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2018 Supreme(Bom) 2788
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.C. Dharmadhikari, B.P. Colabawalla, JJ.
Messers D.k. Enterprises - Appellant
Versus
Income Tax Appellate Tribunal - Respondent
Writ Petition No.1199 of 2008 With Income Tax Appeal Nos. 144, 145, 220, 227 with 228
Decided On : 03-10-2018
J.D. Mistri, Senior Advocate, with Mr. Atul K. Jasani, Advocate, for the Petitioner; A.R. Malhotra with Mr. N.A. Kazi, Advocates, for the Respondents in all matters
Headnote:
Income Tax Act, 1961 - Section 254(2), 132(4), 263, 40A(3), 69C, 69 - Income Tax Appellate Tribunal - Petitioner prayed for order - What we have found from a reading of order initially passed by ITAT is that appeals of Revenue and that of the assessee were decided by a common order and both were partly allowed. When they were partly allowed by a common order, but the assessee being concerned with certain issues and arising out of the appeals for particular assessment years, filed a miscellaneous application invoking Section 254(2) of the Income Tax Act, 1961 - A copy of the miscellaneous application is at Exhibit-V (page 357) to petition. In that application, it is stated petitioner before us, that the appeals were disposed of by a common order of Tribunal - There are certain mistakes in this order which need rectification – Held, On our suggestion, charts were made and handed over - They are all on record - Though Income Tax Department would justify the gross additions to the extent but additions to the extent have been sustained by the Income Tax Appellate Tribunal. Therefore, the amount has never been sustained. Even if the appeals brought by the Revenue before the Tribunal were only partly allowed and that order has gained finality, the Department could not recover anything above and what is sustained by the Income Tax Appellate Tribunal - Sustenance is to the extent - Facts and circumstances peculiar to this case and because there are on-money details which were in issue, but such transactions having been flatly denied much less the quantum derived therefrom, all additions were in the realm of guess work. They were pure conjectures and surmises. Now, sending back both the parties to the Tribunal serves the interest of none and particularly of public revenue. Hence, Court dispose of the appeals and the writ petition with the following order and directions - All income tax appeals are disposed of accordingly – Ordered Accordingly
JUDGMENT
S.C. Dharmadhikari, J. (Oral) - This writ petition under Article 226 of the Constitution of India challenges an order, dated 28.9.2007, passed by the Income Tax Appellate Tribunal ("ITAT/Tribunal" for short), Bench at Mumbai, in Miscellaneous Application Nos.316, 317, 318, 319 & 320/Mum/2007, for Assessment Years 1989-90, 1990-91, 1991-92, 1992-93 & 1993-94.
2. The miscellaneous applications filed on 31.2.2003 by the present petitioner prayed for the order of the ITAT, initially passed and a consolidated one, to be corrected.
3. What we have found from a reading of the order initially passed by the ITAT is that the appeals of the Revenue and that of the assessee were decided by a common order and both were partly allowed. When they were partly allowed by a common order, but the assessee being concerned with certain issues and arising out of the appeals for particular assessment years, filed a miscellaneous application invoking Section 254(2) of the Income Tax Act, 1961 ("the IT Act" for short).
4. A copy of the miscellaneous application is at Exhibit-V (page 357) to the petition. In that application, it is stated by M/s. D.K. Enterprise, the petitioner before us, that the appeals were disposed of by a common order of the Tribunal on 29-6-2001. There are certain mistakes in this order which need rectification.
5. The application said that the core or major issue was an addition on account of "on-money".
6. It is stated that there was a search and seizure action under Section 132 of the IT Act on 9-3-1992 and 26-10-1994 during which certain incriminating papers were seized. During the search and seizure, statement of Shri D.K. Shah (since deceased), the main partner of the applicant/petitioner, was recorded under Section 132(4) of the IT Act wherein he had declared that Rs. 30,00,000/was received as on-money over and above the agreement value of the units booked in their project at Dadar Manish Market.
7. Due to the search and seizure actions, the assessments were reopened either under Section 147 or under Section 263 of the IT Act. Particularly, assessments for the Assessment Years 1989-90 and 1993-94 were reopened under Section 147, and assessment for the Assessment Year 1990-91 was reopened under Section 263 of the IT Act.
8. It was alleged by the petitioner/applicant that in the initial order of the Tribunal, which is a common order, in para No.12, internal page 11, the Tribunal came to the conclusion that 40% of the on-money be taken as income after observing that the assessee had disclosed 21% of gross receipts in the Assessment Year 1992-93 and therefore it can be reasonably estimated that at least double the percentage, as disclosed by the assessee, constituted the element of profit in the on-money.
9. The petitioner/applicant alleged that this estimate was without any basis. It is stated that the issue as regards the estimation of profit at 40% of on-money was never raised and therefore, it is an apparent mistake. At the most and without prejudice, double the percentage of profit from the project at Dadar Manish Market would be 4.86%. Since the total profit declared from the project comes to Rs. 39,52,784/( 2.43%), which after adding the declared amount of Rs. 30,00,000/comes to Rs. 69,52,784/, percentage-wise it comes to 4.27%. It is stated that from the assessment order for the Assessment Year 1998-99, it was observed that the profit from the project was finally arrived at Rs. 39,52,784/, but the Assessing Officer assessed the profit from the project at Rs. 64,24,841/just because it was so offered. If these facts and figures are taken into account, the profit from the said project comes to 3.95%, that too after considering the disclosure of Rs. 30,00,000/and thus the estimate of on-money would workout double of 3.95% to 7.90% and not 40%, as held.
10. This is how the mistakes were pointed out, ground-wise and appeal-wise.
11. It was, therefore, prayed that the mistakes be corrected.
12. The important prayer in
