BLUE DIAMOND REALATORS P. LTD, MUMBAI V. ASST CIT CIR -44, MUMBAI

ITA 7158/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8559 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-09-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 21-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K SHIVARAM
• Keywords: Search and seizure; Document seized
• Section: 143(3); 153A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . . , . BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER / AND , SHRI RAJENDRA, ACCOUNTANT MEMBER I.TA. NO. 7156/MUM/2011 ASSESSMENT YEAR 2003-04 I.TA. NO. 7157/MUM/2011 ASSESSMENT YEAR 2004-05 I.TA. NO. 7158/MUM/2011 ASSESSMENT YEAR 2005-06 I.TA. NO. 7159/MUM/2011 ASSESSMENT YEAR 2006-07 M/S. BLUE DIAMOND REALATORS PVT LTD., 21A NIRMAL, NARIMAN POINT, MUMBAI 400 021. PAN: AAACB 4883 B VS. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-44, 6 TH FLOOR, AAYAKAR BHAVAN, MUMBAI-400 020. ( / APPELLANT ) ( !' / RESPONDENT ) # / APPELLANT BY : SHRI K. SHIVARAM !' $ # / RESPONDENT BY : SHRI MANOJ KUMAR % $ &' / DATE OF HEARING : 27-09-2012 ()* $ &' / DATE OF PRONOUNCEMENT : 10-10-2012 + / O R D E R PER BENCH, THE FOLLOWING GROUNDS OF APPEAL WERE FILED BY THE A SSESSEE CHALLENGING THE ORDER DT. 23-06-2011 OF CIT(A)-38, MUMBAI FOR ALL THE ASSESSMENT YEARS I.E., 2003-04, 2004-05, 2005-06 & 2006-07. I.TA. NOS. 7156, 7157, 7158, 7159/MUM/2011 M/S. BLUE DIAMOND REALATORS PVT LTD., 2 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DETERMINING ANNUAL RA TE-ABLE VALUE OF THE PROPERTY BEING GODOWN AT BASEMENT BY APPLYING 8.5% OF THE CO ST OF THE PROPERTY AGAINST RS. NIL RETURNED BY THE APPELLANT PROPERTY BEING VACANT THROUGHOUT THE YEAR. 2.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN DETERMINING ANNUAL RATE-ABLE VALUE OF THE PROPERTY BEING GODOWN AT BASEMENT BY APPLYING 8.5% OF THE COST OF THE PROPERTY AGAINST R S.24,924/- AS PER CERTIFICATE ISSUED BY THE SOCIETY BASED ON RATE-ABLE VALUE MUNICIPAL C ORPORATION OF GREATER MUMBAI PROPERTY BEING VACANT THROUGHOUT THE YEAR. 3.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) ERRED IN DETERMINING ANNUAL RATE-ABLE VALUE OF THE PROPERTY BEING GODOWN AT BASEMENT BY APPLYING 8.5% OF THE COST OF THE PROPERTY AND IGNOR ING PROVISIONS OF SECTION 23(C) OF THE I. T. ACT 1961 AND DECISION IN CASE OF PREMSUDH A EXPORTS PVT LTD V ACIT REPORTED IN 295 ITR (AT) 341 (MUM) PROPERTY BEING VACANT DURING THE WHOLE OF THE PREVIOUS YEAR AND ACTUAL RENT RECEIVED RS. NIL. 4. EACH OF THE ABOVE GROUNDS ARE WITHOU T PREJUDICE TO ONE ANOTHER. 5. THE APPELLANT CRAVES LEAVE TO ADD ALT ER OR AMEND ANY OF THE ABOVE GROUNDS OF APPEAL. ADDITIONAL GROUNDS OF APPEAL 1.THE LD CIT(A) FAILED TO APPRECIATE THAT ASSESSMEN T U/S. 153A DOES NOT PERMIT ADDITIONS WHICH ARE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND HENCE ADDITION OF NOTIONAL INCOME FRO M HOUSE PROPERTY OF RS. 25,02,900/- MAY BE DELETED. 2. THE APPELLANT CRAVES LEAVE TO ADD, AM END, ALTER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 2. ASSESSEE-COMPANY ENGAGED IN THE BUSINESS OF BUILDER S AND CONTRACTORS, FILED ITS RETURN OF INCOME ON 04-03-2010 DECLARING TOTAL INCO ME AT RS. NIL. ASSESSMENT WAS FINALISED BY THE ASSESSING OFFICER (AO) AT RS. 25. 02 LAKHS VIDE ORDER DT. 26-10-2010 PASSED U/S. 143(3) R.W.S. 153A OF THE INCOME TAX AC T,1961(ACT).AN ACTION U/S.132 OF THE ACT WAS CARRIED OUT IN SOPARIWALA GROUP ON 24 -09-2008.ASSESSEE-COMPANY WAS ONE OF THE CONSTITUENTS OF THE SAID GROUP. 2.1. DURING THE ASSESSMENT PROCEEDINGS AO FOUND THAT THE ASSESSEE WAS OWNING A GODOWN AT DALAMAL BUILDING AT NARIMAN POINT, MUMBAI . AS PER THE AO, ASSESSEE HAD NOT OFFERED ANY INCOME FROM THE SAID BUILDING D URING THE ASSESSMENT YEAR (AY) UNDER CONSIDERATION. AO WAS OF THE OPINION THAT FO R THE PURPOSE OF SECTION 22 OF THE ACT, THE SUM FOR WHICH THE PROPERTY MIGHT REASONABL Y BE EXPECTED TO LET WAS TO BE TREATED AS INCOME FROM HOUSE PROPERTY. INVOKING THE PROVISIONS OF SECTION 23(1)(A) OF THE ACT HE ADOPTED A REASONABLE RENT AT RS. 200 PER SQ. FT. FOR THE ABOVE MENTIONED GODOWN. HE WORKED OUT MUNICIPAL TAXES FOR THE GOD OWN-PREMISES AT RS. 24,420/-. FINALLY, HE TAXED RS. 36 LAKHS UNDER THE HEAD INCO ME FROM HOUSE PROPERTY IN VIEW I.TA. NOS. 7156, 7157, 7158, 7159/MUM/2011 M/S. BLUE DIAMOND REALATORS PVT LTD., 3 OF PROVISIONS OF SECTION 23(1)(A) OF THE ACT.AFTER ALLOWING MUNICIPAL TAXES AND 30% OF THE ANNUAL VALUE U/S. 24(A) OF THE ACT, ASSESSME NT WAS FINALISED AT RS. 25.02 LAKHS. 2.2. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY (FAA). ADDITIONAL GROUNDS OF APPEAL WERE ALSO FILED BEFORE THE FAA WITH REGARD TO SCOPE OF ASSESSMENT U/S.153A OF THE ACT. IT WAS SUBMITTED T HAT ADDITION WERE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH.FAA DECIDED THE APPEALS FOR ALL THE FOUR AYS. BY PASSING A SINGLE ORDER AS THE ISSUES WERE COMMON. AFTER CONSIDERING WRITTEN SUBMISSIONS AND PAPER BOOK FILE D BY THE ASSESSEE AND REMAND REPORT/ASSESSMENT-ORDER OF THE AO,FAA HELD THAT THE APPELLANT WAS NOT PREVENTED BY THE SOCIETY, WHERE GODOWN WAS SITUATED, TO TAKE POS SESSION OF THE PREMISES AND CARRY OUT NECESSARY MODIFICATION WITH THE PURPOSE OF LETT ING OUT THE SAID PROPERTY, THAT THE GODOWN HAD BEEN IN POSSESSION OF THE APPELLANT DURI NG THE PERIOD F.Y. 2002-03 TO 2006-07, THAT TRANSFER OF SHARES OF THE SOCIETY IN THE NAME OF THE APPELLANT ON 14-09- 2004 WAS NOT A DECIDING FACTOR FOR DETERMINING ANNU AL LETTING VALUE (ALV) IN TERMS OF SECTION 23(1)(A) OF THE ACT, THAT AS AN OWNER OF THE PROPERTY ASSESSEE WAS LIABLE TO PAY TAXES ON THE INCOME UNDER THE HEAD HOUSE PROPE RTY UPTO SEPTEMBER 2004 IN RESPECT OF THE GODOWN-PREMISES, THAT AS PER CERTIFI CATE OF THE SOCIETY APPELLANT- COMPANY WAS IN POSSESSION OF THE PROPERTY SINCE F.Y . 2002-03. REFERRING TO THE SECTION 27(III) OF THE ACT, HE HELD THAT MEMBER OF THE CO-OPERATIVE SOCIETY TO WHOM A BUILDING OR PART OF THE BUILDING WAS ALLOTTED WAS D EEMED TO BE THE OWNER OF THE SAID PREMISES. RELYING UPON THE CASES OF HONBLE HIGH C OURT OF A.P. AND HONBLE SUPREME COURT [NANDANAM CONSTRUCTION (222 ITR 737) AND PODDAR CEMENTS LTD., (222 ITR 625)] RESPECTIVELY, HE HELD THAT APPELLANT WAS THE ORIGINAL OWNER OF THE PROPERTY IN QUESTION AND WAS ENTITLED TO RECEIVE TH E INCOME FROM THE SAID PROPERTY. FINALLY, HE HELD THAT APPELLANT WAS LIABLE TO BE TA XED ON ALV TO BE DETERMINED IN RESPECT OF THE AYS. IN APPEAL. APPEAL FILED BY THE ASSESSEE WAS DISMISSED BY THE FAA. 3. BEFORE US, AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT ADDITIONAL GROUNDS OF APPEAL SHOULD BE CONSIDERED ALONG WITH THE MAIN GRO UNDS OF APPEAL FILED BY THE ASSESSEE. IT IS FOUND FROM THE RECORD THAT ASSESSE E HAD RAISED SAME ISSUE BEFORE THE FAA, AS ADDITIONAL GROUND WITH RESPECT TO ASSESSMEN T ORDERS PASSED U/S. 153A OF THE ACT. IT WAS SUBMITTED THAT ADDITION WERE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE PROCE EDINGS. RELYING UPON THE DECISION OF THE SPECIAL BENCH IN THE CASE OF M/S. ALCARGO LO GISTIC LTD. (74 DTR 89) IT WAS REQUESTED THAT ADDITIONAL GROUND SHOULD ALSO BE DEC IDED, THAT THEY WERE BASICALLY LEGAL GROUNDS. DEPARTMENTAL REPRESENTATIVE (DR) SU BMITTED THAT ADDITIONAL GROUNDS WERE NOT ARISING OUT OF THE ORDER OF THE FAA, THAT SAME WERE NOT RAISED BEFORE THE AO OR THE FAA. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. FROM THE RECORDS, IT IS CLEAR THAT ASSESSEE HAD RAISED THE S AME ISSUE AS AN ADDITIONAL GROUND BEFORE THE FAA. IN OUR CONSIDERED OPINION, THE ISS UE OF SCOPE OF ASSESSMENT U/S. 153A, HAS TO BE DECIDED BY THE FAA SPECIALLY IN CAS E WHERE SEARCH AND SEIZURE ACTION WAS CARRIED OUT U/S.132 OF THE ACT. WE FIND THAT FAA HAS NOT DEALT THE ISSUE WHILE DECIDING THE APPEAL FILED BY THE ASSESSEE. I N PARA NO.5.1 OF HIS ORDER HE HAS HELD THAT CONTENTIONS RAISED REGARDING, NON-AVAILA BILITY OF SEIZED MATERIAL FOR MAKING ADDITIONS, WERE NOT RELEVANT IN DECIDING THE ISSUE INVOLVED FOR THE AYS UNDER CONSIDERATION. HE FURTHER HELD THAT ADDITIONAL GRO UNDS OF APPEAL WITH REGARD TO I.TA. NOS. 7156, 7157, 7158, 7159/MUM/2011 M/S. BLUE DIAMOND REALATORS PVT LTD., 4 APPLICABILITY OF SECTION 153A OF THE ACT WERE TECHN ICAL ONLY AND WERE NOT SUPPORTED BY ANY SUBSTANCE OR MATERIAL TO JUSTIFY THE CONTENT IONS. IN OUR HUMBLE OPINION, IN SEARCH AND SEIZURE CASES WHERE ASSESSMENTS ARE FINA LISED AS PER PROVISIONS OF SECTION 153A, ISSUE OF SEIZURE OF DOCUMENTS AND RELEVANCE O F DOCUMENTS/ASSETS SEIZED DURING SEARCH ACTION HAS TO BE DECIDED. IN THESE CIRCUMST ANCES, IN THE INTEREST OF JUSTICE, MATTER IS BEING REMITTED BACK TO THE FILE OF THE FA A FOR DECIDING THE ISSUE WITH REGARD TO APPLICABILITY OF SECTION 153A OF THE ACT. FAA S HOULD PASS A SPEAKING ORDER, WITH REGARD TO SEIZURE/NON-SEIZURE OF RELEVANT/INCRIMINA TING MATERIAL, AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. HENCE, ADDITIONAL GROUND IS ALLOWED FOR STATISTICAL PURPOSES. IN VIEW OF THE ABOVE, WE DO NOT CONSIDER NECE SSARY TO DECIDE OTHER GROUNDS OF APPEALS TAKEN BY ASSESSEE. AS A RESULT, APPEALS FILED BY THE ASSESSEE STA ND ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2012. SD/- SD/- ( . . / B.R. MITTAL ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI, ,% DATE: 10 TH OCTOBER, 2012 TNMM + + + + $ $$ $ !&- !&- !&- !&- .-*& .-*& .-*& .-*& / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR B BENCH, ITAT, MUMBAI 6. GUARD FILE '-& !& //TRUE COPY// +% +% +% +% / BY ORDER, / // / / 0 0 0 0 DY./ASSTT. REGISTRAR , / ITAT, MUMBAI