SHRI PRAFUL TANK, MUMBAI V. PR.CIT CENTTRAL-2, MUMBAI

ITA 3669/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8499 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 28-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARSILAYEN
• Assessee Lawyers: SASHI TULSIAN
• Keywords: Bogus purchase; Search and seizure; Accommodation entries
• Section: 263; 132; 15; 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAVISH SOOD, JM ITA NO. 3669/ MUM/ 2018 (ASSESSMENT YEAR: 2008 - 09 ) SHRI PRAFUL TANK 1103, RAMESHWAR TOWER, SHIMPOLI ROAD, BORIVALI (W), MUMBAI - 400 092 VS. PR. CIT, CENTRAL - 2, ROOM NO. 1920, 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400 021 PAN/GIR NO. AACPT 8421 E ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI SASHI TULSIAN RESPONDENT BY : SHRI ABI RAMA KARSILAYEN DATE OF HEARING : 19.12.2018 DATE OF PRONOUNCEMENT : 01.01. 201 9 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) , MUMBAI (LD.CIT(A) FOR SHORT) DATED 22.03.2018 PASSED U/S. 263 OF THE INCOME TAX ACT, 1961 (THE ACT' FOR SHORT) FOR THE ASSESSMENT YEAR (A.Y.) 2008 - 09. 2. IN THIS CASE, THE ASSESSMENT ORDER WAS FRAMED U/S. 143(3) R/W S. 153A OF THE ACT ON 29.03.2016, PURSUANT TO SEARCH AND SEIZURE OPERATI ON U/S. 132 ON TANK GROUP AND SHAH GROUP ON 03.03.2014. 3. LATER ON, THE LD. CIT(A) ISSUED NOTICE U/S. 263 THAT IN SEARCH THE SHRI BHANWARLAL JAIN GROUP HAS RE VEALED THAT THE ASSESSEE WAS BENEFICIARY OF ACCOMMODATION ENTRIES OF RS.5 LACS. THE ASSESSEE RES PONDED AS UNDER: 2 ITA NO. 3669/MUM/2018 A) THAT THE ASSESSMENT ORDER PASSED U/S. 153A R.W.S. 143(3) WAS BARRED BY LIMITATION. THE ASSESSEE CONTENDED THAT THE ASSESSMENT ORDER U/S. 153A R.W.S. 143(3) WAS ISSUED BY THE ASSESSING OFFICER ON 01.04.2016 AT 20:14:05 HOURS AND HENCE AFTER 31.03.2016 AND WAS HENCE TIME BARRED. B ) THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATION CONDUCTED ON THE ASSESSEE AND THAT IT CANNOT BE SAID THAT THE ASSESSING OFFICER HAD COMMITTED A N ERROR IN ORDER PASSED BY HIM UNDER SECTION 153A R.W.S. 143(3) OF THE ACT WHICH WOULD REQUIRE REVISION UNDER SECTION 263 OF THE ACT. III) NEELARN TRADERS IN WHOSE NAME THE ENTRY WAS TAKEN WAS NOT IN EXISTENCE AT THE TIME OF THIS PREVIOUS YEAR RELEVANT TO THE A.Y. UNDER CONSIDERATION, 4. HOWEVER, THE LD. C IT(A) WAS NOT SATISFIED, HE HELD AS UNDER: (I) THE INCOME TAX DEPARTMENT, MUMBAI, HAS A TIE - UP WITH THE POSTAL AUTHORITIES WHEREIN THE POSTAL STAFF COMES TO THE INCOME TAX DEPARTMENT OFFICE AND PERSON ALLY COLLECTS AIL LETTERS FOR SPEED POST. THE SAID ORDER U/S. 153A R.W.S. 143(3) DATED 29.03,2016 WAS POSTED BY THE INCOME TAX DEPARTMENT VIDE THE AFORESAID ARRANGEMENT WITH THE POSTAL AUTHORITIES ON 31.03.2016. THE XEROX COPY OF THE 'JOURNAL OF SPEED POST 'WHEREIN THE SAID ORDER WAS POSTED ON 31.03.2016 VIDE SPEED POST ACKNOWLEDGEMENT NO. EM960472293IN IS ENCLOSED AS ANNEXURE A TO THIS ORDER IN PROOF AND ACKNOWLEDGEMENT OF THE SAID ORDER DATED 153A R.W.S. 143(3) DATED 29.03.2016 BEING POSTED ON 31.03.2016 I .E. IN TIME. THUS, THE CONTENTION OF THE ASSESSEE THAT THE ORDER U/S. 153A R.W.S. 143(3) DATED 29.03.2016 IS TIME - BARRED IS NOT ACCEPTABLE AND IS HEREBY REJECTED. (II) THE CONTENTION OF THE ASSESSEE THAT THE ASSESSING OFFICER HAD COMMITTED NO ERROR IN ORD ER PASSED BY HIM UNDER SECTION 153A R.W.S. 143(3) OF THE ACT WHICH WOULD REQUIRE REVISION UNDER SECTION 263 OF THE ACT HAS ALSO BEEN CONSIDERED AND FOUND NOT ACCEPTABLE. INFORMATION WAS RECEIVED FROM THE DGIT (INV.J, MUMBAI, THAT A SEARCH AND SEIZURE ACTIO N U/S. 132 OF THE L.T. ACT WAS CONDUCTED IN THE CASE OF SHRI BHANWARLAL JAIN WHEREIN IT WAS FOUND THAT THE SAID GROUP HAD INDULGED IN PROVIDING ACCOMMODATION ENTRIES LIKE BOGUS PURCHASES, SAJES, UNSECURED LOANS AND SHARE CAPITAL, ETC. AS IT IS SEEN THAT TH E ASSESSEE WAS THE BENEFICIARY OF OBTAINING ACCOMMODATION ENTRIES OF RS. 5 LAKHS DURING THE F,Y. 2007 - 08 RELEVANT TO A.Y. 2008 - 09 THROUGH JEWEL DIAM BEING GROUP CONCERN OF SHRI BHANWARLAL JAIN. ON ANALYSIS OF THE FINANCIALS OF THE CONCERN OF SHRI BHANWARLA L JAIN, IT IS SEEN THAT NO ACTUAL TRANSACTION IS CARRIED OUT BY THE SAID PARTY AND THE SAID PARTY ONLY PROVIDED ACCOMMODATION ENTRIES OF SALES/LOANS AFTER CHARGING SMALL COMMISSION. ALSO, ON PERUSAL OF THE RECORDS, IT IS SEEN THAT THE ASSESSING OFFICER HAD NOT EXAMINED THE ABOVE ISSUE AND NO VERIFICATION WAS CARRIED OUT WITH REGARD TO THE ACCOMMODATION ENTRY TAKEN BY THE ASSESSEE IN THE ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S, 153A ON 29,03.2016. THUS, THE SAID ORDER WAS CLEARLY ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. (III) THE CONTENTION OF THE ASSESSEE IS THAT M/S. NEELAM TRADERS - WHICH WAS THE PROPRIETARY CONCERN OF THE ASSESSEE, SHRI PRAFUL S. TANK WAS NOT IN EXISTENCE IS A 3 ITA NO. 3669/MUM/2018 MATTER WHICH SHOULD BE EXAMINED BY THE A.O, IF IT IS SO, THEN THERE SHOULD NOT BE ANY ADDITION IN THIS CASE ON THIS ACCOUNT. THE A.O. IS DIRECTED TO VERIFY THE RECORD, PROVIDE OPPORTUNITY TO THE ASSESSEE AND PASS A SPEAKING ORDER IN THIS REGARD. 5. AG AINST THE ABOVE ORDER, THE ASSESSE E IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT IN THIS CASE THERE WAS NO INCRIMINATING MATERIAL FOUND IN SEARCH CONDUCTED IN THE ASSESSEE'S GROUP COMPANIES. HE SUBMITTED THAT IT IS SETTLED LAW THAT D E HOR S E INCRIMINATING MATERIAL , NO ADDITION CAN BE SUSTAINED IN ASSESSMENT PURSUANT TO SEARCH AND SEIZURE ACTION U /S. 15 3A OF THE ACT. IN T HIS REGARD , HE PLACED RELIANCE UPON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. CONTINENT AL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. [2015] 58 TAXMANN.COM 78 (BOM), . ACCORDINGLY , THE LEARNED COUNSEL OF THE ASSESSEE PLEADED THAT SINCE NO INCRIMINATING MATERIAL HAS BEEN FOUND , THE A.O. HAS RIGHTLY NOT MADE ANY ADDITION IN THIS REGARD. HENCE , H E PLEADED THAT ORDER PASSED U /S. 263 OF THE ACT BY THE LEARNED CIT - A IS TOTALLY DEVOID OF LEGALITY. FURTHERMORE , THE LEARNED COUNSEL SUBMITTED THAT IN THE IDENTICAL SITUATIONS , AN ORDER PASSED U /S. 263 O F THE I.T. A CT WAS QUASHED AND TH E ISSUE WAS CONFIRMED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S. MURLI AGRO PRODUCTS LTD. (IN ITA NO. 36 OF 2009 VIDE ORDER DATED 29.10.2010). 7. P ER CONTRA , THE LD. DEPARTMENTAL REPRESENTATIVE (LD. DR FOR SHORT) RELIED UPON THE ORDER'S OF THE LEARNED CIT (A.). HOWEVER , HE COULD NOT REBUT THE SUBMISSION THAT NO INCRIMINATING MATERIAL HAS BEEN FOUND IN THE SEARCH, CONCLUDED IN THE ASSESSEE GROUP. 8. UP ON CAREFUL CONSIDERATION , WE NOTE THAT IT IS UNDISPUTED THAT THIS IS AN ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT READ WITH SECTION 153A ON ASSESSEE GROUP. IT IS ALSO 4 ITA NO. 3669/MUM/2018 UNDISPUTED THAT NO INCRIMINATING MATERIAL HAS BEEN FOUND IN THE SEARCH. IN SUCH CIRCUMSTANCES , THE RATIO FROM THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CONTINENTAL WARE HOUSING CORPORATION (NHAVA SHEVA) LTD. ( SUPRA ) IS FULLY APPLICABLE. HENCE , NO ADDITION DEVOID OF ANY INCRIMINATING MATERIAL IS SUSTAINABLE. HENCE , THE LD. CIT(A)S ORDER IN THIS REGARD IS LIABLE TO BE QUASHED ON THIS ACCOUNT. FURTHERMORE , IN IDENTICAL CIRC UMSTANCES , IN A CASE WHERE SEARCH HAS NOT LED TO A NY INCRIMINATING MATERIAL , SEARCH ORDER U/S. 263 PASSED BY THE LEARNED CIT WAS Q UASHED . T HE SAME WAS UPHELD BY THE HONBLE BOMBAY HI GH COURT IN THE CASE OF M/S. MURLI AGRO PRODUCTS LTD. (SUPRA), WHICH READS AS UNDER: IN SUCH A CASE, THE A.O. WHILE PASSING THE INDEPENDENT ASSESSMENT ORDER UNDER SECTION 153A READ WITH SECTION 143(3) OF THE I. T. INCOME TAX ACT, 1961 COULD NOT HAVE DISTURBED THE ASSESSMENT/REASSESSMENT ORDER WHICH HAS ATTAINED FINALITY, UNLESS THE MATERIALS GATHERED IN THE COURSE OF THE PROCEEDINGS UNDER SECTION 153A OF THE INCOME TAX ACT, 1961 ESTABLISH THAT THE RELIEFS GRANTED UNDER THE FINALIZED ASSESSMENT/REASSESSMENT WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153A PROCEEDINGS . 9. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT, WE QUASH THE ORDER PASSED U/S. 263 BY THE LD. CIT. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 1 . 0 1 . 2 0 1 9 S D / - S D / - ( RAVISH SOOD ) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 0 1 . 0 1 . 2 0 1 9 ROSHANI , SR. PS 5 ITA NO. 3669/MUM/2018 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 FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI