Assistant Commissioner of Income-tax,, v. Shri Rajendra Babulal Malu,, Kolhapur

ITA 2045/PUN/2014 | 2003-2004
Pronouncement Date: 19-10-2016 | Result: Dismissed

Appeal Details

RSA Number 204524514 RSA 2014
Assessee PAN ABNPM0068L
Bench Pune
Appeal Number ITA 2045/PUN/2014
Duration Of Justice 1 year(s) 11 month(s) 4 day(s)
Appellant Assistant Commissioner of Income-tax,,
Respondent Shri Rajendra Babulal Malu,, Kolhapur
Appeal Type Income Tax Appeal
Pronouncement Date 19-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 19-10-2016
Assessment Year 2003-2004
Appeal Filed On 14-11-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH PUN E !'#'' $ % & BEFORE SHRI R.K. PANDA AM AND SHRI VIKAS AWASTHY JM / ITA NOS. 2043 TO 2048/PN/2014 %' ( ')( / ASSESSMENT YEARS : 2001-02 TO 2006-07 ASSTT. COMMISSIONER OF INCOME TAX ICHALKARANJI CIRCLE ICHALKARANJI DISTT.-KOLHAPUR ....... / APPELLANT ' / V/S. SHRI RAJENDRA BABULAL MALU CHANDAN 8 TH LANE A/P JAYSINGPUR TAL.-SHIROL DISTT.-KOLHAPUR PAN : ABNPM0068L / RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI REVENUE BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 17-10-2016 / DATE OF PRONOUNCEMENT :19-10-2016 * / ORDER PER VIKAS AWASTHY JM : THESE SIX APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) KOLHAPUR DATED 01- 08-2014 COMMON FOR THE ASSESSMENT YEARS 2001-02 TO 2006-07. THE SOLITARY ISSUE RAISED BY THE DEPARTMENT IN ALL THESE APPEALS IS AG AINST THE 2 ITA NOS. 2043 TO 2048/PN/2014 A.YS. 2001-02 TO 2006-07 DELETING OF ADDITION MADE U/S. 68 OF THE INCOME TAX ACT 19 61 (HEREINAFTER REFERRED TO AS THE ACT) IN THE IMPUGNED ASSESSMENT Y EARS. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : A SEARCH AND SEIZURE U/S. 132 OF THE ACT WAS CONDUCTED O N 20-07-2005 AT THE RESIDENTIAL AND BUSINESS PREMISES IN THE CASE OF M ALU GROUP. THE ASSESSEE IS ONE OF THE MEMBERS OF THE MALU GROUP. CONSEQUENT TO THE SEARCH ASSESSMENT ORDERS WERE PASSED FOR THE IMPU GNED ASSESSMENT YEARS U/S. 143(3) R.W.S. 153A(B) OF THE ACT. TH E ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS INTER ALIA MADE ADDITION U/S. 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED LOANS FROM SHRI J.H. MANIYAR. THE DETAILS OF THE ADDITIONS U/S. 68 IN ASSESS MENT YEARS UNDER APPEAL ARE AS UNDER : ASSESSMENT YEAR AMOUNT 2001 - 02 7 38 00 000/ - 2002 - 03 1 88 40 000/ - 2003 - 04 1 40 30 000/ - 2004 - 05 5 50 00 000/ - 2005 - 06 25 00 000/ - 2006 - 07 2 60 00 000/ - IN FIRST APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS) DEL ETED THE ADDITION BY PLACING RELIANCE ON THE ORDER OF TRIBUNAL IN THE CASE OF SHRI JUGALKISHOR MANIYAR VS. ACIT IN ITA NOS. 99 100 & 10 1/NAG/11 FOR ASSESSMENT YEARS 2001-02 2002-03 & 2003-04 DECIDE D ON 23-11-2012. 3 ITA NOS. 2043 TO 2048/PN/2014 A.YS. 2001-02 TO 2006-07 AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI M.K. KULKARNI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE ISSUE RAISED IN THE PRESENT SET OF APPEALS BY THE DEPARTMENT IS IDENTICAL TO THE APPEAL FILED BY THE DEPARTMENT IN ITA NO. 2041/PN/2014 TITLED ASSTT. COMMISSIONER OF INCOME TAX VS. SHRI VENKATESHWARA AGRICULTURAL FARM FOR ASSESSMENT YEAR 200 2-03 DECIDED ON 26-08-2016. THE TRIBUNAL UPHELD THE FINDINGS OF COMMISSIO NER OF INCOME TAX (APPEALS) AND DISMISSED THE APPEAL OF DEPARTMEN T. THE LD. AR PLACED ON RECORD A COPY OF THE ORDER OF CO-ORDINATE BENCH OF THE TRIBUNAL IN THE AFORESAID CASE. 4. SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT VEH EMENTLY SUPPORTED THE FINDINGS OF ASSESSING OFFICER IN MAKING THE ADD ITIONS U/S. 68 OF THE ACT. THE LD. DR SUBMITTED THAT THE COMMIS SIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDITIONS M ADE U/S. 68 OF THE ACT EVEN THOUGH THE GENUINENESS OF THE TRANSACT IONS AND CREDITWORTHINESS OF THE CREDITOR (SHRI J.H. MUNIYAR) WAS NOT ESTABLISHED BY THE ASSESSEE. HOWEVER THE LD. DR FAIRLY ADMITTED THAT IDENTICAL ISSUE WAS RAISED BY THE DEPARTMENT IN THE CASE OF GROUP ASSESSEE SHRI VENKATESHWARA AGRICULTURAL FARM IN ITA NO. 2041/PN/2014 (SUPRA) AND THE TRIBUNAL HAD DISMISSED THE APPEAL OF THE DEPARTME NT VIDE ORDER DATED 26-08-2016. 5. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PER USED. THE DEPARTMENT HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INC OME TAX 4 ITA NOS. 2043 TO 2048/PN/2014 A.YS. 2001-02 TO 2006-07 (APPEALS) IN DELETING THE ADDITIONS MADE U/S. 68 OF THE ACT. THE ASSESSING OFFICER HAD MADE SIMILAR ADDITIONS IN ALL THE ASSESSM ENT YEARS ON THE GROUND THAT SHRI J.H. MANIYAR WAS NOT A MAN OF WORTH AND HAD NO SOURCES FOR ADVANCING MONEY TO THE ASSESSE E. WE FIND THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI VENKATESHWARA AGRICULTURAL FARM (SUPRA) ONE OF THE ASSES SEE FROM MALU GROUP HAS UPHELD THE FINDINGS OF COMMISSIONER OF INCOM E TAX (APPEALS) IN DELETING THE ADDITION MADE U/S. 68 OF THE ACT. I N THE SAID CASE THE ADDITION WAS MADE ON IDENTICAL GROUNDS. THE RELE VANT EXTRACT OF THE FINDINGS OF TRIBUNAL READS AS UNDER : 6. THE ASSESSING OFFICER HAD MADE ADDITION OF ` 20 LAKHS IN RESPECT OF UNEXPLAINED LOANS RECEIVED BY THE ASSESSEE FROM SHRI J.H. MANIYAR. THE ASSESSING OFFICER HAD RAISED DOUBT OVER THE CRE DITWORTHINESS OF THE LENDER. ALTHOUGH THE LOANS WERE RECEIVED BY DEMAN D DRAFT AND BANKING CHANNELS YET THE ASSESSING OFFICER HELD THAT ASSESS EE HAS CIRCULATED ITS OWN UNEXPLAINED FUNDS THROUGH SHRI J.H. MUNIYAR AS LOAN. SHRI J.H. MANIYAR IS ENGAGED IN THE BUSINESS OF EXPORT OF SOF TWARE. THE ASSESSING OFFICER MADE A DETAILED DISCUSSION IN THE ORDER ABO UT THE SOFTWARE EXPORT BUSINESS OF SHRI J.H. MANIYAR AND FINALLY CONCLUDED THAT SHRI J.H. MANIYAR HAS NO SUCH EXPORT INCOME TO LEND MONEY TO THE ASSESSEE. THE ASSESSING OFFICER MADE ADDITION OF ` 20 LAKHS IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS. WE DO NOT FIND ANY M ERIT OF THE SUBMISSIONS MADE BY THE LD. DR WHICH ARE PRIMARILY BASED ON THE OBSERVATIONS OF THE ASSESSING OFFICER. THE LD. COU NSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE ORDER OF TRIBUNAL IN THE CASE OF SHRI JUGALKISHOR MANIYAR VS. ACIT (SUPRA). THE TRIBUNAL IN THE ORDER HAS HELD THAT SHRI JUGALKISHOR MANIYAR WAS ENGAGED IN T HE BUSINESS OF EXPORT OF SOFTWARE AND WAS DERIVING INCOME THERE FR OM. THE RELEVANT EXTRACT OF THE FINDINGS OF THE TRIBUNAL IN THIS REG ARD ARE AS UNDER : 6.1 AGAINST THIS DECISION OF THE TRIBUNAL THE REV ENUE FILED THE MISC. APPLICATION WHICH WAS ALSO DISMISSED BY THE TRIBUN AL VIDE ITS ORDER DATED 25/07/2011. THE TRIBUNAL HAS GIVEN A FINDING OF FACT THAT THE ASSESSEE HAS ESTABLISHED THE GENUINENESS OF THE EXP ORT OF THE SOFTWARE. THE FACTS INVOLVED IN ALL THESE YEARS ARE ALSO THE SAME. ALL THESE YEARS HAVE BEEN REOPENED BY THE ASSESSING OFFICER ON THE BASIS OF SURVEY 5 ITA NOS. 2043 TO 2048/PN/2014 A.YS. 2001-02 TO 2006-07 CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 07/03/ 2007 BY INVESTIGATION WING OF THE DEPARTMENT AND ALSO THE F ACT THAT THE DISALLOWANCE OF EXEMPTION U/S 10B HAS BEEN MADE IN THE ASSESSMENT YEAR 2004-2005 WHICH WAS CONFIRMED BY THE CIT(A). THUS IN OUR OPINION THE BASIS OF THE REOPENING OF ALL THESE AS SESSMENT YEARS IS THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN THE A SSESSMENT YEAR 2004-2005 AS WELL AS THEIR FINDINGS GIVEN IN THE SU RVEY REPORT. WE ALSO NOTED THAT ALONG WITH EACH AND EVERY INVOICE THROU GH WHICH THE EXPORT HAS BEEN MADE BY THE ASSESSEE CERTIFICATE ISSUED B Y THE DY. DIRECTOR (TECH.) OF STPI WAS ATTACHED. THIS CERTIFICATE CLEA RLY STATES THAT THE SOFTWARE DESCRIBED WERE ACTUALLY TRANSMITTED AND TH E EXPORT VALUE DECLARED BY THE EXPORTER HAS BEEN FOUND TO BE IN OR DER AND ACCEPTED BY THAT AUTHORITY. ONCE THE CERTIFICATE IS ISSUED BY T HE STPI THERE REMAINS NO DOUBT THAT THE EXPORT MADE BY THE ASSESSEE STAND DULY VERIFIED BY THE STPI WHICH IS ONE OF THE GOVERNMENT AGENCY. TH IS IS THE SETTLED LAW IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF DURGA DAS RAWAT MAL 87 ITR 369 THAT THE APPARENT IS REAL ONUS IS ON THE PERSON WHO ALLEGES APPARENT IS NOT REAL. WE HAVE GO NE THROUGH THE ORDERS OF THE AUTHORITIES BELOW BUT WE DO NOT FIND ANY EVIDENCE WHICH MAY PROVE THAT THE EXPORT MADE BY THE ASSESSEE WAS BOGUS. THERE HAD BEEN SURVEY IN THE CASE OF THE ASSESSEE BUT NO SPEC IFIC MATERIAL WAS BEING BROUGHT ON RECORD WHICH MAY DISCHARGE THE ONU S OF THE REVENUE THAT THE ASSESSEE HAS NOT MADE THE EXPORT BUT HAS I N FACT BROUGHT HIS OWN FUNDS AT THE PRETEXT OF EXPORT BEING MADE. WHENEVER THE EXPORTS ARE TO BE MADE THE ASSESSEE IS BOUND TO FOLLOW GUIDELI NES ISSUED BY THE STPI AND HAS ALSO TO SUBMIT FIRMS BEFORE THE RBI UN DER THE FEMA ALONG WITH THE CERTIFICATE ISSUED BY THE STPI CERTIFYING THE VALUE DECLARED BY THE EXPORTER TO BE IN ORDER AND ACCEPTED BY THE STP I. THIS FORM HAS BEEN FILED ALONG WITH EACH AND EVERY INVOICE UNDER THE F EMA. IT IS NOT A CASE WHERE THE STPI HAS NOT TO ISSUE ANY CERTIFICATE BEF ORE THE EXPORT ABOUT THE DECLARATION OF THE EXPORT CONSIDERATION BY THE ASSESSEE. WE DO NOT FIND EVEN A SINGLE INSTANCE WHICH MAY PROVE THAT T HE ASSESSEE HAD NOT COMPLIED WITH THE GUIDELINES IN THIS REGARD. THE AS SESSING OFFICER HAS MAINLY RELIED ON A LETTER DATED 03/01/2007 ISSUED B Y STPI TO THE ASSESSEE ASKING THE ASSESSEE TO FURNISH CERTAIN INF ORMATION. THIS LETTER IS ISSUED AFTER THE EXPIRY WHEN ACTUALLY EXPORT HAD ALREADY TAKEN PLACE AND ALSO AT THE INSTANCE OF THE ASSESSING OFFICER A S IS APPARENT FROM PARA 6 OF THE LETTER DATED 22/07/2009 WRITTEN BY TH E ASSESSMENT. DIRECTOR STPI MAHARASHTRA TO ACIT CIRCIE-NAGPUR. THIS PARA READS AS UNDER: 6. AS REGARDS CONTENTS OF PARA NO.6 OF YOUR AFORESA ID LETTER ALL THE THEN DEALING OFFICIALS IN OUR OFFICE HAVE CHANG ED. YOU WILL APPRECIATE THAT THE SOLE REASON BEHIND SENDING OUR LETTER DATED 3 6 ITA NOS. 2043 TO 2048/PN/2014 A.YS. 2001-02 TO 2006-07 RD JANUARY 2007 TO THE SAID STP UNIT WAS TO EXPEDIT E PROCEEDINGS INITIATED BY YOUR OFFICE AND NOTHING EL SE. IN FACT IT IS NOTHING BUT AN OFFSHOOT OF LETTER NO. ITO(INV.)/NGP /JHS/2006-07 DATED 13.12.06 & LETTER NO. ITO(INV.)/NGP/JHS/2006- 07 DATED 21.12.06 RECEIVED BY US FROM THE INCOME TAX OFFICER (INV.) NAGPUR. AS REGARDS SOFTEX FORMS CERTIFIED BY OUR OF FICE AND THE NATURE OF INFORMATION FURNISHED BY M/S JAI HARI SOF TECH WE WISH TO STATE THAT CERTIFICATION OF THE SAID FORMS WAS D ONE BY THE THEN CONCERNED OFFICIALS IN CONFORMITY WITH THE REQUIREM ENTS OF SOFTEX FORMS AS ALREADY EXPLAINED IN PARA NO.2 ABOV E. 6.2 IN VIEW OF THIS FACT WE DO NOT FIND THAT THERE ARE ANY DIFFERENCE OF FACTS AS COMPARED TO THE ASSESSMENT YEAR 2004-2005 AND IN THE ASSESSMENT YEAR 2004- 2005 THIS TRIBUNAL HAS CATEGO RICALLY HELD THAT THE ASSESSEE HAS DULY ESTABLISHED THE GENUINENESS O F THE EXPORT OF THE SOFTWARE BY IT DURING THE YEAR UNDER CONSIDERATION. THE DECISION OF COORDINATE BENCH IS BINDING ON US. RESPECTFULLY FOL LOWING THE SAID DECISION WE SET ASIDE THE ORDER OF CIT(A) IN ALL T HE YEARS AND THUS ALLOW THE GROUND NO. 5 TO 13 OF THE ASSESSEE AND DELETE T HE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT AND DIRECT THE ASSESSING OFFICER TO ALLOW THE DEDUCTION TO THE ASSESSEE U/S 10B OF T HE ACT. 7. A PERUSAL OF THE ORDER OF TRIBUNAL IN THE CASE O F SHRI J.H. MUNIYAR SHOWS THAT EXPORT OF SOFTWARE CARRIED OUT BY HIM WA S GENUINE. THE ASSERTIONS OF THE REVENUE CASTING DOUBT OVER THE SO FTWARE EXPORT BUSINESS AND CREDITWORTHINESS OF SHRI J.H. MUNIYAR IS WITHOUT ANY BASIS. WE FIND NO MERIT IN THE GROUNDS RAISED BY THE REVEN UE AGAINST DELETING OF ADDITION BY COMMISSIONER OF INCOME TAX (APPEALS) ON ACCOUNT OF LOAN OF ` 20 LAKHS FROM SHRI J.H. MUNIYAR. ACCORDINGLY GROU ND NOS. 1 TO 4 RAISED IN THE GROUNDS OF APPEAL ARE DISMISSED. 6. THE LD. DR HAS FAIRLY ADMITTED THAT THE FACTS IN THE P RESENT SET OF APPEALS ARE IDENTICAL TO THE FACTS OF THE CASE ADJUDICATED BY THE TRIBUNAL IN THE CASE OF SHRI VENKATESHWARA AGRICULTURAL FAR M (SUPRA). THE LD. DR HAS NOT BEEN ABLE TO CONTROVERT THE FINDINGS O F TRIBUNAL IN THE AFORESAID CASE. SINCE THE ADDITION U/S. 68 IN THE PRE SENT SET OF APPEALS ARE ARISING FROM SAME SET OF FACTS WE DO NOT FIND ANY MERIT IN 7 ITA NOS. 2043 TO 2048/PN/2014 A.YS. 2001-02 TO 2006-07 THE APPEALS FILED BY THE DEPARTMENT. ACCORDINGLY ALL THE A PPEALS BY THE DEPARTMENT ARE DISMISSED BEING DEVOID OF ANY MERIT. 7. IN THE RESULT ALL THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON WEDNESDAY THE 19 TH DAY OF OCTOBER 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 19 TH OCTOBER 2016 RK *+ %-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A) KOLHAPUR 4. ' / THE CIT-I/II KOLHAPUR/CIT (CENTRAL) PUNE 5. !*+ %% - - . ./0 / DR ITAT B BENCH PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER %5 0 / PRIVATE SECRETARY - / ITAT PUNE