DCIT, C.C.-2(3), KOLKATA V. G.S. GLOBAL PROJECTS PVT. LTD. , KOLKATA

MA 65/KOL/2023

AI Insights

The case involves multiple Miscellaneous Applications filed by the Deputy Commissioner of Income Tax against various respondents, including Square Four Assets Management and Reconstruction Company Pvt. Ltd., G.S. Global Projects Pvt. Ltd., and others. The applications sought rectification of a consolidated order passed by the Income Tax Appellate Tribunal, which had deleted certain additions made by the AO. The Revenue argued that incriminating material was present and should have been considered, whereas the respondents contended that the additions were made solely based on the books of accounts, not on any seized material. The Tribunal, referencing a Supreme Court decision, ruled that in the absence of incriminating material during unabated assessments, the AO's jurisdiction to make additions was limited.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 41145 (ITAT-KOLKATA)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Other Referred Cases: PCIT v. Abhisar Buildwell P. Ltd. (2023) 454 ITR 212 (SC)
• Laws Referred To: Section 254(2) of the Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT KUNDU
• Assessee Lawyers: MIRAJ D. SHAH
• Section: 20

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM MA Nos. 63 & 64/KOL/2023 (Arising in IT(SS)A Nos. 16 & 17/K/22 for A.Ys. 12-13 & 15-16) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. Square Four Assets Management And Reconstruction Company Pvt. Limited, 238A, A.J.C. Bose Road, Kolkata-700020 (Appellant) (Respondent) PAN No. AAFCA5966P MA No. 65/KOL/2023 (Arising in IT(SS)A No. 19/K/22 for A.Y 2011-12) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. G.S. Global Projects Pvt. Limited 238A, A.J.C. Bose Road, Kolkata-700020 (Appellant) (Respondent) PAN No. AABCG7279H MA No. 66/KOL/2023 (Arising in IT(SS)A No. 32/K/22 for A.Y 2011-12) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. Anita Singhania 238A, A.J.C. Bose Road Kolkata-700020 (Appellant) (Respondent) PAN No. ADAPA6445Q Page | 2 MA Nos.63 to 82/KOL/2023 MA No. 67/KOL/2023 (Arising in IT(SS)A No. 38/K/22 for A.Y 2013-14) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. G.S. Global Projects Pvt. Limited 238A, A.J.C. Bose Road Kolkata-700020 (Appellant) (Respondent) PAN No. AABCG7279H MA Nos. 68 & 69/KOL/2023 (Arising in IT(SS)A Nos. 39 & 41/K/22 for A.Ys. 11-12 & 14-15) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. Square Four Housing & Infrastructure Development Pvt. Limited 238A, A.J.C. Bose Road, Kolkata-700020 (Appellant) (Respondent) PAN No. AABCO4154H MA No. 70/KOL/2023 (Arising in IT(SS)A No.43/K/22 for A.Y 2012-13) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. Macro Network Pvt. Limited 238A, A.J.C. Bose Road Kolkata-700020 (Appellant) (Respondent) PAN No. AADCM1415D Page | 3 MA Nos.63 to 82/KOL/2023 MA No. 71/KOL/2023 (Arising in IT(SS)A No.50/K/22 for A.Y 2011-12) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. Srijan Tie Up Pvt. Limited 238A, A.J.C. Bose Road, Flat No. 2B, 2nd Floor, Kolkata-700020 (Appellant) (Respondent) PAN No. AAMCS2678H MA No. 72/KOL/2023 (Arising in IT(SS)A No.51/K/22 for A.Y 2013-14) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. Square Four Assets Management And Reconstruction Company Pvt. Limited 238A, A.J.C. Bose Road Kolkata-700020 (Appellant) (Respondent) PAN No. AAFCA5966P MA No.73/KOL/2023 (Arising in IT(SS)A No.52/K/22 for A.Y. 2014-15) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. M/s. Mechano Paper Machines Limited, 238A, A.J.C. Bose Road, Kolkata-700020 (Appellant) (Respondent) PAN No. AACCM0602M Page | 4 MA Nos.63 to 82/KOL/2023 MA Nos.74 & 75/KOL/2023 (Arising in IT(SS)A Nos.60 & 61/K/22 for A.Y.11-12 & 12-13) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. BRC Construction Company Pvt. Limited 238A, A.J.C. Bose Road, 2nd Floor, Suite-2B, Kolkata-700020 (Appellant) (Respondent) PAN No. AACCB1091P MA No. 76/KOL/2023 (Arising in IT(SS)A No.62/K/22 for A.Y. 2011-12) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. Square Four Assets Management And Reconstruction Company Pvt. Limited 238A, A.J.C. Bose Road, 2nd Floor, Kolkata-700020 (Appellant) (Respondent) PAN No. AAFCA5966P MA No.77/KOL/2023 (Arising in IT(SS)A No.63/K/22 for A.Y. 2011-12) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. Macro Network Pvt. Limited 238A, A.J.C. Bose Road, Kolkata-700020 (Appellant) (Respondent) PAN No. AADCM1415D Page | 5 MA Nos.63 to 82/KOL/2023 MA Nos.78 to 82/KOL/2023 (Arising in IT(SS)A Nos.101 to 105/K/22 for A.Ys. 2011-12 to A.Y. 2015-16 respectively) Deputy Commissioner of Income Tax Central Circle-2(3), Kolkata Aayakar Bhawan Poorva 110, Shantipally, Kolkata-700107 West Bengal Vs. Ganesh Kumar Singhania 238A, A.J.C. Bose Road, Kolkata-700020 (Appellant) (Respondent) PAN No. AKTPS7277C Assessee by : Shri Miraj D. Shah, AR Revenue by : Shri Abhijit Kundu, DR Date of hearing: 29.11.2024 Date of pronouncement : 14.02.2025 O R D E R Per Rajesh Kumar, AM: By virtue of these Miscellaneous Application, the Revenue seeks the rectification of the consolidated order passed by the Tribunal dated 24th May, 2023, in IT(SS)A Nos. 16,17,19,32,38,39,41,43,50,51,52,74, 75,76,77,78 to 82/KOL/2022. 02. The ld. DR vehemently submitted before us that the Tribunal has passed a consolidated order dated 24.05.2023 for 20 cases with lead case as IT(SS)A No. 16/KOL/2022 for A.Y. 2012-13 in case of Square Four Assets Management and Reconstruction Company Pvt. Ltd. It was also pointed out that in the said order certain corrigendum was also passed on 18.07.2023, making certain corrections. The ld. DR submitted that the lead case was followed in all the remaining 19 cases and additions Page | 6 MA Nos.63 to 82/KOL/2023 were deleted on the ground that these being unabated assessment years on the date of search and the ld. AO had no jurisdiction to make the additions in absence of any incriminating material seized during the search, whereas as a matter of fact, incriminating seized material was also there and additions were made on the basis of information contained in the books of accounts of the assessee. Thereafter the ld. DR pointed out that, while referring to the various seized materials during the course of search, submitted that the order passed by the Tribunal is suffering from a patent error within the meaning of Section 254(2) of the Act and therefore, the order passed in all these appeals is required to be rectified accordingly. 03. The ld. Authorized Representative on the other hand strongly opposed the arguments of the ld. DR by referring to the assessment orders and appellate orders passed in these appeals and submitted that nowhere any reference was made to the incriminating seized material during the course of search while making the additions by the ld. AO nonetheless it is stated by the ld. AO in the assessment orders that these additions were made on the basis of information contained in the books of accounts of the assessee. Therefore, the ld. Authorized Representative strongly supported the consolidated order passed by the tribunal wherein after following the decisions of the Hon'ble Apex Court in the case of PCIT v. Abhisar Buildwell P. Ltd. (2023)454 ITR 212(SC) the appeals were allowed on the legal issue by holding that these being unabated assessment years on the date of search and therefore, the ld. AO had no authority to make the additions as there were no incriminating material seized during the search action on the assessee. 04. After hearing the rival contentions and perusing the assessment orders as well as the appellate orders we find that nowhere while making the Page | 7 MA Nos.63 to 82/KOL/2023 additions, the ld. AO or ld. CIT (A) has referred to any seized incriminating material during the search and additions were made on the basis of information contained in the books of accounts. Therefore, these being unabated assessments on the date of search , the jurisdiction of the ld.AO is very limited to make the additions only on the basis of seized incriminating material. We have also perused the submissions of the ld. DR in Para 6 of the MA’s, wherein, the above decision of the Apex court in the case of PCIT v. Abhisar Buildwell P. Ltd. (2023)454 ITR 212(SC) has been referred and para 14(iii) has been extracted. We observe that the Hon'ble Apex Court has observed that in case of any incriminating material found or unearthed in an unabated or completed assessment, then the AO would assess or re-assess the income taking into consideration the incriminating material unearthed during search as well as other materials available with the ld. AO including the income declared in the returns. With utmost respect to the decisions of the Hon'ble Apex Court, we would like to state that Hon'ble Apex Court has given an observation that where the ld. AO has any incrementing material unearthed during the search on the basis of which some additions are made then the ld. AO has jurisdiction to make other additions on the basis of other material available with the ld. AO even if there is no incriminating material unearthed during the search qua the said additions. Therefore, the first condition to be satisfied for making the addition in an unabated/ completed assessment year is that there has to be some addition(s) based on the incriminating material available before him, only other additions can be made sans any incriminating materials. 05. Considering the aforesaid facts and circumstances, we are of the view that the order passed by the Tribunal dated 24th May, 2023 in the Page | 8 MA Nos.63 to 82/KOL/2023 aforesaid IT(SS)s is perfectly in accordance with the law and no interference is required at our end as there is no apparent mistake in the said order and therefore these MA,s are not maintainable. Accordingly, the MAs filed by the Revenue are dismissed. 06. In the result, the Miscellaneous applications filed by the Revenue are dismissed. Order pronounced in the open court on 14.02.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 14.02.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "