Greenfield Shelters (P) Ltd., Salem V. DCIT, Salem

CO 10/CHNY/2016

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2335 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 14-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T VASUDEVAN
• Assessee Lawyers: P RADHAKRISHNAN
• Keywords: Reopening of assessment; Difference of opinion; Block assessment; Reason to believe; Change of opinion
• Section: 143(3); 147; 148; 132

Judgement Text

, / / / , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH, CHENNAI . . . , . '#$ ' , & '' BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.2154, 2155 & 2156/MDS/2015 & C.O. NOS.10, 11 & 12/MDS/2016 ) *) / ASSESSMENT YEARS : 2007-08, 2008-09 & 2009-10 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, NO.3, GANDHI ROAD, SALEM 7. V. M/S GREEN FIELD SHELTERS PVT. LTD., NO.C-10(14/41), PERUMAL KOIL STREET, SWARNAPURI, SALEM. PAN : AACCG 6140 L / CCCG003 ( APPELLANT) ( RESPONDENT & CROSS-OBJECTOR) ,- . / / APPELLANT BY : SH. P. RADHAKRISHNAN, JCIT 01,- . / / RESPONDENT BY : SHRI T. VASUDEVAN, ADVOCATE 2 . 3& / DATE OF HEARING : 24.02.2016 4#* . 3& / DATE OF PRONOUNCEMENT : 05.05.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE APPEALS OF THE REVENUE ARE DIRECTED AGAI NST THE COMMON ORDER DATED 18.08.2015, PASSED BY THE COMMIS SIONER OF INCOME TAX (APPEALS)-18, CHENNAI, FOR THE ASSESSMEN T YEAR 2007- 08, 2008-09 AND 2009-10. THE ASSESSEE HAS ALSO FIL ED CROSS- OBJECTIONS AGAINST THE VERY SAME COMMON ORDER. THE REFORE, WE 2 I.T.A. NOS.2154 TO 2156/MDS/15 C.O. NOS. 10 TO 12/MDS/16 HEARD ALL THESE APPEALS AND CROSS-OBJECTIONS TOGETH ER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. SH. P. RADHAKRISHNAN, THE LD. DEPARTMENTAL REPRE SENTATIVE, SUBMITTED THAT THERE WAS A SEARCH IN THE CASE OF SH RI A.S. AADHINARAYANAN ON 29.01.2009. SEVERAL INCRIMINATIN G MATERIALS WERE FOUND AT THE RESIDENCE OF SHRI A.S. AADHINARAY ANAN. A SIMULTANEOUS SEARCH WAS ALSO CONDUCTED IN THE PREMI SES OF THE ASSESSEE ON 29.01.2009. ASSESSMENT WAS FRAMED ON T HE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N IN THE CASE OF SHRI A.S. AADHINARAYANAN AND IN THE CASE OF THE ASS ESSEE UNDER SECTION 153C OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). THE ASSESSMENT MADE IN THE HANDS OF THE ASSESSEE WAS DE LETED BY THE CIT(APPEALS) ON THE GROUND THAT THE BROCHURE FOUND AT THE RESIDENTIAL PREMISES OF SHRI A.S. AADHINARAYANAN CA NNOT BE CONSTRUED AS INCRIMINATING MATERIAL FOR THE PURPOSE OF INITIATING PROCEEDING UNDER SECTION 153C OF THE ACT. ACCORDIN GLY, THE ADDITION MADE BY THE ASSESSING OFFICER FOR THE ASSE SSMENT YEAR 2008-09 WAS DELETED BY THE CIT(APPEALS). ON APPEAL BY THE REVENUE, THIS TRIBUNAL BY AN ORDER DATED 16.10.2015 , CONFIRMED THE ORDER OF THE CIT(APPEALS), HOLDING THAT THERE CANNO T BE ANY ADDITION ON THE BASIS OF SO-CALLED BROCHURE, WHICH WAS SAID TO BE FOUND IN 3 I.T.A. NOS.2154 TO 2156/MDS/15 C.O. NOS. 10 TO 12/MDS/16 THE PREMISES OF SHRI A.S. AADHINARAYANAN, SINCE THE SAME CANNOT BE CONSTRUED AS INCRIMINATING MATERIAL. THE ASSESS ING OFFICER AFTER THE ORDER OF THE TRIBUNAL, SOUGHT TO REOPEN THE ASS ESSMENT FOR THE ASSESSMENT YEAR 2008-09. ACCORDING TO THE LD. D.R. , THE CIT(APPEALS) FOUND THAT THE MATERIAL AVAILABLE ON R ECORD IS ONLY A BROCHURE WHICH WAS SAID TO BE FOUND AT THE RESIDENC E OF SHRI A.S. AADHINARAYANAN. THIS WAS HELD TO BE NOT AN INCRIMI NATING MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. THERE FORE, THERE CANNOT BE ANY ADDITION FOR THE ASSESSMENT YEAR UNDE R CONSIDERATION. HOWEVER, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER REOPENED THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT. 3. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER SUBM ITTED THAT IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER FOUN D THAT THE ASSESSEE HAS RECEIVED ON-MONEY OF ` 26,00,000/- FROM THE BUYERS FOR THE ASSESSMENT YEAR 2008-09. BY EXTENDING THE SAME ANALOGY FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10, THE A SSESSING OFFICER MADE ADDITION IN THE REASSESSMENT PROCEEDIN GS. ACCORDING TO THE LD. D.R., SINCE THE MATERIAL WAS FOUND DURIN G THE COURSE OF SEARCH OPERATION, WITH REGARD TO RECEIPT OF ON-MONE Y, THE ASSESSING 4 I.T.A. NOS.2154 TO 2156/MDS/15 C.O. NOS. 10 TO 12/MDS/16 OFFICER HAS RIGHTLY REOPENED THE ASSESSMENT. THE R ECEIPT OF ON- MONEY WAS NOT THE SUBJECT MATTER OF EXAMINATION IN THE REGULAR ASSESSMENT, THEREFORE, ACCORDING TO THE LD. D.R., I T IS NOT A CASE OF CHANGE OF OPINION. HOWEVER, THE CIT(APPEALS) FOUND THAT THE ASSUMPTION OF JURISDICTION BY REOPENING THE ASSESSM ENT UNDER SECTION 147 OF THE ACT IS ILLEGAL. ACCORDINGLY, HE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. ACCORDING TO THE LD. D.R., THE PROCEEDING INITIATED UNDER SECTION 153C OF THE ACT MAY NOT BE CORRECT SINCE THE BROCHURE FOUND DURING THE COURSE OF SEARCH OPERATION WAS CONSTRUED AS NOT AN INCRIMINATING MAT ERIAL. THE ASSESSING OFFICER, DURING THE EXAMINATION UNDER SEC TION 132(4) OF THE ACT, FOUND THAT THE ASSESSEE HAS RECEIVED ON-MO NEY ON SALE OF PLOT WHICH WAS SUPPORTED BY THE BROCHURE FOUND AT T HE RESIDENCE OF SHRI A.S. AADHINARAYANAN. THEREFORE, ACCORDING TO THE LD. D.R., THIS MATERIAL IS VERY MUCH AVAILABLE DURING THE COU RSE OF SEARCH OPERATION. SINCE THE INCOME CHARGEABLE TO TAX ESCA PED ASSESSMENT, THE NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED WITHIN FOUR YEARS FROM THE END OF THE RELEVANT ASSE SSMENT YEAR. THEREFORE, THE QUESTION OF CHANGE OF OPINION DOES N OT ARISE. ACCORDING TO THE LD. D.R., IT IS A CASE OF ESCAPEME NT OF INCOME WHICH IS OTHERWISE ASSESSABLE UNDER THE INCOME-TAX ACT. 5 I.T.A. NOS.2154 TO 2156/MDS/15 C.O. NOS. 10 TO 12/MDS/16 THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEA LS) IS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSE SSING OFFICER. 3. ON THE CONTRARY, SHRI T. VASUDEVAN, THE LD.COUNS EL FOR THE ASSESSEE, SUBMITTED THAT THE ONLY DOCUMENT AVAILABL E ON RECORD IS BROCHURE WHICH WAS FOUND AT THE RESIDENCE OF SHRI A .S. AADHINARAYANAN. THERE IS NO OTHER CORROBORATIVE EV IDENCE AVAILABLE ON RECORD TO SUGGEST THAT THE ASSESSEE HA S RECEIVED ON- MONEY. ACCORDING TO THE LD. COUNSEL, IT IS FOR THE ASSESSING OFFICER TO PROVE THAT THE ASSESSEE HAS RECEIVED ON-MONEY OV ER AND ABOVE THE AMOUNT DISCLOSED IN THE SALE DEED. MOREOVER, T HE ASSESSEE WAS NOT GIVEN ANY OPPORTUNITY TO CROSS-EXAMINE THE SO-CALLED PURCHASERS WHO SAID TO HAVE PAID THE ON-MONEY. THE CIT(APPEALS), AFTER EXAMINING THE RELEVANT FACTS, F OUND THAT THERE IS NO FOUNDATION FOR REOPENING ASSESSMENT UNDER SECTIO N 147 OF THE ACT, ACCORDINGLY, HE DELETED THE ADDITION MADE BY T HE ASSESSING OFFICER FOR ALL THE ASSESSMENT YEARS. 4. REFERRING TO THE CROSS-OBJECTIONS FILED BY THE A SSESSEE, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REOP ENING OF ASSESSMENTS WITHOUT ANY FRESH MATERIAL ON RECORD WO ULD AMOUNT TO CHANGE OF OPINION. THE LD.COUNSEL FURTHER SUBMITTE D THAT THERE IS 6 I.T.A. NOS.2154 TO 2156/MDS/15 C.O. NOS. 10 TO 12/MDS/16 NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE RELEVANT MATERIAL FOR COMPLETING THE ASSESSMENT. THEREFORE, ACCORDIN G TO THE LD. COUNSEL, THE ISSUE OF NOTICE UNDER SECTION 148 OF T HE ACT IS NOT JUSTIFIED. THE BROCHURE SEIZED AT THE PREMISES OF SHRI A.S. AADHINARAYANAN RELATES TO ONLY ONE PURCHASER, THERE FORE, ACCORDING TO THE LD. COUNSEL, EXTENDING THE SAME TO ALL THE L ANDS SOLD BY THE ASSESSEE WOULD TANTAMOUNT TO CHANGE OF OPINION. TH EREFORE, ACCORDING TO THE LD. COUNSEL, REOPENING OF ASSESSME NTS IS BAD IN LAW. THE LD.COUNSEL FURTHER POINTED OUT THAT THE A SSESSING OFFICER HIMSELF EXAMINED SOME OF THE PURCHASERS OF THE LAND WHO CONFIRMED THAT THEY HAVE PAID ONLY THE SALE CONSIDE RATION WHICH WAS DISCLOSED IN THE SALE DEED. THEREFORE, THE ASSESSI NG OFFICER REOPENED THE ASSESSMENTS ONLY ON SURMISES AND CONJU NCTURES. THEREFORE, ACCORDING TO THE LD. COUNSEL, REOPENING OF ASSESSMENTS WAS NOT JUSTIFIED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ON THE BASIS OF SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT AT TH E RESIDENTIAL PREMISES OF SHRI A.S. AADHINARAYANAN, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT IN THE CASE OF THE ASSESSE E UNDER SECTION 153C OF THE ACT. ON THE BASIS OF THE BROCH URE FOUND DURING 7 I.T.A. NOS.2154 TO 2156/MDS/15 C.O. NOS. 10 TO 12/MDS/16 THE COURSE OF SEARCH OPERATION, BLOCK ASSESSMENT MA DE UNDER SECTION 153C OF THE ACT, WAS CHALLENGED BEFORE THE CIT(APPEALS) WHO SET ASIDE THE ADDITION MADE BY THE ASSESSING OF FICER ON THE GROUND THAT THE SO-CALLED BROCHURE CANNOT BE CONSTR UED AS INCRIMINATING MATERIAL FOR THE ASSESSMENT YEAR 2008 -09. WHEN THE MATTER TRAVELLED TO THIS TRIBUNAL, THIS TRIBUNAL CO NFIRMED THE ORDER OF THE CIT(APPEALS) HOLDING THAT THERE WAS NO INCRIMIN ATING MATERIAL FOR MAKING ADDITION FOR ON-MONEY FOR THE ASSESSMENT YEA R 2008-09 IN THE BLOCK PERIOD UNDER SECTION 153C OF THE ACT. NO W THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT BY ISSUING NOTI CE UNDER SECTION 148 FOR ALL THE ASSESSMENT YEARS. THE NOTI CE WAS ISSUED WITHIN FOUR YEARS FROM THE END OF THE RELEVANT ASSE SSMENT YEAR. THE PROVISO TO SECTION 147 WOULD BE APPLICABLE ONLY IN CASE THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT. THE PROHIBITION CONTAINED IN THE PROVISO TO SECTION 147 OF THE ACT IS FOR REOPENING ASSESSMENT AFTER EXPIRY OF FOUR YEARS FRO M THE END OF RELEVANT ASSESSMENT YEAR. IN THE CASE BEFORE US, A SSESSMENTS FOR ALL THE THREE ASSESSMENT YEARS WERE REOPENED WITHIN A PERIOD OF FOUR YEARS. THEREFORE, THIS TRIBUNAL IS OF THE CON SIDERED OPINION THAT THE PROVISO TO SECTION 147 OF THE ACT MAY NOT STAND IN THE WAY OF REOPENING ASSESSMENTS. ADMITTEDLY, DURING THE COUR SE OF SEARCH 8 I.T.A. NOS.2154 TO 2156/MDS/15 C.O. NOS. 10 TO 12/MDS/16 OPERATION, A BROCHURE WAS FOUND AND A STATEMENT WAS ALSO RECORDED. THE BROCHURE FOUND BY THE REVENUE AUTHOR ITIES WAS HELD TO BE NOT AN INCRIMINATING MATERIAL. THEREFORE, TH E ADDITION MADE BY THE ASSESSING OFFICER WAS DELETED BY THE CIT(APPEAL S) WHICH WAS CONFIRMED BY THIS TRIBUNAL. BASED UPON THE ORDER O F THIS TRIBUNAL FOR THE BLOCK ASSESSMENT PROCEEDING, CONFIRMING THE ORD ER OF THE CIT(APPEALS), THE CIT(APPEALS) FOUND THAT THERE IS NO FOUNDATION FOR REOPENING ASSESSMENT FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. 6. WE HAVE CAREFULLY GONE THROUGH THE SECTIONS 147 AND 148 OF THE ACT. SECTION 147 CLEARLY SAYS THAT IF THE ASSE SSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT FOR ANY OF THE ASSESSMENT YEAR, SUBJECT TO PROVISIONS OF SECTIONS 147 AND 148 OF THE ACT, CAN ASSESS OR RE-A SSESS SUCH INCOME WHICH ESCAPED ASSESSMENT. IN THIS CASE, THE RE IS SOME EVIDENCE TO INDICATE THAT THE ASSESSEE HAS RECEIVED ON-MONEY FOR THE ASSESSMENT YEAR 2008-09. THE SAME SET OF PLOTS WERE SOLD DURING OTHER YEARS ALSO. THEREFORE, THE ASSESSING OFFICER BELIEVED THAT THE INCOME CHARGEABLE TO TAX ESCAPED ASSESSMEN T. WE HAVE CAREFULLY GONE THROUGH THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING THE ASSESSMENT WHICH IS AVAIL ABLE AT PAGE 41 9 I.T.A. NOS.2154 TO 2156/MDS/15 C.O. NOS. 10 TO 12/MDS/16 OF THE PAPER-BOOK. THE ASSESSING OFFICER STATED IN THE REASONS FOR REOPENING THE ASSESSMENT THAT ONE SHRI A.B.S. SANJA Y STATED IN HIS SWORN STATEMENT THAT HE PAID AN AMOUNT OF ` 26,00,000/- AS ON- MONEY TO THE ASSESSEE-COMPANY AT THE TIME OF PURCHA SE OF TWO PLOTS AT YERCAUD IN THE ASSESSMENT YEAR 2008-09. A COPY OF THE SWORN STATEMENT RECORDED FROM SHRI A.B.S. SANJAY HA S BEEN FILED BY THE REVENUE WHICH IS AVAILABLE ON RECORD. THE SAID SHRI A.B.S. SANJAY CLEARLY EXPLAINED THAT THE PURCHASE VALUE OF THE LAND WAS ` 16,84,750/- FOR TWO PLOTS AND STAMP DUTY WAS PAID S EPARATELY. IN RESPONSE TO QUESTION NO.4, THE SAID SHRI A.B.S. SAN JAY CLARIFIED THAT NO PAYMENT WAS MADE APART FROM THE DOCUMENT VALUE. THEREFORE, NO EVIDENCE IS AVAILABLE ON RECORD TO SUGGEST THAT ANY ON-MONEY WAS RECEIVED BY THE ASSESSEE EVEN FOR ASSESSMENT YE AR 2008-09 FROM SHRI A.B.S. SANJAY. 7. WHEN NO EVIDENCE IS AVAILABLE FOR RECEIPT OF ON- MONEY DURING ASSESSMENT YEAR 2008-09, EXTENDING THE ANALO GY TO OTHER ASSESSMENT YEARS FOR RE-ASSESSMENT PROCEEDINGS MAY NOT BE JUSTIFIED. AS RIGHTLY FOUND BY THE CIT(APPEALS), T HERE IS NO BASE FOR THE REASONS TO BELIEVE THAT THE INCOME OTHERWISE CH ARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IN THE ABSENCE OF ANY MATE RIAL TO 10 I.T.A. NOS.2154 TO 2156/MDS/15 C.O. NOS. 10 TO 12/MDS/16 SUGGEST THAT THE INCOME CHARGEABLE TO TAX ESCAPED A SSESSMENT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER CANNOT BELIEVE THAT THE INCOME CHARGEABLE TO TAX ES CAPED ASSESSMENT. SINCE THE STATEMENT RECORDED FROM SHRI A.B.S. SANJAY DOES NOT INDICATE ANY RECEIPT OF ON-MONEY DURING AS SESSMENT YEAR 2008-09 AND NO MATERIAL IS AVAILABLE ON RECORD FOR ASSESSMENT YEARS 2007-08 AND 2009-10, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTLY FOUND THA T THERE IS NO JUSTIFICATION IN REOPENING THE ASSESSMENTS. THIS T RIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 7. IN THE RESULT, BOTH, THE APPEALS OF THE REVENUE AND THE CROSS-OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 5 TH MAY, 2016 AT CHENNAI. SD/- SD/- (. '#$ ' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 5 TH MAY, 2016. KRI. 11 I.T.A. NOS.2154 TO 2156/MDS/15 C.O. NOS. 10 TO 12/MDS/16 . 0378 98*3 /COPY TO: 1. ,- /APPELLANT 2. 01,- /RESPONDENT 3. 2 :3 () /CIT(A)-18, CHENNAI-34 4. PRINCIPAL CIT-CENTRAL 2, CHENNAI 5. 8; 03 /DR 6. ) < /GF.