BOMBAY DIAMOND CO.PVT. LTD., MUMBAI V. D.C.I.T. CENTRAL CIRCLE - I, MUMBAI

ITA 2294/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0683 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-07-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 09-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N P SINGH
• Keywords: Capital asset; Search and seizure
• Section: 143(3); 133A; 115JB; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B, MU MBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.2294/MUM/2012 (ASSESSMENT YEAR- 2004-05) M/S BOMBAY DIAMONDS CO. PVT. LTD. SU-RAJ HOUSE, 73-C, CROSS ROAD, MAROL, MIDC, ANDHERI (E), MUMBAI-400093 PAN: AAACB0495K VS. D.C.I.T.-CC-I, MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJESH P. SHAH (AR) REVENUE BY : SHRI N.P. SINGH (DR) DATE OF HEARING : 02.05.2017 DATE OF PRONOUNCEMENT : 17.05.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE U/S 253 OF THE INCOME-TAX A CT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-36, MUMBAI DATED 15.02.2012 FOR ASSESSMENT YEAR (AY) 2004-05. THE ASSESSEE HAS RAISED THE FOLLOWING GROU NDS OF APPEAL: ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF AO OF CONS IDERING THE PROFIT ON SALE OF CAPITAL ASSETS OF RS. 10.38 CRORES FOR THE PURPOSE OF CALCULATING BOOK PROFIT U/S 115JB WITHOUT APPRECIATING THAT SUCH PROFIT IS NOT TAXABLE UNDER THE PROVISION OF INCOME TAX ACT AND SAME NEEDS TO BE IGNORED FOR COM PUTING BOOK PROFIT U/S 115JB. 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SURVE Y ACTION U/S 132(1) AND 133A WAS CONDUCTED IN CASE OF SU-RAJ DIAMOND GROUP AND ITS A SSOCIATE GROUP ON 22.08.2008. CONSEQUENT UPON THE ASSESSEE WAS SERVED NOTICE U/S 153C OF THE ACT ON 28.07.2009. IN RESPONSE TO THE NOTICE, THE ASSES SEE-COMPANY FILED RETURN OF INCOME ON 27.08.2009 DECLARING LOSS OF RS. 1,12,64, 969/-. THE ASSESSEE IN ITS REGULAR RETURN OF INCOME FILED ON 01.11.2004 U/S 13 9 ALSO DECLARED THE SIMILAR LOSS/INCOME. THE ASSESSMENT WAS COMPLETED U/S 143(3 ) OF THE ACT ON 30.11.2006. ITA NO.2294/M/2012- M/S BOMBAY DIAMONDS CO. PVT. LTD. 2 WHILE FRAMING THE ASSESSMENT ORDER U/S 143(3) R.W.S . 153C OF THE ACT, THE ASSESSING OFFICER (AO) OBSERVED THAT IN THE ASSESSM ENT COMPLETED U/S 143(3) OF THE ACT DATED 30.11.2006. THE AO WORKED OUT THE BOO K PROFIT U/S 115JB AT RS.7,61,36,507/- AGAINST WHICH THE ASSESSEE FILED A PPEAL BEFORE THE LD. CIT(A)-25, MUMBAI. THE LD CIT(A) DECIDED IT IN FAVOUR OF ASSES SEE VIDE ORDER DATED 29.09.2007. AGGRIEVED BY THE ORDER OF LD. CIT(A), T HE REVENUE FILED APPEAL BEFORE THE TRIBUNAL VIDE ITA NO. 7488/MUM/2007 VIDE ORDER DATED 30.11.2009 DECIDED IN FAVOUR OF REVENUE. HENCE, WHILE PASSING ASSESSME NT ORDER U/S 143(3) R.W.S. 153C OF THE ACT DATED 14.12.2010, THE AO MADE THE A DDITION OF BOOK PROFIT OF RS. 7,61,36,507/-. AGGRIEVED BY THE ASSESSMENT ORDER, T HE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A)-36, MUMBAI. THE LD. CIT(A) FOLLOWING THE DECISION OF TRIBUNAL IN ITA NO. 7488/MUM/2007 DATED 30.11.2009 DECIDED THE APPEAL AGAINST THE ASSESSEE. THUS, FURTHER AGGRIEVED BY THE ORDER OF L D. CIT(A), THE PRESENT APPEAL IS FILED BEFORE US. 3. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE (AR ) OF ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE OUTSET OF THE PROCEEDIN G, THE LD. AR OF THE ASSESSEE ARGUED THAT AGAINST THE ORDER OF TRIBUNAL IN ITA NO . 7488/MUM/2007 DATED 30.11.2009, THE ASSESSEE HAS FILED APPEAL BEFORE TH E JURISDICTIONAL HIGH COURT AND THE SAME HAS BEEN ADMITTED. THE LD. DR FOR THE REVE NUE NOT DISPUTED THE FINDING ON APPEAL BEFORE THE HONBLE HIGH COURT. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND GONE THROUGH THE ORDER OF AUTHORITIES BELOW. WE HAVE SEEN THAT SEARCH AND SEIZURE WAS CONDUCTED ON 22.08.2008, WHEN THE NOTICE U/S 153C DATED 28.07.20 09 WAS SERVED; THE ASSESSMENT U/S 143(3) OF THE ACT WAS ALREADY COMPLE TED ON 30.11.2006. THUS THE ASSESSMENT ORDER COMPLETED ON 30.11.2006 WAS NOT AB ATED. CONSIDERING THE PENDENCY OF APPEAL BEFORE THE HONBLE JURISDICTIONA L HIGH COURT, ARISING OUT OF THE ORDER PASSED U/S 143(3) FOR SAME ASSESSMENT YEAR , WE SET-ASIDE THE ORDER OF AO AND DIRECT THE AO TO WAIT FOR THE OUTCOME OF APPEAL FILED BY ASSESSEE BEFORE THE ITA NO.2294/M/2012- M/S BOMBAY DIAMONDS CO. PVT. LTD. 3 HONBLE HIGH COURT AND DECIDE THE GROUND OF APPEAL IN TERMS OF THE ORDER SO PASSED IN THE APPEAL. 5. WITH THESE DIRECTIONS, THE APPEAL OF THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH DAY OF MAY 2017. SD/- SD/- (SHAMIM YAHYA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 17/05/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/