SUDHA L. BHAWE, THANE V. ACIT CEN CIR 12, MUMBAI

ITA 3210/MUM/2011

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9915 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 18-03-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 21-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H N SINGH
• Section: 69C; 143(3); 153A; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH , JM AND SHRI RAJESH KUMAR, AM ITA NO. 3 2 03 / MUM/ 20 1 1 ( / ASSESSMENT YEAR: 2 0 03 - 04 ) ANIKET V BHAVE, BHAWE HOUSE, OPP GADKARI RANGAYATAN, DR.MOOSE ROAD, THANE - 400602 / VS. ASSTT. COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE - 12, 8 TH FLOOR, CGO COMPLEX, M K ROAD, MUMBAI - 400020 ./ PAN : ABJPB2131K ( / APPELLANT) : ( / RESPONDENT ) ITA NO. 3204/ MUM/ 2011 ( / ASSESSMENT YEAR: 2 003 - 04 ) SUMAN L BHAVE, BHAWE HOUSE, OPP GADKARI RANGAYATAN, DR.MOOSE ROAD, THANE - 400602 / VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 12, 8 TH FLOOR, CGO COMPLEX, M K ROAD, MUMBAI - 400020 ./ PAN : ABJPB2068H ( / APPELLANT) : ( / RESPONDENT ) ITA NO. 3206/ MUM/ 2011 ( / ASSESSMENT YEAR: 2 003 - 04 ) PRATIBHA V BHAVE, BHAWE HOUSE, OPP GADKARI RANGAYATAN, DR.MOOSE ROAD, THANE - 400602 / VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 12, 8 TH FLOOR, CGO COMPLEX, M K ROAD, MUMBAI - 400020 ./ PAN : ABJPB2087N ( / APPELLANT) : ( / RESPONDENT ) 2 ITA NO. 320/M/2011 AND OTHER 6 APPEALS 58/MUM/2015 AND 7 - ANIKET BHAVE ITA NO. 3207/ MUM/ 2011 ( / ASSESSMENT YEAR: 2 003 - 04 ) VIJAY LAXMAN BHAVE, BHAWE HOUSE, OPP GADKARI RANGAYATAN, DR.MOOSE ROAD, THANE - 400602 / VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 12, 8 TH FLOOR, CGO COMPLEX, M K ROAD, MUMBAI - 400020 ./ PAN : ADWPB1871F ( / APPELLANT) : ( / RESPONDENT ) ITA NO. 3208/ MUM/ 2011 ( / ASSESSMENT YEAR: 2 003 - 04 ) LATA L BHAVE, BHAWE HOUSE, OPP GADKARI RANGAYATAN, DR.MOOSE ROAD, THANE - 400602 / VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 12, 8 TH FLOOR, CGO COMPLEX , M K ROAD, MUMBAI - 400020 ./ PAN : ADOPB4808J ( / APPELLANT) : ( / RESPONDENT ) ITA NO. 3210/ MUM/ 2011 ( / ASSESSMENT YEAR: 2 003 - 04 ) SUDHA L BHAVE, BHAWE HOUSE, OPP GADKARI RANGAYATAN, DR.MOOSE ROAD, THANE - 400602 / VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 12, 8 TH FLOOR, CGO COMPLEX, M K ROAD, MUMBAI - 400020 ./ PAN : ABJPB2067J ( / APPELLANT) : ( / RESPONDENT ) 3 ITA NO. 320/M/2011 AND OTHER 6 APPEALS 58/MUM/2015 AND 7 - ANIKET BHAVE ITA NO. 3279/ MUM/ 2011 ( / ASSESSM ENT YEAR: 2 003 - 04 ) ADITI P SANE, BHAWE HOUSE, OPP GADKARI RANGAYATAN, DR.MOOSE ROAD, THANE - 400602 / VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 12, 8 TH FLOOR, CGO COMPLEX, M K ROAD, MUMBAI - 400020 ./ PAN : ARMPS4778G ( / APPELLANT) : ( / RESPONDENT ) / ASSESSEE S BY : SHRI VINOD KUMAR BINDAL / REVENUE BY : SHRI H N SINGH / DATE OF HEARING : 2 9 .6. .2017 / DATE OF PRONOUNCEMENT : 7. 7 . 201 7 / O R D E R PER RAJESH KUMAR, A. M: THE CAPTIONED ARE APPEAL S BY THE DIFFERENT ASSESSEE S PERTAINING TO ASSESSMENT YEAR 2003 - 04. THE APPEALS ARE DIRECTED AGAINST THE COMMON ORDER OF THE CIT(A) - 37, MUMBAI , DATED 19.1.2011 WHICH IN TURN HAS ARIS E N FROM ORDER S PASSED BY THE ASSESSING OFFICER DATED 31.12.2007 UNDER SECTION 143(3) R.W.S.153A OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT). SINCE ISSUE INVOLVED IN ALL THESE APPEALS ARE COMMON , THEREFORE THESE APPEALS AR E CLUBBED TOGETHER, HEARD TOGE THER AND ARE BEING DECIDED BY THIS CONSOLIDATED ORDER, FOR THE SAKE OF CONVENIENCE. 4 ITA NO. 320/M/2011 AND OTHER 6 APPEALS 58/MUM/2015 AND 7 - ANIKET BHAVE ITA NO.3207/MUM/2011 2. THE ASSESSEE VIDE APPLICATION DATED 10.09.2015 HAS RAISED AN ADDITIONAL GROUND CHALLENGING THE JURISDICTION OF THE AO TO MAKE ADDITION IN THE A SSESSMENT FRAMED U/S 143(3) R.W.S.153A WHEN ON THE DATE OF SEARCH THE ASSESSMENT ATTAINED FINALITY AND THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH QUA THE SAID ADDITION . THE ADDITIONAL GROUND RAISED BY THE ASSESSEE READS AS UND ER : THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 15,93,9291 - AS INCOME FROM OTHER SOURCES AND RS. 80,7601 - U/S 69C MADE IN THE ASSESSMENT ORDER BY THE ASSESSING OFFICER AND ENHANCING ADDITION BY RS.21,220/- U/S 69 OF THE AC T WITHOUT APPRECIATING THAT NO INCRIMINATING MATERIAL AND DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT FOR THIS ASSESSMENT YEAR AND THEREFORE, THE ORDER PASSED UNDER SECTION 153A IS BAD IN LAW AS THE ASSESSMENT FOR THIS ASSESSMENT YEAR WAS ALREADY COMPLETED BEFORE THE DATE OF SEARCH AND HAS NOT BEEN ABATED.' SINCE THE ADDITIONAL GROUND RAISED IN ALL THE S E APPEALS BY VARIOUS ASSESSEES IN THE GROUP ARE SAME AND PURELY OF LEGAL AND TECHNICAL IN NATURE ARISING O UT OF FACTS AND MATERIAL ON RECORD BEFORE THE AUTHORITIES BELOW AND DO NOT REQUIRE VERIFICATION OR INVESTIGATION OF FACTS . T HEREFORE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS COMMISSIONER OF INC OME TAX, ( 1998 ) 229 ITR 383 SC, 5 ITA NO. 320/M/2011 AND OTHER 6 APPEALS 58/MUM/2015 AND 7 - ANIKET BHAVE WE ALLOW THE APPLICATION RAISING THE ADDITIONAL GROUND BY THE ASSESSEE AND ADMIT THE SAME FOR ADJUDICATION. 3 . THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 23.09.2003 U/S 139(1) OF THE ACT. T HE RETURN OF INCOME OF THE ASSESSEE WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER A SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED ON 24.1.2006 AT THE RESIDENTIAL PREMISES OF THE ASSESSEE AND OTHER PERSONS IN THE GROUP AND BANK LOCKER S WERE ALSO SEARCHED. THE AO ISSUED NOTICE U/S 153A OF THE ACT WAS ISSUED ON 13.09.2006 WHICH WAS COMPLIED WITH BY THE ASSESSEE BY FILING RETURN OF INCOME ON 8.12.2006 DECLARING AN INCOME OF RS.3,11,95,300/ - . THEREAFTER THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES U/S 143(2) AND 142 (1) WERE ISSUED AND SERVED UPON THE ASSESSEE. THE UNDISPUTED FACTS ARE THAT NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED NOT ISSUED AFTER THE ASSESSEE FILED ORIGINAL RETURN ON 23.09.2003 AND TH US THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT WHICH WAS 12 MONTHS FROM THE END OF MONTH IN WHICH THE RETURN WAS FILED , EXPIRED ON 30.09.2004 AND THEREFORE THE ASSESSMENT IN THE CASE OF THE ASSESSEE ATTAINED FINALITY ON THE DA T E OF SEARCH WHICH WAS CONDUCTED ON 24.1.2006 AND THUS THE ASSESSMENT IN THIS CASE IS NOT ABATED AS THE SAME WAS NOT PENDING ON THE DATE OF SEARCH AS PER THE 6 ITA NO. 320/M/2011 AND OTHER 6 APPEALS 58/MUM/2015 AND 7 - ANIKET BHAVE PROVISIONS OF SECTION 153A OF THE ACT . THE AO MADE THE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE TOWARDS L ONG TERM CAPITAL GAINS OF RS.15,93,929/ - BEING NON GENUINE AND BOGUS AND RS.80, 760/ - COMMISSION ON THE SAID TRANSACTION S OF SHARES U/S 69C OF THE ACT ON THE BASIS OF INFORMATION IN THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE FOR WHICH NO INCR IMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH BY FRAMING THE ASSESSMENT UNDER SECTION 153A READ WITH SECTION 143 OF THE ACT VIDE ORDER DATED 31.12.2007. THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE ON THIS ISSUE ON MERITS. 4. THE L EGAL ISSUE WAS NOT CHALLENGED BEFORE THE LD.CIT(A) AND IS BEING RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL BY WAY OF ADDITIONAL GROUND . UNDER THE PROVISIONS OF SECTION 153A OF THE ACT, THE AO SHALL MAKE ASSESSMENT IN RESPECT OF SIX ASSESSMENT YEARS F ALLING PRIOR TO THE ASSESSMENT YEAR IN WHICH THE SEARCH IS CONDUCTED . IT IS FURTHER PROVIDED IN THE SAID SECTION ONLY THOSE ASSESSMENT S OR REASSESSMENT S WHICH ARE PENDING ON THE DATE OF SEARCH SHALL BE ABATED . IN OTHER WORDS, ONLY THAT ASSESSMENT S WHI CH ARE PENDING ON THE DATE OF SEARCH OUT OF THE SIX YEARS SHALL BE ASSESSED BY THE AO IN THE MANNER AS PROVIDED UNDER THE PROVISIONS OF SECTION 143(3) AND THE AO HAS JURISDICTION TO EXAMINE ALL THE ISSUES IN THE ASSESSMENTS. WHEREAS IN RESPECT OF THOSE YEARS WHICH HAVE 7 ITA NO. 320/M/2011 AND OTHER 6 APPEALS 58/MUM/2015 AND 7 - ANIKET BHAVE ATTAINED FINALITY ON THE DATE OF SEARCH , T HE ADDITION COULD BE MADE ONLY IF THE SAME IS BASED UPON THE SEARCH ED MATERIAL AND NOT OTHERWISE. IN OTHER WORDS, THE AO IS NOT ALLOW ED TO DISTURB THE ALREADY COMPLETED AND FINALIZED ASSESSMENT S IF DURING THE COURSE OF SEARCH , NO INCRIMINATING MATERIAL WAS FOUND IN RESPECT TO THOSE YEAR. IN THE PRESENT CASE BEFORE US THE ASSESSMENT FOR 2003 - 04 HAS ATTAINED FINALITY ON THE DATE OF SEARCH AND ADDITIONS QUA THE LONG TERM CAPITAL GAIN AND COMMISSIO N OF SHARES TRANSACTION COULD ONLY BE MADE , HAD ANY INCRIMINATING MATERIALS WAS FOUND DURING THE SEARCH BUT THAT IS NOT THE CASE. IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. V. DY. CIT (2012) 137 ITD 287, IT HAS BEEN HELD THAT ALREADY COMPLETED ASSE SSMENT CAN ONLY BE DISTURBED IF ANY INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH WITH RESPECT TO THOSE ASSESSMENT YEARS AND NOT OTHERWISE. IN THE CASE OF CIT V/S KABUL CHAWLA (2016) 380 ITR 573(DEL), THE HONBLE DELHI HIGH COURT HELD SI NCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITION COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED WHILE PASSING THIS ORDER THE DECISION RENDERED IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. V. DY. CIT (2012) 137 ITD 287 HAS BEEN REFERRED. THE SAME VIEW HAS BEEN UPHOLD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MURLI AGRO PRODUCTS LTD (BOMBAY HIGH COURT) IN INCOME TAX APPEAL NO.36 OF 2009 8 ITA NO. 320/M/2011 AND OTHER 6 APPEALS 58/MUM/2015 AND 7 - ANIKET BHAVE DATED 29/10/2010. THUS, IT IS SETTLED POSITION OF LAW THAT COMPLETED ASSES SMENT ON THE DATE OF SEARCH IS PERMITTED TO BE DISTURBED U/S 153A OF THE ACT ONLY IF DURING THE COURSE OF SEARCH INCRIMINATING MATERIALS IS FOUND AND NOT OTHERWISE . IN THE CASE BEFORE US, THE REVENUE HAS ADMITTED THAT NO INCRIMINATING MATERIAL WAS FOUN D DURING THE COURSE OF SEARCH QUA LTCG BUT THE LD. DR SUBMITTED THAT SEARCH WAS CONDUCTED ONLY ON THE BASIS OF CONCRETE INFORMATION THAT THE ASSESSEE HAS AVAILED BOGUS ENTRIES OF SHARES TO MANIPULATES ITS INCOME BY SHOWING LONG TERM CAPITAL GAIN. HAVING REGARD TO THE FACTS VIS - - VIS RATIO LAID DOWN IN THE ABOVE DECISION S , WE ARE OF THE CONSIDERED OPINION THAT THERE IS JUSTIFICATION FOR THE AUTHORITIES BELOW TO MAKE THE ADDITION IN THE ASSESSMENT FRAMED U/S 153A READ WITH SECTION 143(3) WHEN NO INC RIMINATION MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AS THE ASSESSMENT WAS FINAL ON THE DATE OF SEARCH . IN VIEW OF THE ABOVE FINDINGS GIVEN HEREIN ABOVE, THE ADDITION S AS MADE BY THE AO ARE DELETED AS THE SAME ARE OUTSIDE THE SCOPE OF SECTION 153A OF THE ACT. T HE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. IN VIEW OF DECISION ON THE LEGAL ISSUE HEREINABOVE , WE ARE NOT GOING INTO THE ISSUES ON MERIT AS THEY BEC O ME PURELY ACADEMIC. THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2003 - 04 IS ALLOWED. 9 ITA NO. 320/M/2011 AND OTHER 6 APPEALS 58/MUM/2015 AND 7 - ANIKET BHAVE 5 . THE FACTS OF OTHER APPEALS IN RESPECT OF OTHER SIMILARLY PLACED ASSESSEES ARE IDENTICAL TO ONE WHICH HAS BEEN DECIDED BY US IN FAVOUR OF THE ASSESSEE IN ITA NO.3207/MUM/2011, ON THE LEGAL ISSUE AND THE ADDITION S WERE DELETED. THEREFORE , OUR DECISION IN ITA NO.3207/MUM/2011 WOULD , MUTATIS MUTANDI , APPLY TO THESE APPEALS AS WELL. ACCORDINGLY, THE AO IS DIRECTED TO DELETE THE ADDITION S CHALLENGED IN ALL THESE APPEALS AS THE AO HAS NO JURISDICTION U/S 153A OF THE ACT AS THERE WAS NO INCR IMINATING MATERIALS FOUND DURING THE SEARCH . SINCE WE HAVE DECIDED THESE APPEAL ON LEGAL AND TECHNICAL ISSUE, THE OTHER GROUNDS RAISED BY THE ASSESSEES ON MERITS BEC O ME ONLY ACADEMIC AND REQUIRED NO ADJUDICATION. 6 . RESULTANTLY, ALL THE APPEALS ARE ALLOWE D . ORDER PRONOUNCED IN THE OPEN COURT ON 7TH JU L Y , 2017. S D SD ( MAHAVIR SINGH ) (RAJESH KUMAR) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 7. 7 .2017 SRL,SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT( A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, T RUE COPY / (DY./ASSTT. REGIS TRAR) , / ITAT, MUMBAI