VIPUL D. SHAH, MUMBAI V. DCIT CEN CIR 2(3), MUMBAI

CO 71/MUM/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 2992 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 15-03-2017
• Court: TRIBUNAL
• Department Lawyers: SUNIL K JHA
• Section: 153A; 132

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 6311 /MUM/ 201 6 (ASSESSMENT YEAR 20 07 - 08 ) DCIT CENTRAL CIRCLE - 2(3) ROOM NO. 804 8 TH FLOOR OLD CGO BUILDING ANNEX M.K. ROAD MUMBAI - 400 020. VS. SHRI VIPUL D. SHAH 401, DEEPAK BUILDING 3 RD FLOOR S.V. ROAD OPP. PAWAN HANS VILE PARLE WEST MUMBAI. ( APPELLANT ) ( RESPONDENT ) C.O. NO. 71/MUM/2017 (ASSESSMENT YEAR 2007 - 08) SHRI VIPUL D. SHAH 401, DEEPAK BUILDING 3 RD FLOOR S.V. ROAD OPP. PAWAN HANS VILE PARLE WES T MUMBAI. VS. DCIT CENTRAL CIRCLE - 2(3) ROOM NO. 804 8 TH FLOOR OLD CGO BUILDING ANNEX M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) PAN : AAHPS5253J ASSESSEE BY SHRI NIKHIL TIWARI DEPARTMENT BY SHRI SUNIL K. JHA DATE OF HEARING 4 . 5. 2 01 7 DATE OF PRONOUNCEMENT 4 .5 . 201 7 O R D E R THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 9.8.2016 PASSED BY THE LEARNED CIT(A) - 48, MUMBAI AND THEY RELATE TO A.Y. 2007 - 08. SHRI VIPUL D. SHAH 2 2. THE ON LY ISSUE URGED BY THE REVENUE IS WHETHER THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE DURING THE YEAR UNDER CONSIDERATION BY FOLLOWING DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHA VA SEVA)( 3 74 ITR 645) BY HOLDING THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS RELATING TO THE IMPUGNED ADDITION AND HENCE SAME IS NOT SUSTAINABLE, AS THE ASSESSMENT YEAR UNDER CONSIDERATION FALLS IN THE CATEGORY OF UNABA TED OR COMPLETED ASSESSMENT. 3. I HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE WAS SUBJECTED TO SEARCH U/S. 132 OF THE ACT ON 17.2.2012. CONSEQUENT THERETO, NOTICE U/S. 153A OF THE ACT WAS ISSUED TO THE ASSESSEE. IN RESPONSE THERETO, THE ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2007 - 08 DECLARING TOTAL INCOME OF ` 10,28,483/ - . THE ASSESSING OFFICER, HOWEVER, COMPLETED THE ASSESSMENT BY DISALLOWING INTEREST EXPENDITURE OF ` 21.03 LAKHS PAID TO A PARTNERSHIP FIRM (IN WHICH THE ASSESSEE I S A PARTNER) ON THE REASONING THAT THE ASSESSEES CAPITAL IS SHOWN AS POSITIVE FIGURE IN THE BALANCE - SHEET OF THE PARTNERSHIP FIRM . BEFORE THE LEARNED CIT(A), THE ASSESSEE CONTENDED THAT THE ASSESSMENT UNDER CONSIDERATION DOES NOT ABATE AND HENCE ADDITION COULD HAVE BE EN MADE BY THE AO ONLY ON THE BASIS OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. SINCE THE REVENUE DID NOT UNEARTH ANY INCRIMINATING MATERIAL, THE IMPUGNED ADDITION WAS OUTSIDE THE SCOPE OF SEC. 153A PROVISIONS. IN THIS RE GARD, THE ASSESSEE PLACED RELIANCE ON THE DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SEVA)(SUPRA). THE LEARNED CIT(A) WAS CONVINCED WITH THE CONTENTIONS OF THE ASSESSEE AND ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION REFERRED ABOVE. THE REVENUE HAS FILED THIS APPEAL CHALLENGING THE DECISION RENDERED BY THE LEARNED CIT(A). SHRI VIPUL D. SHAH 3 4. LEARNED DEPARTMENTAL REPRESENTATIVE PLACED RELIANCE ON THE DECISION RENDERED BY HON'BLE KERALA HIGH COURT IN THE CASE OF CIT VS. ST. FRANCIS CLAY DECOR TILES (70 TAXMANN.COM 234), WHEREIN HON'BLE KERALA HIGH COURT HAS HELD THAT ANY MATERIAL WHICH WAS UNEARTHED DURING THE SEARCH OPERATION OR ANY STATEMENT MADE DURING THE COURSE OF SEARCH BY THE ASSESSEE I S VALUABLE PIECE OF EVIDENCE IN ORDER TO INVOKE PROVISIONS OF SECTION 153A OF THE ACT. LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT HON'BLE KERALA HIGH COURT , AT PARAGRAPH NO 20 OF ITS ORDER , HAS HELD THAT THE ASSESSEE IS BOUND TO FILE RETUR N IN RESPONSE TO NOTIC E U/S. 153A OF THE ACT, EVEN IF ANY DOCUMENT IS NOT UNEARTHED OR ANY STATEMENT IS NOT MADE BY THE ASSESSEE DURING THE COURSE OF SEARCH U/S. 132 OF THE ACT. 5. WE NOTICED THAT HON'BLE HIGH COURT OF KERALA , IN THE ABOVE CITED CASE, HA S DISCUSSED ABOUT THE LIABILITY OF THE ASSESSEE TO FILE RETURN OF INCOME U/S. 153A OF THE ACT, WHEREAS HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SEVA) (SUPRA) HAS HELD THAT ADDITION CAN BE MADE IN THE CASE OF UNABA TED ASSESSMENT ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. I N THE PRESENT CASE, I T IS NOT THE CASE OF THE REVENUE THAT A N Y INCRIMINATING MATERIAL CONCERNING INTEREST EXPENDITURE WAS FOUND DURING THE COURSE OF SEARCH NOR I T IS THE CASE OF THE REVENUE THAT THE ASSESSEE HAS A GREED FOR DISALLOWANCE OF INTEREST EXPENDITURE IN THE STATEMENT TAKEN U/S. 132 (4) OF THE ACT. ACCORDINGLY, I AM OF THE VIEW THAT THE DECISION TAKEN BY THE LEARNED CIT(A), BY FOLLOWING THE BINDING DECISIO N OF HON'BLE JURISDICTIONAL BOMBAY HIGH COURT, DOES NOT CALL FOR ANY INTERFERENCE. 6. THE LEARNED CIT(A) DID NOT ADJUDICATE THE GROUNDS URGED ON MERITS, SINCE HE HAS DELET ED THE ADDITION ON LEGAL GROUND . THE ASSESSEE HAS FILED THE CROSS OBJECTION POIN TING OUT THAT THE LEARNED CIT(A) HAS NOT ADJUDICATED THE ADDITION ON MERITS. SINCE, THE ASSESSEE HAS SUCCEEDED IN APPEAL ON LEGAL GROUND, THE LEARNED CIT(A) HAS CONSIDERED THE GROUNDS URGED ON MERITS WOULD BE ACADEMIC SHRI VIPUL D. SHAH 4 IN NA T URE. I DO NOT FIND ANY INFIRMITY IN THE SAID DECISION RENDERED BY THE LEARNED CIT(A). 7 . IN THE RESULT, APPEAL FILED BY THE REVENUE AND C ROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 4 . 5 . 201 7. SD/ - (B.R.BASKARAN ) ACCOUNTANT MEMBER MUMBAI ; DATED : 4 / 5 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMB AI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI