MANGAL PRABHAT LODHA, MUMBAI V. DCIT CEN CIR 7(3) (ERESTWHILE CEN CIR 4(2), MUMBAI

ITA 3455/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9849 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 08-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MEENA
• Section: 143(3); 142(1); 153A; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JM AND SHRI RAJESH KUMAR , AM ./ I.T.A. NO . 3455 /MUM/201 5 ( / ASSESSMENT YEA R : 200 7 - 08 ) MAGAL P R ABHAT LODHA, 412, 4 TH FLOOR, 17G, VARDHGAMAN CHAMBER, CAWASJI PATEL ROAD, HORNIMAN CIRCLE, FORT, MUMBAI - 400001 / VS. DY. COMMISSIONER OF INCOME TAX CIRCLE 7(3), ROOM NO.655, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 4000 20 / APPELLANT / RESPONDENT PAN: AABPL6198F ./ I.T.A. NO . 3460 & 3461 /MUM/201 5 ( / ASSESSMENT YEA R S : 200 6 - 07 & 2007 - 08 ) ABHINANDAN LODHA, 412, 4 TH FLOOR, 17G, VARDHGAMAN CHAMBER, CAWASJI PATEL ROAD, HORNIMAN CIRCLE, FORT, MUMBAI - 4000 01 / VS. DY. COMMISSIONER OF INCOME TAX CIRCLE 7(3), ROOM NO.655, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 / APPELLANT / RESPONDENT PAN: ABWPL7722P ./ I.T.A. NO .3463 & 3464/MUM/2015 ( / ASSESSMENT YEA R S : 2006 - 07 & 2007 - 08 ) MANJULA MAGALPRABHAT LODHA, 412, 4 TH FLOOR, 17G, VARDHGAMAN CHAMBER, CAWASJI PATEL ROAD, HORNIMAN CIRCLE, FORT, MUMBAI - 400001 / VS. DY. COMMISSIONER OF INCOME TAX CIRCLE 7(3), ROOM NO.655, AAYAKAR BHAVAN, M K ROAD, MUMBA I - 400020 / APPELLANT / RESPONDENT PAN: ACCPL5846M 2 I.T.A. NO. 3455 AND OTHER FOUR APPEALS - LODHA GR. / APPELLANT BY : SHRI VIJAY MEHTA AND SHRI ANUJ KISHNADWALA /R E VENUE BY : SHRI R P MEENA / DATE OF HEARING : 28 .4. 2017 / DATE OF PRONOUNCEMENT : 12. 7 . 2017 / O R D E R PER BENCH : THE CAPTIONED ARE APPEAL S BY THE DIFFERENT ASSESSEE S PERTAINING TO ASSESSMENT YEARS 2006 - 07 AND 2007 - 08. THE APPEALS ARE DIRECTED AGAINST THE COMMON ORDER OF THE CIT(A) - 48 , MUMBAI , DATED 1.4.2015 WHICH IN TURN HAS ARISE N FROM ORDER S PASSED BY THE ASSESSING OFFICER OF RESPECTIVE DATES 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, THEREFO RE THESE APPEALS ARE CLUBBED TOGETHER, HEARD TOGETHER AND ARE BEING DECIDED BY THIS CONSOLIDATED ORDER, FOR THE SAKE OF CONVENIENCE. I.T.A. NO.3455/MUM/2015 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE AS UNDER : 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE ADDITIONS FOR THIS YEAR HAS TO BE RESTRICTED ON THE BASIS OF EVIDENCE FOUND IN THE BOOKS AND DOCUMENTS FOUND DURING THE SEARCH AS PER THE DECISION OF THE ITAT MUMBAI ,SPECIAL BENCH IN THE CASE OF 'ALL CARGO GLOBAL LOGISTICS 3 I.T.A. NO. 3455 AND OTHER FOUR APPEALS - LODHA GR. LTD 23 TAXMANN.COM 103 (MUM)SB, WHICH HAS NOW BEEN UPHELD BY BOMBAY HIGH COURT BY THEIR DECISION DELIVERED ON 21ST APRIL 2015, IN APPEAL NO ITX 1969 OF 2013. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ASSESSMENT ORDER AS THE PAN WAS NOT TRANSFERRED TO THE NEW JURISDICTION EVEN ON THE DATE OF THE ORDER. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C I T(A) ERRED IN C ONFIRMING THE ADDITION OF NOTIONAL RENT OF RS.1,17,600/ - 3 . THE FIRST ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPEAL IS AGAINST THE ORDER OF THE LD.CIT(A) UPHOLDING THE ADDITION MADE BY THE AO WHICH ARE NOT BASED ON THE INCRIMINATING MATERIAL FO UND DURING THE COURSE OF SEARCH CONDUCTED AT THE BUSINESS/RESIDENTIAL PREMISES OF THE ASSESSEE INCLUDING BUSINESS CONCERN. 4 . THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 31.10.2010 U/S 139(1) OF THE ACT DECLARING A TOTAL INCOM E OF RS.35,41,673/ - . NO NOTICE U/S 143(2) WAS ISSUED TO THE ASSESSEE TILL THE LAST DATE WITHIN WHICH THE NOTICE COULD HAVE BEEN ISSUED I.E. 31.10.2008 AND THEREFORE THE RETURN FILED BY THE ASSESSEE ATTAINED FINALITY ON THE DATE OF SEARCH WHICH WAS C ONDUCTED ON10.1.2011 U/S 132 OF THE ACT ON THE LODHA GROUP OF CASES INCLUDING THE ASSESSEE . THEREAFTER THE NOTICE S U/S 143(2) AND 142(1) WERE ISSUED AND SERVED UPON THE ASSESSEE . THE ASSESSEE COMPLIED WITH THE NOTICES BY FILING RETURN OF INCOME U/S 153A ON 26.12.2011 DECLARING THE SAME INCOME AS DECLARED BY THE ASSESSEE U/S 139(1) OF THE 4 I.T.A. NO. 3455 AND OTHER FOUR APPEALS - LODHA GR. ACT. THEREAFTER , THE AO COMPLETED THE ASSESSMENT U/S 143(3) R.W.S.153A OF THE ACT VIDE ORDER DATED 30.3.2013 BY MAKING THE ADDITION OF RS.1,17,600/ - TOWARDS RENT AL VALUE OF THE PROPERTY BY ASSESSING THE INCOME AT RS.36,59,273/ - . 5. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY WHO ALSO CONFIRMED THE ACTION OF THE AO. FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 6 . NOW, THE QUE STION BEFORE US IS WHETHER THE ADDITION IN RESPECT OF HOUSE PROPERTY COULD BE MADE IN THE ASSESSMENT FRAMED U/S 153A R.W.S 143(3) OF THE ACT WHEN THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH QUA THE SAID ADDITION PARTICULARLY WHEN THE ASSESSMENT HAS ALREADY ATTAINED FINALITY ON THE DATE OF SEARCH . THE LD CIT(A) CONFIRMED THE ORDER OF AO BY HOLDING THAT THERE WAS NO PRIOR ORDER U/S 143(3) OF THE ACT AND ACCORDINGLY, THERE IS NO INFIRMITY IN THE ORDER PASSED BY THE AO U/S 153A R.W.S. 143(3) OF THE ACT AS THE ADDITION MADE BY THE AO IS WITHIN HIS JURISDICTION . 7 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BELOW AND CASE LAW RELIED UPON BY THE PARTIES. THE UNDISPUTED F ACTS ARE THAT IN THIS CASE THE DATE OF SEARCH I.E. 10.1.2011 CONDUCTED UNDER SECTION 132 OF THE ACT , THE ASSESSMENT HAS 5 I.T.A. NO. 3455 AND OTHER FOUR APPEALS - LODHA GR. ATTAINED FINALITY . IT IS EVIDENT, ONLY ADDITION MADE BY THE AO IS OF RENTAL INCOME. ADMITTEDLY, DURING THE COURSE OF SEARCH, NO INCRIM INATING MATERIAL WAS FOUND WITH RESPECT TO THE RENTAL INCOME OF THE IMMOVABLE PROPERTY IN RESPECT OF WHICH THE ADDITION OF NOTIONAL RENT WAS MADE BY THE AO. AFTER PERUSING THE PROVISIONS OF SECTION 153A OF THE ACT, WE ARE OF THE VIEW THAT THE AO HAS VERY LIMITED JURISDICTION TO MAKE ADDITION QUA THOSE ASSESSMENT YEARS IN WHICH THE ASSESSMENT S HA VE ATTAINED FINALITY ON THE DATE OF SEARCH AND THAT TOO BASED ON SEARCHED MATERIAL AND NOT OTHERWISE. THE PROVISIONS OF SECTION PROVIDES THAT THE ONLY THOSE ASSES SMENTS OR REASSESSMENTS WHICH ARE PENDING ON THE DATE OF SEARCH SHALL ABATE AND THE AO HAS SAME JURISDICTION TO FRAME THE ASSESSMENTS AS U/S 143(3) OF THE ACT BUT THE ASSESSMENTS WHICH HAVE ALREADY ATTAINED FINALITY SHALL NOT ABATE AND THE AO HAS THE JURIS DICTION TO MAKE ONLY THOSE ADDITIONS WHICH ARE BASED UPON THE SEIZED MATERIALS. IN THE PRESENT CASE, THE SEARCH PARTY DID NOT FOUND ANY INCRIMINATING MATERIAL WITH RESPECT TO THE ADDITION MADE BY THE AO . THE CASE OF THE ASSESSEE IS ALSO SQUARELY COVERED BY THE DECISIONS OF THE VARIOUS HIGH COURTS INCLUDING THE JURISDICTIONAL HIGH COURT. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S ALL CARGO GLOBAL LOGISTICS LTD. (2015) 374 ITR 645 (BOM) , HAS HELD THAT THE ADDITION IN RESPECT OF THE COMPLETED ASSESSMENT ON THE DATE OF SEARCH COULD ONLY BE MA D E ON THE BASIS OF SEARCH MATERIAL AND AO HAS NO JURISDICTION U/S 153A TO RE - ASSESS THE ALREADY 6 I.T.A. NO. 3455 AND OTHER FOUR APPEALS - LODHA GR. COMPLETED ASSES S ME NT IF THERE IS NO INCRIMINATING MATERIAL. IN THE CASE OF CIT VS. MURLI AGRO PRODUCTS LTD (B OMBAY HIGH COURT) IN INCOME TAX APPEAL NO.36 OF 2009 DATED 29/10/2010., THE SAME VIEW HAS BEEN AFFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT . HAVING REGARDS TO THE FACTS OF THE INSTANT CASE IN THE LIGHT OF THE RATIO LAID DOWN BY THE DECISIONS OF THE JURISDICTIONAL HIGH COURT IN THE CASE LAW S REFERRED TO ABOVE , WE SET ASIDE THE ORDER OF THE LD.CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION AS THE R E IS NO JURISDICTION TO MAKE ADDITION U/S 153A OF THE ACT WITHOUT INCRIMINATING MATERIALS BEING FOUN D DURING SEARCH WHEN THE ASSESSMENT HAS ATTAINED FINALITY ON THE DATE OF SEARCH . SINCE WE HAVE ALREADY DECIDED THE LEGAL AND TECHNICAL ISSUE RAISED BY THE ASSESSEE INN HIS FAVOUR, THE OTHER GROUNDS RAISED ON MERIT BECOME ACADEMIC IN NATURE AND THEREFORE R EQUIRE NO ADJUDICATION. THE APPEAL OF THE ASSESSEE STANDS ALLOWED. 8. 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.3455/MUM/2015, ON THE LEGAL ISSUE . THEREFORE, OUR DECISION IN ITA NO.3455/MUM/2011 WOULD ,MUTATIS MUTANDI S , APPLY TO THESE APPEALS AS WELL. ACCORDINGLY, THE AO IS DIRECTED TO DELETE THE ADDITIONS . SINCE WE HAVE DECIDED THESE APPEAL ON LEGAL AND TECHNICAL ISSUE, THE OTHER GROUNDS RAISED BY THE ASSESSEES ON MERITS BECOME ONLY ACADEMIC AND REQUIRED NO ADJUDICATION. 7 I.T.A. NO. 3455 AND OTHER FOUR APPEALS - LODHA GR. 9 . IN THE RESULT, ALL THE APPEAL S FILED BY THE ASSESSEE S ARE ALLOWED . ORDER PRONOUNC ED IN THE OPEN COURT ON 12TH JU L Y , 2017 S D SD ( SAKTIJIT DEY ) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 12. 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. REGISTRAR) , / ITAT, MUMBAI