Deepika A. Mehta v. The DCIT, Central Circle-23, Mumbai
[Citation -2016-LL-0915-82]

Citation 2016-LL-0915-82
Appellant Name Deepika A. Mehta
Respondent Name The DCIT, Central Circle-23, Mumbai
Court ITAT-Mumbai
Relevant Act Income-tax
Date of Order 15/09/2016
Assessment Year 1992-93
Judgment View Judgment
Keyword Tags search and seizure operation • unaccounted investment • unexplained investment • interest expenditure • rectification order • cost of acquisition • levy of interest
Bot Summary: Year 1992-93 against order dated 20/01/2012 passed by the Ld. CIT(Appeals)-40 Mumbai whereby the Ld. CIT(A) partly allowed the assessment order passed by the DCIT, Central Circle 23, Mumbai passed u/s 144 r.w section 254 of the Income Tax Act,1961( in short the Act ) and ITA No. 6164/M/2012 for the Asst. In compliance of order dated 31/8/2005 passed by the ITAT in ITA No. 7308/M/2003, the assessing officer passed assessment order dated 22.12.2006, determining the total income of the assessee at Rs. 29,53,91,212/-. The said order was further challenged by the assessee and the order under challenge has been passed by the Ld. CIT(A) in the second round of appeal by the assessee. The coordinate Bench after hearing the rival submissions has set aside the impugned order and restored all the issues to the file of the AO to pass assessment de novo after affording reasonable opportunity of being heard to the assessee, observing as under: 4. In view of above facts and circumstances, we set aside order of the authorities below and restore the issue to the file of the assessing officer to pass assessment de novo after affording reasonable opportunity of being heard to the assessee and as per observations of hours made in the order is above. Since the coordinate Bench of the Tribunal has restored the identical issues to the file of the AO for fresh adjudication in the case of Harsh S. Metha, we, respectfully following the view taken by the coordinate bench, restore all the grounds except ground number 8 and 14 of the present appeal to the file of AO to pass assessment order afresh after affording reasonable opportunity of being heard to the assessee. ITA 6164/M/2012 for A.Y. 1992-93 This appeal has been filed by the assessee against order dated 09.8.2012 passed by the CIT(A)-40 Mumbai whereby the Ld. CIT(A) rejecting the objection raised by the assessee, directed the AO to enhance the income of the assessee by Rs. 42,49,266/- for the reason that M/s Vyas Vyas, C.A., appointed by the Special Court to audit the books of account as on 08.6.92 in the case of Harshad S. Mehta and other notified entities including the present appellant/assessee, has pointed out the difference between the balance of parties in books of account of late Harshad S. Mehta and the books of account of the respective notified entities.


IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI B.R.BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA No 1889/MUM/2012 Assessment Year: 1992-93 & ITA No 6164/MUM/2012 Assessment Year: 1992-93 Smt. Deepika A. Mehta. DCIT, Central Circle-23, 32, Madhuli, Dr. A.B.Road, 4th Floor, Aayakar Bhavan, Worli, Mumbai- 400018. M.K.Road, Mumbai- 400020. Vs. PAN:- ABNPM8231D (Appellant) (Respondent) Appellant by : Shri. Dharmesh Shah Respondent by : Shri. Dr. P. Daniel. Date of Hearing: 17/06/2016 Date of Pronouncement: 15/09/2016 ORDER PER RAM LAL NEGI, JM assessee has filed ITA No. 1889/M/2012 for Asst. year 1992-93 against order dated 20/01/2012 passed by Ld. CIT(Appeals)-40 Mumbai whereby Ld. CIT(A) partly allowed assessment order passed by DCIT, Central Circle 23, Mumbai passed u/s 144 r.w section 254 of Income Tax Act,1961( in short Act ) and ITA No. 6164/M/2012 for Asst. year 1992-93 against order 9.8.2012 passed by CIT(A)-40, Mumbai, u/s 154 of Act. Since both appeals pertain to same assessee for same assessment year, same were heard together and are being disposed of by this common order for sake of convenience. 2 ITA No 1889, & 6164/MUM/2012 Assessment Year: 1992-93 ITA 1889/M/2012 for A.Y. 1992-93 2. Brief facts of case are that appellant/assessee is relative of Late Shri. Harshad S. Mehta involved in securities scam. search and seizure action u/s 132 of Act was carried out at premises of appellant/assessee on 27/09/1990. During course of search large number of documents were seized. second search and seizure operation was also carried out on 28/02/1992. During course of second search also large number of documents and valuables were seized. Since appellant/ assessee had not filed her return of income for assessment year under consideration within prescribed time, assessment proceedings were carried out pursuant to search action. Ultimately, assessment was completed u/s 144 of Act on 28/02/1995 determining total income at Rs. 27,63,93,984/-. 3. assessee challenged assessment order before Ld. CIT(A). CIT(A) vide order dated 19/03/2003 granted only partial relief to assessee. Feeling aggrieved by said order, assessee filed second appeal before ITAT. ITAT after hearing parties considered it fit to set aside matter back to file of AO to pass assessment order afresh. In compliance of order dated 31/8/2005 passed by ITAT in ITA No. 7308/M/2003, assessing officer passed assessment order dated 22.12.2006, determining total income of assessee at Rs. 29,53,91,212/-. said order was further challenged by assessee and order under challenge has been passed by Ld. CIT(A) in second round of appeal by assessee. assessee has challenged impugned order on following effective grounds:- 3 ITA No 1889, & 6164/MUM/2012 Assessment Year: 1992-93 1. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in not appreciating that Assessing Officer has not complied with principles of natural justice either during course of assessment proceedings or during course of remand proceedings. 2. Learned Commissioner of Income-tax (Appeals) has erred in law and in facts in not determining income based on final books of account thereby confirming manner of determination of income by Assessing Officer. Learned Commissioner of Income-tax (Appeals) ought to have accepted book results shown by appellant. 3. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in not appreciating that correct quantity of purchase and sale of shares should be adopted while determining income of assessee. 4. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in upholding working of unexplained investments relying on various sources of information. 5. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in granting partial credit in respect of purchases made by appellant and rejecting balance part on ground that evidences thereof were not filed during original assessment proceedings but only during set aside proceedings. 6. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in upholding determination of unaccounted investment as per Annexure A-1 of assessment order amounting to Rs. 24,85,56,416/-on basis of information collected from various companies allegedly showing shareholding of appellant without appreciating that copies of said letters/information was neither provided to appellant during assessment proceedings nor during remand proceedings. 7. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in confirming value of unexplained investment based on average of market rates as on 1.4.1992 4 ITA No 1889, & 6164/MUM/2012 Assessment Year: 1992-93 without appreciating that value of investment ought to have been determined at cost of acquisition based on dates of purchase. 8. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in confirming income from dividend and interest at Rs.67,41,033/-. 9. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in confirming addition of Rs. 29,343/-0n account of unexplained receipts. 10. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in confirming addition of Rs. 2,52,252/-on account of profit from sunrise enterprise. 11. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in confirming disallowance of deduction on account of interest expenditure claimed by appellant. 12. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in not granting set off of addition on account of source against application of such source based on telescoping theory. 13. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in confirming levy of interest u/s 234A and 234B of Act. 14. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in not appreciating that provisions of s.220(2) of Act cannot be invoked in case of notified entity. 4. At very outset, Ld. Counsel for assessee submitted that grounds raised in present appeal are identical to grounds raised in case of Hitesh S. Mehta, ITA No 538/M/2012 for assessment year 1992-93 decided on 01.5.2013 by Mumbai Tribunal. Therefore, present appeal is squarely covered by order passed by ITAT Mumbai in case Hitesh S. Mehta (supra). On other hand Ld. Departmental representative (DR) 5 ITA No 1889, & 6164/MUM/2012 Assessment Year: 1992-93 relying on findings of authority below, submitted that there is no infirmity in order passed by Ld. Ld. CIT(A). 5. We notice that except ground No 8 and 14 of present appeal, all grounds are identical to grounds raised by assessee in case of Hitesh S. Mehta (supra). coordinate Bench after hearing rival submissions has set aside impugned order and restored all issues to file of AO to pass assessment de novo after affording reasonable opportunity of being heard to assessee, observing as under: 4. We have heard rival submissions and consider them carefully. We have also perused copies of order of tribunal in case of Smt. Pratima Metha and assessment passed in first round. 5. After considering all relevant material, we found that matter should go back to file of Assessing Officer to pass afresh order. It is seen that for rejecting books of account, AO has not given any valid reasons as no specific defect has been pointed out in books of account, therefore in our view Assessing Officer should go through books for determining income on basis of books of accounts. Assessing Officer has to bring on record specific evidence or defect to prove falsity of books of account is no falsity has been proved in assessment order passed by AO. Besides this department has to provide all details and material on which basis addition have been made earlier. If such material is disputed by assessee then in our view correctness of such material has to be examined as per provision of law. We are not convinced with argument of Ld. DR that assessee can collect information from parties from where Assessing Officer has obtained copies on which basis addition have been made. Therefore assessing officer is directed to provide copies of all 6 ITA No 1889, & 6164/MUM/2012 Assessment Year: 1992-93 information on which basis, AO wanted to made additions in hands of assessee. If AO does not provide material then in our view addition cannot be made. In view of above facts and circumstances, we set aside order of authorities below and restore issue to file of assessing officer to pass assessment de novo after affording reasonable opportunity of being heard to assessee and as per observations of hours made in order is above. We order accordingly. 6. Since coordinate Bench of Tribunal has restored identical issues to file of AO for fresh adjudication in case of Harsh S. Metha (supra), we, respectfully following view taken by coordinate bench, restore all grounds except ground number 8 and 14 of present appeal to file of AO to pass assessment order afresh after affording reasonable opportunity of being heard to assessee. Accordingly, ground Nos. 1 to7 and 9 to 13 of appeal are allowed for statistical purpose. 7. As regards ground No 8 we find no merit in contention of assessee that learned CIT (A) has erred in law and in facts in confirming income from dividend and interest at Rs. 6 741033/ . As pointed out by Ld. CIT(A) appellant/assessee has produced books of account before assessing officer in set-aside proceedings and AO after going through same in light of contention of assessee determined dividend and interest income in question. However, no evidence to rebut findings of AO was produced either before Ld. CIT(A) or before us. Therefore, we have no reason to reverse finding of CIT(A). Hence we uphold findings of Ld. CIT(A) and dismiss this ground of appeal of assessee. 7 ITA No 1889, & 6164/MUM/2012 Assessment Year: 1992-93 8. So far as ground number 14 is concerned since all grounds except ground No. 8 are being set aside to file of AO for fresh adjudication, AO may examine same in accordance with law in set aside proceedings. ITA 6164/M/2012 for A.Y. 1992-93 This appeal has been filed by assessee against order dated 09.8.2012 passed by CIT(A)-40 Mumbai whereby Ld. CIT(A) rejecting objection raised by assessee, directed AO to enhance income of assessee by Rs. 42,49,266/- for reason that M/s Vyas & Vyas, C.A., appointed by Special Court to audit books of account as on 08.6.92 in case of Harshad S. Mehta and other notified entities including present appellant/assessee, has pointed out difference between balance of parties in books of account of late Harshad S. Mehta and books of account of respective notified entities. 2. assessee has challenged impugned order on following effective grounds:- 1. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in making addition of Rs. 42,49,266/- and thereby enhancing assessment vide impugned order u/s 154 of Act which is unsustainable. 2. Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in determining alleged difference between two accounts at Rs. 42,49,266/- and treating same as income of appellant. 3. Ld. Counsel for assessee submitted that issue raised in present case is identical to issue raised in case of appellant s mother- in-law, Smt. Rasila S. Mehta in ITA No 3352/Mum/2012 dated 07.6.2013 for 8 ITA No 1889, & 6164/MUM/2012 Assessment Year: 1992-93 A. Y. 1992-93 and Mumbai tribunal has remanded identical issue to record of AO for consideration and adjudication. 4. In view of fact that coordinate Bench has remanded back identical issue to file of AO for fresh adjudication, we follow view taken by coordinate Bench in case of Smt. Rasila S. Mehta (supra) and set aside issue urged in present appeal against rectification order passed by Ld. CIT(A) to file of AO for consideration and fresh adjudication after affording reasonable opportunity of being heard to assessee. In result, first appeal is partly allowed and second appeal is allowed for statistical purposes. Order pronounced in open court on 15th Sept.,2016 Sd/- Sd/- (B.R.BASKARAN) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 15/09/2016 Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A)- 4. CIT 5.DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// / (Dy./Asstt. Registrar) , ITAT, Mumbai Pramila Deepika A. Mehta v. DCIT, Central Circle-23, Mumbai
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