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Income Tax Appellate Tribunal, NAGPUR BENCH : NAGPUR
Before: SHRI SATBEER SINGH GODARA & DR. DIPAK RIPOTE
Sl. CIT(A)’s Appellant / No. Respondent / order Proceedings Cross ITA.No. A.Y. appealed Respondent u/sec. against, Objector case no. & Dated The ACIT, Smt. Disha CIT(A)-1/ Circle-1, Deven Malviya, 1. 400/NAG./2019 2009-10 244/2016- Room L/H late Shri 17 , dated No.508, 5th Deven Malviya, 23.09.2019 Floor, MECL Plot No.K-6, CIT(A)-1/ Bldg., 303, Janardhan 262/2016- 2. 401/NAG./2019 2009-10 Seminary Apts. Laxmi 17, dated Hills, Nagar, Nagpur. 20.09.2019 Nagpur – 440 PIN - 440 022 143(3) CIT(A)-1/ 006 Maharashtra. r.w.s.147 of 223/2017- 3. 402/NAG./2019 2010-11 Maharashtra. PAN 18, dated the Income ABIPM5726E 20.09.2019 Tax Act, Smt. Disha CIT(A)-1/ 4. 2009-10 Deven C.O.No.05/NAG./2020 1961 (in 244/2016- in Malviya, The ACIT, ITA.400/NAG./2019 L/H Late 17 , dated short "the Circle-1, Shri Deven 23.09.2019 Act"). Malviya, Plot Room No.508, No.-K-6, 303, 5th Floor, MECL C.O.No.06/NAG./2020 2009-10 Janardhan CIT(A)-1/ 5. in Bldg., Seminary ITA.No.401/NAG./2019 Apts. Laxmi 262/2016- Nagar, Hills, Nagpur – 17, dated Nagpur – 440 20.09.2019 440 006 022 Maharashtra. Maharashtra. PAN ABIPM5726E
For Revenue : Shri Kailash Kanojiya, Sr. DR For Assessee : Shri Kapil Hirani, C.A.
Date of Hearing : 30.08.2023 Date of Pronouncement : 25.10.2023
2 ITA.Nos.400 to 402/Nag./2019 And C.O.Nos.5 & 6/Nag./2020. ORDER PER SATBEER SINGH GODARA, J.M. :
The instant batch of five appeals pertains to a single assessee Smt. Disha Devan Malviya L/H Late Shri Deven Malviya. All other particulars already stand are tabulated in the cause title hereinabove
Heard both the parties. Case file perused.
It emerges at the outset that the Revenue’s “lead” 2. appeal ITA.No.400/NAG./2019 raises the following substantive grounds in the instant appeal :
“On the facts and circumstances of the case and in law; the Ld. CIT(Appeals), Nagpur has erred in not considering the fact that the assessee at the time of assessment has not submitted any explanation with regard to the sources of net deposits of Rs.688.16 Lakhs in the bank accounts of the assessee, hence it remained unexplained.
2. The decision of Ld. CIT(Appeals) deleting the addition of Rs.688.16 Lacs is perverse on facts and bad in law as the decision is based on assessment made by the assessing officer for the AY 2011-12 and res-judicata is not applicable to income tax proceedings. 3. The decision of Ld. CIT(Appeals) deleting the addition of Rs.688.16 lacs is perverse on facts in as much as the 3 ITA.Nos.400 to 402/Nag./2019 And C.O.Nos.5 & 6/Nag./2020. same has been reached on perverse appreciation of evidences on record. 4. Any other grounds which may be raised at the time of hearing with due permission of Hon’ble ITAT.”
The assessee’s twin cross-objections C.O.Nos.05 & 06/NAG./2020, the Revenue’s as many appeals hereinabove I.T.A.Nos.400 & 401/NAG./2019 raise the following identical substantive grounds :
1. “On the facts and circumstances of the case and in law, the learned CIT(A)-1, Nagpur erred in holding the reopening of the assessment and the reassessment so framed to be legal. On the facts and circumstances of the case, the reopening of the assessment and the re-assessment as completed are illegal, invalid and against the principles of natural justice.
On the facts and circumstances of the case and in law, learned CIT(A)-I, Nagpur erred in holding that the addition made by the AO was made U/s.69 of the IT Act, 1961 despite the AO having not specified any section as such. On the facts and circumstances of the case and in law, the addition as held to be made U/s 69 makes the entire addition made by the AO illegal and liable to be deleted as per law. 3. The addition made by the AO, if held to be made U/s 68 of the IT Act, 1961 being solely based on the bank statements is illegal and liable to be deleted in full as per law.
4 ITA.Nos.400 to 402/Nag./2019 And C.O.Nos.5 & 6/Nag./2020.
4. The Respondent, not being a beneficiary of the transactions forming basis of the reopening and the additions, assessing the same or part thereof in the hands of the Respondent is illegal and the additions sustained by the CIT(A)-1 deserves to be deleted as per law.
5. Without prejudice, in case it is held that the Respondent is a beneficiary, then the addition sustained by the CIT(A)-1 deserves to be substantially reduced in the interest of justice.
6. The Respondent craves leave to add, amend, alter vary and/or withdraw any or all the above grounds of Cross Objection with the kind permission of the Hon’ble Tribunal.”
It further emerges during the course of hearing that the Revenue’s latter twin appeals ITA.Nos.401 & 402/NAG./ 2019 also canvass the very substantive grounds as the only difference therein is qua the quantum of the impugned sec.68 unexplained cash credit addition(s) of Rs.624.07 and Rs.456.47; respectively.
Both the learned representatives next invited our attention to the CIT(A)'s detailed discussion in this Revenue’s lead appeal ITA.No.400/NAG./2019 partly reversing the Assessing Officer’s action adding the impugned cash credits / deposits of Rs.6,88,16,000/- to the extent of commission component therein only as follows :
5 ITA.Nos.400 to 402/Nag./2019 And C.O.Nos.5 & 6/Nag./2020. 6 ITA.Nos.400 to 402/Nag./2019 And C.O.Nos.5 & 6/Nag./2020. 7 ITA.Nos.400 to 402/Nag./2019 And C.O.Nos.5 & 6/Nag./2020. 8 ITA.Nos.400 to 402/Nag./2019 And C.O.Nos.5 & 6/Nag./2020. 9 ITA.Nos.400 to 402/Nag./2019 And C.O.Nos.5 & 6/Nag./2020.
This is what leaves the Revenue aggrieved seeking to revive the Assessing Officer’s action making the impugned addition in entirety.
We have given our thoughtful consideration to the vehement rival stands. The Revenue’s case before us is that once the Assessing Officer had found the assessee; or her deceased husband/predecessor in interest Shri Deven Malviya; as the case may be, to have made the impugned deposits in their respective bank accounts, the same had been rightly assessed in entirety than the impugned commission component only. We wish to make it clear that the assessee has not even bothered to file the corresponding bank
10 ITA.Nos.400 to 402/Nag./2019 And C.O.Nos.5 & 6/Nag./2020. statements before us which could even remotely indicate her withdrawals followed by deposits for the purpose of granting telescoping benefit. All what she has done is to place on record Assessing Officer’s assessment order dated 29.12.2018 in assessment year 2011-2012 allegedly assessing the commission component itself @ 5% of the turnover concerned. Learned counsel sought to highlight the fact that it was the assessee’s deceased husband Shri Deven Malviya who was looking after all the banking transactions and therefore, once it is found that he had taken deposits from various customers in lieu of promising higher returns, the impugned commission rate has rightly been assessed in this taxpayer’s hands.
6.1. We find no merit in assessee’s stand before us. This is for the precise reason that once she has sought to treat all the impugned cash deposits in her bank account(s) as part of the turnover, it was her bounden duty only to place on record the corresponding details of the customers concerned vis-à-vis the withdrawals from her bank account(s) along with the alleged project details. All this has never seen light of the day till date. Her reliance on the assessment findings for A.Y. 2011-12 is without any substance therefore. Faced with the situation, we see no other option but to accept the Revenue’s contentions as the assessee has failed to explain the source of the impugned deposits along with identity, genuineness and 11 ITA.Nos.400 to 402/Nag./2019 And C.O.Nos.5 & 6/Nag./2020. creditworthiness in light of Sumati Dayal vs. CIT [1995] 214 ITR 801 (SC) and CIT vs. Durga Prasad More [1971] 82 ITR 540 (SC) and PCIT vs. NRA Iron & Steel Pvt. Ltd. [2019] 412 ITR 461 (SC); all pertaining to the similar addition of unexplained cash credits u/sec.68 of the Act.
Learned counsel at this stage sought to highlight assessee’s cross objections and argued that the Assessing Officer had not even quote the correct provision of law as to whether it was a case inviting sec.68 or 69 of the Act. We reject the assessee’s contentions as even if a wrong provision is quoted as per PCIT vs. N R Portfolio Pvt. Ltd., [2014] 264 CTR 258 (Del.) and CIT vs. Nova Promoters & Fin Lease (P) Ltd., [2012] 342 ITR 169 (Del.) (HC), it does not vitiate the impugned additions.
Learned counsel at this stage referred to assessee’s twin cross objections that the impugned addition based solely on the assessee’s bank statements is also not liable to be sustained. We first of all find that no such bank statement has been filed before us at the assessee’s behest to buttress the point that the Assessing Officer’s action amounts to double addition or it goes against the facts on record. Suffice to say, the Assessing Officer herein had recorded his reopening reasons based on the tangible material that the assessee’s
12 ITA.Nos.400 to 402/Nag./2019 And C.O.Nos.5 & 6/Nag./2020. taxable income liable to be assessed had escaped assessment. She has also not placed on record before us the corresponding reopening reasons as well which could suggest any illegality or infirmity, as the case may be, in the impugned additions. Her cross objection(s) are declined in very terms therefore.
It is noticed at the outset that these assessees’ twin cross objections C.O.Nos.05 & 06/NAG./2020 suffer from 102 day’s delay, is condoned since falling under Covid-2019 pandemic outbreak period between 15.03.2020 to 28.02.2022 as per hon’ble apex court’s directions in Cognizance for Extension of Limitation, In re 438 ITR 296 (SC) read with judgment in Cognizance for Extension of Limitation, In re 432 ITR 206 (SC) dated 08-03-2021 and 421 ITR 314, excluding the covid-19 pandemic outbreak period from for all intents and purposes under the limitation law.
“lead” 10. To sum-up, the Revenue’s appeal ITA.No.400/NAG./2019 succeeds and the assessee’s cross objection no.5/NAG./2020 is declined in above terms.
Same order to follow in Revenue’s latter twin appeals ITA.Nos.401 & 401/NAG./2019 which are accepted and assessee’s latter C.O.No.6/NAG./2020 is rejected, in very terms since involving identical facts.
13 ITA.Nos.400 to 402/Nag./2019 And C.O.Nos.5 & 6/Nag./2020. 12. To sum-up, these Revenue’s three appeals ITA.Nos.400, 401 & 402/NAG./2019 are allowed and assessee’s C.O.Nos.05 & 06/NAG./2020 are dismissed in above terms. A copy of this common order be placed in the respective case files.
Order pronounced in the open Court on 25.10.2023.