DCIT, Alwar V. SHRI BASANT BANSAL, GURGAON

ITA 609/JPR/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99552 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 14-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MALAY CHATURVEDI
• Section: 143(3); 153A; 132

Judgement Text

ITA NO.609/JP/2012 DCIT, CENTR AL CIRCLE, ALWAR VS. SHRI BASANT LOK, GURGAON 1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE:SHRI R.P.TOLANI, JM & SHRI VIKRAM SINGH YADA V, AM VK;DJ VIHY LA-@ ITA NO. 609/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2004-05 THE DCIT CENTRAL CIRCLE, ALWAR CUKE VS. SHRI BASANT BANSAL C-13, SUSHANT LOK-1GURGAON, HARYANA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AHYPB 1937 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT C.O. NO.33/JP/2015 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 609/JP/2012) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2004-05 SHRI BASANT BANSAL C-13, SUSHANT LOK-1GURGAON, HARYANA CUKE VS. THE DCIT CENTRAL CIRCLE,ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AHYPB 1937 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI M.S. MEENA, CIT -DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SOMIL AGARWAL AND SHRI MALAY CHATURVEDI, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30/11/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM:- THE REVENUE HAS FILED AN APPEAL AND ASSESSEE HAS FI LED A CROSS OBJECTION AGAINST THE ORDER OF THE LD. CIT(A), CE NTRAL, JAIPUR DATED 30-03- 2012 FOR THE ASSESSMENT YEAR 2004-05. ITA NO.609/JP/2012 DCIT, CENTR AL CIRCLE, ALWAR VS. SHRI BASANT LOK, GURGAON 2 2.1 C.O. OF THE ASSESSEE IS FILED LATE BY 104 DAYS , DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE HAS NOT PRESSED THE CROSS OBJECTION FILED BY THE ASSESSEE. HENCE THE SAME IS DISMISSED BEING NOT PRESSED. 3.1 THE GROUND RAISED BY THE REVENUE IS AS UNDER:- (I) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE OF LD. CIT(A) (CENTRAL), JAIPUR HAS ERRED IN LAW AN D ON FACTS IN DELETING THE ADDITION OF RS. 10,50,000/-OUT OF THE ADDITION OF RS. 20,50,000/- MADE BY THE AO ON ACCOUNT OF DEEME D DIVIDEND AS PER PROVISIONS OF SECTION 2(22)(E) OF T HE ACT (II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF TH E CASE OF LD. CIT(A) (CENTRAL), JAIPUR HAS ERRED IN LAW AN D ON FACTS IN HOLDING THAT RS. 10,50,000/- WAS IMPREST FROM M/S. MISTY MEADOWS (P) LTD. WHICH DID NOT FALL IN THE AMBIT OF PROVISIONS OF SECTION 2(22)(E) OF THE ACT EVEN THOUGH THERE WA S NO SUCH EVIDENCE ON RECORD TO PROVE THAT ANY IMPREST WAS GI VEN BY THE SAID COMPANY TO THE ASSESSEE. 4.1 THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET FILED AN APPLICATON UNDER RULE 27 OF INCOME-TAX APPELLATE RULES, 1963 RAISING THEREIN FOLLOWING GROUND. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FA CTS IN DELETING THE ENTIRE ADDITION MADE U/S 2(22)(E) EVEN THOUGH THE SAID ADDITION COULD NOT BE MADE U/S 153A, INTER ALI A, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND AS A RE SULT OF SEARCH QUA THIS ADDITION. 4.2 FOR THE ADMISSIBILITY OF THIS APPLICATION LD. C OUNSEL REFERRED TO LD. CIT(A)S ORDER DISMISSING THE LEGALITY OF THE ADDIT ION WHICH IS AS UNDER:- ITA NO.609/JP/2012 DCIT, CENTR AL CIRCLE, ALWAR VS. SHRI BASANT LOK, GURGAON 3 2. GROUND NO. 1 TO 4 RELATE TO ASSESSMENT WITHOUT JURISDICTION, INITIATION OF PROCEEDINGS U/S 153A IN VALID, BEYOND THE SCOPE OF SECTION 153A AND ASSESSMENT MADE AT A TOTAL INCOME OF RS. 23,39,420/-. 2.1 THE A.R. HAS NOT MADE ANY SPECIFIC SUBMISSIONS WITH REGARD TO ABOVE GROUNDS OF APPEALS, HENCE THES E GROUNDS OF APPEAL STAND DISMISSED. LD. COUNSEL CONTENDS THAT A READING OF THIS PARA AN D RECORD MAKE IT CLEAR THAT THIS SPECIFIC GROUND WAS RAISED BY THE ASSESSEE AND DISMISSED BY A VAGUE FINDING THAT SPECIFIC SUBMISSION WERE NOT MADE. THE ASSESSEE HAD RAISED AND ARGUED THIS LEGAL GROUND WHICH WAS SUPPORTED BY VAR IOUS HON'BLE HIGH COURT JUDGMENTS. LD. CIT(A) HAS NOT GIVEN ANY FINDI NG THAT EVEN BY IMPLICATIONS DID NOT PRESS THIS GROUND. SINCE A VAL ID LEGAL GROUND WAS RAISED IT WAS INCUMBENT ON LD. CIT(A) TO ADJUDICATE IT, IN STEAD OF SUMMARILY DISMISSING THIS GROUND IN AN UNTENABLE MANNER. 4.3 THE ASSESSEE HAD TAKEN THIS GROUND IN HIS C.O., CHALLENGING THE ENTIRE ADDITION MADE U/S 2(22)(E) WHICH IS BEING NOT PRESS ED AS ALTERNATE REMEDY UNDER RULE 27 BEING AVAILABLE. THE APPLICATION IS A CCORDINGLY MADE TO SUPPORT LD. CIT(A)S ORDER ON THE GROUND RELATING T O SEC. 2(22)(E), DECIDED AGAINST ASSESSEE. SINCE IT IS A LEGAL ISSUE, DULY R AISED BEFORE THE LD. CIT(A) AND REMAINED UNDECIDED; THE APPLICATION RULE 27 IS JUSTIFIED AND MAY BE ADMITTED TO IN RESPECT OF GROUND DECIDED AGAINST IT . ITA NO.609/JP/2012 DCIT, CENTR AL CIRCLE, ALWAR VS. SHRI BASANT LOK, GURGAON 4 RULE 27 OF INCOME-TAX APPELLATE RULES, 1963 READS AS UNDER:- 27. THE RESPONDENT THOUGH MAY HE MAY NOT APPEALED, MAY SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GROUNDS DECIDED AGAINST HIM. RELIANCE FOR ADMISSION OF APPLICATION IS PLACED ON: (A) ROHTAK & HISSAR DISTRICTS ELECTRIC SUPPLY CO. L TD. VS. CIT 128 ITR 52 (DEL.) (B) ITO VS. SMT. GURINDER KAUR 102 ITD 189 (DEL.) ACIT VS. BALBIR CHAND MAINI, 111 TTJ 160 (CHD.) (D) ACIT VS. INDIA CEMENTS LTD. 124 ITD 343 (CHENNA I) (E) ITO VS. BLOOSOM FLORICULTURE, 134 TTJ 51 (UO), (LUCKNOW) (F) DCIT VS. ANANT RAJ INDUSTRIES LTD. , 124 ITD 28 4 (DEL.) (G) ADIT (INV.) VS. BANK OF TOKYO 18 DTR (TRIB) 432 (DEL.) (H) DCIT VS. JUBILIANT ENPRO (P) LTD. 112 DTR 195 ( DELHI) - HOLDING THAT RESPONDENT CANNOT BE DEBARRED FROM RAI SING THAT ASPECT OF THE ISSUE WHICH WAS NOT TAKEN UP BEFORE THE FIRST A PPELLATE AUTHORITY OR TAKEN UP BUT REMAIN UNDECIDED (I) JEHANGIR H.C. JEHANGIR VS. ITO [2014] 112 DTR 2 62 (BOM.) HOLDING THAT ISSUE CANNOT BE REFUSED TO BE CONSIDER ED BY TRIBUNAL MERELY BECAUSE THE LD. CIT(A) DID NOT RENDER ANY VI EW. (J) CHANDRA PRAKASH JAIN VS. ACIT (INV.) [2014] 107 DTR 91 (ALL.) HOLDING THAT THERE IS NO ILLEGALITY IF THE TRIBUNAL PROCEEDS TO DISPOSE THE DIFFERENT ASPECTS OF THE SAME ISSUE. (K) CIT VS. SANGAMITRA BHARALI (SMT.) [2014] 361 IT R 481 (GAU.) 4.4 THE LD. DR IS HEARD QUA THE ASSESSEE'S APPLICAT ION UNDER RULE 27 OF INCOME-TAX APPELLATE RULES, 1963. ITA NO.609/JP/2012 DCIT, CENTR AL CIRCLE, ALWAR VS. SHRI BASANT LOK, GURGAON 5 4.5 WE HAVE HEARD BOTH PARTIES IN RESPECT OF APPLIC ATION AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN QUESTIO N ABOUT ADDITION U/S 2(22)(E) MADE IN SEARCH ASSESSMENT U/S 153A BEING N OT BASED ON ANY INCRIMINATING MATERIAL STANDS DECIDED BY VARIOUS CO URTS INCLUDING HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF JAI STEEL VS. ACIT, 259 CTR 281 (RAJ.) AND IS PURELY LEGAL IN NATURE. FURTHER, THIS ISSUE WAS RAISED BEFORE THE LD. CIT(A) IN FIRST APPEAL BY A PROPER GROUND WHICH HAS NOT BEEN ADJUDICATED PROPERLY. THEREFORE, THE APPLICATION OF THE ASSESSE E UNDER RULE 27 OF INCOME-TAX APPELLATE RULES, 1963 DESERVES TO BE ADM ITTED. 4.6 ADVERTING TO HIS ISSUE LD. COUNSEL CONTENDS THA T IT IS UNDISPUTED THAT NO INCRIMINATING MATERIAL WHATSOEVER WAS FOUND DURI NG THE COURSE OF SEARCH IN RESPECT OF THIS ADDITION. THE ASSESSMENT FOR IMP UGNED YEAR 2004-05 STANDS CONCLUDED AS THE SEARCH WAS CONDUCTED ON 17- 09-2008 AND WAS NOT ABATED IN TERMS OF SECOND PROVISO TO SEC. 153A. IT IS A SETTLED PROPOSITION OF LAW AS HELD BY VARIOUS JUDICIAL AUTHORITIES THAT AN Y ADDITION CANNOT BE MADE IN AN ASSESSMENT U/S 153A OF THE ACT CONSEQUENT TO SEARCH UNLESS SOME INCRIMINATING MATERIAL IS FOUND DURING THE COURSE O F SEARCH. RELIANCE IS PLACED OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA (ITA NO. 707/2014) WHEREIN IT HAS BEEN HELD AS UNDE R:- ITA NO.609/JP/2012 DCIT, CENTR AL CIRCLE, ALWAR VS. SHRI BASANT LOK, GURGAON 6 37.. (VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT U/S 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURI NG THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE IN THE COURSE OF ORIGINAL ASSESSM ENT. 38. IN THE PRESENT APPEALS CONCERN AYS. 2002- 03, 2005-06 AND 2006-07. ON THE DATE OF THE SEARCH, THE SAID ASSESSMENTS ALREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEA RCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. HON'BLE DELHI HIGH COURT WHILE HOLDING SO HAS RELIE D ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF JA I STEEL VS. ACIT (SUPRA) BY FOLLOWING OBSERVATIONS: 33. THE DECISION OF THE RAJASTHAN HIGH COURT IN J AI STEEL (INDIA), JODHPUR VS. ACIT (SUPRA) INVOLVED A CASE WHERE CERTAIN BOOKS OF ACCOUNT AND OTHER DOCUMENTS THAT H AD NOT BEEN PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT WERE FOUND IN THE COURSE OF SEARCH. IT WAS HELD WHERE UNDISCLO SED INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AS A CONSEQU ENCE OF THE SEARCH, THE SAME WOULD ALSO BE TAKEN INTO CONSIDERA TION WHILE COMPUTING THE TOTAL INCOME U/S 153A OF THE ACT. THE COURT THEN EXPLAINED AS UNDER:- 22. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONGWITH THE PURCHA SE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICA TELY LINKED WITH SEARCH AND REQUISITION U/S 132 AND 132A OF THE ACT, IT IS APPARENT THAT:- ITA NO.609/JP/2012 DCIT, CENTR AL CIRCLE, ALWAR VS. SHRI BASANT LOK, GURGAON 7 (A) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATED IN TERMS OF II PROVISO TO SECTION 153A OF TH E ACT, THE AO ACTS UNDER HIS ORIGINAL JURISDICTION, FOR WH ICH , ASSESSMENTS HAVE TO BE MADE; (B) REGARDING OTHER CASES, THE ADDITION TO THE INCO ME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL. AND IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABAT ED ASSESSMENT OR REASSESSMENT CAN BE MADE. 4.7 LD. DR IN REPLY CONTENDS THAT THOUGH INCRIMINAT ING MATERIAL WAS NOT FOUND IN RESPECT OF THE ADDITION U/S 2(22)(E), HOW EVER, THE SEARCH CASES BEING CENTRALIZED, THE AO MUST BE HAVING SOME MORE INFORMATION IN THIS BEHALF. 4.8 THE LD. AR OF ASSESSEE IN REJOINDER CONTENDS T HE PLAIN LANGUAGE OF THE PROVISIONS OF THE ACT IN THIS BEHALF AND AS SO HELD BY HON'BLE DELHI HIGH COURT AND HON'BLE JURISDICTIONAL HIGH COURT JUDGMEN TS IT IS A SETTLED PROPOSITION THAT THE ADDITION IN SEARCH ASSESSMENT U/S 153A RWS 143(3) MUST BE BASED ON INCRIMINATING MATERIAL FOUND AS A RESUL T OF SEARCH AND NOT ON AN ASSUMPTION THAT LD. AO MAY BE HAVING SOME INCRIMINA TING INFORMATION IN CENTRALIZED CASES. EVEN AO HAS NOT REFERRED TO ANY SUCH ASSUMED INCRIMINATING INFORMATION. THE CONTENTIONS OF LD. D R ARE NOT BORNE OUT FROM ITA NO.609/JP/2012 DCIT, CENTR AL CIRCLE, ALWAR VS. SHRI BASANT LOK, GURGAON 8 THE RECORD ARE NOT BORNE OUT FROM THE RECORD AND OT HER ARGUMENTS MADE BY THE ASSESSEE HAVING NOT BEEN DISPUTED THE IMPUGNED ADDITION U/S 2(22)(E) DESERVES TO BE DELETED. 4.9 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD AND FIND MERIT IN THE ARGUMENTS OF THE LD. AR OF THE ASSESSEE. BY A CATENA OF JUDGMENTS OF HON'BLE COUR TS INCLUDING HON'BLE JURISDICTIONAL HIGH COURT HAVE HELD THAT WHEN ASSES SMENT IS NOT STANDS CONCLUDED AT THE TIME OF SEARCH U/S 132 THE SAME IS NOT ABATED IN TERMS OF TERMS OF SECOND PROVISO TO SEC. 153A; THEN ADDITION CAN BE MADE IN SEARCH ASSESSMENT U/S 153A RWS 143(3) ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH ONLY. AS THE FACTS EMER GES NEITHER THE AO NOR LD. CIT(A) HAS RELIED ON ANY INCRIMINATING MATERIAL IN BEHALF OF IMPUGNED ADDITION U/S 2(22)(E). BESIDES THE LD. DR ALSO HAS NOT POINTED OUR ANY INCRIMINATING MATERIAL AND TAKEN A GENERAL PLEA THA T THE CASE BEING CENTRALIZED, THERE MAY BE SOME INCRIMINATING MATERI AL IN THE POSSESSION OF THE AO. IN OUR CONSIDERED VIEW, WHAT IS DETERMINATI VE FOR SUSTAINING AN ADDITION IN THESE FACTS AND CIRCUMSTANCES IS DISCOV ERY OF INCRIMINATING MATERIAL AS A RESULT OF SEARCH AND NOT AN ASSUMED I NFORMATION ABOUT INCRIMINATING INFORMATION AS PROPOSED BY LD. DR. RE SPECTFULLY FOLLOWING THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF JAI STEEL VS. ITA NO.609/JP/2012 DCIT, CENTR AL CIRCLE, ALWAR VS. SHRI BASANT LOK, GURGAON 9 ACIT, DELHI HIGH COURT IN KABUL CHAWLA (SUPRA) AND VARIOUS OTHER JUDGMENTS CITED ABOVE, WE HOLD THAT THE ADDITION IN QUESTION MADE U/S 2(22)(E) OF THE ACT CANNOT BE MADE IN ASSESSEE'S SE ARCH ASSESSMENT U/S 153A RWS 143(3) IN THESE FACTS AND CIRCUMSTANCES. THE AD DITION MADE U/S 2(22)(E) IS THUS DELETED. SINCE WE HAVE DECIDED THE ISSUE ON THE LEGALITY OF THE IMPUGNED ADDITION, IT IS NOT NECESSARY TO GO INTO T HE MERITS OF THE CASE. THUS THE APPEAL OF THE REVENUE AND THE C.O. OF THE ASSES SEE BOTH ARE DISMISSED. 5.0 IN THE RESULT, THE APPEAL OF THE REVENUE AND TH E C.O. OF THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-11-2015 SD/- SD/- FOE FLAG ;KNO VKJ-IH-RKSYKUH (VIKRAM SINGH YADAV) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 /11/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DCIT, CENTRAL CIRCLE, ALWAR 2. IZR;FKHZ@ THE RESPONDENT- SHRI BASANT BANSAL, GURGAON 3. VK;DJ VK;QDRVIHY ) @ CIT(A) 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.609/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR