RAKSHA CHHADWA, MUMBAI V. ACIT CEN CIR 8, MUMBAI

ITA 8577/MUM/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8081 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 11-09-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 09-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MRS APECKSHA GADA
• Keywords: Gift; Search and seizure
• Section: 143(3); 153A; 14A; 68; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./I.T.A. NO.8576 & 8577/MUM/2010 ( / ASSESSMENT YEARS :2003-04 & 2005-06) MRS. RAKSHA CHHADWA, 602/B,3 RD FLOOR, CAPTAIN HOUSE, DR.AMBEDKAR ROAD, MATUNGA (CR), MUMBAI-400019 / VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-8, MUMBAI. ( / APPELLANT) .. ( ! / RESPONDENT) ./ '# ./ PAN/GIRNO.:ACVPC4405A $ / APPELLANT BY : MRS.APECKSHA GADA ! % $ /RESPONDENT BY: SHRI SANTOSH KUMAR & ' % ( ) / DATE OF HEARING : 12.9.2014 *+ % ( ) /DATE OF PRONOUNCEMENT : 17.10.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST THE SEPARATE ORDERS, BOTH DATED 14.9.2010, PASSED BY LD. CIT(A)- 37, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEARS 2003-04 AND 2005-06. THE ASSESSEE, INTER ALIA, IS CONTESTING THE VALIDITY OF THE ADDITIONS MADE BY TH E ASSESSING OFFICER IN SEC. 153A ASSESSMENT PROCEEDINGS. 2. THE FACTS RELATING THERETO ARE STATED IN BRIEF. THE AO COMPLETED THE ASSESSMENT OF BOTH THE YEARS UNDER CONSIDERATION U/ S 143(3) READ WITH SECTION 153A OF THE INCOME TAX ACT, 1961 (THE ACT) CONSEQUE NT TO THE SEARCH AND SEIZURE OPERATIONS CONDUCTED ON 11.4.2007 AT THE RE SIDENCE OF THE ASSESSEE AS WELL AS IN THE GROUP CASES OF M/S SIA LIFESTYLES PV T LTD. IN THE ASSESSMENT YEAR 2003-04, THE AO ADDED A SUM OF RS.6,54,138/-, BEIN G GIFT RECEIVED BY THE ASSESSEE BY WAY OF SBI RESURGENT INDIA BONDS OF 100 00 US$ EQUIVALENT TO I.T.A. NO.8576 & 8577/MUM/2010 2 RS.6,54,138/-. IN ASSESSMENT YEAR 2005-06, THE AO COMPLETED THE ASSESSMENT BY MAKING THE FOLLOWING ADDITIONS : A) DISALLOWANCE OF INTEREST OF RS. 40,165/-; AND B) ASSESSMENT OF LONG TERM CAPITAL GAINS AS UNEXPLA INED CASH CREDITS RS.28,24,050/-. EVEN THOUGH, THE ASSESSEE CONTENDED BEFORE THE LD. CIT(A) THAT THE ABOVE SAID ADDITIONS MADE IN BOTH THE YEARS ARE NOT BASED UPON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, YET THE LD CIT(A ) CONFIRMED THE ABOVE SAID ADDITIONS MADE IN BOTH THE YEARS. HENCE, THE ASSES SEE HAS FILED THESE TWO APPEALS BEFORE US, INTER ALIA, CONTESTING THE VALID ITY OF THE ABOVE SAID ADDITIONS. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FILED RETURNS OF INCOME FOR THE ASSESSMENT YEAR 2003-04 A ND 2005-06 RESPECTIVELY ON 29.9.2003 AND 5.8.2005. SHE FURTHER SUBMITTED THAT THE RETURNS OF INCOME FILED FOR BOTH THE YEARS WERE SINCE BEEN ACCEPTED BY THE AO, AS HE DID NOT ISSUE NOTICE U/S 143(2) OF THE ACT. SHE FURTHER SUBMITTE D THAT THE TIME LIMIT FOR ISSUING NOTICE U/S 143(2) OF THE ACT FOR BOTH THE YEARS HAD ALSO EXPIRED PRIOR TO THE DATE OF SEARCH, I.E., PRIOR TO 11.04.2007. ACCORDINGLY THE LD A.R SUBMITTED THAT BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION WOULD FALL IN THE CATEGORY OF CONCLUDED ASSESSMENTS AS PER THE PROVISIONS OF SE C. 153A OF THE ACT. ACCORDINGLY SHE SUBMITTED THAT, UNDER SEC. 153A, TH E CONCLUDED ASSESSMENTS WILL NOT ABATE. THE LD. AR OF THE ASSESSEE PLACED RELIANCE ON THE ORDER DATED 11.12.2013 PASSED BY THE MUMBAI BENCH OF TRIBUNAL IN THE CASE OF MR.VINAY CHHADWA V/S ACIT IN ITA NO.8578/MUM/2010 (AY-2003- 04) AND SUBMITTED THAT, IN THE CASE OF CONCLUDED ASSESSMENTS, THE ADDITIONS , IF ANY, CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING CO URSE OF SEARCH. THE LD. AR FURTHER SUBMITTED THAT VARIOUS OTHER BENCHES OF T HE TRIBUNAL HAVE TAKEN IDENTICAL VIEW IN THE FOLLOWING CASES : I) ACIT V/S SAF YEAST CO.PVT.LTD IN ITA NO.4230/M UM/2011(AY-2002-03), DATED 18.10.2012, II) SHRI GOVIND AGARWAL V/S ACIT IN ITA NO.3389/MUM /2011 (AY-2002-03), DATED 10.1.2014; AND III) SHRI GURINDER SINGH BAWA V/S DCIT IN I TA NO.2075/MUM/2010 (AY-2005-06) DATED 16.11.2012 THE LD A.R SUBMITTED THAT THE REVENUE DID NOT UNEAR TH ANY INCRIMINATING MATERIAL DURING THE COURSE OF SEARCH WARRANTING THE ADDITION S MADE BY THE AO IN BOTH THE I.T.A. NO.8576 & 8577/MUM/2010 3 YEARS. THE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITIONS ON THE BASIS OF INFORMATION AVAILABLE IN THE ORIGINAL RETURNS OF IN COME. ACCORDINGLY SHE CONTENDED THE ABOVE SAID ADDITIONS SHOULD BE DELETE D. 4. THE LD. DR DID NOT DISPUTE THE FACTUAL ASPECTS SUBMITTED BY THE LD. AR OF THE ASSESSEE. HOWEVER, HE SUBMITTED THAT ALL THE S IX ASSESSMENT YEARS PRECEDING THE DATE OF SEARCH ARE AUTOMATICALLY RE-O PEND UNDER THE PROVISIONS OF SECTION 153A OF THE ACT AND ACCORDINGLY CONTENDED T HAT THE AO IS ENTITLED TO LOOK INTO ALL THE MATTERS. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT BO TH THE ASSESSMENT YEARS UNDER CONSIDERATION FALL IN THE CATEGORY OF CONCLUDED A SSESSMENTS. IN THE VARIOUS CASE LAW RELIED UPON BY THE LD. AR OF THE ASSESSEE, IT HAS BEEN HELD THAT THE AO WOULD BE ENTITLED TO MAKE ANY ADDITION IN THE CASE OF CONCLUDED ASSESSMENTS ONLY ON THE BASIS OF INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH, SINCE THE CONCLUDED ASSESSMENTS DO NOT ABATE BY VI RTUE OF SECTION 153A OF THE ACT. THE SAID VIEW IS ALSO SUPPORTED BY THE DECISI ON OF MUMBAI SPECIAL BENCH OF ITAT RENDERED IN THE CASE OF ALL CARGO GLOBAL LOGIS TICS LTD (ITA NO.5108 TO 5022/MUM/2010 DATED 06-07-2012). FURTHER, IN THE CASE OF SHRI GOVIND AGARWAL (SUPRA) RELIED UPON BY THE ASSESSEE, WE NOTICE THA T THE TRIBUNAL HAS PLACED RELIANCE ON THE DECISION RENDERED BY THE HONBLE RA JASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA), JODHPUR V/S ACIT [2013 ] 36 TAXMANN.COM 523, WHEREIN THE HONBLE RAJASTHAN HIGH COURT HAS HEL D THAT IN CASE, NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SUCH SEARCH OR REQUISITION, THEN THE QUESTION OF REASSESSMENT OF THE CONCLUDED ASSESSMENTS DOES N OT ARISE, WHICH WOULD REQUIRE MORE REITERATION AND IT IS ONLY IN THE CONT EXT OF THE ABATED ASSESSMENT UNDER SECOND PROVISO WHICH IS REQUIRED TO BE ASSESS ED. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSER VATIONS MADE BY THE CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SH RI GOVIND AGARWAL (SUPRA): 17. RAJASTHAN HIGH COURT JUDGMENT IN THE CASE OF JAI STEEL (INDIA) (SUPRA), VIDE PARA 18, IT IS CATEGORICALLY MENTIONE D THAT THE REQUIREMENT OF ASSESSMENT OR REASSESSMENT UNDER THE SAID SECTION ( 153A) HAS TO BE READ IN THE CONTEXT OF SECTIONS 132 OR 132A OF THE ACT, INASMUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF S EARCH OR REQUISITION, THEN THE QUESTION OF REASSESSMENT OF THE CONCLUDED ASSESSMENTS DOES NOT ARISE, WHICH WOULD MORE REITERATION.. THUS , THE JUDGMENT OF I.T.A. NO.8576 & 8577/MUM/2010 4 HON BLE HIGH COURT IN THE CASE OF JAI STEEL LTD, SUPRA AND ABOVE DECISIONS OF THE TRIBUNAL ARE CATEGORICAL IN CONCLUDING THAT, IN CASE OF THE CONCLUDED ASSESSMENTS LIKE THE PRESENT ONE, THE ADD ITIONS ARE MADE ONLY BASED ON THE INCRIMINATING MATERIAL DISCOVERED DURING THE SEARCH ACTION. THE FACTS OF THE JAI STEEL LTD (SUPRA) ARE IDENTIC AL TO THE PRESENT ONE I.E., AO MADE ADDITIONS BY REASSESSING U/S 153A ON THE COMPLETED ASSESSMENT U/S 143(1) OF THE ACT. THUS, C ONSIDERING THE JUDGMENT IN THE CASE OF THE JAI STEEL LTD (SUPRA), THE ARGUMENTS ON THE LEGAL ISSUE RAISED BEFORE US STANDS COVERED. THEREF ORE, CONSIDERING THE RAJASTHAN HIGH COURT S JUDGMENT IN THE CASE OF JAI STEELS LTD, SUPRA, WE HAVE NO DIFFICULTY IN (I) UPHOLDING THE ISSUE OF NO TICE U/S 153A OF THE ACT AND (2) IN DISAPPROVING THE MAKING OF THE IMPUGNED ADDITIONS U/S 68 AND 14A OF THE ACT, WHICH ARE NOT BACKED BY THE INCRIMI NATING MATERIALS. IN THE ABSENCE OF INCRIMINATING MATERIAL, THE ROLE OF THE AO IS ONLY TO REITERATE THE RETURNED INCOME FILED IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT. ACCORDINGLY, IN SUBSTANCE, THE COMMON LEGAL ISSUE R AISED IN THE GROUNDS FOR BOTH THE APPEALS OF THE ASSESSEE (ITA NO 3389&3 390/M/2011) IS ALLOWED 6. IN THE INSTANT CASES ALSO, THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ADDITIONS MADE BY THE AO IN ASSESSMENT YEARS 2 003-04 AND 2005-06 ARE NOT BASED UPON ANY INCRIMINATING MATERIAL FOUND DUR ING THE COURSE OF SEARCH. FURTHER, BOTH THE ABOVE SAID ASSESSMENT YEARS FALL IN THE CATEGORY OF CONCLUDED ASSESSMENTS. HENCE, BY FOLLOWING THE CONSISTENT VI EW TAKEN BY THE VARIOUS BENCHES OF TRIBUNAL, WE HOLD THAT THE IMPUGNED ADDI TIONS MADE IN BOTH THE YEARS UNDER CONSIDERATION ARE LIABLE TO BE DELETED. ACCO RDINGLY, WE SET ASIDE THE ORDERS PASSED BY THE LD. CIT(A) IN BOTH THE YEARS AND DIRECT THE AO TO DELETE THE IMPUGNED ADDITIONS MADE IN BOTH THE YEARS. 7. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. . THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 17TH OCT , 2014. *+ & , -. / 0 17TH OCT, 2014 + % 1' 2 SD SD ( . . / H.L. KARWA) ( . . ,/ B.R. BASKARAN) / PRESIDENT / ACCOUNTANT MEMBER - & ' MUMBAI: OCT,2014. . . ./ SRL , SR. PS I.T.A. NO.8576 & 8577/MUM/2010 5 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. & 3( ( ) / THE CIT(A)- CONCERNED 4. & 3( / CIT CONCERNED 5. 6. 45 1 (6 , ) 6 , - & ' / DR, ITAT, MUMBAI CONCERNED 1 7 ' / GUARD FILE. 8 & / BY ORDER, TRUE COPY 9 ' (ASSTT. REGISTRAR) ) 6 , - & ' /ITAT, MUMBAI