ASST CIT CEN CIR 8(2), MUMBAI V. ABHIJIT AVARSEKAR, MUMBAI

ITA 396/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9712 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 27-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MEENA
• Assessee Lawyers: RAKESH MOHAN
• Keywords: Search and seizure
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD , JUDICIAL MEMBER ITA NO. 396/MUM/2016 : A.Y : 2007 - 08 ACIT, CENTRAL CIRCLE - 8(2), MUMBAI (APPELLANT) VS. SHRI ABHIJIT AVARSEKAR 1252, PUSHPANJALI APARTMENTS, OLD PRABHADEVI ROAD, PRABHADEVI, MUMBAI 400 025. PAN : AAAPA5573E (RESPONDENT) APPELLANT BY : SHRI R.P. MEENA RESPONDENT BY : SHRI RAKESH MOHAN DATE OF HEARING : 03/07/2017 DATE OF PRONOUNCEMENT : 31 /07/2017 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 48 , MUMBAI DATED 23.11.2015 , PERTAINING TO THE ASSESSMENT YEAR 2007 - 08 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 31.3.2014 UNDER SECTION 153A R.W.S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN ITS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUND OF APPEAL: - 1. ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF UNSECURED LOAN OF RS.37,00,000/ - U/S 2 SHRI ABHIJIT AVARSEKAR ITA NO. 396/MUM/2016 68 OF THE I.T ACT FOLLOWING THE RATIO OF THE DECISION IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (374 ITR 64 5) WITHOUT APPRECIATING THE FACT THAT THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF ALL CARGO LOGISTICS PVT. LTD. (ITA NO. 1414 OF 2013) ON SIMILAR ISSUE HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND SLP HAS BEEN FILED WHICH IS PENDING? 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THERE WAS A SEARCH AND SEIZURE ACTION U/S 132(1) OF THE ACT ON 10.2.2012 IN THE OFFICE PREMISES OF M/S. UNITY INFRAPROJECTS LTD., WHERE ASSESSEE IS ONE OF THE DIRECTORS. IN RESPONSE TO THE NOTICE ISSUED U/S 153A OF THE ACT DAT ED 14.12.2012, ASSESSEE FILED HIS RETURN OF INCOME ON 21.9.2013 DECLARING AN INCOME OF RS.2,82,86,230/ - AS AGAINST THE INCOME ORIGINALLY DECLARED IN THE RETURN FILED U/S 139(1) OF THE ACT OF RS.2,83,15,065/ - . IN THE SUBSEQUENT ASSESSMENT FINALISED U/S 153 A R.W.S 143(3) OF THE ACT DATED 31.3.2014 , THE TOTAL INCOME HAS BEEN ASSESSED AT RS.3,21,60,570/ - . THE ASSESSED INCOME, INTER - ALIA , INCLUDED AN ADDITION OF RS.37,00,000/ - ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN. AS PER THE ASSESSMENT ORDER, IT IS SEEN T HAT DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, ASSESSEE HAD ACCEPTED A LOAN OF RS.37,00,000/ - FROM SMT. BHAVNA MEHTA. IN THE COURSE OF THE IMPUGNED ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO E STABLISH THE IDENTITY AND CREDIT - WORTHINESS OF THE LOAN CREDITOR. THE ASSESSING OFFICER FURTHER RECORDS THAT AS ASSESSEE HAD FAILED TO DISCHARGE HIS BURDEN OF ESTABLISHING THE GENUINENESS OF THE LOAN TRANSACTION AND CREDIT - WORTHINESS OF THE LOAN CREDITOR, THE LOAN OF RS.37,00,000/ - WAS TREATED AS UNEXPLAINED CASH - CREDIT U/S 68 OF THE ACT. THE ADDITION SO MADE BY THE ASSESSING OFFICER HAS SINCE BEEN DELETED BY T HE CIT(A) FOLLOWING THE RATIO OF THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT 3 SHRI ABHIJIT AVARSEKAR ITA NO. 396/MUM/2016 IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (ITA NO. 1414 OF 2013) . AGAINST SUCH A DECISION, REVENUE IS IN APPEAL BEFORE US. 4. BEFORE US , THE ONLY PLEA RAISED BY THE REVEN UE IS THAT THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND AN SLP HAS BEEN FILED BEFORE THE HON'BLE SUPREME COURT. 5. HAVING CONSIDERED THE ARGUMENTS RAISED B Y THE REVENUE, WE FIND NO REASONS TO INTERFERE WITH THE DECISION OF THE CIT(A), AS OUR SUBSEQUENT DISCUSSION WOULD SHOW. OSTENSIBLY, IN THE PRESENT CASE, A SEARCH AND SEIZURE ACTION WAS CARRIED OUT U/S 132(1) OF THE ACT ON 10.2.2012 AND AS ON THAT DATE, N O ASSESSMENT WAS PENDING FOR THE INSTANT ASSESSMENT YEAR AND, THEREFORE, IN TERMS OF THE SECOND PROVISO TO SEC. 153A(1) OF THE ACT, SUCH ASSESSMENT DID NOT ABATE. IN FACT, IT IS NOTICED BY THE LOWER AUTHORITIES THAT AS A CONSEQUENCE OF AN EARLIER SEARCH A CTION U/S 132(1) OF THE ACT DATED 23.11.2007 , AN ASSESSMENT U/S 153A R.W.S. 143(3) OF THE ACT WAS COMPLETED ON 18.12.2009. BE THAT AS IT MAY, IT IS QUITE CLEAR THAT THE ORIGINAL ASSESSMENT WAS NOT PENDING ON THE DATE OF THE SEARCH AND, THEREFORE, THE SAME DID NOT ABATE. IN THIS BACKGROUND, IN TERMS OF THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA), NO ADDITION COULD BE MADE IN THE IMPUGNED ASSESSMENT WITH RESPECT TO AN ISSUE WHICH HAD BECOME FINAL IN T HE EARLIER ASSESSMENT PROVIDED THERE WAS NO INCRIMINATING MATERIAL FOUND IN THE COURSE OF THE SEARCH OR ANY POST - SEARCH INQUIRIES . NOTABLY, IN THE EARLIER ASSESSMENT FINALISED PRIOR TO THE IMPUGNED SEARCH, NO ADDITION HAS BEEN MADE WITH REGARD TO THE 4 SHRI ABHIJIT AVARSEKAR ITA NO. 396/MUM/2016 LOAN RECEIVED FROM SMT. BHAVNA MEHTA AND FURTHER, THE DISCUSSION IN THE ASSESSMENT ORDER DOES NOT REVEAL ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF THE SEARCH OR IN THE POST - SEARCH INQUIRIES WHICH WOULD JUSTIFY INVOKING OF SEC. 68 OF THE ACT QUA THE CRE DIT OF RS.37,00,000/ - STANDING IN THE NAME OF SMT. BHAVNA MEHTA. THE AFORESAID MATRIX HAS PREVAILED WITH THE CIT(A) IN DELETING THE ADDITION, WHICH IS IN CONSONANCE WITH THE RATIO LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA). BEFORE US, THERE IS NO ARGUMENT SET - UP BY THE REVENUE TO POINT OUT THAT THERE WAS ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH OR IN THE POST - SEARCH INQUIRIES QUA THE CREDIT OF RS.37,00,000/ - STANDING IN THE NAME OF SMT . BHAVNA MEHTA. THEREFORE, WE FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE ULTIMATE DECISION OF THE CIT(A) IN DELETING THE ADDITION, WHICH IS HEREBY AFFIRMED. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 3 1 S T JULY, 2017. SD/ - SD/ - (RAVISH SOOD) JUDICIAL MEMBER ( G.S. PANNU ) ACCOUNTANT MEMBER MUMBAI, DATE : 3 1 S T JULY, 2017 * SSL * COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 5 SHRI ABHIJIT AVARSEKAR ITA NO. 396/MUM/2016 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI