SHRI RAJESH AHUJA,RAIPUR (CG) vs. THE DY. COMMISSIONER OF INCOME TAX 1(1), BHILAI(CG)

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ITA 23/BIL/2016Status: DisposedITAT Raipur23 October 2018AY 2012-137 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the Commissioner (Appeals) of Central Excise had accepted similar explanations and cancelled the excise duty levy. Since this order was not available to the Assessing Officer or the CIT(A), the Tribunal remanded the issue back to the Assessing Officer for proper verification.

What were the facts?

During a search by the Central Excise Department, a significant amount of cash was found at the residential premises of the assessees. The assessees explained the cash as advance received for land sale, cash balance of family members, and business concerns.

What were the issues?

Whether the cash found during the search was adequately explained by the assessees, and if the CIT(A) erred in confirming the additions made by the AO without considering the subsequent order from the Central Excise Commissioner (Appeals).

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Before: SHRI R. K. PANDA & MS SUCHITRA KAMBLE

Hearing: 13.08.2018Pronounced: 23.10.2018

PER SUCHITRA KAMBLE, JM

These two appeals are filed by two different assesseses against the orders dated 16/12/2015 & 14/12/2015 passed by CIT(A)-II Raipur (CG) for Assessment Year 2012-13. The issue contested in the present appeals are identical.

2 ITA No. 23 & 24/BIL/2016

2.

The grounds of appeal are as under:

I.T.A .No. 23/RPR/2016

“1. In the facts and circumstances of the case and in law, Ld.CIT(A) erred in confirming following additions made by A.O, invoking Section 69, on account of cash found during search conducted by Central Excise Department:- a) Addition of Rs.70,00,000/- explained to be advance received against sale of land and; b) Audition of Rs.15,00,000/- explained to be cash balance pertaining to appellant’s wife Smt. Rekha Ahuja and, c) Rs. 13,88,000/- explained to be cash balance pertaining to various family members and business concerns of appellant. Ld.CIT(A) was not justified in confirming the additions made by the A.O.” I.T.A .No. 24/RPR/2016

“1. In the facts and circumstances of the case and in law, the Ld.CIT(A) erred in confirming following additions made by the A.O, invoking Section 69, on account of cash found during search conducted by Central Excise Department:-

a) Addition of Rs.30,00,000/- explained to be advance received against sale of land and;

b) Rs. 12,64,000/-explained to be cash balance pertaining to various family members and business concerns of appellant.

Ld.CIT(A) was not justified in confirming the additions made by the A.O.”

3.

These two appeals are on identical issues, therefore, we are taking the lead case of Rajesh Ahuja being ITA No. 23/RPR/2016 first. The assessee, Shri Rajesh Ahuja, is a Director in M/s Oriental Ispat Pvt. Ltd. and M/s P. S. Steel Tubes Pvt. Ltd. He also derives income from Bhilai Structure and Orient Steel re-rolling Mills which is a partnership concern. During the Financial Year, the Central Excise Departments conducted a search on 24/12/2011 and

3 ITA No. 23 & 24/BIL/2016

25/12/2011 in the business and residential premises of the assessee. During the course of the search proceedings cash amounting to Rs.1,13,83,000/- was found and seized at the residential premises of the assessee. The seized material, related documents including the statement recorded by the Central Excise Authorities was forwarded to the DCIT, Circle 1(1), Bhilai. During the assessment proceedings, the Assessing Officer asked the assessee to explain the sources of the cash amounting to Rs.113.83 lacs found and seized at his residential premises. The assessee furnished detailed submissions in this regard explaining the sources of the cash and to whom it pertains. The Assessing Officer made assessment and added Rs. 15 lacs u/s 69 in respect of unexplained cash in the hands of the assessee.

4.

Being aggrieved by the same, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee on 16/12/2015.

5.

In relation to cash found and seized material, the excise authorizes also carried out proceedings in the case of P.S Steel Tubes Pvt. Ltd. wherein the assessee is a Director. It was allegation of the Excise Department that the cash so found represents unaccounted sale proceeds. The Excise Assessing Authority, Assistant Commissioner Customs and Central Excise, Division-1, Bhilai treated the cash so found as sale proceeds and raised demand for excise duty thereon. The issue was carried by P.S Steel Tubes Pvt. Ltd. before Commissioner (Appeals), Central Excise, Customs and Service Tax, Raipur who decided the appeal vide order dated 29/4/2016. The explanation of the cash found during search representing cash balance of different family members/ business concern was accepted by the Commissioner (Appeals) Central Excise, Customs and Service Tax and the levy of Excise Duty by the Assessing Authority was cancelled. The Ld. AR relied upon the order dated 29/4/2016 passed by the Commissioner (Appeals), Central Excise, Custom and Service Tax, Raipur and submitted before us that the same was not taken into account by the CIT(A) as the order of the CIT(A) is prior to the order passed by the

4 ITA No. 23 & 24/BIL/2016

Commissioner (Appeals), Central Excise, Customs and Service Tax, Raipur. During the hearing, the Ld. AR submitted that the Tribunal has called for remand report in case of Shri Rajesh Ahuja, Bhilai. The Assistant Commissioner, Income Tax, 1(1) has placed remand report dated 2/1/2018 before us wherein, the Ld. AR pointed out that the Assessing Officer has found the order of the Commissioner (Appeals), Central Excise Custom and Service Tax, Raipur tenable.

6.

The Ld. DR relied upon the order of the Assessing Officer as well as the order of the CIT(A).

7.

We have heard both the parties and perused the material available on record before us. It will be appropriate at this stage to remand back this issue to the fie of the Assessing Officer as the order of the Commissioner (Appeals), Central Excise, Customs and Service Tax, Raipur was not available before the Assessing Officer as well as before the CIT(A). The fact that the Assessing Officer vide remand report dated 2/1/2018 found the said order of Commissioner (Appeals), Central Excise Custom and Service Tax tenable is in our opinion needs to be properly verified at the level of the Assessing Officer to take proper cognizance of the actual facts of the case. Therefore, we remand back this issue to the file of the Assessing Officer and set aside the order of the CIT(A). Needless to say, the assessee be given opportunity of hearing by following principal of natural justice. Therefore, ITA No. 23/RPR/2016 is partly allowed for statistical purpose.

8.

As regards ITA No. 24/RPR/2016, there also the remand report was called by us and the Assessing Officer therein has also found the order of the Commissioner (Appeals), Central Excise Customs and Service Tax tenable. Therefore, in this appeal, as well the issue is restored to the file of the Assessing Officer with the identical directions as given in ITA No. 23/RPR/2016. Hence, ITA No. 24/RPR/2016 is partly allowed for statistical

5 ITA No. 23 & 24/BIL/2016

purpose.

9.

In result, both the appeals are partly allowed for statistical purpose.

Order pronounced in the Open Court on 23rd OCTOBER, 2018.

Sd/- Sd/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 23/10/2018 *R.N Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

Private Secretary…….. Raipur Bench, Raipur………….

6 ITA No. 23 & 24/BIL/2016

Date of dictation 22.10.2018

Date on which the typed draft is placed before the 22.10.2018 dictating Member

Date on which the typed draft is placed before the Other Member

Date on which the approved draft comes to the Sr. PS/PS

Date on which the fair order is placed before the Dictating Member for pronouncement

Date on which the fair order comes back to the Sr. .10.2018 PS/PS

Date on which the final order is uploaded on the .10.2018 website of ITAT

Date on which the file goes to the Bench Clerk .10.2018

Date on which the file goes to the Head Clerk

The date on which the file goes to the Assistant Registrar for signature on the order

Date of dispatch of the Order

7 ITA No. 23 & 24/BIL/2016

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