SMT. MANJU MITTAL, FEROZE PUR CANTT V. DY. COMMISSIONER OF INCOME VTAX CENTRAL CIRCLE-1, JALANDHAR

ITA 193/ASR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6324 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-11-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 22-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRABHJO T KAUR LD
• Assessee Lawyers: ASHRAY SARNA LD
• Keywords: Search and seizure
• Section: 2(22)(e); 143(1); 192; 153; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N.K.CHOUDHRY, JUDICIAL MEMBER AND DR. A.L.SAINI, ACCOUNTANT MEMBER ITA NO.193/ASR/2019 ASSESSMENT YEAR: 2012-13 SMT. MANJU MITTAL H.NO. 15-17, STREET NO.4, FEROZEPUR CANTT. VS. DY. CIT, CENTRAL CIRCLE-1, JALANDHAR. [PAN: ABZPM 7157J] (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ASHRAY SAR NA (LD. CA) RESPONDENT BY: SMT. PRABHJOT KAUR (LD. CIT- DR) DATE OF HEARING: 29.11.2019 DATE OF PRONOUNCEMENT: 01.01.2020 ORDER PER N.K.CHOUDHRY, JM: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE/APPELLANT AGAINST THE IMPUGNED ORDER DATED 12.02.2019 PASSED BY THE LD. CIT(A)-5, LUDHIANA, U/S 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH OPERATION U /S 132 OF THE ACT WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON DATED 11.02.2016 AND THE BUSINESS PREMISES OF OTHER CONCERNS/PERSONS OF BHAGWATI GROUP OF FEROZEPUR. DURIN G THE COURSE OF SEARCH, CERTAIN TYPED BALANCE SHEETS/TRIAL BALANCES ETC. IN THE COMPUTERS INSTALLED AT THE RESPECTIVE BUSINESS PREMISES OF M/S. BHAGWATI LACTO VEGETARIAN EXPORTS PVT. LTD., FEROZEP UR CANTT. IN SHORT ITA NO.193/ASR/ 2019 (A.Y.2012-13) SMT. MANJU M ITTAL VS. DCIT 2 WILL BE REFERRED AS 'BLVE' AND M/S BHAGWATI LACTO FOOD S PVT. LTD., THE TWO COMPANIES IN WHICH THE ASSESSEE LATER BECAME SUBSTANTIV E SHAREHOLDER WERE FOUND AND SEIZED. AS PER REVENUE MOST OF THE FIGURES OF RAISING OF FUNDS AS PER THE DOCUMENTS DID NOT TALLY WITH THE AUDITED BALANCE SHEET OF THE RESPECTIVE COMPANY. WHILE E XAMINING THE ASSESSEES BALANCE SHEET, IT WAS NOTICED THAT THE ASSESSEE HAD RECEIVED LOAN OF RS.47,55,000/- ON DIFFERENT DATES FRO M 26.05.2011 TO 09.09.2011 FROM M/S. BLVE, WHEREIN SHE HELD 12.69% OF THE SHAREHOLDING DURING THE RELEVANT FINANCIAL YEAR. THIS WAS IN ADDITION TO HER CREDIT BALANCE OF M/S LBVE APPEARING IN THE BOOKS O F M/S RAHUL ENTERPRISES ON ACCOUNT OF PURCHASES MADE FROM M/S. BLVE . THE ASSESSEE WAS CONFRONTED WITH THE FACTS AND SHOW CAUSED AS TO WH Y THE AMOUNT OF LOAN SHOULD NOT BE TAXED AS DEEMED DIVI DEND AS PER PROVISIONS OF SECTION 2(22)(3) OF THE ACT. IN RESPONSE TO WHICH, THE ASSESSEE HAD RELIED UPON THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT (CENTRAL) VS. KABUL CHAWLA, REPORTED AT 380 I TR 573 (DELHI), AND SUBMITTED THAT NO INCRIMINATING ARTICLE HAS BEEN R ECOVERED DURING THE COURSE OF SEARCH FROM THE ASSESSEE OR RESIDENTIAL PREMI SES OF THE ASSESSEE AND EVEN THE ASSESSMENT STANDS PROCESSED AND COMPLETED U/S 143(1) OF THE ACT. HENCE, NO ADDITION IS CALLED FOR. THE ASSESSING OFFICER WHILE RELYING UPON THE JUDGMENT PASSED BY THE KERELA HIGH COURT IN THE CASE OF E.N. GOPAL KUMAR VS. CIT(CENTRA L) REPORTED AT 390 ITR 131 (KER) WHEREIN IT WAS HELD THAT THE STATUE NOWHERE MAKES I T CONDITIONAL THAT THE DEPARTMENT HAS TO UNEARTH SOME INCRIMINATING MATERIAL TO CONCLUDE SOME METHOD AGAINST THE ASSESS EE IN EVENTS WHERE THE ASSESSMENT IS TRIGGERED BY A NOTICE UNDER SECTI ON 153(1)(A) OF THE ACT , MADE THE ADDITION OF RS.42,55,000/- U/S 2(22)(E) OF THE ACT. ITA NO.193/ASR/ 2019 (A.Y.2012-13) SMT. MANJU M ITTAL VS. DCIT 3 3. THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE THE LD. CIT(A) WHO VIDE IMPUGNED ORDER ON THE SAME FOOTING AS HELD BY ASSESSING OFFICER , UPHELD THE ADDITION. 4. THE ASSESSE CHALLENGED THE IMPUGNED ORDER AND WHILE RELY ING UPON THE JUDGMENT OF DELHI HIGH COURT IN THE CASE OF C IT VS. KABUL CHAWALA 61 TAXMANN.COM 412, REITERATED THE SAME CONTEN TIONS AS RAISED BEFORE THE AUTHORITIES BELOW. 5. ON THE CONTRARY, THE LD. DR RELIED UPON THE VARIOUS JUDGMENTS AND SUBMITTED THAT THOUGH THE INCRIMINATING MATERIAL WAS RECOVERED DURING THE TIME SEARCH OPERATION, HOWEVER IN LAW THER E IS NO NECESSITY OF ANY INCRIMINATING MATERIAL WHILE INITIATING PROCEE DINGS U/S 153 OF THE ACT AS BY VARIOUS HIGH COURTS AND THE ADDITION CAN BE MADE WITHOUT ANY INCRIMINATING MATERIAL QUA THE YEARS COVER ED BY SEC.153A. THE LD. DR FINALLY ARGUED THAT THE CONCLUSIO N DRAWN BY DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWALA ( SUPRA) IS CONTRARY TO THE PRINCIPLE LAID BY THE SAME HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA ( 24 TAXMANN.COM 98) AND CHETAN DAS LACHMAN DAS ( 25 TAXMANN.COM 227 ) AND ALSO VARIOUS DECISION OF OTHER HIGH COURTS. THE LD. CIT DR FURTHER SUBMITTED THAT THE DECISION OF KABUL CHAWLA (SUPRA) IS NOT A GOOD LAW BECAUSE THE ISSUE RELATING TO M ATERIAL NOT FOUND DURING THE SEARCH WAS CONSIDERED TO BE OPEN IN AN IL KUMAR BHATIA (SUPRA) WHEREAS THE SAME WAS ALREADY DECIDED IN THAT CASE. CONSEQUENTLY, THE CASE DECIDED IN CHETAN DAS LACHMAN DAS (SUPRA) WAS NOT DISTINGUISHABLE FROM THE CASE OF KABUL CHAWLA (SU PRA). ITA NO.193/ASR/ 2019 (A.Y.2012-13) SMT. MANJU M ITTAL VS. DCIT 4 6. HAVING HEARD THE PARTIES AT LENGTH AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. IT WAS CLAIMED BY THE ASSEEEE 0THAT THE INCOME TAX RETURN FOR THE RELEVANT ASSESSMENT YEAR 2012-13 HAS ALREADY BEEN PROCESSED AND COMPLETED ON DATED 23.03.3013 U/S 14 3(1) OF THE ACT. WHEREAS A SEARCH OPERATION U/S 132 WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 11.02.2016. FURTHE R THE MATERIAL I.E., BACK UP DATA STORED IN VARIOUS COMPUTE RS LYING IN THE BUSINESS PREMISES OF M/S BHAGWATI LACTO FOODS PVT. LTD., AN D FROM THE LAPTOP OF SH. MANJEET SINGH, ACCOUNTANT OF THE COMPANY, WAS USED AGAINST THE ASSESSEE AS INCRIMINATING MATERIAL. FURTH ER NOTHING HAS BEEN RECOVERED EITHER FROM POSSESSION OR PREMISES OF TH E ASSESSEE. THOUGH THE ASSESSEE CLAIMED BEFORE THE AUTHORITIE S BELOW THAT WHERE NO ASSESSMENT PROCEEDING FOR THE YEAR UNDER CONSIDERATION IS PENDING, IN THAT EVENTUALITY, IN THE ABSENCE OF ANY INCRIMINATING EVIDENCE FOUND DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS, NO ADDITION/DISALLOWANCE CAN BE MADE QUA UN ABATED ASSESSMENT FOR THE SAID YEAR, HOWEVER THE AUTHORITIES BEL OW HELD THAT AS PER KERALA HIGH COURT JUDGMENT IN THE CASE OF KERAL A HIGH COURT IN THE CASE OF E.N. GOPAL KUMAR VS. CIT(CENTRAL) (SUPRA ), THERE IS NO CONDITION THAT THE DEPARTMENT HAS TO UNEARTH SOME INCRI MINATING MATERIAL TO CONCLUDE SOME METHOD AGAINST THE ASSESSEE IN E VENTS WHERE THE ASSESSMENT IS TRIGGERED BY A NOTICE UNDER SECTI ON 153(1)(A) OF THE ACT. 7. THE QUESTION INVOLVED IN THE INSTANT CASE RELATES TO THE ISSUE , WHERE NO ASSESSMENT PROCEEDING FOR THE YEAR UNDER CONSIDER ATION IS PENDING, IN THAT EVENTUALITY, IN THE ABSENCE OF ANY I NCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE P ROCEEDINGS, ITA NO.193/ASR/ 2019 (A.Y.2012-13) SMT. MANJU M ITTAL VS. DCIT 5 WHETHER THE ADDITION CAN BE MADE QUA UNABATED ASSESSMEN T FOR THE SAID YEAR. 8. THE JUDGMENTS WHICH ARE AGAINST THE ASSESSEES CONTENTION A RE MANY BUT WE ARE QUOTING FEW ON WHICH THE REVENUE DE PARTMENT HAS RELIED:- (I) E.N. GOPAL KUMAR VS. CIT (CENTRAL) REPORTED 390 ITR 131(KERELA HIGH COURT) (II) CIT VS. RAJ KUMAR ARORA, 52 TAXMANN.COM.172 (III) CIT VS. K.P. UMMAER, PROP. STAR ROLLING MILL [2019] 413 ITR 0251 (IV) CANARA HOUSING DEVELOPMENT CO. VS. DCIT 49 TAX MANN.COM 98, (V) CIT VS. ANIL KUMAR BHATIA 24 TAXMANN.COM 98 (VI) CIT VS. CHETAN DAS LUCHMAN DAS 25 TAXMANN.COM 227. 9. THERE ARE MANY JUDGMENTS OF VARIOUS HIGH COURTS IN F AVOUR OF THE ASSESSEES CONTENTION, HOWEVER FOR THE SAKE OF BREVITY , WE ARE MENTIONING FEW. (1) CIT VS. KABUL CHAWALA 61 TAXMANN.COM 412 (2) PR. CIT VS. DHARAMPAL PREMCHAND LTD. [2018] 408 ITR 0170 (DELHI HIGH COURT) (3) PR. CIT VS. SUNRISE FINLEASE (PVT.T) LTD. [2018] 30 5 CTR (GUJ) 421 (GUJRAT HIGH COURT) (4) CIT VS. DEEPAK KUMAR AGARWAL & ORS [2017] 100 CCH 0 011 (MUMBAI HIGH COURT) (5) PR. JOINT CIT VS. MEETA GUTGUTIA [2017] 395 ITR 526 (DELHI HIGH COURT) (6) PR. JOINT CIT VS. MEETA GUTGUTIA [2018] TAXMANN.COM 411 (SUPREME COURT) IN SLP (C ) DAIRY NO. 18121/2018 DA TED 2 ND JULY, 2018. ITA NO.193/ASR/ 2019 (A.Y.2012-13) SMT. MANJU M ITTAL VS. DCIT 6 10. NO DOUBT THERE ARE JUDGMENTS ON BOTH SIDES TO THE ISSUE , HOWEVER, AS PER DECISION OF HON'BLE APEX COURT IN THE CA SE OF CIT VS. VEGETABLE PRODUCTS 88 ITR 192 , WHEREIN THE HON'BLE CO URT LAID DOWN THE PROPOSITION TO THE EFFECTS 'WHENEVER THERE ARE TWO REASONABLE CONSTRUCTIONS OF A TAXING PROVISION ARE POSSIBLE TH AT CONSTRUCTION WHICH FAVOURS THE ASSESSEE MUST BE ADOPTED' MEANING THEREBY WHEN TWO DIFFERENT VIEWS OF COURT ARE AVAILABLE ON AN ISSUE THEN THE VIEW WHICH FAVORS THE ASSESSEE OR THE JUDGMENT WHICH FAVO URS THE ASSESSEE SHOULD BE FOLLOWED, WE DO NOT HAVE HESITATION TO FOLLOW THE JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT(CENTRAL-3) VS. KABUL CHAWLA (SUPRA) WHEREIN CLEARL Y HELD THAT IF ON THE DATE OF SEARCH, THE ASSESSMENT PROCEEDINGS ALREADY STOOD COMPLETED AND NO INCRIMINATING MATERIAL UNEAR THED DURING THE SEARCH, THEN NO ADDITION CAN BE MADE TO THE INCOME ALREADY ASSESSED . THE SAID DICTUM OF THE HONBLE HIGH COURT CONFIRMED BY THE HONBLE APEX COURT VIDE ORDER DATED 2 ND JULY, 2018 IN THE CASE OF PR. JOINT CIT VS. MEETA GUTGUTIA (SUPRA) BY DISMISSING THE SLP FILED AGAINST THE JUDGMENT OF DELHI HIGH COURT, WHEREIN THE SAME DICTUM HAS BEEN LAID DOWN BY THE HO N'BLE COURT AS LAID DOWN IN THE CIT VS. KABUL CHAWLA (SUPRA) , HENCE IT CANNOT SAID THAT LAW LAID DOWN BY DELHI HIGH COURT IN KABUL CHAWLA CASE {SUPRA} IS NOT A GOOD LAW AS CLAIMED BY THE LD. CIT DR. EVEN OTHERWISE THE CASES RELIED UPON DECIDED BY THE HIGH COUR TS HAVE NOT BEEN CONFIRMED BY THE HONBLE APEX COURT, HENCE, THE V IEW WHICH FAVORS THE ASSESSEE AND/OR THE JUDGMENTS WHICH FAVOURS THE ASSESSEE ARE REQUIRED TO THE RESPECTFULLY FOLLOWED . ITA NO.193/ASR/ 2019 (A.Y.2012-13) SMT. MANJU M ITTAL VS. DCIT 7 11. WHILE COMING TO THE INSTANT CASE, THOUGH THE LD. CIT DR ALSO RELIED UPON THE JUDGMENT OF APEX COURT IN DY. CIT V S ZUARI ESTATE DEVELOPMENT AND INVESTMENT CO. LTD. [2015] 373 ITR 6 61 AND SUBMITTED THAT ANY INTIMATION ISSUED U/S 143(1) CANNOT BE CONSIDERED AS ASSESSMENT, HOWEVER IT IS A FACT THAT IN THIS CASE INCOME T AX RETURN FILED BY THE ASSESSEE FOR THE RELEVANT ASSESSMENT YE AR: 2011- 12 HAS ALREADY BEEN PROCESSED AND COMPLETED ON 23.03.301 3 BY THE REVENUE DEPARTMENT U/S 143(1) OF THE ACT AND IT IS NO T THE CASE OF THE REVENUE DEPARTMENT THAT THE ASSESSMENT PROCEEDINGS W ERE STILL ALIVE AS ON THE DATE OF SEARCH OPERATION, THEREFORE T HE CASE CITED BY THE LD. CIT DR IS DISTINGUISHABLE ON FACTS. 12. EVEN FROM THE ORDERS PASSED BY THE AUTHORITIES BELOW TH ERE IS NOTHING TO SUGGEST AS TO WHAT INCRIMINATING MATERIAL H AS BEEN FOUND ON DATED 11.02.2016 DURING THE SEARCH U/S 132(1) OF TH E ACT FROM THE ASSESSEE'S POSSESSION OR PREMISES, ON THE BASIS OF WHICH THE ADD ITIONS HAVE BEEN MADE. 13. AS THE ISSUE INVOLVED IN THE INSTANT CASE IS SQUARELY COVE RED BY THE DECISIONS OF DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) AND CIT VS. MEETA GUTGUTIA (SUPRA) AND BY THE CO-ORDINATE BENCH AT AMRITSAR {JALANDHAR CAMP} IN THE CASE OF SMT. SANJANA MITTAL VS. DCIT { ITA NO. 487/ASR/2018 DECIDED ON DATED 11 TH MARCH, 2019 } WHEREIN ALSO THE DICTUM LAID DOWN IN KABUL CHAWLA CAS E SUPRA) HAS BEEN FOLLOWED , HENCE RESPECTFULLY FOLLOWING THE SAME, WE ARE INCLINED TO DELETE THE ADDITION MADE BY THE AO A ND SUSTAINED BY THE LD. CIT(A). CONSEQUENTLY, THE APPEAL I.E. ITA N O. 272/ASR/2019 IS LIABLE TO BE ALLOWED, HENCE STANDS ALLOWED. ITA NO.193/ASR/ 2019 (A.Y.2012-13) SMT. MANJU M ITTAL VS. DCIT 8 14. IN THE RESULT, THE BOTH THE APPEALS FILED BY THE ASSESSE E STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/0 1/2020. SD/- SD/- (DR. A.L.SAINI) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 01/01/2020. /PK/ PS. COPY FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THEN CIT(APPEALS) 5. SR DR, I.T.A.T. AMRITSAR 6. GUARD FILE TRUE COPY BY ORDER