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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
This appeal by the Revenue is directed against the order dated 14.07.2021 of Commissioner of Income Tax(Appeals), for Assessment Year 2018-19. The revenue has raised following grounds of appeal:
“1.On the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting the addition of Rs.11,00,000/- made by the Assessing Officer u/s 69A of the Income Tax Act, 1961 as unexplained money.
2.On the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting the addition of Rs.1,31,10,047/- made by the Mayankraj Singh Bhadoria Page 2 of 5 Assessing Officer u/s 69 of the Income Tax Act, 1961 as unexplained investment.”
At the time of hearing Ld. DR has submitted that there was a search and seizure action u/s 132 of the Act on 23.03.2018 in the case of Amaltas group of Indore. During the search and seizure action inter alia gewellery of Rs.1,31,10,047/- and cash of Rs.11 lacs was seized out of the total jewellery and cash found during the search. The cash and jewellery was seized from the possession the assesse and therefore, the assessing officer has made the addition of seized cash and jewellery in the hands of the assessee while passing the assessment order u/s 143(3). He has pointed out that the Ld. CIT(A) has deleted the addition on the ground that father of the assesse namely Suresh Bhadoria has offered the income on account of cash and jewellery before Settlement Commission in the application filed u/s 245C of the Act. The ld. CIT(A) has further observed that in view of the order of the Settlement Commission the addition made by the AO are deleted. He has pointed out that the impugned order passed by the Ld. CIT(A) is based on incorrect and misconceive facts as Settlement Commission has passed an order on 09.06.2023. A copy has been filed by the Ld. AR of the assesse and therefore, addition deleted by the CIT(A) on presumption that Settlement Commission passed an order prior to the impugned order is not sustainable in law and liable to be deleted.
2.1 He has further submitted that at the time of passing the impugned order the application of the assesse was only allowed to be processed u/s 245D(1) of the Act vide order dated 03.12.2019 and no order for disposed off the application by Settlement Commission was passed. Thus, Ld. AR has submitted that the impugned order is based on incorrect facts and further it is not clear from the order of the Settlement Commission dated 09.06.2023 that the income on account of jewellery of Rs.1,31,10,047/- and cash of Rs.11 lacs seized from the possession of the assesse was offered to tax by the father of the assesse as claimed by the assesse. Page 2 of 5
Mayankraj Singh Bhadoria Page 3 of 5 3. On the other hand, Ld. AR has submitted that the assesse can file the details of the income offered to tax before the Settlement Commission while filing the application u/s 245C of the Act. He has submitted that this fact was very much in the knowledge of Settlement Commission that the AO has assessed the income on account of seized cash and jewellery in the hands of the assesse whereas the father of the assesse has offered the income before the Settlement Commission.
We have considered the rival submissions as well as relevant material on record. At the outset, we note that in the application u/s 245C of the Act these applicants namely the father of the assesse, M/s Mayank Welfare Society and M/s Amaltas Education Welfare Society have declared the income for A.Y.2012-13 and 2016-17 amounting to Rs.2,05,70,300/-. Prima facie there was no income declared by these three persons for A.Y.2017-18 and 2018-19 in the application u/s 245C of the Act. Therefore, it is a matter of verification whether the father of the assesse who is one of the applicants before Income Tax Settlement Commission declared the income arising from search and seizure action u/s 132 of the Act includes the income on account of cash of Rs.11 lacs and jewellery of Rs.1,31,10,047/- seized during the course of search and seizure which is subject matter of this appeal of the revenue. The Ld. CIT(A) has held as under:
“Thus, it is evidently clear that the income earned by Shri Suresh Bhadoria has been declared before Hon'ble ITSC and due taxes have been paid. The further, addition made by the AO is nothing but double taxation. In view of the order of Hon'ble ITSC (supra) the addition made by the AO amounting to Rs 11,00,000/- & Rs. 1,31,10,047/- are Deleted. Therefore, appeal on these grounds is Allowed.”
4.1 As it is manifest from the concluding part of the impugned order of Ld. CIT(A) that the additions made by the AO were deleted by considering that the father of the assessee Shri Suresh Bhadoria has declared the Page 3 of 5
Mayankraj Singh Bhadoria Page 4 of 5 income in respect of these two items being cash and jewellery before the Income Tax Settlement Commission and paid due taxes. The ld. CIT(A) has also observed that in view of the order of the Settlement Commission the addition made by the AO are deleted. We find that what is referred by the Ld. CIT(A) is only the application of the assesse u/s 245C was admitted for further proceedings u/s 245D(1) vide order dated 03.12.2019 whereas the final order has been passed by the Settlement Commission on 09.06.2023. The relevant part of the order of the Settlement Commission in para 7.1 is as under:
“Shri Suresh Singh Bhadoria
7.1 In this case, it is seen that the applicant has offered an estimated income of Rs.70 lakhs on account of miscellaneous property transactions on power of attorney basis. The applicant has offered this estimated income to cover up the assets found during the search Considering the extent of transactions and the applicant's involvement in property transactions, it is felt that this estimate is on the lower side and, therefore, an additional income of Rs.50 lakhs is added as undisclosed income under this head for AY 2018-19.”
4.2 From this order it is not clear whether the father of the assesse has declared and offered to tax the income on account of cash of Rs.11 lacs and jewellery of Rs.1,31,10,047/- seized during the course of search and seizure action. Accordingly in the facts and circumstances of the case and in the interest of justice we set aside the impugned order of the Ld. CIT(A) and remand the matter to the record of the Ld. CIT(A) for deciding the same afresh after proper verification of the fact whether the income on account of cash and jewellery in question seized during the course of search and seizure action was declared and offered to tax by the father of the assessee before Income Tax Settlement Commission and whether the order passed by the Settlement Commission covered this issue of seized
Mayankraj Singh Bhadoria Page 5 of 5 cash and jewellery. Needless to say the assessee be given appropriate opportunity of hearing before passing afresh order.
In the result, the appeal filed by the assesse is allowed for statistical purpose.
Order pronounced in the open court on 30.08.2023.