Deepakbhai H. Amarseda,, Surat vs Assessee

सुनवाई क तार ख/ Date of Hea ring : 21/11/2014 घोषणा क तार ख /Date of P ronouncement: 16/01/2015

आदेश /O R D E R

PER MUKUL Kr. SHRAWAT, JUDICIAL MEMBER :

This Misc. Application has been filed on 4th October, 2013 and the applicant has stated that vide paragraphs 6 and 7 of the order of the Tribunal dated 10.05.2013 has confirmed protective assessment made in the hands of the assessee. However, according to this application the prayer of the applicant is that the Tribunal was required to give a final finding on the fact whether a substantive assessment should have been made in the hands of the assessee or not. Relevant portion of the M.A. is reproduced below:

"3. It is clear from the above that the order of the Hon'ble C.I.T.(Appeals) has been upheld on the ground that the addition made protectively in the hands of the Applicant is valid though it has been stated that if the addition made substantively in the hands of Shri Mukesh Amarseda is confirmed, the MA No.182/Ahd/2013 in ITA No.694/Ahd/2010 Deepakbhai H. Amarseda Vs. ITO, Ward-9(1), Ahmedabad For A.Y. 2003-04 -2- addition made protectively in the hands of the Applicant will not survive. Thus, the addition made has been confirmed on protective basis.

4. It is strongly submitted that same income cannot be assessed twice in law and the Hon'ble Income Tax Appellate Tribunal being the final fact finding authority cannot confirm the assessment on protective basis.

5. The reliance is placed on the decision of Allahabad High Court in the case of 64 1TR 428, wherein it has been held as under:

"Held further, though it might be open to an Income-tax Officer to make a protective assessment, it is not open to the Income-tax Appellate Tribunal, which is the final court of fact, to make a protective order. The Act requires the Tribunal to give final findings of fact which, in this case, can only mean that it must find, as a fact, that the impugned sum was the income of the assessee and of no one else. When the Tribunal refused to give any such finding, it is not possible for the Tribunal to confirm such an assessment, albeit under section 34(1)(a).

Obiter. - What the Tribunal ought to have done in a case like this was to hear both the appeals together, and, finally determine as to whether the impugned sum was, if at all, the income of the husband or the wife."

The above decision has been approved by Madhya Pradesh High Court in the case of Smt. Dayabai vs. CIT -154 ITR 248, wherein it has been held as under:

"Held, that the same income cannot be assessed twice in law. The income from the matinee show business had been assessed both in the hands of the assessee firm as also on D which, is law, was not permissible. Therefore, the Tribunal was not justified in confirming the protective assessment on D."

6. In view of the above, the order passed by 'C Bench of the Income Tax Appellate Tribunal deserves to be modified so as to give its final conclusion on the issue whether the income is to be assessed in the hands of the Applicant on protective basis, for which act of kindness, the Applicant shall remain ever grateful."

2. The Applicant has placed reliance on the decision of Smt. Dayabai Vs. CIT, 154 ITR 248 (MP) and an another decision of Hon'ble Allahabad High Court pronounced in the case of Smt. Hemlata Agarwal Vs. CIT, 64 ITR 428 (Alld.) for the legal proposition that the income cannot be assessed twice and that the Tribunal being a "final Court of MA No.182/Ahd/2013 in ITA No.694/Ahd/2010 Deepakbhai H. Amarseda Vs. ITO, Ward-9(1), Ahmedabad For A.Y. 2003-04 -3-

fact" cannot make a protective order. Hence, the prayer is that the order of the Tribunal is to be modified and to give a final verdict about the correctness of the assessment made protectively in the hands of the assessee.

3. For reference, the Applicant has also reproduced paragraphs 6 and 7 of the order of the Tribunal reproduced below:

"6. Aggrieved by the order of the learned C1T(A), the assessee is now in appeal before us. The only submission advanced by the learned AR before us was that since the learned AO had substantively made addition in the hands of Shri Mukesh Amarseda, the addition made protectively in the hands of the assessee will not survive. The learned DR relied on the order of the learned AO and the learned CIT(A) before us.

7. After hearing both the sides and perusing the materials on record we find that it is premature to adjudicate on the submission of the learned AR at this stage. Once, the case reaches finality with respect to addition made substantively in the hands of Shri Mukesh Amarseda, consequently, the addition made protectively in the hands of the assessee would not survive. Further, from the survey conducted on Shri Pankaj Danawala (C.A.) it is evident that the assessee was a conduit to raise capital for various other parties as stated herein above. In these circumstances, we do not find any infirmity in the order of the learned CIT(A), hence, we hereby confirm the same."

4. From the side of the Applicant, learned AR, Mrs. Arti N. Shah appeared and pleaded that an assessment was made on the assessee vide an order u/s.144 r.w.s. 147 of the IT Act, dated 28.08.2008 and the income of Rs.2,30,858/- was assessed protectively in the hands of the assessee. The AO has also given a finding that the impugned income of Rs.2,30,858/- is required to be substantively added in the case of Sri Mukesh Amarsed. The Argument of Mrs. Shah is that the Tribunal being a final fact finding authority should have first ascertained the correct position of substantive assessment instead of confirming the protective MA No.182/Ahd/2013 in ITA No.694/Ahd/2010 Deepakbhai H. Amarseda Vs. ITO, Ward-9(1), Ahmedabad For A.Y. 2003-04 -4-

assessment made in the hands of the assessee. Mrs. Shah has placed strong reliance on the order of the Smt. Hemlata Agarwal (supra).

5. On the other hand, from the side of the Revenue, learned Sr.D.R. Mr. M.K. Singh has pleaded that the Tribunal has not passed an order given direction to assess the impugned income in the hands of the assessee on protective basis. Rather, it was already decided by the AO to assess the said income protectively in the case of the assessee, but simultaneously the AO has held that the income is to be assessed substantively in the hands of one Sri Mukesh Amarseda. Therefore, learned DR has pleaded that the case law cited are not applicable on the facts of the case.

6. We have heard both the sides. We have perused the records available before us in the light of the case law cited. Facts of the case have revealed that a survey was conducted u/s.133A in the case of one Sri Pankaj Danawala, C.A. and thereupon it was found that the assessee was one of the benamidar of the group identified as "Sri Mukesh Amarseda Group". This group was the beneficiary of the bogus capital which were found to be created on papers by Sri Pankaj Danawala, C.A. As a result of survey, it was found that the said Chartered Accountant was forming fictitious capital by creating certain files and that capital was shown as unsecured loans to certain groups who were in requirement of "white capital fund". All these facts were duly recorded in the order referred for our perusal. With this background, the assessment was made on protective basis in the hands of the assessee and substantively assessed in the hands of the said group who was the beneficiary of this MA No.182/Ahd/2013 in ITA No.694/Ahd/2010 Deepakbhai H. Amarseda Vs. ITO, Ward-9(1), Ahmedabad For A.Y. 2003-04 -5-

manipulative arrangement. Therefore, one thing is clear that the Tribunal was not the authority who has directed the AO to assess the impugned income in the hands of the assessee on protective basis but it was done by the AO himself and that action of the AO was also confirmed by the learned CIT(A).

6.1 It is true that in the case of Smt. Hemlata Agarwal (supra) the Hon'ble Allahabad High Court has held that the Tribunal being a final fact finding body who give a finding about the correct position whether to be assessed on protective basis or on substantive basis and when the Tribunal has refused to give such finding then the confirmation of protective assessment by the Tribunal cannot be upheld. Keeping this legal position in mind we have inquired during the course of the proceedings to place on record certain evidences such as the Assessment Order made on substantive basis in the hands of Sri Mukesh Amarseda Group so that no double taxation could be made, but even on asking no such information was placed before us. It is also true that we are the final fact finding authority, but facts are required to be placed on record by the litigants appearing before us. In the absence of such disclosure of basic facts the Tribunal is handicapped to give any such finding on fact. So the alternate recourse left is to give a finding on the basis of the records available; as also to protect the interest of the litigants; either Assessee or the Revenue Department. If any of the party before us is aggrieved then it is their duty to place such evidence to substantiate the claim which can also be appreciated by the Tribunal so as to give a clear finding on facts. Therefore in the case of Smt. Dayabai (supra) it was held by Hon'ble Madhya Pradesh High Court that when the substantive assessment has MA No.182/Ahd/2013 in ITA No.694/Ahd/2010 Deepakbhai H. Amarseda Vs. ITO, Ward-9(1), Ahmedabad For A.Y. 2003-04 -6-

been finalized in the hands of one assessee then there is no reason to assess that income twice in the hands of another assessee that too on protective basis. So the first requirement is to establish that a substantive assessment has been finalized in either of one hand. In the absence of such evidence the right recourse available is to allow the Revenue to continue with the protective assessment and when the correct position of the assessment is finalized; then not to tax the same income twice. This was exactly pronounced by the Tribunal. We, therefore, find no fallacy in the judgment given by the Respected Co-ordinate Bench in the order dated 10.05.2013, which is not to be disturbed, thus resulted into dismissal of this Application.

7. In the result, the present Misc. Application is dismissed.

Sd/- Sd/- (ANIL CHATURVEDI) (MUKUL Kr. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 16/01/2015 Prabhat Kr. Kesarwani, Sr. P.S. आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आयु त / Concerned CIT 4. आयकर आयु त(अपील) / The CIT(A)-III, Ahmedabad

5. वभागीय त न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड फाईल / Guard file.

आदेशानुस ार / BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad