JCIT(OSD), CC-8(1), MUMBAI V. GREEN WATER RESORT PVT.LTD.,

ITA 2843/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0771 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 18-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Unexplained cash credit; Search and seizure
• Section: 80HHC; 153A; 147; 68; 263; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A , MUMBAI BEFORE S HRI G.S. PANNU (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 2843 /MUM/20 1 6 ASSESSMENT YEAR: 2008 - 09 THE JCIT (OSD) CC - 8(1), ROOM NO. 656, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 40 0020 VS. M/S GREEN WATER RESORT PVT. LTD., ROOM NO. 505, 5 TH FLOOR, NARAYANI BLDG., 27 , BRABOURNE ROADM KOLKATA, WEST BENGAL - 700001 PAN: AABCJ7993H (APPELLANT) (RESPONDENT) REVENUE BY : SHRI RAJESH KUMAR YADAV ( D R) ASSESSEE BY : NONE DATE OF HEARING: 25 /10 /201 7 DATE OF PRONOUNCEMENT: 19 / 01 /201 8 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST ORDER DATED 28/01/2016 PASSED BY THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) - 50 , MUMBAI , FOR THE A S S ESSMENT YEAR 2008 - 09 , WHEREBY THE LD. CIT (A) HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 143 (3) READ WITH SECTION 153C OF THE INCOME TAX ACT, 1961 (FOR SHORT THE A C T). 2. BR IEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CARRIED OUT IN THE GROUP CASES BELONGING TO M/S ENPAR GROUP PROMOTED BY SH. RAVINDRA LAD . DURING THE SEARCH PROCEEDINGS, DOCUMENTS/LOOSE PAPER S IN THE FORM OF TRIA L BALANCES BELONGING TO THE ASSESSEE FOR THE PERIOD APRIL, 2010 TO MARCH, 2011, APRIL, 2012 TO JANUARY, 2013 AND APRIL, 2011 TO MARCH, 2012 WERE SEIZED. ACCORDINGLY, NOTICE U/S 153C READ WITH SECTION 153A (1) (A) WAS SERVED UPON THE ASSESSEE. IN RESPONSE T HEREOF THE 2 ITA NO. 2843 /MUM/2016 ASSE SSMENT YEAR: 2008 - 09 ASSESSEE SUBMITTED THAT THE RETURN OF INCOME FILED U/S 139 (1) MAY BE TREAT ED AS RETURN OF INCOME U/S 153C. IN THE PRESENT CASE, THE ASSESSMENT HAD BEEN COMPLETED U/S 143 (3) READ WITH SECTION 147 OF THE ACT DETERMINING THE TOTAL INCOME AT RS. 7 8,470/ - . 3. FROM THE PERUSAL OF THE BALANCE SHEETS, IT WAS OBSERVED THAT DURING THE YEAR THE ASSESSEE HAD RAISED A SUM OF RS. 9,83,70,000/ - BY ALLOTTING 4 ,91,85 EQUITY SHARES OF RS. 10 EACH AT A PREMIUM OF RS. 190 PER SHARE. THE ASSESSEE FILED REQUIRED DE TAILS OF 18 PARTIES TO WHOM, THE AO ISSUED NOTICE U/S 133 (6) OF THE ACT CALLING THE DETAILS OF RETURN OF INCOME FILED, COPY OF BANK STATEMENTS, COPIES OF AUDITED REPORTS. AFTER GOING THROUGH THE DETAILS, THE AO ISSUED SHOW CAUSE NOTICE AS TO WHY THE ADDIT ION TO THE SHARE CAPITAL SHOULD NOT BE TREATED AS UNEXPLAINED CREDIT U/S 68 OF THE ACT. THE ASSESSEE SUBMITTED THE DETAILED REPLY OBJECTING THE ADDITION . THE AO REJECTED THE CONTENTION OF THE ASSESSEE AND MADE ADDITION OF THE SAID AMOUNT U/S 68 OF THE ACT AND DETERMINED THE TOTAL INCOME OF THE ASSE SSEE AT RS. 9,84,48,470/ - . THE A SSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A). THE LD. CIT (A) ALLOWED THE APPEAL OF THE ASSESSEE AND DIRECTED THE AO TO DELETE THE ADDITION. 4 . AGGRIEVED BY THE ORDER OF LD. CIT (APPEAL S ), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROUND : - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 9,83,70,000 / - BEING UNEXPLAINED CASH CREDIT RELYING ON THE DECISION IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. WITHOUT APPRECIATING THE FACT THAT THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF ALL CARGO LOGISTICS PVT. LTD. (ITA NO. 14 14 OF 2013) ON SIMILAR ISSUE HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND SLP HAS BEEN FILED WHICH IS PENDING. 3 ITA NO. 2843 /MUM/2016 ASSE SSMENT YEAR: 2008 - 09 5. THIS CASE WAS FIXED FOR HEARING FOR 25.10.2017. ON THE SAID DATE, CASE WAS CALLED FOR HEARING , HOWEVER, NONE APPEARED ON BEHALF OF THE ASSES SEE. WE FURTHER NOTICED THAT ASSESSEE HAD NOT APPEARED ON EARLIER DATE OF HEARING. SINCE, THE LD. CIT (A) HAS DECIDED THE PRESENT APPEAL BY FOLLOWING THE ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT, WE DECIDED TO DISPOSE OF THE CASE ON THE BASIS OF MATE RIAL ON RECORD AFTER HEARING THE DEPARTMENTAL REPRESENTATIVE (DR). 6. BEFORE US, THE LD. DR RELYING ON THE ASSESSMENT ORDER SUBMITTED THAT THE LD. CIT (A) HAS WRONGLY DELETED THE ADDITION OF RS. 9,83,70,000/ - MADE BY THE AO BEING UNEXPLAINED CASH CREDIT R ELYING ON THE DECISION IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION LTD. WITHOUT APPRECIATING THE FACT THAT THE DEPARTMENT HAS CHALLENGED THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ALL CARGO LOGISTICS PVT. LTD., ITA NO. 1414 OF 2013 ON THE SIMILAR ISSUE BY FILING SLP IN THE HONBLE SUPREME COURT. 7. WE HAVE PERUSED THE ORDERS PASSED BY THE AUTHORITIES BELOW AND ALSO GONE THROUGH THE CASES RELIED UPON BY THE PARTIES BEFORE THE AUTHORITIES BELOW. THE FINDINGS OF THE LD. CIT (A) ON THE ISSUE INVOLVED IN THIS CASE READS AS UNDER: - 7.1 I HAVE CAREFULLY CONSIDERED THE CONTENTION OF THE AO AND THE SUBMISSIONS OF THE AR. I FIND THAT THOUGH THE DOCUMENTS RELIED UPON BY THE INITIATING THE PROCEEDINGS U/S 153C FOR AY 2007 - 08 TO AY 2012 - 13 PER TAIN TO PERIOD AY 2010 - 2011, 2011 - 12 AND 2013 - 14, NO ADDITIONS HAVE BEEN MADE THOSE ASSESSMENT YEARS. THE ONLY ASSESSMENT YEAR IN WHICH ADDITIONS HAVE BEEN MADE IS THE AY 2008 - 09. EVEN IN THE ASSESSMENT YEAR , THE ADDITIONS MADE WERE NOT BASED ON THE DOCUM ENTS AS RELIED UPON BY THE AO. THIS CLEARLY SHOWS THAT NO INCRIMINATING DOCUMENTS RELATING TO THE APPELLANT WAS SEIZED FOR A.Y. 2008 - 09. I ALSO FIND THAT THE ASSESSMENT FOR A.Y. 2008 - 09 WAS 4 ITA NO. 2843 /MUM/2016 ASSE SSMENT YEAR: 2008 - 09 COMPLETED U/S 143 (3) R.W.S. 147 OF THE ACT BEFORE THE DATE OF INI TIATION OF THE SEARCH. 7.2 IN PARA 9.6 OF THE ASSESSMENT ORDER, THE AO HAS RELIED ON THE ORDER OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MURLI AGRO PRODUCTS LTD. IN ITA NO. 36 OF 2009. IN PARA 3 OF THAT ORDER, THE HONBLE BOMBAY HIGH COURT OBSERVED AS UNDER: - 13. IN THE PRESENT CASE, THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY MATERIAL WAS UNEARTHED DURING THE SEARCH OR DURING THE 153A PROCEEDINGS WHICH WOULD SHOW THAT THE RELIEF UNDER SECTION 80HHC WAS ERRONEOUS. IN SUCH A CASE, THE A.O. WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 153A READ WITH SECTION 143 (3) COULD NOT HAVE DISTURBED THE ASSESSMENT ORDER FINALIZED ON 29.12.2000 RELATING TO SECTION 80HHC DEDUCTION AND CONSEQUENTLY THE C.I.T. COULD NOT HAVE INVOKED JURISDICTION UNDER SECTI ON 263 OF THE ACT. 7.3 THUS, THE HIGH COURT OBSERVED THAT THE A.O., WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 153A R.W.S. 143 (3) COULD NOT HAVE DISTURBED THE ASSESSMENT ORDER ALREADY FINALIZED AS THERE WAS NOTHING ON RECORD TO SUGGEST THAT ANY MA TERIAL HAD BEEN UNEARTHED DURING THE SEARCH OR DURING THE 153A PROCEEDINGS WHICH WOULD SHOW THAT THE RELIEF UNDER SECTION 80HHC WAS ERRONEOUS. FROM THIS THE AO WRONGLY INFERRED THAT THE HONBLE BOMBAY HIGH COURT HAD HELD THAT HAD ANY MATERIAL BEEN UNEARTHE D DURING THE 153A PROCEEDINGS, THE A.O. WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 153A READ WITH SECTION 143 (3) COULD HAVE DISTURBED THE ASSESSMENT ORDER ALREADY FINALIZED. 7.4 THE AO RELIED ON THE ORDER OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING DEVELOPMENT CO. (274 CTR 122) (KARNATAKA) WHEREIN THE HONBLE COURT HELD THAT THE ASSESSING OFFICER CAN DETERMINE THE TOTAL INCOME OF THE ASSESSEE TAKING INTO CONSIDERATION THE MATERIALS WHICH WAS THE SUBJECT - MATTER OF EARLIER RETUR N AND THE UNDISCLOSED INCOME UNEARTHED DURING THE SEARCH AND ALSO ANY OTHER INCOME WHICH COMES TO HIS NOTICE IN COURSE OF PROCEEDINGS U/S 153A. 5 ITA NO. 2843 /MUM/2016 ASSE SSMENT YEAR: 2008 - 09 7.5 THE HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN CASE OF COMMISSIONER OF INCOME - TAX - II, THANE V CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD., BHARATI VIDYAPEETH MEDICAL FOUNDATION, IT HAS BEEN HELD THAT NO ADDITIONS CAN BE MADE FOR UNABATED ASSESSMENTS WHICH HAVE ACHIEVED FINALITY AND FOR WHICH NO INCRIMINATING MATERIAL HAS BEEN FOUND. 7.6 THUS, I FI ND THAT THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IS CONTRARY TO THE DECISION OF THE JURISDICTIONAL HIGH COURT (BOMBAY HIGH COURT). HOWEVER, THE DECISION OF THE JURISDICTIONAL COURT IS BINDING ON ME. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN CASE OF COMMISSIONER OF INCOME - TAX - II, THANE V CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD., I HOLD THAT THE AO WAS NO JUSTIFIED IN MAKING THE ADDITION. ACCORDINGLY, I DIRECT THE AO TO DELETE THE A DDITION OF RS. 9,83,70,000/ - . 8. WE NOTICE THAT THE LD. CIT (A) HAS DECIDED THE ISSUE IN QUESTION IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT PASSED IN THE CASE OF COMMISSIONER OF INCOME TAX VS. CONTINE NTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. AND DIRECT THE AO TO DELETE THE ADDITION IN QUESTION. WE FURTHER NOTICE THAT THE DEPARTMENT HAS NOT CHALLENGED THE FACTS MENTIONED BY THE LD. CIT (A) IN ITS ORDER AND CHALLENGED THE IMPUGNED ORDER ON LY ON THE GROUND THAT SINCE THE DEPARTMENT HAS CHALLENGED THE JUDGMENT OF HONBLE BOMBAY HIGH COURT PASSED IN THE CASE OF ALL CARGO LOGISTICS PVT. LTD., ITA NO. 1414 OF 2013, ON THE IDENTICAL ISSUE, THE LD. CIT (A) OUGHT TO HAVE AFFIRMED THE ADDITION IN QUESTION M ADE BY THE AO. DURING THE COURSE OF ARGUMENTS, NEITHER THE LD. DR CONTENDED THAT THE HONBLE SUPREME COURT HAS STAYED THE OPERATION OF THE JUDGMENT PASSED BY THE HONBLE HIGH COURT IN CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. NOR ANY DOCUMENT WAS PRODUCED TO ESTABLISH THAT THE HONBLE SUPREME COURT HAS STAYED THE SAID JUDGMENT OF THE HONBLE HIGH COURT. UNDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT (A) TO 6 ITA NO. 2843 /MUM/2016 ASSE SSMENT YEAR: 2008 - 09 INTERFERE WITH THE SAME. SINCE, THE IMPUGNED ORDER I S IN ACCORDANCE WITH THE LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT, WE UPHOLD THE FINDINGS OF LD. CIT (A) AND DISMISS THE SOLE GROUND OF APPEAL OF THE REVENUE. IN THE RESULT, APPEAL FILED BY THE REVENUE FOR A SSESSMENT YEAR 2008 - 2009 IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JANUARY, 2018 . SD/ - SD/ - ( G.S. PANNU ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 19 / 01/2018 ALINDRA, 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