M/s MLC Industries P. Ltd., V. CIT (A), Bangalore

ITA 229/BANG/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0311 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-05-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 14-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P CHANDRASHEKAR
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL BANGALORE BENCH B, BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NOS.229 TO 235(BANG) 2014 (ASSESSMENT YEAR : 2004-05 TO 2010-11) M/S MLC INDUSTRIES PVT.LTD., NO.1 & 2, MURPHY ROAD, BANGALORE-560 0001 PAN NO.AABCM2535Q APPELLANT VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), BANGALORE RE SPONDENT AND (ITA NO.1688 (BANG)/2013 (ASSESSMENT YEAR : 2004-05) THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), BANGALORE APPELLANT VS M/S MLC INDUSTRIES PVT.LTD., NO.1 & 2, MURPHY ROAD, BANGALORE-560 0001 PAN NO.AABCM2535Q RESPONDENT ASSESSEE BY : SHRI S.PARTHASARATHI, ADVOCATE REVENUE BY : SHRI P.CHANDRASHEKAR, CIT DATE OF HEARING : 05-05-2016 DATE OF PRONOUNCEMENT : .06-2016 O R D E R PER BENCH: THESE ARE SEVEN APPEAL FILED BY THE ASAESSEE FOR T HE ASSESSMENT YEARS : 2004-05 TO 2010-11 AND THERE IS ONE APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR : 2004-05. ALL THESE APPEALS WERE HEARD TOGETHER ITA NO.229-235(B)/14 & 1688(BANG)2013 2 AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ALL THE SEVEN APPEALS FILED BY THE ASSESSEE, THE ASSESSEE HAS RAISED ONE IDENTICAL ADDITIONAL GROUND WHICH IS REP RODUCED BELOW: ON THE FACTS THERE BEING NO SATISFACTION NOTE OF THE ASSESSING AUTHORITY OF THE RAID PARTY WHICH WAS A P RE- REQUISITE CONDITION BEFORE TRANSMITTING THE RECORDS TO THE APPELLANTS ASSESSING AUTHORITY PROVIDED TO THE APPELLANT, THE ASSESSMENT UNDER SECTION 153C RWS 143(3) OF THE ACT, AS MADE BY THE ASSESSING AUTHORI TY IS OPPOSED TO LAW AND LIABLE TO BE CANCELLED. IT WAS SUBMITTED BY THE LD.AR OF THE ASSESSEE THAT IN NONE OF THE YEARS, THE SATISFACTION WAS RECORDED BY THE AO OF T HE SEARCHED PERSON WHICH IS A PRE REQUIREMENT FOR INVOKING PROVISIONS OF SEC.153C OF THE IT ACT, 1961 AND THEREFORE, THE CONSEQUENT ASSESSMENT FRAMED BY THE AO IN ALL THE SEVEN ASSESSMENT YEARS IS TO BE QUASHED. 3. THE LD. DR OF THE REVENUE SUPPORTED THE ASSESSM ENT ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT IN THE ASSESSMENT ORDER FOR EACH YEAR, THE AO HAS NOTED AS UNDER; THERE WAS A SEARCH U/S 132 OF THE IT ACT IN THE C ASE OF ONE SHRI S.M.KAMAL PASHA, GOLDEN HATCHERIES NO.3 , THIMMAIAH ROAD, QUEENS ROAD CROSS, BANGALORE ON 20 - 11-2009. DURING THE COURSE OF ABOVE SEARCH A COPY O F SALE DEED DATED 30-09-2003 EXECUTED BY THE ASSESSEE COMP ANY ITA NO.229-235(B)/14 & 1688(BANG)2013 3 IN FAVOUR OF M/S MILLENNIA REALTORS PVT.LTD. BANGAL ORE WAS SEIZED VIDE SEIZED DOCUMENTS NO.A/S/MK/GH/3. IN VIEW OF THE ABOVE, THE CASE OF ASSESSEE COMPANY ATTRACTE D THE PROVISIONS OF SEC.153C OF THE ACT. THE CASE WAS N OTIFIED TO THIS OFFICE VIDE NOTIFICATION ORDER IN F NO. NOTIFI CATION/CIT-B- III/2011-12 DATED 25-04-2011 OF CIT, BANGALORE-III, BANGALORE. ACCORDINGLY, A NOTICE U/S 153C DATED 29 -04- 2011 WAS SERVED ON THE ASSESSEE REQUIRING IT TO FIL E RETURN OF INCOME FOR AY: 2004-05. IN RESPONSE TO THE ABOV E THE ASSESSEE FILED A REPLY LETTER DATED 03-10-2011 INTI MATING THAT THE RETURN OF INCOME FILED BY IT BEFORE DCIT, CIRCLE-12(1), BANGALORE ON 13-10-2004 MAY BE TREATED AS RETURN FI LED IN RESPONSE TO NOTICE U/S153C DATED 29-04-2011. IN TH E SAID RETURN THE ASSESSEE HAD DECLARED A TOTAL INCOME OF RS.18,43,77,740/- (EIGHTEEN CRORE FORTY THREE LAKH SEVENTY SEVEN THOUSAND SEVEN HUNDRED AND FORTY). THE BREA K-UP OF THE ABOVE TOTAL INCOME IS GIVEN BELOW. 5. FROM THE ABOVE NOTING BY THE AO IN THE ASSESSME NT ORDER IN EACH OF THESE YEARS, IT COMES OUT THAT THERE IS NO REFERENC E TO ANY SATISFACTION RECORDED BY THE AO OF THE SEARCHED PERSON, AS REQUI RED U/S 153C OF THE IT ACT, AND THE NOTICE U/S 153 C WAS ISSUED BY THE AO ON 29.04.2011 ON THE BASIS OF NOTIFICATION ORDER DATED 25-04-2011 OF CIT -III, BANGALORE. THE LD. DR OF THE REVENUE WAS CONFRONTED ON THIS ASPECT BU T HE COULD NOT PRODUCE ANY EVIDENCE TO SHOW THAT REQUIRED SATISFACTION WAS RECORDED BY THE AO OF THE SEARCHED PERSON IN ANY OF THE YEARS AND THEREFO RE, WE HAVE NO HESITATION IN HOLDING THAT THE ASSESSMENT ORDER PAS SED BY THE AO IN ANY OF THESE YEARS ON THE BASIS OF SUCH IMPROPER INVOCATIO N OF SEC.153C OF THE IT ITA NO.229-235(B)/14 & 1688(BANG)2013 4 ACT, 1961IS NOT VALID ALTHOUGH, THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED BY THE ASSESSEE IN EACH OF T HESE YEARS HAS TO BE TAXED AS PER THE RETURN OF INCOME BUT NO ADDITION C AN BE MADE AS HAS BEEN MADE BY THE AO IN THESE ASSESSMENT ORDERS. WE HOLD ACCORDINGLY AND QUASH ALL THE SEVEN ASSESSMENT ORDERS. 6. IN VIEW OF OUR ABOVE DECISION WITH REGARD TO ADD ITIONAL GROUNDS RAISED BY THE ASSESSEE IN EACH OF THE SEVEN YEARS, THE OTH ER ISSUES RAISED BY THE ASSESSEE IN THESE APPEALS DO NOT REQUIRE ANY ADJUDI CATION BECAUSE WHEN THE ASSESSMENT ORDER ITSELF HAS BEEN QUASHED THE AD DITION MADE BY THE AO DOES NOT SURVIVE AND THEREFORE, NO ADJUDICATION IS CALLED FOR THESE GRIEVANCES OF THE ASSESSEE ON MERIT OF THESE ADDITI ONS. SIMILARLY, THE APPEAL OF THE REVENUE FOR AY: 2004-05 HAS BECOME IN FRUCTUOUS BECAUSE WHEN THE ASSESSMENT ORDER ITSELF IS QUASHED, NO ADD ITION SURVIVES AND THEREFORE, DELETION OF SUCH ADDITION BY LD. CIT(A) ALSO CANNOT BE DISPUTED ON MERIT. 7. IN THE RESULT, ALL THE SEVEN APPEALS FILED BY T HE ASSESSEE ARE ALLOWED WHEREAS THE APPEAL FILED BY THE REVENUE FOR AY: 200 4-05 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. (VIJAY PAL RAO) (A.K. GARODIA) JUDICAL MEMBER AC C OUNTANT MEMBER BANGALORE: D A T E D : .06.2016 AM* ITA NO.229-235(B)/14 & 1688(BANG)2013 5 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR, ITAT, BANGALORE 1. DATE OF DICTATION .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT CO MES TO THE SR. P. S. .. 4 DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE ORDER COMES BACK TO THE SR. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER DOES FOR XEROX & ENDORSEMENT . 10. DATE ON WH ICH THE FILE GOES TO THE HEAD CLERK. 11 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER. 12 THE DATE ON WHICH THE FILE GOES TO THE DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER 13 DATE OF DIS PATCH OF ORDER