Sukhamani Hotels Private Limited, Agartala V. Deputy Commissioner of Income Tax, Circle - Agartala, Agartala

ITA 374/GTY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9755 (ITAT-GUWAHATI)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 31-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K BHARDWAJ J
• Keywords: Search and seizure
• Section: 143(3); 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH, GUWAHATI BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 374 / KOL / 2018 ASSESSMENT YEAR :2011-12 SUKHAMANI HOTELS PVT. LTD., B.K. ROAD, BANMALIPUR, AGARTALA-799001 [ PAN NO.AAMCS 5948 N ] V/S . ACIT, CIRCLE-AGARTALA AGARTALA /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SANJAY MODY, FCA /BY RESPONDENT SHRI A.K. BHARDWAJ, JCIT-DR /DATE OF HEARING 12-07-2019 /DATE OF PRONOUNCEMENT 01-10-2019 / O R D E R PER BENCH:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2011-12 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-SHILLONGS ORD ER DATED 24.10.2018 PASSED IN CASE NO.CIT(A)/SHG/10312/2016-17, INVOLVI NG PROCEEDINGS U/S 153C R.W.S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. IT TRANSPIRES AT THE OUTSET THAT THE ASSESSEES FIRST AND FOREMOST SUBSTANTIVE GRIEVANCE RAISED IN THE INSTANT APPEAL CHALLENGES CORRECTNESS OF PROVISION OF 153C ON THE GROUND THAT THE ASSESSING OFFICER HAD NOT RECORDED A VALID SATISFACTION THAT ANY MONEY, BULLION OR JEWEL LERY; AS THE CASE MAY BE, ITA NO.374/GAU/2018 A.Y.2011-12 SUKHAMANI HOTELS PVT. LTD. VS. ACIT, CIR-AGA RTALA PAGE 2 BELONGED TO HIM AS STIPULATED U/S 153C(1) OF THE AC T. OUR ATTENTION IS INVITED TO THE FACT THAT THE ASSESSING OFFICER HAD RECORDED HI S ALLEGED SATISFACTION IN THE YEAR 2014 I.E. MUCH EARLIER THAN THE RELEVANT AMEND MENT IN SEC. 153C VIDE FINANCE ACT, 2015 WITH EFFECT FROM 01.06.2015. THE RELEVANT SATISFACTION AGAINST THE ASSESSEE READS AS UNDER:- SATISFACTOIN NOTE THE ASSESSEE IS AN INDIVIDUAL IN STATUS AND DERIVES HIS INCOME FROM CARRIAGE CONTRACT AND TRADING OF AGRO PRODUCTS. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 23-08-2013 AT OFFICE PREMISES OF RAJAR SHI MOTORS PVT LTD AND ALSO IN RESIDENCE OF SHRI SWAPAN KUMAR PAUL AND WAR RANT EXECUTED ON SHRI SWAPAN PAUL AND RAJARSHI MOTORS PVT. LTD. THE ASSES SEE IS A SON OF SHRI SWAPAN KUMAR PAUL AND ALSO A DIRECTOR OF RAJARSHI M OTORS PVT. LTD. DURING SEARCH OPERATION VARIOUS BOOKS OF ACCOUNT IN THE NA ME OF ASSESSEE WERE FOUND AND SEIZED PERTAINING TO THE SWAPAN KUMAR PAU L GROUP OF COMPANIES WHERE SUBSTANTIAL INTER GROUP TRANSACTIONS DETECTED . ALSO SHRI SWAPAN KUMAR PAUL MADE DISCLOSURES OF UNDISCLOSED INCOME IN THE HANDS OF ASSESSEE. CONSEQUENTLY, NOTICE U/S. 153C WAS ISSUED TO THE AS SESSEE. 3. WE NOTICE IN THIS BACKDROP OF FACTS THAT THE ASS ESSING OFFICER HAS NOWHERE RECORED AS TO WHETHER THE IMPUGNED SEIZED M ATERIALS BELONGED TO THE ASSESSEE OR NOT AS PER THE UNAMENDED STATUTORY PROVISION. THIS TRIBUNALS CO-ORDINATE BENCHS ORDER IN MANJU DEVI AGARWAL VS. ACIT CIRCLE-4 GUWAHATI IN ITA NO.155-158/GAU/2013 DECIDED ON 12.07.2019 HOLDS THAT SUCH A SATISFACTION NOTE DOES NOT FULFILL THE RELEVANT STA TUTORY CONDITIONS INCORPORATED SEC. 153C OF THE ACT AS FOLLOWS:- 3. WE NOW COME TO THE BASIC RELEVANT FACTS. IT IS N OT IN DISPUTE THE DEPARTMENT HAS CARRIED OUT THE SEARCH IN QUESTION A T 19.11.2009 IN CASE OF PODDAR GROUP, SHRI ANUP PODDAR AND SHRI SUDHIR AGAR WAL (ASSESSEES HUSBAND). HER RESIDENTIAL PREMISES FORMED SUBJECT-M ATTER. THE AUTHORIZED OFFICER APPEARS TO HAVE COME ACROSS VARIOUS POSTAL PASS BOOK(S) IN THE NAMES OF EMPLOYEES OF HIS FORMER TWO ASSESSEES. IT IS THI S MATERIAL THAT HAS BEEN TAKEN TO BE BELONGING TO THE ASSESSEE FOR THE PURPOSE OF INITIATING THE IMPUGNED SATISFACTION U/S 153C OF THE ACT. 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS. THE FIRST MOOT QUESTION BEFORE US AS TO WHETHER POSTAL PASS BOOKS IN ISSUE (SUPRA) COULD BE TREATED TO BE BELONGING TO THE ASSESSEE OR NOT FOR THE PURPOSE OF RECORDING A VALID SATISFACTION U/S 153C OF THE ACT. WE MAKE IT CLEAR THAT WE ARE DEALING WITH A SATISFACTION DATED 21.06.2011 R EQUIRING THE RELEVANT CATEGORY OF ASSET TO BE BELONGING TO THE TAXPAYER THAN MERELY PERTAINING OR RELATING STOOD INTRODUCED SUBSEQUENTLY VIDE THE FINANCE AC T, 2015 ITA NO.374/GAU/2018 A.Y.2011-12 SUKHAMANI HOTELS PVT. LTD. VS. ACIT, CIR-AGA RTALA PAGE 3 CONTAINING SEC. 153C(1)(B) APPLICABLE WITH EFFECT F ROM 01.06.2015. WE PROCEED IN THIS FACTUAL BACKDROP TO NOTICE THAT THE SAID DOCUMENTS NOWHERE CONTAINED EVEN THE ASSESSEES NAME MUCH LESS THAN BELONGING TO HER ARE TAKEN AS TO DEMAND BELONGING TO HER. THIS QUESTION CAME UP BEFORE WHEREIN IT WAS HELD THAT THIS BELONGING HAS TO BE TREATED AS HAVING OWNERSHIP OF SIZED MATERIAL. VARIOUS JUDICIAL PRECEDENTS CWT VS. BOSHW ANATH CHATTERJEE 103 ITR 531, LATE NAWAB SRI MIR OSMAN ALI KHAN (1986) 1 62 ITR 888, SB (HOUSE & LAND) PVT. LTD. VS. CIT (1979) 119 ITR 786, ADDL . CIT VS. SAHAY PROPERTIES & INVESTMENT PVT. LTD. (11983) 144 ITR 357 (PAT) HO LD THAT THIS CLINCHING EXPRESSION OF BELONGS TO IMPLIES OWNERSHIP OF AN ASSESSEE WHICH IS NOWHERE THE REVENUE BEFORE US. 5. NEXT ARGUMENT RAISED AT REVENUES BEHEST IS THAT THE ASSESSEE ADMITTED BEFORE THE DDIT(INV) THAT SHE HAD DERIVED COMMISSIO N INCOME EARNED AS A POSTAL AGENT. IT EMERGES FROM THE CASE RECORD(S) TH AT THE CORRESPONDING COMMISSION INCOME ALREADY STOOD DISCLOSED IN THE RE GULAR BOOKS OF ACCOUNTS. COUPLE WITH THIS, WE WISH TO EMPHASIZE THAT THE CBD TS DATED 10.03.2003 REITERATED ON 18.12.2014 MAKES IT CLEAR THAT SUCH A N ADMISSION IN ABSENCE OF ANY COGENT EVIDENCE DOES NOT CARRY ANY SIGNIFICANCE . IT HAS ALREADY COME ON RECORD THAT THE RELEVANT POSTAL PASS-BOOKS DID NOT BELONG TO THE ASSESSEE. WE THUS DECLINE THE REVENUES SECOND ARGUMENTS AS WELL . 6. LASTLY COMES YET ANOTHER EQUALLY IMPORTANT ASPEC T REGARDING VALIDITY OF IMPUGNED PROCEEDINGS. THERE IS NO DISPUTE THAT THIS ASSESSEE AS WELL AS THE SEARCHED ASSESSEE HER HUSBAND (SUPRA) ARE ASSESSED BY THE SAME ASSESSING OFFICER. WE NOTICE IN THIS BACKDROP THAT THE ASSESSING OFFICER NOWHERE RECORDED A SEPARATE SATISFACTION IN THE SAI D THAT THE SEIZED MATERIAL DID NOT BELONG TO HIM BUT TO THIS TAXPAYER FOLLOWED BY A SIMILAR CORRESPONDING SATISFACTION IN HER CASE. MR. HAOKIP AT THIS STAGE INVITES OUR ATTENTION TO THE ASSESSING OFFICERS SATISFACTION IN CASE OF ASSESSE ES HUSBAND DATED 15.12.2011. WE FIND THAT THE ASSESSING OFFICERS SA ID SATISFACTION TO THIS EFFECT MERELY HOLDS THAT THE CORRESPONDING INCREMENT DOCUM ENTS SEIZED FROM THE SEARCHED PREMISES RELATE TO THE ASSESSEE WHEREAS BANK PASS BOOKS BELONGED TO HER CLIENTS. WE CONCLUDE IN VIEW OF THE SE CLINCHING FACTS THAT THIS CRUCIAL SATISFACTION FORMING FOUNDATION OF THE REVE NUES ARGUMENT DOES NOT FULFILL THE SAID LEGAL CRITERIA. WE FURTHER QUOTE H ONBLE GUJARAT HIGH COURTS DECISION IN CIT VS. LALIT KUMAR M PATEL (2014) 222 TAXMANN.96 (GUJ) DEALT WITH A SIMILAR SEC. 158BD SATISFACTION IS ON INSTAN CE OF THE SAME. ASSESSING OFFICER CONCLUDE THAT THE FOREGOING TWIN SATISFACTI ON PRINCIPLE QUITE WELL APPLIES FOR THE ASSESSEES CASE IF THEY ARE ASSESSED IN HIS SAME ASSESSING AUTHORITYS JURISDICTION. WE TAKE INTO ACCOUNT ALL THESE FOREGO ING LEGAL POSITION TO CONCLUDE THAT THE LEARNED LOWER AUTHORITIES HAVES ERRED IN I NITIATING SEC. 153C PROCEEDINGS IN ABSENCE OF A VALID SATISFACTION. THE SE ASSESSMENTS ARE ACCORDINGLY QUASHED. THE ASSESSEES OTHER GROUNDS ON MERITS ARE RENDERED INFRUCTUOUS. ITA NO.374/GAU/2018 A.Y.2011-12 SUKHAMANI HOTELS PVT. LTD. VS. ACIT, CIR-AGA RTALA PAGE 4 WE ADOPT THE ABOVE DETAILED REASONING MUTATIS MUTANDIS TO THAT THE IMPUGNED ASSESSMENT IS LIABLE TO BE QUASHED SINCE NOT TAKEN RECOURSE BY THE ASSESSING OFFICER AFTER RECORDING A VALID SATISFACTION U/S 15 3C OF THE ACT. THE ASSESSEES OTHER GROUNDS ON MERITS ARE RENDERED INFRUCTUOUS. 4. THIS ASSESSEES APPEAL IS ALLOWED IN ABOVE TERMS . ORDER PRONOUNCED IN ACCORDANCE WITH RULE 34(3) OF T HE ITAT RULES BY PUTTING ON NOTICE BOARD 01/10/2019 SD/- SD/- ( #) (%& #) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) GUWAHATI, *DKP '- 01 / 10 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SUKHAMANI HOTELS PVT. LTD. B.K. ROAD, BA NMALIPUR, AGARTALA- 799001 2. /RESPONDENT-ACIT, CIRCLE-AGARTALA, 3. 2 3 8 / CONCERNED CIT GUWAHATI 4. 3- / CIT (A) GUWAHATI 5. ; &&2, 2, 8 / DR, ITAT, GUWAHATI 6. A / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY (ON TOUR) 2,