DCIT, CENTRAL CIRCLE-2(1), Nagpur V. ZAIDUN LEENG SDN BHD ARTEFACT PROJECTS LTD(JV), Nagpur

ITA 390/NAG/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1298 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 13-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Tax effect
• Section: 143(3)

Judgement Text

1 ITA NO. 390/NAG/2014 & ITA NO. 381/NAG/2014 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER.. I.T.A.NO.390/NAG/2014 ASSESSMENT YEAR : 20 07 - 08 . DEPUTY COMMISSIONER OF INCOME TAX ZAIDUN LEENG SDN BHD ARTEFACT CENTRAL CIRCLE - 2(1), VS. PROJECTS LTD.(JV), ARTEFACT TOWER, NAGPUR. CHHATRAPATISQUARE,WARDHA ROAD, NAGPUR. PAN AAAAZ0129L APPELLANT RESPONDENT I.T.A.NO.381/NAG/2014 ASSESSMENT YEAR : 20 07 - 08 . ZAIDUN LEENG SDN BHD ARTEFACT DEPUTY COM MISSIONER OF INCOME TAX PROJECTS LTD.(JV), ARTEFACT TOWER, VS. CENTRAL CIRCLE - 2(1), CHHATRAPATISQUARE,WARDHA ROAD, NAGPUR. NAGPUR. APPELLANT. RESPONDENT. DEPARTMENT BY : SHRI A.R. NINAWE. ASSESSEE BY : SHRI K.P. DEWANI . DATE OF HEARING : 25 - 11 - 2016 DATE OF PRONOUNCEMENT : 25 TH NOV.., 2016 O R D E R. PER RAM LAL NEGI . JM THESE ARE THE CROSS APPEALS PREFERRED BY THE REVENUE AND THE ASSESSEE AGAINST IMPUGNED ORDER DATED 09/5/2014 PASSED BY THE CIT(APPEALS) - III, NAGPUR PERTAINING TO THE ASSESSMENT YEAR 2007 - 08 WHEREBY THE LEARNED CIT(APPEALS) PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST 2 ITA NO. 390/NAG/2014 & ITA NO. 381/NAG/2014 ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 153C OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER ON THE FOLLOWING EFFECTIVE GROUNDS: - 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT M/S ASOKA BUILDCON LTD. HAD ADMITTED UNRECORDED PAYMENTS TO THE ASSESSEE COMPANY, BASED ON THE EVIDENCES FOUND DURING THE COURSE OF SEARCH AT THE PREMISES, AND ALSO DISCLOSED THIS FACT BEFORE THE HONBLE SETTLEMENT COMMISSION, THOUGH A CONFIRMATION LETTER WAS ISSUED SUBSEQUENTLY TO THE EFFACT THAT THE PAYMENTS NOTED IN THE CASE DIARY DO NOT REFER TO ANY PAYM ENTS MADE TO M/SARTEFACT PROJECTS LTD., OR ITS DIRECTORS, AND THE NAME OF ARTEFACT WAS USED TO IDENTIFY THE PROJECT TO WHICH THE EXPENSES RELATE. THE CONFIRMATION DOES NOT TALK ABOUT THE ASSESSEE COMPANY, I.E. ZAIDUN LEENG SDN BHA ARTEFACTS LTD.(JV). THE REFORE, THE ASSESSING OFFICER HAD RIGHTLY INITIATED ACTION UNDER SECTION 153C AND TAKEN INTO COGNIZANCE, THE EVIDENCES, AND ADDITION WAS MADE IN THE CASE OF THE ASSESSEE COMPANY, BEING PROJECT CONSULTANT TO NH 6 AND LABAD - JAWARA PROJECTS OF THE WORK DO NE BY M/S ASOKA BUILDCON LTD. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN IN LAW, WHETHER THE LD. CIT (A) ERRED IN IGNORING THE FACT THAT THE SEIZED MATERIAL CONTAINED ENTRIES OF UNRECORDED PAYMENTS TO A CONCERN REFERRED TO AS ARTE AND ARTEFACT, AND THE AMOUNTS WERE MENTIO NED TO BE MADE UNDER THE HEADSNH 6 AND LABAD - JAWARA,AS THE ASSESSING OFFICER HAD CLEARLY BROUGHT OUT IN HIS ORDER, THAT THE ASSESSEE COMPANY IS THE ONLY CONCERN WITH THE NAMEARTE AND ARTEFACT, WITH WHOM THE ASOKA GROUP HAD DEALINGS IN RESPECT TONH 6 AND LABAD - JAWARA PROJECTS. WITH SUCH EVIDENCE FOUND IN THE SEARCH OF M/S ASOKA BUILDCON LTD., PROVING THE TRANSACTIONS RECORDED THEREIN, IT WAS NOT NECESSARY THAT THE EVIDENCES REGARDING THESE TRANSACTIONS SHOULD ALSO BE FOUND AT THE ASSESSEE COMPANY S PREMISES, AT THE TIME OF SUBSEQUENT SEARCH AT THE ASSESSEE COMPANYS GROUP. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TAX EFFECT IN THIS CASE IS BELOW RS.10,00 ,000/ - AS THE AMOUNT OF ADDITION IN DISPUTE IS ONLY 3 ITA NO. 390/NAG/2014 & ITA NO. 381/NAG/2014 RS. 20, 00,000/ - AND AS PER THE CBDT CIRCULAR NO. 21 OF 2015, DATED 10/12/2015, THE PRESENT APPEAL IS NOT MAINTAINABLE. 4. THE LD. DR FAIRLY ADMITTED THAT THE TAX EFFECT IN DEPARTMENTS APPEAL IS BELOW RS.10 LAKHS, WE FIND THAT THE ISSUE RAISED IN APPEAL DOE S NOT FALL UNDER ANY OF THE EXCEPTIONS SPECIFIED IN PARA 8 OF THE CIRCULAR. SINCE, IT HAS BEEN SPECIFICALLY CLARIFIED IN THE CIRCULAR AFORESAID THAT THE INSTRUCTION WILL APPLY RETROSPECTIVELY TO ALL THE PENDING APPEALS, THE PRESENT APPEAL FILED BY THE REVE NUE IS NOT MAINTAINABLE. WE, THEREFORE, DISMISS THE SAME IN LIMINE . I.T.A.NO.381/NAG/2014 THE LD. COUNSEL FOR THE APPELLANT/ ASSESSEE SUBMITTED THAT SINCE THE APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED IN TERMS OF THE CBDT CIRCULAR NO. 21 OF 2 015, DATED 10/12/2015, THE ASSESSEE DOES NOT WANT TO PRESS THIS APPEAL, THEREFORE, THE ASSESSEE MAY BE PERMITTED TO WITHDRAW THE SAME. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION IN CASE THE ASSESSEE IS ALLOWED TO WITHDRAW THE APPEAL. WE, ACCO RDINGLY, ALLOW THE APPLICATION FILED BY THE LD. COUNSEL AND DISMISS THE APPEAL AS WITHDRAWN. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE AS WELL AS THE REVENUE FOR THE AY 2007 - 08 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF NOV., 2016. SD/ - SD/ - ( SHAMIM YAHYA) (RAM LAL NEGI) ACOUNTANT MEMBER. JUDICIAL MEMBER. NAGPUR, DATED: 25 TH NOV. , 2016. 4 ITA NO. 390/NAG/2014 & ITA NO. 381/NAG/2014 COPY FORWARDED TO : 1. ZAIDUM LEENG SDN BHD ARTEFCT PROJECTS LTD. (IV), ARTEFECT TOWER, 54/3, CHHATRAPATI SQUARE, WARDHA ROAD, NAGPUR - 440015. 2. D.C.I.T., CENTRAL CIRCLE - 2(1), NAGPUR. 3. C.I.T. - ( CENTRAL ), NAGPUR. 4. CIT(APPEALS), - I II, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.