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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGH, VICE- & SHRI G. MANJUNATHA
PER G. MANJUNATHA, AM: This appeal filed by the assessee is directed against order passed by the learned Commissioner of Income Tax (Appeals)- 13, Chennai, dated 02.02.2018 and pertains to assessment year 2009-10.
The assessee has raised following grounds of appeal:-
“1. The Order of CIT(A) is contrary to the law, facts and circumstances of the case.
2. The CIT(A) erred in confirming the order of the AO without appreciating that no adequate opportunity was given to the assessee before passing the impugned assessment order.
3. The CIT(A) erred in confirming the addition of Rs.1,57,13,940/- u/. 68 of the Income tax Act, without appreciating the fact that the credit of Rs.1,24,63,8501- was not the credit during the impugned assessment year and the credit appear in the earlier year’s accounts.
4. The CIT(A) erred in confirming the view of the assessing officer to treat the cash deposit of Rs.32,52,000/- made in the bank account as unexplained credit without taking into account the attendant circumstances.
5. The CIT(A) erred in adding the interest of Rs.3,03,850/- without looking into the nature of transaction and without proper enquiries.
6. The CIT(A) having noticed that a writ petition No. 566 of 2010 was filed by Mr.Umed C Mehta, the father of the appellant and a stay was granted in MP No. 1 of 2010 against the order of the Settlement Commission, ought not to have proceeded with the appeal.
7. The CIT(A) ought to have appreciated that the averment s made in the Settlement Commission proceedings is that the entire income of the assessee belongs only to Sri. Umed C Mehta and so any proceedings relating to Mr.Umed C Mehta, especially the order passed in the Settlement Commission would cover the present assessee as well.
8. The CIT(A) erred in his observation that the additions made in the present appeal is to be decided independently without recourse to the proceedings before the Settlement Commission which is ht subject matter of the WP No. 566 of 2010 as well as the interim order of granting stay by the Madras High Court has a definite bearing in the impugned proceedings.
The CIT(A) erred in treating the entries as unexplained sundry creditors as income of the assessee without appreciating that the correct assessment should be made only on the hands of Mr.Umed C Mehta, the father of the appellant in pursuant to the proceedings before the Settlement Commission cited above.
The CIT(A) erred in treating the interest payment to bogus sundry creditors as income of the assessee for the said reasons.
The CIT(A) also erred in treating the cash credit in the savings bank account without appreciating the relevant facts of the case in this regard.”
Brief facts of the case are that the assessee has filed her return of income for assessment year 2009-10 on 01.08.2009 declaring total income of Rs.4,21,638/-. The case was taken up for scrutiny and assessment has been completed u/s.143(3) of the Income Tax Act, 1961, on 23.12.2011 and determined total income of Rs.1,64,39,338/- by making additions towards unexplained cash credit of Rs.1,24,63,850/- u/s.68 of the Income Tax Act, 1961, disallowance of interest expenses of Rs.3,03,850/- and unexplained cash deposit to bank account at Rs.32,50,000/- u/s.68 of the Income Tax Act, 1961. The assessee carried the matter in appeal before the first appellate authority. Before the learned CIT(A), the assessee submitted that Shri Umed C.Mehta, father of the assessee, has filed an application before the Income Tax Settlement Commission and claimed that additions made in the hands of the assessee is to be assessed in the hands of Shri Umed C.Mehta, father of the assessee and thus, till the Income Tax Settlement Commission passes its order, appeal may be kept in abeyance.
The learned CIT(A), after considering relevant submissions of the assessee rejected contention of the assessee and sustained additions made by the Assessing Officer towards unexplained sundry creditors and consequent interest u/s.68 of the Act, and also unexplained cash credit to savings bank account u/s.68 of the Income Tax Act, 1961. Aggrieved by the learned CIT(A) order, the assessee is in appeal before us.
The learned A.R for the assessee , at the time of hearing, submitted that Shri Umed C.Mehta has filed an application before the Income Tax Settlement Commission and in the said application pleaded that income assessed in the hands of Mrs.Anju Jitendra Kothari, present assessee, is to be assessed in the hands of Shri Umed C.Mehta. The learned A.R further submitted that although Settlement Commission has rejected application filed by the assessee for various reasons, but Shri Umed C.Mehta has filed Writ Petition before the Hon'ble High Court of Madras and the Hon’ble High Court in W.P.No.23631 of 2009 dated 09.08.2019 has set aside order passed by the Income Tax Settlement Commission and restored the issue back to the Income Tax Settlement Commission for deciding application filed by the assessee afresh. Since, pleading of Shri Umed C.Mehta before the Income Tax Settlement Commission was that income assessed in the hands of assessee, is to be assessed in his hands, unless application filed by Shri Umed C.Mehta before the Income Tax Settlement Commission is decided, present additions made by the Assessing Officer in the hands of the assessee cannot be decided. Therefore, the learned AR requested to set aside appeal to file of the Assessing Officer to take decision, after outcome of order of the Income Tax Settlement Commission in the case of Shri Umed C.Mehta.
The learned DR, on the other hand, fairly agreed that arguments of the assessee that issues involved in the present appeal can be decided only after the Income Tax Settlement Commission decides application filed by Shri Umed C.Mehta is correct and hence, appeal may be set aside to the file of the Assessing Officer to keep issues alive.
Having heard both the parties and considered arguments of the learned counsels for the assessee as well as Revenue, we are of the considered view that issue needs to go back to file of the Assessing Officer to consider the issues afresh, after the Income Tax Settlement Commission disposes of application filed by Shri Umed C.Mehta, because both the parties have categorically agreed that additions made in the present case are already claimed to be income of Shri Umed C.Mehta in the application filed before the Income Tax Settlement Commission.
Hence, we set aside order passed by the learned CIT(A) and restore the issues to file of the Assessing Officer and direct the Assessing Officer to reconsider all the issues de novo in accordance with law, after the Income Tax Settlement Commission decides application filed by Shri Umed C.Mehta.
We make it very clear that the issues involved in the appeal are left open to the decision of the Assessing Officer to decide in accordance with law.
In the result, appeal filed by the assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 14th February, 2022