ACIT, CC- 31, NEW DELHI V. PERNOD RICHARD INDIA PVT. LTD., NEW DELHI

ITA 3815/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2544 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 26-03-2020
• Assessment Year: 2006-2007
• Appeal Filed On: 12-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL GULATI
• Keywords: Search and seizure; Validity of assessment
• Section: 153A; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.AS. NO.3814 & 3815/DEL/2017 ASSESSMENT YEARS: 2005-2006 & 2006-07 ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-31, NEW DELHI. VS. M/S. PERNOD RICARD INDIA PVT. LTD., 104, ASHOKA ESTATE, BARAKHAMBA ROAD, NEW DELHI. TAN/PAN: AAACS 4781P (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SATPAL GULATI, CIT-DR RESPONDENT BY: SHRI DEEPAK CHOPRA, ADV. DATE OF HEARING: 23 11 2020 DATE OF PRONOUNCEMENT: 27 11 2020 O R D E R PER AMIT SHUKLA, JM THE AFORESAID APPEALS HAVE BEEN FILED BY THE REVENU E AGAINST THE SEPARATE IMPUGNED ORDER OF EVEN DATE 16 .12.2016, PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)- XLIV, NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED U/S. 153A FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07. IN BO TH THE APPEALS, FOLLOWING GROUNDS OF APPEAL HAVE BEEN RAIS ED:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE OF RS.9,34,68,532/- MADE O ACCOUNT OF BRAND EXPENSES. I.T.AS. NO. 3814 & 3815/DEL/2017 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTED TH E ASSESSING OFFICER TO DELETE THE DISALLOWANCE OF RS.131,54,537/- MADE ON ACCOUNT OF BRAND REGISTRATI ON EXPENSES. 3. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, A LTER TO FORGO ANY GROUND(S) OF APPEAL EITHER BEFORE OR AT T HE TIME OF HEARING OF THE APPEAL. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE, MR. DEEPAK CHOPRA SUBMITTED THAT IN THE CROSS APPEALS FILED BY THE ASSESSEE IN ITAS NO.3847 & 3848/DEL/2017 FOR THE SA ME ASSESSMENT YEAR, THE TRIBUNAL HAS QUASHED THE ASSES SMENT PASSED U/S.153A ON THE GROUND THAT NONE OF THE ADDI TIONS MADE BY THE ASSESSING OFFICER ARE BASED ON SEIZED M ATERIAL SINCE THESE ARE UNABATED ASSESSMENT, THEREFORE, IN VIEW OF THE JUDGMENTS OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. KABUL CHAWLA REPORTED IN 388 ITR 573 (DEL) AND PR.CIT VS. MEETA GUTGUTIA REPORTED IN 395 ITR 526 (DEL) AND THE DECISION OF HONBLE SUPREME COURT IN THE CA SE OF CIT VS. SINHAGAD TECHNICAL EDUCATION SOCIETY IN CIVIL A PPEAL NO.11081/2017 ORDER DATED 29.08.2017, NONE OF THE ADDITIONS MADE BY THE ASSESSING OFFICER CAN BE SUST AINED. I.T.AS. NO. 3814 & 3815/DEL/2017 3 3. LD. DR ALSO ADMITTED THAT IN VIEW OF THE DECISIO N OF THE TRIBUNAL THE GROUNDS OF APPEAL RAISED BY THE REVENU E HAVE BECOME INFRUCTOUS. 4. AFTER CONSIDERING THE AFORESAID SUBMISSIONS AND ON PERUSAL OF THE IMPUGNED ORDERS, WE FIND THAT HERE I N THIS CASE SEARCH AND SEIZURE ACTION U/S.1 32(1) WAS CONDUCTED ON 15.02.2011 AND ACCORDINGLY PROCEEDINGS U/S.153A HAS BEEN INITIATED. ADMITTEDLY, THE ADDITIONS MADE BY THE AS SESSING OFFICER ARE NOT BASED ON ANY INCRIMINATING OR SEIZE D MATERIAL FOUND DURING THE COURSE OF SEARCH. LD. CIT(A) HAD D ISMISSED THE SAID PLEA OF THE ASSESSEE FOLLOWING THE DECISIO N OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANIL KUMAR BHATIA REPORTED IN 352 ITR 433 (DEL) . HOWEVER, THIS TRIBUNAL IN ASSESSEES APPEALS FOR THE SAME ASSESSMENT YEAR HAS HELD THAT NONE OF THE ADDITIONS MADE BY THE ASSESSING OF FICER ARE BASED ON SEIZED MATERIAL AND HAVE ALLOWED THE GROUN DS RAISED BY THE ASSESSEE, CHALLENGING THE VALIDITY OF INITIA TION OF PROCEEDINGS U/S.153A BY FOLLOWING THE JUDGMENT OF HO NBLE SUPREME COURT IN THE CASE OF CIT VS. SINHAGAD TECHNICAL EDUCATION SOCIETY (SUPRA) AND HONBLE JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF KABUL CHAWLA AND MEETA GUTGUTIA (SUPRA). THE RELEVANT OBSERVATIONS OF THE TRIBUNAL ARE AS UNDER: 10. . WE FIND THE ISSUE IS NOW SETTLED IN FAVOUR OF THE A SSESSEE BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF I.T.AS. NO. 3814 & 3815/DEL/2017 4 CIT VS. SINHAGAD TECHNICAL EDUCATION SOCIETY IN CIV IL APPEAL NO. 11081/2017 ORDER DATED 29.08.2017, WHERE IN THE HON'BLE SUPREME COURT HAS OBSERVED THAT THE SEI ZED MATERIAL MUST HAVE A CO-RELATION WITH THE ASSESSMEN T YEAR TO WHICH THEY PERTAIN TO AND THEREFORE INVOKING JUR ISDICTION U/S. 153C FOR AN ASSESSMENT YEAR THAT HAD NO RELATI ON TO THE SEIZED MATERIAL IS BAD IN LAW. THE HONBLE DELH I HIGH COURT IN A PLETHORA OF RECENT DECISIONS HAS HELD TH AT COMPLETED ASSESSMENTS CANNOT BE RE-OPENED BY ISSUE OF NOTICE U/S 153A IN ABSENCE OF ANY INCRIMINATING MAT ERIAL FOUND DURING THE COURSE OF SEARCH. SINCE IN THE INS TANT CASE, ADMITTEDLY NO INCRIMINATING MATERIAL RELATING TO THESE TWO YEARS WERE FOUND DURING THE COURSE OF SEARCH, THEREFORE, IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA), MEETA GU TGUTIA (SUPRA) AND THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF SINHGAD TECHNICAL EDUCATION SOCIETY (SUPRA) , WE HOLD THAT THE INVOKING OF JURISDICTION U/S 153A OF THE I.T. ACT BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LA W. WE, THEREFORE, SET-ASIDE THE ORDER OF THE CIT(A) ON THI S ISSUE AND THE GROUNDS RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF ASSESSMENTS PROCEEDINGS INITIATED U/S 1 53A ARE ALLOWED. 11. SINCE THE ASSESSEE SUCCEEDS ON THIS PRELIMINARY LEGAL ISSUE, THEREFORE, THE OTHER GROUNDS BECOME ACADEMIC IN NATURE AND, THEREFORE, ARE NOT BEING ADJUDICATED. I.T.AS. NO. 3814 & 3815/DEL/2017 5 5. IN VIEW OF THE AFORESAID FINDINGS AND OBSERVATIO N OF THE TRIBUNAL, THE GROUNDS RAISED BY THE REVENUE ARE DIS MISSED AS INFRUCTUOUS, BECAUSE THE ADDITIONS CHALLENGED BY TH E REVENUE ARE NOT BASED ON ANY SEIZED MATERIAL FOUND DURING T HE COURSE OF SEARCH. ACCORDINGLY, THE REVENUES APPEALS ARE D ISMISSED. 6. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2020 SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] [ACCOUNTANT MEMBER] JUDICIAL MEMBER DATED: 27/11/2020 PKK: