Kiran H. Shah, Mumbai vs Department Of Income Tax

ी संजय अरोड़ा, लेखा सद य एवं अ मत श ु ला, या यक सद य के सम ।

BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM

आयकर अपील सं./I.T.A. No. 5964/Mum/2013 ( नधा रण वष / Assessment Year: 2010-11) ACIT Central Circle 15 & 16, Shri Kiran H. Shah, R.No. 402, 4th Floor, Aayakar बनाम/ 4/5 Amrut Tower, 247 Telang Bhavan, M.K.Road, Mumbai-400 020 Vs. Road, Matunga, Mumbai-400019, थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AACPS0379N (अपीलाथ /Appellant) : (!"यथ / Respondent) !"या ेप सं./C.O. No. 274/Mum/2014 (Arising out of ITA No.5964/Mum/2013 ( नधा रण वष / Assessment Year: 2010-11) Shri Kiran H. Shah, ACIT Central Circle 15 & 16, 4/5 Amrut Tower, 247 Telang Road, R.No. 402, 4th Floor, Aayakar बनाम/ Matunga, Mumbai-400019 Bhavan, M. K. Road, Vs. Mumbai-400 020

थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AACPS0379N (अपीलाथ /Appellant) : (!"यथ / Respondent)

अपीलाथ क# ओर से / Appellant by : Ms. S. Padmaja

!"यथ क# ओर से/Respondent by : Shri Nitin M. Furia

सुनवाई क# तार(ख / : 23.02.2015 Date of Hearing घोषणा क# तार(ख / : 11.03.2015 Date of Pronouncement

आदे श / O R D E R Per Sanjay Arora, A. M.:

This is an appeal by the Revenue and cross objection (CO) by the assessee arising out of the order dated 02.07.2013 by the Commissioner of Income Tax (Appeals)-39, Mumbai ('CIT(A)' for short) allowing the assessee's appeal contesting 2 ITA No. 5964 /Mu m/2 013 & C.O.No.274 /Mu m/2014 (A.Y . 2 010 -11 ) Shri Kiran H. Shah.vs. ACIT

its' assessment u/s. 143(3) of the Income-tax Act, 1961 dated 18.12.2012 for the assessment year (AY) 2010-2011.

2. The brief facts of the case are that the assessee was found during the course of assessment proceedings to have deposited a sum of Rs. 10.20 lakhs in his bank account with Indian Bank, Matunga Bazar Branch, Mumbai on 31.03.2010. The assessee, who was subject to search proceeding u/s. 132 of the Act on 22.09.2005 and, consequently, assessment u/s. 143(3) r/w s. 153C for the AYs 2000-01 to 2006-07, explained the source thereof as the opening cash balance of Rs.2.33 crs. as at the beginning of the said period, i.e., as on 01.04.1999. The existence of the cash balance thereat found confirmation with the Tribunal, i.e., in appeal against the assessments framed in consequence to the order/s u/s. 263, inasmuch as the Assessing Officer (AO) had, in accepting the said balance, taken a probable view, so that its non- acceptance by the ld. CIT under review proceedings was only a change of opinion. The AO, in examination of the assessee's claim of the impugned deposit as being only an application of the said cash balance (i.e., as on 01.04.1999), deposited in bank during the current year, found the assessee to have claimed during the course of the assessment proceedings for AY 2008-09, to have applied the same to the extent of Rs. 10.20 lacs by deposit in his bank account in March, 2010. Further, it was observed that the said balance of Rs. 2.33 crores had already been added to the assessee's income for AY 2000-01 vide assessment u/s 143(3) r/w s. 263 dated 28.12.2010. He, accordingly, assessed the same in the assessee's hands for the current year protectively. The learned CIT(A) has deleted the same in view of the Tribunals' order supra, i.e., quashing the order u/s. 263. Aggrieved, the Revenue is in appeal.

3. We have heard the parties, and perused the material on record.

The only reason stated by the Revenue per its ground/s of appeal in not accepting the impugned order is the non-acceptance of the Tribunals' order supra quashing the order u/s. 263 for AYs 2000-01 to 2006-07, having been appealed against the same before the Hon'ble High Court. We are unable to appreciate the Revenues' case. Decidedly, a protective assessment is only to safeguard the interest of the Revenue. It is not the case that any cash was found during search. As apparent, certain investments, as the cash deposited in the bank account during the current year, 3 ITA No. 5964 /Mu m/2 013 & C.O.No.274 /Mu m/2014 (A.Y . 2 010 -11 ) Shri Kiran H. Shah.vs. ACIT

were found for the previous years relevant to A.Ys. 2000-01 to 2006-07, during search, and which were explained by the assessee as to their source with reference to the cash with him as on 31.03.1999, so that it was available with him as an opening balance on 01.04.1999. The date '31.03.1999', or earlier to it, i.e., from which the cash was stated to be available, falling prior to the period for which the assessments were initiated pursuant to the search, the same could not be brought to tax for those years and, thus, at all. The Revenue disputing the said availability of cash, i.e., as on 31.03.1999 (or prior to 01.04.1999), whereby the assessee explained the various investments for the following years, ought to have been taxed the corresponding sums for the said years, i.e., substantively, and there is no case for any protective assessment. The Revenue, however, assessed the entire sum of Rs.2.33 crs. for the first year, i.e., A.Y. 2000-01, admitting thus to the availability of cash in that year. How could that be? The only controversy is whether the cash was available with the assessee on 31.03.1999 or not?

If the cash is not available with the assessee on 31.03.1999, how could it suddenly appear with him on 01.04.1999, or during the previous year beginning with that date, validating the assessment for A.Y. 2000-01. The other fall-out of such substantive assessment (of the entire sum) for A.Y. 2000-01 is that the assessment/s qua the respective investment/s for the following years is on a protective basis. This is again not understandable. Assuming the availability of cash on 01.04.1999 (or during the previous year relevant to A.Ys. 2000-01, i.e., f.y. 1999- 2000), the investment for the subsequent years is only its' application, so that it would not lead to or result in a fresh assessment/s, either substantive or protective. It is to be appreciated that this is not a classical case of a protective assessment, as where the dispute is as to the year of assessment, so that the assessment for one year is made substantively and for another, protectively, i.e., to protect the interest of the Revenue. It is rather a case of either an assessment for the year of investment, which is thus in substance a substantive assessment, or of no assessment at all, i.e., where the availability of cash as on 31.03.1999 is accepted.

This is precisely what has happened in the instant case, with the tribunal quashing the section 263 order assailing the acceptance of adequate cash availability with the assessee as on 31.03.1999 by the A.O. The confirmation of the tribunal's order by the hon'ble jurisdictional high court, 4 ITA No. 5964 /Mu m/2 013 & C.O.No.274 /Mu m/2014 (A.Y . 2 010 -11 ) Shri Kiran H. Shah.vs. ACIT

as urged by the assessee per its CO, which is supportive, thus seals the Revenue's case against it.

For the current year as well, the assessee explaining the source of the bank deposit/s as the cash balance (with him) as on 31.03.1999, the same stands assessed in his hands on a protective basis. That is, the very fact that the assessment for the current year qua the bank deposit/s was made on a protective basis itself establishes that the A.O. was satisfied that the source thereof forms part of the cash balance of Rs.2.33 crs. as on 31.03.1999, i.e., as ascribed to by the assessee, or, at best, during the previous year relevant to AY 2000-01. We have already clarified that the fate of the impugned assessment does not hinge on that of the substantive assessment for that year (A.Y. 2000-01). It is, on the contrary, a case of either assessment/s for the relevant year, i.e., the year of investment/s, as the current year, or no assessment at all, as where the availability of cash as at the beginning of 01.04.1999 is accepted. The latter having been accepted, removes the very basis of the Revenue's case. We decide accordingly.

4. In the result, the Revenue's appeal is dismissed, and the assessee's C.O. treated as allowed.

Order pronounced in the open court on March 11, 2015 Sd/- Sd/-

(Amit Shukla) (Sanjay Arora) या यक सद य / Judicial Member लेखा सद य / Accountant Member मुंबई Mumbai; -दनांक Dated : 11.03.2015 व. न.स./ S.K. PS.

आदे श क ! त#ल$प अ%े$षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. !"यथ / The Respondent

3. आयकर आयु त(अपील) / The CIT(A)

4. आयकर आय ु त / CIT - concerned

5. .वभागीय ! त न1ध, आयकर अपील(य अ1धकरण, मुंबई / DR, ITAT, Mumbai

6. गाड4 फाईल / Guard File आदे शानस ु ार/ BY ORDER,

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