M/s. Anush Finlease and Construction Pvt. Ltd., Delhi V. ACIT, New Delhi

CO 300/DEL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7446 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 14-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 29-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHAR AD AGARWAL; DR SHASHWAT BAJPAI
• Keywords: Document seized; Documents seized
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH D DD D : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, G.D. AGRAWAL, G.D. AGRAWAL, G.D. AGRAWAL, VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT AND AND AND AND SHRI SUDHANSHU SRIVASTAVA SHRI SUDHANSHU SRIVASTAVA SHRI SUDHANSHU SRIVASTAVA SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA ITAITA ITA NO NONO NO . .. . 6576/DEL/2013 6576/DEL/2013 6576/DEL/2013 6576/DEL/2013 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2010 2010 2010 2010 - -- - 11 1111 11 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CI CENTRAL CI CENTRAL CI CENTRAL CIRCLE RCLE RCLE RCLE- -- -09, 09, 09, 09, JHANDEWALAN, JHANDEWALAN, JHANDEWALAN, JHANDEWALAN, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S ANUSH FINLEASE AND M/S ANUSH FINLEASE AND M/S ANUSH FINLEASE AND M/S ANUSH FINLEASE AND CONSTRUCTION PVT.LTD., CONSTRUCTION PVT.LTD., CONSTRUCTION PVT.LTD., CONSTRUCTION PVT.LTD., PLOT NO.11, CBD SHAHDARA, PLOT NO.11, CBD SHAHDARA, PLOT NO.11, CBD SHAHDARA, PLOT NO.11, CBD SHAHDARA, DELHI DELHI DELHI DELHI 110 032. 110 032. 110 032. 110 032. PAN : PAN : PAN : PAN : AACCA7004R. AACCA7004R. AACCA7004R. AACCA7004R. (APPELLANT) (RESPONDENT) CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION NO NONO NO .300/DEL/2016 .300/DEL/2016 .300/DEL/2016 .300/DEL/2016 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2010 2010 2010 2010 - -- - 11 1111 11 M/S AN M/S AN M/S AN M/S AN USH FINLEASE AND USH FINLEASE AND USH FINLEASE AND USH FINLEASE AND CONSTRUCTION PVT.LTD., CONSTRUCTION PVT.LTD., CONSTRUCTION PVT.LTD., CONSTRUCTION PVT.LTD., PLOT NO.11, CBD SHAHDARA, PLOT NO.11, CBD SHAHDARA, PLOT NO.11, CBD SHAHDARA, PLOT NO.11, CBD SHAHDARA, DELHI DELHI DELHI DELHI 110 032. 110 032. 110 032. 110 032. PAN : AACCA7004R. PAN : AACCA7004R. PAN : AACCA7004R. PAN : AACCA7004R. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -09, 09, 09, 09, JHANDEWALAN, JHANDEWALAN, JHANDEWALAN, JHANDEWALAN, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI J.K. MIS HRA, CIT - DR. ASSESSEE BY : DR. SHASHWAT BAJPAI AND SHRI SHARAD AGARWAL, ADVOCATES. DATE OF HEARING : 10.01.2019 10.01.2019 10.01.2019 10.01.2019 DATE OF PRONOUNCEMENT : 14.01.2019 14.01.2019 14.01.2019 14.01.2019 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, PER G.D. AGRAWAL, PER G.D. AGRAWAL, PER G.D. AGRAWAL, VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT : :: :- -- - THE APPEAL BY THE REVENUE AND THE CROSS-OBJECTION BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2010-11 ARE DIRECTED AGAIN ST THE ORDER OF LEARNED CIT(A)-XXXII, NEW DELHI DATED 16 TH SEPTEMBER, 2013. ITA-6576/D/2013 & C.O. NO.300/D/2016 2 2. THE FACTS OF THE CASE ARE THAT PROCEEDINGS UNDER SECTION 153C WERE INITIATED BY THE ASSESSING OFFICER ON THE BASIS OF S EARCH IN THE CASE OF M/S JAGAT AGRO COMMODITIES PVT.LTD. AND M/S JAG AT PROJECTS LTD. THE ASSESSMENT WAS COMPLETED U/S 143(3)/153C AT `5,98,52, 000/- AS AGAINST NIL INCOME DECLARED BY THE ASSESSEE. BEFORE TH E LEARNED CIT(A), THE ASSESSEE CHALLENGED THE INITIATION OF PROCE EDINGS UNDER SECTION 153C AS WELL AS THE ADDITION ON MERITS. LEARN ED CIT(A) UPHELD THE INITIATION OF PROCEEDINGS U/S 153C BUT DELETED TH E ADDITION OF `5,98,52,000/- MADE BY THE ASSESSING OFFICER. THE REVE NUE, AGGRIEVED WITH THE DELETION OF THE ADDITION, IS IN A PPEAL BEFORE US WHILE THE ASSESSEE, BY FILING THE CROSS-OBJECTION, HAS CHALLENGE D THE VALIDITY OF PROCEEDINGS UNDER SECTION 153C ITSELF. 3. AT THE TIME OF HEARING BEFORE US, IT IS STATED BY T HE LEARNED COUNSEL THAT THE ISSUE OF VALIDITY OF PROCEEDINGS UNDE R SECTION 153C IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIO N OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PRINCIPAL CI T VS. INDEX SECURITIES PRIVATE LIMITED VIDE ITA NO.566 TO 571/2017. HE STA TED THAT THE OTHER COMPANIES ARE THE GROUP COMPANIES OF THIS GROUP AND TH E CASES WERE REOPENED UNDER SECTION 153C ON THE BASIS OF MATERIAL FOUND AND SEIZED DURING THE COURSE OF SEARCH OF M/S JAGAT AGRO CO MMODITIES PVT.LTD. THE SAME SEIZED MATERIAL WAS CONSIDERED BY T HE HONBLE HIGH COURT WHICH IS CONSIDERED HERE IN THIS APPEAL BEFORE U S FOR INITIATION OF PROCEEDINGS UNDER SECTION 153C. HE REFERRED TO PARA GRAPH 8 ONWARDS OF THE ORDER OF LEARNED CIT(A) AND POINTED OUT THAT LEARNED CIT(A) HAS RECORDED THE FINDING THAT THE NOTICE UNDER SECTION 153C WAS INITIATED ON THE BASIS OF AUDITED BALANCE SHEET AS ON 31 ST MARCH, 2009 OF THE ASSESSEE BEING FOUND WITH M/S JAGAT AGRO COMMODITIES PVT. LTD. HE STATED THAT NEITHER THE MATERIAL FOUND WAS INCRIMINAT ING NOR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION BECAUSE ASSESSMENT YE AR UNDER CONSIDERATION IS 2010-11 WHILE THE BALANCE SHEE T UNDER ITA-6576/D/2013 & C.O. NO.300/D/2016 3 CONSIDERATION WAS RELATING TO ASSESSMENT YEAR 2009-10. H E STATED THAT BOTH THESE ASPECTS ARE DISCUSSED BY HON'BLE JURISDICTIONA L HIGH COURT IN PARAGRAPH 30 & 31 OF THEIR ORDER. HE, THEREFORE , STATED THAT THE ABOVE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT W OULD BE SQUARELY APPLICABLE. 4. LEARNED CIT-DR, ON THE OTHER HAND, RELIED UPON T HE ORDER OF LEARNED CIT(A) SO FAR AS THE QUESTION OF VALIDITY OF I NITIATION OF PROCEEDINGS UNDER SECTION 153C IS CONCERNED. HE STATE D THAT ONCE A DOCUMENT IS FOUND FOR ANY ASSESSMENT YEAR, THE PROCEEDIN GS UNDER SECTION 153C NEED TO BE INITIATED FOR A PERIOD OF SI X YEARS. HE RELIED UPON THE DECISION OF LEARNED CIT(A) ON THIS ASPECT AND STATED THAT PROCEEDINGS UNDER SECTION 153C WERE VALIDLY INITIATE D AND THE SAME SHOULD BE UPHELD. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND T HAT IN PARAGRAPH 8, LEARNED CIT(A) HAS RECORDED THE FINDING THE DOCU MENT FOUND AND SEIZED IN COURSE OF SEARCH U/S 132 INCLUDED AUDITED BAL ANCE SHEET, INCLUSIVE OF THE FINANCIAL STATEMENTS OF THE APPELLANT COMPANY FOR THE YEAR ENDED ON 31.03.2009. THIS DOCUMENT PERTAINS TO THE ASSESSMENT YEAR 2009-10. AGAIN, IN PARAGRAPH 10.2, HE DISCUSSED THESE FACTS AND ALSO REPRODUCED THE SATISFACTION RECORDED BY THE ASSESSING OFFICER OF M/S JAGAT PROJECTS LTD. THE SAME IS REPRODUCED FOR REA DY REFERENCE :- 10.2 AS PER THE SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER, PROCEEDINGS U/S 153C WAS TAKEN ON THE BASIS OF THE DOCUMENT FOUND AND SEIZED I.E. AUDIT REPO RT AND FINANCIAL ACCOUNTS FOR THE YEAR ENDED ON 31.03.2 009 FROM THE SEARCHED PREMISES OF JAGAT GROUP, SPECIFICALLY FROM THE PREMISES OF M/S JAGAT AGRO COMMODITIES PVT.LTD . AND M/S JAGAT PROJECTS LTD. ON 14.09.2010. I HAVE CA LLED FOR THE ASSESSMENT FOLDERS IN THE CASE OF M/S JAGAT ITA-6576/D/2013 & C.O. NO.300/D/2016 4 COMMODITIES PVT.LTD. AND M/S JAGAT PROJECTS LTD., REL EVANT TO THE ASSESSMENT YEAR 2011-12, THE FINANCIAL YEAR IN WHICH THE SEARCH TOOK PLACE AND PERUSED THEM. IN TH E FILE OF M/S JAGAT PROJECTS LTD., THE ASSESSING OFFICER RECORDE D A SATISFACTION NOTE ON 11.02.2013 BEFORE TRANSFERRING TH E SAID NOTE TO THE FILE OF THE APPELLANT WHICH IS EXTRA CTED AND GIVEN BELOW : DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF M/S JAGAT AGRO COMMODITIES PVT.LTD. AND M/S JAGAT PROJECTS LTD. IT WAS NOTICED THAT DURING SEARCH AND SE IZURE OPERATION U/S 132 OF THE I.T. ACT, 1961, UNDERTAKEN ON 14.09.2010 IN THE CASE OF M/S JAGAT AGRO COMMODITIES PVT.LTD. AND M/S JAGAT PROJECTS LTD. AT 802, AMBA DEE P BUILDING, K.G. MARG, NEW DELHI, AUDIT REPORT INCLUSI VE OF FINANCIAL ACCOUNTS FOR THE YEAR ENDED ON 31.03.2009 WERE FOUND AND SEIZED BY THE SEARCH PARTY J-5. THE SEIZED DOCUMENTS APPEARS AT PAGE NO.190 TO 206 OF ANNEXURE A-9 AND BELONGS TO M/S ANUSH FINLEASE & CONSTRUCTION PVT.LT D. 2. THE CASE OF M/S ANUSH FINLEASE & CONSTRUCTION PVT.LTD. HAS BEEN CENTRALIZED TO THIS CIRCLE VIDE LET TER F.NO.CIT-I/CENTRALISATION/2011-12/2100 DATED 17.11.2 011. 3. I AM, THEREFORE, SATISFIED THAT THE DOCUMENTS, REFERRED TO ABOVE BELONG TO M/S ANUSH FINLEASE & CONSTRUCTION PVT.LTD. WARRANTING ACTION U/S 153C IN T HIS CASE. 6. THUS, IT IS NOT IN DISPUTE THAT THE ONLY MATERIAL O N THE BASIS OF WHICH PROCEEDINGS U/S 153C WERE INITIATED WAS THE AUDI TED BALANCE SHEET AND FINANCIAL STATEMENTS OF THE ASSESSEE FOR THE YEA R ENDED ON 31 ST MARCH, 2009. THAT HON'BLE JURISDICTIONAL HIGH COUR T HAS CONSIDERED IDENTICAL ISSUE IN THE CASE OF INDEX SECURIT IES PRIVATE LIMITED (SUPRA) AND HELD AS UNDER :- 30. IN THE PRESENT CASE, THE DOCUMENTS SEIZED WERE THE TRIAL BALANCE AND BALANCE SHEETS OF THE TWO ASSESSEES FOR THE PERIOD 1ST APRIL TO 13TH SEPTEMBER 2010 (FOR ISR PL) AND 1ST APRIL TO 4TH SEPTEMBER 2010 (FOR VSIPL). BOT H SETS OF DOCUMENTS WERE SEIZED NOT FROM THE RESPECTIVE ITA-6576/D/2013 & C.O. NO.300/D/2016 5 ASSESSEES BUT FROM THE SEARCHED PERSON I.E. JAGAT AGRO COMMODITIES (P) LTD. IN OTHER WORDS, ALTHOUGH THE SAID DOCUMENTS MIGHT 'PERTAIN' TO THE ASSESSEES, THEY DID NOT BELONG TO THEM. THEREFORE, ONE ESSENTIAL JURISDICTION AL REQUIREMENT TO JUSTIFY THE ASSUMPTION OF JURISDICTION UNDER SECTION 153 C OF THE ACT WAS NOT MET IN THE CASE OF T HE TWO ASSESSEES. 31. AS REGARDS THE SECOND JURISDICTIONAL REQUIREMENT V IZ., THAT THE SEIZED DOCUMENTS MUST BE INCRIMINATING AND MU ST RELATE TO THE AYS WHOSE ASSESSMENTS ARE SOUGHT TO BE REOPENED, THE DECISION OF THE SUPREME COURT IN COMMISSIONER OF INCOME TAX-III, PUNE V. SINHGAD TECHN ICAL EDUCATION SOCIETY (SUPRA) SETTLES THE ISSUE AND HOLDS THI S TO BE AN ESSENTIAL REQUIREMENT. THE DECISIONS OF THIS C OURT IN CIT-7 V. RRJ SECURITIES (2016) 380 ITR 612 (DEL) AND ARN INFRASTRUCTURE INDIA LIMITED V. ACIT [2017] 394 ITR 569 (DEL) ALSO HOLD THAT IN ORDER TO JUSTIFY THE ASSUMPTION OF JURISDICTION UNDER SECTION 153 C OF THE ACT THE DOCU MENTS SEIZED MUST BE INCRIMINATING AND MUST RELATE TO EACH OF THE AYS WHOSE ASSESSMENTS ARE SOUGHT TO BE REOPENED. SINCE THE SATISFACTION NOTE FORMS THE BASIS FOR INITIATI NG THE PROCEEDINGS UNDER SECTION 153 C OF THE ACT, IT IS FU TILE FOR MR MANCHANDA TO CONTEND THAT THIS REQUIREMENT NEED N OT BE MET FOR INITIATION OF THE PROCEEDINGS BUT ONLY DU RING THE SUBSEQUENT ASSESSMENT. 7. THAT IN PARAGRAPH 31 ABOVE, THEIR LORDSHIPS HAVE POINTED OUT THE DOCUMENT MUST BE INCRIMINATING AND IT MUST RELATE TO THE ASSESSMENT YEAR WHOSE ASSESSMENTS ARE SOUGHT TO BE REOPENED. IN THIS CASE, ADMITTEDLY, THE DOCUMENT WAS RELATING TO ASSESSMENT YEAR 2009-10 WHILE THE ASSESSMENT REOPENED IS FOR 2010-11. THEREFORE , THE REQUIREMENT THAT THE DOCUMENT SHOULD RELATE TO THE A SSESSMENT YEAR SOUGHT TO BE REOPENED IS NOT FULFILLED. MOREOVER, HO W THE AUDITED BALANCE SHEET AND FINANCIAL STATEMENTS OF THE ASSESSEE AR E INCRIMINATING MATERIAL HAS ALSO NOT BEEN PROVED. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT ON THE FACTS OF THE ASSESSEE S CASE, THE ABOVE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT W OULD BE SQUARELY ITA-6576/D/2013 & C.O. NO.300/D/2016 6 APPLICABLE. RESPECTFULLY FOLLOWING THE SAME, WE QUASH THE INITIATION OF PROCEEDINGS U/S 153C AND CONSEQUENTIALLY, THE IMPUGNED ASSESSMENT ORDER IS ALSO QUASHED. ONCE THE ASSESSMENT ORDER ITSELF HAS BEEN QUASHED, THE REVENUES APPEAL DOES NOT SURVIVE FOR ADJ UDICATION. 8. IN THE RESULT, THE CROSS-OBJECTION OF THE ASSESSEE IS AL LOWED AND REVENUES APPEAL IS DEEMED TO BE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 14.01.2019. SD/- SD/- (SUDHANSHU SRIVASTAVA (SUDHANSHU SRIVASTAVA (SUDHANSHU SRIVASTAVA (SUDHANSHU SRIVASTAVA ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT VK. COPY FORWARDED TO: - 1. REVENUE : ASSISTANT COMMISSIONER OF INCOME TA X, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -09, JHANDEWALAN, NEW DELHI. 09, JHANDEWALAN, NEW DELHI. 09, JHANDEWALAN, NEW DELHI. 09, JHANDEWALAN, NEW DELHI. 2. ASSESSEE : M/S ANUSH FINLEASE AND CONSTRUCTION PVT. LTD., M/S ANUSH FINLEASE AND CONSTRUCTION PVT.LTD., M/S ANUSH FINLEASE AND CONSTRUCTION PVT.LTD., M/S ANUSH FINLEASE AND CONSTRUCTION PVT.LTD., PLOT NO.11, CBD SHAHDARA, DELHI PLOT NO.11, CBD SHAHDARA, DELHI PLOT NO.11, CBD SHAHDARA, DELHI PLOT NO.11, CBD SHAHDARA, DELHI 110 032. 110 032. 110 032. 110 032. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR