL THE CIT(A) OBSERVED THAT THE ISSUE IN DI SPUTE IS SIMILAR TO THE FACTS CONSIDERED BY THE RAJASTHAN HI GH COURT IN THE CASE OF CIT VS. TAJ OIL TRADERS (262 ITR 500) (RAJ. ) AND CIT VS. DURGAVATI SINGH (234 ITR 249) (ALL) WHEREIN THEIR L ORDSHIPS HELD AS UNDER: 'THE LAW DOES NOT PERMIT ASSESSMENT OF THE SAME INCOME SUCCESSIVELY IN DIFFERENT HANDS. THE TAX CA N ONLY BE LEVIED AND COLLECTED IN THE HANDS OF THE PE RSON WHO HAS REALLY EARNED THE INCOME AND IS LIABLE TO P AY TAX THEREON. IN VIEW OF THE FACT THAT THE ASSESSME NT IN RESPECT OF THE DISPUTE INCOME HAD ALREADY BEEN UPHE LD IN THE HANDS OF THE ASSESSEE'S HUSBAND BY THE HIGH COURT IN (1998) 232 ITR 934 THE TRIBUNAL WAS JUSTIF IED IN CANCELLING THE ASSESSMENT MADE ON THE ASSESSEE O N THE BASIS OF THE RETURN FILED BY HER.' AGAINST THIS THE REVENUE IS IN APPEAL BEFORE US. 12.1 THE LEARNED DR SUBMITTED THAT THE CIT(A) ORDE R IS AGAINST THE LAW AND IT IS TO BE SET ASIDE. 12.2 ON THE OTHER HAND THE LEARNED AR SUBMITTED TH AT IN THE ABOVE APPEALS THE ISSUE RELATING TO RELIEF FROM THE DOUBLE TAXATION 8 ITA NO. 1177/HYD/2013 & ORS. SHRI AVADESH BADRUKA & ANR. ======================== OF INCOME IN THE HANDS OF THE PARTNERS AFTER THE SA ME INCOME IS HELD TO BE TAXABLE IN SUBSTANTIVE BASIS IN THE FIRM AND THE ASSESSING OFFICER AFTER SUBSTANTIVELY TAXING THE TO TAL UNDISCLOSED INCOME IN THE HANDS OF THE FIRM FAILED TO GIVE APPR OPRIATE RELIEF IN THE HANDS OF THE PARTNER WHO OFFERED THE SAME IN HI S RETURN THUS RESULTED IN DOUBLE TAXATION OF THE INCOME FOR WHICH PARTNER IS ENTITLED TO RELIEF. THE SAME WAS GRANTED BY THE COM MISSIONER (APPEALS) GOING BY THE MERITS OF THE CASE AGAINST W HICH THE REVENUE IS IN APPEAL FOR THE RESPECTIVE ASSESSMENT YEARS. I N THIS REGARD IT IS SUBMITTED THAT THE POSITION OF LAW AS HELD BY THIS HONOURABLE BENCH IN DCIT VS. A. ADINARAYANA REDDY (2013) 27 ITR (TRI B) 580 (HYDERABAD) PARTICULARLY ON THE FOLLOWING PROPOSITI ON IS APPLICABLE TO ASSESSEES' CASES: 'TAX CAN BE COLLECTED ONLY AS PROVIDED UNDER THE AC T. IF AN ASSESSEE UNDER A MISTAKE MISCONCEPTION OR ON NO T BEING PROPERLY INSTRUCTED IS OVER ASSESSED THE AUTHORITIES UNDER THE ACT ARE REQUIRED TO ASSIST HI M AND ENSURE THAT ONLY LEGITIMATE TAXES DUE ARE COLLECTED . THE INCOME-TAX IS A LEVY ON INCOME. IF THE INCOME DOES NOT RESULT AT ALL THERE CANNOT BE A TAX EVEN THOUGH T HERE IS OFFER BY THE ASSESSEE WHICH DID NOT MATERIALIZE.' 12.3 THE AR SUBMITTED THAT I N THE INSTANT CASE IT IS AN UNDISPUTED FACT THAT THE PARTNERS HAVE OFFERED UNDISCLOSED INC OME WHICH WAS LATER HELD TO BE TAXABLE ONLY IN THE FIRM. THE ASSE SSING OFFICER HAVING TAXED THE TOTAL INCOME IN THE FIRM AS DIRECT ED SHOULD NOT HAVE SUSTAINED EVEN THE INCOME RETURNED BY THE PART NER ONCE THE LEGITIMATE TAXES DUE ARE COLLECTED FROM THE FIRM. F AILURE ON THE PART OF THE ASSESSING OFFICER TO FOLLOW THE LAW ; T HE ACTION OF THE COMMISSIONER ALLOWING THE RELIEF FROM DOUBLE TAXATI ON IS IN ACCORDANCE WITH LAW. 13. WE HAVE HEARD BOTH THE PARTIES. FIRST WE CONSIDER THE APPEALS RELATING TO A.YS. 2004-05 AND 2005-06. IN THIS CASE ORIGINALLY FOR A.YS. 2004-05 2005-06 THE AO PASSED THE 9 ITA NO. 1177/HYD/2013 & ORS. SHRI AVADESH BADRUKA & ANR. ======================== ASSESSMENT ORDER U/S. 153C OF THE IT ACT ON 29.12.2 008 IN THE CASE OF SRI AVADESH BADRUKA AND SRI GOPAL LAL BADRU KA. BOTH THE ASSESSEES PREFERRED APPEALS BEFORE THE CIT(A). THE CIT(A) PASSED INDEPENDENT APPELLATE ORDERS ON 22.12.2009 IN ALL T HESE CASES FOR A.YS. 2004-05 AND 2005-06. AGAINST THE ORDERS OF TH E CIT(A) THE ASSESSEES CAME IN APPEAL BEFORE THE TRIBUNAL. AS D ISCUSSED IN PARA 7 OF THIS ORDER THE TRIBUNAL DISPOSED OF THE APPEALS OF THE ASSESSEES VIDE ORDER DATED 26.11.2010. THIS ORDER OF THE TRIBUNAL WAS CONFIRMED BY THE HONBLE AP HIGH COURT AS REPOR TED IN 346 ITR 106 (AP). IT IS ALSO BE NOTED THAT THE AO PASSED THE CONSEQUENTIAL ORDER TO THE ORDER OF THE CIT(A) DATED 22.12.2009 O N 26.3.2010 FOR A.YS. 2004-05 AND 2005-06. AGAINST THE CONSEQUENTI AL ORDER OF THE AO THE ASSESSEES WENT IN APPEAL BEFORE THE CIT (A). THE CIT(A) DISPOSED THE CASES FOR BOTH THE ASSESSMENT YEARS TH ROUGH SEPARATE ORDERS ON 25.7.2012. ON CONFIRMATION BY T HE CIT(A) THE ASSESSEES CAME IN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL IN ITA NOS. 1475 1458 AND 1455 AND 1456 VIDE ORDER DATED 19.4.2013 DISPOSED OF THE CASES. FOR CLARITY WE WOULD MENT ION THE CHRONOLOGY OF EVENTS FOR A.YS. 2004-05 AND 2005-06 AS FOLLOWS: 29.12.2008 AO PASSED THE ASSESSMENT ORDERS ASSESSEES FILED APPLICATION U/S. 154 BEFORE THE AO DATED 22.8.2012 25.12.2009 CIT(A) CONFIRMED AO'S ACTION AO PASSED THE CONSEQUENTIAL ORDER TO THE ORDER OF THE CIT(A) DT. 26.3.2010 THE AO REJECTED THE APPEAL U/S. 154. DATED 12.09.2012 26.11.2010 TRIBUNAL UPHELD THE CIT(A) ORDER THE CIT(A) CONFIRMED ORDER OF THE AO DATED 25.07.2012 ASSESSEE PREFERRED APPEAL TO THE CIT(A) THE CIT(A) ALLOWED THE APPEALS DATED 15.5.2013. THE HIGH COURT OF AP CONFIRMED THE TRIBUNAL ORDER (346 ITR 106) THE TRIBUNAL CONFIRMED THE CIT(A) ORDER DATED 19.4.2013 AGAINST THE CIT(A) ORDER NOW THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL. PRESENT APPEALS 10 ITA NO. 1177/HYD/2013 & ORS. SHRI AVADESH BADRUKA & ANR. ======================== 14. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE CIT (A). THE CIT(A) IN THESE CASES EXCEEDED HER JURISDICTION AND CROSSED THE LIMIT. ADMITTEDLY IN THE CASE OF SRI GOPAL LAL BA DRUKA AND SRI AVADESH BADRUKA FOR A.YS. 2004-5 AND 2005-06 WHO A RE ASSESSEES HEREIN CAME IN APPEAL BEFORE THIS TRIBUN AL IN ITA NOS. 1475 AND 1458/HYD/2012 AND 1455 AND 1456/HYD/2012 O N THE SAME ISSUE AGAINST THE ORDER OF THE CIT(A) PASSED O N 25.7.2012. THE TRIBUNAL IN ITS COMMON ORDER OBSERVED AS FOLLOW S: '5. WE FIND THAT THE VIDE ASSESSMENT ORDERS DATED 29.12.2008 THE TOTAL INCOMES WERE DETERMINED AFTER MAKING ADDITIONS OF RS. 3 13 36 547/- FOR THE A.Y. 2004- 2005 AND RS. 1 06 94 170/- FOR THE A.Y. 2005-2006 O N PROTECTIVE BASIS. THE INCOMES OF RS. 22 35 000/- FO R THE A.Y. 2004-2005 AND RS. 31 20 000/- FOR THE A.Y. 200 5- 2006 OFFERED BY THE ASSESSEE IN THE RETURN OF INCOM E WERE SEPARATELY CONSIDERED AND SEPARATE DISALLOWANC ES IN RESPECT OF AD-HOC EXPENDITURE OF RS. 14 90 000/ - FOR THE A.Y. 2004-2005 AND RS. 20 80 000/- FOR THE A.Y. 2005-2006 OUT OF SUCH INCOMES WERE MADE IN THE HAN DS OF THE ASSESSEE ON SUBSTANTIVE BASIS. IN OUR CONSID ERED OPINION THE INCOMES ADMITTED BY THE ASSESSEE CANNO T BE DISTURBED. SINCE THE INCOMES FROM RECEIPTS OF RS. 37 25 000/- FOR A.Y. 2004-2005 AND OF RS. 52 00 000 /- FOR A.Y. 2005-2006 WERE SUBSTANTIALLY ASSESSED IN THE HANDS OF THE ASSESSEE ONLY AND THE SAME HAD BEEN RETAINED WHILE PASSING THE CONSEQUENTIAL ORDERS WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) IN RETAININ G THE ADDITION OF RS. 37 25 000/- FOR A.Y. 2004-2005 AND RS. 52 00 000/- FOR THE A.Y. 2005-2006. AT THIS JUNCTUR E WE MAY REFER TO THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF CIT VS. SHELLY PRODUCTS AND ANOTHER (2003) 261 ITR 367 (SC) WHEREIN IT HAS BEEN HELD TH AT WHEN AN ORDER OF ASSESSMENT IS SET ASIDE OR ANNULLE D NO FURTHER ASSESSMENT CAN BE MADE. THE ASSESSEE WOU LD BE ENTITLED ONLY TO THE AMOUNT OF TAX PAID IN EXCES S OF THE LIABILITY INCURRED BY HIM ON THE BASIS OF INCOM E DISCLOSED BUT NOT THE TAX PAID BY HIM BY WAY OF ADV ANCE TAX OR SELF-ASSESSMENT TAX. AMENDMENT OF SECTION 24 0 W.E.F. 1 ST APRIL 1989 BY INSERTION OF PROVISO (B) IS DECLARATORY OF THE LAW AND THEREFORE RETROSPECTIVE . IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT (SUPRA) WE F IND NO INFIRMITY IN THE ORDER OF THE CIT(A) FOR THESE T WO ASSESSMENT YEARS VIZ. 2004-2005 AND 2005-2006. WE 11 ITA NO. 1177/HYD/2013 & ORS. SHRI AVADESH BADRUKA & ANR. ======================== ACCORDINGLY UPHOLD THE SAME REJECTING THE GROUNDS O F THE ASSESSEE IN THESE APPEALS. 6. NOW COMING TO THE OTHER SET OF APPEALS VIZ. I TA. NO. 1455 & 1456/HYD/2012 WE FIND THAT THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO ISSUES INVOLVED IN THE CASE OF AVADESH BADRUKA SON OF GOPAL LAL BADRUK A ARE MUTATIS MUTANDIS WITH THAT OF GOPAL LAL BADRUKA AS 50% OF THE STAKE IN M/S. AHURA HOLDINGS IS HELD BY AVADESH BADRUKA WHEREAS THE OTHER 50% IS HELD BY GOPAL LAL BADRUKA. HENCE THE CONCLUSIONS DRAWN BY US IN THE CASE OF GOPAL LAL BADRUKA FOR THE A.YS. 2 004- 2005 AND 2005-2006 SHALL BE FOLLOWED IN CASE OF AVADESH BADRUKA FOR THE A.YS. 2004-2005 AND 2005- 2006 AS WELL. HENCE FOR THE REASONS DISCUSSED IN T HE PRECEDING PARA WE UPHOLD THE ORDER OF THE CIT(A) A ND REJECT THE GROUNDS OF THE ASSESSEE IN THESE TWO APP EALS AS WELL.' 15. BEING SO THE ISSUE IN DISPUTE ADJUDICATED BY THE C IT(A) IN THE IMPUGNED ORDER HAS ALREADY REACHED FINALITY. T HE CIT(A) WANTS TO DO THE THINGS INDIRECTLY WHICH CANNOT BE DONE DI RECTLY. IN OUR CONSIDERED OPINION THE CIT(A) WAS NOT CORRECT IN P ASSING THE IMPUGNED ORDER IN FAVOUR OF THE ASSESSEE TO RECTIFY THE MISTAKE IF ANY WHICH WAS ALREADY DECIDED BY THE TRIBUNAL VIDE ORDER DATED 19.4.2013 IN ASSESSEES OWN CASE. THE ORIGINAL ORD ER OF THE CIT(A) BEING SUBJECT MATTER OF APPEAL BEFORE THE TRIBUNAL FOR A.YS. 2004- 05 AND 2005-06 IN THESE ASSESSEES' CASES INITIATIO N OF PROCEEDINGS U/S. 154 OF THE ACT EITHER BY THE AO/CIT (A) OR BY THE ASSESSEE IS BAD IN LAW. THE SAID ORDER OF AO/CIT(A ) HAVING MERGED WITH THE APPELLATE ORDERS OF THE TRIBUNAL DATED 19. 4.2013 IT LOSES ITS VERY IDENTITY AND THE AO/CIT(A) ARE ALSO CEASED OF THEIR JURISDICTION OVER THE SAME. THE CIT(A) IN THE GUIS E OF RECTIFYING MISTAKE CANNOT SIT ON THE JUDGEMENT OVER HER/HIS OW N ORDER OR ON THE ORDER OF THE TRIBUNAL AND CANNOT RE-DECIDE THE ISSUE WHICH WAS ALREADY DECIDED BY THE TRIBUNAL IN ASSESSEES OWN C ASE SO AS TO TAKE A DIFFERENT VIEW. SUCH AN EXERCISE IS BEYOND THE SCOPE OF RECTIFICATION ENVISAGED U/S. 154 OF THE ACT. MORE SO IT SHOULD BE NOTED THAT THE DECISION OF THE CIT(A) IS TOTALLY CO NTRARY TO THE 12 ITA NO. 1177/HYD/2013 & ORS. SHRI AVADESH BADRUKA & ANR. ======================== JUDGEMENT OF SUPREME COURT IN THE CASE OF CIT VS. S HELLY PRODUCTS & ANR (261 ITR 376) WHEREIN THEIR LORDSHIPS HELD TH AT WHEN AN ORDER OF ASSESSMENT IS SET ASIDE OR ANNULLED AND NO FURTHER ASSESSMENT CAN BE MADE THE ASSESSEE WOULD BE ENTIT LED ONLY TO THE AMOUNT OF TAX PAID IN EXCESS OF THE LIABILITY I NCURRED BY HIM ON THE BASIS OF INCOME DISCLOSED AND NOT THE TAX PAID BY HIM BY WAY OF ADVANCE TAX OR SELF-ASSESSMENT TAX; AMENDMENT OF SE CTION 240 W.E.F. 1 ST APRIL 1989 BY ADDITION OF PROVISO (B) IS DECLARA TORY OF THE LAW AND THEREFORE RETROSPECTIVELY. 16. THE ABOVE ARGUMENT OF THE ASSESSEE'S COUNSEL IS TOT ALLY MISCONCEIVED AND PLACING RELIANCE ON THE ORDER OF T HE TRIBUNAL IN THE CASE OF A. AUDINARAYANA REDDY (SUPRA) IS TOTALL Y AGAINST THE FACTS OF THE CASE. THE ISSUE DEALT WITH BY THE TRI BUNAL IN THE CASE OF A. AUDINARAYANA REDDY IS NOTHING TO DO WITH THE ASS ESSEE'S CASE REGARDING REFUND OF TAX ON ADMITTED INCOME. ACCORD INGLY CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE WE ARE INCLINED TO ALLOW THE APPEAL OF THE REVENUE IN TOTALITY. 17. THE GROUNDS RELATING TO A.Y. 2007-08 IN BOTH ASSESS EES' CASES ARE ALSO SIMILAR AND ACCORDINGLY THESE APPEA LS OF THE REVENUE ARE ALSO ALLOWED ON SIMILAR REASONS. 18. IN THE RESULT ALL THE APPEALS OF THE REVENUE ARE A LLOWED. PRONOUNCED IN THE OPEN COURT ON 23 RD APRIL 2013 SD/- (SAKTIJIT DEY) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD DATED THE 23 RD APRIL 2014 TPRAO 13 ITA NO. 1177/HYD/2013 & ORS. SHRI AVADESH BADRUKA & ANR. ======================== COPY TO: 1. THE INCOME TAX OFFICER WARD-6(3) 6-C IT TOWERS AC GUARDS MASAB TANK HYDERABAD. 2. SHRI AVADESH BADRUKA PLOT NO. 684A ROAD NO. 33 J UBILEE HILLS HYDERABAD-500 033. 3. SHRI GOPAL LAL BADRUKA PLOT NO. 684A ROAD NO. 33 JUBILEE HILLS HYDERABAD-500 033. 4. THE CIT(A)-IV HYDERABAD. 5. THE CIT-III HYDERABAD 6. THE DR B BENCH ITAT HYDERABAD.