ACIT, New Delhi V. M/s. Sandur Bypass Projects Pvt. Ltd., New Delhi

ITA 1973/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6151 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 03-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K SAMPATH SHRI H K CHOUDHA
• Keywords: Depreciation; Search and seizure; Set aside
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCE) ITA NO.1973/DEL./2017 (ASSESSMENT YEAR : 2010-11) ACIT, CENTRAL CIRCLE 14, VS. M/S. SANDUR BYPASS PRO JECTS PVT. LTD., NEW DELHI. E 9, 3 RD FLOOR, NDSE, PART II, NEW DELHI - 110 049. (PAN : AAKCS3657A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH, ADVOCATE REVENUE BY : SHRI H.K. CHOUDHARY, CIT DR DATE OF HEARING : 02.09.2021 DATE OF ORDER : 14.09.2021 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, ACIT, CENTRAL CIRCLE 14, NEW DELHI (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 24.01.2017 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-XXVI, NEW DELH I QUA THE ASSESSMENT YEAR 2010-11 ON THE GROUNDS INTER ALIA T HAT :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN LAW IN HOLDING THAT THE AO COUL D NOT HAVE PROCEEDED TO FRAME ASSESSMENT U/S 153A OF THE ACT A S NO INCRIMINATING DOCUMENTS/ASSETS WERE FOUND DURING TH E SEARCH ITA NO.1973/DEL./2017 2 WITHOUT APPRECIATING THAT THE PROVISION OF SECTION 153A OF THE ACT DOES NOT STIPULATES ANY SUCH CONDITIONALITY. 2. ON THE FACTS AND IN THE .CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN LAW IN ALLOWING THE APPEAL OF T HE ASSESSEE WITHOUT INDEPENDENTLY VERIFYING THE FACTS OF THE CA SE, BEING A FACT FINDING AUTHORITY AS MANDATED BY THE DELHI HIGH COU RT IN THE CASE OF CIT VS JANSAMPARK ADVERTISING. 3. THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELE TING THE ADDITION OF RS.19,97,747/- BY REWORKING THE AMOUNT OF AMORTIZATION AT RS.55,77,987/- AS AGAINST RS.75,75, 734/-. 4. THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELE TING THE ADDITION OF RS.38,56,433/- BY DISALLOWING 50% OF I NTEREST ON TERM LOAN DEBITED TO PROFIT & LOSS ACCOUNT. 5. THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELE TING THE ADDITION OF RS.3,64,000, RS.50,90,000/- ,RS.L,43,22 ,782/- & RS3,76,30,664 FOR ASSESSMENT YEAR 2007-08 TO ASSESS MENT YEAR 2010-11. 6. THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELE TING THE ADDITION OF DISALLOWANCE OF RS.2,56,048/- ON ACCOU NT OF DEPRECIATION. 7. THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELE TING THE ADDITION OF RS.36,23,497, RS.39,11,364/-, RS.2,37,1 9,300/- AND RS.L,00,00,000/- 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF SEARCH AN D SEIZURE OPERATION CARRIED OUT ON DSC GROUP INCLUDING ASSESS EE ON 28.08.2012, ASSESSMENT HAS BEEN FRAMED U/S 153A/143 (3) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) BY MAKI NG ADDITIONS ON ACCOUNT OF EXCESS AMORTIZATION, INTEREST TO THE EXT ENT OF 50% & DEPRECIATION TO THE TUNE OF RS.19,97,747/-, RS.38, 56,433/- & RS.2,56,048/- RESPECTIVELY AND THEREBY ASSESSED THE TOTAL INCOME AT RS.3,86,728/-. ITA NO.1973/DEL./2017 3 3. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING APPEAL WHO HAS QUASHED THE ASSESSMENT FRAMED U/S 153A OF THE ACT ON THE GROUND THAT NO INCRIMINATING DOCUMEN T/ASSET HAS BEEN FOUND DURING THE SEARCH OPERATION PERTAINING T O THE YEAR UNDER ASSESSMENT AND THEREBY ALLOWED THE APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF F ILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. WE HAVE PERUSED THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) ALLOWING THE APPEAL FILED BY THE ASSESSEE, OPER ATIVE PART THEREOF IS EXTRACTED FOR READY PERUSAL AS UNDER :- SUMMARY OF THE LEGAL POSITION (XXIII) ON A CONSPECTUS OF SECTION 153A(1) OF THE A CT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONED DECISIONS, THE LEGA L POSITION THAT EMERGES IS AS UNDER: A) ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153A (1) WILL HAVE TO BE MANDATORY ISSUED TO. THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. B) ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME ITA NO.1973/DEL./2017 4 FOR SUCH AYS WILL HAVE TO BE COMPLETED BY THE AOS AS A FRESH EXERCISE. C) THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX.' D) ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' E) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153A IS RELATABLE TO ABATED PROCEEDINGS [I.E. THOSE PENDING ON THE DATE OF SEARCH] AND THE WORD REASSESS TO COMPLETED ASSESSMENT PROCEEDINGS. F) INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. G) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. ITA NO.1973/DEL./2017 5 (XXIV) THE PRESENT APPEALS CONCERN AYS, 2002-03, 20 05-06 AND 2006-07. ON THE DATE OF THE SEARCH THE SAID ASSESSM ENTS ALREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITI ONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED . (XXV) THE QUESTION FRAMED BY THE COURT IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. (XXVI) THE APPEALS ARE ACCORDINGLY DISMISSED BUT IN THE CIRCUMSTANCES NO ORDERS AS TO COSTS.' 11. IN VIEW OF ABOVE ANALYSIS OF LEGAL VIEW ON THE ISSUE, THE AO COULDN'T HAVE PROCEEDED TO FRAME ASSESSMENT U/S 153A IN RESPECT OF YEAR UNDER CONSIDERATION AS NO INCRIMINA TING DOCUMENTS/ASSETS HAVE BEEN FOUND DURING SEARCH OPER ATION PERTAINING TO THIS YEAR. THIS GROUND OF APPEAL, IS THEREFORE, ALLOWED. SINCE THE ASSESSMENT FRAMED HAS BEEN HELD TO BE WIT HOUT JURISDICTION, THE REST OF THE GROUNDS OF APPEAL BEC OME ACADEMIC IN NATURE AND NOT ADJUDICATED. IN THE RESULT THE APPEAL IS ALLOWED. 6. LD. DR FOR THE REVENUE CHALLENGING THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) RELIED UPON THE ASSESSMENT ORDER PASSED IN THIS CASE AND CONTENDED THAT ADDITION ON MERIT H AS NOT BEEN DISCUSSED AND ADJUDICATED UPON BY THE LD. CIT(A). 7. BARE PERUSAL OF THE ASSESSMENT ORDER PASSED BY T HE AO GOES TO PROVE ON FILE THAT NO INCRIMINATING MATERIAL W AS THERE TO SUPPORT THE ADDITIONS MADE BY THE AO. IT IS SETTLE D PRINCIPLE OF LAW THAT WHEN NO INCRIMINATING MATERIAL HAS COME ON REC ORD, VERY INITIATION OF ASSESSMENT PROCEEDINGS U/S 153A IS NO T SUSTAINABLE IN THE EYES OF LAW. LD. DR FOR THE REVENUE HAS FAILED TO REBUT THE ITA NO.1973/DEL./2017 6 ISSUE DECIDED BY THE LD. CIT (A) THAT IN THE ABSENC E OF ANY INCRIMINATING MATERIAL, ASSUMPTION OF JURISDICTION U/S 153A OF THE ACT IS BAD IN LAW. LD. CIT (A) HAS DECIDED THE FAC TUAL ISSUE IN THE LIGHT OF THE SETTLED PRINCIPLE OF LAW LAID DOWN BY HONBLE HIGH COURT AS WELL AS COORDINATE BENCH OF THE TRIBUNAL. 8. HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS . KABUL CHAWLA 380 ITR 573 (DEL.) HAS DECIDED THE IDENTICAL ISSUE BY HOLDING THAT, COMPLETED ASSESSMENT CAN BE INTERFERED BY THE AO WHILE MAKING ASSESSMENT U/S 153A ONLY ON THE BAS IS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURS E OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR P ROPERTY DISCOVERED IN THE COURSE OF SEARCH, WHICH WERE NOT THERE IN THE COURSE OF ORIGINAL ASSESSMENT . 9. SO, WHEN THERE IS NO INCRIMINATING MATERIAL UNEA RTHED DURING THE SEARCH AND SEIZURE OPERATION, LD. CIT (A) HAS L EGALLY AND VALIDLY DELETED THE ADDITIONS. RESULTANTLY, THE AP PEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 14 TH DAY OF SEPTEMBER, 2021. SD/- SD/- (N.K. BILLAIYA) (KULDIP SIN GH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 14 TH DAY OF SEPTEMBER, 2021/TS ITA NO.1973/DEL./2017 7 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.