RAJESH PODDAR, MUMBAI V. DCIT CENT. CIR. 7(4), MUMBAI

ITA 2114/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8308 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 01-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MEENADR
• Assessee Lawyers: DEVENDRA H JAIN
• Keywords: Search and seizure
• Section: 69C; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI , , BEFORE S/SHRI RAJENDRA, A.M. AND SANJAY GARG,J.M. ./ ././ ./ ITA NO.2114/MUM/2016 / ASSESSMENT YEAR: 2011-12 MR. RAJESH PODDAR 42, GAUTAM APARTMENT 31, JUHU ROAD, SANTACRUZ (W) MUMBAI-400 054. PAN: AAFPP 3092 C VS. DCIT, CENTRAL CIRCLE-7(4) ROOM NO.659, 6TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. ( / // / APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI R.P. MEENA-DR ASSESSEE BY: SHRI DEVENDRA H. JAIN / // / DATE OF HEARING: 08.02.2017 !'#$ / DATE OF PRONOUNCEMENT:22.02.2017 , ,, , 1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , ,, , -PER RAJENDRA,AM: CHALLENGING THE ORDER DATED 29.01.2016 OF CIT(A)-48 , MUMBAI THE ASSESSEE HAS FILED THE PRESENT APPEAL. 2. A SEARCH AND SEIZURE ACTION U/S.132(1) OF THE ACT W AS CARRIED OUT IN LOHA ISPAAT GROUP OF CASES ON 22/2/12.THE NOTICE U/S. 153A WAS ISSUED TO THE ASSESSEE ON 16.10.2012.THE ASSESSEE FILED ITS RETURN OF INCOME ON 27.11.2012,DECLARING INCOME OF RS.25.48 LAKHS.THE AO COMPLETED THE ASSESSMENT U/S.143(3) R.W.S.153A OF THE ACT ON 27.03.2014,DETERMINING HIS INCOME AT RS.30.48LAKHS. 3. DURING THE ASSESSMENT PROCEEDINGS THE AO OBSERVED T HAT THE ASSESSEE HAD A FAMILY OF SIX MEMBERS, THAT HE WAS STAYING IN A SELF OWNED TWO 2B HK FLATS OF TOTAL AREA OF 2200 SQ.FT IN SANTACRUZ(W) MUMBAI,THAT BOTH HIS CHILDREN WERE GOI NG TO COLLEGE,THAT THE FATHER OF THE ASSESSEE WAS A SENIOR CITIZEN.HE TABULATED THE DRAW INGS MADE BY ASSESSEE AND MEMBERS OF THE FAMILY FROM AY 2006-07 TO 2011-12 AS UNDER :- AY. SELF DRAWINGS (RS.) WIFE DRAWINGS PARENTS DRAWINGS (RS.) CHILDREN DRAWINGS (RS.) TOTAL DRAWING (RS.) 2006-07 1,83,143/- 1,38,751/- 53,601/- NIL 3,77,495 /- 2007-08 3,44,174/- 1,24,010/- 55,401 22,612/- 5,46, 197/- 2008-09 7,12,816/- 2,20,781/- 20,000/- 843/- 9,54,4 40/- 2009-10 19,85,487/- 8,26,448/- 52,084/- 3,371/- 28, 67,390/- (INCLUDES FOREIGN TRAVEL EXPENSE OF RS.11,89,000/-) 2010-11 4,90,768/- 1,39,323/- 1,12,702/- NIL 7,42,7 93/- 2114/M/16(11-12)- RAJESH PODDAR 2 2011-12 1,32,939/- 2,64,623/- 41,949/- NIL 4,39,511 /- 2012-13 1,57,350/- 77,903/- 21,323/- NIL 2,56,578/- HE FURTHER OBSERVED THAT THE ASSESSEE HAD GONE ABRO AD AND HAD SPENT RS.12.00 LAKHS APPROX FOR FOREIGN VISIT, THAT THE DRAWING SHOWN BY HIM W OULD NOT BE SUFFICIENT TO SUFFICE THE EXPENSES ACTUALLY BORNE BY ANY FAMILY STAYING IN SU CH A LOCALITY OF MUMBAI, THAT THE ASSESSEE HAD SHOWN DRAWING OF RS.3000-4000 PER MONTH,PER PER SON.CONSIDERING THE INCREASE IN INFLATION,FAMILY SIZE HE HELD THAT THE DRAWING SHOW N BY THE ASSESSEE WERE NOT ADEQUATE. INVOKING THE PROVISIONS OF SECTION 69C OF THE ACT,H E HELD THAT AN ADDITION OF RS.5.00 LAKHS TO THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSI DERATION ON ESTIMATED BASIS. 4. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).DURING THE APPELLATE PROC EEDINGS BEFORE THE FAA THE ASSESSEE MADE ELABORATE SUBMISSIONS, WHO IN TURN CONFIRMED THE ADDITION MADE BY AO OBSERVING THAT ASSESSEE HAD SPENT A GOOD DEAL OF MONEY ON THE EDUC ATION OF CHILDREN,MAINTENANCE OF RESIDENCE ETC. 5. BEFORE US,THE AUTHORISED REPRESENTATIVE(AR)STATED T HAT THE YEAR UNDER CONSIDERATION WAS UNABATED YEAR, THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH WITH REGARD TO LOW HOUSE HOLD WITHDRAWAL.THE DEPARTMENTAL REPRESENTATI VE (DR) LEFT THE ISSUE TO THE DISCRETION OF THE BENCH. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS WE FIND THAT AN ACTION U/.S132(1) WAS TAKEN IN CASE OF GROUP ENTITIES, THAT AO HAD MADE CERTAIN ADDITIONS INVOKING PROVISIONS OF SECTION 69C OF THE ACT, THAT THE YEAR UNDER CONSIDERATION IS UNABATED YEAR, THAT NO ACTION COULD BE TAKEN U/S153A FOR ASSESSMENTS OF UNABATED YEARS.WE WOULD LIKE TO REFER TO THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD.(374ITR645). THE RELEVANT PORTION OF THE JUDGMENT READS AS UNDER. UNDER SECTION 153A OF THE INCOME-TAX ACT, 1961, WHI CH ENABLES CARRYING OUT OF SEARCH OR EXERCISE OF POWER OF REQUISITION, ASSESSMENT IN FUR THERANCE THEREOF IS CONTEMPLATED. THERE IS A MANDATE TO ISSUE NOTICES UNDER SECTION 153(1)(A) AN D ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MA DE. THUS, THE CRUCIAL WORDS SEARCH AND REQUISITION APPEAR IN THE SUBSTANTIVE PROVISION A ND THE PROVISOS. THAT WOULD THROW LIGHT ON THE ISSUE OF APPLICABILITY OF THE PROVISION. TRUE I T IS THAT THE ASSESSMENT WHICH HAS TO BE MADE IN PURSUANCE OF THE NOTICE IS IN RELATION TO THE SIX Y EARS. AN ORDER WILL HAVE TO BE MADE IN THAT REGARD. WHILE MAKING THE ORDER, THE INCOME OR THE R ETURN OF INCOME FILED FOR ALL THESE ASSESSMENT YEARS IS TO BE TAKEN INTO ACCOUNT. A REF ERENCE WILL HAVE TO BE MADE TO THE INCOME DISCLOSED THEREIN. HOWEVER, THE SCOPE OF ENQUIRY TH OUGH NOT CONFINED ESSENTIALLY REVOLVES AROUND THE SEARCH OR THE REQUISITION UNDER SECTION 132A , AS THE CASE MAY BE. THE PROVISION DEALS WITH THOSE CASES WHERE ASSESSMENT OR REASSESS MENT, IF ANY, RELATING TO THE ASSESSMENT 2114/M/16(11-12)- RAJESH PODDAR 3 YEARS FALLING WITHIN THE PERIOD OF SIX ASSESSMENT Y EARS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A WERE PENDING. IF THEY WERE PENDING ON THE DATE OF THE INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A , AS THE CASE MAY BE, THEY ABATE. IT IS ONLY PENDING PROCEEDINGS THAT WOULD ABATE AND NOT W HERE THERE ARE ORDERS MADE OF ASSESSMENT OR REASSESSMENT AND WHICH ARE IN FORCE ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF THE REQUISITION. RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT WE DECIDE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. AS A RESULT APPEAL FILED BY ASSESSEE STANDS ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND FEBRUARY, 2017. 22 2017 SD/- SD/- ( /SANJAY GARG) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; % /DATED : 22.02.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.