DCIT CC 3(1) CEN RG 3A-9 ENERCON TOWER, VEERA DESAI RD, VEERA INDL ESTATE, ANDHERI, MUMBAI V. VAAYU INDAI POWER CORPORATION PVT. LTD, MUMBAI

ITA 6841/MUM/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3636 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 21-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNITA BILLA
• Assessee Lawyers: A K GHOSH AGGARWAL
• Section: 6; 11; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B ', MUMBAI BEFORE SHRI C.N. PRASAD, HONBLE JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL , HONBLE ACCOUNTANT MEMBER ITA. NO S . 6840 & 6841/MUM / 201 6 (A.Y S: 2010 - 11 & 2011 - 12 ) D Y. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 3(1) ROOM NO. 1913/1924, 19 TH FLOOR, AIR INDIA BLDG., NARIMAN POINT, MUMBAI 400 021 V. M/S. VAAYU INDIA POWER CORP . LTD., A - 9, ENERCON TOWER, VEERA DESAI ROAD, VEERA INDUSTRIAL ESTATE, ANDHERI (W), MUMBAI 400 053 PAN: AADCV 1218 M ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI A.K. GHOSH AGGARWAL REVENUE BY : SMT SUNITA BILLA DATE OF HEARING : 10 .12.2018 DATE OF PRONOUNCEMENT : 20 .02.2019 O R D E R PER C.N. PRASAD (JM) 1. THESE TWO APPEAL S ARE FILED BY THE REVENUE AGAINST COMMON ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 51 MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 12.08.2016 FOR THE ASSESSMENT YEAR S 2010 - 11 & 2011 - 12. 2. THE REVENUE HAS RAISED IDENTICAL GROUND IN BOTH THE SE ASSESSMENT YEAR S AS UNDER: 2 ITA. NOS. 6840 & 6841/MUM/2016 M/S. VAAYU INDIA POWER CORP . LTD., 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION BY HOLDING THAT IN THE CASE OF ASSESSMENTS U/S. 153A, ADDITIONS/DISALLOWANCES CAN BE MADE ONLY BASED ON THE MATERIAL SEIZED / EVIDENCES FOUND DURING THE SEARCH BY RELYING ON THE DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD V. DCIT WITHOUT APPRECIATING THAT THE DEPARTMENT HAS FILED SLP BEFORE THE HON'BLE SUPREME COURT WHICH IS PENDING. 3. AT THE OUTSET, LD. COUN SEL FOR THE ASSESSEE SUBMITTED THAT NO INCRIMINATING MATERIAL HAS BEEN SEIZED IN THE COURSE OF SEARCH PROCEEDINGS AND T HEREFORE, SINCE THE ADDITION/ DISALLOWANCE WERE NOT MADE BASED ON ANY SEIZED MATERIALS THE ADDITION/DISALLOWANCE ARE LIABLE TO BE DELETED. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT HAS BEEN HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. ALL CARGO GLOBAL LOGISTICS LTD . [374 ITR 645] THAT ADDITION/ DISALLOWANCE CAN BE MADE ONLY BASED ON THE SEIZED MATERIAL AND THIS DECISION HAS BEEN FOLLOWED BY THE LD. CIT(A) AND DELETED THE DISALLOWANCE. T HEREFORE , LD. COUNSEL STRONGLY PLACED RELIANCE ON THE ORDER OF THE LD. CIT(A) AND REQUESTED TH AT THE REVENUES APPEAL S BE DISMISSED. 4. LD. DR FAIRLY SUBMITTED THAT LD. CIT(A) HAS G IVEN A FINDING THAT NO INCRIMINATING MATERIAL HAS BEEN SEIZED AND IN THE ABSENCE OF INCRIMINATING MATERIAL NO ADDITION /DISALLOWANCE CAN BE MADE. HE SUPPORTED THE O RDER OF THE ASSESSING OFFICER. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF TH E AUTHORITIES BELOW. IT IS THE FINDING OF THE LD. CIT(A) THAT, THE ONLY ISSUE INVOLVED IN THE PRESENT APPEAL IS IN RE SPECT OF DISALLOWANCE MADE 3 ITA. NOS. 6840 & 6841/MUM/2016 M/S. VAAYU INDIA POWER CORP . LTD., U/S. 14A OF THE ACT. THE ASSESSEE HAS RAISED SPECIFIC GROUND REGARDING LEGALITY OF THE ASSESSMENT STATING THAT ASSESSING OFFICER ERRED IN MAKING DISALLOWANCE U/S. 14A IN A SEARCH ASSESSMENT WITHOUT APPRECIATING THE FACT THAT THERE WAS NO EVIDENCE OR MATERIAL FOUND IN THE COURSE OF SEARCH ACTION TO MAKE SUCH DISALLOWANCE . THEREFO RE, THE LD. CIT(A) FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT CIT V. ALL CARGO GLOBAL LOGISTICS LTD (SUPRA) DELETED THE DISALLOWANCE IN THE ABSENCE OF ANY SEIZED MATERIAL OBSERVING AS UNDER: - 6. I HAVE CONSIDERE D THE ARGUMENTS OF THE ASSESSEE. THERE IS NO DISPUTE WITH REGARD TO THE FACT T HAT BOTH THE ABOVE ASSESSMENT S HAVE ATTAINED FINALITY BEFOR E THE DATE OF THE SEARCH . THEREFORE, BOTH THESE ASSESSMENT S ARE UNABATED ASSESSMENT S FOR THE PURPOSES OF SEC. 153A. IT IS NOW A SETTLED LAW IN VIEW OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD THAT T IN CASE OF UNABATED ASSESSMENT S, ADDITIONS/ DISALLOWANCES CAN BE MADE ONLY BASED ON THE MATERIAL SEIZED / EVIDENCE FOUND DURING THE SEARCH. IT IS ALSO UNDISPUTED THAT IN NEITHER OF THE ASSESSMENT YEARS THERE WAS ANY MATERIAL / EVIDENCES FOUND IN RELATION TO THE 14A DISALLOWANCE MADE BY THE AO. THEREFORE,, IT IS HELD THAT IN CASE OF BOTH THE ASSESSMENT YEAR S W HERE THE ASSESSMENT S HAVE ATTAINED FINALITY AND NO PROCEEDINGS ARE PENDING AS ON THE DATE OF SEARCH, NO ADDITION / DISALLOWANCE CAN BE MADE IN ABSENCE OF ANY INCRIMINATING MATERIAL / EVIDENCES FOUND DURING THE COURSE OF SEARCH AS HELD BY HONBLE BOMBAY HIG H COURT IN THE ABOVE REFERRED DECISION. IN VIEW OF THE ABOVE, THE ADDITION MADE BY INVOKING THE PROVISIONS OF SEC. 14A IN BOTH THE ASSESSMENT YEAR S IS DIRECTED TO BE DELETED AS THE AO DOES NOT HAVE JURISDICTION TO MAKE SUCH ADDITIONS IN VIEW OF THE BINDIN G JURISDICTIONAL HIGH COURT DECISION. 7. AS THE ADDITIONS ARE UNSUSTAINABLE IN THE ASSESSMENT U/S. 153A, I DO NOT DEEM IT NECESSARY TO ADJUDICATE ON THE OTHER GROUNDS RELATING TO THE MERITS OF THE ADDITION AS THE SAME WOULD BE OF ACADEMIC INTEREST. THEREF ORE, I DIRECT THE AO TO DELETE THE ADDITIONS 6. ON A CAREFUL READING OF THE LD. CIT(A) ORDER , WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER PASSED BY THE LD. CIT(A) IN DELETING THE DISALLOWANCE MADE U/S. 14A OF THE ACT BY THE ASSESSING OFFICER IN A SEARCH ASSESSMENT IN THE ABSENCE OF ANY SEIZED MATERIALS. THUS THE GROUNDS RAISED BY THE REVENUE ARE REJECTED. 4 ITA. NOS. 6840 & 6841/MUM/2016 M/S. VAAYU INDIA POWER CORP . LTD., 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH FE BRUARY, 2019 SD/ - SD/ - ( MAN OJ KUMAR AGGARWAL ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 20/ 02/2019 GIRIDHAR, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM