ITO 2(2)(1), MUMBAI V. I.A. & I.C PVT .LTD, MUMBAI

ITA 7481/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0020 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 19-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B C S NAIK
• Keywords: Capital asset; Search and seizure; Opportunity of being heard; Valuation report; Documents seized
• Section: 143(3); 153A; 132

Judgement Text

M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI RAJENDRA , AM AND SHRI RAVISH SOOD, JM ./ I.T.A. NO. 7481/MUM/2016 ( / ASSESSMENT YEAR: 2007 - 08) INCOME - TAX OFFICER 2(2)(1) ROOM NO. 549, AAYKAR BHAVAN, MUMBAI - 400 020 / VS. M/S I.A & I.C PVT. LTD. 16 GUNDECHA CHAMBER, NAGINDAS MASTER ROAD, FORT, MUMBAI 400 023. ./ ./ PAN/GIR NO. AAAC12620K ( /APPELLANT ) : ( / RESPONDENT) ./ I.T.A. NO. 7440/MUM/2016 ( / ASSESSMENT YEAR: 2009 - 10) INCOME - TAX OFFICER 2(2)(1) ROOM NO. 549, AAYKAR BHAVAN, MUMBAI - 400 020 / VS. M/S I.A & I.C PVT. LTD. 16 GUNDECHA CHAMBER, NAGINDAS MASTER ROAD, FORT, MUMBAI 400 023. ./ ./ PAN/GIR NO. AAAC12620K ( /APPELLANT ) : ( / RESPONDENT) / APPELLANT BY : SHRI B.C.S NAIK, CIT D.R / RESPONDENT BY : SHRI NEELKANTH KHANDELWAL / DATE OF HEARING : 24/08/2017 / DATE OF PRONOUNCEMENT : 30 /08/2017 M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 2 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER T HE PRESENT APPEAL S FILED BY THE REVENUE ARE AGAINST THE RESPECTIVE ORDERS PASSED BY THE CIT(A) - 5 0 , MUMBAI, IN THE CASE OF THE ASSESSEE FOR A.Y. 2007 - 08 AND A.Y. 2009 - 10, BOTH DATED 29.08.2016 , WHICH IN ITSELF ARISES FROM THE RESPECTIVE ASSESSMENT S FRAMED BY THE A.O U/S 143(3) R.W.S 153C OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), EACH DATED 2603.2013 . THAT AS COMMON ISSUES ARE INVOLVED IN THE RESPECTIVE APPEALS OF THE REVENUE, THEREFORE, THEY ARE BEING TAKEN UP TOGETHER AND DISPOSED OF BY WAY OF A CONSOLIDATE ORDER. WE FIRST TAKE UP THE APPEAL OF THE REVENUE FOR A.Y. 2007 - 08. THE REVENUE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD RAISED BEFORE US THE FOLLOWING GROUND S OF APPEAL: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION MADE MERELY ON TECHNICAL ISSUES OF NON - RECEIPT OF COMMENT OF THE A.O ON ASSESSES LETTER WITHOUT APPRECIATING THE FACTS. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION IN SPITE OF DISMISSING ASSESSES GROUND OF APPEAL RELATING TO VALIDITY OF PROCEEDING U/S 153A OF INCOME TAX ACT. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION WITHOUT APPRECIATING THE FACT THAT ASSESSMENT FOR THE ASSESSMENT YEAR AUTOMATICALLY GET ABATED WITHIN THE MEANING OF 2 ND PROVISO OF SEC. 153A OF INCOME TAX ACT. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION WITHOUT GIVING AUTHENTIC FINDINGS THAT THE PENDING PROCEEDINGS FOR THE A.Y. WERE NOT ABATED WITHIN THE MEANING OF 2 ND PROVISO OF SECTION 153A OF THE ACT. M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 3 5. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE DECISION OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE A.O BE RESTORED. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY, VIZ. M/S I.A & I.C PRIVATE LIMITED IS A SUBSIDIARY COMPANY OF M/S JIK INDUSTRIES LIMITED. THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF LEASING OF PROPERTY HAD FILED ITS RETURN OF INCOME ON 28.09.2012, DECLARING LOSS OF ( - ) RS. 52,67,700/ - . THAT SEARCH & SEIZURE PROCEEDINGS WERE CONDUCTED UNDER SEC. 132 OF THE ACT ON 04.02.2011 IN THE CASE OF M/S JIK INDUSTRIES LIMITED AND ITS CMD SH. R.G PARIKH. THAT AS CLAIMED BY THE A.O , DURING THE C O URSE OF THE SEARCH PROCEEDINGS DOCUMENTS AND COMPUTER BACKUP PERTAIN ING TO THE ASSESSEE W ERE FOUND AND SEIZED. TH AT A NOTICE UNDER SEC. 153C WAS ISSUED TO THE ASSESSEE , HOWEVER, THE LATTER FAILED TO FILE ITS RETURN OF INCOME IN COMPLIANCE THERETO WITHIN THE SPECIFIED TIME PERIOD, AND FILED THE SAME ONLY ON 28.09.2012, DE CLARING A LOSS OF ( - ) RS. 52,67,700 / - [ INCLUDING LOSS OF ( - )RS. 39,23,420/ - UNDER THE HEAD CAPITAL GAIN ] . THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O DELIBERATING ON THE FACTS OF THE CASE, THEREIN BEING OF THE VIEW THAT THE ASSESSEE H AD SHOWN OTHER INCOME OF RS. 15,32,715/ - , BUT DESPITE BEING DIRECTED TO FURNISH THE DETAILS OF THE INCOME/EXPENDITURE AS REGARDS THE SAME, HOWEVER FAILED TO PLACE ON RECORD THE SAME. THE A.O IN THE BACKDROP OF THE AFORESAID FACTS TREATED THE ENTIRE AMOUN T OF RS. 15,32,715/ - AS THE INCOME FROM OTHER SOURCES OF THE ASSESSEE, AND NO EXPENDITURE WAS ALLOWED AGAINST THE SAME. THE A.O FURTHER DELIBERATING ON THE CLAIM OF THE ASSESSEE TOWARDS LOSS ON TRANSFER OF LAND, REFERRED THE MATTER TO THE DVO, HOWEVER, AS THE VALUATION REPORT FROM THE DVO WAS AWAITED, THEREFORE, THE A.O BEING OF THE CONSIDERED VIEW THAT THE TIME LIMITATION FOR FRAMING OF THE ASSESSMENT WAS FAST APPROACHING AND T HE MATTER COULD NOT BE KEPT OPEN, THUS DID NOT WAIT M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 4 FOR THE VALUATION REPORT AND PROCEEDED WITH THE ASSESSMENT AND LEFT THE ISSUE AS REGARDS COMPUTING OF THE INCOME/LOSS OF THE ASSESSEE UNDER THE HEAD CAPITAL GAIN TO BE DECIDED ON R ECEIPT OF THE VALUATION REPORT. THE A.O THUS ON THE BASIS OF HIS AFORESAID OBSERVATIONS ASSESSED T HE INCOME OF THE ASSESSEE UNDER SEC. 143(3) R.W.S 153C AT AN AMOUNT OF RS. 1,88,435/ - 3. THE ASSESSEE BEING AGGRIEVED WITH THE ASSESSMENT FRAMED BY THE A.O, THEREIN CARRIED TH E MATTER IN APPEAL BEFORE THE CIT(A). THAT IT WAS AVERRED BY THE ASSESSEE THAT TH E A.O WHILE FRAMING THE ASSESSMENT HAD FAILED TO CONSIDER THE LOSS OF RS. 39,23,430/ - THAT WAS CLAIMED BY THE ASSESSEE UNDER THE HEAD CAPITAL GAIN. THE ASSESSEE IN ADDITION TO THE ASSAILING OF THE ASSESSMENT FRAMED BY THE A.O ON MERITS, ALSO AVERRED TH AT THE ASSESSMENT FRAMED BY THE A.O UNDER SEC. 143(3) R.W.S 153C WAS BAD IN LAW. THE ASSESSEE DURING THE COURSE OF THE APPELLATE PROCEEDINGS ASSAILED THE VALIDITY OF THE ASSUM PTION OF J URISDICTION BY THE A.O IN ITS CASE UNDER SEC. 153C, BY RAISING ADDITION AL GROUNDS OF APPEAL BEFORE THE CIT(A), ON THE FOLLOWING COUNTS: - (I). THAT THE A.O HAD WRONGLY ASSUMED JURISDICTION UNDER SEC. 153C WITHOUT SATISFYING THE MANDATORY REQUIREMENT OF PREPARATION OF SATISFACTION NOTE. (II). THAT AS NO INCRIMINATING MATERIA L/DOCUMENTS RELATING TO THE ASSESSEE COMPANY WAS EITHER FOUND OR SEIZED DURING THE COURSE OF THE SEARCH PROCEEDINGS CONDUCTED IN THE CASE OF M/S JIK INDUSTRIES LTD AND ITS PROMOTER SH. R.G PARIKH, THEREFORE, THE A.O HAD WRONGLY ASSUMED JURISDICTION UNDER S EC. 153C IN THE CASE OF THE ASSESSEE. M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 5 4. THE CIT(A) DURING THE COURSE OF HEARING OF THE APPEAL ADMITTED THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE. TH AT IN THE ABSENCE OF ANY EXPLANATION OF THE ASSESSEE IN SUPPORT OF ITS CONTENTION THAT THE A.O HAD FAILED TO RECORD HIS SATISFACTION FOR VALID ASSUMPTION OF JURISDICTION UNDER SEC. 153C , AS WELL AS NOT PERSUADED TO ACCEPT THE CLAIM OF THE ASSESSEE THAT THE DOCUMENTS SEIZED DURING THE COURSE OF THE SEARCH & S EIZURE PROCEEDINGS SHOULD BE OF INCRIMINATING NATURE FOR VALID ASSUMPTION OF JURISDICTION BY THE A.O UNDER SEC. 153C, IN THE BACKDROP OF THE FACT THAT IT WAS NOT THE CASE OF THE ASSESSEE THAT ONLY COPIES OF ACKNOWLEDGEMENT OF RETURNS AND COPIES OF THE FINA L ACCOUNTS OF THE ASSESSEE WERE SEIZED DURING THE COURSE OF THE SEARCH PROCEEDINGS, THEREFORE, DID NOT FIND FAVOUR WITH THE AFORESAID GROUNDS ON THE BASIS OF WHICH THE VALIDITY OF ASSUMPTION OF JURISDICTION BY THE A.O UNDER SC. 153C WAS ASSAILED BY THE ASS ESSEE BEFORE HIM. 5. T HE CIT(A) HOWEVER AFTER DELIBERATING ON THE CONTENTIONS RAISED BY THE ASSESSEE BEFORE HIM AS REGARDS THE VALIDITY OF THE ASSESSMENT FRAMED BY THE A.O , ON THE GROUND THAT AS NO ASSESSMENT HAD ABATED IN THE CASE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2007 - 08, THEREFORE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE HAVING BEEN FOUND AND SEIZED DURING THE COURSE OF THE SEARCH PROCEEDINGS CONDUCTED IN THE CASE OF M/S JIK INDUSTRIES LTD AND ITS PROMOTER SH. R.G PARIKH, NO ADDITIONS COULD HAVE BEEN MADE IN RESPECT OF THE UNABATED ASSESSMENT OF THE ASSESSEE FOR A.Y. 2007 - 08, WHICH HAD ATTAINED FINALITY , THEREIN COMMUNICATED THE SAID CLAIM OF THE ASSESSEE TO THE A.O AND CALLED UPON HIM TO FURNISH H IS COMMENTS AS REGARDS THE SAME ON 08.08.2016. THAT AS STANDS GATHERED FROM THE ORDER OF THE CIT(A), THOUGH NO REPLY WAS FILED BY THE A.O, HOWEVER, HE SENT THE CASE RECORDS FOR THE PERUSAL OF THE CIT(A). THE CIT(A) AFTER PERUSING THE CASE RECORDS, THEREIN OBSERVED THAT THE SAME WERE FOUND TO BE INCOMPLETE, AS WELL AS THERE WAS M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 6 NOTHING WHICH COULD GO TO SUGGEST THAT THERE WAS ANY ABATEMENT OF THE ASSESSMENT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2007 - 08. THE CIT(A) FURTHER OBSERVING THAT AS THE A.O DESPITE HAVING BEEN AFFORDED AN OPPORTUNITY TO REBUT THE CLAIM OF THE ASSESSEE HAD HOWEVER FAILED TO DO SO, THEREFORE, THE CLAIM OF THE ASSESSEE WAS TO BE HELD AS CORRECT. THE CIT(A) THUS IN THE BACKDROP OF HIS AFORESAID OBSERVATIONS, THUS CONC LUDED THAT IN LIGHT OF THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT - II, THANE VS. CONTINENTAL WAREHOUSING CORPORATION ( 2015) 374 ITR 645 (BOM) , IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE HAVING BEEN FOUN D DURING THE COURSE OF THE SEARCH PROCEEDINGS, NO ADDITION COULD BE MADE IN RESPECT OF THE UNABATED ASSESSMENT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2007 - 08.THE CIT(A) THUS CONCLUDED THAT THE A.O HAD ERRED IN DISTURBING THE ASSESSMENT S WHICH HAD ATTAINED FINALITY, AND THUS DIRECTED THE A.O TO RESTORE THE TOTAL INCOME AS IT EXISTED IMMEDIATELY BEFORE THE SEARCH AND SEIZURE PROCEEDINGS AND DELET E THE ADDITIONS AND DISALLOWANCES MADE IN THE ORDER PASSED UNDER SEC. 143(3) R.W.S 153C. 6 . THE REVENUE BEING AGGRIEVED WITH THE ORDER OF T HE CIT(A) HAD THEREIN CARRIED THE MATTER IN APPEAL BEFORE US. THAT THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) DREW OUR ATTENTION TO PAGE 5 PARA 6.3.3 OF THE ORDER OF THE CIT(A). IT WAS SUBMITTED BY THE LD. D.R THAT THE CIT(A) THOUGH BEING WELL CONVERSANT OF THE FACT THAT COMPLETE CASE RECORDS OF THE ASSESSEE WERE NOT THERE BEFORE HIM, HOWEVER, INSTEAD OF SUMMONING THE RECORDS AND MAKING PROPER INVESTIGATIONS A S REGARDS THE FACTS OF THE CASE, HAD RATHER PROCEEDED WITH AND ON THE BASIS OF THE INCOMPLETE RECORDS AVAILABLE BEFORE HIM , AND THEREIN CONCLUDED THAT AS NO INCRIMINATING MATERIAL RELATING TO THE ASSESSEE WAS SEIZED DURING THE COURSE OF THE SEARCH & SEIZUR E PROCEEDINGS CONDUCTED ON M/S JIK INDUSTRIES LTD AND ITS PROMOTER M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 7 SHRI. R.G. PARIKH, THEREFORE, THE UNABATED ASSESSMENT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2007 - 08 COULD NOT BE DISTURBED. IT WAS THUS AVERRED BY THE LD. D.R THAT THE FINDINGS OF FACTS ARRIVED AT BY THE CIT(A) ON THE BASIS OF INCOMPLETE RECORDS AVAILABLE BEFORE HIM DID NOT INSPIRE ANY CONFIDENCE , AND THE SAME THUS COULD NOT BE ALLOWED TO FORM THE BASIS FOR ADJUDICATION OF THE VALIDITY OF THE ASSUMPTION OF JURISDICTION BY THE A.O UNDER SEC. 153C. IT WAS THUS SUBMITTED BY THE LD. D.R THAT THE ORDER OF THE CIT(A) IN ALL FAIRNESS WAS REQUIRED TO BE SET ASIDE TO HIS FILE, WITH A DIRECTION TO AD JUDICATE THE SAME AFRESH AFTER CALLING FOR THE COMPLETE CASE RECORDS. PER CONTRA, THE LD. AUTHORISED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE VEHEMENTLY OBJECTED THE AVERMENTS OF THE LD. D.R AND RELIED ON THE ORDER OF THE CIT(A) . IT WAS AVERRED BY THE LD. A.R THAT THE CIT(A) AFTER TIME AND AGAIN CALLING UPON THE A.O TO FURNISH THE INFORMATION, HAD THEREAFTER ON THE FAILURE ON THE PART OF THE LATTER TO EFFECT NECESSARY COMPLIANCE, HAD THUS PROCEEDED WITH ON THE BASIS OF THE CASE RECORDS AS WAS FORWARDED BY THE A.O. THE LD. A.R IN SUPPORT OF HIS AFORESAID CONTENTION HAD PLACED ON RECORD A LETTER DATED. 21.08.2017 FILED WITH THE CIT(A) - 50, MUMBAI, WHEREIN THE ASSESSEE HAD REQUESTED FOR THE COPIES OF THE LETTERS THAT WAS WRITTEN BY THE CIT(A) TO THE A.O DURING THE COURSE OF THE HEARING OF THE APPEAL. THE LD. A.R RELIED ON THE ORDER OF THE CIT(A) AND SUBMITTED THAT NO INFIRMITY DID EMERGE FROM HIS ORDER. IT WAS THUS SUBMITTED BY THE LD. A.R THAT AS THE APPEAL FILED BY THE REVENUE WAS DEVOID OF ANY MERIT, THEREFORE, THE SAME WAS LIABLE TO BE VACATED. 7 . WE HAVE HEARD THE AUTHORISED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND ARE NOT IMPRESSED BY THE MANNER IN WH ICH THE CIT(A) HAD PROCEEDED WITH AND DISPOSED OF THE APPEAL OF THE ASSESSEE. M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 8 WE FIND THAT IT REMAINS AS A MATTER OF FACT THAT THE CASE RECORDS OF THE ASSESSEE AS WERE THERE BEFORE THE CIT(A), AS CONCEDED BY THE LATTER, WERE FOUND TO BE INCOMPLETE. WE ARE UNABLE TO COMPREHEND THAT AS TO HOW THE CIT(A) IN THE ABSENCE OF COMPLETE RECORDS HAD CONCLUDED THAT NO INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE WAS FOUND AND SEIZED DURING THE COURSE OF THE SEARCH & SEIZURE PROCEEDINGS CONDUCTED UNDER SEC. 132 ON M/S JIK INDUSTRIES LTD AND ITS PROMOTER SHRI. R.G. PARIKH . WE ALSO FIND IT BEYOND OUR COMPREHENSION THAT IN THE ABSENCE OF THE COMPLETE RECORDS HOW THE CIT(A) HAD OBSERVED THAT THE ASSESSMENT IN THE CASE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, V IZ. A.Y. 2007 - 08 WAS UNABATED. WE ARE OF THE CONSIDERED VIEW THAT A CORRECT FACTUAL POSITION IN CONTEXT OF THE AFORESAID ISSUES NOT ONLY HAD A MATERIAL BEARING, BUT RATHER WAS INDISPENSABLY REQUIRED FOR FAIR ADJUDICATION ON THE VALIDITY OF THE ASSUMPTION O F JURISDICTION BY THE A.O UNDER SEC. 153C IN THE CASE OF THE ASSESSEE. WE ARE UNABLE TO PERSUADE OURSELVES TO BE IN AGREEMENT WITH THE AFORESAID VIEW ARRIVED AT BY THE CIT(A) IN RESPECT OF THE VALIDITY OF THE ASSUMPTION OF JURISDICTION BY THE A.O UNDER SEC . 153C ON THE AFORESAID COUNT, AS THE SAME CAN SAFELY BE HELD TO HAVE BEEN ARRIVED AT BY THE CIT(A) ON THE BASIS OF AN HALF HEARTED APPROACH ADOPTED BY HIM WHILE RECORDING THE FACTS ON THE BASIS OF INCOMPLETE RECORDS. WE FURTHER FIND THAT EVEN OTHERWISE TH E AFORESAID OBSERVATIONS OF THE CIT(A) THAT NO INCRIMINATING MATERIAL WAS SEIZED DURING THE COURSE OF SEARCH & SEIZURE PROCEEDINGS CONDUCTED ON M/S JIK INDUSTRIES LTD AND ITS PROMOTER SHRI. R.G. PARIKH, IS ITSELF FOUND TO MILITATE AND IS IN SERIOUS CONFLIC T WITH HIS OBSERVATION THAT IT WAS NOT THE CASE OF THE ASSESSEE THAT ONLY ACKNOWLEDGEMENT OF RETURN AND COPIES OF THE FINAL ACCOUNT OF THE ASSESSEE WERE SEIZED DURING THE COURSE OF THE AFORESAID SEARCH & SEIZURE PROCEEDINGS. THE AFORESAID OBSERVATIONS OF T HE CIT(A) THOUGH RENDERED IN CONTEXT OF THE CLAIM OF M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 9 THE ASSESSEE THAT NO INCRIMINATING MATERIAL WAS FOUND AND SEIZED DURING THE COURSE OF THE SEARCH & SEIZURE PROCEEDINGS, THEREFORE, THE A.O COULD NOT HAVE ASSUMED JURISDICTION UNDER SEC. 153C, THUS RAISES DOUBTS AS REGARDS THE TRUE STATE OF AFFAIRS IN RESPECT OF THE NATURE OF THE MATERIAL BELONGING TO THE ASSESSEE, AS WAS SEIZED DURING THE COURSE OF THE SEARCH & SEIZURE PROCEEDINGS CONDUCTED ON M/S JIK INDUSTRIES LTD AND ITS PROMOTER SHRI. R.G. PARIKH. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS, THUS IN ALL FAIRNESS AND IN THE INTEREST OF JUSTICE RESTORE THE MATTER TO THE FILE OF THE CIT( A ) FOR FRESH ADJUDICATION ON THE ISSUE AS TO WHETHER THE ASSESSMENT IN THE CASE OF THE ASSESSEE FOR THE YEAR U NDER CONSIDERATION, VIZ. A.Y. 2007 - 08 WAS ABATED OR NOT , AND AS TO WHETHER ANY INCRIMINATING DOCUMENT /MATERIAL BELONGING TO THE ASSESSEE WAS FOUND DURING THE COURSE OF T HE SEARCH & SEIZURE PROCEEDINGS CONDUCTED AS ON 04.02.2011 ON M/S JIK INDUSTRIES LTD A ND ITS PROMOTER SHRI. R.G. PARIKH . THE CIT(A) IS DIRECTED TO PROCEED WITH THE FRESH ADJUDICATION DURING THE COURSE OF T HE SET ASIDE PROCEEDINGS ONLY AFTER SUMMON ING THE COMPLETE CASE RECORDS OF THE ASSESSEE . THE CIT(A) SHALL AFTER PERUSING THE COMPLETE C ASE RECORDS OF THE ASSESSEE ADJUDICATE THE VALIDITY OF THE ADDITIONS MADE BY THE A.O IN THE HANDS OF THE ASSESSEE, IN THE BACKDROP OF THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT - II, THANE VS. CONTINENTAL WAREHOUSING CORPORATION (2015) 374 ITR 645 (BOM) . NEEDLES TO SAY, THE CIT(A) SHALL DURING THE COURSE OF THE SET ASIDE PROCEEDINGS AFFORD SUFFICIENT OPPORTUNITY OF BEING HEARD TO BOTH THE PARTIES, WHO SHALL REMAIN AT A LIBERTY TO SUBSTANTIATE THEIR RESPECTIVE CONTENTIONS DURING TH E COURSE OF THE SET ASIDE PROCEEDINGS. WE FURTHER DIRECT THE CIT(A) TO COMPLETE THE SET ASIDE PROCEEDINGS WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF RECEIPT OF THIS ORDER. THE EFFECTIVE GROUNDS OF APPEAL NO(S). 1 TO 4 ARE ALLOWED FOR STATISTICAL PURPOS ES IN TERMS OF OUR AFORESAID OBSERVATIONS. M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 10 8 . THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF OUR AFORESAID OBSERVATIONS. I TA NO. 7440/MUM/2016 A.Y. 2009 - 10 (APPEAL OF THE REVENUE) 9 . WE SHALL NOW TAKE UP THE APPEAL OF THE REVENUE FOR A.Y. 2009 - 10. THE REVENUE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD RAISED THE FOLLOWING GROUNDS OF APPEAL BEFORE US: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION MADE MERELY ON TECHNICAL ISSUES OF NON - RECEIPT OF COMMENT OF THE A.O ON ASSESSES LETTER WITHOUT APPRECIATING THE FACTS. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) WAS RIGHT IN DE LETING THE ADDITION IN SPITE OF DISMISSING ASSESSES GROUND OF APPEAL RELATING TO VALIDITY OF PROCEEDING U/S 153A OF INCOME TAX ACT. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION WIT HOUT APPRECIATING THE FACT THAT ASSESSMENT FOR THE ASSESSMENT YEAR AUTOMATICALLY GET ABATED WITHIN THE MEANING OF 2 ND PROVISO OF SEC. 153A OF INCOME TAX ACT. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION WITHOUT GIVING AUTHENTIC FINDINGS THAT THE PENDING PROCEEDINGS FOR THE A.Y. WERE NOT ABATED WITHIN THE MEANING OF 2 ND PROVISO OF SECTION 153A OF THE ACT. 10 . BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY HAD FILED ITS RETURN OF INCOME DECLARING LOSS OF ( - ) RS. 2,78,14,685/ - . THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O DELIBERATING ON THE FACTS OF THE CASE, THEREIN BEING OF THE VIEW THAT THE ASSESSEE HAD SHOWN OTHER INCOME OF RS. 26,831/ - , BUT DESPITE BEING DIRECTED TO FURNISH THE DETAILS OF THE INCOME/EXPENDITURE AS REGARDS THE SAME, HOWEVER FAILED TO PLACE ON RECORD THE SAME. THE A.O IN THE BACKDROP OF THE AFORESAID FACTS TREATED THE ENTIRE AMOUNT OF M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 11 RS. 26,831/ - AS THE I NCOME OF THE AS SESSEE FROM OTHER SOURCES, AGAINST WHICH NO EXPENDITURE WAS ALLOWED . THE A.O THUS ON THE BASIS OF HIS AFORESAID OBSERVATIONS ASSESSED THE INCOME OF THE ASSESSEE UNDER SEC. 143(3) R.W.S 153C AT AN AMOUNT OF RS. 27,255 / - . 11 . THE ASSESSEE BEING AGGRIEVED WITH THE ASSESSMENT FRAMED BY THE A.O, THEREIN CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER DELIBERATING ON THE CONTENTIONS RAISED BY THE ASSESSEE BEFORE HIM AS REGARDS THE VALIDITY OF THE ASSUMPTION OF JURI SDICTION BY THE A.O, ON THE GROUND THAT AS NO ASSESSMENT HAD ABATED IN THE CASE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2007 - 08, THEREFORE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL PERTAINING TO THE ASSESSEE HAVING BEEN FOUND AND SE IZED DURING THE COURSE OF THE SEARCH PROCEEDINGS CONDUCTED IN THE CASE OF M/S JIK INDUSTRIES LTD AND ITS PROMOTER SH. R.G PARIKH, NO ADDITIONS COULD HAVE BEEN MADE IN RESPECT OF THE UNABATED ASSESSMENT OF THE ASSESSEE FOR A.Y. 2008 - 09, WHICH HAD ATTAINED F INALITY, THEREIN COMMUNICATED THE SAID CLAIM OF THE ASSESSEE TO THE A.O AND CALLED UPON HIM TO FURNISH HIS COMMENTS AS REGARDS THE SAME ON 08.08.2016. THAT AS STANDS GATHERED FROM T HE ORDER OF THE CIT(A), THOUGH NO REPLY WAS FILED BY THE A.O, HOWEVER, THE A.O SENT THE CASE RECORDS FOR THE PERUSAL OF THE CIT(A). THE CIT(A) AFTER PERUSING THE CASE RECORDS, THEREIN OBSERVED THAT THE SAME WAS FOUND TO BE INCOMPLETE, AS WELL AS THERE WAS NOTHING WHICH COULD GO TO SUGGEST THAT THERE WAS ANY ABATEMENT OF THE ASSE SSMENT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2008 - 09. THE CIT(A) FURTHER OBSERVING THAT AS THE A.O DESPITE HAVING BEEN AFFORDED AN OPPORTUNITY TO REBUT THE CLAIM OF THE ASSESSEE, HOWEVER FAILED TO DO SO, THEREFORE, THE CLAIM OF THE AS SESSEE WAS TO BE HELD AS CORRECT. THE CIT(A) THUS IN THE BACKDROP OF HIS AFORESAID OBSERVATIONS CONCLUDED THAT IN LIGHT OF THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT - II, THANE VS. CONTINENTAL WAREHOUSING M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 12 CORPORATION (2015) 374 I TR 645 (BOM) , IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE HAVING BEEN FOUND DURING THE COURSE OF THE SEARCH & SEIZURE PROCEEDINGS, NO ADDITION COULD BE MADE IN RESPECT OF THE UNABATED ASSESSMENT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2008 - 09. THE CIT(A) THUS CONCLUDED THAT THE A.O HAD ERRED IN DISTURBING THE ASSESSMENTS WHICH HAD ATTAINED FINALITY AND DIRECTED THE A.O TO RESTORE THE TOTAL INCOME AS IT EXISTED IMMEDIATELY BEFORE THE SEARCH BY DELETING THE ADDIT IONS AND DISALLOWANCES MADE IN THE ORDER PASSED UNDER SEC. 143(3) R.W.S 153C. 12 . THE REVENUE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A), HAD THEREIN CARRIED THE MATTER IN APPEAL BEFORE US. THAT AT THE VERY OUTSET OF THE HEARING OF THE AP PEAL IT WAS SUBMITTED BY THE LD. D.R THAT THE FACTS AND THE ISSUE INVOLVED IN THE PRESENT APPEAL OF THE REVENUE FOR A.Y. 2009 - 10, W ERE THE SAME AS WERE INVOLVED IN THE LATTERS APPEAL FOR A.Y. 2008 - 09, MARKED AS ITA NO. 7481/MUM/2016. THE AFORESAID CLAIM OF THE LD. D.R WAS NOT CONTROVERTED BY THE LD. A.R. WE HAVE PERUSED THE RECORDS AND FIND THAT THE FACTS AND THE ISSUE INVOLVED IN THE PRESENT APPEAL OF THE REVENUE FOR A.Y. 2009 - 10 ARE THE SAME , AS WERE INVOLVED IN ITS APPEAL FOR A.Y. 2007 - 08, MARKED AS ITA NO. 7481/MUM/2016, THEREFORE, OUR ORDER PASSED WHILE DISPOSING OF THE GROUNDS OF APPEAL NO(S) 1 TO 4 IN THE APPEAL OF THE REVENUE FOR A.Y. 2007 - 08, MARKED AS ITA NO. 7481/MUM/2016 , SHALL APPLY MUTATIS MUTANDIS FOR ADJUDICATING THE GROUNDS OF APPEAL NO(S ). 1 TO 4 RAISED BY THE REVENUE IN ITS PRESENT APPEAL FOR A.Y. 2009 - 10. WE THUS IN TERMS OF OUR OBSERVATIONS RECORDED WHILE DISPOSING OF THE APPEAL OF THE REVENUE FOR A.Y. 2007 - 08, MARKED AS ITA NO. 7481/MUM/2016, RESTORE THE PRESENT APPEAL TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. THE APPEAL OF THE REVENUE FOR A.Y. 2009 - 10 IS THUS ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF OUR AFORESAID OBSERVATIONS. M/S I.A & I.C PVT. LTD ITA NO(S). 7481 & 7440/MUM/2016 13 ORDER PRONOUNCED ON THE OPEN COURT ON 30 .08.2017 SD/ - SD/ - (RAJENDRA) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 30 .08.2017 PS. ROHIT KUMAR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI