DCIT CEN CIR 8(1), MUMBAI V. KORPUS FINANCIAL SERVICES P.LTD, MUMBAI

ITA 7679/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9666 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-08-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 30-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: NITHI PATEL
• Keywords: Opportunity of being heard
• Section: 132

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 7679 /MUM/ 201 6 (ASSESSMENT YEAR 20 05 - 06 ) DCIT, CC - 8(1) ROOM NO. 656 6 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. VS. M/S. KORPUS FINANCIAL SERVICES PVT. LTD. 1,2,3, GUNDECHA CHAMBERS N.M. ROAD, FORT MUMBAI - 400 023. PAN : AACCK4562A ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI NITHI PATEL DEPARTMENT BY SHRI RAM TIWARI DATE OF HEARING 2 1 .9. 201 7 DATE OF PRONOUNCEMENT 21 . 9 . 201 7 O R D E R T HE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED CIT(A) - 50, MUMBAI AND IT RELATES TO THE A.Y. 2005 - 06. 2. THE LEARNED AR SUBMITTED THAT THE ASSESSMENT YEAR UNDER CONSIDERATION FALLS UNDER THE CATEGORY OF UNABATED AS SESSMENT AND THE ASSESSING OFFICER HAS MADE IMPUGNED ADDITIONS WITHOUT MAKING REFERENCE TO ANY OF THE INCRIMINATING MATERIAL. HE SUBMITTED THAT THE AO COULD MAKE ADDITION IN THE CASE OF UNABATED ASSESSMENTS ONLY ON THE BASIS OF INCRIMINATING MATERIALS FOUN D DURING THE COURSE OF SEARCH. LEARNED AR FURTHER SUBMITTED THAT IDENTICAL ISSUE WAS CONSIDERED BY THE DIVISION BENCH IN THE CASE OF SISTER CONCERNS OF THE ASSESSEE NAMED M/S. I.A & I.C PVT. LTD. (ITA NOS. 7481/MUM/2016 AND OTHERS), AND THE TRIBUNAL VIDE I TS ORDER DATED 30.8.2007, RESTORED THE MATTER TO THE FILE OF THE LEARNED CIT(A) WITH THE DIRECTION TO FOLLOW THE DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (374 ITR 645) M/S. KORPUS FINANCIAL SERVICES PVT. LTD. 2 3. I HEARD LEARNED DEPA RTMENTAL REPRESENTATIVE. I NOTICED THAT THE DIVISION BENCH OF THE TRIBUNAL HAS RESTORED AN IDENTICAL ISSUE TO THE FILE OF THE LD CIT(A) WITH FOLLOWING OBSERVATIONS: - 7. WE HAVE HEARD THE AUTHORISED REPRESENTATIVES FOR BOTH THE PAR TIES, 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 WHICH THE CIT(A) HAD PROCEEDED WITH AND DISPOSED OF THE APPEAL OF THE ASSESSEE. 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 HE 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 31K 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, VIZ. A.Y. 2007 - 08 WAS UNABATED. WE ARE OF THE CONSIDERED VIEW THAT A CORRECT FACTUAL POS ITION 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 OF 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 B Y 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 THE AFORESAID OBSERVATIONS OF THE CIT(A) THAT NO INCRIMINATING MATERIAL WAS SEIZED DURING THE COURSE OF SEARCH & SEIZURE PROCEEDINGS CONDUCTED ON M/S JI K INDUSTRIES LTD AND ITS PROMOTER SHRI R.G. PARIKH, IS ITSELF FOUND TO MILITATE AND IS IN SERIOUS CONFLICT WITH HIS OBSERVATION THAT IT WAS NOT THE CASE OF THE ASSESSEE THAT ONLY ACKNOWLEDGEMEN T 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 THE CIT(A) THOUGH RENDERED IN CONTEXT OF THE CLAIM OF 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 M/S. KORPUS FINANCIAL SERVICES PVT. LTD. 3 THE TRUE STATE OF AFFAIRS IN RESPECT OF THE NATURE OF THE MATERIAL BE LONGING TO THE ASSESSEE, AS WAS SEIZED DURING THE COURSE OF THE SEARCH & SEIZURE PROCEEDINGS CONDUCTED 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 UNDER 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 THE SEARCH & SEIZURE PROCEEDINGS CONDUCTED AS ON 04.02.2011 ON M/S JIK INDUSTRIES LTD AND ITS PROMOTER SHRI R.G. PARIKH. THE CIT(A) IS DIRECTED TO PROCEED WITH THE FRESH ADJUDICATI ON DURING THE COURSE OF THE 'SET ASIDE' PROCEEDINGS ONLY AFTER SUMMONING THE COMPLETE CASE RECORDS OF THE ASSESSEE. THE CIT(A) SHALL AFTER PERUSING THE COMPLETE CASE RECORDS OF THE ASSESSEE ADJUDICATE THE VALIDITY OF THE ADDITIONS MADE BY THE A.O IN THE HA NDS OF THE ASSESSEE, IN THE BACKDROP OF THE JUDGMENT OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF CIT - I!, THANE VS. CONTINENTAL WAREHOUSING CORPORATION (2015) 374 ITR 645 (BORN). NEEDLES TO SAY, THE CIT(A) SHALL DURING THE COURSE OF THE SET ASIDE PRO CEEDINGS AFFORD SUFFICIENT OPPORTUNITY OF BEING HEARD TO BOTH THE PARTIES, WHO SHALL REMAIN AT A LIBERTY TO SUBSTANTIATE THEIR RESPECTIVE CONTENTIONS DURING THE COURSE OF THE SET ASIDE PROCEEDINGS. WE FURTHER DIRECT THE CIT(A) TO COMPLETE THE SET ASIDE PRO CEEDINGS 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 PURPOSES IN TERMS OF OUR AFORESAID OBSERVATIONS. 4. FOLLOWING THE DECISION RENDERED BY THE DIVISION BE NCH, I ALSO RESTORE ALL THE MATTERS TO THE FILE OF LEARNED CIT(A) WITH IDENTICAL DIRECTIONS. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 2 1 . 9 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 2 1 / 9 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT M/S. KORPUS FINANCIAL SERVICES PVT. LTD. 4 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI