M/s. Aggarwal Plaza Pvt. Ltd., New Delhi V. DCIT, New Delhi

CO 133/DEL/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9709 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-07-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 23-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K JAIN
• Assessee Lawyers: A MISHRA
• Keywords: Search and seizure
• Section: 143(3); 153A; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE J.S. REDDY, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER ITA NO. 1605/DEL/2013 ASSESSMENT YEAR: 2005-06 DCIT, CENTRAL CIRCLE-1, ROOM NO. 322, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI. VS. AGGARWAL PLAZA PVT. LTD., 278, AGGARWAL CITY PLAZA, PLOT NO. 17, MANGLAM PLACE, SECTOR-3, ROHINI, NEW DELHI. AAFCA7583G (APPELLANT) (RESPONDENT) & CROSS OBJECTION NO. 133/DEL/2013 ASSESSMENT YEAR: 2005-06 AGGARWAL PLAZA PVT. LTD., 278, AGGARWAL CITY PLAZA, PLOT NO. 17, MANGLAM PLACE, SECTOR-3, ROHINI, NEW DELHI. AAFCA7583G VS. DCIT, CENTRAL CIRCLE-1, ROOM NO. 322, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: MS. A. MISHRA, CIT(DR) RESPONDENT BY: SH. A.K. JAIN, CA ITA NO. 1605/D/2013 & C.O. NO. 133/D/2013 2 O R D E R PER J.S. REDDY, A.M. THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AG AINST THE ORDER OF THE CIT(APPEALS)-III, NEW DELHI DATED 15/01/2013 ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING ADDITION OF RS. 10,00, 000/- MADE BY THE AO U/S 68 OF THE INCOME TAX ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN NOT FOLLOWING THE JURISDICTIONA L HIGH COURT DECISION IN THE CASE OF CIT VS. NR PORTF OLIO PVT. LTD. ITA NO. 134/2012 DATED 21.12.2012, WHEREI N ON THE SIMILAR ISSUE THE COURT HAS DECIDED IN FAVOU R OF REVENUE. 3. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TEN ABLE ON FACTS AND IN LAW. 2. THE CROSS OBJECTION IS FILED BY THE ASSESSEE ON THE FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE PROCEEDINGS INITIATED U/S 153A OF I.T. ACT, WHICH IS BAD IN LAW IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE BEING FOUND DURING THE COURSE OF SEARCH. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E CIT(APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE VALIDATE OF IMPUGNED ASSESSMENT ORDER DATED 30.12.2011 U/S 153A OF I.T. ACT AS FRAMED BY THE ASSESSING OFFICER IN RESPECT OF CLOSE D ITA NO. 1605/D/2013 & C.O. NO. 133/D/2013 3 ASSESSMENT FOR WHICH NO INCRIMINATING MATERIAL SEIZED DURING THE COURSE OF SEARCH AND SEIZURE ACTION. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E CIT(APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THEN ACTION AND PROCEDURE FOLLOWED BY THEN AO DURING THE PROCEEDING U/S 153A OF THE I.T. ACT, WHICH IS INVALID IN EYES OF LAW BEING BASED ON INCORRECT POSTULATE THAT SEARCH ASSESSMENT U/S 153A IS DENOVO IN NATURE WHEREAS THE SAME IS TO BE BASED AND CONFINED TO INCRIMINATING MATERIAL UNEARTHED DURING SEARCH OPERATIONS. 3. WE HAVE HEARD MS. A. MISHRA, LD. CIT(DR) ON BEHA LF OF THE REVENUE AND SH. A.K. JAIN, LD. COUNSEL ON BEHALF OF THE ASS ESSEE. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND PERUSAL OF THE PAPERS ON RECORD AND ORDERS OF THE AUTHORITIES BELO W, WE HOLD AS FOLLOWS. 4. THE LD. CIT(A) AT PARA 9.3 PAGE 25 OBSERVED AS F OLLOWS: IN MY VIEW THE AO IS NOT RIGHT IN NOT CONSIDERING THE EVIDENCES FILED IN THE EARLIER ORIGINAL PROCEEDINGS U/S 143(3) WHICH WERE AVAILABLE WITH HIM AND SECONDLY I N THE ABSENCE OF THE FACT THAT NO INCRIMINATING DOCUM ENTS HAVE BEEN FOUND TO SUGGEST THAT THE TRANSACTION WIT H HAMARA SAMAY TV NETWORK IS A DOUBTFUL ONE. 4.1 HE HELD AS FOLLOWS AT PAGE 27 PARA 9.7: 9.7 I FIND FROM THE EVIDENCES AVAILABLE ON RECORD THAT FROM ITS SIDE, THE APPELLANT COMPANY HAS FURNISHED ALL THE NECESSARY DOCUMENTARY EVIDENCE RELATING TO SHARE ITA NO. 1605/D/2013 & C.O. NO. 133/D/2013 4 CAPITAL. FIRSTLY IN THE ORIGINAL PROCEEDINGS U/S 1 43(3) AND LATER AGAIN IN 153A PROCEEDINGS. ALSO NO INCRIMINATING DOCUMENT/EVIDENCE IS AVAILABLE OR NEW FACTS HAVE EMERGED DURING THE SEARCH PROCEEDINGS DOUBTING THE CREDITWORTHINESS OR GENUINENESS OF TRANSACTIONS, SPECIFICALLY IN VIEW OF THE FACT THAT IN ORIGINAL 143(3) PROCEEDINGS THE IDENTITY, CREDITWORTHINESS AND GENUINENESS HAS BEEN ACCEPTED. (EMPHASIS OURS) 5. TO A SPECIFIC QUESTION THE LD. DEPARTMENTAL REPR ESENTATIVE RELIED ON PARA 5.2 OF THE ASSESSMENT ORDER. THIS PARA REFERS POST SEARCH ENQUIRIES. THUS, THE UNDISPUTED FACT IS THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. 5.1 IN THIS CASE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 29/10/2005. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 30/03/20 07. SEARCH AND SEIZURE OPERATIONS HAD TAKEN PLACE ON 20/09/2009. THUS, AS ON THIS DATE THERE IS NO ASSESSMENT PROCEEDINGS FOR THE A.Y. 200 5-06 IS PENDING. UNDER THESE CIRCUMSTANCES, THE ISSUE IS WHETHER THE ORDER PASSED U/S 153A READ WITH SECTION 143(3) BY THE AO IS BAD IN LAW THE ADD ITIONS WERE NOT BASED ON AN INCRIMINATING MATERIAL FOUND DURING THE COURSE O F SEARCH. 6. THE G BENCH OF THE ITAT IN ITA NO. 3184/DEL/20 13 ORDER DATED 16/06/2014 CONSIDERED A SIMILAR ISSUE. AFTER CONSI DERING JUDGMENTS OF THE JURISDICTIONAL HIGH COURT, AT PARA 14 THE BENCH HEL D AS FOLLOWS: 14. SINCE THE SPECIAL BENCH HAS DECIDED THIS ISSU E IN THIS MANNER, IT IS NOT POSSIBLE FOR US TO DEVIATE FROM T HE SAME. ITA NO. 1605/D/2013 & C.O. NO. 133/D/2013 5 THERE HAS TO BE SOME CONSISTENCY IN THE VIEW TAKEN BY THE TRIBUNAL. ONCE A SPECIAL BENCH HAS DECIDED A PARTIC ULAR ISSUE IN A PARTICULAR MANNER, THEN, THAT BECOMES BINDING ON ALL THE DIVISION BENCHES ACROSS THE COUNTRY UNLESS THERE IS A CONTRARY JUDGMENT OF THE HONBLE SUPREME COURT OR THAT OF SO ME HIGH COURT. AS THE LD. DR FAILED TO POINT OUT ANY SPECIF IC AND DIRECT JUDGMENT RENDERED BY THE HONBLE HIGH COURT ON THE ISSUE WHICH IS OBTAINING IN THE PRESENT APPEAL, WE ARE DI SINCLINED TO DEVIATE FROM THE SPECIAL BENCH ORDER IN THE CASE OF ALL CARGO (SUPRA). WE, THEREFORE, HOLD IN PRINCIPLE THAT NO A DDITION CAN BE MADE FOR ANY ASSESSMENT YEAR U/S 153A, THE ASSES SMENT FOR WHICH IS NOT PENDING ON THE DATE OF SEARCH, UNLESS ANY INCRIMINATING MATERIAL IS FOUND IN THE COURSE OF SE ARCH. 7. CONSISTENT WITH A VIEW TAKEN THEREIN, WE UPHOLD THE CONTENTION OF THE ASSESSEE THAT NO ADDITION CAN BE MADE FOR THIS ASSE SSMENT YEAR U/S 153A HAS NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND AS NO ASSESSMENT IS PENDING AS ON DATE OF SEARCH. 8. AS WE UPHELD THIS ARGUMENT OF THE ASSESSEE IN TH E CROSS OBJECTION, WE NEED NOT ADJUDICATE THE APPEAL OF THE REVENUE AS IT WOULD BE AN ACADEMIC EXERCISE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND CROSS OBJECTION IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/07/2014 SD/- SD/- (GEORGE GEORGE K) JUDICIAL MEMBER (J.S. REDDY) ACCOUNTANT MEMBER ITA NO. 1605/D/2013 & C.O. NO. 133/D/2013 6 DATED: 18/07/104 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR