M/S. APEX TIME P.LTD, MUMBAI v. DY. CIT. CIRCLE 8(1), MUMBAI

ITSSA 34/MUM/2008 | misc
Pronouncement Date: 30-03-2011 | Result: Allowed

Appeal Details

RSA Number 3419916 RSA 2008
Assessee PAN AAACA9908N
Bench Mumbai
Appeal Number ITSSA 34/MUM/2008
Duration Of Justice 3 year(s) 2 day(s)
Appellant M/S. APEX TIME P.LTD, MUMBAI
Respondent DY. CIT. CIRCLE 8(1), MUMBAI
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 30-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-03-2011
Date Of Final Hearing 06-04-2010
Next Hearing Date 06-04-2010
Assessment Year misc
Appeal Filed On 28-03-2008
Judgment Text
1 IT(SS)A.NO.34/MUM/2008 M/S APEX TIME P. LTD. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER. I.T.(SS)A. NO. 34/MUM/2008 BLOCK PER IOD : 9-9-96 TO 9-1-10 M/S APEX TIME P. LTD. DY. COMMISSIONER OF INCOME-TAX 105/106 SUPER MARKET VS. CIRCLE-8(1) MUMBAI. MONGHAI BHAI ROAD VILE PARLE (E) MUMBAI 400 057. PAN AAACA 9908N. APPELLANT RESPONDENT. APPELLANT BY : SHRI M.P.MAKHIJA. RESPONDENT BY : SHRI P.K. DAS. O R D E R PER J. SUDHAKAR REDDY A.M. : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED A GAINST THE ORDER OF THE CIT(APPEALS)-VII MUMBAI DATED 23-01-2008. 2. THE FACTS OF THE CASE ARE BROUGHT OUT IN THE CIT (APPEALS) ORDER AND ARE EXTRACTED BELOW FOR READY REFERENCE : THE AO IN THE ASSESSMENT ORDER HAS POINTED OUT TH AT AN ACTION U/S 132 WAS CARRIED OUT IN THE CASE OF NANDOLIYA GROUP OF CASES AND DURING THE SEARCH DOCUMENTS WERE SEIZED WHICH SHOWED THAT MR. RASHID I. NANDOLIA AND MR. RAFIK I NANDOLIA WERE HAVING SHARE HOLDING IN THE A SSESSEE COMPANY AND THAT THE SEIZED DOCUMENTS ALSO SHOWED THAT MR. RAFI KBHAI AND MR. RASHIDBHAI RECEIVED PROFITS OF RS.12 500/- EACH FRO M M/S APEX IN 1998. THE A.O. ALSO FOUND THAT THE COMPANY HAD SHOWN PROFITS ONLY TO THE EXTENT OF 2 IT(SS)A.NO.34/MUM/2008 M/S APEX TIME P. LTD. RS.4 716/- AND RS.3 732/- IN 1999-2000 AND 2000-200 1 RESPECTIVELY WHEREAS DOCUMENTS SHOWED THAT BOTH MR. RAFIK I NAN DOLIA AND MR. RASHID I NANDOLIA RECEIVED PROFITS OF RS.12 500/- EACH IN BOTH THE YEARS. THE A.O. THEREFORE CONCLUDED THAT THE DOCUMENTS SHOWED THAT THE COMPANY MADE PROFITS TO THE EXTENT OF RS.5 LAKHS EACH FOR THE A. Y. 999-2000 AND A.Y. 2000-01 THE SAME BEING COMPUTED ON THE BASIS OF PR OFIT PERCENTAGE OF 2.5%. DURING THE ASSESSMENT PROCEEDINGS AN AFFIDAVIT WAS FILED BY MR. RASHID NANDOLIA WHEREIN IT WAS STATED THAT THE NAME APE X WAS OF A DIFFERENT CONCERN AND HAD NOTHING TO DO WITH THE ASSESSEE COM PANY M/S APEX TIME PVT. LTD. IT HAS BEEN FURTHER POINTED OUT BY THE A. O. THAT THE AFFIDAVIT ITSELF SHOWS THAT THE DIARY BELONGS TO MR. RASHIDBHAI WHO HAD WRITTEN THE ENTRIES AND THE AFFIDAVIT ADMITS THAT MR. RASHIDBHAI HAD RE CEIVED MONEY THROUGH HIS BROTHER IN THE NAME OF APEX. REGARDING THE PLEA T HAT APEX WAS NOT THE CONCERN BY THE NAME OF APEX TIME PVT. LTD. IT HA S BEEN STATED BY THE A.O. THAT THOUGH MR. RASHIDBHAI STATES THAT APEX WAS A DIFFERENT CONCERN HE DOES NOT GIVE ANY DETAILS OF WHICH APEX CONCERN I S HE REFERRING TO. THE A.O. THEREFORE RELYING ON THE ENTRIES REGARDING A ND AFTER ESTIMATING THE PROFIT DETERMINED THE TOTAL UNDISCLOSED INCOME AT A SUM OF RS.10 00 000/-. 3. THE FIRST APPELLATE AUTHORITY DISMISSED THE APPE AL OF THE ASSESSEE. 4. BEFORE US THE ASSESSEE RAISED THE FOLLOWING GROU NDS : 1. THE ORDER PASSED BY THE LEARNED ASSESSING OFFICE R I.E. DY.CIT 8(1) MUMBAI ON 30/8/2006 IS PRIMA FACIE ILLEGAL AB-INI TIO-VOID AND BAD- IN-LAW SINCE THE LEARNED ASSESSING OFFICER DID NOT HAVE JURISDICTION OVER APPELLANTS CASE AS THE ASSESSEE COMPANY WAS R EGULARLY ASSESSED TO TAX BY ITO WARD 6(4) MUMBAI. 2. WITHOUT PREJUDICE TO THE ABOVE THE APPELLANT SUB MITS THAT THERE IS NO MENTION IN THE ASSESSMENT ORDER THAT ANY SATISFACTI ON WAS RECORDED BY THE ASSESSING OFFICER WHILE COMPLETING THE BLOCK ASSESSMENT OF NANDOKYA GROUP OF CASES THAT ANY UNDISCLOSED INCOME BELONGS TO THE ASSESSEE AND AS SUCH THE ISSUANCE OF NOTICE U/S 158 BD IS AB-INITIO- VOID AND BAD IN LAW. 3. THE APPELLANT SUBMITS THAT EVEN ON MERITS THE LE ARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN DETERMINING UNDISCLOSED INCOME OF THE APPELLANT COMPANY AT RS.1 0 LAKHS. 3 IT(SS)A.NO.34/MUM/2008 M/S APEX TIME P. LTD. THE ASSESSEE ALSO RAISED AN ADDITIONAL GROUND WHICH READS AS FOLLOWS: THE ORDER PASSED BY THE ASSESSING OFFICER IS AB-IN ITIO-VOID AND BAD-IN-LAW SINCE THE SAME HAS BEEN PASSED WITHOUT ISSUING NOTI CE U/S 143(2) OF THE INCOME TAX ACT 1961. 5. THE LEARNED COUNSEL FOR THE ASSESSEE MR. M.P. M AKHIJA SUBMITTED THAT THERE WAS NO SATISFACTION RECORDED BY THE AO WHO COMPLET ED THE BLOCK ASSESSMENT OF NANDOKYA GROUP OF CASES THAT UNDISCLOSED INCOME BE LONGING TO THE ASSESSEE HAS BEEN FOUND DURING THE COURSE OF SEARCH AND HENCE T HE NOTICE U/S 158BD WAS BAD IN LAW. 6. THIS BENCH IN VIEW OF THE RIVAL CONTENTIONS ON THE ISSUE AS TO WHETHER A SATISFACTION NOTE HAS BEEN RECORDED OR NOT ON 8-9- 2009 DIRECTED THE LEARNED DR TO PRODUCE THE ASSESSMENT RECORDS. SIMILAR DIRECTIONS WERE GIVEN ON 10-11-2009. THEREAFTER THE LEARNED DR HAD SOUGHT ADJOURNMENT ON 18-01-2010. ON 26-10-2010 THE DIRECTIONS WERE ONCE AGAIN REPEATED BY THE BENC H. ON 13-01-2011 THE LEARNED DR SOUGHT ADJOURNMENT ON THE GROUND THAT THE RECORD S ARE NOT AVAILABLE. TODAY BEFORE US THE LEARNED DR MR. P.K. DAS FILED A SET OF CORRESPONDENCE WHEREIN THE DR HAS REQUESTED THE CONCERN AO AS WELL AS THE CONC ERN CIT VIDE LETTER DATED 26 TH OCT. 2010 AND 8 TH MARCH 2011 TO FURNISH THE SATISFACTION NOTE RECOR DED BY THE AO AND ALSO TO SUBMIT THE ASSESSMENT RECORD AS DIRECTE D BY THE BENCH. HE SUBMITTED THAT DESPITE THESE REPEATED EFFORTS THE RECORD HAS NOT BEEN SENT BY THE CONCERNED AUTHORITIES. HE PRAYED FOR MORE TIME. 7. MR. M.P. MAKHIJA THE LEARNED A.R. SUBMITTED THA T ADVERSE INFERENCE SHOULD BE TAKEN AND THE BENCH SHOULD DECIDE THE CASE IN HI S FAVOUR AS MORE THAN 1 YEARS HAS ELAPSED SINCE DIRECTIONS WERE GIVEN TO T HE REVENUE AND NO RECORDS ARE PRODUCED TILL DATE. 4 IT(SS)A.NO.34/MUM/2008 M/S APEX TIME P. LTD. 8. AFTER HEARING RIVAL CONTENTIONS WE AGREE WITH T HE SUBMISSIONS OF MR. M.P. MAKHIJA THAT NO USEFUL PURPOSE WOULD BE SERVED BY A DJOURNING THE MATTER ONCE AGAIN TO GIVE FURTHER TIME TO THE REVENUE FOR PRO DUCING THE RECORDS AS MORE THAN 1 YEAR HAS ELAPSED SINCE THE DATE OF ISSUAL OF DI RECTIONS. HENCE ADVERSE INFERENCE IS TAKEN AND GROUND NO.2 OF THE ASSESSEE THAT NO SATISFACTION WAS RECORDED BY THE AO WHO COMPLETED THE BLOCK ASSESSME NT OF NANDOKYA GROUP OF CASES APPEARS TO BE FACTUALLY CORRECT. THUS WE QU ASH THE BLOCK ASSESSMENT ORDER BY APPLYING THE JUDGMENT OF THE HONBLE SUPREME COU RT IN THE CASE OF MANISH MAHESHWARI 289 ITR 341 WHEREIN IT IS HELD THAT (I) SATISFACTION MUST BE RECORDED BY THE ASSESSING OFFICER THAT UNDISCLOSED INCOME B ELONG TO ANY PERSON OTHER THAN THE PERSON WITH RESPECT OF WHOM SEARCH WAS MADE U/S 132 OF THE ACT AND (II) THE BOOKS OF ACCOUNT OR THE DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAD TO BE HANDED OVER TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSONS. . 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH 2011. SD/- SD/- (R.S.PADVEKAR) (J. SUD HAKAR REDDY) JUDICIAL MEMBER. ACCOUNT ANT MEMBER MUMBAI DATED: 30 TH MARCH 2011. WAKODE 5 IT(SS)A.NO.34/MUM/2008 M/S APEX TIME P. LTD. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR A-BENCH (TRU E COPY) BY ORDER ASSTT. REGISTR AR ITAT MUMBAI. WAKODE