DCIT, Central Circle - XVI, Kolkata, Kolkata V. M/s. PAMEM Coal Mines Ltd, Kolkata

ITA 1176/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87617 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 13-08-2012
• Court: TRIBUNAL
• Department Lawyers: ASSESSMENT YEAR THAT IN FACTS; CI
• Keywords: Search and seizure
• Section: 143(3); 153A; 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOLKATA [ BEFORE SHRI MAHAVIR SINGH, J.M. AND SHRI SHAMIM YAHYA , A . M . ] I.T. A . NO S . 1176 TO 1178 /KOL/20 12 ASSESSMENT YEAR S : 2003 - 04 TO 2005 - 06 DCIT, C.C. - XV I , KOLKATA - VS - M/S.PANEM COAL MI NES LTD.,KOLKATA (APPELLANT) AACCP 6935E .. ( RESPONDENT ) DATE OF CONCLUDING THE HEA RING : 15 . 01 .201 5 DATE OF PRONOUNCING THE ORDER : 15 . 01 .201 5 APPEARANCES : F OR THE DEPARTMENT : SHR I VIJAY KUMAR , CIT( DR ) : FOR THE ASSESSEE : SHRI SATISH KHOSLA , ADVOCATE , SHRI MANISH MALIK, ADVOCATE & SHRI L.N.MALIK, CA O R D E R PER SHRI SHAMIM YAHYA, A.M. : THESE APPEAL S BY THE REVENUE ARE DIRECTED AGAINST THE RESPECT IVE ORDER S OF THE CIT (A) PERTAINING TO THE AS SESSMENT YEAR S 2003 - 04 TO 2005 - 2 006 . SINCE COMMON GROU NDS ARE RAISED AND THE APPEALS WERE HEARD TOGETHER, HENCE T HESE ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. COMMON GROUNDS EXCEPTING VARIANCE IN AMOUNT READ AS UNDER: ITA NO.1176/KOL/2012 FOR THE ASSESSMENT YEAR 2003 - 04 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF INTEREST OF RS.29,51,510/ - EARNED BY THE ASSESSEE COMPANY DURING THE YEA R, BY RELYING UPON THE DECISION OF ITAT, KOL S DECISION IN THE CASE OF L.M. J INTERNATIONAL VS - DCIT (2008) 119 TTJ (KOL) 214 , WHICH STATES THAT SECTION 153A/153C DOES NOT AUTHORIZE DE - NOVO ASSESSMENT, WITHOUT APPRECIATING THAT THIS ADDITION WAS ALSO MA DE IN THE ORIGINAL ASSESSMENT COMPLETED U/S 143(3) OF THE ACT AND AS SUCH IT WAS NOT A NEW ISSUE DECIDED IN THE ASSESSMENT COMPLETED U/S. 153A OF THE ACT. ITA NOS.1176 TO 1178/K/12 ASSESSMENT YEARS 2003 - 04 TO 2005 - 06 PANEM COAL MINES LTD. 2 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN NOT DECIDING THE ISSUE ON MERIT ON TAXABILITY OF INTEREST INCOME AS REVENUE RECEIPT AND ALSO FAILED TO CONSIDER THAT WHEN THE ASSESSEE HAD CLAIMED CREDIT FOR TDS ON THE INTEREST INCOME, THE TAX DEDUCTED WAS INCOME OF THE ASSESSEE AS PER PROVISIONS OF SEC.198 OF THE I. T. ACT AND THE ASSESSEE WAS DUTY BOUND TO SHOW THE ENTIRE RECEIPT ON WHICH TAX WAS DEDUCTED, AS ITS INCOME. 3. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN RESPECT OF EMTA GROUP OF COMPANIES, TO WHICH THE ASSESSEE BELONGS, ON 15.01.2009 AND ON SUBS EQUENT DATES. PURSUANT TO THE SAID SEARCH, NOTICE UNDER SECTION 153A OF THE I.T. ACT WAS ISSUED AND ASSESSMENT FRAMED THEREUNDER. ONE OF THE ISSUE ON WHICH THE ADDITION WAS MADE BY THE AO PERTAINS TO INTEREST INCOME ADJUSTED WITH PROJECT COST. SINCE THE FA CTS ARE IDENTICAL, WE ARE ADJUDICATING THE ISSUE WITH REFERENCE TO FACTS AND FIGURES FROM ASSESSMENT YEAR 2003 - 04. ON THIS ISSUE, THE AO MADE THE ADDITION BY OBSERVING AS UNDER: INTEREST INCOME ADJUSTED WITH PROJECT COST ON PERUSAL OF RECORDS, IT IS S EEN THAT DURING THE YEAR, COMPANY HAD FDR S AMOUNTING TO RS.3,55,00,000/ - IN CANARA BANK ON WHICH TOTAL INTEREST EARNED BY THE COMPANY WAS RS.29,51,512/ - , TDS OF RS.6,19,818/ - . IT IS OBSERVED THAT COMPANY HAS NOT REFLECTED THE INTEREST INCOME AS TAXABLE IN COME BUT CLAIMED REFUND OF RS.6,19,818/. THE ISSUE WAS EXAMINED BY THE A.O. AT THE TIME OF ORIGINAL ASSESSMENT MADE VIDE ORDER DATED 27.01.2006 AND THE SAID AMOUNT OF RS.29,51,512/ - WAS ADDED BACK TO THE TOTAL INCOME. THE SAME ISSUE WAS RAISED THROUGH QUES TION NO.9 OF THE QUESTIONNAIRE ISSUED ALONG WITH THE NOTICE U/S 142(1), ON THE BACKGROUND OF JUDGEMENT GIVEN BY HON BLE SUPREME COURT IN THE CASE OF TUTICORIN ALKALI CHEMICALS & FERTILIZERS LTD. VS. CIT [227 ITR 172]. 4 . AT THE OUTSET, ON THIS ISSUE, TH E LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT IN ORIGINAL ASSESSMENT PROCEEDINGS FOR THE SAME ASSESSMENT YEARS, THE SAME ISSUE WAS RAISED BY THE AO AND ADDITION WAS MADE. HOWEVER, THE LD. CIT(A) GRANTED RELIEF WHICH WAS UPHELD BY THE ITAT, DELHI BENCHES AND REVENUE S APPEAL BEFORE THE HON BLE ITA NOS.1176 TO 1178/K/12 ASSESSMENT YEARS 2003 - 04 TO 2005 - 06 PANEM COAL MINES LTD. 3 DELHI HIGH COURT WAS ALSO DISMISSED. THE DEPARTMENT, THEREAFTER FILED SLP BEFORE THE HON BLE SUPREME COURT AND NO STAY HAS BEEN GRANTED AGAINST THE ORDER OF THE HON BLE HIGH COURT. HOWEVER, THE AO WAS NOT SATISFIED. HE PROCEEDED TO MAKE THE ADDITION AMOUNTING TO RS.29,51,512 / - . CONSIDERING THE ELABORATE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER: 6. I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED THE ASSESSMENT ORDER. I HAVE ALSO GONE THROUGH THE ORDER OF THE CIT(A), ORDER OF THE ITAT, DELHI AND ORDER OF HON BLE DELHI HIGH COURT PASSED IN RESPONSE TO ORIGINAL ASSESSMENT U/S. 143(3) OF THE ACT DATED 27.01.2006. THE FACTS OF THE CASE AND THE BUSINESS ACTIVITIES OF THE APPELLANT COMPANY HAS ALREADY BEEN DISCUSSED ABOVE. IT IS OBSERVED THAT IN THE ORIGINAL ASSESSMENT COMPLETED U/S. 143(3) OF THE ACT, THE AO ALREADY ADJUDICATED THE ISSUE OF TAXABILITY OF INTEREST INCOME AND RELYING ON THE DECISION OF SUPREME COURT IN THE CASE OF TUTICORIN ALKALI CHEMICALS & FERTILIZERS LTD. VS. C.I.T. (SUPRA), THE AO BROUGHT TO TAX THE INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES . AGAINST THE SAID ORDER THE APPELLANT COMPANY FILED AN APPEAL BEFORE THE CIT(A) AND RELYING ON THE DECISION OF SUPREME COURT IN THE CASE OF BOKARO STEEL LTD. (SUPRA), THE APPEAL FILED BY THE ASSESSEE WAS ALLOWED. THE REVENUE CONTESTED THE ORDER OF THE CIT(A) BEFORE THE ITAT, DELHI AND IN THE SECOND APPEAL THE ITAT CONFIRMED THE ORDER OF THE CIT(A ). THE ISSUE WAS FURTHER AGITATED BY THE REVENUE BEFORE THE HON BLE DELHI COURT U/S. 260A OF THE ACT. THE DELHI HIGH COURT ALSO DISMISSED THE APPEAL FILED BY THE REVENUE. THEREAFTER, SLP WAS FILED BEFORE THE HON BLE SUPREME COURT WHICH IS PENDING. FROM ABO VE IT IS APPARENT THAT THE ISSUE OF TAXABILITY OF INTEREST INCOME PRIOR TO COMMENCEMENT OF BUSINESS OF THE APPELLANT COMPANY WAS DECIDED IN FAVOUR OF APPELLANT BY THE HON BLE DELHI HIGH COURT. IN THE PROCEEDINGS INITIATED U/S. 153A OF THE ACT, THE AO AGAIN ADJUDICATED THE SAME ISSUE AND MADE ADDITION ON ACCOUNT OF INTEREST INCOME ON THE SAME GROUND ON WHICH THE ADDITION WAS MADE IN THE ORIGINAL ORDER U/S 143(3) OF THE ACT. ON CAREFUL CONSIDERATION OF FACTS AND IN LAW, I AM OF THE OPINION THAT THE AO HAS NO POWER TO MAKE AN ADDITION AGAIN ON THE ISSUE WHICH WAS DECIDED BY THE HIGHER AUTHORITIES. IT IS A FACT ON RECORD THAT IN THE CURSE OF SEARCH PROCEEDINGS NO INCRIMINATING DOCUMENTS WERE FOUND RELATING TO APPELLANT COMPANY FOR THE YEAR UNDER APPEAL AND, THER EFORE, IN THE ASSESSMENT ORDER NO ADDITION WAS MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INCOME. IN THE CASE LMJ INTERNATIONAL LTD. VS. DCIT (SUPRA), AFTER ANALYZING THE PROVISIONS OF SECTION 153A, FIRST AND SECOND PROVISO OF ITA NOS.1176 TO 1178/K/12 ASSESSMENT YEARS 2003 - 04 TO 2005 - 06 PANEM COAL MINES LTD. 4 SECTION 153A AND PROVISIONS OF SECTION 153A OF THE ACT, IT IS HELD BY THE HON BLE ITAT, KOLKATA THAT AFTER THE SEARCH, THE TOTAL INCOME OF THE ASSESSEE IS TO BE COMPUTED ON THE BASIS OF THE UNDISCLOSED INCOME UNEARTHED DURING SEARCH AND THE SAME IS TO BE ADDED WITH THE REGULAR INCOME AS SESSED U/S. 143(3) OR COMPUTED U/S 143(1) FOR EACH OF THE SIX PRECEDING ASSESSMENT YEARS. WHERE NOTHING INCRIMINATING IS FOUND IN THE CURSE OF SEARCH RELATING TO ANY ASSESSMENT YEARS, THE ASSESSMENTS FOR SUCH YEARS CANNOT DISTURBED. IT IS CONCLUDED BY THE HON BLE ITAT THAT UNDER THE PROCEEDINGS UNDER SECTION 153A/153C THE ITEMS OF REGULAR ASSESSMENT CANNOT BE ADDED BACK AND ONLY UNDISCLOSED INCOME DETECTED IN THE COURSE OF SEARCH CAN BE ADDED AND CHARGED TO TAX. IN THE CASE OF APPELLANT COMPANY THE ISSUE IN VOLVED WAS ALREADY ADJUDICATED UPTO THE STAGE OF HIGH COURT AND DECIDED IN FAVOUR OF APPELLANT COMPANY AND, THEREFORE, IN THE PROCEEDINGS U/S 153A NO FURTHER ADDITION ON ACCOUNT OF INTEREST INCOME COULD BE MADE BY THE AO. IN VIEW OF ABOVE, THE AO IS DIRECT ED TO DELETE THE ADDITION OF RS.29,51,512/ - . 5. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEAL BEFORE US. 6 . WE H AVE HEARD BOTH THE COUNSEL S AND PERUSED THE RECORDS. THE LD. DR RELIED UPON THE ORDERS OF THE AO. HOWEVER, THE LD. COUNSEL OF THE ASSESSE E SUBMITTED THAT ADDITION ON THE SAME ISSUE HAS BEEN MADE BY THE AO IN THE ORIGINAL PROCEEDINGS UNDER SECTION 143(3) OF THE IT ACT. AGAINST THIS ADDITION, THE ASSESSEE HAD GOT RELIEF FROM LD. CIT(A), ITAT AND HON BLE DELHI HIGH COURT. HENCE, THE LD. COUNSE L SUBMITTED THAT THERE IS NO REASON WHY THIS ADDITION SHOULD BE MADE IN THE PROCEEDINGS UNDER SECTION 153 OF THE I.T. ACT. THE LD. COUNSEL FURTHER SUBMITTED THAT THE ASSESSMENT IN THIS CASE HAS BEEN FRAMED UNDER SECTION 153A OF THE I.T. ACT. HE SUBMITTED T HAT ASSESSMENT UNDER THIS SECTION IS NOT PERMISSIBLE DE HORS INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH. THE LD. COUNSEL SUBMITTED THAT NO SUCH INCRIMINATING MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH. THE LD. COUNSEL IN THIS REGAR D PLACED RELIANCE UPON THE DECISION OF THIS TRIBUNAL IN THE CASE OF TRISHUL HI - TECH INDUSTRIES VS - DCIT IN ITA NOS. 84 TO 86/KOL/2011 BY ORDER DATED 24.09.2014. LD. COUNSEL ALSO PLACED ITA NOS.1176 TO 1178/K/12 ASSESSMENT YEARS 2003 - 04 TO 2005 - 06 PANEM COAL MINES LTD. 5 RELIANCE UPON THE DECISION OF THE HON BLE HIGH COURT OF RAJASTHAN IN T HE CASE OF M/S.JAI STEEL (INDIA), JODHPUR VS - ACIT, JODHPUR 259 CTR 281. 6.1 WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. WE FIND THAT ON THE SAME ISSUE OF ADDITION ON ACCOUNT OF INTEREST, THE ASSESSEE HAS GOT RELIEF FROM THE APPELLATE AUTHORITIES UPT O THE LEVEL OF HON BLE HIGH COURT IN THE PROCEEDINGS UNDER SECTION 143(3) OF THE I.T. ACT FOR THE SAME ASSESSMENT YEAR . IN SUCH CIRCUMSTANCES, THERE IS NO REASON TO SUSTAIN SUCH ADDITION UNDER SECTION 153A OF THE I.T. ACT. WHEN THE AO WAS APPRISED OF THE F ACTUAL POSITION, THE ASSESSEE HAS GOT RELIEF ON THE SAME ISSUE FROM THE APPELLATE AUTHORITY UP TO THE LEVEL OF HON BLE DELHI HIGH COURT, THE AO HAS REJECTED THE SAME BY SAYING THAT THERE IS NO INTERPRETATION OF LAW PROVIDED BY THE JURISDICTIONAL HIGH COU RT IN FAVOUR OF THE ASS ESSEE. WE FIND THAT I T IS ALSO NOT THE CASE THAT T HERE IS ANY CONTRARY DECISION BY THE HON BLE JURISDICTIONAL HIGH COURT. IN SUCH VIEW OF THE MATTER, THE DECISION OF THE HON BLE DELHI HIGH COURT IS BINDING ON INFERIOR COURTS . IN THIS VIEW OF THE MATTER, THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE AND LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION. 6.2 THE OTHER GROUND ON WHICH THE LD. CIT(A) HAS DELETED THE ADDITION IS THAT THE PRESENT ASSESSMENT HAS BEEN FRAMED UNDER SECTION 153A OF THE I.T. ACT AND NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH ON THE IMPUGNED ISSUE. WE FIND THAT IT HAS NOT BEEN DISPUTED BY THE REVENUE THAT ANY INCRIMINATING MATERIAL ON THIS ISSUE WAS FOUND DURING THE COURSE OF SEARCH. IN SUCH SCE NARIO, THE RATIO FROM THE HON BLE HIGH COURT OF RAJASTHAN IN THE CASE OF JAY STEEL INDIA ( SUPRA ) WOULD APPLY. IN THE SAID CASE, IT HAS BEEN EXPOUNDED THAT WHERE ASSESSMENT ALREADY STOOD COMPLETED AND NOTHING INCRIMINATING WAS FOUND ON ACCOUNT OF SEARCH ON REQUISITION, THEN THE QUESTION OF REASSESSMENT ON THE COMPLETED ASSESSMENT DOES NOT ARISE. THUS, AS ORIGINAL ASSESSMENT IN THIS CASE WAS ALREADY COMPLETED AND NOTHING INCRIMINATING WAS FOUND DURING THE SEARCH, THE IMPUGNED ADDITION BY THE AO IS NOT SUSTAIN ABLE FROM THIS POINT ITA NOS.1176 TO 1178/K/12 ASSESSMENT YEARS 2003 - 04 TO 2005 - 06 PANEM COAL MINES LTD. 6 OF VIEW ALSO. ACCORDINGLY, IN THE BACKGROUND OF AFORESAID DISCUSSION AND PRECEDENT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). ACCORDINGLY, WE UPHOLD THE SAME. 7 . IN THE RESULT, THE SE APPEAL S FILED BY THE REVENUE STA ND DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 15 TH JANUARY, 2015. SD/ - SD/ - ( MAHAVIR SINGH ) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH JANUARY, 2015 COPY OF THE ORDER FORWARDED TO: 1 . M/S. PANEM COAL MINES LTD., 801 CENTRAL PLAZA, 2/6, SARAT BOSE ROAD, KOLKATA - 700 0 20 2 ACIT, C.C. XV I , KO LKATA 3 . THE CIT(A), 4. CIT, 5 . DR, TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KO LKATA TALUKDAR(SR.P.S.)