Assistant Commissioner of Income-tax 2(1), RAIPUR (CG) V. M/s Shree Ram Enterprises, RAIPUR (CG)

ITA 116/BIL/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0523 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 09-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV VARSHNEY
• Assessee Lawyers: R B DOSHI
• Keywords: Unexplained cash credit
• Section: 68; 132

Judgement Text

1 ITA NO. 116/BLPR/2012 CO NO. 19/BLPR/2012 IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR. BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T. A. NO. 1 16 /BLPR/201 2 ASSESSMENT YEAR : 2004 - 05. ASSTT. COMMISSIONER OF INCOME - TAX, M/S SHREE RAM ENTERPRISES, RAIPUR. VS. RAIPUR. APPELLANT. RESPONDENT . C.O. NO. 19/BLPR/2012 (IN ITA NO. 116/BLPR/2012) ASSESSMENT YEAR : 2004 - 05. M/S SHREE RAM ENTERPRISES, ASSTT. COMMISSIONER OF RAIPUR. VS. INCOME - TAX, RAIPUR. CROSS OBJECTOR. RESPONDENT. DEPARTMENT BY : SHRI RAJIV VARSHNEY. ASSESSE`E BY : SHRI R.B. DOSHI. DATE OF HEARING : 1 5 - 10 - 2015. DATE OF PRONOUNCEMENT : 18 TH NOV. ., 2015. O R D E R PER SHRI SHAMIN YAHYA, A.M . THIS APPEAL BY THE ASSESSEE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS), RAIPUR DATED 25 - 12 - 2012 AND PERTAINS TO ASSESSMENT YEAR 2004 - 05. GROUNDS RAISED IN REVENUES APPEAL READ AS UNDER : 1. WHETHER ON THE FACTS AND ON FACTS & CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN VACATING THE ORDER OF A.O. MADE U/S 153C OF THE INCOME - TAX ACT, 1961. 2. THE ORDER O F THE LD. CIT(A) IS ERRONEOUS BOTH IN LAW AND ON FACTS. 2 ITA NO. 116/BLPR/2012 CO NO. 19/BLPR/2012 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND CONSEQUENT UPON SEARCH U/S 132 OF THE ACT CONDUCTED IN THE CASE OF PRIME ISPAQT LTD. AND OTHER GROUP CASES ON 04 - 02 - 2010, NOT ICE U/S 153C OF THE ACT WAS ISSUED, AS THE ASSESSEE IS RELATED TO THIS GROUP. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED AND TOTAL INCOME WAS ASSESSED AT RS.55,47,937/ - AS AGAINST RETURNED INCOME OF RS.24,380/ - . THE ADDITION OF RS.55,23,557/ - RELATES TO UN EXPLAINED CREDITS APPEARING IN THE NAMES OF PARTNERS. 3. BEFORE THE LEARNED CIT(APPEALS) IT WAS CONTENDED THAT NO DOCUMENT/RECORD NOR ANY UNDISCLOSED INCOME RELATING TO THE ASSESSEE WERE FOND DURING THE SEARCH AND UNLESS SOME UNDISCLOSED INCOME RELATING TO THE ASSESSEE WAS UNEARTHED, THE PROVISIONS OF SECTION 153C CANNOT BE INVOKED. IT WAS CONTENDED THAT SINCE NO ADDITION WAS MADE ON ACCOUNT OF ANY SEIZED MATERIAL, THE AO HAD NO JURISDICTION TO ISSUE NOTICE AND SUBSEQUENTLY PASS AN ORDER U/S 153A. CONSIDER ING THE ABOVE, LEARNED CIT(APPEALS) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE HOLDING AS UNDER : I HAVE GONE THROUGH THE SUBMISSIONS OF THE APPELLANT. DURING THE SEARCH CONDUCTED U/S 132 IN THE PREMISES OF THE PARTNER, NO INCRIMINATING DOCUMENTS OR UND ISCLOSED INCOME RELATING TO THE APPELLANT WAS FOUND. ACCORDINGLY, KEEPING IN VIEW THE DECISIONS QUOTED ABOVE AQND THE ORDER OF THE HONBLE JURISDICTIONAL BENCH IN THE CASE OF M/S SHAKTI TRADERS IN ITA(SS)A NO. 119/NAG/2008 DATED 19.06.2009, IN WHICH IT WAS HELD THAT AO HAS NO JURISDICTION TO TAKE ACTION U/S 153C, WITHOUT ANY INCRIMINATING MATERIAL PERTAINING TO THE RELEVANT ASSESSMENT YEAR, I AM OF THE OPINION THAT AO IS NOT CORRECT IN TAKING ACTION U/S 153C AND MAKING AN ADDITION OF AN ITEM, WHICH WAS NOT UNEARTHED DURING SEARCH. ACCORDINGLY, THE ASSESSMENT ORDER IS VACATED AND THE APPEAL IS ALLOWED ON THIS GROUND. 4. AGAINST THE ABOVE ORDER, REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. UPON CAREFUL CONSIDERAT ION WE FIND THAT IT IS UNDISPUTED THAT IN THE SEARC H A N D SEIZURE 3 ITA NO. 116/BLPR/2012 CO NO. 19/BLPR/2012 OPERATION NO DOCUMENT OR MATERIAL IN RELATION TO THE ASSESSEE WAS FOUND. SECTION 153C PROVIDES AS UNDER : 153C. [(1)] [NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT, - (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONG TO, OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINED THEREIN, RELATES TO, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON] [AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESSEE OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDAN CE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMEN T YEAR OR YEARS REFERRED TO IN SUB - SECTION (1) OF SECTION 153A] . FROM THE ABOVE IT IS EVIDENT THAT IT IS ONLY WHEN THAT MONEY, BULLION, VALUABLE ARTICLES, BOOKS OF ACCOUNTS ETC. OF A PERSON OTHER THAN THE SEARCH ED PERSON IS FOUND, THEN THE AO OF THAT PERSON SHALL HANDOVER THE MATERIAL TO THE AO OF THE OTHER PERSON. HENCE, PLAIN READING OF SECTION 153C MANDATES THAT FINDING OF ANY MATERIAL RELATING TO THE ASSESSEE IS S INE QU A NON FOR INITIATING ANY ACTION U/S 153 C . HENCE SINCE NO INCRIMINATING MATERIAL WAS FOUND, THERE IS ALSO NO QUESTION OF ANY SATISFACTION RECORDED BY THE AO. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, LEARNED CIT(APPEALS) IS CORRECT IN HOLDING THAT THE JURISDICTION ASSUMED BY THE AO IN THIS CASE IS BAD IN LAW. FURTHER MORE LEARNED COUNSEL OF THE ASSESSEE HAS ALSO SUBMITTED THAT IN THIS CASE RETURN OF INCOME ORIGINALLY WAS ALREADY FILED ON 07 - 07 - 2004. HENCE LEARNED COUNSEL PLEADED THAT 4 ITA NO. 116/BLPR/2012 CO NO. 19/BLPR/2012 THERE WAS NO PENDING ASSESSMENT ON THE DATE OF SEARCH. HENCE LEARNED COUNSEL PLEADED THAT THIS WAS A CASE OF NON ABATED ASSESSMENT AND IN SUCH CASES ASSESSMENTS CAN BE MADE ONLY ON THE BASIS OF BOOKS OF ACCOUNTS AND OTHER DOCUMENTS NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT BUT FOUND IN THE COURSE OF SEARCH AND UNDISCLOSED INCOME FOR UNDISCLOSED PROPERTY IS COVERED IN THE COURSE OF SEARCH. FOR THIS PROPOSITION LEARNED COUNSEL PLACED RELIANCE UPON THE DECISION OF THE SPECIAL BENCH OF THE ITAT IN THE CASE OF A L L CARGO GLOBAL LOGISTICS. LEARNED COUNSEL FURTHER S UBMITTED THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT S. CONTINENTAL WAREHOUSING CORPORATION 279 CTR 389 HAS HELD THAT THE SPECIAL BENCH UNDERSTANDING OF LEGAL P ROVISION IS NOT PERVERSE NO R DOES IT SU FFER FROM ANY ERROR OF LAW APPARENT ON THE FAC E OF THE RECORD. WE FIND THAT SINCE WE HAVE ALREADY HELD THAT SINCE NO INCRIMINATING AND/OR OTHERWISE MATERIAL RELATING TO THE ASSESSEE WERE FOUND DURING THE SEARCH, ASSUMPTION OF JURISDICTION IN THIS CASE U/S 153C IS NOT SUSTAINABLE. HENCE ADJUDICATION ON THIS ASPECT OF THE SUBMISSION OF THE LEARNED COUNSEL OF THE ASSESSEE IS ONLY OF ACADEMIC INTEREST . HENCE WE ARE NOT ENGAGING INTO THE SAME. HENCE UPHOLDING THE CIT(APPEALS) ORDER , THE REVENUES APPEAL IS DISMISSED. 6. ASSESSEES CROSS OBJECTION: IN THIS CROSS OBJECTION THE ASSESSEE HAS AGITATED THAT THE LEARNED CIT(APPEALS) HAS ERRED IN NOT ADJUDICATING THE MERITS OF THE CASE WHICH RELATED TO ADDITION U/S 68 ON ACCOUNT OF UNEXPLAINED CASH CREDIT IN THE NATURE OF ADDITION TO PARTNERS CAPITAL ACCOUNT W ITH THE ASSESSEE FIRM. IN THIS REGARD THE ASSESSEE HAS ALSO PLACED RELIANCE UPON THE D ECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF RA I SONS ENGINEERS AND CONTRACTORS IN ITA NO. 95 OF 2000 VIDE ORDER DATED 8 TH OCT., 2009. 7. WE FIND THAT ON THE ISSUE OF JURISDICTION ITSELF WE HAVE UPHELD THE ORDER OF LEARNED CIT(APPE A LS). HENCE ADJUDICATION OF THE ISSUE RAISED IN THE CROSS 5 ITA NO. 116/BLPR/2012 CO NO. 19/BLPR/2012 OBJECTION IS ONLY OF ACADEMIC INTEREST. HENCE WE ARE NOT ENGAGING INTO THE SAME. HENCE THE CROSS OBJECTION IS DISMISSED AS INFRUCTUOUS. 8 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALSO DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF NOV. , 2015. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 18 TH NOV. ., 2015. COPY FORWARDED TO : 1. M/S SHREE RAM ENTERPRISES, PYARELAL AGRAWAL MARG, RAMSAGARPARA , RAIPUR. 2. A.C.I.T. , RA IPUR. 3. C.I.T., CONCERNED 4. CIT(APPEALS), RAIPUR. 5. D.R., ITAT, RAIPUR. 6. GUARD FILE TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR