Siddheshwar Industries Pvt. Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 760/PUN/2016

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 4318 (ITAT-PUNE)
• Duration Of Justice: 6 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 19-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: HARI KRISHAN
• Keywords: Business income; Search and seizure
• Section: 132; 43B; 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.760/PUN/2016 िनधाᭅरण वषᭅ / Assessment Year: 2008-09 Siddheshwar Industries Pvt. Ltd., Plot No.A-50, H- Block, MIDC, Pimpri, Pune- 411018. PAN : AAGCS4976E Vs. DCIT, Central Circle- 2(2), Pune. Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)- 12, Pune [‘CIT(A)’ for short] dated 23.10.2015 for the assessment year 2008-09. 2. The appellant raised the following grounds of appeal :- “1. In the facts and circumstances of the case and in law, the learned C.I.T. [A] 12 has erred by wrongly enhance the amount of Rs.2,95,00,000/- by disallowing the claim of deduction u/s 43B in revised return of income filed u/s 153A of the I T Act. The aforesaid addition being arbitrary, perverse, based on surmises and conjecture Assessee by : Shri Hari Krishan Revenue by : Shri Piyushkumar Singh Yadav Date of hearing : 09.03.2022 Date of pronouncement : 20.04.2022 ITA No.760/PUN/2016 2 the learned C.I.T. [A] enhance the same. The impugned enhance addition may please be deleted. 2. The appellant denies his liability to pay any interest u/s 234 B and 234 C of the I.T.Act 1961 and hence the same may please be deleted. 3. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal.” 3. At the outset, there is a delay of 95 days in filing the present appeal. The assessee filed an affidavit stating that one Mr. Mahesh Jagdale earlier Accountant of the appellant company, who was entrusted with the responsibility of looking after the income-tax matter received the order of the ld. CIT(A) on 17.11.2015, left the company on 31.12.2015. The new Accountant who was appointed in his place in the month of January, 2016 had come to know that the appeal against the ld. CIT(A)’s order was not filed then the appeal is immediately filed with the delay of 95 days on 20.04.2016. An affidavit from the new Accountant also filed to this effect. Thus, it was submitted that the delay in filing the present appeal was neither deliberate nor intentional and the assessee had not gained anything on account of delay in filing the present appeal. Thus, it is prayed that delay should be condoned. ITA No.760/PUN/2016 3 4. On the other hand, ld. CIT-DR has no serious objection in condoning the delay of 95 days. 5. Considering the fact that the delay had occurred on account of change of Accountant which is beyond the control of the assessee, it is a fit case to condone the delay of 95 days. Accordingly, we condone the delay of 95 days and admit the appeal for adjudication. 6. Briefly, the facts of the case are as under : The appellant is a private limited company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of manufacturing of spare parts and engineering goods. The return of income for the assessment year 2008-09 was filed on 30.09.2008 declaring total income of Rs.9,58,977/-. Subsequently, search and seizure operations u/s 132 of the Income Tax Act, 1961 (‘the Act’) were conducted in the business and residential premises of the appellant on 27.09.2010. During the course of search and seizure operations, certain incriminating material was stated to have been found. The statement of the appellant was recorded under the provisions of section 132(4) of the Act, wherein, it is stated that the appellant had made gross disclosure of Rs.10,72,84,798/- which inter-alia include disallowance of statutory dues u/s 43B of the Act. ITA No.760/PUN/2016 4 In the return of income filed in response to notice u/s 153A for the assessment year under consideration, the appellant had claimed a sum of Rs.2,95,00,000/- as deduction while offering disallowance of Rs.1,16,13,421/- u/s 43B. The said claim of allowance of section 43B was made on the basis of payment Rs.2,95,00,000/- relating to disallowance of statutory dues u/s 43B for assessment year 2006-07 stated to have been offered to tax in the return of income in response to notice u/s 153A of the Act. Against the said return of income, the assessment was completed by the Dy. Commissioner of Income Tax, Central Circle- 2(3), Pune (‘the Assessing Officer’) vide order dated 28.03.2013 passed u/s 143(3) r.w.s. 153A of the Act accepting the claim for deduction u/s 43B of Rs.2,95,00,000/- and making addition on account of rental income of Rs.6,67,926/- on account of change of head of income of ‘rental income’. 7. Being aggrieved by the action of the Assessing Officer, an appeal was filed before the ld. CIT(A) contending that the income from rental income should be assessed under the head “income from house property” not under the “business income”. The ld. CIT(A) while dismissing this ground of appeal following its earlier orders for earlier years had noticed that the appellant made a fresh claim in ITA No.760/PUN/2016 5 the return of income filed in response to notice u/s 153A of the Act in the form of claim for allowance of deduction u/s 43B on payment basis of Rs.2,95,00,000/-, issued a show-cause for enhancement. The appellant also filed an explanation as to how the claim of the assessee was allowable. The ld. CIT(A) placing reliance on the decision of the Hon’ble Rajasthan High Court in the case of Jai Steel (India) vs. ACIT, 259 CTR 281 and the decision of Co- ordinate Bench of the Tribunal in the case of Shankar R. Jhunjhunwala, ITA No.225/PUN/2011 dated 31.07.2012 held that the proceedings u/s 153A are not meant for the benefit of the appellant and no fresh claim can be allowed in the return of income filed in response to notice u/s 153A of the Act. Accordingly, he disallowed the claim made for deduction of Rs.2,95,00,000/- on payment basis u/s 43B of the Act. 8. Being aggrieved by the above decision of the ld. CIT(A), the appellant is in appeal before us. 9. The ld. Counsel for the assessee submitted that when the disallowances u/s 43B are part of the disclosure made u/s 132(4) of the Act, the appellant had complied with the disclosure made u/s 132(4) by offering sum of Rs.10,72,84,798/-, the amount so offered ITA No.760/PUN/2016 6 to tax in the earlier year should be allowed as deduction in the year of payment as stipulated under the provisions of section 43B of the Act. He also taken us through the copies of the statement recorded from one Shri Raviraj Vikas Takawane u/s 132(4) placed at page no.1 to 14 of the Paper Book. He also placed reliance on several judicial precedents. 10. On the other hand, ld. CIT-DR contended that no fresh claim can be made in the return filed in response to notice u/s 153A of the Act. The assessment u/s 153A should be based on only incriminating material found as result of search and seizure operations. The claim for deduction u/s 43B is not a part of disclosure made by the assessee u/s 132(4) of the Act. Thus, ld. CIT(DR) submitted that the enhancement done by the ld. CIT(A) is correct and should be upheld. 11. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the allowability of a fresh claim made in the return of income filed in response to notice u/s 153A of the Act. Admittedly, in the present case, the original assessment proceedings stands concluded. Thus, there is no abatement of the assessment proceedings for the year under ITA No.760/PUN/2016 7 consideration. The Hon’ble High Court while interpreting the provisions of section 153A held that the proceedings u/s 153A shall not be valid unless it is based on the material found as result of search and seizure operations conducted u/s 132 of the Act. Reference in this regard can be made to the following judgements :- (i) CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd., 374 ITR 645 (Bom.-HC). (ii) CIT vs. Kabul Chawla, 380 ITR 573 (Delhi-HC). (iii) CIT vs. SKS Ispat & Power Ltd., 398 ITR 584 (Bom.-HC). (iv) CIT vs. Deepak Kumar Agarwal, 398 ITR 586 (Bom.-HC). 12. As a corollary, it follow that no fresh claim unrelated to the undisclosed income can be made in the return of income filed in response to notice u/s 153A of the Act. Even the Hon’ble Jurisdictional High Court in the case of CIT vs. Gurinder Singh Bawa, 386 ITR 483 has laid down that the provisions of section 153A cannot be tool to have a second inning of assessment either to the revenue or the assessee. Even the decision of the Hon’ble Rajasthan High Court relied upon by the ld. CIT(A) in Jai Steel (India) (supra) held it to the same effect. Similar findings have been given by the Co-ordinate Bench of this Tribunal in the case of ITA No.760/PUN/2016 8 Shankar R. Jhunjhunwala, ITA No.225/PUN/2011 dated 31.07.2012. 13. In the light of the above settled position, we need to examine the claim of the assessee made in return of income filed in response to notice u/s 153A of the Act. In the present case, no doubt the appellant offered disallowance u/s 43B during the course of search and seizure operation, in the statement recorded u/s 132(4) of the Act. There is no whisper in the statement recorded u/s 132(4) as to the claim for allowance u/s 43B on payment basis. The issue of disallowance u/s 43B and allowance u/s 43B are two separate and independent issues. The claim made for allowance of statutory dues on payment basis u/s 43B, is not in relation to the amount of disallowance offered u/s 43B for the assessment year under consideration and the claim of the allowance u/s 43B is not part of statement recorded u/s 132(4) of the Act. Thus, it does not form part of incriminating material founds as a result search action, nor regular assessment is pending. In light of the legal position discussed above, the claim made for allowance of statutory dues on payment basis cannot be allowed in the present proceedings. The case laws relied upon by the assessee does not come to the rescue as ITA No.760/PUN/2016 9 they do deal with different fact-situations. Thus, we do not find any merit in the grounds of appeal raised by the assessee in this appeal and hence dismissed. 14. In the result, the appeal filed by the assessee stands dismissed. Order pronounced on this 20 th day of April, 2022. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 20 th April, 2022. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A)-12, Pune. 4. The Pr. CIT, Central, Pune. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.