TEC PACIFIC (I) LTD ( NOW KNOWN AS INGRAM MICRO INDIA LTD), MUMBAI V. DCIT (OSD-II) CEN RG 7, MUMBAI

ITA 2383/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93035 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 13-04-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 25-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY
• Keywords: Depreciation; Search and seizure; Loose papers; Bad and doubtful debts
• Section: 133A; 153A; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , , , BEFORE SHRI A.D. JAIN , JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO S . 2383, 2384 & 2385/MUM/2011 ( / ASSESSMENT YEAR S : 2002 - 03 TO 2004 - 05 M/S. TECH PACIFIC (INDIA) LTD. (NOW KNOWN AS INGRAM MICRO INDIA LTD., GATE NO. 1A, GODREJ INDUSTRIES COMPLEX, PIROJSHAH NAGAR, VIKHROLI(E), MUMBAI - 400 079 / VS. THE DCIT,(OSD) - II, CENTRAL RANGE - 7, AAYAKAR BHAVAN, MUMBAI ./ ./ PAN/GIR NO. : AABCT 1296R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI J.D. MISTRY SHRI NISHANT THAKKAR / RESPONDENT BY : SHRI MANJUNATHA SWAMY / DATE OF HEARING : 1 6 . 0 7 .2015 / DATE OF PRONOUNCEMENT : 1 6 .0 7 .2015 / O R D E R PER N.K. BILLAIYA, AM: TH ESE THREE APPEAL S ARE BY THE ASSESSEE PREFERRED AGAINST THE VERY SAME ORDER OF THE LD. CIT(A) - 40 , MUMBAI DT. 05.01.2011 PERTAINING TO ASSESSMENT YEAR 200 2 - 0 3, 2003 - 04 AND 2004 - 05 . ALL THESE APPEALS BY ITA. NO S . 2383 TO 2385/M/2011 2 THE ASSESSEE HAVE COMMON GROUND S OF APPEAL S , THEREFORE THEY WERE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT GROUND NO. 1 IN ALL THESE APPEALS CHALLENGES THE JURISDICTION OF THE OFFICER FOR MAKING AN ASSESSMENT U/S. 153(A) OF THE ACT. IT IS THE SAY OF THE LD. COUNSEL THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE HONBLE JURISDICTIONAL HIGH CO URT IN THE CASE OF CIT VS (1) CONTINENTAL WAREHOUSING CORPORATION AND (2) ALL CARGO GLOBAL LOGISTICS LTD. , 374 ITR 645. THE LD. COUNSEL FURTHER STATED THAT IF THE ORDER OF THE HONBLE BOMBAY HIGH COURT IS FOLLOWED AND GROUND NO. 1 IS ALLOWED, THE OTHER G ROUNDS OF APPEAL WILL BECOME OTIOSE. 3. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BRING ANY DISTINGUISHING DECISION IN FAVOUR OF THE REVENUE. 4. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE GROUP IS ENGAGED IN TRADING OF C OMPUTER SOFTWARE AND COMPUTER PERIPHERALS BOTH DOMESTICALLY AND ABROAD. SEARCH AND SEIZURE ACTION U/S. 132 AND ALSO SURVEY ACTION U/S. 133A OF THE ACT WERE CARRIED OUT ON THIS GROUP ON 6.9.2007. THE SEARCH/SURVEY ACTIONS RESULTED INTO SEIZURE AND IMPOUND ING OF DOCUMENTS, LOOSE PAPERS AND OTHER MATERIAL EVIDENCING THE IRREGULARITIES RELATING MAINLY TO INTERNATIONAL TAX. 4.1. THE ASSESSMENT FOR A.Y 2002 - 03 WAS COMPLETED BY DISALLOWING BAD DEBTS CLAIMED RS. 8,76.448/ - , DEPRECIATION ON GOODWILL RS. 35,39,13 2/ - , DEPRECIATION ON COMMERCIAL VEHICLES - RS. 5,33,790/ - AND STAFF/ OTHER WELFARE EXPENSES AT RS. 3,05,508/ - . ASSESSMENT FOR A.Y ITA. NO S . 2383 TO 2385/M/2011 3 2003 - 04 WAS COMPLETED BY MAKING DISALLOWANCES ON SIMILAR HEADS THOUGH WITH DIFFERENT QUANTUM AND THE SAME IS DONE IN A.Y. 2004 - 05. 5. AGGRIEVED BY THE ASSESSMENTS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ADDITIONS/DISALLOWANCES WHICH WAS NOT MA D E IN THE NORMAL/REGULAR ASSE SSMENT AND IN RESPECT WHEREOF NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH CANNOT NOW BE MADE FOR THE FIRST TIME IN THE ASSESSMENT MADE U/S. 153A OF THE ACT, SINCE IT WOULD CONFER UPON THE AO THE POWER TO REVIEW OR REVISE HIS OWN ORDER. IT IS THE SAY OF THE LD. COUNSEL THAT THIS PROPOSITION HAS BEEN CONFIRMED BY THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION AND ALL CARGO GLOBAL LOGISTICS LTD (SUPRA). 7. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTHORI TIES BELOW. WE HAVE ALSO GONE THROUGH THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA). IT IS AN UNDISPUTED FACT THAT THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH FOR MAKING THE IMPUGNED DISALLOWANCES/ADDITIONS. THE RATIO LAI D DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA) SQUARELY APPLY ON THE FACTS OF THE CASE WHEREIN THE HONBLE HIGH COURT HAS HELD AS UNDER: HELD, DISMISSING THE APPEALS, (I) THAT THE NOTICE U/S. 153A WAS FOUNDED ON SEARCH. IF THERE WAS NO INCRIM INATING MATERIAL FOUND DURING THE SEARCH THEN THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE POWER U/S. 153A BEING NOT EXPECTED TO BE EXERCISED ROUTINELY, SHOULD BE EXERCISED IF THE SEARCH REVEALED ANY INCRIMINATING MATERIAL. IF THAT WAS NOT FOUND THEN IN REL ATION TO THE SECOND PHASE OF THREE YEARS, THERE WAS NO WARRANT FOR MAKING AN ORDER WITHIN THE MEANING OF THIS PROVISIONS. ITA. NO S . 2383 TO 2385/M/2011 4 RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND QUASH THE IMPUGNED ASSESSMENT ORDERS 8. SINCE WE HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE ON THE POINT OF JURISDICTION , WE DO NOT FIND IT NECESSARY TO DECIDE THE OTHER GROUNDS OF APPEAL WHICH BECOME OTIOSE. 9. IN THE RESULT, A LL THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. OR DER PRONOUNCED IN THE OPEN COURT ON 1 6 TH JU LY , 2015 SD/ - SD/ - ( A.D. JAIN ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 1 6 TH JU LY , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI