TMI Blog2020 (12) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... is challenged before Ld. CIT(A) is the same issue in which Ld. PCIT has reviewed u/s 263 PCIT has no power to review the order passed u/s 143(3) and the same order was appealed and adjudicated u/s 254 of the Act. Therefore, we are in agreement with the submission of assessee and we quash the order passed u/s 263 of the Act without going into any merits of the case since Ld. CIT(A) has already considered the merits of this case and passed an order in this regard. Accordingly, the grounds raised by the assessee in this regard are allowed. PCIT has initiated the proceedings u/s 263 of the Act and treated the order passed by AO u/s 153C r.w.s. 143(3) of the Act for the AY 2014-15 and 2015-16. We notice that the issue under consideration is exactly similar to the issue raised in Assessment Year 2016-17. PCIT has reviewed the assessment order which was passed on 11.12.17. It is fact on record that search and seizure operation was initiated on 25.06.15 and assessment orders under consideration for Assessment Year 2014-15 and 2015-16 were assessed u/s 153C and combined order for all the assessments including Assessment Year 2016-17 were passed on the same date 11.12.17. Therefore, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay only a fee of ₹ 500 per appeal. Therefore, the assessee has remitted excess appeal fees to the extent of ₹ 28,500/- and he brought to our notice decision of Coordinate Bench of ITAT, Amritsar in the case of Kiranjeet Singh MANU/IS/5007/2006 : (2006) 101 TTJ (Amritsar). 6. We notice that assessee is required to pay fees of ₹ 500 per appeal u/s 253(6)(b) of the Act, therefore, the assessee is required to pay only ₹ 1500 for filing the appeal against the order u/s 263 whereas, he has remitted ₹ 30,000/- instead of ₹ 1,500/-. It is directed accordingly to Registry that the excess appeal fees paid was liable to be refunded either by the way of adjusting the same against outstanding demand if any or by way of granting of refund within a period of one month from the date of receipt of the order in appeal. 7. Now coming to the facts of the lead case i.e. ITA No. 1579/Mum/2020, accordingly we are extracting the facts from this appeal. The brief facts of the case are, assessment order u/s 143(3) of the Act was passed by AO on 11.12.17 assessing the total income of the assessee at ₹ 9,70,55,250/- against the returned income of ₹ 5,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015-16. However, the balance was outstanding even as on 28.06.18 as mentioned in the ITSC order in the case of M/s. Ahuja Group. Further, the interest of ₹ 46,32,534/- was accrued on the advance outstanding in the beginning of financial year relevant to Assessment Year 2016-17. This issue was not examined by the AO for Assessment Year 2016-17. Considering the above facts, Ld. PCIT issued notice u/s 263 of the Act with reference to above facts recorded in the notice. 9. In response to the above notice, assessee submitted that reply filed on 20.05.2019 and 09.10.2019 may be taken on record. Ld. PCIT observed that assessee tried to explain the entire transaction of flat booking. In the submission, it was claimed that a flat was booked in Ahuja Towers, Prabhadevi, bearing flat no. A-41 for ₹ 2.01 crores. In January 2009, the balance amount of ₹ 16 crores was to be paid when flat was ready for possession. At the time of taking possession of this flat, assessee and the builder agreed to shift the booking to another apartment (B-48) of the same size in the same complex. It was claimed by the assessee that in the opinion of Developer, the transaction may be treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inafter referred to as the Pr. CIT) erred in framing an order dated 16.03.2020 under section 263 of the Act to set aside the order of the Deputy Commissioner of Income-tax, Central Circle 6(2), Mumbai (hereinafter referred to as the Assessing Officer), by holding that the assessment order dated 11.12.2017 passed by the Assessing Officer under section 153C r.w.s. 143(3) of the Act is erroneous and prejudicial to the interest of the Revenue. Consequently, the Pr. CIT has erred in directing the Assessing Officer to pass a fresh assessment order. The appellant contends that the Pr. CIT has not appreciated the facts of the case, inasmuch as the basis of his conclusion are the same documents which has been already been considered by the Assessing Officer to make the addition in his assessment order for income-tax assessment year 2016-17, (and such addition was subsequently deleted by the CIT(A)), and thus, the impugned order passed by the Pr. CIT under section 263 is bad in law. The appellant further, contends that the said document relied upon by the Pr. CIT permeates through the relevant previous years namely, years ended 31st March 2014 to 2016. The Assessing Officer in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, records, corresponding bank entries that tally with the Appellant's statement, reconciliations and corroborative evidences, and statement on oath by the Developer's staff, all consistently and conclusively prove that the Appellant's stand is correct. The appellant craves leave to add to, alter and/or amend the aforestated ground of appeal. 14. Before us Ld. AR appearing on behalf of the assessee submitted written submission and for the sake of convenience, it is reproduced below:- 2.1 The assessee is a salaried person and has declared income from salary, long-term capital gains, and interest income. The return of income was e-filed on 28th July 2016 declaring a total income of ₹ 5,94,05,250/-. 2.2. The assessee had booked a flat namely, Flat 41, A-Wing, Ahuja Tower, Rajabhau Desai Marg, Prabhadevi, Mumbai 400025 in January 2009, by making a payment of booking amount of ₹ 2.01 crore. 2.3. In 2014, it was required by the assessee to pay the balance amount of ₹ 16 crore and take possession of the flat. 2.4. However, at this stage, Ahuja Property and the assessee negotiated to shift the booking to another flat namely, flat n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a personal secretary and assistant to key persons of the Ahuja group handling post-sales activities. 2.10. The statement on oath of Ms Merlin Fernandes was recorded by the search party on 26.06.2015 and 28.06.2015-refer page nos. 144-145 and 146 to 150 of the paper book-relevant question is Q. 11 on page no 145 of the paper book and Qs. 5 to 8 on page no 147 to 150 of the paper book 2.11. The statement on oath of Mr. Jagdish Ahuja recorded by the search party on 28.06.2015-refer page nos. 151-152 and 153 to 156 of the paper book 2.12. During assessment proceedings- 2.12.1. The Assessing Officer issued a notice dated 12.10.2017 requiring the assessee to submit his response in respect of the ledger account found in the parallel books of account maintained by the Ahuja group which contained some cash loan transactions with the assessee-refer page nos. 138 to 141 of the paper book-relevant points are point nos. 10 to 15 (a) Point no 10 of the said notice-refer page no 139 of the paper book- During the search and seizure action conducted in M/s. Ahuja group certain loose papers were found and seized and marked as page Nos. 1 to 5 of Annexure 1 from the table of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roup were planning to take any payment by cash is neither of any meaning, nor of any relevance to our clients. That may have or may not have been their plan we do not know. As far as our client is concerned, the entire bill as per the agreement of ₹ 27.50 cr been settled by our client by cheque, our client's bank statement reflect the same entries, and this tallies with the statement of Ms. Merlin. Our client being a salaried employee, has no source of such income............ Hence the statement from Merlin that Mr. Vaidyanathan has paid the full consideration of ₹ 27.50 cr. by cheque for the flat at B-48, exactly tallies with the payments made from our client's side as per our bank statement. Again, of the ₹ 27.50 Crores, ₹ 7.00 crore as margin money has been paid from his bank account, and ₹ 20.50 crore has been paid by taking loan from ICICI Bank, and hence it is clear that the entire payment of ₹ 27.50 crore paid to the Ahuja Group has been made from fully accounted sources. From the above- As per the response of Ms Merlin of Ahuja group quoted above in verbatim as recorded by the search party, it is an esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book) has stated that In the above statement, Ms. Fernandez has said that Mr. Vaidyanathan had booked a flat in A-41 and paid ₹ 2.01 crores at the time of booking and the company paid ₹ 10.0 crores to Mr. Vaidyanathan. This statement is correct and the explanation for the same is as follows:............... (Entire facts of the case as mentioned in point no 2 above is stated (hence, for the sake of brevity, the assessee is not reproducing the same here; though the letter is enclosed in the paper book at page nos. 157 to 170-relevant portion being at page nos. 162 and 163). From the above- It will be appreciated that- i. the entire amount on booking of first flat A 41 has been paid by cheque. ii. the amount of ₹ 10 crore on cancellation of A 41 has been received by cheque. iii. the down payment for the new booking of ₹ 7 crore has been paid by cheque. iv. and the balance of ₹ 20.5 cr has been paid by obtaining loan from a bank and hence, has been paid by cheque/bank transfer, and v. the corpus charges of ₹ 1.58 cr has been paid by cheque. Thus, the statement made by Merlin with regard to payments made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish that her statement is correct and tallies with us. 2. Our assessee has been regularly filing his return and paying taxes for over the 27 years and his credentials as a taxpayer are established beyond doubt. Analysis of his Bank Account for last 6 years clearly show that there was normal withdrawal of day to day expenses over that period. Most of his expenses are paid by cheques and credit card which are charged to his bank account. Details of all expenses and withdrawals have been provided in F1 to F8. Apart from general household expenses, EMI payments, payments to drivers, maids and charity, there are no other significant withdrawals from his bank account. In fact, during the entire period of FY 10 to FY 16, only ₹ 17,29,4471/- has been withdrawn from his bank account. It is not logically possible for our client to generate and pay cash to Ahuja developers. Their statement is baseless and not true. Errors in the Statement of Mr. Jagdish Ahuja-The assessee points out that there are material errors of fact in the statement of Mr. Ahuja vis a vis the actual documented transactions- 1. In his statement, he has stated that the new property is purchased in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised by the Assessing Officer in his show cause notice dated 31.10.2017 during the assessment proceedings for income-tax assessment year 2016-17, post-search on the Ahuja group in section 153C proceedings and a sum of ₹ 3,76,50,000 was added by him. There is no new information that has come to the notice of the Revenue for which a show-cause notice issued by the Pr. CIT under section 263; the basis of his conclusion is the same seized document which has been considered by the Assessing Officer to make the addition in his assessment order for income-tax assessment year 2016-17. Thus, the subject matter of revision is already considered by the Assessing Officer. As such, to make the same matter a subject matter of revision on the basis of same set of information is bad in law and hence, the impugned order of the Pr. CIT needs to be vacated for this reason alone. 3.2. Erroneous -The date of the order of the Assessing Officer is 11.12.2017; and the date of the order of ITSC is 28.06.2018 which is subsequent to the date of the assessment order, and the basis of the Pr. CIT to conclude that the order of the Assessing Officer is erroneous is the said order of the ITSC-inasmuc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to such matters as had not been considered and decided in such appeal Reliance is placed on the decision of the Honourable jurisdictional High Court in the case of Ranka Jewellers v. Addl. CIT reported in MANU/MH/0364/2010 : 328 ITR 148 (Bom) (b) The order of the CIT(A) deleting the addition made by the Assessing Officer is accepted by the Revenue as no appeal has been preferred to the Tribunal on this issue. The order of the CIT(A) is dated 21.09.2018 which would have been received in the office of the Pr. CIT in the month of October, 2018, and the period of 60 days to file appeal to the Tribunal elapsed by December, 2018; the notice of the Pr. CIT is dated 11.04.2019. Thus, the decision of the CIT(A) that was accepted by the Revenue and had attained finality on the subject matter, is now sought to be disturbed by the Pr CIT by invoking the provisions of section 263-this cannot be done inasmuch as the merger theory would apply and the order of the Assessing Officer is merged with the order of the CIT(A). 3.5. Refer Notice of the Pr CIT u/s 263 There are contradictions in the said notice 3.5.1. read 2nd para of the notice which states that Wherein it is seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case where two opinions on same facts are possible and the Assessing Officer has taken one plausible view-thus, the Pr. CIT is precluded to invoke the provisions of section 263 of the Act. 3.8. Refer Notice under section 263-4th para re taxability of interest ₹ 46,32,534/- on outstanding balance as at 28.06.2018 3.8.1. The said entries have no basis as the same are at Ahuja group, that too in parallel books of account, not acknowledged by the appellant, unreconciled with the transactions entered with the assessee and also at variance with the statement of Ms Merlin. Such entries thus, have no evidentiary value. 3.8.2. Further, Mr. Ahuja in his statement on oath-response to Q. 46 has stated that ........ Since the flat was cancelled, we paid him back the sum of approximately ₹ 6 crore in cheque inclining interest amount......... 3.9. Explanation 2 to section 263-not applicable-clause (a)-the assessment order could be deemed to be erroneous if an order was passed by the Assessing Officer in favour of the assessee without making enquiries. However, in the case on hand, the Assessing Officer has done detailed enquiries during the course of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady reckoner value of Rs. ____ which is the basis for payment of stamp duty; the value is government recognised. Thus, there can be no on-money in such a situation. 3.13. Refer statement on oath of Mr. Jagdish Ahuja-Q. 46 Q-46. In the Statement on oath of Miss Merlin Fernances (sic Fernandes) under section 132(4) of the Income-tax Act 1961, recorded on 26/06/2015, it was stated that there were talks of receiving ₹ 3.5 crores in cash from Shri V. Vaidyanathan. the noting of which is also made by her on page no. 4 of loose papers folder (Annexure A-l) found and seized from the present premises........ 3.13.1. The Officer is not stating the true facts of the question and the response of Ms Merlin to Mr. Ahuja-please refer the statement on oath of Ms Merlin-Q. 11 (on page 145 of the paper book)-the figure mentioned is ₹ 3.73 crores. Thus, really, the loose paper mentions the figure of ₹ 3.73 crore, the Officer says ₹ 3.50 crore and Mr. Ahuja tows the line of the Officer and says that he has received approximately ₹ 3.50 crore. Thus, there is no truth in the averment of receipt of cash by Ahuja group from the appellant. 3.14. It is we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Ahuja Group) for the purchase of flat and accordingly, AO made the additions. We notice that the assessment order passed by the AO on 11.12.17 and the Ld. PCIT heavily relied on the orders of ITSC passed u/s 245D(4) of the Act dated 26.06.18. It is a facts on record that Ld. PCIT initiated the proceedings u/s 263 of the Act only on 11.04.19 by issuing notice and ITSC has passed the order on 26.06.18, therefore Ld. PCIT observed his findings from the order of ITSC only after 26.06.18 and initiated the proceedings subsequently. It is relevant to note that this assessment order was passed on 11.12.17, therefore the AO was never aware of the fact that what M/s. Ahuja Group will disclose before the Settlement Commission. Further, AO completed this assessment when all the cases relevant for this search and seizure action was centralized and all the transactions under consideration were investigated under coordination basis for all the issues relating to M/s. Ahuja Group and assessee. Based on the information available at the time of assessment proceedings alone was considered by the AO to complete the assessment. It is not humanly possible for the AO to project/expect what M/s. Ahuja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, the grounds raised by the assessee in this regard are allowed. 19. We further notice that Ld. PCIT has initiated the proceedings u/s 263 of the Act and treated the order passed by AO u/s 153C r.w.s. 143(3) of the Act for the AY 2014-15 and 2015-16. We notice that the issue under consideration is exactly similar to the issue raised in Assessment Year 2016-17. In our considered view, Ld. PCIT has reviewed the assessment order which was passed on 11.12.17. It is fact on record that search and seizure operation was initiated on 25.06.15 and assessment orders under consideration for Assessment Year 2014-15 and 2015-16 were assessed u/s 153C and combined order for all the assessments including Assessment Year 2016-17 were passed on the same date 11.12.17. Therefore, in our considered view, AO has considered the facts on records and taken a view on the transactions with M/s. Ahuja Group in Assessment Year 2016-17 and also made the additions in Assessment Year 2016-17 after analyzing the same sets of documents which was reviewed by Ld. PCIT now. Therefore, Ld. PCIT cannot review the order which was already verified and investigated by AO at the time of assessment and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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