DCIT, New Delhi V. M/s Inmstronics Ltd., New Delhi

ITA 3360/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0021 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 26-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA
• Keywords: Search and seizure
• Section: 69C; 153A; 22; 153C; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI C BEN CH, NEW DELHI [THROUGH VIDEO CONFERENCE] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI K.N. CHARY, JUDICIAL MEMBE R ITA NO. 3360/DEL/2017 [A.Y 2008-09] THE DY. C.I.T VS. M/S INMSTRONICS LTD CIRCLE 1(1) F 345, LADO SARAI NEW DELHI NEW DELHI PAN: AAACI 0163 R [APPELLANT] [RESPONDENT] ASSESSEE BY : NONE REVENUE BY : MS. ANIMA, SR. DR DATE OF HEARING : 22.07.2021 DATE OF PRONOUNCEMENT : 22.07.2021 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE CIT(A) - 29, NEW DELHI DATED 17.02.2017 PERTAINING TO A.Y 2008-09 . 2 2. THE SOLITARY GRIEVANCE OF THE REVENUE READS AS UNDE R: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, LD. CIT(A) HAS ERRED IN LAW AS WELL AS FACTS IN DEL ETING THE ADDITION OF RS. 2,67,970/- MADE ON ACCOUNT OF UNEXP LAINED EXPENDITURE. DISALLOWANCE OF EXPENSE OF RS. 11,45, 939/- AND DISALLOWANCE U/S 35D OF RS. 2,32,25,000/- BY RELYIN G ON THE DEICISON IN THE CASE OF KABUL CHAWLA BY THE JURISDI CTIONAL HIGH COURT WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND SLP AGAINST THE SAME HAS BEEN FILED BEFORE THE HON'BLE SUPREME COURT, 3. NONE APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF NOTICE. WE DECIDED TO PROCEED EXPARTE. 4. THE LD. DR WAS HEARD AT LENGTH, WHO PLACED STRON G RELIANCE ON THE ASSESSMENT ORDER. 5. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW. THE FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE O PERATION U/S 132 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO A S 'THE ACT'] WAS CARRIED OUT ON 18.02.2013 IN UNITECH MACHINES GROUP OF CASES WHICH 3 ALSO INCLUDED THE BUSINESS PREMISES OF THE ASSESSEE . ACCORDINGLY, PROCEEDINGS U/S 153A OF THE ACT WERE INITIATED, IN RESPONSE TO WHICH THE ASSESSEE FILED RETURN OF INCOME ON 13.01.2015 D ECLARING TOTAL INCOME OF RS. 42,98,460/- 6. ASSESSMENT WAS COMPLETED BY MAKING THE FOLLOWING OBSERVATIONS: 5. AGAINST THE, ORDER PASSED U/S 153A R.W.S 153C OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) WHE REIN THE APPEAL OF THE ASSESSEE HAS BEEN PARTLY ALLOWED. AGAINST TH E LD. CIT(A) ORDER BOTH THE ASSESSEE AND THE DEPARTMENT FILED AP PEAL BEFORE THE 1TAT. THE ITAT VIDE PARA NO. 5 OF THEIR ORDER D ATED 13.03.2015 QUASHED THE ASSESSMENT ORDER FOR THE A.Y S. 2003-04 TO 2008-09 PASSED U/S 153A R.W. 153C OF THE INCOME TAX ACT, 1961. THE PARA 5 OF THE SAID ORDER IS REPRODUCED HEREUNDE R:- '5. IN THE INSTANT CASE ALSO, THE REVENUE HAS NOT P LACED ANY SATISFACTION RECORDED BY THE A.O. OF THE SEARCHED P ERSONS ON RECORD PERTAINING TO ASSESSMENT YEARS 2003-04 TO 2008- 09. THEREFORE, IN THE ABSENCE OF SUCH SATISFACTION BY THE A.O. OF THE SEARCHED PERSONS, THE ASSESSMENT FRAMED BY INVOKING THE PROVISIONS OF SECTIONS J53C CANNOT BE SUSTAINED. ACCORDINGLY, THE ASSESSMENT ORDERS PERTA INING TO ASSESSMENT YEARS 2003-04 TO 2008-09 ARE HEREBY QUASHED .. 4 6. THE ITAT VIDE THEIR ORDER DATED 15.03.2015 HAS QUAS HED THE ASSESSMENT ORDER FOR THE A.YS. 2003-04 TO 2008- 09 ON TECHNICAL GROUND WITHOUT GOING INTO MERIT OF THE CA SE AS MENTIONED ABOVE. THE ADDITIONS/DISALLOWANCES MADE IN THE ORIG INAL ORDER PASSED U/S 153A R.W.S. 153C ON 31.12.2010 IS HEREBY MADE AGAIN FOR THE REASON MENTIONED THEREIN UNDER THE FOLLOWING HE ADS:- I. UNEXPLAINED PURCHASES U/S 69C RS. 2,67,970/- II EXPENSES DISALLOWED AS DISCUSSED ABOVE RS. 11,45,939/- III ADDITION U/S 35D RS.2.32,25.000/- TOTAL ADDITION RS.2,46,38,909/- THUS, TOTAL ADDITION OF RS. 2,46,38,909/- IS HEREBY MADE. THE SAID ASSESSMENT ORDER PASSED U/S 153A R.W.S. 153C ON 31. 12.2010 IS MADE PART OF THIS ASSESSMENT ORDER. (ADDITION:- 2,46,38,909/-) 7. WHEN THE ASSESSMENT WAS AGITATED BEFORE THE LD. CIT(A), THE LD. CIT(A) OBSERVED AS UNDER: 12. I HAVE GONE THROUGH THE ABOVE SUBMISSIONS OF THE AP PELLANT AND HAVE CONSIDERED THE FACTS AND EVIDENCES ON RECO RD AND ALSO THE CASE LAWS RELIED UPON BY THE APPELLANT. 12.1 IT IS AN UNDISPUTED FACT THAT THE ADDITIONS MADE IN THE ORDER UNDER SECTION 143(3)/153C DATED 31.12.2010 AMOUNTIN G TO RS.2,46,38,909/- HAS BEEN DELETED BY HON'BLE ITAT, BY QUASHING 5 THE ORDER OF AO. IT IS ALSO UNDISPUTED FACT THAT BE FORE INVOCATION OF PRESENT PROCEEDINGS, THE ASSESSMENT WAS COMPLETE D TWICE AND NOTHING INCRIMINATING IN THIS REGARD WAS FOUND DURI NG SEARCH. ACCORDINGLY, THE AO CANNOT MAKE ANY INCREMENTAL AD DITIONS. IT IS ALSO STATED THAT THE REVENUE HAS FILED APPEAL WITH THE HON'BLE DELHI HIGH COURT AGAINST THE ORDER OF HON'BLE ITAT, WHICH IS PENDING ADJUDICATION. THEREFORE, THIS ADDITION AMOU NTING TO RS.2,46,38,909/- WILL BE GOVERNED BY THE FINAL DECI SION BY HON'BLE DELHI HIGH COURT OR TILL IT REACHES FINALITY. HOWEV ER, AS OF NOW, THE DECISION BY HON'BLE ITAT SHALL BE BINDING AND HENCE ADDITION CANNOT BE MADE AGAIN FOR THE SAME REASONING. FURTHE R, PRESENT PROCEEDINGS ARE WITH REFERENCE TO SEARCH CASES THER EFORE THIS CANNOT BE SUBJECT MATTER OF NEW ADDITION. THEREFORE , THIS ADDITION SHALL DEPEND UPON THE FINAL JUDGEMENT WITH REFERENC E TO THE EARLIER PROCEEDINGS UNDER SECTION 153A/143(3) OF THE ACT. T HE DECISION OF HON'BLE HIGH COURT SHALL BE MERGED TOGETHER WITH TH E PRESENT ORDER UNDER APPEAL. ACCORDINGLY, THIS GROUND OF APP EAL IS PARTLY ALLOWED. 8. WHILE DECIDING THE APPEAL, THE LD. CIT(A) FOLLOW ED THE BINDING DECISION IN THE CASE OF KABUL CHAWLA 61 TAXMANN.COM 412 [DELHI]. MERELY BECAUSE THE REVENUE HAS PREFERRED AN APPEAL AGAINST THE DECISION OF KABUL CHAWLA BEFORE THE HON'BLE SUPREME COURT WOULD NOT MAKE THE ORDER OF THE LD. CIT(A) ERRONEOUS. CONSID ERING THE FACTS OF THE CASE IN TOTALITY AS MENTIONED HEREINABOVE, WE D ECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 6 9. IN THE RESULT THE APPEAL OF THE REVENUE IN ITA NO. 3360/DEL/2017 IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT IN THE PR ESENCE OF BOTH THE RIVAL REPRESENTATIVE ON 22.07.2021. SD/- SD/- [ K.N. CHARY ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22 ND JULY, 2021 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 7 DATE OF DICTATION ATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER