NATASHA VIJAY GUPTA, MUMBAI V. DCIT- CC -4 (2), MUMBAI

ITA 3812/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4308 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHUTOSH RAJHANS
• Assessee Lawyers: MAYANK CHAUHAN
• Keywords: Rule 8D
• Section: 143(3); 153A; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI M. BALAGANESH , AM & SHRI RAVISH SOOD , JM ITA NO. 3812 / MUM/20 1 8 ( ASSESSMENT YEAR : 2009 - 10 ) MS. NATASHA VIJAY GUPTA 6 TH NEW HARILEELA HOUSE MINT ROAD, FORT, MUMBAI 400 001 VS. D Y. COMMISSIONER OF INCOME TAX - CC - 4(2) AIR INDIA BUILDING, 19 TH FLOOR, ROOM NO.1918, NARIMAN POINT MUMBAI 400 021 PAN/GIR NO. AABPG3428M ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY SHRI MAYANK CHAUHAN REVENUE BY SHRI ASHUTOSH RAJHANS DATE OF HEARING 11 / 03 /201 9 DATE OF PRONOUNCEMENT 13 / 03 /201 9 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL FILED BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 52, [HEREINAFTER REFERRED TO AS THE LD CITA ] MUMBAI DATED 21/03/2018 FOR A.Y.2009 - 10 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 153A OF THE INCOME TAX ACT, 1961. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) HAVING HELD THAT NO ADDITION COULD BE MADE IN THE HAN DS OF THE ITA NO.3812/MUM/2018 MS. NATASHA VIJAY GUPTA 2 ASSESSEE FOR THE A.Y.2009 - 10 IN THE ASSESSMENT U/S.153A OF THE ACT DUE TO NON - EXISTENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH RELATABLE TO SEARCHED ASSESSMENT YEAR , OUGHT NOT TO HAVE PROVIDED TO ADJUDICATE THE DISALLOWAN CE MADE U/S.14A AND 36(1)(III) OF THE ACT ON MERITS. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND HAD FILED HER ORIGINAL RETURN OF INCOME ON 30/09/2009 DECLARING TOTAL INCOME OF RS.5,36,471/ - WHICH WAS PROCESSED U/S.143(1) OF THE ACT. ADMITTEDLY, NO NOTICE U/S.143(2) OF THE ACT WAS ISSUED FOR THE SAID ASSESSMENT YEAR ON THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN STEEL ITEMS, JEWELLERY UNDER THE NAME AND STYLE OF P ROPRIETORSHIP CONCERN M/S. N G TRADERS AND ALSO DEA LING IN BULLIONS THROUGH MCX . S EARCH AND SEIZURE ACTION U/S.132 OF THE ACT AND SURVEY ACTION U/S.153A OF THE ACT WERE CARRIED OUT AT VARIOUS PREMISES OF USHDEV GROUP ON 11/09/201 4 . THE ASSESSEE IS ONE OF T HE PARTIES BELONGING TO THE GROUP . C ONSEQUENT UPON THE SEARCH OF USHDEV GROUP, THE ASSESSEES CASE WAS ALSO CENTRALISED VIDE ORDER DATED 13/03/2015. SUBSEQUENTLY, THE LD. AO ISSUED NOTICE U/S.153A OF THE ACT DATED 04/03/2015 TO THE ASSESSEE. THE ASSESSEE F ILED HER RETURN OF INCOME FOR A.Y.2009 - 10 IN RESPONSE TO NOTICE U/S.153A OF THE ACT ON 14/01/2016 DECLARING TOTAL INCOME OF RS.6,36,471/ - . THE LD. AO COMPLETED THE ASSESSMENT U/S.143(3) R.W.S. 153A OF THE ACT ON ITA NO.3812/MUM/2018 MS. NATASHA VIJAY GUPTA 3 31/10/2016 AFTER MAKING DISALLOWANCE U/S. 14 A OF THE ACT READ WITH RULE 8D OF THE RULES TO THE TUNE OF RS.31,41,994/ - AND DISALLOWANCE U/S.36(1)(III) TOWARDS INTEREST TO THE TUNE OF RS.3,50,000/ - IN THE ASSESSMENT. IN THE ENTIRE ASSESSMENT ORDER FRAMED U/S.143(3) R.W.S. 153A OF THE ACT , T HE LD. AO D ID NOT MAKE ANY REFERENCE TO ANY SEIZED MATERIAL WITH REGARD TO THE ISSUES OF DISALLOWANCE U/S.14A AND 36(1)(III) OF THE ACT. 3.1. THE LD. CIT(A) APPRECIATED THE CONTENTIONS OF THE ASSESSEE THAT THE ASS ESSMENT FOR THE A.Y. 2009 - 10 WAS AN UNABATED ASSESSMEN T A S ON THE DATE OF SEARCH AS ADMITTEDLY , NO NOTICE U/S.143(2) OF THE ACT WAS ISSUED BY THE LD. AO ON THE ORIGINAL RETURN OF INCOME FILED ON 30/09/2009 FOR THE A.Y.20 09 - 10. THE LD. CIT(A) HE LD THAT AS ON THE DATE OF SEARCH ON 11/09/2014, THE ASSESSMENT FOR THE A.Y. 2009 - 10 HAD BECOME UNABATED. THE LD. CIT(A) ALSO HELD THAT THERE WAS ABSOLUTELY NO INCRIMINATING MATERIAL FOUND DURING COURSE OF SEARCH RELATING TO ISSUE OF DISALLOWANCE U/S.14A AND DISALLOWANCE OF INTEREST U/S.36(1)(III) OF THE ACT. ACCORDINGLY, HE HELD THAT ACTION OF THE LD. AO IN MAKING THE AFORESAID TWO DISALLOWANCES IN THE ABSENCE OF ANY INCRIMINATING MATERIAL WAS CLEARLY INCORRECT AND ALLOWED GROUND NO.2 OF THE APPEAL OF THE ASSESSEE RAISED BEFORE HIM . LATER THE LD. CIT(A) PROCEEDED TO ADJUD ICATE THE ISSUE OF DISALLOWANCE U/S.14A AND 36(1)(III) OF THE ACT ON MERITS AND DECIDED AGAINST THE ASSESSEE . ITA NO.3812/MUM/2018 MS. NATASHA VIJAY GUPTA 4 4. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL SUBMISSIONS. WE FIND THAT THE LD. CIT(A) HAD ALREADY HELD THAT IN THE AS SESSMENT U/S.153A OF THE ACT IN RESPECT OF COMPLETED ASSESSMENT / UNABATED ASSESSMENT, THERE CANNOT BE ANY DISTURBANCE TO THE ORIGINALLY ASSESSED INCOME EITHER U/S.143(1) OR U/S.143(3) OF THE ACT , U NLESS THERE IS SOME INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH RELATABLE TO SAID UNABATED ASSESSMENT WARRANTING ANY DISTURBANCE THEREON . I T IS NOT IN DISPUTE THAT THERE IS ABSOLUTELY NO INCRIMINATING MATERIAL FOUND DURING COURSE OF SEARCH FOR A.Y.2009 - 10 RELATABLE TO ISSUE OF DISALLOWANCE U/S.14A AN D SECTION 36(1)(III) OF THE ACT. ACCORDINGLY, WE HOLD THAT THE LD. CIT(A) HAD RIGHTLY ALLOWED GROUND NO.2 RAISED BEFORE HIM BY THE ASSESSEE STATING THAT THE ASSESSMENT U/S.153A OF THE ACT COULD NOT BE MADE BY DISTURBING THE ORIGINALLY ASSESSED INCOME COMPL ETED EITHER U/S 143(1) OR 143(3) OF THE ACT, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL AND THAT NO FRESH DISALLOWANCE COULD BE MADE WITHOUT THE EXISTENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE LD. CIT(A) HAVING HELD SO OUGH T NOT TO HAVE ADJUDICATED THE VERY SAME ISSUES OF DISALLOWANCE U/S.14 A AND 36(1)(III) OF THE ACT ON MERITS. WE HOLD THAT THE MOMENT, THE LD. CIT(A) HAD ALLOWED GROUND NO.2 OF THE ASSESSEE RAISED BEFORE HIM, HE BECOMES FUNCTUS OFFICIO TO ADJUDICATE THE OTHE R ISSUES ON MERITS. IN OTHER WORDS, THE LD. CIT(A) HAD ALREADY GRANTED RELIEF TO THE ASSESSEE ON THE ITA NO.3812/MUM/2018 MS. NATASHA VIJAY GUPTA 5 TECHNICAL ISSUE / LEGAL ISSUE RAISED BEFORE HIM. THEREAFTER, THERE IS NO NEED FOR THE LD. CIT(A) TO ADDRESS THE OTHER GROUNDS RAISED ON THE VERY SAME ISSUE S ON MERITS. HENCE, WE HOLD THAT THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE ACTION OF THE LD. AO IN MAKING THE DISALLOWANCE U/S.14A AND 36(1)( III ) OF THE ACT IS NOT SUSTAINABLE IN THE EYES OF LAW. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALL OWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 / 03 /201 9 SD/ - ( RAVISH SOOD ) SD/ - ( M.BALAGANESH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; D ATED 13 / 03 /201 9 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//