SHRI MAHESH D. GUPTA, Nagpur V. ACIT-CENTRAL-CIRCLE-2(3), Nagpur

ITA 183/NAG/2014

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5239 (ITAT-NAGPUR)
• Duration Of Justice: 4 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 04-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U U KASAR JT
• Keywords: Search and seizure; Reassessment proceedings
• Section: 143(3); 153A; 143(1); 143(2); 131; 148; 139

Judgement Text

UKXIQJ , UKXIQJ IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR . , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.183/NAG/2014 / ASSESSMENT YEAR : 200405 MAHESH D. GUPTA, C/O. M/S LOYA BAGRI & CO., CHARTERED ACCOUNTANTS, GANDHIBAG, NAGPUR440002. PAN : AATPG8810F ....... / APPELLANT / V/S. ACIT, CENTRAL CIRCLE2(3), NAGPUR. / RESPONDENT ASSESSEE BY : SHRI RAJESH LOYA, ADV. REVENUE BY : SHRI U. U. KASAR, JT.CIT / DATE OF HEARING : 27.03.2019 / DATE OF PRONOUNCEMENT : 29.03.2019 / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)- 16, MUMBAI [HOLDING CONCURRENT JURISDICTION OF CIT(A)-I, NAGPUR] DATED 04.12.2013 FOR THE ASSESSMENT YEAR 2004-05. 2 ITA NO.183/NAG/2014 2. BEFORE US, AT THE OUTSET, DEVIATING FROM THE GROUNDS OF APPEAL, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS IS A CASE WHERE THE ASSESSMENT WAS COMPLETED U/S 153A R.W.S. 143(3) OF THE ACT. REFERRING TO THE SAID ASSESSMENT ORDER, LD. COUNSEL SUBMITTED THAT THE DISALLOWANCE OF RS.37,23,327/ WAS MADE ON ACCOUNT OF CERTAIN EXPENSES WHICH WERE ALREADY ACCOUNTED IN THE BOOKS OF ACCOUNT. AS SUCH, NO SEIZED MATERIAL WAS FOUND DURING THE SEARCH AND SEIZURE ACTION IN SUPPORT OF THE SAID ADDITION/DISALLOWANCE. FAIRLY REFERRING TO THE VARIOUS PARAGRAPHS OF THE ASSESSMENT ORDER, LD. COUNSEL SUBMITTED THAT THOUGH THERE WAS SEIZED MATERIAL IN GENERAL AND A STATEMENT WAS RECORDED U/S 131 OF THE ACT, THERE IS NO SEIZED AND INCRIMINATING EVIDENCES LINKED DIRECTLY OR INDIRECTLY RELATABLE TO THE ADDITION MADE BY THE ASSESSING OFFICER AMOUNTING TO RS.37,23,327/. FURTHER, HE SUBMITTED THAT THIS IS A CASE WHERE THE ASSESSEE FILED THE RETURN OF INCOME U/S 139 OF THE ACT ORIGINALLY ON 31.03.2005 AND THE ASSESSMENT WAS COMPLETED IN ALL RESPECTS. THERE IS NO TIME FOR ASSESSING OFFICER TO ISSUE NOTICE U/S 143(2) OR U/S 148 OF THE ACT TO TAX THE SAID INCOME UNDER THE REASSESSMENT PROCEEDINGS. THUS, THE ASSESSMENT MADE BY THE ASSESSING OFFICER CONSTITUTES NON-ABATED ASSESSMENT. UNDER THESE FACTS, AS PER THE LD. COUNSEL FOR THE 3 ITA NO.183/NAG/2014 ASSESSEE, THE ADDITION MADE BY THE ASSESSING OFFICER CONSTITUTES A GENERAL ADDITION AND IS UNSUSTAINABLE IN LAW. IN THIS REGARD, LD. COUNSEL FOR THE ASSESSEE FILED A WRITTEN SUBMISSION, WHICH READS AS UNDER : (1) THE ASSESSMENT OF ASSESSEE WAS MADE CONSEQUENT TO SEARCH ACTION CONDUCTED ON GROUP ON 29-07-2009. THE ADDITIONS MADE IN THE ORDER U/S 143(3) R.W.S. 153A ARE BASED ON CONJECTURES AND SURMISES OF THE AO AND NO CONCRETE EVIDENCE WAS BROUGHT ON RECORD WHICH PROVES THAT THE FINANCIAL AND OTHER EXPENSES ARE NOT INCURRED FOR THE REGULAR BUSINESS ACTIVITY OF THE ASSESSEE. EARLIER, INTIMATION U/S 143(1) DATED 23-02-2006 WAS PASSED AND LATER ASSESSMENT WAS MADE U/S 143(3) CONSEQUENT TO SEARCH CONDUCTED ON 24-12-2003. VARIOUS ADDITIONS WERE MADE IN THE ASSESSMENT ORDER U/S 143(3) WHICH WERE CONTESTED BEFORE CIT(A) AND ALSO BEFORE HON'BLE ITAT AND SUBSTANTIAL RELIEF WAS GRANTED BY THE AUTHORITIES. ADDITION IN THE NATURE OF DISALLOWANCE OF FINANCIAL AND OTHER EXPENSES WAS NOT MADE IN THE ASSESSMENT ORDER WHICH HAS ALREADY ATTAINED FINALITY BEFORE HON'BLE ITAT AS THE SAME WAS NOT CONTESTED BY DEPARTMENT. (2) NO INCRIMINATING DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH CONDUCTED ON 29-07-2009 WHICH CORROBORATES THE ADDITION MADE BY AO AND PARTLY CONFIRMED BY CIT(A). THUS, IN VIEW OF THE FOLLOWING JUDGEMENTS OF APEX COURT AND HIGH COURTS INCLUDING JURISDICTIONAL HIGH COURT, ADDITION COULD NOT BE MADE IN CASE OF UNABATED ASSESSMENT WHERE NO INCRIMINATING DOCUMENTS IS FOUND DURING THE COURSE OF SEARCH WHICH LEND WEIGHT TO THE ADDITION MADE. CIT VS MEETA GUTGUTIA [2018] 96 TAXMANN.COM 468 (SC) SLP FILED BY REVENUE DISMISSED IN CASE OF PR CIT VS. KURELE PAPER MILLS PVT LTD S.L.P(C) NO-34554 OF 2015 DT.07.12.2015 HIGH COURT OF BOMBAY IN CIT VS SKS ISPAT POWER LTD [2017] 398 ITR 583 HIGH COURT OF GUJRAT IN CIT VS SAUMYA CONSTRUCTION [2017] 81 TAXMANN 292 4 ITA NO.183/NAG/2014 DCIT VS. M/S RASHMI IRON INDUSTRIES IN ITA NO.67/KOL/2017 ITAT KOLKATA 12-12-2018 ITAT HYDERABAD IN CASE OF YELLAIAH SETTY ITA NO. 494/HYD/2017 DT.15-11-2018 DCIT VS. SHREE SHAKAMBARI VASTU NIRMAN PVT LTD 21-08-2018 CIT-20 VS. DEEPAK KUMAR AGARWAL (2017) 86 TAXMANN.COM 3 (BOM.) K. SERA SERA PRODUCTIONS LTD. VS. DCIT (2017) 87 TAXMANN.COM 249 (MUM TRIB.) ANIL MAHAVIR GUPTA VS. ACIT (2017) 82 TAXMANN.COM 122 (MUM TRIB.) ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT 137 ITD 287 (MUM.) (S.B.) AFFIRMED BY HON'BLE BOMBAY HIGH COURT IN ITA NO. 1969 OF 2013 DATED 21-4-2015 PR. CIT VS. SUNRISE FINLEASE (P.) LTD. (2018) 89 TAXMANN.COM 1 (GUJARAT) CIT VS. KABUL CHAWALA (2015) 234 TAXMANN 300 (DEL.) CIT VS. GURINDER SINGH BAWA (2016) 386 ITR 483 (BOM.) PR. CIT VS MS. LATA JAIN (2016) 384 ITR 543 (DEL.) CIT VS. MGF AUTOMOBILE LTD. (DEL.) KRISHNA KUMAR SINGHANIA VS. DCIT (2017) 88 TAXMANN.COM 259 (KOL. TRIB) CIT (CENTRAL) VS. MURLI AGRO PRODUCTS LTD.[2014] 49 TAXMANN.COM 172 (BOM.) CIT VS. PRATIBHA INDUSTRIES LTD.[2013] 141 ITD 151 CIT VS. LANCY CONSTRUCTIONS [2016] 383 ITR 168 CIT VS. ANUPKUMAR BHATIA (2013) 352 ITR 493 (DEL.) JAI STEEL INDIA JODHPUR VS. ACIT (2013) TAX PUB. (DT) 1647 (RAJ.) (3) THE COPY STATEMENT OF ASSESSEE RECORDED U/S 131 ON 11-09- 2009 RELIED UPON BY AO AND REPRODUCED IN ASSESSMENT ORDER WAS NOT 5 ITA NO.183/NAG/2014 PROVIDED TO THE ASSESSEE INSPITE OF REPEATED REQUESTS MADE TO THE INVESTIGATION WING AND AO. 3. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). 4. ON HEARING BOTH THE SIDES ON THIS LEGAL ISSUE, WE FIND THE ADDITION MADE BY THE ASSESSING OFFICER HAS NO RELIANCE TO THE SEIZED MATERIAL FOUND DURING THE SEARCH AND SEIZURE ACTION. THERE IS NO DISPUTE ON THE FACT THAT THE ASSESSMENT UNDER CONSIDERATION IS NON ABATED ASSESSMENT (COMPLETED) AND THE ADDITION CAN BE MADE IN SUCH CASES OF ASSESSMENT WITH THE SUPPORT/STRENGTHEN OF A SEIZED MATERIAL ONLY. THE ABOVE REFERRED JUDGEMENTS ARE STRONGLY SUPPORTED IN FAVOUR OF THE ASSESSEE. THE WRITTEN SUBMISSION MADE BY THE ASSESSEE HAS TO BE ACCEPTED IN FAVOUR OF THE ASSESSEE ON THE LEGAL ISSUE VIDE PARA 1, 2 AND 3 (EXTRACTED ABOVE). ACCORDINGLY, THE LEGAL ISSUE RAISED BY THE ASSESSEE IN THE PRESENT APPEAL HAS TO BE ALLOWED IN FAVOUR OF THE ASSESSEE. 5. CONSIDERING THE ABOVE DECISIONS ON THE LEGAL ISSUE IN FAVOUR OF THE ASSESSEE, THE ADJUDICATION OF OTHER ISSUES RAISED BY THE ASSESSEE 6 ITA NO.183/NAG/2014 BECOMES ACADEMIC EXERCISE. ACCORDINGLY, THE SAME ARE DISMISSED AS ACADEMIC. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 29 TH DAY OF MARCH, 2019. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER UKXIQJ / NAGPUR; / DATED : 29 TH MARCH, 2019. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A) 4. THE CIT 5. , , UKXIQJ , UKXIQJ / DR, ITAT, NAGPUR BENCH, NAGPUR. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , UKXIQJ / ITAT, NAGPUR.