DCIT, CIRCLE- 1(1), GURGAON V. DLF UNIVERSAL LTD. (formerly known as DLF Retail Developers Ltd.), NEW DELHI

ITA 5558/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6139 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 31-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Search and seizure; Rule 8D
• Section: 153A; 14A; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DLEHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.5558/DEL/2017 ASSESSMENT YEAR: 2008-09 DCIT, CIRCLE 1(1), VS. DLF UNIVERSAL LTD., (FORMERLY GURGAON. KNOWN AS DLF RETAIL DEVELOPERS LTD.), 9 TH FLOOR, DLF CENTRE, SANSAD MARG, NEW DELHI. PAN : AAACJ 1655P C.O. NO. 231/DEL/2017 (IN ITA NO.5558/DEL/2017) ASSESSMENT YEAR: 2008-09 DLF UNIVERSAL LTD., (FORMERLY VS. DCIT, CIRC LE 1(1), KNOWN AS DLF RETAIL DEVELOPERS GURGAON. LTD.), 9 TH FLOOR, DLF CENTRE, SANSAD MARG, NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : MS. NIDHI SRIVASTAVA, CIT/DR ASSESSEE BY : SH. R.S. SINGHVI, C.A. DATE OF HEARING: 22/01/2020 DATE OF ORDER : 13/02/2020 ORDER PER K. NARASIMHA CHARY, J.M. CHALLENGING THE ORDER DATED 29/07/2013 IN APPEAL NO . 140/15-16 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-1, GURGAON 2 (LD. CIT(A)), FOR ASSESSMENT YEAR 2008-09, IN THE CASE OF M/S. DLF UNIVERSAL LTD. (THE ASSESSEE), REVENUE PREFERRED THIS APPEA L. THE ASSESSEE HAS ALSO FILED CROSS-OBJECTIONS CHALLENGING THE VALIDITY OF INITIATION OF PROCEEDINGS U/S. 153A OF THE INCOME-TAX ACT, 1961 (THE ACT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT. FOR THE AS SESSMENT YEAR 2008-09, THEY HAVE FILED RETURN OF INCOME ON 29.09.2008 DECL ARING A TOTAL INCOME OF RS.2,85,15,17,102/- AND REVISED THE SAME ON 07.02.2 009 WITH DECLARED INCOME OF RS.2,85,15,27,398/-. SUBSEQUENTLY, PURSUA NT TO THE SEARCH AND SEIZURE ACTION CARRIED OUT IN THE CASE OF M/S. ORRI S INFRASTRUCTURE LIMITED GROUP OF CASES ON 16.01.2013, NOTICE U/S. 153A OF T HE ACT WAS ISSUED ON 10.03.2015. THE ASSESSEE REPLIED THAT NEITHER ANY S EARCH WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE NOR ANY INQUIRY WAS CO NDUCTED BY THE INVESTIGATION WING AND THE SAID NOTICE WAS ISSUED O N THE BASIS OF SEARCH CONDUCTED IN THE CASE OF ORRIS INFRASTRUCTURE LIMIT ED, WHEREIN SOME DOCUMENTS WERE FOUND IN THE LOCKER MAINTAINED BY TH E ASSESSEE AND M/S. ORRIS INFRASTRUCTURE GROUP JOINTLY. THE ASSESSEE, H OWEVER, FILED ITS RETURN OF INCOME, AS WAS FILED EARLIER ONLY. THE ASSESSMENT U /S. 153A/143(3) OF THE ACT WAS COMPLETED BY ORDER DATED 30.03.2015 AT AN INCOM E OF RS.28,75,90,520/- BY MAKING ADDITION OF RS.2,03,63,120/- U/S. 14A REA D WITH RULE 8D OF THE RULES. 3. AGGRIEVED BY SUCH AN ADDITION, THE ASSESSEE PREF ERRED APPEAL BEFORE THE CIT(A) AND CONTENDED THAT THE DIVIDEND INCOME I TSELF IS RS.26,51,114/- AND FURTHER THAT NO DOCUMENT PERTAINING TO THE ASSE SSEE WAS FOUND FROM ANY OF THE TWO LOCKERS, IN RESPECT OF WHICH WARRANT OF AUTHORIZATION BEARING THE NAME OF THE ASSESSEE WAS ISSUED. IT WAS FURTHER CON TENDED THAT THE ONLY 3 DOCUMENT FOUND PERTAINING TO THE ASSESSEE FROM THE OFFICE OF M/S. ORRIS INFRASTRUCTURE LTD. DOES NOT BELONG TO THE ASSESSEE . 4. THE LD. CIT(A) CONSIDERED THE MATERIAL AVAILABLE BEFORE HIM AND REACHED A FACTUAL CONCLUSION THAT NO DOCUMENT PERTA INING TO THE ASSESSEE QUA THE ADDITION U/S. 14A READ WITH RULE 8D WAS FOU ND DURING THE SEARCH AND THEREFORE, IN THE LIGHT OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA, 380 ITR 573 AND PCIT VS. K URELE PAPER MILLS LTD., 380 ITR 571, THE LD. CIT(A) DIRECTED THE DELETION OF TH E DISALLOWANCE. 5. THE REVENUE FILED THIS APPEAL CHALLENGING SUCH D ELETION OF THE ADDITION MADE BY THE ASSESSING OFFICER U/S. 14A REA D WITH RULE 8D, WHEREAS THE ASSESSEE PREFERRED THE CROSS OBJECTION STATING THAT THE CIT(A) SHOULD HAVE ADJUDICATED THE CHALLENGE OF THE ASSESSEE TO I NITIATION OF PROCEEDINGS U/S. 153A WHEN NO SEARCH WAS CONDUCTED ON THE ASSES SEE. 6. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF SUBMISSIONS MADE ON EITHER SIDE. THE ASSESSMENT ORDER DOES NOT SHOW ANY MATERIAL SEIZED IN THE SEARCH AND SEIZURE PROCEEDINGS TO FORM A BASIS FOR ADDITION U/S. 14A READ WITH RULE 8D OF THE RULES. IT IS NOT IN DISPUTE THA T AS ON THE DATE OF ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER U/S. 153A, THE ASSESSMENT FOR THE ASSESSMENT YEAR 2008-09 WAS A CONCLUDED ONE AND THEREFORE, IT DOES NOT GET ABATED. IT IS SETTLED PRINCIPLE OF LAW THAT IN TERMS OF DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KA BUL CHAWLA (SUPRA), CHINTELS INDIA LTD VS. DCIT, 397 ITR 416 (DEL), PCIT VS. BES T INFRASTRUCTURE (INDIA) LTD., 397 ITR 82 (DEL), PCIT VS. MEETA GUTGUTIA, 395 ITR 526 (DEL), LD. PCIT VS. MS LATA JAIN, 384 ITR 543 (DEL), THE ASSESSMENTS AND R EASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE AND THE TOTAL IN COME FOR SUCH ASSESSMENT 4 YEARS WILL HAVE TO BE COMPUTED BY THE ASSESSING OFF ICERS AS A FRESH EXERCISE; AND THAT ALTHOUGH SECTION 153A OF THE ACT DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILA BLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY, AN ASSESSMENT HAS TO BE MADE U NDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL. IN THE ABSENCE OF ANY MATERIAL TO THE CONTRARY, IT IS NOT POSSIBLE FOR US TO FIND FAULT W ITH THE FINDINGS OF THE LD. CIT(A) WHILE FOLLOWING THE DECISION OF HONBLE JURI SDICTIONAL HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA) TO REACH A CONCLUSION THAT THE ADDITION MADE U/S. 14A READ WITH RULE 8D CANNOT BE SUSTAINED IN T HE ABSENCE OF ANY INCRIMINATING MATERIAL UN-EARTHED DURING THE SEARCH PROCEEDINGS. WE, ACCORDINGLY FIND THE GROUNDS OF APPEAL AS DEVOID OF MERITS AND THE SAME ARE LIABLE TO BE DISMISSED AND ARE ACCORDINGLY DISMISSE D. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED AND CONSEQUENTLY, THE C ROSS OBJECTIONS FILED BY THE ASSESSEE BECOMES INFRUCTUOUS. THE CROSS OBJECTI ONS OF THE ASSESSEE ARE, THEREFORE, ALSO DISMISSED AS INFRUCTUOUS. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND CRO SS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH FEBRUARY, 2020. SD/- SD/- (PRASHANT MAHARISHI) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13/02/2019 AKS