CINEYUG, MUMBAI V. ASST CIT CEN RG 15 & 16, MUMBAI

ITA 1224/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1734 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-09-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 09-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Search and seizure
• Section: 143(3); 133A; 153A; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C, MU MBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.1224/MUM/2016 FOR A Y : 2004-05 M/S CINEYUG, GROUND FLOOR , ELDORA APARTMENTS, JUHU CHURCH ROAD, JUHU, MUMBAI - 400049 PAN: AAAFC7001P VS ACIT-CENTRAL RANGE,15 & 16, AIR INDIA BUILDING, NARIMAN POINT , MUMBAI-400021. (APPELLANT) (RESPONDENT) ASSESSEE BY SH. VIPUL JOSHI (AR) REVENUE BY : SH. SUBHACHAN RA M (DR) DATE OF HEARING : 15.11.2016 DATE OF PRONOUNCEMENT : 09.12.2016 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE FILED UNDER SECTION 253 OF INCOME TAX ACT (ACT)T IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOM E TAX (APPEALS) DATED 18 TH OF DECEMBER 2015 FOR ASSESSMENT YEAR 2004-05. THE ASSE SSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: (I) THE LD CIT (APPEALS) ERRED IN CONFIRMING THE DISALL OWANCE OF DEPRECIATION OF RS.3,65,934 /- CLAIMED ON PREMISES AT COMMERCE CENTRE. (II) THE LD CIT(A) ERRED IN HOLDING THAT THE PREMISES AT COMMERCE CENTRE WAS LET OUT AND NOT PREMISES AT ELDORA APARTMENTS T HEREBY CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS. 3,64,934/-. THE ASSESSEE VIDE ITS APPLICATION DATED 19 TH APRIL 2016 RAISED THE FOLLOWING ADDITIONAL GROUNDS OF APPEAL: (III) THE LEARNED CIT(A) FAILED TO APPRECIATE THAT NO DIS ALLOWANCE OF DEPRECIATION OF RS. 3,65,934/- COULD HAVE BEEN MADE WHILE COMPLETIN G ASSESSMENT UNDER SECTION 153A OF THE INCOME TAX ACT 1961. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR WAS COMPLETED UNDER SECTION 143(3) ON 27 TH DECEMBER 2006. SEARCH AND SURVEY IT A NO.1224/M/2016 M/S CINEYUG 2 OPERATION UNDER SECTION 132 AND 133A OF THE ACT WAS CARRIED OUT ON 25 NOV 2009 IN CASE OF CIEYUG GROUPS AND OTHERS PERSONS AND ENT ITIES CONNECTED WITH CINYUG GROUPS. CONSEQUENT UPON THE ASSESSEES CASE WAS COV ERED AS PER THE PROVISIONS OF SECTION 153A. A NOTICE UNDER SECTION 153A WAS IS SUED ON 02.08.2010 REQUIRING THE ASSESSEE TO FILE RETURN OF INCOME. IN RESPONSE TO THE NOTICE UNDER SECTION 153A THE ASSESSEE FILED RETURN OF INCOME ON 6 SEPTEMBER 2010 DECLARING TOTAL INCOME OF RS. 89,460/-. THE ASSESSEE IN THE R ETURN OF INCOME FILED ON 29 OCTOBER 2004 DECLARED THE SIMILAR INCOME AS DECLARE D IN THE ORIGINAL RETURN OF INCOME FILED U/S 139(1) OF THE ACT. THE AO WHILE FR AMING ASSESSMENT UNDER SECTION 153A R.W.S.143(3) BESIDES THE OTHER ADDITIO N AND DISALLOWANCE DISALLOWED THE DEPRECIATION OF RS. 3,65,934/-IN HIS ORDER DATE D 29 TH DECEMBER 2011. ON APPEAL BEFORE COMMISSIONER (APPEALS) THE DISALLOWAN CE WAS SUSTAINED. FURTHER, AGGRIEVED BY THE ORDER OF LD. COMMISSIONER (APPEAL S) THE ASSESSEE FILED PRESENT APPEAL BEFORE US. 3. FIRST WE SHALL DISCUSS THE ADDITIONAL GROUND OF APP EAL RAISED BY ASSESSEE WHICH IS PURELY LEGAL IN NATURE AND GOES TO THE ROOT OF T HE CASE. WE HAVE HEARD THE LD. AR OF THE ASSESSEE AND THE LD. DR FOR THE REVENUE A ND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR OF THE ASSESSEE ARG UED THAT ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR WAS COMPLETED UNDER SECTIO N 143(3) ON 27 TH DECEMBER 2006. THERE WAS NO INCRIMINATING MATERIAL FOUND DUR ING THE SEARCH CONCERNING THE DISALLOWANCE OF DEPRECIATION AND HENCE NO ADDIT ION CAN BE MADE IN THE ASSESSMENT UNDER SECTION 153A R.W.S 143(3) OF THE A CT. THERE IS NO REFERENCE IN THE ENTIRE ASSESSMENT ORDER OR IN THE ORDER PASSED BY LD. COMMISSIONER (APPEALS) THAT ANY INCRIMINATING MATERIAL WAS FOUND WHILE MAK ING ANY ADDITION AGAINST THE ASSESSEE. THE LD. AR FOR THE ASSESSEE FURTHER REL IED UPON THE DECISIONS OF DELHI HIGH COURT IN CIT VS ANIL KUMAR BHATIA [2013] 352 I TR 493(DELHI) AND OF JURISDICTIONAL HIGH COURT IN CIT VS CONTINENTAL WAR EHOUSING [2015] 374 ITR 645 (BOMBAY). ON THE OTHER HAND LD. DR FOR THE REVE NUE SUPPORTED THE ORDER OF AUTHORITIES BELOW AND ARGUED THAT NEITHER UNDER SEC TION 132 NOR UNDER SECTION153A, THE PHRASEOLOGY OF INCRIMINATING IS USED BY THE LEGISLATURE, THEREFORE ANY MATERIAL UNEARTHED DURING THE SEARCH OPERATION OR ANY STATEMENT IT A NO.1224/M/2016 M/S CINEYUG 3 DURING THE COURSE OF SEARCH BY THE ASSESSEE IS VALU ABLE PIECE OF EVIDENCE IN ORDER TO INVOKE SECTION 153A OF THE ACT. THE LD. DR FOR T HE REVENUE FURTHER RELIED UPON THE DECISION OF KERALA HIGH COURT IN CIT VERSUS ST FRANCIS CLAY DECOR TILES [2016] TAXMAN.COM 234(KERALA), THE DECISION ITAT DE LHI IN MS SHYAM LATA KAUSHIK VS ACIT [2008] 114 ITD 305 (DELHI) AND ALSO FILED THE PHOTOCOPY OF A PAGE OF LAW LEXICON DICTIONARY, CONTAINING THE WORD INCRIMINATING AS DEFINE THEREIN. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PAR TIES AND FURTHER GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR UNDER SECTION 143(3) WAS COMPLETED ON 27 TH DECEMBER 2006. THUS, WHEN NOTICE UNDER SECTION 153A WAS ISSUED ON 02.08.2010 THE ASS ESSMENT WAS COMPLETED. IN OTHER WORDS THE ASSESSMENT FOR THE RELEVANT ASSESSM ENT YEAR UNDER CONSIDERATION REMAINS UNABATED. IN RESPONSE TO THE NOTICE UNDER S ECTION 153A THE ASSESSEE FILED RETURN OF INCOME ON 6 TH SEPTEMBER 2010 DECLARING THE SAME INCOME AS DECLAR ED ORIGINALLY WHILE FURNISHING RETURN OF INCOME. IN TH E ENTIRE ASSESSMENT ORDER THE AO HAS NOT MADE ANY WHISPER THAT ANY INCRIMINATING EVIDENCE WAS FOUND DURING THE SEARCH ACTION CARRIED UNDER SECTION 132 ON THE BASIS OF WHICH THE DISALLOWANCE OF DEPRECIATION WAS MADE. THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS CON TINENTAL WAREHOUSING (SUPRA) HELD THAT NO ADDITION CAN BE MADE IN RESPEC T OF UNABATED ASSESSMENT WHICH HAS BECOME FINAL IF NO INCRIMINATING MATERIAL IS FOUND DURING THE SEARCH. FURTHER THE HONBLE DELHI HIGH COURT IN CIT VS ANIL KUMAR BHATIA (SUPRA) HELD THAT THE ASSESSMENT CONTEMPLATED BY SECTION 153A OF THE ACT IS NOT A DE NOVO ASSESSMENT AND THE ADDITIONS MADE THEREIN HAD TO BE NECESSARILY RESTRICTED TO THE UNDISCLOSED INCOME UNEARTHED DURING THE SEARCH. THE SECTION HAS TO BE STRICTLY INTERPRETED. IT IS NOT AN ASSESSMENT SUCH A NORMAL OR REGULAR SCRUTINY ASSESSMENT. THE SUM AND SUBSTANCE OF THESE TWO DECISIONS ARE TH AT THE COMPLETED ASSESSMENTS SHOULD NOT BE DISTURBED UNLESS THE FRESH EVIDENCE I S UNEARTHED DURING THE SEARCH AND SEIZURE. 5. NOW LET US EXAMINE THE WORD INCRIMINATING USED BY VARIOUS HIGHER JUDICIAL FORUMS WHILE DISCUSSING THE SCOPE OF THE SECTION 15 3A OF THE ACT. NO DOUBT THE IT A NO.1224/M/2016 M/S CINEYUG 4 WORD INCRIMINATING IS MEANT TO SHOW THE INVOLVEME NT OF A PERSON IN SUCH ACT OR OMISSION WHICH IS PENAL IN NATURE. HOWEVER, IT MAY BE NOTED THAT THE WORD INCRIMINATING IS REFERRED BY VARIOUS JUDICIAL FOR UMS WHILE DEFINING THE SCOPE OF ASSESSMENT UNDER SECTION 153A THE ACT, AND THE SAME SHOULD BE READ IN THE CONTEXT OF THE FRESH EVIDENCE WHICH IS UNEARTHED D URING THE SEARCH OR SEIZURE AND ARE UNFAVOURABLE, MAY BE USED AGAINST THE ASSESSEE . FURTHER THE LD. DR FOR THE REVENUE RELIED ON THE DECISION OF KERALA HIGH COURT IN CIT VERSUS ST FRANCIS CLAY DECOR TILES (SUPRA). WITH UTMOST REGARD TO THI S DECISION WE MAY NOTE THAT THE FACTS OF THIS CASE ARE AT VARIANCE AS IT IS NOT CLEAR FROM THE FACTS IF ANY ADDITION WAS MADE IN ABATED OR IN UNABATED ASSESSMENT. MOREO VER, THE DECISION OF THE HONBLE JURISDICTIONAL HIGH IS ALWAYS HAS A BINDING PRECEDENT. FURTHER, THE LD. DR RELIED ON THE DECISION OF DELHI TRIBUNAL IN MS S HYAM LATA KAUSHIK VS ACIT (SUPRA), IS ALSO NOT HELPFUL TO THE REVENUE AS THE COORDINATE BENCH HAS NOT GIVEN ANY FINDING THE COMPLETED ASSESSMENT BEFORE THE DAT E OF SEARCH CAN BE DISTURBED. THE MAIN ISSUE IN THE ADDITIONAL GROUND FOR OUR CON SIDERATION IS WHETHER ANY ADDITION CAN BE MADE IN THE ASSESSMENT U/S 153A, IN ABSENCE OF ANY FRESH EVIDENCE IN COMPLETED ASSESSMENT ON THE DATE OF SEA RCH OR NOT. AND THIS ISSUE HAS BEEN ANSWERED BY JURISDICTIONAL HIGH COURT IN CIT V S CONTINENTAL WAREHOUSING (SUPRA).WITH THESE OBSERVATION THE ADDITIONAL GROU ND OF APPEAL RAISED BY ASSESSEE IS ALLOWED. AS WE HAVE ALLOWED THE ADDITIO NAL GROUND OF APPEAL HOLDING THAT THE ADDITION MADE BY ASSESSING OFFICER IN THE ASSESSMENT UNDER SECTION 153A IS NOT BASED ON ANY INCRIMINATING EVIDENCE FOUND I N THE COURSE OF SEARCH, THUS THE DISCUSSION ON OTHER GROUNDS OF APPEAL HAVE BECA ME ACADEMIC. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 9 TH DAY OF DECEMBER 2016. SD/- SD/- (B.R.BASKARAN) PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 09/12/2016 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. IT A NO.1224/M/2016 M/S CINEYUG 5 BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/