DCIT 14(1)(1), MUMBAI V. ADITYA MARINE LID, MUMBAI

ITA 429/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7393 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 29-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHENDR
• Keywords: Reopening of assessment; Tangible material
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A, MU MBAI BEFORE SHRI B.R. BASAKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.429/MUM/2016 (ASSESSMENT YEAR- 2006-07) DCIT-14(1)(1), ROOM NO.460, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. M/S ADITYA MARINE LTD. 411, RAIKAR CHAMBER, 234, N.G. ACHARYA MARG, GOVANDI, MUMBAI-400088 PAN:-AACEA8257C (APPELLANT) (RESPONDENT) REVENUE BY : SHRI M.C. OMI NINGSHEN-DR ASSESSEE BY : SHRI AJIT KUMAR JAIN & SHRI SIDDHESH CHAUGULE DATE OF HEARING : 08/05/2018 DATE OF PRONOUNCEMENT : 18/05/2018 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY THE REVENUE U/S 253 OF THE INCOME TA X ACT, DIRECTING AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) -10, MUMBAI, DATED 23/10/2015 FOR THE ASSESSMENT YEAR 20 06-07. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A), ERRED IN HOLDING THE REOPENING OF ASSESSMENT FOR T HE A.Y. 2006-07 AS NOT PROPER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A), ERRED IN DELETING THE ADDITION MADE BY THE A. O. OF `. 7,45,45,449/- AGAINST THE SURVEY FEES, EXCESS PAYMENT OF LIAONING FEES AN D SUPPRESSION OF GP/NP. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COMPA NY IS ENGAGED IN THE BUSINESS OF CLEARING & FORWARDING SHIPPING AGEN T/CARGO & VESSEL ITA NO. 429/MUM/2016 - M/S ADITYA MAR INE LTD. 2 HANDLING, SURTAX PLANT EXPORT TRADING, PRODUCTION O F POWER THROUGH WIND MILL EQUIPMENT AND E-FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 31/10/2007, DECLARING TOTAL INCOME AT RS . NIL. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT. SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED U/S 147 OF THE ACT. A NOTICE U/S 148 OF TH E ACT DATED 26/03/2013 WAS SERVED UPON THE ASSESSEE. ASSESSMENT WAS REOPEN ED ON THE BASIS OF SURVEY REPORT RECEIVED FROM ACIT GANDHIDHAM DATED 2 6/03/2013. IT WAS REPORTED BY ACIT GANDHIDHAM THAT A SURVEY WAS CONDU CTED ON 27- 29/12/2012 AT BRANCH OFFICE OF THE ASSESSEE COMPANY AT GANDHIDHAM. STATEMENT OF MANAGING DIRECTOR WAS RECORDED ON 01/0 1/2013 AND 02/01/2013, ON THE BASIS OF SAID REPORT THE ASSESSI NG OFFICER ISSUED NOTICE U/S 148 OF THE ACT ON THE GROUND THAT DUE TO UN-DIS CLOSURE OF FULLY AND TRULY ALL MATERIAL FACTS, NECESSARY FOR ASSESSMENT BY THE ASSESSEE THE INCOME ESCAPED ASSESSMENT. THE ASSESSEE FILED ITS OBJECTIO N AGAINST THE REOPENING OF THE ASSESSMENT AND REQUESTED FOR REASONS OF REOP ENING. THE REASONS OF REOPENING WAS PROVIDED TO THE ASSESSEE VIDE LETTER DATED 01/10/2013. IN RESPONSE TO THE REASONS OF REOPENING, THE ASSESSEE AGAIN RAISED OBJECTION ON 03/10/2013 AND CONTENDED THAT THE ASSESSMENT CANNOT BE REOPENED ON THAT REPORT. THE OBJECTION OF THE ASSESSEE WAS DISPOSED OF AND WAS COMMUNICATED TO THE ASSESSEE VIDE LETTER DATED 13.0 1.2014. THE LD. ASSESSING OFFICER PROCEEDED FOR REASSESSMENT U/S 14 3(3) R.W.S. 147 OF THE ACT. THE RE-ASSESSMENT WAS COMPLETED ON 28/03/2014 . THE ASSESSING ITA NO. 429/MUM/2016 - M/S ADITYA MAR INE LTD. 3 OFFICER WHILE PASSING ASSESSMENT ORDER DISALLOWED T HE SURVEY FEES OF RS.2,07,991/- AND 50% OF LIASONING FEES I.E. RS.3, 62,14,274/-. THE ASSESSING OFFICER ALSO ESTIMATED THE NET PROFIT @ 1 7%. ON APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THE R EASSESSMENT WAS HELD IN IMPROPER AND INVALID. THE ASSESSEE WAS ALSO GRAN TED RELIEF ON VARIOUS ADDITIONS. THEREFORE, AGGRIEVED BY THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE FILED PRESENT APP EAL BEFORE US. 4. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE ( DR) FOR THE REVENUE AND THE LD. AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. D EPARTMENTAL REPRESENTATIVE FOR THE REVENUE SUPPORTED THE ORDER OF THE LD. ASSESSING OFFICER. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMIT S THAT ASSESSMENT WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED FROM ACIT GANDHIDHAM. IN THE SAID REPORT, THERE WAS CREDIBLE INFORMATION ABO UT THE PAYMENT OF BOGUS SURVEY FEES. THE LD. (DR) OF THE REVENUE SUBMITS TH AT THE AO MADE REOPENING ON THE BASIS OF SURVEY REPORT BY ACIT GAN DHIDHAM, WHEREIN, IT WAS REPORTED THAT SURVEY COMMISSION PAID BY THE ASS ESSEE WAS FOUND TO BE BOGUS. ON THE OTHER HAND THE LD. AR FOR THE ASSESS EE SUBMITS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS OBSERVED T HAT NO INCRIMINATING MATERIAL WAS FOUND FOR ASSESSMENT YEAR 2013-14 OR F OR ASSESSMENT YEAR 2006-07 DURING THE COURSE OF SURVEY PROCEEDINGS, TH EREFORE, THE LD. ITA NO. 429/MUM/2016 - M/S ADITYA MAR INE LTD. 4 COMMISSIONER OF INCOME TAX (APPEALS), AFTER CONSIDE RING THE FACTS OF THE CASE, QUASHED THE NOTICE U/S 148 OF THE ACT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE A SSESSMENT FOR UNDER CONSIDERATION WAS INITIALLY COMPLETED ON 13/12/2008 U/S 143(3) OF THE ACT. THE ASSESSMENT WAS REOPENED UNDER SECTION 147 ON 26 /03/2013. THE REOPENING IS BEYOND FOUR YEARS FROM THE END OF RELE VANT ASSESSMENT YEAR. AS PER PROVISO OF SECTION 147 OF THE ACT, NO REOPEN ING IS PERMISSIBLE BEYOND THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PAR T OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT. A PERUSAL OF REASONS RECORDED/CONVEYED TO THE ASSESSE E REVEALS THAT THERE IS NO REFERENCE IF THE INCOME ESCAPED ASSESSMENT BY NO T DISCLOSING ALL MATERIAL FACTS TRULY AND FULLY NECESSARY FOR ASSESS MENT. WE HAVE FURTHER NOTED THAT THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) HAS RECORDED THAT NO EVIDENCE RELATING TO THE ASSESSMENT YEAR 20 06-07 WAS FOUND DURING THE SURVEY PROCEEDINGS. SURVEY WAS CONDUCTED ON 27- 29/12/2012 AND THAT ASSESSMENT U/S 143(3) R.W.S. 147 WAS PASSED ON 28/0 3/2014. NO TANGIBLE EVIDENCE HAS BEEN TAKEN ON RECORD WHICH MAY SHOW TH AT THERE WAS MATERIAL/EVIDENCE FOR REOPEN THE ASSESSMENT FOR ASS ESSMENT YEAR 2006-07. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONCLU DED THAT IN ABSENCE ITA NO. 429/MUM/2016 - M/S ADITYA MAR INE LTD. 5 OF TANGIBLE MATERIAL, THE LD. ASSESSING OFFICER IS BARRED FROM REVIVING HIS OWN ORDER AS PER THE DECISION OF HONBLE SUPREME CO URT IN THE CASE OF KELVINATOR (INDIA) LTD.(SUPRA). IN OUR VIEW, IN AB SENCE OF ANY TANGIBLE MATERIAL, THE REOPENING OF ASSESSMENT U/S 147 OF TH E ACT BEYOND THE PERIOD OF FOUR YEAR FROM THE END OF RELEVANT ASSESSMENT YE ARS IS NOT PERMISSIBLE. THUS, WE DO NOT FIND ANY REASON TO INTERFERE WITH T HE FINDING OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). NO CONTRARY L AW IS BROUGHT TO OUR NOTICE TO TAKE DIFFERENT VIEW. IN THE RESULT, GROUN D NO.1 OF THE APPEAL, RAISED BY THE REVENUE IS DISMISSED. 6. SINCE, WE HAVE UPHELD THE FINDING OF THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) IN GROUND NO.1 HOLDING THAT T HE REOPENING U/S 147 OF THE ACT WAS INVALID, THEREFORE, DISCUSSION ON OT HER GROUND OF APPEAL ON MERIT RAISED BY THE REVENUE HAVE BECOME ACADEMIC. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON DAY OF 18 TH MAY 2018. SD/- SD/- (B.R.BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 18/05/2018 SHEKHAR. P.S 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.