JCIT CEN CIR 1(4), MUMBAI V. ULTRATECH CEMENT LTD, MUMBAI

ITA 1564/MUM/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1319 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 09-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MOHAN
• Keywords: Depreciation; Additional depreciation; Validity of assessment; Revised return; Reassessment proceedings
• Section: 143(3); 80HHC; 153A; 14A; 153; 153C; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI , !' .$% ,!( !' BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER. . 1560 / / 2018 (. .2008-09 ) ITA NO. 1560/MUM/2018 (A.Y.2008-09) . 1558 / / 2018 (. .2009-10 ) ITA NO. 1558/MUM/2018 (A.Y.2009-10) . 1564 / / 2018 (. .2010-11 ) ITA NO. 1564/MUM/2018 (A.Y.2010-11) DY.COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 1(4), 902, 9 TH FLOOR, PRATISHTHA BHAVAN, OLD CGO BLDG.(ANNEXE), M.K.ROAD, MUMBAI 400 020 / VS. : / APPELLANT M/S. ULTRATECH CEMENT LTD., AHURA CENTRE, B-WING,MAHAKALI CAVES ROAD, ANDHERI (EAST), MUMBAI 400 093 PAN: AAACL6442L : / RESPONDENT ASSESSEE BY : SHRI NITESH JOSHI REVENUE BY : SHRI A. MOHAN / DATE OF HEARING : 19/11/2020 / DATE OF PRONOUNCEMENT : 08/02/2021 / ORDER PER VIKAS AWASTHY, JM: THESE THREE APPEALS BY THE REVENUE ARE FOR ASSESSME NT YEARS 2008-09,2009- 10 AND 2010-11 ASSAILING THE FINDINGS OF COMMISSION ER OF INCOME TAX (APPEALS)-47, MUMBAI ( IN SHORT THE CIT(A)) FOR THE RESPECTIVE ASSESSMENT YEARS . ALL THE THREE 2 ITA NO. 1560/MUM/2018 (A.Y.2008-09) ITA NO. 1558/MUM/2018 (A.Y.2009-10) ITA NO. 1564/MUM/2018 (A.Y.2010-11) IMPUGNED ORDERS ARE OF EVEN DATE I.E. 20/12/2017 SINCE ALL THESE APPEALS GERMINATE FROM SAME SET OF FACTS, THESE ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THIS COMMON ORDER. 2. SHRI NITESH JOSHI, APPEARING ON BEHALF OF THE AS SESSEE SUBMITTED THAT A SEARCH OPERATION WAS CONDUCTED AT THE PREMISES OF M/S. ADI TYA BIRLA MANAGEMENT CORPORATION PVT. LTD. ON 16/10/2013. THE ASSESSEE IS ONE OF THE GROUP COMPANIES, HOWEVER, NO SEARCH IN THE CASE OF ASSESSEE WAS CARR IED OUT. DURING THE SEARCH ON M/S. ADITYA BIRLA MANAGEMENT CORPORATION PVT. LTD. NO INCRIMINATING MATERIAL WAS FOUND QUA THE ASSESSEE. THE LD.AUTHORIZED REPRESEN TATIVE OF THE ASSESSEE SUBMITTED THAT THE APPEALS OF THE REVENUE ARE LIABLE TO BE DI SMISSED ON THE SHORT GROUND THAT ON THE DATE OF SEARCH THE ASSESSMENT IN ALL THE TH REE IMPUGNED ASSESSMENT YEARS WAS COMPLETED. IN OTHER WORDS, ASSESSMENTS WERE NOT PENDING AT THE TIME OF SEARCH, CONSEQUENTLY, IN THE IMPUGNED ASSESSMENT YE ARS THE ASSESSMENT HAD NOT ABATED. HENCE, WITHOUT THERE BEING ANY INCRIMINAT ING MATERIAL NO ADDITION COULD HAVE BEEN MADE IN ASSESSMENT PROCEEDINGS UNDER SEC TION 153C OF THE ACT. IN SUPPORT OF HIS CONTENTIONS THE LD.AUTHORIZED REPRE SENTATIVE OF THE ASSESSEE PLACED RELIANCE ON THE DECISION OF CIT VS. CONTINENTAL WAR EHOUSING CORPORATION (NHAVA SHEVA) LTD. REPORTED AS 374 ITR 645(BOM). THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED THAT THE FACTS IN ALL THE THREE IMPUGNED ASSESSMENT YEARS ARE IDENTICAL. THE ASSESSMENT UNDER SECTION 153C IN ALL THE THREE IMPUGNED ASSESSMENT YEARS WER E MADE CONSEQUENT TO SEARCH OPERATION IN THE CASE OF M/S. ADITYA BIRLA MANAGEM ENT CORPORATION PVT.LTD. ON 16/10/2013. 3. ON THE OTHER HAND, SHRI A. MOHAN, REPRESENTING T HE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR REVERS ING THE FINDINGS OF CIT(A). THE 3 ITA NO. 1560/MUM/2018 (A.Y.2008-09) ITA NO. 1558/MUM/2018 (A.Y.2009-10) ITA NO. 1564/MUM/2018 (A.Y.2010-11) LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT CI T(A) HAS ERRED IN HOLDING THAT THE ASSESSMENT MADE UNDER SECTION 153C OF THE INCOME TA X ACT, 1961 ( IN SHORT THE ACT)IN THE CASE OF ASSESSEE ARE NOT SUSTAINABLE IN THE ABSENCE OF ANY INCRIMINATING MATERIAL. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SIDE S AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE REVENUE IN APPEAL HAS ASSAILED THE FINDINGS OF CIT(A) ON THE LEGAL ISSUE OF VALIDITY OF ASSESSMENT S COMPLETED UNDER SECTION 153C OF THE ACT AS WELL AS ASSAILING THE DELETION OF ADDIT IONS ON MERITS. BEFORE PROCEEDING FURTHER TO DECIDE THE ISSUE OF VALIDITY OF ASSESSME NT UNDER SECTION 153C OF THE ACT SANS ANY INCRIMINATING MATERIAL, IT WOULD BE NECES SARY TO REFER TO THE CHRONOLOGY OF EVENTS. ASSESSMEN T YEAR 2008-09. DATE EVENTS. 29/09/2008 RETURN OF INCOME FILED BY THE ASSESSEE U NDER SECTION 139 OF THE ACT 29/03/2010 REVISED RETURN OF INCOME FILED. 28/02/2011 ASSESSMENT COMPLETED UNDER SECTION 143(3 ) OF THE ACT 21/12/2011 FIRST APPEAL DECIDED BY CIT(A) 16/10/2013 DATE OF SEARCH IN THE CASE OF GROUP COMP ANY 26/11/2014 NOTICE ISSUED UNDER SECTION 153C R.W.S. 153C OF THE ACT 29/03/2016 ASSESSMENT U/S .153C R.W.S. 143(3) MADE. AS IS EVIDENT FROM THE CHRONOLOGY OF EVENTS TABULAT ED ABOVE, ON THE DATE OF SEARCH THE ASSESSMENT FOR ASSESSMENT YEAR 2008-09 HAD COMP LETED. IN SEARCH PROCEEDINGS UNDER SECTION 132 OF THE ACT NO INCRIMINATING DOCU MENTS WAS FOUND AGAINST THE ASSESSEE. IT IS NO MORE RESINTEGRA THAT IN THE A BSENCE OF ANY INCRIMINATING MATERIAL NO ASSESSMENT UNDER SECTION 153C CAN BE MADE WHERE ASSESSMENT HAS NOT ABATED, I.E. THERE IS NO PENDING ASSESSMENT. 4 ITA NO. 1560/MUM/2018 (A.Y.2008-09) ITA NO. 1558/MUM/2018 (A.Y.2009-10) ITA NO. 1564/MUM/2018 (A.Y.2010-11) 5. IN THE CASE OF CIT VS. MURLI AGRO PRODUCTS REPO RTED AS 49 TAXMANN.COM 172(BOM) THE HONBLE HIGH COURT HELD: 9. WHAT SECTION 153A CONTEMPLATES IS THAT, NOTWITHSTAN DING THE REGULAR PROVISIONS FOR ASSESSMENT/REASSESSMENT CONTAINED IN THE IT ACT, WH ERE SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A ON OR AFTER 31/5/2003 IN THE CASE OF ANY PERSON, THE ASSESSING OFFICER SHALL ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH RETURN OF INCOME WITHIN THE TIME STIPULATED THEREIN, IN RE SPECT OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH THE SEARCH IS CONDUCTED OR REQUISITION IS MADE AND THEREAFTER ASSESS OR REA SSESS THE TOTAL INCOME FOR THOSE ASSESSMENT YEARS. THE SECOND PROVISO TO SECTION 153 A PROVIDES FOR ABATEMENT OF ASSESSMENT/REASSESSMENT PROCEEDINGS WHICH ARE PENDI NG ON THE DATE OF SEARCH/REQUISITION. SECTION 153A(2) PROVIDES THAT WHEN THE ASSESSMENT M ADE UNDER SECTION 153(A)(1) IS ANNULLED, THE ASSESSMENT OR REASSESSMENT THAT STOOD ABATED SHALL STAND REVIVED. 10. THUS ON A PLAIN READING OF SECTION 153A OF THE INCOME-TAX ACT, IT BECOMES CLEAR THAT ON INITIATION OF PROCEEDINGS UNDER SECTION 153A, IT IS ONLY THE ASSESSMENT/REASSESSMENT PROCEEDINGS THAT ARE PENDING ON THE DATE OF CONDUCT ING SEARCH UNDER SECTION 132 OR MAKING REQUISITION UNDER SECTION 132A OF THE ACT STAND ABA TED AND NOT THE ASSESSMENTS/REASSESSMENTS ALREADY FINALISED FOR THO SE ASSESSMENT YEARS COVERED UNDER SECTION 153A OF THE ACT. BY A CIRCULAR NO. 8 OF 200 3 DATED 18-9-2003 (SEE 263 ITR (ST) 61 AT 107) THE CBDT HAS CLARIFIED THAT ON INITIATION OF P ROCEEDINGS UNDER SECTION 153A, THE PROCEEDINGS PENDING IN APPEAL, REVISION OR RECTIFIC ATION PROCEEDINGS AGAINST FINALISED ASSESSMENT/REASSESSMENT SHALL NOT ABATE. IT IS ONLY BECAUSE, THE FINALISED ASSESSMENTS/REASSESSMENTS DO NOT ABATE, THE APPEAL, REVISION OR RECTIFICATION PENDING AGAINST FINALISED ASSESSMENTS/REASSESSMENTS WOULD N OT ABATE. THEREFORE, THE ARGUMENT OF THE REVENUE, THAT ON INITIATION OF PROCEEDINGS UNDE R SECTION 153A, THE ASSESSMENTS/REASSESSMENTS FINALISED FOR THE ASSESSM ENT YEARS COVERED UNDER SECTION 153A OF THE INCOME-TAX ACT STAND ABATED CANNOT BE ACCEPTED. SIMILARLY ON ANNULMENT OF ASSESSMENT MADE UNDER SECTION 153A (1) WHAT STANDS REVIVED IS THE PENDING ASSESSMENT/REASSESSMENT PROCEEDINGS WHICH STOOD ABATED AS PER SECTION 153A( 1). 11. IN THE PRESENT CASE, AS CONTENDED BY SHRI MANI, LEARNED COUNSEL FOR THE ASSESSEE, THE ASSESSMENT FOR THE ASSESSMENT YEAR 1998-99 WAS FINA LISED ON 29-12-2000 AND SEARCH WAS CONDUCTED THEREAFTER ON 3-12-2003. THEREFORE, IN TH E FACTS OF THE PRESENT CASE, INITIATION OF PROCEEDINGS UNDER SECTION 153A WOULD NOT AFFECT THE ASSESSMENT FINALISED ON 29-12-2000. 12. ONCE IT IS HELD THAT THE ASSESSMENT FINALIZED O N 29.12.2000 HAS ATTAINED FINALITY, THEN THE DEDUCTION ALLOWED UNDER SECTION 80 HHC OF THE INCOM E-TAX ACT AS WELL AS THE LOSS COMPUTED UNDER THE ASSESSMENT DATED 29-12-2000 WOULD ATTAIN FINALITY. IN SUCH A CASE, THE A.O. WHILE PASSING THE INDEPENDENT ASSESSMENT ORDER UNDER SECT ION 153A READ WITH SECTION 143(3) OF THE IT. ACT COULD NOT HAVE DISTURBED THE ASSESSMENT / REASSESSMENT ORDER WHICH HAS ATTAINED FINALITY, UNLESS THE MATERIALS GATHERED IN THE COUR SE OF THE PROCEEDINGS UNDER SECTION 153A OF THE INCOME-TAX ACT ESTABLISH THAT THE RELIEFS GRANT ED UNDER THE FINALISED ASSESSMENT/REASSESSMENT WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153A PROCEEDINGS. 5 ITA NO. 1560/MUM/2018 (A.Y.2008-09) ITA NO. 1558/MUM/2018 (A.Y.2009-10) ITA NO. 1564/MUM/2018 (A.Y.2010-11) 13. IN THE PRESENT CASE, THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY MATERIAL WAS UNEARTHED DURING THE SEARCH OR DURING THE 153A PROC EEDINGS WHICH WOULD SHOW THAT THE RELIEF UNDER SECTION 80HHC WAS ERRONEOUS. IN SUCH A CASE, THE A.O. WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 153A READ WITH SECTI ON 143(3) COULD NOT HAVE DISTURBED THE ASSESSMENT ORDER FINALISED ON 29.12.2000 RELATING T O SECTION 80HHC DEDUCTION AND CONSEQUENTLY THE C.I.T. COULD NOT HAVE INVOKED JURI SDICTION UNDER SECTION 263 OF THE ACT. 5.1 SIMILAR VIEW WAS EXPRESSED BY HON'BLE DELHI HIG H COURT IN THE CASE OF CIT VS. KABUL CHAWLA,380 ITR 573(DEL). THE HONBLE HIGH CO URT HELD THAT COMPLETED ASSESSMENT CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIM INATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH THAT WAS NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 5.2 THE HONBLE JURISDICTIONAL HIGH COURT IN THE C ASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (SUPRA) FOLLOWING THE DECISION RENDERED IN THE CASE OF MURLI AGRO PRODUCTS (SUPRA) HELD THAT NO ADDITION CAN BE MADE IN RESPECT OF ASSESSMENT THAT HAS BECOME FINA L, IF NO INCRIMINATING MATERIAL IS FOUND DURING SEARCH. APART FROM THE JUDGMENTS CITED ABOVE, THERE ARE SE VERAL OTHER JUDGMENTS BY HONBLE HIGH COURTS AND DECISIONS OF THE TRIBUNAL SUPPORTING SIMILAR VIEW 6. IN THE PRESENT CASE, THE LD.DEPARTMENTAL REPRESE NTATIVE HAS FAILED TO SHOW FROM RECORDS ANY INCRIMINATING MATERIAL FOUND DU RING THE SEARCH THAT COULD HAVE RESULTED IN ADDITION IN THE HANDS OF ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR. IT IS AN UNDISPUTED FACT THAT ON THE DATE OF SEARCH ASSES SMENT FOR ASSESSMENT YEAR 2008- 09 WAS NOT PENDING. WE CONCUR WITH THE FINDINGS OF CIT(A) THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL NO ADDITION OR DISALLOW ANCE CAN BE MADE IN THE ASSESSMENT PROCEEDINGS UNDER SECTION 153C OF THE AC T, IN THE CASE OF NON-ABATED ASSESSMENTS. 6 ITA NO. 1560/MUM/2018 (A.Y.2008-09) ITA NO. 1558/MUM/2018 (A.Y.2009-10) ITA NO. 1564/MUM/2018 (A.Y.2010-11) 7. AFTER EXAMINING THE ASSESSMENT ORDER WE OBSERVE THAT THE ASSESSING OFFICER HAS MADE ADDITION/DISALLOWANCES ON FOLLOWING COUNT S: (I) SALES TAX SUBSIDY. (II) DISALLOWANCE U/S.80IA(4)(I) OF THE ACT (III)DISALLOWANCE U/S . 14A OF THE ACT (IV)DEDUCTION ON ACCOUNT OF EMISSION OF CARBON CRE DITS. (V) ADDITIONAL DEPRECIATION U/S.32(1)(IIA) OF THE ACT . ALL THESE ADDITIONS/DISALLOWANCES WERE CONSIDERED B Y THE ASSESSING OFFICER IN ORIGINAL ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. IN THE ABSENCE OF ANY INCRIMINATING MATERIAL DURING THE COURSE OF SEARC H NO FRESH ADDITION/DISALLOWANCE WAS MADE. ONCE THE ASSESSMENT MADE UNDER SECTION 1 43(3) HAS BECOME FINAL, THE ASSESSMENT MADE UNDER SECTION 153A R.W.S143(3) DEAL ING WITH SAME SET OF DISALLOWANCE/ADDITION WITHOUT THERE BEING ANY INCRI MINATING MATERIAL IS UN- SUSTAINABLE IN LAW. THE ASSESSING OFFICER CANNOT R EFRAME THE ASSESSMENT UNDER SECTION 153A OF THE ACT SANS FRESH INCRIMINATING MA TERIAL. THE APPEAL OF THE REVENUE IS DEVOID OF ANY MERIT, HENCE, DISMISSED. ITA NO.1558 & 1564/MUM/2018 A.YS 2009-10 & 2010-1 1: 8. IN BOTH THESE ASSESSMENT YEARS THE FACTS ARE SIM ILAR TO ASSESSMENT YEAR 2008- 09. THE ASSESSMENT UNDER SECTION 153A R.W.S. 143(3 ) OF THE ACT WAS MADE WITHOUT THERE BEING ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH OPERATION UNDER SECTION 132 OF THE ACT IN THE CASE OF GROUP COMPANY . THE ORIGINAL ASSESSMENT MADE UNDER SECTION 143(3) IN BOTH THE IMPUGNED ASSESSMEN T YEARS WERE UNDISPUTEDLY COMPLETED BEFORE THE DATE OF SEARCH. THE CHRONOLOGY OF EVENTS IN ASSESSMENT YEAR 2009-10 AND 2010-11 ARE TABULATED HEREIN UNDER: 7 ITA NO. 1560/MUM/2018 (A.Y.2008-09) ITA NO. 1558/MUM/2018 (A.Y.2009-10) ITA NO. 1564/MUM/2018 (A.Y.2010-11) DATE EVENTS. A.Y.2009-10 A.Y.2010-11 29/09/2009 29/09/2010 RETURN OF INCOME FILED BY THE ASSESSEE UNDER SECTION 139 OF THE ACT 30/03/2011 15/03/2012 REVISED RETURN OF INCOME FILE D. 31/12/2012 18/12/2013 ASSESSMENT COMPLETED UNDER SE CTION 143(3) OF THE ACT 30/05/2014 30/05/2014 FIRST APPEAL DECIDED BY CIT(A ) 16/10/2013 16/10/2013 DATE OF SEARCH IN THE CASE OF GROUP COMPANY 26/11/2014 26/11/2014 NOTICE ISSUED UNDER SECTION 153C R.W.S. 153C OF THE ACT 29/03/2016 29/03/2016 ASSESSMENT U/S .153C R.W.S. 1 43(3) MADE. FROM ABOVE TABLE, IT IS EVIDENT THAT ON THE DATE OF SEARCH THE ASSESSMENT FOR IMPUGNED ASSESSMENT YEARS WERE NOT PENDING. THUS, IT IS A CASE OF UNABATED ASSESSMENT. SINCE, THE FACTS GERMANE TO THE PRESENT APPEALS ARE PARI-MATERIA TO ASSESSMENT YEAR 2008-09, THE FINDINGS GIVEN BY US W HILE ADJUDICATING THE APPEAL OF THE REVENUE IN 2008-09 WOULD MUTATIS MUTANDIS APPLY TO THE PRESENT APPEALS AS WELL. CONSEQUENTLY, BOTH THESE APPEALS BY THE REVE NUE ARE DISMISSED. 9. TO SUM UP, APPEALS BY THE REVENUE FOR ASSESSMENT YEAR 2008-09,2009-10 AND 2010-11 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, T HE 8 TH DAY OF FEBRUARY, 2021. SD/- SD/- (S.RIFAUR RAHMAN) (VIKAS AWASTHY) !( / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, - '/ DATED: /02/2021 VM , SR. PS(O/S) 8 ITA NO. 1560/MUM/2018 (A.Y.2008-09) ITA NO. 1558/MUM/2018 (A.Y.2009-10) ITA NO. 1564/MUM/2018 (A.Y.2010-11) COPY OF THE ORDER FORWARDED TO : 1. . / THE APPELLANT , 2. /0 / THE RESPONDENT. 3. 10 ( ) / THE CIT(A)- 4. 10 CIT 5. 23/0' , . . . , / DR, ITAT, MUMBAI 6. 3456 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI