DCIT, Ernakulam v. Shri Shakeela Halid, Cochin

ITSSA 202/COCH/2005 | misc
Pronouncement Date: 27-12-2011

Appeal Details

RSA Number 20221916 RSA 2005
Bench Cochin
Appeal Number ITSSA 202/COCH/2005
Duration Of Justice 6 year(s) 1 month(s) 9 day(s)
Appellant DCIT, Ernakulam
Respondent Shri Shakeela Halid, Cochin
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 27-12-2011
Appeal Filed By Department
Bench Allotted DB
Tribunal Order Date 27-12-2011
Date Of Final Hearing 12-10-2011
Next Hearing Date 12-10-2011
Assessment Year misc
Appeal Filed On 18-11-2005
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE S/SHRI N.R.S.GANESAN JM AND SANJAY AROR A AM I.T.(SS)A NO. 201/COCH/2005 BLOCK ASSESSMENT: 1989-1990 TO 1998-99 AND BROKEN PERIOD 1-4-1998 TO 22-6-1998 THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-1(3) ERNAKULAM. SHRI M.HALID G-378 PANAMPILLY NAGAR KOCHI-36. (REVENUE-APPELLANT) (ASSESSEE - RESPONDENT) I.T.(SS)A NO. 202/COCH/2005 BLOCK ASSESSMENT: 1989-1990 TO 1998-99 AND BROKEN PERIOD 1-4-1998 TO 22-6-1998 THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-1(3) ERNAKULAM. SMT. SHAKEELA HALID G-378 PANAMPILLY NAGAR KOCHI-36. (REVENUE-APPELLANT) (ASSESSEE - RESPONDENT) REVENUE BY MS. S. VIJAYAPRABHA JR.DR ASSESSEE BY NONE DATE OF HEARING 12/10/2011 DATE OF PRONOUNCEMENT 27/12/2011 O R D E R PER SANJAY ARORA AM: THESE ARE A SET OF TWO APPEALS BY THE REVENUE ARI SING OUT OF SEPARATE ORDERS OF EVEN DATE (22-8-2005) BY THE COMMISSIONER OF INCOME -TAX (APPEALS)-II KOCHI (CIT(A) FOR SHORT) DISMISSING THE APPEALS BY THE ASSESSES BEING HUSBAND AND WIFE IN RESPECT OF BLOCK ASSESSMENT (FOR THE BROKEN PERIOD 1-4-1998 TO 22-6-1998) PURSUANT TO THE SEARCH I.T.A. NOS.201 & 202/COCH/2005 DY. CIT ERNAKULAM V. SHRI M.HALID & SMT. SH AKEELA HALID 2 AND SEIZURE OPERATIONS U/S. 132 OF THE INCOME-TAX A CT 1961 ('THE ACT' HEREINAFTER) AT THEIR RESIDENTIAL PREMISES AT G 378 PANAMPILLY NAGAR KO CHI. 2. NONE APPEARED ON BEHALF OF THE ASSESSEES NOR ANY ADJOURNMENT APPLICATION STANDS RECEIVED EVEN AS THE HEARING NOTICE STOOD DULY SER VED ON THEM THROUGH THE REVENUE ON THE DIRECTION BY THE BENCH. THE ASSESSEES HAVE ENGA GED A REPUTED COUNSEL SHRI T.BANUSEKAR FCA ACCEDING TO WHOSE REQUEST THE MAT TER STOOD ADJOURNED FOR HEARING ON THE PREVIOUS TWO OCCASIONS. ACCORDINGLY THE MATTE R WAS PROCEEDED WITH AND IS BEING DISPOSED OF AFTER HEARING THE LD. DR ON THE BASIS OF THE MATERIAL ON RECORD. 3.1 IN THE CASE OF SHRI M.HALID THE REVENUE HAS RA ISED TWO ISSUES. THE FIRST IS THE DIRECTION BY THE LD. CIT(A) TO THE ASSESSING OFFICE R (AO) TO TAKE THE UNDISCLOSED INCOME IN HIS HANDS AT NIL EVEN AS THE ASSESSEE HAS HIMS ELF RETURNED AN UNDISCLOSED INCOME OF ` 48 439/-. THE PRINCIPAL GRIEVANCE OF THE REVENUE H OWEVER IS THAT THE ENTIRE UNDISCLOSED INCOME OF THE ASSESSEE ASSESSED AT ` 80 64 980/- STANDS DELETED BY THE LD. CIT(A) ON TH E BASIS THAT THE ASSETS SUBJECT TO ASSESSMENT AS UNDI SCLOSED INCOME `BELONGED TO THE ASSESSEES WIFE SMT. SHAKEELA HALID WHO HAD ADMIT TED THE OWNERSHIP OF THE PROPERTY/S UNDER REFERENCE BEING REGISTERED IN HER NAME ALSO STATING THE SOURCE OF FUNDS; RATHER; HAVING ADMITTEDLY RETURNED AN UNDISCLOSED INCOME OF ` 26 61 203/-. IN FACT THE AO HAD EVEN ASSESSED THE SALARY INCOME WHICH WAS FURTHER SUBJECT TO TDS IN THE HANDS OF SH. M. HALID. THE ASSESSMENT IN THE HANDS OF THE ASSESS EE-HUSBAND THUS WOULD NOT HOLD IN LAW. THE REVENUE OBJECTS TO THE SAID FINDING ON THE BASIS THAT THE ASSESSEE HAD BY HIS SWORN STATEMENT UNDER SECTION 132(4) OF THE ACT REC ORDED DURING SEARCH ADMITTED TO HAVING ACQUIRED ASSETS OUT OF HIS UNDISCLOSED INCOM E IN THE NAME OF HIS WIFE. 3.2 COMING TO THE CASE OF THE WIFE SMT. SHAKEELA H ALID WE FIND THAT THE IMPUGNED ORDER BEARS IN THE MAIN THREE FINDINGS AND CONSEQU ENTLY THREE DIRECTIONS EACH OF WHICH STANDS OBJECTED TO BY THE REVENUE PER A CORRESPONDI NG GROUND OF APPEAL. FIRSTLY THE AOS ACTION IN ESTIMATING THE VALUE OF THE ASSETS T REATED AS UNDISCLOSED INCOME HAS BEEN DIRECTED TO BE DELETED AS IT WAS ONLY THE MONEY AC TUALLY PAID AT THE TIME OF ACQUIRING THE I.T.A. NOS.201 & 202/COCH/2005 DY. CIT ERNAKULAM V. SHRI M.HALID & SMT. SH AKEELA HALID 3 ASSET/S WHICH COULD BE TAKEN AS UNDISCLOSED INCOME AND NOT ANY SUBSEQUENT INCREASE IN ITS VALUE. ALSO THE AVOS REPORT HAD NOT BEEN CONF RONTED TO THE ASSESSEE. IN FACT THE AO DID NOT GO BY THE REPORT OF THE VALUATION OFFICER BUT ON THE BASIS OF THE INFORMATION BY ONE M/S. RIYAL COMMUNICATION SERVICES AND WHICH A GAIN WAS NOT SUPPLIED TO THE ASSESSEE. FURTHER NO MATERIAL - IN THE FIRST PLACE - WAS FOUND IN OR AS A RESULT OF SEARCH TO SHOW THAT M/S. RIYAN COMMUNICATION SERVICES WAS IN ANY MANNER INVOLVED IN THE CONSTRUCTION OF VALUATION AS CONTRACTORS. THE SECON D RELATES TO A DIRECTION FOR ALLOWING CREDIT AT ` 2.27 LAKHS IN RESPECT OF MONEY REALISED ON THE SALE OF GOLD JEWELLERY WHICH WAS IN FACT SUPPORTED BY A PROPER BILL. THIRDLY THE AO HAS BEEN DIRECTED TO ACCEPT THE CLAIM OF ADVANCE OF ` 21.6 LAKHS STATED TO RECEIVED FROM ONE SHRI ABDUL KAREEM TOWARD THE (PROPOSED) SALE OF COMMERCIAL LAND AND BUILDING UN DER CONSTRUCTION THEREON THE ENTIRE AMOUNT HAVING BEEN RECEIVED THROUGH THE BANKING CHA NNEL. 4. BEFORE US LIKE CONTENTIONS WERE RAISED BY EITHE R SIDE WITH THE LD. DR SUBMITTING THAT THE REVENUE WAS PERFECTLY JUSTIFIED IN LAW IN PROCEEDING AGAINST BOTH THE HUSBAND AND WIFE MAKING PROTECTIVE ASSESSMENT IN THE CASE OF THE LATTER DISCUSSION IN RESPECT OF WHICH IS AT PARA 4 OF THE ASSESSMENT ORDER. INVEST MENTS WERE FOUND NOT ONLY IN THE NAME OF THE WIFE BUT ALSO CHILDREN AND FURTHER ADMITT ED TO HAVE BEEN MADE BY THE ASSESSEE SO THAT THE SAME COULD BE ASSESSED U/S. 69 IN HIS HAND S. THERE HAS BEEN NO ITEM-WISE DISCUSSION BY THE LD. CIT(A) VIDE HIS IMPUGNED ORDE RS WHICH ARE CLEARLY NOT SPEAKING ORDERS. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD. 5.1 OUR FIRST OBSERVATION IS THAT BOTH THE IMPUG NED ORDERS ARE NOT SPEAKING ORDERS IN TERMS OF S. 250(6) OF THE ACT. ACCORDINGLY THERE HAS BEEN NO PROPER ADJUDICATION OF THE ASSESSEES APPEALS BY THE FIRST APPELLATE AUTHORITY . IT IS TO BE CLARIFIED THAT THE ORDER BY THE SAID AUTHORITY IS SUBJECT TO REVIEW ON APPEAL BEFOR E THE HIGHER APPELLATE FORUMS AND ACCORDINGLY IT IS INCUMBENT THEREON TO CLEARLY STA TE THE POINTS ARISING FOR DETERMINATION; THE DECISION THEREON AND THE REASON THEREFOR AS IT IS ONLY THEN THAT WHERE CONTESTED COULD A PROPER DECISION WITH REGARD TO THE VALIDITY OF TH E ADJUDICATION BY THE SAID AUTHORITY ONLY I.T.A. NOS.201 & 202/COCH/2005 DY. CIT ERNAKULAM V. SHRI M.HALID & SMT. SH AKEELA HALID 4 BE ARRIVED AT. THIS REQUIREMENT AN ESSENTIAL INGRE DIENT AND A SINE QUA NON FOR ANY JUDICIAL ORDER STANDS STATUTORILY INCORPORATED PER SECTION 250(6) OF THE ACT. WE MAY EXEMPLIFY THE BASIS OF OUR FINDINGS THUS: THE ENTIRE ASSESSM ENT OF ` 80.65 LAKHS IN THE HANDS OF THE HUSBAND HAS BEEN DIRECTED TO BE REDUCED TO NIL ON T HE BASIS THAT THE CORRESPONDING ASSETS STANDS ASSESSED IN THE HANDS OF THE WIFE WHOSE ASS ESSMENT WAS IN FACT MADE MUCH LATER. FURTHER THE WIFE HAS RETURNED ONLY A SUM OF ` 26.61 LAKHS. EVEN IF THE ASSESSED FIGURE OF ` 71.79 LAKHS IS ADOPTED THERE IS CLEARLY A DIFFEREN CE BETWEEN THE TWO AMOUNTS. WITHOUT DOUBT AS APPARENT FROM A MERE BROWSE OF THE TWO AS SESSMENT ORDERS THERE IS A DIFFERENCE IN THE ASSET PROFILE OF THE TWO ASSESSMENTS I.E. THERE IS NO ONE TO ONE CORRESPONDENCE BETWEEN THE ASSETS BROUGHT TO TAX IN THE TWO ASSESS MENTS SO AS TO JUSTIFY A COMPLETE NEUTRALIZATION OF THE UNDISCLOSED INCOME IN THE HAN DS OF THE HUSBAND. IN FACT WERE THE TWO ASSESSMENTS TO BE IDENTICAL OR NEARLY SO ALL THAT THE AO WOULD HAVE TO DO IS TO STATE THE SAME REASONS OR REPEAT THE ORDER IN THE CASE OF WIFE WHILE HE HAS SEPARATELY DISCUSSED THE INVESTMENTS MADE CLARIFYING WHERE THE SAME STA NDS ASSESSED ONLY IN THE HANDS OF THE HUSBAND. THE DUPLICATION AS IT APPEARS IS FOR ` 65.91 LAKHS (REFER PARA 6 OF THE ASSESSMENT ORDER IN THE CASE OF WIFE). THAT THE REVENUE COULD PROCEED INDEPENDENTLY AGAINST THE TWO ASSESSES QUA A PARTICULAR INCOME I.E. SUBSTANTIALLY AND PRIMA RILY IN THE HANDS OF ONE AND PROTECTIVELY IN THE HANDS OF THE OTHER IS PART OF TRITE LAW CLARIFIED BY THE COURTS TIME AND AGAIN AND FOR WHICH REFERENCE HAS BEEN MADE BY THE AO TO THE DECISIONS IN THE CASE OF LALJI HARIDAS VS. ITO 43 ITR 387 392 (SC); G. TOPI SAHEB VS. CIT 170 ITR 181 (A.P); AND JAGANNATH HANUMANBUX VS. ITO 31 ITR 603 (CAL.). THE LD. CIT(A) HAS ALSO NOT ADVERTED TO ANY OF THESE DECISIONS IN HIS IMPUGNED ORDERS. IN FACT SHRI M. HALID HAS CLEARLY AD MITTED TO THE OWNERSHIP OF SOME IMMOVABLE PROPERTIES THOUGH REGISTERED IN THE NAME OF HIS WI FE; RATHER STATING IN RESPECT OF THE TWO PROPERTIES AS HAVING BEEN PURCHASED BY THE WIFE WI TH ONE (86 CENTS OF LAND AT KARANAKODAM) IN THE NAME OF HER BROTHER SHRI ABDUL SALAM (REFER PARA 4 5 OF THE ASSESSMENT ORDER IN THE CASE OF SHRI M. HALID AND P ARA 12 OF THE ASSESSMENT ORDER IN THE CASE OF SMT. SHAKEELA). CONTINUING FURTHER VIDE PA RA 6 OF THE IMPUGNED ORDER (IN THE CASE OF SMT. SHAKEELA HALID) REFERENCE IS MADE TO THE D ISCUSSION AT PARA 5 OF THE ASSESSMENT ORDER IN THE CASE OF SHRI M.HALID WHILE WE FIND NO REFERENCE TO THE ADVANCE OF ` 21.6 I.T.A. NOS.201 & 202/COCH/2005 DY. CIT ERNAKULAM V. SHRI M.HALID & SMT. SH AKEELA HALID 5 LAKHS AS RECEIVED FROM SHRI ABDUL KARIM AT THE SAID PARA OF THE ASSESSMENT ORDER. EVEN WITH REGARD TO OTHER ADJUSTMENTS DIRECTED BY THE LD . CIT(A) VIZ. THE SALE OF GOLD JEWELLERY THE OBSERVATIONS MADE BY HIM DIRECTING ITS DELETION (VIDE PARA 5) ARE CRYPTIC AND WITHOUT REFERENCE TO THE REASONS ATTENDING THE DECISION BY THE AO (REFER PARA 14 OF THE ASSESSMENT ORDER). IN FACT THE ENTIRE IMPUGNE D ORDERS ARE DE HORS THE EVIDENCE CULLED AND WHICH ARE ONLY THOSE FOUND AND CONSIDER ED BY THE AO. THERE IS NO REFERENCE TO THE STATEMENT/S U/S. 132(4) OF THE ACT ON WHICH HEAVY RELIANCE STANDS PLACED BY THE REVENUE. REFERENCE IN THIS CONTEXT MAY ALSO BE MADE TO THE DECISION IN THE CASE OF V. KUNHAMBU & SONS V. CIT 219 ITR 235 (KER.) QUA THE PRIMACY OF THE DEPOSITIONS MADE THEREUNDER EVEN AS THE SAME AGAIN REPRESENTS TRITE LAW. 5.2 SO HOWEVER WE MAY CLARIFY THAT THOUGH THE REVENUES RIGHT TO FRAME PROTECTIVE ASSESSMENTS IS WELL RECOGNIZED IT COULD NOT PROCEE D SUBSTANTIALLY QUA A PARTICULAR INCOME AGAINST MORE THAN ONE ASSESSEE. IN DOING SO IT RAT HER ACTS INCONSISTENTLY. THIS OBSERVATION OF COURSE WOULD BE VALID ONLY IN RESP ECT OF THE SAME INCOME AND NOT IN RESPECT OF INDEPENDENT INCOMES SO THAT A PARTICULA R ASSESSMENT MAY COMPRISE BOTH `INCOMES I.E. FOR WHICH THE REVENUE ASSESSES SUB STANTIALLY AND PROTECTIVELY; IT BEING ALSO BARRED FROM RECOVERING TAX ON ANY PROTECTIVELY ASSESSED INCOME. THE LD. CIT(A) THEREFORE OUGHT TO HAVE AFTER HEARING BOTH THE PA RTIES ISSUED DEFINITE FINDINGS AS TO THE EXTENT TO WHICH EITHER ASSESSMENT IS A PROTECTIVE A SSESSMENT HIS POWERS BEING CO- TERMINUS WITH THAT OF THE ASSESSING AUTHORITY. THE AO HAS COLLATED DATA FOUND AS A RESULT OF SEARCH (OR MATERIALS/INFORMATION AVAILABLE WITH HIM) AND ISSUED DEFINITE FINDINGS TO ALL OF WHICH THERE IS NO REFERENCE OR WHISPER IN TH E IMPUGNED ORDERS. IN OUR VIEW THE LD. CIT(A) OUGHT TO HAVE ISSUED SEPARATE FINDINGS QUA EACH ASSET/PROPERTY AND CLARIFY THE BASIS ON WHICH HE HAS CONSIDERED IT TO BE LIABLE TO BE ASSESSED EITHER IN THE HANDS OF THE HUSBAND OR WIFE. OF COURSE WHERE THE PROPERTY HAS BEEN ASSESSED ONLY IN THE HANDS OF EITHER THIS REQUIREMENT WOULD AUTOMATICALLY ABATE. 5.3 UNDER THE CIRCUMSTANCES DELINEATED ABOVE A ND THE REASONS AFORE-STATED WE ONLY CONSIDER IT FIT AND PROPER TO VACATE THE TWO IMPUGN ED ORDERS AND RESTORE THE APPEALS BACK I.T.A. NOS.201 & 202/COCH/2005 DY. CIT ERNAKULAM V. SHRI M.HALID & SMT. SH AKEELA HALID 6 TO THE FILE OF THE FIRST APPELLATE AUTHORITY TO DE CIDE THE SAME AFRESH ON MERITS IN ACCORDANCE W ITH LAW AND AFTER AFFORDING BOTH THE PARTIES A FAIR OPPORTUNITY OF BEING HEARD. IN DOING SO WE DRAW SUPPORT FROM THE DECIS ION BY THE APEX COURT IN THE CASE OF KAPURCHAND SRIMAL V. CIT (1981) 131 ITR 451 (SC) AND ALSO CLARIFY TO BEING NOT CONSTRUED AS HAVING EXPRESSED ANY OPINION ON MERITS . WE DECIDE ACCORDINGLY. 6. IN THE RESULT BOTH THE APPEALS BY THE REVENU E ARE ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 27THH DECEMBER 2011 GJ COPY TO: 1. SHRI M.HALID G-378 PANAMPILLY NAGAR KOCHI 6 82 036. 2. SMT. SHAKEELA HALID G-378 PANAMPILLY NAGAR KO CHI 682 036. 3. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1( 3) ERNAKULAM. 4. THE COMMISSIONER OF INCOME-TAX (APPEALS)-II KOC HI. 5. THE COMMISSIONER OF INCOME-TAX KOCHI. 6. D.R. I.T.A.T. COCHIN BENCH COCHIN. 7. GUARD FILE .