ACIT CC 22 & 30 CEN RG 5, MUMBAI V. WELSPUN SYNTEX LTD, MUMBAI

ITA 5474/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2517 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Department
• Bench Allotted: G
• Next Hearing Date: 16-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 28-08-2014
• Court: TRIBUNAL
• Department Lawyers: MRS VIDISHA KALRA
• Assessee Lawyers: MITESH SHAH
• Section: 143(3); 153A; 14A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER I.T.A. NO.5474/M/2014 (ASSESSMENT YEAR: 2005 - 2006 ) ACIT, CC - 22, R.NO.404, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI 400 020. / VS. WELSPUN HOUSE, 9 TH FLOOR, TRADE WORLD, B - WING, KAMALA MILLS COMPOUND, S B MARG, LOWER PAREL (W), MUMBAI - 13. ./ PAN : AAACW0489L ( / APPELLANT) .. ( / RESPONDENT ) C.O. NO.60/M/2016 (ARISING OUT OF I.T.A. NO.5474/M/2014) (ASSESSMENT YEAR: 2005 - 2006 ) WELSPUN HOUSE, 9 TH FLOOR, TRADE WORLD, B - WING, KAMALA MILLS COMPOUND, S B MARG, LOWER PAREL (W), MUMBAI - 13. / VS. ACIT, CC - 22, R.NO.404, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI 400 020. ./ PAN : AAACW0489L ( / APPELLANT) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI MITESH SHAH / REVENUE BY : MRS. VIDISHA KALRA, CIT - DR / DATE OF HEARING : 16.06.2016 / DATE OF PRONOUNCEMENT : 20.07 .2016 / O R D E R PER D. KARUNAKARA RAO, AM: THE CAPTIONED APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005 - 06. SINCE, THE ISSUES RAISED IN THESE APPEALS ARE INTER - CONNECTED, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOW ING PARAGRAPHS OF THIS ORDER. 2 ITA NO.5474/M/2014 (BY REVENUE) 2. THIS APPEAL FILED BY THE REVENUE ON 28.8.2014 IS AGAINST THE ORDER OF THE CIT (A) - 39, MUMBAI DATED 24.6.2014 FOR THE AY 2005 - 06. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN HOLDING THAT INITIATION OF THE ASSESSMENT PROCEEDINGS AND COMPLETION OF THE ASSESSMENT U/S 143(3) R.W.S 153A BY THE ASSESSING OFFICER AS BAD IN LAW A ND WITHOUT JURISDICTION. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN NOT DECIDING THE ISSUE ON MERIT AND ALLOWING THE APPEAL OF THE ASSESSEE WITHOUT APPRECIATING THAT THE AO RIGHTLY ADDED BACK THE SUM OF RS. 49,73,391/ - ON ACCOUNT OF DISALLOWANCE U/S 14A. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN NOT DECIDING THE ISSUE ON MERIT AND ALLOWING THE APPEAL OF THE ASSESSEE WITHOUT APPRECIATING THAT THE AO RIGHTL Y ADDED BACK THE ADDITION OF RS. 52,23,391/ - TO THE BOOK PROFIT. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN RESTRICTING CARRY FORWARD OF UNABSORBED ALLOWANCES. 3. THE CORE ISSUE INVOLVED IN THIS APPEAL IS TH E VALIDITY OF THE ADDITIONS MADE U/S 14A OF THE ACT, UNRELATED TO THE SEARCHED MATERIAL WHEN IT IS A CASE OF ASSESSMENT U/S 153A OF THE ACT IN THE CONTEXT OF UN - ABATED ASSESSMENT. IN THE PRESENT CASE, THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT BEF ORE THE ACTION U/S 132 OF THE ACT. IN THIS REGARD, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE CO BECOMES INFRUCTUOUS AND ACADEMIC IF THE ORDER OF THE CIT (A) IS CONFIRMED DISMISSING THE GROUNDS RAISED BY THE REVENUE. THEREFORE, WE TAKE UP THE REVENUES APPEAL ON THE ISSUE OF ADDITIONS MADE U/S 14A OF THE ACT. 4. THIS IS THE CASE OF ASSESSMENT U/S 143(3) OF THE ACT. EARLIER, THE SCRUTINY ASSESSMENT WAS COMPLETED IN REGULAR COURSE. IN THE RE - ASSESSMENT MADE U/S 153A OF THE ACT, ASSESSIN G OFFICER MADE A DISALLOWANCE U/S 14A OF THE ACT AMOUNTING TO RS. 49,73,391/ - . IT IS AN ADMITTED FACT THAT NO INCRIMINATING MATERIAL WAS CITED BY THE AO IN THE ASSESSMENT ORDER TO BACK UP THE ABOVE DISALLOWANCE. CONSIDERING THESE FACTS, CIT (A) GRANTED RE LIEF AS PER THE DISCUSSION GIVEN IN PARA 9 OF HER ORDER DATED 24.6.2014. 5. AFTER HEARING BOTH THE PARTIES, WE HAVE PERUSED THE ORDERS OF THE REVENUE AUTHORITIES IN GENERAL AND THE SAID PARA 9 OF THE CIT (A)S ORDER IN PARTICULAR. WE FIND, THE SAME IS RE LEVANT HERE. CONSIDERING THE SIGNIFICANCE OF THE SAID PARA 9 OF THE CIT (A)S ORDER FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAME IS EXTRACTED AS UNDER: - 9. IN VIEW OF THE ABOVE DISCUSSION, FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE HONBL E MUMBAI TRIBUNAL IN CASE OF ALL CARGO GLOBAL LOGISTICS LTD VS. DEPUTY CIT (18 ITR 106) (SB) IT IS HELD THAT IN THE INSTANT CASE, THE ASSESSING OFFICER DID NOT HAVE POWER TO MAKE ANY ADDITION OR RESTRICTION IN ABSENCE OF INCRIMINATING MATERIAL. THEREFORE, IT FOLLOWS THAT BOTH THE ADDITIONS MADE BY THE ASSESSING OFFICER TO THE INCOME AND BOOK PROFIT AND 3 RESTRICTING ON UNABSORBED ALLOWANCES ARE BEYOND SCOPE OF SECTION 153A. GROUND 1 IS DECIDED IN FAVOUR OF THE APPELLANT. HAVING DECIDED ON THE VALIDITY OF T HE ADDITIONS / ASSESSMENT, THE OTHER GROUNDS, ON THE MERITS OF THE ADDITION MADE, ARE NOT ADJUDICATION UPON. 6. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT CIT (A) RIGHTLY ADJUDICATED THE ISSUE WHILE GRANTING RELIEF TO THE ASSESSEE. THEREFORE, IN OUR VIEW, THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 8. NOW WE SHALL TAKE UP THE CO FILED BY THE ASSESSEE. BASICALLY, CO SUPPORTS THE DECISION OF THE CIT (A) APART FROM QUESTIONING THE VALIDITY OF THE ADDITIONS U/S 14A OF THE ACT. THEREFORE, CONSIDERING OUR DECISION ON THE ISSUE OF ADDITIONS MADE U/S 14A OF THE ACT, WHICH IS DECIDED IN FAVOUR OF THE ASSESSEE IN THE ABOVE PARAS OF THIS ORDER, THE ADJUDICATION OF THE CO BECOMES INFRUCTUOUS. ACCORDINGLY, CO RAISED BY THE ASSESSEE IS DISMISSED AS INFRUCTUOUS. 9. IN THE RESULT, CO RAISED BY THE ASSESSEE IS DISMISSED AS INFRUCTUOUS. 10. CONCLUSIVELY, APPEAL OF THE REVENUE AND THE CO RAISED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 2 0 T H J U L Y , 2016. S D / - S D / - (C.N. PRASAD) (D. KARUNAKARA RAO) (JUDICIAL MEMBER) ACCOUNTANT MEMBER MUMBAI ; 2 0 . 7 .2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI