Texworld Fashions Pvt. Ltd., Ahmedabad V. The ACIT, Central Circle - 2(4), Ahmedabad

ITA 6/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9565 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 01-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Initiation of penalty proceedings; Difference of opinion; Change of opinion
• Section: 142(1); 153A; 147; 68; 148; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ./ ITA.NO.6/AHD/2016 / ASSTT. YEAR: 2010-2011 TEXWORLD FASHIONS PVT.LTD. 63/2, NEW CLOTH MARKET O/S.RAPUR GATE AHMEDABAD 380 001. PAN : AACCT 2582 M VS ACIT, CENT.CIR.2(4) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : MS.URVASHI SHODHAN REVENUE BY : PRAJNA PARAMITA, SR.DR / DATE OF HEARING : 16/02/2016 / DATE OF PRONOUNCEMENT: 17 /02/2016 $%/ O R D E R THIS APPEAL OF THE ASSESSEE AROSE FROM ORDER OF THE LD.CIT(A)-12, AHMEDABAD DATED 29.9.2015 FOR THE ASSTT.YEAR 2010-2 011. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONFIR MING ACTION OF AO ASSESSING APPELLANT U/S 147 R W S 143 (3) OF THE AC T IN ABSENCE OF ANY FRESH MATERIAL TO FORM BELIEF OF ESCAPEMENT OF INCO ME. LD. CIT (A) OUGHT TO HAVE QUASHED THE PROCEEDINGS UNDERTAKEN BY AO ON CHANGE OF OPINION. 2. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CO NFIRMING ACTION OF AO FRAMING ASSESSMENT U/S 143 (3) R W S 147 ON 25/0 3/2013 THAT OUGHT TO HAVE BEEN FRAMED U/S 153C OF THE ACT ON OR BEFORE ITA NO.6/AHD/2016 2 31/12/2011. LD. CIT (A) OUGHT TO HAVE HELD ASSESSME NT PROCEEDINGS TIME BARRED AND THUS VOID AB INITIO. 3. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CO NFIRMING ACTION OF AO TREATING SHARE APPLICATION MONEY RECEIVED OF RS. 12, 00, OOO/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. LD. C IT (A) OUGHT TO HAVE DELETED ADDITION ONCE THE PRIMARY ONUS WAS DIS CHARGED BY THE APPELLANT FILING COMPLETE DETAILS OF NAME/ADDRESS / PAN/BALANCE SHEET OF THE SHARE APPLICANT TO ESTABLISH CREDITWOR THINESS AND GENUINENESS OF THE TRANSACTION. IT BE SO HELD NOW. 4. LD. CIT (A) ERRED IN LAW AND ON FACTS CONFI RMING ADDITION MADE BY AO OF SHARE APPLICATION MONEY RECEIVED FROM M/S LILY ENCLAVE PVT. LTD. SIMPLY FOLLOWING APPELLATE ORDER FOR A Y 2009/10 WITHOUT INDEPENDENTLY DEALING WITH DOCUMENTARY EVIDENCE SUB MITTED BY THE APPELLANT. 5. LEVY OF INTEREST U/S 234 A/B/C & D OF THE A CT IS UNJUSTIFIED. 6. INITIATION OF PENALTY PROCEEDINGS U/S 271 ( L)(C) OF THE ACT IS UNJUSTIFIED. 3. THE ISSUE IN THE PRESENT CASE IS WHETHER THE YEA R OF SEARCH WILL BE INCLUDED WITH EARLIER SIX YEARS, AND THE ASSESSMENT CAN BE MADE UNDER SECTION 153A/153C OR UNDER SECTION 147/148 OF THE ACT. 4. THE FACTS OF THE CASE ARE THAT SEARCH WAS CONDUC TED ON 6.8.2009. DURING THE YEAR ENDING 31.3.2010 NOTICE UNDER SECTI ON 153C OF THE ACT WAS INITIATED FOR SIX PRECEDING PREVIOUS YEARS. THE NOT ICE U/S.153C IN WHICH SEARCH WAS TAKEN PLACE AVAILABLE AT PAGE NO.1 TO 6 OF THE PAPER BOOK. THEREAFTER, NOTICE UNDER SECTION 142(1) WAS ISSUED FOR THE ASSTT.YEAR 2004-05 TO 2010-11 INCLUDING THE SIX PREVIOUS YEARS I.E. AS STT.YEAR 2004-05 TO 2009- 10, MEANING THEREBY, THE NOTICE FOR THE ASSTT.YEAR 2010-11 WAS ISSUED UNDER SECTION 142(1) ONLY, NOT UNDER SECTION 153C OF THE ACT. THE ASSESSEE HAS SUBMITTED HIS REPLY WHICH IS AVAILABLE AT PAGE NO.1 0 TO 14 OF THE PAPER BOOK. THE NOTICE UNDER SECTION 142(1) WAS WITHDRAWN BY TH E DEPARTMENT FOR THE ITA NO.6/AHD/2016 3 ASSTT.YEAR 2010-11, WHICH IS AVAILABLE AT PAGE NO.1 5 OF THE PAPER BOOK, WHICH IS DATED 9.12.2011. THEREAFTER, NOTICE UNDER SECTI ON 148 WAS ISSUED FOR THE ASSTT.YEAR 2010-11 FOR REOPENING OF THE ASSESSMENT, AND THE AO PROCEEDED TO MAKE THE ASSESSMENT UNDER SECTION 148, WHEN THE ASS ESSEE RAISED OBJECTION ON LEGAL ISSUE THAT NOTICE UNDER SECTION 148 IS BAD IN LAW. THE SAME IS AVAILABLE AT PAGE NO.19 OF THE PAPER BOOK. THIS ISSUE WAS RA ISED BEFORE THE LD.CIT(A) WHO REJECTED THE SAME VIDE HIS ORDER DATED 29.9.201 5 VIDE PAGES 3 TO 5 OF HIS ORDER. 5. IT WAS ARGUED BY MS.URVASHI SHODHAN, LD.COUNSEL FOR THE ASSESSEE THAT IT IS THE ONLY NOTICE UNDER SECTION 153A/153C COULD HAVE BEEN ISSUED, AND ACCORDINGLY, THE ASSESSMENT COULD HAVE BEEN MADE AN D NOTICE UNDER SECTION 148 CANNOT BE ISSUED IN SUCH CASES. THE ISSUE IS A LSO COVERED BY THE DECISION OF THE ITAT, AHMEDABAD BENCH A IN THE CASE OF MEG HMANI ORGANICS LTD. VS. DCIT, IT(SS)A.NO.224/AHD/2014 AND IT(SS)A.NO.18 9/AHD/20009 ORDER DATED 26.10.2012, WHERE THE DECISION OF THE TRIBUNA L IN THE CASE OF DR.MANSUKH KANJIBHAI SHAH IN ITA NO.2878, 2879 & 28 80/AHD/2007 HAD BEEN FOLLOWED. THE LD.AR ALSO RELIED UPON THE DECI SION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF AL-CARGO GLOBAL LOGI STICS LTD., 137 ITD 287 (MUM)(SB) IN THIS REGARD. THE LD.COUNSEL FOR THE A SSESSEE ALSO ARGUED THAT THE ASSESSMENT IS ALSO TIME-BARRED, AND SHE INVITED OUR ATTENTION TO SECTION 153B, WHERE THE ASSESSMENT SHOULD BE COMPLETED, AS PER CLAUSE (II) OF SECTION 153B(1), WITHIN TWENTY-ONE MONTHS FROM THE END OF T HE FINANCIAL YEAR IN WHICH THE LAST OF THE AUTHORIZATION FOR SEARCH UNDE R SECTION 132 OR FOR REQUISITION UNDER SECTION 132A WAS EXECUTED. THE P ERIOD OF 21 MONTHS IS APPLICABLE FOR THE SEARCH CONTACTED BEFORE 1 ST APRIL, 2010 AND IN THE PRESENT CASE, IT WAS CARRIED OUT ON 6.8.2009, AND ACCORDING LY, THE ASSESSMENT SHOULD HAVE BEEN COMPLETED ON 31.12.2011, AND AS PER THE A O, THE ASSESSMENT HAS ITA NO.6/AHD/2016 4 BEEN COMPLETED ON 25.3.2013, AND THEREFORE, THE ASS ESSMENT IS TIME BARRED AND LIABLE TO BE QUASHED. 6. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE OR DERS OF THE LOWER AUTHORITIES. 7. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE F ACTS OF THE CASE. THE ISSUE IN THE PRESENT CASE IS COVERED BY THE DECISIO N OF THE ITAT, AHMEDABAD BENCH IN THE CASE OF MEGHMANI ORGANICS LTD. VS. DCI T (SUPRA) AND NO NOTICE UNDER SECTION148 AND NO ASSESSMENT UNDER SECTION 14 7 CAN BE MADE IN THE SEARCH CASES EXCEPT UNDER SECTION 153A AND/OR 153C OF THE ACT . THE ISSUE IS ALSO COVERED BY THE DECISION OF THE SPECIAL BENCH O F THE TRIBUNAL IN THE CASE OF AL-CARGO GLOBAL LOGISTICS LTD., (SUPRA). ALSO T HE ASSESSMENT IS TIME BARRED AS ARGUED BY THE LD.COUNSEL FOR THE ASSESSME NT, AND THE ASSESSMENT SHOULD HAVE BEEN COMPLETED BY 31.12.2011, WHEREAS I N THE PRESENT CASE, IT HAS BEEN COMPLETED ON 25.3.2013. ACCORDINGLY, ON BOTH THE COUNTS, THE ASSESSMENT IS LIABLE TO BE QUASHED, AND IT IS ORDER ED ACCORDINGLY. THUS, THE ORDER OF THE LD.CIT(A) IS REVERSED AND ALL THE GROU NDS OF THE APPEAL ARE ALLOWED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 17 TH FEBRUARY, 2016 AT AHMEDABAD. SD/- ( B.P. JAIN ) ACCOUNTANT MEMBER AHMEDABAD; DATED 17/02/2016