AR. Murugadoss, CHENNAI V. ACIT, CHENNAI

ITA 560/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77360 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2014
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 27-05-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 07-03-2014
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Depreciation; Corroborative evidences
• Section: 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NOS. 559, 560, 561, 562, 563 & 564/MDS/2014 ASSESSMENT YEARS : 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 & 2009-10 SHRI A.R.MURUGADOSS, D.NO.136, FLAT NO.9E, BLOCK 3, CEEBROS, SHYAMALA GARDEN, ARCOT ROAD, SALIGRAMAM, CHENNAI-600 093 [PAN: AICPM 9576 F] ( !% /APPELLANT) VS ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II(2), 121, MAHATMA GANDHI ROAD, CHENNAI-600 034 ( &'!% /RESPONDENT) / APPELLANT BY : SHRI A.S.SRIRAMAN, ADVOCATE / RESPONDENT BY : SHRI S.DAS GUPTA, JCIT / DATE OF HEARING : 27-05-2014 / DATE OF PRONOUNCEMENT : 16-06-2014 #( / O R D E R PER VIKAS AWASTHY, J.M: THE SET OF SIX APPEALS HAVE BEEN FILED BY THE ASSE SSEE IMPUGNING THE ORDER OF COMMISSIONER OF INCOME TAX(A )(C)-II, CHENNAI, DATED 20-12-2013 COMMON FOR ALL THE SIX AS SESSMENT YEARS (AYS). IN ALL THE APPEALS, THE ASSESSES HAS IMPUGNED THE FINDINGS OF THE CIT(APPEALS) WITH RESPECT TO: I. DIS-ALLOWANCE OF EXPENDITURE; AND I.T.A. NOS. 559 TO 564/MDS/2014 2 II. DIS-ALLOWANCE OF DEPRECIATION ON MOTOR-CAR, MOB ILE PHONE AND COMPUTERS AS PERSONAL IN NATURE TO THE EXTENT O F 25%. SINCE IN ALL THE APPEALS, COMMON ISSUES ARE RAISED, ALL THE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION. 2. THE FACTS IN BRIEF ARE: THE ASSESSEE IS A FILM DIRECTOR. A SEARCH OPERATION WAS CONDUCTED U/S.132 OF THE OF TH E INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) O N 19-01-2010 IN THE RESIDENTIAL PREMISES OF THE ASSESSEE AT SHYAMAL A GARDEN, ARCOT ROAD, SALIGRAMAM, CHENNAI-93 AND SURVEY U/S.1 33A AT THE OFFICE PREMISES AT 1B, SOWMITRI APARTMENTS, 18/4, 1 9 TH AVENUE, ASHOK NAGAR, CHENNAI. NOTICE U/S.142 R.W.S. 153A WAS ISSUED TO THE ASSESSEE FOR ALL THE SIX AYS I.E., FROM 2004-05 TO 2009-10. THE ASSESSEE ASKED THE ASSESSING OFFICER TO TREAT THE O RIGINAL RETURN FILED FOR THE RESPECTIVE AYS AS RETURN IN PURSUANCE TO NOTICE ISSUED U/S.142 R.W.S.153A. THE ASSESSEE HAD FILED RETURN OF INCOME FOR THE AYS.2004-05 TO 2009-10 AND THE ASSESSMENT FOR T HE RESPECTIVE AY WAS COMPLETED U/S.143(1). CONSEQUENT TO THE SEARCH, THE ASSESSING OFFICER FINALISAED THE ASSESS MENT ORDER FOR THE AFOREMENTIONED AYS U/S.153A R.W.S.143(3) OF THE ACT BY MAKING ADDITIONS INTER ALIA ON ACCOUNT OF : I.T.A. NOS. 559 TO 564/MDS/2014 3 I. DIS-ALLOWANCE OF CERTAIN EXPENSES, FOR LACK OF SUPPORTING EVIDENCE: AY. 2004 - 05 2005 - 06 2006 - 07 2007 - 08 2008 - 09 2009 - 10 EXPENDITURE DIS-ALLOWED 69,719 2,64,195 10,819 63,530 95,263 49,411 II. DIS-ALLOWANCE OF DEPRECIATION IN RESPECT OF MOT OR-CAR, MOBILE PHONE AND COMPUTER TO THE EXTENT OF 50% ON ACCOUNT OF PERSONAL USE. AGGRIEVED BY THE ASSESSMENT ORDERS, THE ASSESSEE P REFERRED APPEALS BEFORE THE CIT(APPEALS) FOR THE RESPECTIVE AYS. THE CIT(APPEALS), CONFIRMED THE ORDER OF ASSESSING OFFI CER WITH REGARD TO THE DIS-ALLOWANCE OF EXPENDITURE ON THE GROUND T HAT THE EXPENDITURES WERE NOT SUPPORTED BY VOUCHERS AND THE DETAILS OF PAYMENT MADE BY CHEQUE. AS FAR AS DEPRECIATION IS CONCERNED, THE CIT(APPEALS) PARTLY ACCEPTED THE PLEA OF ASSESS EE AND RESTRICTED THE SAME TO 25%. NOT SATISFIED WITH THE ORDER OF CIT(APPEALS), THE ASSESSEE HAS COME IN SECOND APPEA L BEFORE THE TRIBUNAL. 3. SHRI A.S.SRIRAMAN, APPEARING ON BEHALF OF THE AS SESSEE SUBMITTED THAT THE ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER WITHOUT ANY VALID REASON OR JUSTIFICATION. THE ORIGINAL ASSESSMENTS FOR THE RESPECTIVE AYS WERE COMPLETED U /S.143(1) I.T.A. NOS. 559 TO 564/MDS/2014 4 AND AT THE TIME OF SEARCH, NO ASSESSMENT FOR THE IM PUGNED AYS WAS PENDING. NO INCRIMINATING MATERIAL WAS FOUND D URING THE SEARCH. THEREFORE, THE ADDITION MADE BY THE AUTHOR ITIES BELOW IS NOT TENABLE. IN ORDER TO SUPPORT HIS SUBMISSIONS, THE LD.COUNSEL PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF A.B.S.SANJJAY VS. ACIT IN ITA NOS.1691, 1692 & 1693/MDS/2013 DECIDED ON 24-01-2014. 4. ON THE OTHER HAND, SHRI S.DAS GUPTA, APPEARING O N BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE IMPUGNED ORDER AND PRAYED FOR DISMISSAL OF THE APPEALS OF THE ASSESSEE . 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CONSIDERED THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL ON WHICH THE LD.C OUNSEL HAS PLACED RELIANCE. IT IS AN UN-DISPUTED FACT THAT TH E ASSESSEE HAD ALREADY FILED RETURNS OF THE INCOME FOR THE AYS UND ER CONSIDERATION. THE ASSESSMENT FOR THE RESPECTIVE AYS HAD ALREADY B EEN COMPLETED U/S.143(1). THUS, AT THE TIME OF SEARCH, THE ASSESSEE HAD ALREADY FILED RETURNS FOR THE IMPUGNED AYS AND ASSESSMENTS FOR THE SAME WERE COMPLETED. FROM THE PERUSAL OF T HE ORDERS OF I.T.A. NOS. 559 TO 564/MDS/2014 5 THE AUTHORITIES BELOW, WE FIND THAT DURING SEARCH O PERATIONS, NO INCRIMINATING MATERIAL WAS SEIZED. THE ADDITIONS O N ACCOUNT OF DIS-ALLOWANCE OF EXPENSES AND DIS-ALLOWANCE OF DEPR ECIATION WERE MADE FROM THE DOCUMENTS ALREADY ON RECORD. THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD., VS. DCIT REPORTED AS 137 ITD 287 (MUMBAI) (SB) HAS HELD THAT WHERE THE ASSESSMENTS ARE COMPLETED A ND NO ASSESSMENT IS PENDING AT THE TIME OF ASSESSMENT U/S .153A, RE- ASSESSMENT CAN BE MADE ONLY IF INCRIMINATING MATERI ALS ARE COLLECTED IN THE COURSE OF SEARCH AND THE ITEMS INC LUDED IN THE EARLIER AYS CANNOT BE RE-CONSIDERED THROUGH RE-ASSE SSMENT. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF A.B.S.SANJJAY VS. ACIT (SUPRA) HAS FOLLOWED THE DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD., VS. DCIT (SUPRA), AND THE JUDGMENT OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) VS. ACIT REPORTED AS 88 DTR (RAJ) 1 AND DELETED THE ADDITION S MADE ON SIMILAR GROUNDS. 6. THE HONBLE HIGH COURTS AND DIFFERENT BENCHES OF THE TRIBUNAL HAVE BEEN CONSISTENTLY TAKING A VIEW THA T IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SEARCH OF REQUISITION, THE QUESTION OF RE-ASSESSMENT OF THE CONCLUDED ASSE SSMENT DOES I.T.A. NOS. 559 TO 564/MDS/2014 6 NOT ARISE. NOW, IT IS A WELL SETTLED LAW THAT RE-A SSESSMENT OF THE CONCLUDED ASSESSMENT IS PERMITTED IN ASSESSMENT U/S .153A ONLY IF INCRIMINATING MATERIAL ARE FOUND IN THE COURSE OF S EARCH. IN THE PRESENT CASE, WE DO NOT FIND EITHER FROM TH E ASSESSMENT ORDER OR FROM THE ORDER OF THE FIRST APP ELLATE AUTHORITY THAT ANY INCRIMINATING MATERIAL WAS FOUND DURING SE ARCH OPERATION SO AS TO DIS-ALLOW EXPENDITURE. WE FIND MERIT IN T HE SUBMISSIONS MADE BY THE LD.COUNSEL FOR THE ASSESSEE AND DELETE THE ADDITIONS ON ACCOUNT OF DIS-ALLOWANCE OF EXPENDITURE AND DEPR ECIATION. IN THE RESULT, ALL THE SIX APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON MONDAY, THE 16 TH JUNE, 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( ! ) (DR. O.K. NARAYANAN) (VIKAS AWAS THY) / VICE PRESIDENT ! '# / JUDICIAL MEMBER $ /CHENNAI, %'& /DATED: 16 TH JUNE, 2014 TNMM ''(!)*+* /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ' ' ,-. /CIT(A) 4. ' ' , /CIT 5. */0!!12 /DR 6. 0345 /GF