THE ITO-2(5), INDORE vs. SHRI MAHESH B. BANGLEWALA, INDORE

PDF · subscribers
ITA 781/IND/2016Status: DisposedITAT Indore20 March 2018AY 2009-1014 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that crucial issues remained unexamined by the lower authorities, including discrepancies in sale consideration, cash flow details, and ownership of the land. The CIT(A) also passed orders without awaiting a remand report.

What were the facts?

The Assessing Officer made additions under Section 68 for cash credits and imposed penalties under Section 271(1)(c). The CIT(A) deleted these additions and penalties. The revenue appealed against these deletions.

What were the issues?

Whether the CIT(A) erred in deleting additions and penalties without proper examination of evidence and without awaiting a remand report. The taxability of the transaction and ownership of the property were also key issues.

Which sections of the Income-tax Act were involved?

Section 68,Section 271(1)(c),Section 148,Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: Shri Kul Bharat, Hon’ble & Shri Manish Borad, Hon’ble

For Appellant: Shri R.P. Mourya
Hearing: 7.3.2018Pronounced: 20.3.2018

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE Before Shri Kul Bharat, Hon’ble Judicial Member and Shri Manish Borad, Hon’ble Accountant Member

ITA Nos. 782 & 783/Ind/2016 A.Ys.2009- 2010

ACIT 2(5) Indore ::: Appellant Vs Smt. Rukmabai Banglewala Indore ::: Respondent ITA Nos. 781 & 1020/Ind/2016 A.Ys.2009- 2010 ACIT 2(5) Indore ::: Appellant Vs Mahesh B. Banglewala ::: Respondent Appellant by Shri R.P. Mourya Respondents by None Date of hearing 7.3.2018 Date of pronouncement 20.3.2018

O R D E R PER SHRI MANISH BORAD, AM

This bunch of four appeals are directed at the instance

of the revenue relating to two assessees for the assessment

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala year 2009-10 out of which two are against deletion of

quantum addition and the remaining two are against

deletion of penalty imposed u/s 271(1)(c) of the Act. ITA No.

781/Ind/2016 & 782/Ind/2016 are directed against the

order of the Commissioner of Income Tax (Appeals)-I,

Indore, dated 29.3.2016 which are arising out of the order

u/s 144/147 of the Act framed by the ITO, Ward 2(5),

Indore, on 26.3.2014. ITA No. 783/Ind/2016 and ITA No.

1020/Ind/2016 are directed against the order of the

Commissioner of Income Tax (Appeals)-I, Indore, dated

31.3.2016 which arise out of the order u/s 271)1)(c) of the

Act framed on 11.9.2014 by the ITO 2(5), Indore.

2.

During the course of hearing, none appeared on behalf

of the assessee. As informed by the registry the assessee

has been communicated for date of hearing by registered

AD as well as notice has been served through learned DR

but the assessee has remained non-compliant. As the case

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala has been adjourned on various dates, we find it appropriate

to hear these appeals with the assistance of the learned

DR.

3.

As the issues raised in all these appeals are common,

these appeals were heard together and are being disposed

of by this common order for the sake of convenience.

4.

For the purpose of adjudication we take the facts of the

assessee Shri Mahesh B.Bunglewala. Brief facts are that

through AIR information, the learned Assessing Officer

came to know that the assessee has deposited cash of

Rs.15 lacs in his savings bank account. Notice u/s 148 of

the Act was issued on 30.3.2013 and information called for

from the bank u/s 133(6) of the Act. On 24.10.2013 the

assessee filed reply stating that agricultural land in the

name of his grand-father, late Shri Ram Prasad Bunglewala

was sold during F.Y. 2008-09 for a sum of

Rs.1,91,80,000/- and payment towards sale consideration 3

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala was received through cheque as well as cash. Part of the

cash was deposited in the assessee’s account and some

portion was deposited in the account of the mother of the

assessee, Smt. Rukmabai. Thereafter, the Assessing

Officer carried out necessary inquiries from the purchaser

company i.e. Makewell Developers Pvt. Ltd. and observed

that as per the registry the sale consideration was shown at

Rs.1,60,00,000/- whereas the assessee has disclosed the

for sale consideration of Rs.1,91,80,000/-. There was

further mis-match with regard to the amount received by

assessee as to whether it was through account payee

cheque or cash. A show cause notice was sent to the

assessee calling for details of bank passbook, ownership of

other agricultural land, copy of Rin Pustika, statement of

affairs and other source of income but the assessee did not

reply to the show cause notice and the learned Assessing

Officer had no option except to go ahead with passing an

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala ex-parte assessment, making addition of Rs.1,72,00,000/-

u/s 68 of the Act. In the case of the assessee’s mother, the

learned Assessing Officer made an addition of Rs. 40 lacs

u/s 68 of the Act. Aggrieved, both the assessees preferred

appeals before the Commissioner of Income Tax (Appeals)

and succeeded. Subsequent to the passing of the

assessment order the Assessing Officer also initiated

penalty proceedings but the assessee again remained non-

compliant and accordingly ex-party order was framed

imposing penalty of Rs.57,39,000/- and Rs.12,50,000/- in

the hands of Shri Mahesh B. Bunglewala and Smt.

Rukmabai Bunglewala, respectively.

5.

Aggrieved, both the assessee preferred appeal before the

Commissioner of Income Tax (Appeals) against the

quantum addition and the penalty imposed u/s 271(1)(c) of

the Act and succeeded. Now the revenue is in appeal before

the Tribunal raising the following grounds :-

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala ITA No.781/Ind/2016 – Mahesh B. Bunglewala

(i) Whether in the facts and in the circumstances of

the case, the ld. CIT(A) erred in law in deleting the

addition amounting to Rs.1,62,50,000/- out of total

addition of Rs.1,72,00,000/- made by the A.O. on

account of illegal cash credit even though the

assessee did not explain proper source of the

same, nor was any documentary evidence filed

regarding availability of cash with the assessee.

Thus, the amount remained undisclosed income in

the hands of the assessee u/s 68 of the IT Act.

(ii) Whether in the facts and in the circumstances of

the case, the ld. CIT(A) erred in allowing the

appeal of the assessee by passing his order even

before the submission of the remand report.

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala ITA No.782/Ind/2016 – Smt.Rukmabai Bunglewala

(i) Whether in the facts and in the circumstances of

the case, the ld. CIT(A) erred in law in deleting the

addition amounting to Rs.40,00,000/- made by the

A.O. on account of illegal cash credit even though

the assessee did not explain proper source of the

same, nor was any documentary evidence filed

regarding availability of cash with the assessee.

Thus, the amount remained undisclosed income in

the hands of the assessee u/s 68 of the IT Act.

(ii) Whether in the facts and in the circumstances of

the case, the ld. CIT(A) erred in allowing the

appeal of the assessee by passing his order even

before the submission of the remand report.

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala ITA No. 783/Ind/2016 Smt.Rukmabai Bunglewala

(i) Whether in the facts and in the circumstances of

the case, the ld. CIT(A) erred in law in deleting the

penalty of Rs.12,50,000/- imposed by the A.O. u/s

271(1)(c) of the Act for concealing of the tax raised

on account of illegal cash credit ofRs.40,00,000/-

even though the assessee did not explain proper

source of the same, nor was any documentary

evidence filed regarding availability of cash with

the assessee. Thus, the amount remained

undisclosed income in the hands of the assessee

u/s 68 of the IT Act.

ITA No. 1020/Ind/2016 Mahesh B. Bunglewala

“On the facts and in the circumstances of the case, the

ld. CIT(A) erred in restricting the penalty u/s 271(1)(c) of

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala the IT Act, 1961 imposed by the A.O. at Rs. 57,39,000/-

to Rs. 1,97,480/- only.”

6.

From the perusal of the above grounds we observe that

in ITA Nos. 781 & 782/Ind/2016 the revenue apart from

being aggrieved with deletion of quantum addition has also

raised a ground against the order of the Commissioner of

Income Tax (Appeals) which has been passed without

awaiting the remand report called from the Assessing

Officer.

7.

The learned DR vehemently argued supported the order

of the Assessing Officer and further submitted that the

Commissioner of Income Tax (Appeals) has given relief to

the assessee on the basis of cash flow statements and other

documents which never came up before the Assessing

Officer for examination. Further, the Commissioner of

Income Tax (Appeals) did not wait for the remand report

from the Assessing Officer which was very much crucial for 9

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala adjudication of the issue and, therefore, an opportunity

may be given to the Assessing Officer for examining the

related documents and decide the issue afresh and

direction may also be given to the assessee to remain

compliant on the date of hearing.

8.

We have heard the learned DR and perused the record

placed before us. In these four appeals two relate to

quantum addition and the remaining two relates to penalty

imposed on the additions made by the Assessing Officer.

The Commissioner of Income Tax (Appeals) has given relief

to the assessee deleting the substantial portion of quantum

addition as well as penalty u/s 271(1)(c) of the Act.

9.

We find that the assessee did not cooperate during

the course of assessment proceedings as well as the

penalty proceedings and further the Commissioner of

Income Tax (Appeals) overlooked the fact that remand

report was very crucial in the present cases and the 10

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala assessee did not file requisite details during the

assessment and penalty proceedings.

10.

From perusal of record we also observe that

following issues remained un-examined by the lower

authorities :-

(i) Even when the assessee has claimed to own and

possess agricultural land, there is no income from

agriculture shown in the return of income.

(ii) The sale consideration for the impugned land has been

accepted by the assessee at Rs. 1,91,80,000/- whereas

the purchaser M/s Manewell DevelopersPvt. Ltd. vide

its letter dated 20.12.2013 along with copy of registered

document, has shown the sale consideration of

Rs.1,60,00,000/-.

(iii) The details of cheques received in the account of the

assessee/his mother/his grand-mother as well as

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala remaining portion in cash or whether the cheques were

not account payee and who has withdrawn the cash

from the bank and subsequent thereto, the basis of

depositing the cash in various bank accounts is also

not clear on going through the orders of the lower

authorities.

(iv) A detailed cash flow has been submitted before the

Commissioner of Income Tax (Appeals) and there are

plethora of entries in cash flow statement and in our

view a remand report from the Assessing Officer was a

must for verification of various details.

(v) Taxability of transaction is also one of the issues because

the impugned land was owned by the grand-father Mr.

Ramprasad who was alive at the time of selling the

land and he died in the year 2012. Looking to this

aspect, whether the impugned land was owned by

Ramprasad or it was an ancestral property. It also

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala needs to be examined that the income is to be assessed

under which the assessee i.e. legal heir of Ramprasad

or HUF of Ramprasad or the assessee Mr. Mahesh

along with his mother.

11.

We, therefore, in the given facts and circumstances

of the case as well as in the interest of justice and in view

of our above observation, are of the considered view that all

the issues raised in these four appeal relating to quantum

as well as penalty imposed u/s 271(12)(c) of the Act needs

to be set aside to the file of the Assessing Officer for de

novo assessment and we further direct the assessee to

remain compliant with the notices of hearing and should

not take unnecessary adjournment unless otherwise

required. Needless to mention that proper opportunity of

being heard be provided to the assessee.

12.

Our above finding shall mutatis mutandis apply to

other appeals also. 13

ITA Nos.781, 782 & 783/Ind/2016 ITO vs.Mahesh & Rukmabai Bunglewala 13. In view of our above discussion, all the grounds

raised by the revenue in all these four appeals are allowed

for statistical purposes.

14.

In the result, all the appeals are allowed for

statistical purposes.

Pronounced in open Court on 20 March, 2018.

Sd/- sd/-

(KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER

20 March, 2018 Dn/- Copy to – Appellant/Respodent/Pr.CIT/CIT(A)/DR/Guard File By order Private Secretary

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →