ACIT, CC-44, MUMBAI v. SHILPA SUNIL MAJITHIA, MUMBAI

ITA 5138/MUM/2009 | 1995-1996
Pronouncement Date: 24-10-2016 | Result: Dismissed

Appeal Details

RSA Number 513819914 RSA 2009
Assessee PAN AAFPM7765B
Bench Mumbai
Appeal Number ITA 5138/MUM/2009
Duration Of Justice 7 year(s) 1 month(s) 15 day(s)
Appellant ACIT, CC-44, MUMBAI
Respondent SHILPA SUNIL MAJITHIA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 24-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 24-10-2016
Date Of Final Hearing 05-11-2014
Next Hearing Date 05-11-2014
Assessment Year 1995-1996
Appeal Filed On 09-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI BEFORE SHRI SANJAY ARORA A M AND SHRI RAM LAL NEGI J M ./ I.T.A. NO S . 5138 & 5139 /MUM/2009 ( / ASSESSMENT YEAR S : 2003 - 04 & 2006 - 07 ) DC. CC - 44 ROOM NO. 656 6 TH FLOOR AAYAKAR BHAVAN M. K. ROAD MUMBAI - 20 / VS. SHILPA SUNIL MAJITHIA 3/30 GITA BHAVAN C - WING BULABHAI DESAI ROAD MUMBAI - 400 036 ./ ./ PAN/GIR NO. AAFPM 7765 B ( / APPELL ANT ) : ( / RESPONDENT ) & . / C.O. NO S . 69 & 70 /MUM/2010 (ARISING OUT OF ITA NOS. 5138 & 5139/MUM/2009) ( / ASSESSMENT YEAR S : 2003 - 04 & 2006 - 07 ) SHILPA SUNIL MAJITHIA MUMBAI - 400 036 / VS. DC. CC - 44 MUMBAI - 20 ( CRO SS OBJECTOR ) : ( RESPONDENT ) ./ I.T.A. NO. 5140/MUM/2009 ( / ASSESSMENT YEAR: 2001 - 02 ) DC. CC - 44 ROOM NO. 656 6 TH FLOOR AAYAKAR BHAVAN M. K. ROAD MUMBAI - 20 / VS. SHOB H ANA S. MAJITHIA BLDG. NO.2 5 TH FLOOR PLT NO. 68 SHA NTI KUTIR OPP. ANDHERI FIRE BRIDGE S. V. ROAD ANDHERI (W) MUMBAI - 400 058 ./ ./ PAN/GIR NO. ADMPM 7636 P ( / APPELLANT ) : ( / RESPONDENT ) & . / C.O. NO. 71/MUM/2010 (ARISING OUT OF ITA NOS . 5140/MUM/2009) ( / ASSESSMENT YEARS: 200 1 - 02 ) 2 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) SHOB H ANA S. MAJITHIA MUMBAI - 400 058 / VS. DC. CC - 44 MUMBAI - 20 ( CROSS OBJECTOR ) : ( RESPONDENT ) ./ I.T.A. NO. 5141/MUM/2009 ( / ASSESSMENT YEAR: 2001 - 02 ) DC. CC - 44 ROOM NO. 656 6 TH FLOOR AAYAKAR BHAVAN M. K. ROAD MUMBAI - 20 / VS. SHANTIKUMAR D. MAJITHIA BLDG. NO. 2 5 TH FLOOR PLOT NO. 68 SHANTI KUTIR OPP. ANDHERI FIRE BRIDGE S. V. RD. ANDHERI (W) MUMBAI - 58 ./ ./ PAN/GIR NO. AABPM 4 32 J ( / APPELLANT ) : ( / RESPONDENT ) & . / C.O. NO. 72/MUM/2010 (ARISING OUT OF ITA NOS. 5141/MUM/2009) ( / ASSESSMENT YEARS: 2001 - 02 ) SHANTIKUMAR D. MAJITHIA MUMBAI - 58 / VS. DC. CC - 44 MUMBAI - 2 0 ( CROSS OBJECTOR ) : ( RESPONDENT ) / APPELLANT BY : SHRI P. R. GHOSH / RESPONDENT BY : SHRI F. V. IRANI & APURVA SHAH / DATE OF HEARING : 15 . 7 .2016 / DATE OF PRONOUNCEMENT : 24 . 1 0 .2016 / O R D E R PER SANJAY ARORA A. M.: THIS IS A SET OF FOUR APPEALS BY THE REVENUE AND CORRESPONDING CROSS OBJECTIONS (COS) BY THE ASSESSEES IN RESPECT OF THEIR ASSESSMENT S FOR ASSESSMENT 3 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) YEAR S (A.Y S .) 2001 - 02 2003 - 04 AND 2006 - 07 . AT THE VERY OUTSET IT WAS POINTED OUT BY THE LD. AUTHORIZED REPRESENTATIVE (AR) THE ASSESSEES COUNSEL SHRI F. V. IRANI ADVOCATE ADD UC ING A WORKING OF THE TAX EFFECT OF THE REVENUES APPEALS IN THE CASE OF SHILPA S. MAJITHIA (IN ITA NOS. 5138 AND 5139/MUM/2009 F OR A.YS. 2003 - 04 AND 2006 - 07 RESPECTIVELY) AT RS.9 75 370/ - (I.E. AT 20% OF THE ALLOWING TERM CAPITAL LOSS OF RS.48 76 852/ - ) IS BELOW RS.10 LACS SO THAT THE SAME ARE NOT MAINTAINABLE. IT WAS FURTHER EXPLAINED BY HIM THAT THE ASSESSEE RETURNED L ONG - T ERM C APITAL L OSS (LTCL) AT THE IMPUGNED AMOUNT OF RS.48 . 77 LACS WHICH WAS DENIED IN THE ASSESSMENT BY THE ASSESSING OFFICER (A.O.). THE ASSESSEE WAS SUCCESSFUL IN FIRST APPEAL AND THE LOSS AT THE RETURN ED SUM WAS DIRECTED TO BE CARRY FORWARD . THE SAME CAME TO BE SET OFF IN A.Y. 2006 - 07 THE APPEAL BY THE REVENUE FOR WHICH YEAR IS THEREFORE CONSEQUENTIAL . ON ENQUIRY BY THE B ENCH IF ANY SURCHARGE IS APPLICABLE FOR THE RELEVANT YEARS IT WAS POINTED OUT BY HIM THAT THE SURCHARGE AND CESS OF 5% AND 2% (ON THE A MOUNT OF TAX) IS APPLICABLE FOR A.YS. 2003 - 04 AND 2006 - 07 RESPECTIVELY SO THAT THE TAX EFFECT FOR THE LATER YEAR (A.Y. 2006 - 07 ) WOULD ONLY BE BELOW RS.10 LACS. 2. IN OUR VIEW THE REVENUES APPEAL FOR A.Y. 2006 - 07 IS CLEARLY I NFR U CTU OUS AND ARISES ONLY IN CONSEQUENCE OF THE ASSESSMENT FOR A.Y. 2003 - 04 WHEREAT THE CAUSE OF ACTION (GRIEVANCE) IN TH E FORM OF DISALLOWANCE OF THE CLAIM OF LTCL ELIGIBLE FOR CARRY FORWARD AND SET OFF AROSE FOR THE FIRST TIME. WHETHER THE SAME WOULD FINALLY STAND TO BE SET OFF A ND FOR WHICH YEAR/S L IES IN THE WOMB OF FUTURE I.E. IS UNCERTAIN. THE DETERMINATION OF THE I NCOME (WHICH INCLUDES LOSS) INCLUDING THE ASPECT OF ITS CARRY FORWARD FOR A.Y. 2003 - 04 WOULD BY ITSELF RESOLVE THE ISSUE FOR A.Y. 2006 - 07 WHICH ARISES ONLY I N CONSEQUENCE. THE REVENUES APPEAL FOR A.Y. 2006 - 07 IS ACCORDINGLY LIABLE TO BE DISMISSED AS NOT MAINTAINABLE AND SO CONSEQUENTIALLY WOULD BE THE CORRESPONDING CROSS OBJECTION BY THE ASSESSEE . A S REGARDS THE APPEAL FOR A.Y. 2003 - 04 THE TAX EFFECT TH EREOF IS ADMITTEDLY I N EXCESS OF RS.10 LACS AND ACCORDINGLY CANNOT 4 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) BE SAID TO BE NOT MAINTAINABLE AND THEREFORE IS NOT HIT BY SECTION 268A OF THE ACT READ WITH THE EXT A NT CIRCULAR DATED 10.12.2015. THE LD. AR WOULD NEXT CONTEN D THAT THOUGH THE ISSUE ON ME RITS HAS BEEN DECIDED FOR EACH OF THE THREE SURVIVING APPEALS I.E. FOR A.YS. 2001 - 02 AND 2003 - 04 (SUPRA) BY THE COMMISSIONER OF INCOME TAX (APPEALS) CENTRAL - II MU MBAI (CIT(A) FOR SHORT) IN THE FAVOUR OF THE ASSESSEE - RESPONDENTS THEY HAVE PREFERRED CR OSS OBJECTIONS IN - AS - MUCH AS THE ASSESSMENTS ARE WITHOUT JURISDICTION AND THUS BAD IN LAW. THIS IS AS NO INCRIMINATING MATERIAL WHATSOEVER WAS FOUND DURING THE SEARCH ; EA CH OF THE THREE AS SESSMENT BEING U/S. 143(3) R/W S. 153A OF THE INCOME TAX ACT 1961 (THE ACT HEREINAFTER) . TOWARD THIS HE WOULD TAKE US TO THE RELEVANT PART OF THE ASSESSMENT ORDER /S AS WELL AS THE IMPUGNED ORDER /S BY THE FIRST APPELLATE AUTHORITY BEFORE WH OM ALSO THE ASSESSEE RAISE D THIS CONTENTION TO BE NEGATIVE D BY THE LD. C IT( A ) HOLDING THAT THE ASSESSMENT U/S. 153A IS A SPECIAL PROCEDURE AKIN TO SECTION 147 AND DOES NOT REQUIRE FOR INITIATION OF THE PROCEEDINGS THERE - UNDER A N Y INCRIMINATING MATERIAL TO BE FOUND IN THE COURSE OF SEARCH CONSEQUENT TO WHICH THE SAID PROCEE DINGS STAND INITIATED. THE MATTER HE WOULD ADD IS SINCE SETTLED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION [2015] 374 ITR 645 (BOM). THIS THEN IS THE ISSUE RAISED PER THE RESPECTIVE CROSS OBJECTIONS BY T HE ASSESS EE - RESPONDENTS. THE LD. DR DID N OT CONTROVERT THE SAID CONTENTION S BY THE LD. AR. 3. THE INCRIMINATING MATERIAL I.E. WHICH INCRIMINATES THE ASSESSEES RETURN WOULD STAND TO BE WHERE SO FOUND ONLY ON AND DURING THE COURSE OF SEARCH. SECTION 153A STANDS HOWEVER TRIGGER ED ON THE INITIATION OF THE SEARCH U/S.132 (OR ON THE REQUISITION U/S.132A) SO THAT THE SAME IS BY ITSELF A JURISDICTIONAL FACT WHILE THE FINDING OF INCRIMINATING MATERIAL IF ANY IS A MATTER SUBSEQUENT. THE SAME SHOULD NOT THEREFORE D ISTURB OR OPERATE TO VALIDATE (OR AS THE CASE MAY BE INVALIDATE ) THE ASSUMPTION OF 5 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) JURISDICTION FOR PROCEEDING S/ ASSESSMENT U/S.153A VALIDLY MADE I.E. IN CONSEQUENCE TO A VALID SEARCH. THE A PEX C OURT IN CENTRAL PROVI N CES MANGANES E ORE CO. L TD. VS. ITO [ 1991 ] 191 ITR 0662 (SC) SPEAKING IN THE CONTEXT OF SECTION 147 EXPLAINED THAT IT IS THE EXISTENCE AND THE VALIDITY OF THE REASON /S TO BELIEVE (I.E. TOWARD UNDER - ASSESSMENT OF THE ASSESSEES INCOME FOR A PARTICULAR YEAR) THAT IS RELEVANT. THAT THE ASSES SEE MAY EXPLAIN THE TRANSACTION OR THE SAME (ASSESSMENT PROCEEDINGS) MAY NOT LEAD TO ANY ASSESSMENT OF INCOME IS A MAT T ER SUBSEQUENT. THE FINAL OUTCOME OF THE REASSESSMENT IS NOT RELEVANT SO THAT THE SAME SHOULD NOT IMPACT THE VALIDITY OF THE REASSESSMEN T O R THE ASS UMPTION OF JURISDICTION U/S. 147. FURTHER IN P. R. METRANI VS. CIT [2006] 287 ITR 209 (SC) THE HBLE A PEX C OURT CLARIFIED THAT SECTION 132 IS A COMPLETE CODE IN ITSELF AND CAN NOT INTRUDE INTO ANY OTHER PROVISION OF THE ACT. SIMILARLY THE OTH ER PROVISION S OF THE ACT CANNOT INTERFERE WITH THE SCHEME OR THE WORKING OF SECTION 132 OR ITS PROVISIONS. APPRO VING THE DECISIONS IN THE CASE OF PUSHKAR NARAIN SARAF VS. CIT [ 1990 ] 183 ITR 388 (ALL) AND DAYA CHAND VS. CIT [ 2001 ] 250 ITR 327 (DEL) IT HELD T HEREFORE THAT THE PRESUMPTION U/S. 132(4A) WOULD NOT BE AVAILABLE TO THE ASSESSING AUTHORITY FOR THE PURPOSE OF FRAMING T HE ASSESSMENT UNDER THE ACT FOR WHICH ONLY THE REGULAR PROVISIONS WOULD PREVAIL. THE SAID DECISION AS SHALL BE EVIDENT HA S A CLEAR A ND DIRECT BEARING IN RATIO ON THE DECISION BY THE HON'BLE JURISDICTIONAL HIGH COURT IN CONTINENTAL WAREHOUSING CORPORATION (SUPRA). THE MATTER STANDS ALSO DISCUSSED BY THE TRIBUNAL IN DETAIL IN KASHINATH TAPURIAH VS. DY. CIT (IN ITA NOS. 3815 - 3821 /M/10 D ATED 25.04.2016 /COPY ON RECORD ). SO HOWEVER THE SAID COURT WHOSE DECISION IS BINDING ON US H AS IN UNEQUIVOCAL TERMS HELD THAT THE PROVISION OF SECTION 153A C AN NOT BE INVOKED WHERE NO INCRIMINATING MATERIAL IS FOUND IN PURSUANCE TO A SEARCH U/S.132 I.E . OTHER THAN FOR THE YEARS WHERE THE ASSESSMENT IS PENDING ON THE DATE OF SEARCH I.E. FOR COMPLETED ASSESSMENTS . COMING TO THE FACTS OF THE CASE THE ISSUE FOR A.Y. 2001 - 02 IN THE CASE OF SHANTIKUMAR D. MAJITHIA AND SHOB H ANA S. MAJITHIA IS THE INCOME IF ANY ARISING OUT 6 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) OF THE FORFE ITURE OF THE ADVANCE RECEIVED BY THE ASSESSEE - RESPONDENTS FROM M/S. CREST HOTELS LTD. (FOR THE PURCHASE OF SALT PAN LANDS). THE REVENUE HA S NOT REGARD ED THE SAME AS GENUINE AND BROUGHT THE SAME TO TAX AS DIVIDEND U/S. 56 OF THE ACT. THE SAME BEING RECEIVE D IN PURSUANT TO AN A GREEMENT DATED 12.9.1998 WERE RECEIVED IN THE MAIN DURING F.Y. 1998 - 99 AND TO S O ME EXTENT IN F.Y.1999 - 2000. THERE IS NO MENTION OR REFERENCE TO ANY MATERIAL MUCH LESS INCRIMINATING FOUND DURING SEARCH IN TH E ASSESSMENT ORDER OR THE IMPUGNED ORDER WITH REFERENCE TO THE SAID TRANSACTION. SIMILARLY FOR A.Y. 2003 - 04 (IN THE CASE OF SHILPA SUNIL MAJITHIA) AS AFORE - STATED THE ISSUE ARISING IS WITH REGARD TO THE LTCL ON SALE OF SHARES (TO A KNOWN PERSON ) HELD BY HER IN CREST HOTELS LTD. WHICH AGAIN HAS BEEN CONSIDERED AS A BOGUS AND COLLUSIVE TRANSACTION. THERE IS FURTHER AGAIN NO REFERENCE TO ANY MATERIAL TOWARD THE SAME EITHER IN THE ASSESSMENT OR THE IMPUGNED ORDER. THE N EXT RELEVANT ASPECT THAT WOULD NEED TO BE CONSIDERED I S IF THE ASSESSMENT IS PENDING IN THE CASE OF RELEVANT SEARCH ( I.E. IN THE CASE OF ROHAN GROUP INCLUDING DIFFERENT DIRECTORS OR DIFFERENT ASSOCIATED AND SISTER CONCERNS AND RELATED PARTIES ) WHICH IS ON 10.8.2006 . NO ASSESSMENTS HAVE BEEN FRAMED IN CASE OF ANY O F THE ASSESSEES EVEN AS RETURNS HAVE BEEN FILED BY THEM SO THAT THE SAME WOULD ONLY BE PRESUMABLY PROCESSED U/S. 143(1) WHICH PRECLUDES ANY ADJUSTMENT TO THE RETURNED INCOME AND FURTHER IN THE ABSENCE OF ANY CHANGE IN THE TAX LIABILITY OR REFUND THE ACKNOWLEDGMENT (OF THE RETURN) ITSELF IS DEEMED BY LAW TO BE THE INTIMATION U/S. 143(1) WHICH STANDS PLACED ON RECORD IN THE CASE OF SHANTIKUMAR D. MAJITHIA FOR AY 2001 - 02 ( NO. 026857 DATED 30/3/2002 ISSUED BY THE OFFICE OF JT. CIT WARD 25(1) MUMBAI). THE SAME CANNOT BE AS EXPLAINED IN BY THE HONBLE APEX COURT IN ASST. CIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. [ 2007 ] 291 ITR 500 (SC) REGARDED AS AN ASSESSMENT . THE CONTENTION THAT THERE I S NO PENDING ASSESSMENT THAT WOULD STAND TO ABATE IN THESE CASES THUS SHA LL NOT HOLD . 7 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) T HE ASSESSEE HAS BEFORE US RELIED ON THE DECISION IN CIT VS . THAKKAR POP ATLAL VELJI SA LES LTD . ( I NCOME T AX A PPEAL NO. 2 2 66 OF 2013 DATED 29/3/2016) BY THE HON BLE HIGH COURT. IN THAT CASE THE AO EXTRAPOLATED THE MATERIAL FOUND IN SEARCH (COV ERING THE PERIOD AUGUST 20 0 5 TO SEPTEMBER 20 0 5 ) APPLYING THE AVERAGE SALE SO FOUND FOR THE ENTIRE YEAR BEING THE PREVIOUS YEAR RELEVANT TO A Y 200 6 - 0 7. T HE H ON B LE C OURT FOUND T HAT AS NOT TENABLE SO THAT THE AO HAD TO RESTRICT HIMSELF TO THE MATERIAL FOUN D IN SEARCH EVEN IF THE ARGUMENT OF THE R EVENUE THAT IT WAS (NOT) A CASE OF A COMPLETED ASSESSMENT AS NO NOTICE UNDER SECTION 143 (2) HAD BEEN ISSUED. THE RELIANCE ON THE DECISION BY THE A PEX C OURT IN THE CASE OF CIT V . HM ESUFALI HM ABDULALI WAS FOUND IN APPROP RIATE. THE DECISION WAS RENDERED IN THE P ECULIAR FACTS OF THE CASE AND READ AS A WHOLE RESTS ON ANSWERING AS TO WHETHER THE T RIBUNAL WAS JUSTIFIED IN LAW IN DIRECTING THE AO TO TAKE THE FIGURE OF THE TURNOVER AT THE UNDISCLOSED SUM FOR THE PERIOD AUGUST TO SEPTEMBER 2005 AND WHICH THE HONOURABLE COURT FOUND AS SO. THE ISSUE SETTLED BY THE HONOURABLE COURT IN OUR HUMBLE VIEW I S THUS WHETHER INFERENTIAL FINDINGS ARE AVAILABLE IN RESPECT OF IN CRIMINATING MATERIAL FOUND IN SEARCH IN A SECTION 153 A ASSESSME NT AND NOT WHETHER WHAT CONSTITUTES A PENDING ASSESSMENT OR A COMPLETED ASSESSMENT. A PRECEDENT IS AN AUTHORITY ONLY FOR WHAT IT ACTUALLY DECIDES AND NOT WHAT MAY REMOTELY O R EVEN LOGICALLY FOLLOW FROM IT ( G OODYEAR INDIA LTD. VS. STATE OF HARYANA AND ANO THER [1991] 188 ITR 402 (SC) ; BLUE STAR LTD. V. CIT [1996] 217 ITR 514 (BOM.); AND LACHMAN DASS BHATIA HINGWALA (P.) LTD. VS. A SSTT. CIT [2011] 330 ITR 243 (DEL.) (FB)). T HE SAID DECISION CANNOT BE IN ANY CASE BE READ AS NOT C ONSISTENT WITH WHAT STA NDS STATED E XPLICITLY OR EXPLAINED IN C ONTINENTAL W AREHOUSING CORPORATION ( SUPRA ) . THE SAID LATTER DECISION STANDS ALSO DISCUSSED AT LENGTH IN KASHINATH TAPU RIA (SUPRA) TO WHICH WE MAY PROFITABLY ADVERT TO ALSO R EPRODUCING FROM THE DECISION IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION ( SUPRA ) ; THE TRIBUNAL IN THAT CASE ENDEAVORING TO EXPLAIN THE SAID DECISION W.R.T THE HON BLE COURT S MANDATE FOR THE REQUIREMENT OF INCRIMINATING MATERIAL IN CASE OF A CO MPLETED/CONCLUDED ASSESSMENT: 8 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) WE HAVE HOWEVER TWO OBSERVATIONS TO MAKE IN THIS REGARD. FIRSTLY IF AND WHERE A LOSS UNDER THE HEAD CAPITAL GAINS OBTAINS CONSEQUENT TO THE A.O.S FINDINGS ISS UED HAVING REGARD TO THE PROVISION OF SECTION 71 OF THE ACT I.E. WHICH ALLOWS THE SET OFF OF LOSS FROM ONE HEAD OF INCOME AGAINST INCOME FROM ANOTHER FOR THE SAME YEAR; THE RETURN HAVING BEEN FILED ONLY ON 29.7.2006 I.E. MUCH AFTER THE TIME ALLOWED FOR FURNISHING THE RETURN U/S. 139(1) THE SAME SHALL NOT BE IN TERMS OF SECTIONS 80 AND 139(3) STAND TO BE CARRY FORWARD. TWO THERE IS NO INDICATION IF THE ASSESSMENT FOR THE CURRENT YEAR (A.Y. 2005 - 06) WAS FRAMED AT ANY TIME I.E. PRIOR TO THE IMPUGNED ASSESSMENT. TRUE ONE COULD ARGUE AS INDEED IT WAS BEFORE US THAT WHERE NO ASSESSMENT FOR THE YEAR IS PENDING IN - AS - MUCH AS THE TIME PROVIDED FOR THE SERVICE OF NOTICE U/S. 143(2) UNDER THE ACT HAD EXPIRED IT DID NOT ABATE AND IT WAS BY IMPLICATION A CONCLUDED ASSESSMENT WHICH CANNOT BE INTERFERED WITH IN SECTION 153A PROCEEDINGS. BOTH THE PARTIES BEFORE US RELIED IN SUPPORT OF THEIR CASES ON THE DECISION IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (SUPRA). THERE IS FIRSTLY ADMITTEDLY NO I NTIMATION U/S. 143(1) OR ORDER U/S. 143(3) SO THAT THE STATED ISSUE DOES NOT ARISE FOR CONSIDERATION SAVE FOR A.Y. 2002 - 03 FOR WHICH AS AFORE - DISCUSSED CONCLUDED ASSESSMENT U/S. 143(3) STANDS MADE. FURTHER THIS ISSUE WILL ALSO NOT ARISE FOR A.Y. 2007 - 08 FOR WHICH NO RETURN HAS ADMITTEDLY BEEN FILED U/S. 139 AND THE IMPUGNED ASSESSMENT (U/S. 144) FOR WHICH YEAR IS THE ORIGINAL ASSESSMENT. AS HOWEVER PROCESSING OF EACH RETURN VALIDLY FURNISHED IS AN ESTABLISHED PROCEDURE WE CONSIDER THIS ISSUE WIT HOUT PREJUDICE MOVING ON THE PREMISE THAT THE SAME MAY HAVE BEEN SUBJECT TO PROCESSING U/S. 143(1) AND WHICH ISSUE WOULD THEREFORE SURVIVE FOR A.YS. 2001 - 02 2003 - 04 TO 2005 - 06. THIS IS AS FOR A.Y. 2006 - 07 THE RETURN FILED PRIOR TO THE DATE OF SEARCH IS ON 28.5.2008 I.E. BEYOND THE TIME PRESCRIBED THEREFOR U/S. 139(1) OR FOR A BELATED RETURN U/S. 139(4) AND THUS NON - EST IN THE EYES OF LAW. ON MERITS THE GIST OF THE AFORE - SAID DECISION EVEN OTHERWISE BINDING ON US STANDS STATED AT PARA 18.2 OF THIS ORDER MAKING REFERENCE TO DIFFERENT PARAGRAPHS THEREOF. THE SAME CAREFULLY PERUSED IN OUR VIEW MAKES IT ABUNDANTLY CLEAR THAT WHEN THE HONBLE COURT SPEAKS OF A COMPLETED ASSESSMENT IT ADVERTS AND REFERS TO JUST THAT I.E. AN ASSESSMENT COMPLETED OB SERVING THE DUE PROCESS OF LAW FOR WHICH THERE IS AN ORDER OF ASSESSMENT (OR REASSESSMENT) IN FORCE AS ON THE DATE OF SEARCH OR REQUISITION. IT IN SO DOING REITERATES ITS EARLIER DECISION IN CIT VS. MURLI AGRO PRODUCTS LTD. (IN ITA NO. 36 OF 2009 DATED 29.10.2010) WHICH IT IN FACT FOLLOWS REPRODUCING THE RELEVANT PART (PARAS 8 - 13) AT PARA 28 OF ITS JUDGMENT (REPORTED AT PGS. 658 660 OF THE 9 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) REPORTS). VIDE PARA 10 (REPRODUCED) THE HONBLE COURT SPEAKS OF ASSESSMENT/REASSESSMENT WHICH STANDS FINALIZED A S NOT ABATING SO THAT THE APPEAL OR REVISION PROCEEDINGS PENDING AGAINST SUCH FINALIZED ASSESSMENT WOULD NOT ABATE. THIS IS ALSO WHAT STANDS CLARIFIED BY THE BOARD PER ITS CIRCULARS. THEN AT PARA 12 (REPRODUCED) IT CLARIFIES THAT IN PASSING AN ASSESSMEN T U/S. 153A R/W S. 143(3) THE A.O. CANNOT DISTURB THE FINALITY OF AN (RE)ASSESSMENT ORDER UNLESS OF - COURSE THE RELIEF GRANTED UNDER A FINALISED ASSESSMENT IS CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF SECTION 153A PROCEEDINGS. IT FURTHER EXPRES SES ITSELF UNEQUIVOCALLY AT PARA 29 (OF ITS LATER DECISION) AT PG. 660 OF THE REPORTS AS UNDER: IF THEY WERE PENDING ON THE DATE OF INITIATION OF THE SEARCH U/S. 132 OR MAKING OF REQUISITION U/S. 132A AS THE CASE MAY BE THEY ABATE. IT IS ONLY THE PENDING PROCEEDINGS THAT WOULD ABATE AND NOT WHERE THERE ARE ORDERS MADE OF ASSESSMENT OR REASSESSMENT A RE IN FORCE ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF A REQUISITION . WHAT ONE MAY ASK COULD BE MORE EXPLICIT THAN THIS ? A FINALISED ASSE SSMENT IT CONTINUES TO EXPLAIN (AT PG. 661) CANNOT BE TOUCHED BY RESORTING TO THE PROVISION (SECTION 153A). WHETHER THE PROCESSING OF THE RETURN U/S. 143(1) COULD BE SAID TO BE AN ASSESSMENT IS A MATTER DEALT WITH AND CAN BE SAID TO BE CONCLUDED BY THE DECISION BY THE HONBLE APEX COURT IN CIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. [2007] 291 ITR 500 ( SC). TRACING THE LEGISLATIVE HISTORY OF THE PROVISION FOR WHICH IT MAKES REFERENCE TO ITS EARLIER DECISION IN APOGEE INTERNATIONAL LTD. VS. UNION OF I NDIA [1996] 220 ITR 248 (SC) IT EXPLAINED THAT THE LEGISLATIVE INTENT IS VERY CLEAR FROM THE USE OF THE WORD INTIMATION AS SUBSTITUTED FOR ASSESSMENT WHICH DENOTE DIFFERENT CONCEPTS. WHILE IN ASSESSMENT THE A.O. IS FREE TO MAKE ANY ADDITION AFTER G RANT OF OPPORTUNITY TO THE ASSESSEE NO SUCH ADDITION/ADJUSTMENT IS PERMISSIBLE U/S. 143(1) WHERE - UNDER HE CANNOT GO BEYOND THE RETURN ACCOUNTS OR DOCUMENTS ACCOMPANYING THE RETURN AND FOR THE REASON THAT NO OPPORTUNITY IS GRANTED TO THE ASSESSEE. SUBST ANTIAL CHANGES IT NOTES HAVE BEEN FURTHER MADE W.E.F. 01.6.1999 RESTRICTING THE POWER TO MAKE ADJUSTMENT TO REMOVAL OF ARITHMETIC ERRORS OR THAT OTHERWISE APPARENT ON THE BASIS OF THE RETURN ITSELF OR THE DOCUMENTS ACCOMPANYING THE SAME. THE PROCESSING OF THE RETURN LEADING TO AN INTIMATION U/S. 143(1) MAY NOT BE DONE BY THE AO HIMSELF AND FURTHER IS WITHOUT PREJUDICE TO THE PROVISION OF SECTION 143(2) (REFER PGS. 507 TO 510 OF THE REPORTS). THE INTIMATION U/S. 143(1) IT FURTHER EXPLAINS IS NOT AN ASSESSMENT AND CANNOT BE TREATED AS AN ASSESSMENT ORDER ALSO EXPLAINING THE PURPOSE FOR WHICH IT IS DEEMED AS A NOTICE OF DEMAND U/S. 156 I.E. TO 10 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) ENABLE RECOVERY THEREOF WHERE IT REFLECTS TAX PAYABLE. CONTINUING FURTHER IT EXPLAINS THAT THE WORD AS SESSMENT IS USED IN THE ACT FOR CONVEYING DIFFERENT MEANINGS. IT MAY BE USED TO MEAN THE COMPUTATION OF INCOME SOMETIMES THE DETERMINATION OF THE AMOUNT OF TAX PAYABLE AND SOMETIMES THE WHOLE PROCEDURE LAID DOWN IN THE ACT FOR IMPOSING LIABILITY UPO N THE TAX PAYER (PGS. 507 - 510). WE HAVING SET OUT THE SAID DECISION IN BRIEF MAY AS WELL REPRODUCE A PART THEREOF (PGS. 509 - 510) AS UNDER: IN THE SCHEME OF THINGS AS NOTED ABOVE THE INTIMATION UNDER SECTION 143(1)(A) CANNOT BE TREATED TO BE AN ORDER OF ASSESSMENT . THE DISTINCTION IS ALSO WELL BROUGHT OUT BY THE STATUTORY PROVISIONS AS THEY STOOD AT DIFFERENT POINTS OF TIME. UNDER SECTION 143(L)(A) AS IT STOOD PRIOR TO APRIL 1 1989 THE ASSESSING OFFICER HAD TO PASS AN ASSESSMENT ORDER IF HE DECIDED TO ACCEPT THE RETURN BUT UNDER THE AMENDED PROVISION THE REQUIREMENT OF PASSING OF AN ASSESSMENT ORDER HAS BEEN DISPENSED WITH AND INSTEAD AN INTIMATI ON IS REQUIRED TO BE SENT. VARIOUS CIRCULARS SENT BY THE CENTRAL BOARD OF DIRECT TAXES SPELL OUT THE INTENT OF THE LEGISLATURE I.E. TO MINIMIZE THE DEPARTMENTAL WORK TO SCRUTINIZE EACH AND EVERY RETURN AND TO CONCENTRATE ON SELECTIVE SCRUTINY OF RETURNS. THESE ASPECTS WERE HIGHLIGHTED BY ONE OF US (D. K. JAIN J) IN APOGEE INTERNATIONAL LIMITED V. UNION OF INDIA [(1996) 220 ITR 248]. IT MAY BE NOTED ABOVE THAT UNDER THE FIRST PROVISO TO THE NEWLY SUBSTIT UTED SECTION 143(1) WITH EFFECT FROM JUNE 1 1999 EXCEPT AS PROVIDED IN THE PROVISION ITSELF THE ACKNOWLEDGMENT OF THE RETURN SHALL BE DEEMED TO BE AN INTIMATION UNDER SECTION 143(1) WHERE (A) EITHER NO SUM IS PAYABLE BY THE ASSESSEE OR (B) NO REFUND IS DUE TO HIM. IT IS SIGNIFICANT THAT THE ACKNOWLEDGMENT IS NOT DONE BY ANY ASSESSING OFFICER BUT MOSTLY BY MINISTERIAL STAFF. CAN IT BE SAID THAT ANY ASSESSMENT IS DONE BY THEM? THE REPLY IS AN EMPHATIC N O . THE INTIMATION UNDER SECTION 143(1)(A) WAS DEEMED TO BE A NOTICE OF DEMAND UNDER SECTION 156 FOR THE APPARENT PURPOSE OF MAKING MACHINERY PROVISIONS RELATING TO RECOVERY OF TAX APPLICABLE. BY SUCH APPLICATION ONLY RECOVERY INDICATED TO BE PAYABLE IN THE INTIMATION BECAME PERMISSIBLE. AND NOTHING MORE CAN BE INFERRED FROM THE DEEMING PROVISION. TH EREFORE THERE BEING NO ASSESSMENT UNDER SECTION 143(1)(A) THE QUESTION OF CHANGE OF OPINION AS CONTENDED DOES NOT ARISE . FINALLY WE MAY FOR THE SAKE OF COMPLETENESS OF THE DISCUSSION IN THE MATTER WHICH WE HAVE THOUGH FOUND AS COMPLETELY COVERED BY THE 11 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) DECISIONS BY THE HONBLE JURISDICTIONAL AND THE HONBLE APEX COURT CITED SUPRA CONSIDER THE ARGUMENT OF THE PROCESSING OF A RETURN U/S. 143(1) AS LEADING TO AN ASSESSMENT I.E. AFTER THE EXPIRY OF THE TIME PRESCRIBED FOR THE SERVICE OF NOTICE U/S. 143(2) IN THE CONTEXT OF SECTION 153A PROCEEDINGS OR A S. 153A ASSESSMENT. THERE IS NO CONCEPT OF DEEMED ASSESSMENT I.E. BY LAPSE OF TIME UNDER THE ACT WHICH IS A POSITIVE ACT OF DETERMINATION OF INC OME BY THE ASSESSING AUTHORITY. THE LAW DOES NOT CONTEMPLATE TWO ASSESSMENTS I.E. ONE BY ISSUE OF NOTICE U/S. 143(2) AND THE OTHER OTHERWISE I.E. WITHOUT THE ISSUE OF THE SAID NOTICE. AS EXPLAINED BY THE HONBLE COURT PER ITS AFORE - REFERRED DECISIONS WHAT SECTION 153A CONTEMPLATES QUITE SIMPLY IS THAT THE RETURN (FOR A YEAR) THAT HAS UNDERGONE THE PROCESS OF VERIFICATION RESULTING IN AN ORDER OF ASSESSMENT (OR REASSESSMENT) BECOMES FINALIZED AND CANNOT BE VISITED AGAIN. THAT IS WHAT S. 153A CONTE MPLATES IS AN ASSESSMENT OF TOTAL INCOME ON A SCRUTINY OF THE ASSESSEES CLAIMS I.E. FOLLOWING THE VERIFICATION PROCEDURE UNDER THE ACT AND DUE APPLICATION OF MIND BY THE A.O. AND IT IS PRECISELY FOR THIS REASON THAT WHERE THE ASSESSMENT STANDS SO FRAME D PASSING AN ASSESSMENT ORDER THE SAME IS HELD AS NOT LIABLE TO BE VISITED AGAIN. THIS IS SUBJECT TO THE CAVEAT THAT NO ADVERSE MATERIAL INCRIMINATING THE RETURN IS FOUND IN SEARCH OR REQUISITION (OF BOOKS OF ACCOUNT OR OTHER ASSETS). IT IS NOTABLE THA T EVEN INCOME RECORDED IN THE BOOKS OF ACCOUNT WOULD STAND TO BE INCLUDED IN A SECTION 153A ASSESSMENT WHERE NOT PRODUCED BUT FOUND DURING SEARCH OR REQUISITION. THERE IS NO QUESTION OF CALLING FOR THE BOOKS OF ACCOUNT MUCH LESS EXAMINING THEM UNDER THE PROCESSING OF THE RETURN. AS EXPLAINED BY THE APEX COURT IN RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) THE QUESTION OF THE A.O. EXPRESSING HIS OPINION U/S. 143(1) DOES NOT ARISE. THERE IS NO DETERMINATION OF INCOME IN SUCH A CASE BY THE A.O. WHO IS PRECLUDED FOR MAKING ENQUIRIES NAY EVEN AFFECTING PRIMA FACIE ADJUSTMENTS TO THE RETURN (W.E.F. 01.6.1999). THE INCOME SO ACCEPTED BEING NOT DETERMINED BY THE A.O. AND SANS ANY ASSESSMENT ORDER CAN ONLY BE SAID TO BE RETURNED OR PROCESSED INCOME AND N OT ASSESSED INCOME. THE ASSESSEES ARGUMENT TO OUR MIND CONSTRICTS THE SCOPE OF THE PROVISO TO SECTION 153A BEYOND ITS MANDATE WHICH IS LIMITED TO ABATEMENT OF ASSESSMENTS PENDING ON THE DATE OF INITIATION OF SEARCH OR AS THE CASE MAY BE MAKING TH E REQUISITION. AS AFORE - DISCUSSED THE LIMITATION ON THE SCOPE OF INQUIRY OR EXAMINATION ONLY TO THE FINDINGS OF SEARCH OR REQUISITION WHILE MAKING A S. 153A ASSESSMENT WOULD EXTEND ONLY TO CONCLUDED ASSESSMENTS SIGNIFIED BY ORDERS OF ASSESSMENT OR REASSE SSMENT . THIS WE FIND TO BE THE UNEQUIVOCAL VIEW EXPRESSED BY THE HONBLE COURT IN CONTINENTAL WAREHOUSING CORPORATION 12 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) (SUPRA) AND MURLI AGRO PRODUCTS LTD. (SUPRA) JUDICIALLY BINDING ON US AND WHICH WE FURTHER FIND AS CONSISTENT WITH THE DECISIONS IN RAJ ESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) AND KELVINATOR OF INDIA LTD. (SUPRA) AS ALSO THE SCOPE AND PURPORT OF A S. 153A ASSESSMENT AS EXPLAINED BY THE HONBLE COURTS OF LAW. [EMPHASIS BY ITALICS OURS] THE RELIANCE ON THE DECISION IN THAKKAR POPATLAL VELJI SALES LTD . ( SUPRA ) W OULD THUS BE OF LITTLE ASSISTANCE TO THE ASSESSEE . WE MAY THEREFORE ADDRESS THE INSTANT APPEALS ON MERITS . THE BACKGROUND FACTS 4. THE BACKGROUND FACTS WHICH ARE PRINCIPALLY COMMON IN BRIEF ARE THAT THE COMPANY BY THE NAME CREST H OTELS LTD . (CHL FOR SHOR T) ENTERED INTO AN A GREEMENT ON 21/9/1998 FOR PURCHASE OF 178 ACRES OF SALT P A N LANDS AT TR OMBOY FOR A TOTAL CONSIDERATION OF RS. 19.58 CR. PAYING RS. 786.325 L ACS AS ADVANCE TO THE VENDORS . AS THE S AID COMPANY WAS UNABLE TO FULFIL L THE TERMS OF THE SAID CONTRACT THE ADVANCES WERE FORFEITED BY THEM IN MARCH 2000. THE MATTER WAS REFERRED TO ARBITRATION WHICH WAS V IDE ORDER DATED 5/6/2000 AWARDED IN FAVOUR OF THE FORFEITURE. THE VE ND O RS BEING THE PERSONS HAVING CONTROLLING INTEREST IN AND MANAGING THE COMPANY CHL AND THE IR FAMILY MEMBERS THE TRANSACTION WAS DOUBTED BY THE AO AS NOT GENUINE BRINGING THE AMOUNT /S FORFEIT ED TO TAX IN THE HANDS OF TWO ASSESSEES I.E. SHANTIKUMAR MAJITHIA AND HIS WIFE SHOBANA M AJITHIA FOR AY 2001 - 02. SH ILPA MAJITHIA TH E THIRD ASSESSEE HELD 10 000 SHARES (OF THE FACE VALUE OF RS. 1 00 EACH) IN CHL ACQUIRED AT A COST OF RS. 136/ - EACH IN THE YEAR 1985 . THE SAME WERE SOLD TO ONE KISHORE RUGHANI ON 26 / 03 / 2003 FOR A CONSIDERATION OF RS. 10 000 / - I.E. A T R E . 1 PER SHAR E INCURRING LONG - TERM CAPITAL LOSS ( L TCL) AT RS. 4 8 76 852/ - WHICH WAS CLAIM ED FOR CARRY FORWARD AND SET OFF AGAINST LONG TERM CAPITAL GAIN (LTCG) ARISING TO HER FOR AY 2006 - 07. THE BOOK VALUE OF THE SHARES IN CHL AS AT 31/3/20 0 1 AND 31/3/20 0 2 WAS AT RS. 851 / - AND 85 2/ - RESPECTIVELY. KISHORE R UGHA NI TO WHOM THE SHARES WERE SOLD WAS ONLY A LOWLY PAID 13 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) EMPLOYEE IN THE FAMILY OWNED COMPANY (CHL) WHO HAD BEEN IN FACT FINANCIALLY ASSISTED BY THE ASSESSEE BY GRANTING AN INTEREST - FREE LOAN/ADVANCE OF RS. 5 L AC S (ON 18/11/205) (RETURNED ON 1/3/2006). THE SALE TRANSACTION WAS THUS CONSIDERED AS A PLOY TO EVADE TAX BY CLAIMING A CONTRIVED L TCL WHICH WAS ACCORDINGLY DENIED FOR BEING CARRY FORWARD. THE RESPECTIVE CASES 5. IN THE VIEW OF THE FIRST APPELLATE AUTHORITY THE MATTER STOOD SQUARELY COVERED BY THE DECISION BY THE TRIBUNAL IN THE CASE OF S HANTIKUMAR MAJITHIA (IN ITA NO. 8312/MUM (J)/2 0 04 DATED 19/1/20 0 5 FOR A Y 1999 - 00) SINCE FOLLOWED IN THE CASE OF OTHER OWNERS OF THE SAME PLOT I.E. PANKAJ MAJITHIA (IN ITA NO. 3335/M UM ( C )/2007 DATED 13/1/2009 FOR AY 2000 - 01) AND SUNIL S. MAJITHIA (ITA NO. 6959/M UM (D) 2005 DATED 4/4.4.2008 FOR AY 2000 - 01) ALSO REPRODUCING THERE - FROM (REFER PARA 3.5 OF THE ORDER IN SHANTIKUMAR MAJITHIA AND SHOBANA MAJITHIA ). THE TRIBUNAL HA D CONSIDERED THE ISSUE IN ALL ITS ASPECTS PER A SPEAKING ORDER CONCLUDING I T . IT WAS THEREFORE NOT OPEN FOR THE R EVENUE TO REVISIT THE ISSUES P ARTICULAR LY IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND IN SEARCH MUCH LESS QUA THE SUM OR THE TRANS ACTION S UNDER REFERENCE . THERE WAS ANOTHER ASPECT OF THE MATTER I.E. THE AMOUNT EVEN AS OBSERVED BY THE TRIBUNAL COULD BE BROUGHT TO TAX ONLY IN THE YEAR OF FORFEITURE THE AMOUNT BEING RECEIVED ONLY IN THE PREVIOUS YEAR S RELEVANT TO A YS 1999 - 00 AND 2 000 - 01 (PARA 3.5.7). IN THE CASE OF SHILPA S. MAJITHIA WHAT WAS UNDER THE CHALLENGE IS THE GENUINENESS OF THE SALE TRANSACTION OF SHARES IN CHL. THE SAME STOOD IMPU GNED ON THE BASIS OF BOOK VALUE OF THE RELEVANT SHARES STATED TO BE AT RS. 850+ DURING FY 2000 - 01 AND 20 0 1 - 02 I.E. IMMEDIATELY PRIOR TO THE SALE. THE SAME HAS BEEN EXPLAINED AS NOT REFLECTING THE CORRECT VALUE INASMUCH AS THE AO HAD NOT DEDUCTED THE ACCUMULATED DEBIT BALANCE IN ITS P & L ACCOUNT (RS. 5.04 CR. ) AS WELL AS THE DOUBTFUL ADVANCES CARRIED IN THE BALANCE SHEET(AT RS. 7.86 CR.) REDUCING WHICH THE BOOK VALUE OF ITS SHARES BECAME NEGATIVE. 14 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) LIKEWISE REMOVING NON - RECURRING INCOME FROM ITS INCOME STATEMENT YIELDED LOSS. AS SUCH BOTH THE BOOK VALUE AS WELL AS EARNING PER SHARE WERE NEGA TIVE JUSTIFYING THE SALE CONSIDERATION OF THE SHARES TH ERE IN AT R E . 1 / - P ER SHARE. IT IS THIS THAT FOUND FAVOUR WITH THE LD. CIT (A) . FINDINGS - SHANTIKUMAR MAJITHIA AND SHOBANA MAJITHIA 6.1 CLEARLY THEREFORE THE FIRST APPELLATE AUTHORITY HAS ALLOWED RELIEF TO THE ASSESSEES BEING HUSBAND AND WIFE ON THE BASIS OF DOCTRINE OF MERGER OF THE ORDER OF THE TRIBUNAL FOR AY 1999 - 00 (IN THE CASE OF SHANITKUMAR MAJITHIA) AS THE FINAL FACT - FINDING AUTHORITY AND WHICH HAD IN FACT BEEN FOLLOWED BY THE OTHER BENCHES OF THE TRIBUNAL AS WELL I.E. FOR AYS 1999 - 00 AND 2000 - 01 WHEREAT THE AMOUNT/S WAS RECEIVED. THE DECISION BEING BY A SUPERIOR APPELLATE FORUM WAS BINDING ON HIM . THE TRIBUNAL REGARDED THE RECEIPT AS CAPITAL IN NATURE HOLDING SO BY RELYING ON THE DECISION IN T HE CASE OF TRAVANCORE RUBBER AND TEA CO. LTD . VS. CIT [2000] 243 ITR 158 (SC) ALSO REFERRING TO SECTION 51 OF THE ACT WHICH WOULD OPERATE IN CASE OF ANY SUBSEQUENT SALE OF THEIR LANDS BY THE CO - OWNERS. THE SAID ORDER IS NOT ON RECORD NOR ARE ANY OF THE O THERS REFERRED TO BY THE LD. CIT(A) IN HIS ORDER. THERE IS NO REFERENCE TO THE GENUINENESS ASPECT OF THE TRANSACTION BY THE TRIBUNAL. ITS ONLY OBSERVATION QUA GENUINENESS THAT WE FIND IS IN THE REPRODUCTION OF ITS SAID ORDER (AT PARA 3.5 OF THE IMPUGNED OR DER) AS FOLLOWS: THE RATIO OF THE APEX COURT IS THAT THE FORFEITURE OF EARNEST MONEY AND ADVANCE BY VENDOR WAS A CAPITAL RECEIPT AND THE FACTS ARE SIMILAR IN THE CASE ON HAND ALSO ACCORDING TO AN UNDERSTANDING. THERE IS ALSO FORCE.. . AS REGARDS THE DUBIOUS TAX PLANNING THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE VERY SAME TRANSACTIONS HAVE BEEN CONSIDERED BY THE TWO AUTHORITIES I.E. THE ARBITRATOR AND THE SINGLE JUDGE OF THE BOMBAY HIGH COURT AND THEY HAVE NOT DOUBTED THE GENUI NENESS OF THE AGREEMENT IS TO BE ACCEPTED. THUS WHATEVER WAS DONE BY THE ASSESSEE WITHIN THE FOUR CORNERS OF LAW CANNOT FALL UNDER THE DUBIOUS TAX PLANNING. IN THIS VIEW OF THE MATTER . 15 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) THE DECISION BY THE HONORABLE HIGH COURT (NO.370 OF 2000 DATED 23 /1/20001) BEFORE WHICH THE ARBITRATION AWARD DATED 5/6/2000 SUPRA WAS UNSUCCESSFULLY CHALLENGED IS ALSO NOT BEFORE US. IT DOES NOT APPEAR TO BE SO BEFORE THE TRIBUNAL AS WELL WHOSE OBSERVATION IS GUIDED BY THE FACT THAT THE ARBITRATION AWARD COULD NOT H AVE BEEN APPROVED BY THE HONORABLE COURT OTHERWISE. THE QUESTION HOWEVER IS WHETHER THE ASPECT OF GENUINENESS WAS RAISED BEFORE THE HONORABLE COURT WHICH IS CONSTRAINED EXCEPT UNDER ORIGINAL JURISDICTION TO CONFINE ITSELF TO MATTERS OF SUBSTANTIAL LAW ARISING OUT OF THE ORDERS CHALLENGED BEFORE IT. GENUINENESS OF OTHERWISE OF A TRANSACTION IS A MATTER OF FACT ON WHICH WE OBSERVE NO FINDING BY THE TRIBUNAL . WHAT WERE THE TERMS OF THE REFERENCE BEFORE THE ARBITRATOR AND WHICH WOULD PRESUMABLY BE ONLY Q UA THE RIGHT TO FORFEIT I.E. GIVEN THE VALIDITY OF THE AGREEMENT WHICH ITSELF PRESUMES IT BEING GENUINE. AGAIN WHAT WAS THE QUESTION/S OF LAW FORMULATED FOR BEING ANSWERED RAISED BEFORE THE HONORABLE COURT? AS CLARIFIED BY THE AO IN THE REMAND REPORT THE LIMITED PURPOSE THEREOF WAS WHETHER THE FORFEITURE WAS AGAINST PUBLIC POLICY OR NOT . WHY THE VERY FACT THAT THE RECOVERY SUITS WERE FILED SUBSEQUENTLY BY THE COMPANY SHOWS THE LIMITED NATURE OF THE CHALLENGE BEFORE THE HONORABLE COURT AGAINST THE ARBI TRATION AWARD. THERE IS NO WHISP ER ON ANY OTHER OR THIS ASPECT OF THE TRANSACTION OR THE AGREEMENT IN THE ORDER BY THE TRIBUNAL WHICH IS CONSIDERED AS COVERING THE ISSUE UNDER REFERENCE ON ALL FOURS BY THE LD. CIT(A). IT IS THE GENUINENESS OF THE AGREEMEN T AND CONSEQUENTLY THE TRANSACTIONS MADE IN PURSUANCE THERETO THAT IS SUSPECT AND IN DOUBT AND WHICH WE CONSIDER AS ONLY VALIDLY SO. THE TRANSACTION IS BETWEEN A CLOSELY HELD COMPANY (C HL) (AS SIGNIFIED BY THE WORDS FAMILY OWNED COMPANY BY THE AO) A ND THE PERSONS HAVING CONTROLLING INTEREST THEREIN AND MANAGING THE SAME AND THE IR FAMILY MEMBERS. THE BUSINESS PURPOSE OF ACQUIRING SALT PAN LANDS - TO THE EXTENT OF 178 ACRES AT HUGE COST OF RS. 19.58 CR. (I.E. GOING BY 1998 PRICES) IS NOT CLEAR. EVEN THE TITLE AND 7/12 EXTRACTS ARE STATED TO BE IN THE NAME OF THE CENTRE GOVERNMENT; AND TO CONSIDER THAT THE COMPANY AGREED TO PAY A HUGE COST OF NEARLY RS.20 CR. THE SALE 16 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) RATE (PROPOSED) ITSELF WOULD REQUIRE BEING JUSTIFIED IN TERMS OF THE GOING MARKET RAT E OF LAND WHICH WOULD IN TURN DEPEND ON THE USE TO WHICH IT WAS OR COULD BE PUT. THE TRANSACTION UNDER REFERENCE IS BETWEEN THE COMPANY AND THE OWNERS OF LAND. IT IS THESE PARTIES WHO CARRIED THE MATTER IN ARBITRATION AND BEFORE THE HONORABLE COURTS. WHY WOU LD THEY CHALLENGE THE GENUINENESS OF THE TRANSACTION MAKING IT NON - EST IN THE EYES OF LAW. IT IS ON THE OTHER HAND THE REVENUE THAT DOUBTS ITS GENUINENESS REGARDING IT IS AS MOTIVATED WITH THE INTENT TO SIPHON OFF THE COMPANYS MONIES WITHOUT PAYING T AX. THE QUESTION OF GENUINENESS WAS THUS NOT BEFORE NOR CONSEQUENTLY EXAMINED BY EITHER OF THE TWO AUTHORITIES EVEN AS THE AO POINTS OUT IN THE REMAND REPORT. THE RECOVERY SUITS FILED BY THE COMPANY AGAIN HAVE BEEN RECORDED AS COLLUSIVE BY THE REVENUE . THE REASON FOR SO CONSIDERING IS THAT THE AMOUNT BE ING OUTSTANDING IN THE BOOKS OF THE COMPANY FOR LONG ON THE OSTENSIBLE REASON OF THE MATTER BEING SUBJUDICE TOWARD WHICH THEREFORE SUITS COLLUSIVE IN NATURE WERE FILED. WE ARE THEREFORE NOT A T ALL IN AGREEMENT WITH THE LD. CIT(A) THAT THE TRANSACTIONS HAVE BEEN CONFIRMED BY THE TRIBUNAL AS GENUINE PER ITS ORDER DATED 19/1/2005 SUPRA AND ITS OBSERVATIONS EVEN AS POINTED OUT BY THE AO ARE TO BE READ AS TO THE GENUINENESS OF THE TRANSACTIONS BEIN G NOT IN DOUBT AND TOWARD WHICH IT DRAWS ON THE ORDERS BY THE ARBITRATOR AND THE HONBLE COURT WITHOUT IN ANY MANNER REFERRING TO THEIR CONTENTS. IN CONSEQUENCE THE MATTER MUST BE REGARDED AS OPEN AND CANNOT BE REGARDED AS CONCLUDED BY THE SAID ORDER AS CANVASSED BEFORE US (ALSO REFER PARA 6.2) . SO HOWEVER THE AMOUNT COULD BE BROUGHT TO TAX ONLY IN THE YEAR OF ITS REC EIPT BY WAY OF DIVIDEND OR O N ITS FORFEITURE INASMUCH AS THE SAME CAN BE REGARDED AS A DEFINING EVENT ESTABLISHING THE MOTIVE BEHIND THE ARRANGEMENT SO TH AT THE INCOME ACCRUES THEREAT. THE YEARS OF RECEIPT ARE FYS. 1998 - 99 AND 1999 - 00 WHILE THE FORFEITURE IS SAID TO BE IN MARCH 2000. IT IS THE ENTRIES IN THE BOOKS OF ACCOUNT OF THE COMPANY WRITING OFF THE ADVANCE S THAT WOULD SIGNIFY THE FORFEITURE. THE AMOUN T COULD THUS BE BROUGHT TO TAX IN THE RELEVANT ASSESSMENT YEARS ONLY BEING AYS. 1999 - 00 AND 2000 - 17 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) 01. HOW COULD THE DATE OF FILING THE CIVIL SUIT (N O .630 OF 2001) I.E. 26/2/2001 WE WONDER RELEVANT ? AS RIGHTLY POINTED OUT BY THE ASSESSEE THE AO IS PR E CLUDED FROM HOLDING THAT THE TAX ARISES WITH REFERENCE TO A SUIT (TRANSACTION) WHICH HE REGARDS AS COLLUSIVE. HOW WE WONDER IS THE SAID DATE RELEVANT ? NO INCOME ACCORDINGLY ARISES FOR BEING TAXED FOR THE CURRENT YEAR I.E. AY 2001 - 02. SHILP A S. MAJITHIA 6.2 IN OUR CLEAR VIEW THE PAYMENT OF ITS ENTIRE NAY MORE THAN ITS NET WORTH BY THE COMPANY AS ADVANCE EXHIBITS AND CONFIRMS IF ANY PROOF WAS REQUIRED THE COLLUSIVE AND SHAM NATURE OF THE TRANSACTION. AT THE SAME TIME IT CANNOT BE DISPU TED THAT EVEN SO THE ADVANCES WERE NOT RECOVERABLE WITH IN FACT THE REVENUE ITSELF REGARDING THE RECOVERY SUITS AS COLLUSIVE AND AS ONLY A RUSE TO GIVE A SEMBLANCE OF GENUINENESS TO THE TRANSACTION. WE HAVE IN FACT OURSELVES CONSIDERED IT TO BE AS A DE VICE TO SIPHON OFF THE COMPANYS FUNDS WITHOUT PAYING ANY TAX. THE SHARES IN THE COMPANY CHL ARE THUS OF LITTLE VALUE. HOW UNDER THE CIRCUMSTANCES THE SALE TRANSACTION OF ITS SHARES BE REGARDED AS NOT PROPER ? THAT IS EVEN IF THE BUYER IS KNOWN OR AS IT APPEARS HAND - PICKED AS A TRUSTED EMPLOYEE (OF THE COMPANY) TO BUY THE SHARES; THE ASSESSEE THEREBY ONLY REALIZING HER SHARES AT A FAIR VALUE. THERE IS NOTHING ON RECORD NOR EVEN ALLEGED THAT THE SALE CONSIDERATION TRAVELLED BACK TO THE ASSESSEE - SEL LER OR THE RIGHTS IN RESPECT OF THE TRANSFERRED SHARES WERE STILL BEING EXERCISED BY HER. NO DOUBT IT WOULD BE VERY DIFFICULT TO PROVE SO BUT THEN THE BURDEN OF PROOF IN LAW IS ONLY ON THE PERSON WHO ALLEGES THE APPARENT AS NOT REAL. WE HAVE ALREADY STA TED THE AGREEMENT DATED 21/9/1998 AND THE CONSEQUENT ADVANCE TRANSACTION S TO BE SHAM AND A DEVICE TO SIPHON OFF THE FUNDS OF THE COMPANY. THE AMOUNTS ADVANCED BEING NOT FORTHCOMING HAVE TO BE REDUCED TO ARRIVE AT THE BOOK VALUE OF THE SHARES. THE REVENUE THEREFORE CONTRADICTS ITSELF WHEN IT DOUBTS THE TRANSACTION ON ACCOUNT OF LOW SALE CONSIDERATION OF SHARES. THAT THE ASSESSEE STANDS TO 18 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) GAIN BY SET OFF OF LOSS INURING THUS AGAINST THE GAIN ARISING IN FUTURE IS TO OUR MIND HARDLY A REASON TO DOUBT THE GENUINENESS OF THE TRANSACTION WHICH HAS OCCURRED YEARS EARLIER. WHY AN ASSESSEE IS AT LIBERTY TO PLAN HIS AFFAIRS IN A MANNER SO AS TO MINIMIZE HIS TAX LIABILITY. THE DATE OF FILING THE ORIGINAL RETURN DECLARING INCOME AT RS. 1 48 243/ - PER WHICH THE I MPUGNED LOSS STANDS CLAIMED IS NOT ON RECORD. SUBJECT TO THE SATISFACTION OF THE LEGAL REQUIREMENTS AS SET OUT IN SECTIONS 139(3) AND 80 WE ALLOW THE ASSESSEES CLAIM FOR THE COMPUTATION AND CARRY FORWARD OF LOSS ARISING TO THE ASSESSEE ON THE SALE OF 1 0 000 SHARES IN CHL DURING THE YEAR VACATING THE AOS FINDINGS PER PARA 6 OF HIS ORDER AND WHO SHALL ALSO DETERMINE THE LOSS TO BE CARRY FORWARD. HE HAS IN FACT BEEN DIRECTED LIKEWISE BY THE LD. CIT(A). WE DECIDE ACCORDINGLY AND THE ASSESSEE SUCCEEDS. 7. IN THE RESULT THE R EVENUE S APPEAL S AND ASSESSEES CROSS OBJECTIONS ARE DISMISSED . O RDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 24 201 6 SD/ - SD/ - ( RAM LAL NEGI ) (S ANJAY ARORA) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 24.10 .201 6 . . ./ ROSHANI SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. / DR ITAT MUMBAI 6. / GUARD F ILE 19 ITA NO S . 5138 TO 5141 /MUM/ 2009 & CO NOS. 69 TO 72/MUM/2010 (A.YS. 2001 - 02 2003 - 04 & 2006 - 07) / BY ORDER / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI