BALASORE ALLOYS LTD, ORRISSA V. ASST CIT CEN CIR 3(2), MUMBAI

ITA 1168/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0928 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 26-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: D V LAKHANI
• Keywords: Search and seizure
• Section: 153A; 147; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE S/SHRI RAJENDRA, A.M. AND AMARJIT SINGH , J.M. ./ ITA NO S . 1167 TO 116 9 /MUM/201 5 / ASSESSMENT YEAR S : 2007 - 08, 2008 - 09 & 2009 - 10 M/S. BALASORE ALLOYS LTD, (FORMERLY ISPAT ALLOYS LTD) , MUMBAI. PAN: AAACI3967 P VS. A CIT , CIRCLE - 3( 2 ), (EARLIER DCIT, 18 & 19), MUMBAI. ( / APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI YASHWANT KUMAR BHASKAR (DR) ASSESSEE BY: SHRI D.V.LAKHANI / DATE OF HEARING: 03 / 10 /2017 / DATE OF PRONOUNCEMENT: 01/01/2018 , 1961 254(1) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) . , - PER RAJENDRA,AM : CHALLENGING THE ORDERS DTD. 29.12.2014,3012.2014 AND 16.12.2014 OF THE CIT (A) - 51 ,MUMBAI THE ASSESSEE HAS FILED APPEALS FOR THE ABOVE MENTIONED THREE ASSESSMENT YEARS(AY.S). ASSESSEE , A LISTED PUBLIC COMPAY, IS INVOLVED IN THE BUSINESS OF MANUFACTURING OF F ERRO ALLOYS . DETAILS OF DATES OF FILING OF RETURNS,RETURNED INCOMES,DATES OF ASSESSMENTS AND ASSESSED INCOMES CAN BE TABULATED AS UNDER: AY. ROI FILED ON RETURNED INOCME ASSTT.DATE ASSESSED INCOME [U/S.143(3)R.W.S.153A] 07 - 08 31/10/2007 NIL 31.03 . 2013 NIL 08 - 09 29.09.2008 NIL 31.03.2013 27.14 CRORES 09 - 10 19.02.2011 1.02 CRORES 31.03.2013 25.32 CRORES AS THE ISSUES IN ALL THE APPEALS ARE COMMON,SO,WE ARE ADJUDICATING THEM TOGETHER . ITA/ 1167 / MUM / 2015/ AY.2007 - 08 .BRIEF FACTS: 2. A SEARCH AND SEIZURE ACTION ,U/S.132 OF THE ACT WAS INITIATED IN THE CASE OF THE ASSESSEE ON 30.11.2010 IN ISPAT GROUP OF CASES,INCLUDING THE ASSESSEE. THE AO ISSUED NOTICES TO THE ASSESSEE , AS PER THE PROVISIONS OF SECTION 153A OF THE ACT DIRECTING IT TO FILE RETURNS OF INCOME FOR THE ABOVE MENTIONED AY.THE AO COMPLETED THE ASSESSMENT AS MENTIONED IN THE ABOVE TABLE. 3 . S OLE GROUND OF APPEAL , RAISED BY THE ASSESSEE, IS ABOUT NOT ALLOWING ITS CLAIM FOR THE SUM PAID TOWARDS ELECTRICITY CHARGES TO NESCO . DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE APPELLANT HAD RAISED AN ADDITIONAL CLAIM OF AN AMOUNT OF RS.3885.98 LAKHS ON ACCOUNT OF ELECTRICITY CHARGES PAID TO NESCO. HE OBSERVED THAT NO SUCH CLAIM HAD BEEN MADE IN THE RETURN WHICH HAD BEEN FILED U /S. 139(1) OF THE ACT,THAT T HE CLAIM WAS MADE FOR THE FIRST TIME, IN THE COURSE OF PROCEEDINGS INITIATED BY ISSUE OF NOTICE U /S. 153A, THAT 1167 TO 1169 OF BALASORE ALLOYS LTD. 2 PROCEEDING S U/S. 153 - A WERE FOR THE BENEFIT OF REVENUE ,THAT THE PRINCIPLES OF LAW LAID DOWN BY THE APEX COURT IN THE CASE OF SUN ENGINEERING WORKS IN THE CONTEXT OF SECTION 147 WOULD EQUALLY APPLY TO THE PROVISIONS U/S. 153A. ACCORDINGLY, HE DECLINED TO ALLOW THE CLAIM OF DE DUCTION OF RS. 3885.98 LAKHS. 3.1 . AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA) A ND MADE ELABORATE SUBMISSIONS.AFTER CONSIDERING THE AVAILABLE MATERIAL,HE HELD THAT CLAIM OF PAYMENT OF RS.3885.98 LAKHS TO NESCO HAD COME UP FOR ADJUDICATION IN THE A Y. 2005 - 06 ,THAT W HILE DISPOSING OFF THE APPEAL FOR THAT A Y. IT HAS BEEN HELD THAT THE CLAI M FOR DEDUCTION WA S NOT AT ALL TENABLE EITHER ON THE BASIS OF ACCRUAL/CRYSTALLIZATION OF THE CL AIM OR BASED ON ACTUAL PAYMENT.ACCORDINGLY,HE DISALLOWED THE CLAIM MADE BY THE ASSESSEE. 3.2 . DURING THE COURSE OF HEARING BEFORE US,THE AUTHORISED REPRESENTATIVE (AR) FAIRLY AGREED THAT THE ISSUE,RAISED BY THE ASSESSEE, STANDS DECIDED AGAINST IT,THAT THE TRIBUNAL ,WHILE DECIDING THE APPEAL S FOR THE AY. S.2005 - 06 AND 2006 - 07 (I TA .S / 1166 & 621 AND 667 / MUM / 2015 / DTD. 07.04.2017 ) HAD HELD THAT IN ABSENCE OF INCRIMINATING MAT ERIAL , FOUND DURING THE SEARCH AND SEIZURE PROCEEDING,NO ASSESSMENT COULD BE MADE, IF THE ASSESSMENT FOR THAT YEAR WAS ALREADY COMPLETED BY THE AO . THE DR STATED THAT THE AO HAD PASSED ASSESSMENT ORDER,FOR THE YEAR UNDER APPEAL,BEFORE INITIATION OF THE ACTION U/S.132 OF THE ACT. CONSIDERING THE ABOVE, WE DISMISS THE EFFECTIVE GROUND OF APPEAL RAISED BY THE ASSESSEE. ITA/ 1168 / MUM / 2015 / - AY .2008 - 09: 4 . FOLLOWING OUR ORDER FOR THE EARLIER YEAR,WE DISMISS THE APPEAL FILED BY THE ASSESSEE,AS THE FACTS FOR BOTH THE AY. S.ARE SIMILAR. ITA/1169/MUM/2015/ - AY.2009 - 10: 5 . FACTS FOR THE YEAR UNDER CONSIDERATION ARE SLIGHTLY DIFFERENT.THE AR STATED THAT ON TH E DATE OF SEARCH THE ASSESSMENT,FOR THE YEAR UNDER APPEAL, WAS NOT COMPLETED,THAT THE ASSESSEE COULD MAKE A FRESH CLAIM FOR THE DEDUCTION IN LIGHT OF THE JUDGMENT OF THE HONBLE BOMBAY HIGH DELI VERED IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA)L TD. , (374 ITR 645),THAT THE DEPARTMENTAL AUTHORITIES DID NOT HAVE THE BENEFIT OF THE ABOVE JUDGMENT ,THAT MATTER SHO ULD BE RESTORED BACK TO THE AO TO CONSIDER THE CLAIM MADE FOR THE YEAR UNDER APPEAL .THE DEPARTMENTAL REPRESENTATIVE (DR)LEFT THE ISSUE TO THE DISCRETION OF THE BENCH. 5.1 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT T HE ASSESSMENT FOR THE YEAR WAS PENDING ON THE DATE OF THE INITIATION OF THE SEARCH U /S. 132 OF THE ACT .IN THE MATTER OF CONTINENTAL WA REHOUSING CORPORATION (NHAVA SHEVA)L TD. (SUPRA) THE HONBLE HIGH COURT HAS HELD AS UNDER: 1167 TO 1169 OF BALASORE ALLOYS LTD. 3 UNDER SECTION 153A OF THE INCOME - T AX ACT, 1961, WHICH ENABLES CARRYING OUT OF SEARCH OR EXERCISE OF POWER OF REQUISITION, ASSESSMENT IN FURTHERANCE THEREOF IS CONTEMPLATED. THERE IS A MANDATE TO ISSUE NOTICES UNDER SECTION 153(1)(A) AND ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. THUS, THE CRUCIAL WORDS SEARCH AND REQUISITION APPEAR IN THE SUBSTANTIVE PROVISION AND THE PROVISOS. THAT WOULD THR OW LIGHT ON THE ISSUE OF APPLICABILITY OF THE PROVISION. TRUE IT IS THAT THE ASSESSMENT WHICH HAS TO BE MADE IN PURSUANCE OF THE NOTICE IS IN RELATION TO THE SIX YEARS. AN ORDER WILL HAVE TO BE MADE IN THAT REGARD. WHILE MAKING THE ORDER, THE INCOME OR THE RETURN OF INCOME FILED FOR ALL THESE ASSESSMENT YEARS IS TO BE TAKEN INTO ACCOUNT. A REFERENCE WILL HAVE TO BE MADE TO THE INCOME DISCLOSED THEREIN. HOWEVER, THE SCOPE OF ENQUIRY THOUGH NOT CONFINED ESSENTIALLY REVOLVES AROUND THE SEARCH OR THE REQUISITIO N UNDER SECTION 132A , AS THE CASE MAY BE. THE PROVISION DEALS WITH THOSE CASES WHERE ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO THE ASSESSMENT YEARS FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN SUB - SECTION (1) OF SECTION 153A WERE PENDING. IF THEY WERE PENDING ON THE DATE OF THE INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A , AS THE CASE MAY BE, THEY ABATE. IT IS ONLY PENDING PROCEEDINGS THAT WOULD ABATE AND NOT WHERE THERE ARE ORDERS MADE O F ASSESSMENT OR REASSESSMENT AND WHICH ARE IN FORCE ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF THE REQUISITION. CONSIDERING THE ABOVE,WE ARE OF THE OPINION THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION ,WHO WOULD DECIDE THE ISSUE AFTER AFFORDING A REASONABLE OPPORTUNITY TO THE ASSESSEE.EFFECTIVE GROUND OF APPEAL IS ALLOWED IN FAVOUR OF THE ASSESSEE,IN PART. AS A RESULT, APPEAL S FILED BY THE ASSESSEE FOR THE AY.S.2007 - 08 AND 2008 - 09 STAND DISMISSED AND THE APP EAL FOR THE AY.2009 - 10 IS PARTLY ALLOWED . . . 2007 - 08 2008 - 09 . . 2009-10 . ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST , JANUARY , 201 8 . 1 , 201 8 SD/ - SD/ - ( / AMARJIT SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; / DATED : 01 . 0 1 .201 8 . SD/ - JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI.