DCIT- CC- 3(1), MUMBAI V. NIRMAL LIFSTYLE (PUNE) PVT. LTD., MUMBAI

ITA 3087/MUM/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7106 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 11-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Notional interest; Set aside
• Section: 143(3); 133A; 153A; 143(1); 143(2)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI PAVANKUMAR GADALE ( JM) I.T.A. NO. 3087/MUM/2018 (ASSESSMENT YEAR 2012-13) DCIT, CC-3(1) ROOM NO. 1924 AIR INDIA BUILDING 19 TH FLOOR NARIMAN POINT MUMBAI-400 021. VS. M/S. NIRMAL LIFE STYLE (PUNE) PVT. LTD. 3 RD FLOOR, MULTIPLEX BUILDING, LBS MARG MULUND-WEST MUMBAI-400 080. PAN : AACCN4986H (APPELLANT) (RESPONDENT) ASSESSEE BY NONE DEPARTMENT BY SHRI RAHUL RAMAN DATE OF HEARING 24.08.2021 DATE OF PRONOUNCEMENT 25.08.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 13.2.2018 AND PERTAINS TO ASSESSMENT Y EAR 2012-13. 2. GROUNDS OF APPEAL READ AS UNDER : 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE A O ON ACCOUNT OF DEEMED NOTIONAL INTEREST INCOME AND DISALLOWANCE MADE ON ACC OUNT OF LOAN PROCESSING FEE BY HOLDING THAT NO INCRIMINATING MATER IAL WAS AVAILABLE IN RESPECT OF THE SAID ADDITION AND THE SAID DISALLOWAN CE'. 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DECIDING THAT THE ASSESSMENT U/S 143(3 ) RWS 153A AS INVALID BY HOLDING THAT THE ASSESSMENT WAS NON-ABETTED AND NO I NCRIMINATING MATERIAL UNEARTHED DURING SEARCH ACTION TO MAKE THE RE-A SSESSMENT WITHOUT APPRECIATING THE INCRIMINATING CIRCUMSTANCES AND INCRI MINATING MATERIAL COLLECTED DURING THE NIRMAL GROUP SEARCH' THE APPELLANT CRAVES TO LEAVE, TO ADD, TO AMEND AND/OR TO ALTER ANY OF THE GROUND OF APPEAL, IF NEED BE. M/S. NIRMAL LIFE STYLE (PUNE) PVT. LTD. 2 THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROUND STATE D ABOVE, THE ORDER OF THE LD.CIT(A)-51, MUMBAI, MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. BRIEF FACTS OF THE CASE ARE AS UNDER : A SEARCH & SURVEY ACTION UNDER SECTION 132&133A OF THE INCOME-TAX ACT, 1961 WAS CARRIED OUT ON 23 RD OCTOBER, 2013 IN THE CASE OF M/S. NIRMAL LIFESTYLE LTD AND ITS ASSOCIATED CONCERNS AT OFFICE ADDRESS I.E. 3 RD FLOOR, MULTIPLEX BUILDING, NIRMAL LIFESTYLE MALL, L.B.S. M ARG, MULUND (WEST), MUMBAI- 400080, ITS BRANCH OFFICES, SITE OFFICES, O FFICE OF THE SUBSIDIARIES AND ASSOCIATE CONCERNS AND RESIDENCES OF MAIN PERSONS. SOME OF THE RELATED ENTITIES WERE ALSO COVERED UNDER SECTION 133A OF TH E INCOME-TAX ACT, 1961.CONSEQUENT TO SEARCH ASSESSMENT, THE CASE OF A SSESSEE WAS CENTRALIZED WITH THIS OFFICE VIDE ORDER NO. PR. CIT-15/JURIS-12 7/TRANSFER/2015-16 DATED 26-11-2015. SINCE THE WARRANT OF SEARCH AUTHORIZATI ON WAS ISSUED IN THE NAME OF ASSESSEE-COMPANY, ASSESSMENT IN THIS CASE IS REQ UIRED TO BE MADE IN MANNER LAID OUT IN CHAPTER XIV OF THE I.T. ACT, 196 1 TO BE PRCISED UNDER SECTION 153A OF THE I.T. ACT. ACCORDINGLY NOTICE U NDER SECTION 153A OF THE ACT FOR THE A.Y. 2008-09 TO 2013-14 AND NOTICE UNDER SE CTION 143(2) FOR A.Y. 2014- 15 WERE ISSUED ON 30.11.2015. 4. IN THE ASSESSMENT ORDER FOR THIS ASSESSMENT YEAR , THE ASSESSING OFFICER PROCEEDED TO MAKE ADDITION AMOUNTING TO RS. 7,30,72 ,000/- ON ACCOUNT OF DISALLOWANCE OF LOAN PROCESSING FEES AND INTEREST. THE ABOVE ADDITION WAS MADE WITHOUT REFERENCE TO ANY SEIZED MATERIAL FOUND DURING THE SEARCH. 5. UPON ASSESSEES APPEAL LEARNED CIT(A) QUASHED TH E ASSESSMENT BY GIVING A FINDING THAT THIS ASSESSMENT ORDER WAS NON-ABATED AND HAS ATTAINED FINALITY. HENCE, ASSESSMENT UNDER SECTION 153A OF THE ACT WIT HOUT BASED UPON ANYTHING FOUND IN SEARCH IS UNTENABLE. HE HELD AS U NDER :- FROM THE AFORESAID, IT CAN BE OBSERVED THAT A NON-A BATED ASSESSMENT CAN BE INTERFERED WITH BY THE AO WHILE MAKING ASSESSMENT U/ S 143(3) R.W.S. 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEA RTHED DURING THE SEARCH ACTION. IN THE INSTANT CASE, THE ASSESSEE HAD R ECEIVED INTIMATION U/S M/S. NIRMAL LIFE STYLE (PUNE) PVT. LTD. 3 143(1) AND THE TIME LIMIT AVAILABLE FOR SELECTION OF T HE CASE FOR SCRUTINY HAD LAPSED WHEN THE SEARCH ACTION TOOK PLACE. THEREFORE, TH E ASSESSMENT FOR THE RELEVANT YEAR WAS NON-ABATED WHICH HAD ATTAINED FINALI TY. IT IS FURTHER OBSERVED THAT NO INCRIMINATING MATERIAL WAS FOUND TO MA KE THE SAID ADDITION ON ACCOUNT OF DEEMED NOTIONAL INTEREST INCOME AND TH E SAID DISALLOWANCE OF LOAN PROCESSING FEE. THEREFORE, THE ACTION OF THE AO O F MAKING THE SAID ADDITION AND THE SAID DISALLOWANCE IN ABSENCE OF SEI ZED MATERIAL IS CLEARLY INCORRECT. ACCORDINGLY, THE ADDITIONAL GROUND OF APPE AL RAISED BY THE ASSESSEE IS ALLOWED. 6. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 7. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIV E AND PERUSED THE RECORD. NONE APPEARED ON BEHALF OF THE ASSESSEE. L EARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE GROUNDS OF APPEAL. 8. UPON CAREFUL CONSIDERATION, WE ARE OF THE CONSID ERED OPINION THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE . LEARNED CIT(A) HAS TAKEN CORRECT VIEW OF THE MATTER. ASSESSMENT UNDER SECTIO N 153A OF THE ACT IN THE CASE OF NON-ABATED ASSESSMENT CANNOT BE MADE WITHOU T ANY REFERENCE OF SEIZED MATERIAL. THIS PROVISION IS DULY COVERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF M/S. ALL CARGO GLOBAL LOGISTICS LTD (137 IT D 287). ACCORDINGLY WE UPHOLD THE ORDER OF LEARNED CIT(A). 9. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 25.8.2021. SD/- SD/- (PAVANKUMAR GADALE) (SHAM IM YAHYA) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI; DATED : 25/08/2021 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. M/S. NIRMAL LIFE STYLE (PUNE) PVT. LTD. 4 BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI