Appeal details
Counselvise Citation
[2017] 127 COUNSELVISE.COM (IT) 0333 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 10 month(s) 29 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-08-2017
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2007-2008
Appeal Filed On
05-09-2014
Judgement Text
1 ITA 5625 & 25626/MUM/2014 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A.NO. 5625 & 5626/MUM/2014 (ASSESSMENT YEARS : 2007-08 & 2008-09) DCIT, CENT. CIR.10, MUMBAI VS M/ S KAPSTONE CONSTRUCTION PVT LTD 702, NATRAJ M.V. ROAD JUNCTION, W.E. HIGHWAY, ANDHERI (E), MUMBAI-69 PAN : AAACCK3513F APPELLANT RESPONDENT APPELLANT BY SHRI RP MEENA RESPONDENT BY SHRI NARESH KUMAR DATE OF HEARING 26 -07-2017 DATE OF PRONOUNCEMENT 04- 08-2017 O R D E R PER G MANJUNATHA, AM : THESE ARE TWO APPEALS FILED BY THE ASSESSEE DIREC TED AGAINST SEPARATE, BUT IDENTICAL ORDERS OF THE CIT(A)-37, MUMBAI DATED 27-06-2014 FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09. SINCE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, THESE APPEALS WERE HEARD TOGETHER AND ARE D ISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY, ENGAGED IN THE BUSINESS OF CONSTRUCTION ACTIVITIES, FILED ITS RETU RN OF INCOME FOR THE ASSESSMENT 2 ITA 5625 & 25626/MUM/2014 YEARS 2007-08 AND 2008-09 ON 15-11-2007 AND 01-10-2 008 DECLARING TOTAL INCOME OF RS.1,04,63,968 AND LOSS OF RS.3,78,81,604 , RESPECTIVELY. THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2007-08 AND 20 08-09 WERE COMPLETED U/S 143(3) ON 21-12-2009 DETERMINING TOTAL INCOME A T RS.1,04,63,968 AN RS.6,46,452, RESPECTIVELY. A SEARCH & SEIZURE ACTI ON U/S 132 OF THE ACT, 1961 WAS CONDUCTED ON 21-10-2010 IN THE CASE OF RUSTOMJE E GROUP ALONGWITH EVERSHINE GROUP. CONSEQUENT TO SEARCH, THE CASE OF THE ASSESSEE WAS CENTRALIZED AND ACCORDINGLY PROCEEDINGS U/S 153A R. W.S. 153C OF THE ACT, WERE INITIATED. IN RESPONSE TO NOTICE U/S 153C, THE ASS ESSEE COMPANY HAS FILED ITS RETURN OF INCOME ON 06-11-2012 DECLARING TOTAL INCO ME OF RS.1,04,63,968 AND LOSS OF RS.3,78,33,069, RESPECTIVELY. THE CASES WE RE SELECTED FOR SCRUTINY AND STATUTORY NOTICES U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED. IN RESPONSE TO NOTICES, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED THE DETAILS, AS CALLED FOR. THE ASSESSME NTS FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09 WERE COMPLETED U/S 143(3) R.W.S . 153C ON 31-03-2013 DETERMINING TOTAL INCOME AT RS.2,58,16,368 AND NET LOSS OF RS.54,03,906, RESPECTIVELY, INTERALIA MAKING CERTAIN ADDITIONS TO WARDS DISALLOWANCE OF PENALTY, RESTRUCTURING EXPENSES, DISALLOWANCE U/S 1 4A AND PERSONAL COST. AGGRIEVED BY THE ASSESSMENT ORDERS, ASSESSEE PREFER RED APPEALS BEFORE CIT(A). 3 ITA 5625 & 25626/MUM/2014 3. BEFORE THE CIT(A), THE ASSESSEE HAS TAKEN A LEGAL G ROUND CHALLENGING THE ADDITIONS MADE BY THE AO IN THE ASSESSMENT ORDERS P ASSED U/S 143(3) R.W.S. 153C TOWARDS CERTAIN EXPENDITURE WITHOUT ANY INCRIM INATING MATERIAL FOUND IN THE SEARCH. THE ASSESSEE ALSO CHALLENGED ADDITIONS MADE BY THE AO ON MERITS. THE CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF AS SESSEE AND RELYING UPON THE DECISION OF ITAT, MUMBAI SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD VS DCIT (2012) 137 ITD 287(MUM)(SB) ALLOWED THE LEGAL GROUND RAISED BY THE ASSESSEE CHALLENGING THE ADDITIONS MADE TO THE UNABATED ASSESSMENTS IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DUR ING THE COURSE OF SEARCH AND PARTLY ALLOWED APPEAL FILED BY THE ASSESSEE. A GGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 4. THE REVENUE HAS RAISED COMMON GROUNDS OF APPEAL FOR BOTH THE ASSESSMENT YEARS. FOR THE SAKE OF CONVENIENCE, GRO UNDS OF APPEAL FOR THE ASSESSMENT YEAR 2007-08 ARE REPRODUCED HEREUNDER:- (I) 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) WAS RIGHT I N DELETING ADDITION OF RS.2,00,000/- MADE ON ACCOUNT OF PENALT Y PAID AND RS.1,51,52,400/- MADE ON ACCOUNT OF RESTRUCTURING EXPENSES DISALLOWED, BY PLACING RELIA NCE ON THE DECISION OF THE HON'HLE ITAT MUMBAI SPECIAL BEN CH IN THE CASE OF ALL CARGOLOGISTICS LIMITED (2010) 23 TA XMAN.COM 103 (MUM) (SB), WITHOUGHT APPRECIATING THE FACTS T HAT THE 4 ITA 5625 & 25626/MUM/2014 REVENUE HAS NOT ACCEPTED THE SAID DECISION AND IT H AS FILED APPEAL AGAINST THE SAME BEFORE THE HON'BLE BO MBAY HIGH COURT, WHICH IS STILL PENDING. (II) 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF [ LIE CASE AND IN LAW, THE LEARNED CIT(A) WAS RIGHT IN D ELETING DISALLOWANCE U1S.14A, BY PLACING RELIANCE ON THE DE CISION OF THE HON'HLE ITAT MUMBAI SPECIAL BENCH IN THE CAS E OF AL CARGO LOGISTICS LIMITED (2010) 23 TAXMAN.COM 103 (M UM) (SB), WITHOUT APPRECIATING THE FACTS THAT THE REVE NUE HAS NOT ACCEPTED THE SAID DECISION AND IT HAS FILED APP EAL AGAINST THE SAME BEFORE THE HON'BLE BOMBAY HIGH COU RT, WHICH IS STILL PENDING?' 5. WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED THE M ATERIAL AVAILABLE ON RECORD. AT THE TIME OF HEARING, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF ITAT, MUMBA I SPECIAL BENCH IN THE CASE OF DCIT VS ALL CARGO GLOBAL LOGISTICS LTD (SUPRA) W HERE THE TRIBUNAL HELD THAT IN THE CASE OF UNABATED OR CONCLUDED ASSESSMENTS, NO A DDITIONS CAN BE MADE IN RESPECT OF ASSESSMENTS WHICH HAVE BECOME FINAL IN T HE ABSENCE OF INCRIMINATING MATERIAL FOUND, DURING THE COURSE OF SEARCH. THE LD.AR FURTHER SUBMITTED THAT A SIMILAR ISSUE HAS BEEN CONSIDERED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS CONTINENTAL WAREHOUSING CORPORATION LTD (2015) 374 ITR 645 (BOM) AND THE HONBLE HIGH COURT CONSIDERIN G THE PROVISIONS OF SECTION 153A / 153C HELD THAT NO ADDITIONS CAN BE MADE IN R ESPECT OF ASSESSMENTS WHICH HAVE BECOME FINAL, IF NO INCRIMINATING MATERI AL IS FOUND DURING THE COURSE OF SEARCH. 5 ITA 5625 & 25626/MUM/2014 6. THE LD.DR FAIRLY ACCEPTED THAT THE ISSUE IS COVERE D IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT, MUMBAI SPECIAL BE NCH AND ALSO HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS CONTINENTAL WAREHOUSING CORPORATION LTD (SUPRA). 7. HAVING HEARD BOTH THE SIDES AND CONSIDERED THE MATE RIAL ON RECORD, WE FIND THAT THE ISSUE IS NO LONGER RES INTEGRA . THE ITAT, MUMBAI SPECIAL BENCH IN THE CASE OF DCIT VS ALL CARGO GLOBAL LOGISTICS LTD (SUPRA) HAS CONSIDERED SIMILAR ISSUE IN THE LIGHT OF PROVISIONS OF SECTIONS 153A / 153C AND AFTER ANALYSING THE PROVISIONS HELD THAT IN ASSESSMENTS THAT ARE ABATED , THE AO ATTAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON A CCOUNT OF SECTION 153A FOR WHICH THE ASSESSMENT SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS, SEPARATELY. IN ANOTHER CASES, IN ADDITION TO THE I NCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON T HE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEST OF RELEVANT PROVISIO NS MEANS BOOKS OF ACCOUNT, OTHER DOCUMENTS FOUND DURING THE COURSE OF SEARCH, BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED INCOM E OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. THE HONBLE BOMBAY HIGH C OURT IN THE CASE OF CIT VS CONTINENTAL WAREHOUSING CORPORATION LTD (SUPRA) HAS CONSIDERED SIMILAR ISSUE 6 ITA 5625 & 25626/MUM/2014 IN THE LIGHT OF PROVISIONS OF SECTION 153A / 153C AND AFTER CONSIDERING THE PROVISIONS HELD THAT NO ADDITIONS CAN BE MADE IN RE SPECT OF ASSESSMENT WHICH HAVE BECOME FINAL, IF ANY INCRIMINATING MATERIAL FO UND DURING THE COURSE OF SEARCH. IN YET ANOTHER CASE, THE HONBLE BOMBAY HI GH COURT IN CIT VS GURINDER SINGH BAWA (2016) 386 ITR 483 (BOM) OBSERVED THAT W HERE NO ASSESSMENTS ARE PENDING AT THE TIME OF INITIATION OF PROCEEDINGS U/ S 153A AND NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, ENT IRE PROCEEDINGS U/S 153A WERE WITHOUT JURISDICTION. 8. IN THIS CASE, SEARCH HAS BEEN TAKEN PLACE ON 20-10- 2010. AS ON THE DATE OF SEARCH, THE ASSESSMENTS FOR THE ASSESSMENT YEARS 20 07-08 AND 2008-09 WERE NOT ABATED. THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) HAD ALSO EXPIRED. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09 WERE ALREADY COMPLETED AS ON TH E DATE OF SEARCH AND NO PROCEEDINGS ARE PENDING AND, THEREFORE, THE AO HAS NO JURISDICTION TO MAKE ANY ADDITIONS IN THE ABSENCE OF ANY INCRIMINATING MATER IAL FOUND, AS A RESULT OF SEARCH. NO DOUBT, THE AO HAS NOT REFERRED TO ANY I NCRIMINATING MATERIAL FOUND DURING SEARCH FOR THE IMPUGNED ADDITIONS. THEREFOR E, WE ARE OF THE VIEW THAT NO ADDITION CAN BE MADE TO RETURNED INCOME IN ASSES SMENTS U/S 153A / 153C IN THE ABSENCE OF ANY INCRIMINATING MATERIALS. SINCE THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT, IN TH E CASES OF CIT VS 7 ITA 5625 & 25626/MUM/2014 CONTINENTAL WAREHOUSING CORPORATION LTD (SUPRA) AND CIT VS GURINDER SINGH BAWA (SUPRA) AND THE LD.DR FAILED TO BRING ON RECOR D ANY CONTRARY DECISIONS, BY RESPECTFULLY FOLLOWING THE DECISIONS OF HONBLE BOM BAY HIGH COURT WE DIRECT THE AO TO DELETE THE ADDITIONS MADE FOR THE ASSESSM ENT YEARS 2007-08 AND 2008-09. 8. IN THE RESULT, THE APPEALS FILED BY THE REVENUE FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH AUG, 2017. SD/- SD/- (MAHAVIR SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 04 TH AUGUST, 2017 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI
