GAMMON INFRASTRUCTURE PROJECTS LTD., Mumbai V. ACIT CC-41 (PRESENTLY WITH D.C.I.T. CENT. CIR. - 7(2), Mumbai

ITA 2618/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6179 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 27-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: FAROOQ IRANI SHRI VINOD MODI
• Keywords: Bogus purchase; Search and seizure; Set aside
• Section: 143(3); 153A; 80IA; 201; 153C; 15

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI RAMLAL NEGI (JM) I.T.A. NO. 2618 /MUM/ 201 8 (ASSESSMENT YEAR 20 0 7 - 0 8 ) GAMMON INFRASTRUCTURE PROJECTS LTD. GAMMON HOUSE, VEER SAVARKAR MARG, PRABHADEVI MUMBAI - 400 025. PAN : AABCG8641H V S . ACIT, CC - 41 ROOM NO. 655 6 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI - 20. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI FAROOQ IRANI SHRI VINOD MODI DEPARTMENT BY SHRI AJAY KUMAR DATE OF HEARING 19 . 12 . 201 9 DATE OF PRONOUNCEM ENT 06 . 0 2 . 20 20 O R D E R PER SHAMIM YAHYA (AM) : - T HIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 30.4.2013 AND PERTAINS TO A.Y. 2007 - 08. 2. GROUNDS OF APPEAL READ AS UNDER : - 1. ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 47, MUMBAI ['CIT(A)'J, ERRED IN DISMISSING THE ADDITIONAL GROUND RAISED BY THE APPELLANT DURING THE COURSE OF THE APPEAL PROCEEDINGS, BY HOLDING THAT THE INCRIMINATING MATERIAL FOUND IN RELATION TO GAMMON INDIA LIMITED WERE INSEPARABLY CONNECTED WITH THE APPELLANT AND THAT THE AO WAS EMPOWERED TO FRAME ASSESSMENT UNDER SECTION 153A OF THE INCOME TAX ACT, 1961 ('THE ACT'), DISREGARDING THE BINDING DECISION OF THE BOMBAY HIGH COURT IN THE C ASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. [137 ITR 645 (BOM.)]. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 47, MUMBAI ['CIT(A)'J, ERRED IN HOLDING THAT THE APPELLA NT IS NOT ELIGIBLE FOR DEDUCTION OF RS. 3,99,29,8887 - UNDER SECTION 80 - IA OF THE ON DEVELOPERS FEES. 3. EACH OF THE ABOVE GROUNDS IS WITHOUT PREJUDICE TO ONE ANOTHER. GAMMON INFRASTRUCTURE PROJECTS LTD 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT U/S. 143(3) WAS DULY COMPLETED IN TH IS CASE. SUBSEQUENTLY PURSUANT TO SEARCH AND SEIZURE ACTION IN THE CASE OF GAMMON INDIA LIMITED AND ITS OTHER GROUP COMPANIE S, ASSESSMENT WAS OPENED U/S. 15 3 A . IN THE ASSESSMENT ORDER THE ASSESSING OFFICER DID NOT MENTION OR REFER TO ANY INCRIMINATING MATE RIAL AND MADE ASSESSMENT DISALLOWING THE CLAIM OF THE ASSESSEE U/S. 80IA ON THE SAME REASONING AS WAS DONE IN THE ORIGINAL ASSESSMENT ORDER U/S. 143(3). IN ITS APPEAL BEFORE LEARNED CIT(A) THE ASSESSEE TOOK ADDITIONAL GROUND THAT SINCE ADDITION IS WITHOUT ANY INCRIMINATING MATERIAL FOUND DURING SEARCH ASSESSMENT WAS NOT WITHIN JURISDICTION. ASSESSEE IN THIS REGARD RELIED UPON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (374 ITR 645 ) AND CIT VS. ALL CARGO GLOBAL LOGISTICS LTD. (374 ITR 645). LEARNED CIT(A) ASKED FOR THE REMAND ON THE ADDITIONAL GROUND FROM THE ASSESSING OFFICER. HOWEVER, THERE WAS NO REPORT FROM THE ASSESSING OFFICER. AFTER NOTING THESE FACTS LEARNED CIT(A) HELD THAT IN VIEW OF SEVERAL INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH U/S. 132, RELATING TO M/S. GAMMON INDIA LTD. A CUMULATIVE DECLARATION WAS MADE BY M/S. GAMMON INDIA LTD. AMOUNTING TO RS. 50 CRORES. TH AT TH E INCRIMINATING DOCUMENTS RELATED TO U NACCOUNTED SCRAP SALES, WHICH HAS GENERATED UNACCOUNTED CASH, BOGUS PURCHASES, BOGUS SUB - CONTRACTS AND MISCELLANEOUS INCOME. HENCE, LEARNED CIT(A) HELD THAT THE INCRIMINATING SEIZED MATERIAL FOUND IN RELATION TO M/S. GAMMON INDIA LTD. IS INTIMATELY AND INS EPARABLY CONNECTED WITH THE ASSESSEE COMPANY. LEARNED CIT(A) HELD THAT THERE WAS ENOUGH INCRIMINATING MATERIAL ON RECORD OF THE ASSESSING OFFICER TO FRAME AN ASSESSMENT U/S. 153A. HENCE, HE DISMISSED THIS CLAIM BY THE ASSESSEE. 4. AGAINST THIS ORDER THE A SSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. AT THE OUTSET, LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT IN THE ORIGINAL ASSESSMENT U/S. 143(3) MORE OR LESS SAME ASSESSMENT WAS DONE. HE SUBMITTED THAT THER E IS NO GAMMON INFRASTRUCTURE PROJECTS LTD 3 WHISPER WHATSOEVER OF ANY INCRIMINATING MATERIAL LINKED TO THE ADDITION MENTIONED IN THE ASSESSMENT ORDER PURSUANT TO SEARCH . DESPITE NO FINDING OF ANY MATERIAL IN THE ASSESSMENT ORDER AND ALSO NO REPORT IN THIS REGARD , L EARNED CIT(A) PROCEEDED TO HYPOTHESIZE T HAT INCRIMINATING MATERIAL FOUND IN RELATION TO M/S. GAMMON INDIA LTD. IS INTIMATELY AND INSEPARABLY CONNECTED WITH THE ASSESSEE COMPANY . LEARNED COUNSEL CONTENDED THAT THE ABOVE FACT BY NO STRETCH OF IMAGINATION CAN BE HELD TO BE SATISF YING LEGAL REQUIREM ENT THAT FOR ASSUMING JURISDICTION FOR ADDITION/ASSESSMENT U/S. 153A OF THE ACT INCRIMINATING MATERIAL HAS TO BE FOUND. LEARNED COUNSEL SUBMITTED THAT EVEN FOR ARGUMENT SAKE LEARNED CIT(A)S HYPOTHESIS THAT SOME INCRIMINATING MATERIAL INT IMATELY AND INSEPA RABLY CONNECTED WITH THE ASSESSEE WAS FOUND IN RELATION TO M/S. GAMMON INDIA LTD., THEN IT WOULD BE THE CASE OF ASSESSMENT U/S. 153C OF THE ACT FOR THE ASSESSEE . TH EN THE WHOLE ISSUE OF SATISFACTION BY THE ASSESSING OFFICER WOULD ARISE. LEARNED COUNSEL SUB MITTED THAT THERE IS NO WHISPER OF INCRIMINATING MATERIAL FOUND IN THIS CASE IN THE ASSESSMENT ORDER. HENCE, HE SUBMITTED T HIS ADDITION DEHORSE ANY INCRIMINATING FOUND IS NOT SUSTAINABLE ON THE TOUCHSTONE OF JURISDICTION DECISION SUBMITTED AS ABOVE. 6. P ER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF LEARNED CIT(A) . 7. UPON CAREFUL CONSIDERATION WE AGREE WITH LEARNED COUNSEL OF THE ASSESSEE THAT THE REVENUE HAS FAILED TO PROVE THAT ADDITION IN THE PRESENT CASE IS BASED UPON ANY IN CRIMINATING MATERIAL. THIS IS NEITHER EMANATING FROM THE ASSESSMENT ORDER NOR ANY COGENT EVIDENCE OR RECORD HAS BEEN SUBMITTED BY THE REVENUE. LEARNED CIT(A) HAS ONLY MADE HYPOTHESI S THAT INCRIMINATING MATERIAL IN TIMATELY LINKED TO THE ASSESSEE M IGHT HAVE BEEN FOUND IN THE CASE OF M/S. GAMMON INDIA LIMITED. THIS HYPOTHESIS ITSELF IS NOT SUSTAINABLE AS IT IS ONLY A CONJECTURE. EVEN IN THAT HYPOTHETICAL CASE INCRIMINATING FOUND RELATING TO THE ASSESSEE FOUND IN THE CASE OF M/S. GAMMON INDIA LIMITED CAN LEAD T O ASSESSMENT U/S. 153C AND NOT U/S. 153A. IN THE SE CIRCUMSTANCES AND FACTS IN OUR CONSIDERED OPINION ON THE TOUCHSTONE OF JURISDICTION IN THE CASE OF GAMMON INFRASTRUCTURE PROJECTS LTD 4 CONTINENTAL WAREHOUSING CORPORATION (SUPRA) AND ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA) ASSESSMENT IN THIS CASE IS DEVOID OF VALID JURISDICTION. HENCE, WE SET ASIDE THE ORDER OF LEARNED CIT(A) ON THIS ISSUE AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. ACCORDINGLY ASSESSMENT HAS BEEN FOUND TO BE NOT VALI D ON THE GROUND OF LACK OF JURISDICTION. HENCE, THIS ISSU E IS DECIDED IN FAVOUR OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 6.2.2020 . SD/ - SD/ - ( RAMLAL NEGI ) (SH A MIM YAHYA ) JUDICIAL MEMB ER ACCOUNTANT MEMBER MUMBAI ; DATED : 6 /0 2 / 20 1 9 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// ( ASSISTANT REGISTRAR ) PS ITAT, MUMBAI