Mansukh Timbadia Vs ACIT (ITAT Pune)
In this case scrutiny of entries of seized loose papers reveals that the transactions noted thereon were not genuine and have no evidentiary value for the reason no clear details concerning the AY consideration are ascertainable as rightly pointed by the ld. AR as it establishes estimations only. This is apparent from the impugned order that the CIT(A) recorded a finding that the transaction noted in the seized papers as relied on by the AO were not genuine. Therefore, in our opinion, there was no document to show the payment of such a huge cash payment of Rs.34,36,00,000/- and the evidence of a third party which was retracted is clearly inadmissible and insufficient to prove any such huge cash payment. Coming to the vehement arguments of ld. DR, a mere suspicion that the real estate business are prone to take part on sale amount in cash is not a ground to accept such a huge cash payment was received by the assessee specially when such payment had not been supported by any other evidence.
26. There had been no corroborative evidence and no adverse inference could be drawn against the assessee in terms of alleged entries of loose papers. Unless it is established on record that as a matter of fact the cash payment as alleged by the respondent-revenue did pass to the assessee from M/s. Krupa Land Pvt. Ltd. it cannot be said respondent-revenue had any right to make any addition. On perusal of the statement of Dilip Dherai at Page No. 135-14 1 of paper book and no conclusion can be drawn that the entries in loose papers belongs to assessee representing cash payment. Even the CIT(A) clearly held in the impugned order at para 3.11 at page 20, that the AO squarely failed to carry out necessary investigation/enquiries from the buyer M/s Krupa Land, meaning thereby, the CIT(A) also discredited the entries alleged to have been found in the seized loose papers of annexure 1-4, as dumb documents. When the seized loose papers Annexure 1 to 4 by itself, in our opinion, did not indicate receipt of alleged cash payment and no relevancy to the year under consideration, therefore, addition confirmed by the CIT-A to the extent of Rs.3,33,06,667/- is not justified. Thus, ground Nos. 1 to 3 and connected ground no.5 raised by the assessee are allowed. Ground No. 4 requires no adjudication in view of our decision in additional ground.
FULL TEXT OF THE ORDER OF ITAT PUNE
These two appeals by the assessee and Revenue against the common order dated 30-10-2015 passed by the Commissioner of Income Tax (Appeals)-2, Thane, [‘CIT(A)’] for assessment year 2008-09.
2. We find the issues raised in both the appeals are similar basing on the same identical facts. Therefore, with the consent of both the parties, we proceed to hear both the appeals together and to pass a consolidated order for the sake of convenience.
3. First, we shall take up appeal of assessee in ITA No. 1713/PUN/2015 for A.Y. 2008-09.
4. The ld. AR, Smt. Hiral Sejpal submits that the assessee raised additional ground No. 1 questioning the validity of reassessment u/s. 147 of the Act is invalid for non-issuance of notice u/s. 143(2) of the Act. She submits that the said additional ground purely raises a question of law and no facts are requires to be brought on record and prayed to admit the same and adjudicate the additional ground of appeal as preliminary issue and placed reliance in the case of National Thermal Power Corporation Vs. CIT reported in 229 ITR 383 (SC). Upon hearing both the parties and as no objection as reported by the ld. DR, we proceed to adjudicate the additional ground raised by the assessee as preliminary issue.
5. The ld. AR drew our attention to the paper book containing 99 pages and submits that the assessee filed return of income on 27-12-2008 and the same was processed u/s. 143(1) of the Act vide intimation dated 15-02-2010 The ld. AR drew our attention to the Page Nos. 32 and 34 of the paper book and argued that the AO issued the said notices both dated 01- 05-2013 and no notice issued subsequent to the letter dated 18-01-2014 filed by the assessee requesting the AO to treat the original return filed in response to notice u/s. 148 of the Act. She argued that the AO failed to issue notice u/s. 143(2) of the Act after filing of return of income vide letter dated 18-01-2014 by the assessee in response to notice u/s. 148 of the Act and the issuance of notice u/s. 143(2) is mandatory. Non-issuance of notice shall invalidate the reassessment made u/s. 147 of the Act. She referred to the decision of Hon’ble Supreme Court in the case of ACIT Vs. Hotel Blue Moon reported in 321 ITR 362 (SC) and submits that omission on the part of assessing authority to issue notice u/s. 143(2) of the Act cannot be procedural irregularity and the same is not curable, requirement of notice u/s. 143(2) of the Act cannot be dispensed with. Further, drew our attention to the decision of Hon’ble High Court of Bombay in the case of Geno Pharmaceuticals Ltd. Vs. ACIT reported in 32 taxmann.com 162 and submits that the notice u/s. 143(2) is mandatory while adjudicating the assessment proceedings u/s. 148 of the Act and in the absence of which, the AO cannot proceed to make an inquiry on the return filed in compliance with the notice issued u/s. 148 of the Act. Further, she submits that the provisions u/s. 292BB are not applicable as it is a deeming section saves the AO in a case where the notice issued and there is a discrepancy as regards the service of the notice.
6. The ld. DR, Shri Sardar Singh Meena submits that the said assessment reopened on an intimation received from Central Circle and the AO issued notice u/s. 148 of the Act on 12-06-20 12 which was received by the assessee on 15-06-20 12. The ld. DR drew our attention to the provisions u/s. 148 of the Act and argued that the assessee required to file the return of income in response to notice u/s. 148 of the Act in prescribed time i.e. within 30 days. The ld. DR drew our attention to the chronology of events and submits that the notice u/s. 148 of the Act was issued on 12-06-2002 and the assessee has to file return within 30 days i.e. 12-07- 2012. The assessee did not file any return of income in response to notice u/s. 148 but the AO issued notice u/s. 143(2) and 142(1() both dated 07- 08-20 12 and passed assessment order on 18-03-20 14. He argued that if the assessee does not file return of income within 30 days and request the AO to treat the original return as in response to notice u/s. 148 beyond 30 days, the AO has to treat that no ROI filed. The ld. DR drew our attention to the letter dated 18-01-2014 and argued that the assessee requested the AO to treat the original ROI dated 30-12-2008 to be the ROI in response to notice u/s. 148 of the Act which is beyond 30 days from the date of service of notice u/s. 148 of the Act and no requirement of issuance of notice u/s. 143(2) of the Act is required in response to such letter dt:18-01-2014, the assessee is not entitled to raise non-issuance of notice u/s 143(2) of the Act. The ld. DR placed reliance on the order of Delhi Tribunal in the case of Rakesh Aggarwal Vs. ITO in MA 249/DEL/2020 in ITA No. 2461/DEL/2019 for A.Y. 2010-11 vide order dated 15-12-2020 and a decision of Hon’ble High Court of Madras in the case of Home Finders Housing Ltd. Vs. ITO reported in 404 ITR 61 1(Mad.).
7. Heard both the parties and perused the material available on record. We note that the assessee filed return of income u/s. 139(1) of the Act on 30-12-2008 which was processed u/s. 143(1) of the Act vide order dt: 15-02-2010. Thereafter, on receipt of information the AO reopened the assessment by issuing notice u/s. 148 of the Act on 12-06-20 12. The contention of ld. DR is that the assessee required to file return of income or a letter requesting the AO to treat original return as return of income in response to notice u/s. 148 of the Act, as the case may be, within 30 days from the date of receipt of said notice. Admittedly, there is no dispute with ld. AR that the assessee filed letter dated 18-01-2014 which is beyond 30 days from the receipt of service of notice u/s. 148 of the Act, therefore, according to Ld. DR, no notice u/s. 143(2) is required to be issued in response to such letter, the AO treating the original return as on record, rightly issued notice u/s. 143(2) and 142(1) both dated 07-08-2012. We find, as relied by the Sri.S.S.Meena, Ld.DR, the Delhi Tribunal in the case of Rakesh Aggarwal (supra) vide Para No. 8 held the onus of filing of ROI on the assessee is a responsibility which is cast upon him to be fulfilled by him, if he fails to take benefit of any of the provisions of law, the assessee cannot plea that the notice u/s. 143(2) should have been issued. In the present case, the assessee filed a letter dated 18-01-2014 requesting to treat the original return of income as in response to notice u/s. 148 of the Act. Since, the same is beyond specified time the AO cannot take cognizance of the same and proceeded with the assessment considering the notices issued u/sec 143(2)& 142(1) of the Act on 07-08-2012. Therefore, the contention of ld. AR that no notice u/s. 143(2) issued subsequent to the letter dated 18-01-2014 is not acceptable and rejected. Thus, the additional ground No. 1 raised by the assessee is dismissed.
8. Now, on merits, ground Nos. 1 to 3 raised by the assessee are relating to confirmation of addition on account of alleged cash receipts on sale of land to M/s. Krupa Land Ltd. That the issue raised in Gr.No’s 1to 3 by the assessee and grounds 1 & 2 raised by the Revenue in its appeal are interlinked involving the part relief granted by the CIT-A. Therefore, we make it clear, the discussion by us hereunder is applicable to Revenue appeal also.
9. Brief facts relating to the issue on hand are that a search and survey operation was conducted in the cases of Jai Corp Group on 05-03-2009 u/s. 132 of the Act. The said search was conducted on its employees and close associates involved in the process of acquiring land. According to the AO, plethora of incriminating evidences were gathered during search operations on many places and at the residence of Mr. Dilip Dherai. M/s. Krupa Land Ltd. is belonged to Jai Corp Group. The said company had purchased various lands from the assessee in Nevali village, the details of which mentioned here under:
