UNI DESIGN ELITE JEWELLERY P.LTD, MUMBAI V. DCIT CEN CIR 9, MUMBAI

ITA 2011/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0991 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 22-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: RAKESH MOHAN
• Keywords: Search and seizure; Loose papers
• Section: 143(3); 10AA; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER ITA NOS.2011, 2012 & 2013/M/2017 ASSESSMENT YEARS: 2009-10, 2010-11 & 2011-12 M/S. UNI DESIGN ELITE JEWELLERY PVT. LTD., 401-402, TOWER NO.II, SEEPZ, ANDHERI (E), MUMBAI-400 096 PAN: AAACK3499E VS. THE DY. COMMISSIONER OF INCOME TAX (CENTRAL CIRCLE)-1(2), OLD CGO BUILDING, M.K. ROAD, MUMBAI 400 020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI RAKESH MOHAN, A.R. REVENUE BY : MS. N. HEMALATHA, D.R. DATE OF HEARING : 05.12.2017 DATE OF PRONOUNCEMENT : 08.01.2018 O R D E R PER D.T. GARASIA, JUDICIAL MEMBER: THE ABOVE TITLED APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST THE COMMON ORDER DATED 27.01.2017 OF THE CO MMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEARS 2009-10, 2010-11 & 201 1-12. 2. THE COMMON GROUND IN ALL THESE APPEALS TAKEN BY THE ASSESSEE IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE CIT(A) ERRED IN CONFIRMING THE RE-COMPUTATION OF DEDUCTION UNDER SECTION 10AA OF THE INCOME TAX ACT, 1961 (THE ACT) AFTER EXCLUDING TH E OTHER INCOME EARNED BY THE APPELLANT. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A PRIV ATE LIMITED COMPANY AND IS ENGAGED IN BUSINESS OF JEWELLERY MAN UFACTURING AND ITA NOS.2011, 2012 & 2013/M/2017 M/S. UNI DESIGN ELITE JEWELLERY PVT. LTD. 2 EXPORTING THE SAME. THE ASSESSEE IS LOCATED AT SEE PZ, MUMBAI. IN A.Y. 2009-10, 2010-11 & 2011-12 THE ASSESSEE HAS CL AIMED DEDUCTION UNDER SECTION 10AA OF THE ACT. A SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) OF THE ACT WAS CONDUCTE D BY DDIT (INV) UNIT-IX(3), MUMBAI IN THE CASE OF THE MAHENDRA BRO THERS EXPORTS P. LTD. AND RELATED PERSONS. THE ASSESSEE BEING A SISTER CONCERN ALSO COVERED UNDER SECTION 132 OF THE ACT. SUBSEQUENTLY , THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTIO N 153A OF THE ACT AND ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) DID NOT ALLOW THE DEDUCTION UNDER SECTION 10AA ON FOLLOWING TERMS: I) INTEREST ON SECURITY DEPOSIT OF RS.11,514/- II) SUNDRY BALANCE WRITTEN BACK OF RS.55,607/-; AN D III) INTEREST OF FIXED DEPOSIT OF RS.1,35,139/- 4. THE LD. CIT(A) HAS CONFIRMED THE SAME. 5. DURING THE COURSE OF HEARING, THE LD. A.R. HAS T AKEN ADDITIONAL GROUND BEFORE ME THAT THE DEPARTMENT IS NOT JUSTIFI ED IN NOT ALLOWING THE BENEFIT OF SECTION 10AA OF THE ACT. ON THE OTH ER INCOME BEING INTEREST ON SECURITY DEPOSIT, INTEREST ON FIXED DEP OSIT AND SUNDRY BALANCES WRITTEN BACK WITHOUT ANY REFERENCE TO SEIZ ED MATERIAL OR ANY INCRIMINATING EVIDENCE FOUND DURING THE COURSE OF S EARCH. THE ASSESSEE PRAYED THAT ORDER PASSED BY THE AO BY ANY LAW AS JURISDICTION UNDER SECTION 153A IS VACILLATED. 6. HAVING HEARD BOTH THE PARTIES, IN MY OPINION THI S IS A LEGAL GROUND WHICH GOES TO THE ROOT OF THE MATTER. AS PE R THE DECISION OF ITA NOS.2011, 2012 & 2013/M/2017 M/S. UNI DESIGN ELITE JEWELLERY PVT. LTD. 3 HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERM AL POWER CORPORATION 229 ITR 383 SC. ASSESSEE IS AT LIBERTY TO TAKE ADDITIONAL GROUND WHICH GOES TO THE ROOT OF THE CAS E AND IT IS A LAW POINT. THEREFORE, I ADMIT THE SAME. DURING THE C OURSE OF HEARING, THE LD. A.R. SUBMITTED THE PANCHNAMA DATED 09.08.20 11 IN CASE OF ASSESSEE WHICH SHOWS IN COLUMN 5(A)(I), BOOKS OF AC COUNT AND DOCUMENTS FOUND AND SEIZED AS PER ANNEXURE-A TO PAN CHNAMA IN ONE SHEET. THE SAID ANNEXURE IS ALSO ENCLOSED WHICH SH OWS THE SEIZURE OF LOOSE PAPERS NUMBERING 1 TO 95. THE STATEMENT OF O NE MR. BHASKAR BALKRISHNA KAMBLI WAS RECORDED AND THE QUESTION WAS PUT BY IT AND IN REPLY TO QUESTION, ASSESSEE HAD SUBMITTED THAT P AGE 54 TO 95 ARE TRIAL BALANCE, FINANCIAL STATEMENT FOR THE PERIOD 0 1.04.09 TO 8.8.2011 AND SUNDRY CREDITORS FROM APRIL 2007 TO MARCH 2010 AND EXTRACT OF PURCHASE OF REGISTRY FROM APRIL 2009 TO 31.03.11. IT SHOWS THAT NOTHING INCRIMINATING MATERIAL WAS FOUND. THE LD. A.R. SUBMITTED THAT AO ALSO IN THE ASSESSMENT ORDER NOWHERE STATED THAT ANY INCRIMINATING DOCUMENT WAS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS. THEREFORE, LD. A.R. WAS OF A VIEW THA T SECTION 153A IS WRONGLY APPLIED. THEREFORE, HE PRAYED THAT THE MAT TER MAY BE ALLOWED FOR THE THREE ASSESSMENT YEARS. HE RELIED UPON THE JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF A LCARGO GLOBAL LOGISTICS 374 ITR 645 WHEREIN JURISDICTOINAL HIGH C OURT HAS HELD THAT NO ADDITION CAN BE MADE IN ASSESSMENTS PROCEED ING UNDER SECTION 153A OF THE ACT ONLY ON THE BASIS OF MATERI AL FOUND DURING THE COURSE OF SEARCH. ITA NOS.2011, 2012 & 2013/M/2017 M/S. UNI DESIGN ELITE JEWELLERY PVT. LTD. 4 7. ON THE OTHER HAND, THE LD. D.R. RELIED UPON THE ORDER OF REVENUE AUTHORITIES. 8. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES. I FIND THAT JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF CIT VS. ALCARGO 374 ITR 645 HAS HELD AS UNDER: HELD, DISMISSING THE APPEALS, (I) THAT THE NOTICE UNDER SECTION 153A WAS FOUNDED ON SEARCH. IF THERE WAS NO INCRIMINATING MATERIAL F OUND DURING THE SEARCH THEN THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE POWER UNDER SECTION 153A BEING NOT EXPECTED TO BE EXERCISED ROUTINELY, SHOULD BE EXERCISED IF T HE SEARCH REVEALED ANY INCRIMINATING MATERIAL. IF THAT WAS NOT FOUND THEN IN RELATION TO THE SECOND PHASE OF THREE YEARS, THERE WAS NO WARRANT FOR MAKING AN ORD ER WITHIN THE MEANING OF THIS PROVISION. 9. RESPECTFULLY FOLLOWING THE JURISDICTIONAL HIGH C OURT, I HOLD THAT NO INCRIMINATING MATERIAL WAS FOUND IN ALL THE ASSESSMENT YEARS DURING THE SEARCH. THEREFORE, AO IS NOT JUSTIFIED IN INVOKING SECTION 153A IN THE ASSESSMENT YEARS. 10. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.01.2018. SD/- (D.T. GARASIA) JUDICIAL MEMB ER MUMBAI, DATED: 08.01.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// ITA NOS.2011, 2012 & 2013/M/2017 M/S. UNI DESIGN ELITE JEWELLERY PVT. LTD. 5 [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.