Appeal details
Counselvise Citation
[2017] 127 COUNSELVISE.COM (IT) 1573 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-08-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2009-2010
Appeal Filed On
27-04-2017
Judgement Text
, A , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.865-866/KOL/2017 ASSESSMENT YEARS:2009-10 TO 2010-11 M/S AMBICA CAPITAL MARKETS LTD., 3, HAREN MUKHERJEE ROAD, BELUR, HOWRAH-711 202 [ PAN NO.AAECA 3328 G ] / V/S . DCIT, CIRCLE-2, 110, SHANTI PALLY, E.M. BYE PASS, NEAR RUBY HOSPITAL, KOLKATA-107 /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI S.M. SURANA, ADVOCATE ! /BY RESPONDENT SHRI R.S. BISWAS, CIT-DR $ /DATE OF HEARING 21-06-2017 $ /DATE OF PRONOUNCEMENT 30-08-2-17 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- BOTH APPEAL BY THE ASSESSEE ARE DIRECTED AGAINST T HE SEPARATE ORDER OF PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-1, KOLKATA OF E VEN DATE I.E. ON 22.03.2017 U/S 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERR ED TO AS THE ACT) PERTAINING TO ASSESSMENT YEARS 2009-10 & 2010-11 RESPECTIVELY. SHRI S.M. SURANA, LD. ADVOCATE APPEARED ON BEHALF O F ASSESSEE AND SHRI R.S. BISWAS, LD. DEPARTMENTAL REPRESENTATIVE REPRESENTED ON BEHA LF OF REVENUE. 2. BOTH THE APPEAL OF ASSESSEE ARE HEARD TOGETHER A ND ARE BEING DISPOSED OF BY WAY OF CONSOLIDATE ORDER FOR THE SAKE OF CONVENIENC E. ITA NO.865-866/KOL/2017 A.YS 09-10 & 10-11 M/S AMBICA CAPITL MARKETS LTD. VS. DCIT CC-2(1 ) KOL. PA GE 2 FIRST WE TAKE UP ITA NO.865/KOL/2017 FOR A.Y. 09-10 . 3. GROUNDS RAISED BY ASSESSEE ARE REPRODUCED BELOW: - 1. FOR THAT THE ORDER OF THE LD. PR. CIT IS ARBITRA RY, ILLEGAL AND BAD IN LAW AS HE EXERCISED REVISIONARY JURISDICTION U/S. 253 ON AN O RDER PASSED UNDER SEC. 143(3)/153A WHICH WAS ITSELF INVALID SINCE NO ADDITION WAS MADE ON THE BASIS OF ANY INCRIMINATING MATERIALS UNEARTHED DURING THE COURSE OF SEARCH IN THAT ORDER. 2. FOR THAT THE LD. PR CIT ERRED IN INVOKING THE PR OVISIONS OF SECTION 263 WHEN THE ISSUE WITH REGARD TO THE APPLICABILITY OF SECTION 1 4A WAS NOT THE SUBJECT MATTER OF ORDER U/S. 153A/143(3) AND ACTION U/S. 263 WAS BARR ED BY LIMITATION WHEN THE LIMITATION IS COUNTED FROM THE ORIGINAL ORDERED PAS SED U/S. 143(3) ON 28.11.2011. 3. FOR THAT THE LD. PR CIT ERRED IN APPLYING THE PR OVISIONS OF SECTION 263 WHEN AO APPLIED HIS MIND TO THE ISSUE OF DISALLOWANCE U/S. 14 AND WITH REGARD TO THE DISALLOWANCE OF INTEREST TWO VIEWS WERE POSSIBLE SI NCE THERE WAS NO FINDING THAT THE LOANS TAKEN WERE USED FOR PURCHASE OF SHARES AS INV ESTMENT ON WHICH DIVIDEND WAS EARNED. 4. FOR THAT THE LD. PR. CIT ERRED IN REVISING THE O RDER U/S. 263 WHEN THE SAME WAS NOT ERRONEOUS. 5. FOR THAT THE LD. PR. CIT ERRED IN REVISING THE O RDER ON THE ISSUE OF DISALLOWANCE OF INTEREST EXPENSES U/S 14A WHEN THE LOANS WERE ACCEP TED TO HAVE BEEN TAKEN FOR BUSINESS PURPOSES, WAS FULLY ALLOWABLE AND NO DISAL LOWANCE U/S 14A WAS CALLED FOR IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE ORDER OF THE PR CIT BE CANCELLED AND THE ASSESSEE BE GIVEN THE RELIEF PRAY ED FOR. 7. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUND BEFORE OR AT THE TIME OF HEARING. 4. GROUND NO. 1 TO 5 ARE INTER-RELATED AND THEREFOR E BEING TAKEN UP TOGETHER. THE ISSUE RAISED IS THAT LD. PR.CIT ERRED IN HOLDING TH E ORDER OF ASSESSING OFFICER PASSED U/S. 143(3)/153A OF THE ACT IS ERRONEOUS AND IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE U/S 263 OF THE ACT. 5. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A LIMI TED COMPANY AND ENGAGED IN BUSINESS OF FINANCING AND INVESTMENT ACTIVITIES. TH E ASSESSEE FOR THE YEAR UNDER CONSIDERATION FILED ITS RETURN OF INCOME ON 14.09.2 009 DECLARING TOTAL INCOME AT RS.(4,03,71,507.00) ONLY. THEREAFTER CASE WAS SELEC TED UNDER SCRUTINY UNDER CASS MODULE AND ACCORDINGLY NOTICES U/S 143(2)/142(1) WE RE SERVED UPON THE ASSESSEE. THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE OR DER DATED 28.11.2011 AFTER MAKING CERTAIN ADDITIONS AS DETAILED UNDER : 1) DISALLOWANCES U/S 14A OF THE ACT 10,56,000.00 2) DISALLOWANCES U/S 94(7) OF THE ACT 85,629 .00 ITA NO.865-866/KOL/2017 A.YS 09-10 & 10-11 M/S AMBICA CAPITL MARKETS LTD. VS. DCIT CC-2(1 ) KOL. PA GE 3 THUS, THE ASSESSMENT WAS MADE AT A LOSS OF 3,92,29,878/- WHICH WAS ALLOWED TO BE CARRIED FORWARD TO THE SUBSEQUENT YEAR. SUBSEQUENTLY A SEARCH U/S. 132 OF THE ACT WAS CONDU CTED AT THE OFFICE PREMISES OF ASSESSEE DATED 11.10.2012 AND ON SUBSEQUENT DATES. ACCORDINGLY, ASSESSMENT WAS FRAMED U/S. 143(3) / 153A OF THE ACT VIDE ORDER DAT ED 30.03.2015 AT A TOTAL LOSS OF 3,92,29,878/-ONLY. UNDER BOTH ASSESSMENT ORDERS I.E . 143(3) DATED 28.11.2011 AND 143(3)/153A OF THE ACT DATED 31.03.2015, THE INCOME OF THE ASSESSEE WAS ASSESSED AT THE SAME AMOUNT OF LOSS AS DISCUSSED ABOVE. THE AO IN BOTH THE ASSESSMENT ORDER INVOKED THE PROVISIONS OF SEC. 14A OF THE ACT AND A CCORDINGLY MADE A DISALLOWANCE UNDER RULE 8D(2)(I) AND (III) FOR THE AMOUNT OF 1,14,125 AND 9,41,875/- RESPECTIVELY. 6. SUBSEQUENTLY LD. PR. CIT U/S. 263 FOUND THAT AO HAS NOT MADE ANY DISALLOWANCE IN RESPECT OF INTEREST EXPENSE WHICH W AS CLAIMED IN THE PROFIT AND LOSS ACCOUNT FOR 1,53,70,202/- UNDER THE PROVISION OF RULE 8D(2)(II) OF THE INCOME TAX RULES, 1962 (HEREINAFTER REFERRED TO AS THE RULE) . ACCORDINGLY, LD. PR. CIT CALLED UPON THE ASSESSEE TO CLARIFY WHY THE AMOUNT OF INTE REST EXPENSES WHICH WAS NOT DISALLOWED BY THE AO IN HIS ASSESSMENT ORDER FRAMED U/S. 143(3)/153A OF THE ACT VIDE ORDER DATED 30.03.2015 SHOULD BE ALLOWED. THE ASSESSEE BEFORE LD. PR. CIT SUBMITTED THAT THE ASSESSMENT WAS FRAMED U/S 153A OF THE ACT AT A LOSS OF 3,92,29,878/- WHICH IS EXACTLY THE SAME AMOUNT DETE RMINED IN THE REGULAR ASSESSMENT U/S. 143(3) OF THE ACT DATED 28.11.2011. AS SUCH, THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH. THEREFORE, THE ASSESSMENT WAS FRAMED UNDER THE SECTIONS I.E. 143(3) R.WS. 153 A OF THE ACT BY THE ASSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. 6.1 FURTHER, ASSESSEE SUBMITTED IF AT ALL THERE IS AN ERROR CAUSING PREJUDICE TO THE INTEREST OF REVENUE IN THE INSTANT CASE THEN THE OR DER U/S. 143(3) OF THE ACT WITH REGARD TO DISALLOWANCE OF INTEREST UNDER RULE 8D(2)(II) OF THE IT RULES CAN ONLY BE SUBJECT- MATTER OF REVISION U/S. 263 OF THE ACT AND NOT THE ASSESSMENT ORDER FRAMED UNDER SECTION 143(3)/153A OF THE ACT. 6.2 ASSESSEE AGAIN SUBMITTED TO LD. PR. CIT THAT TH E AO HAS TAKEN A VIEW FOR MAKING THE DISALLOWANCE U/S 14A OF THE ACT IN THE O RIGINAL ASSESSMENT ORDER FRAMED ITA NO.865-866/KOL/2017 A.YS 09-10 & 10-11 M/S AMBICA CAPITL MARKETS LTD. VS. DCIT CC-2(1 ) KOL. PA GE 4 U/S. 143(3) AS WELL UNDER SECTION 143(3)/153A OF TH E ACT AFTER DUE VERIFICATION. THEREFORE, THE LD. PR. CIT U/S. 263 OF THE ACT CANN OT SUBSTITUTE THE VIEW TAKEN BY THE AO BY HOLDING THE ORDER ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF REVENUE. THE ASSESSEE IN THIS CONNECTION RELIED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF M/S THE MALABAR INDUSTRIAL CO. VS. CIT REPORTED IN 243 ITR 83 (SC). THE ASSESSEE FURTHER SUBMITTED THAT IF AT ALL THE I NTEREST EXPENSE NEEDS TO BE DISALLOWED UNDER THE PROVISION OF RULE 8D(2)(II) OF THE RULES THEN THE AMOUNT OF NET INTEREST CAN BE CONSIDERED FOR SUCH DISALLOWANCE. THE AMOUNT NET INTEREST COMES FOR 15 LACS ONLY (INTEREST EXPENSE 1.53 CRORES MINUS INTEREST INCOME 1.38 CRORES). 6.3 HOWEVER, LD. PR. CIT U/S. 263 HAS DISREGARDED T HE CONTENTION OF ASSESSEE AND HELD THE ORDER OF ASSESSING OFFICER PASSED U/S. 143 (3)/153A OF THE ACT AS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE BY OBSERVING AS UNDER:- 5.A THE ASSESSEE ARGUED THAT THE AM ORDER IS NOT ER RONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. IN THIS CONNECTION, IT MAY BE WORTHWHILE TO MENTION THAT THE ASSESSING OFFICER HAD ERRONEOUSLY OMITTED TO COMPUT E THE DISALLOWANCE MADE UNDER RULE 8D(II) OF INCOME TAX RULE, IN-SPITE OF THE FAC T THAT THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.1,53,70,202/- AS INTEREST EXPENSES IN THE PROFIT AND LOSS ACCOUNTS. THE ASSESSING OFFICER HAD THUS, IN CONTRAVENTION TO RUL E 8D(II) OF THE INCOME TAX RULES, ERRONEOUSLY COMPUTED THE DISALLOWANCE MADE U/S. 14A READ WITH RULE 8D AS RS.10,56,000/- WHEREAS IT SHOULD HAVE BEEN CORRECTL Y COMPUTED AT RS.84,06,049/-. THUS HAS RESULTED IN UNDER ASSESSMENT OF INCOME IN CONTRAVENTION TO THE PROVISIONS OF THE INCOME TAX ACT AND INCOME TAX RULES. THE ABOVE FACTS CLEARLY INDICATE THAT THE ASSESSMENT ORDER PASSED BY THE AO HAS CAUSED PREJUD ICE TO THE INTEREST OF REVENUE/.. CONSIDERING THAT THE ORDER OF THE AO IS NOT IN ACCO RDANCE WITH THE PROVISIONS OF SECTION 14A OF THE INCOME TAX ACT, 1961 READ WITH R ULE 8D OF THE INCOME TAX RULES, THE IMPUGNED ASSESSMENT ORDERED, IS THUS, ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 5.B. IT TRANSPIRES FROM THE ABOVE ARGUMENT OF THE A SSESSEE HAD ALSO STATED THAT THE AO HAS TAKEN A VIEW WITH REGARD TO THE APPLICABILIT Y OF SECTION14A AND HAS TO RECORD HIS SATISFACTION AS TO WHETHER THE PROVISIONS OF SE C. 14A WERE APPLICABLE OR NOT. THE VIEW CANNOT BE SUBSTITUTED WITH THE VIEW OF ANY OTH ER AUTHORITY. MOREOVER WHEN THE AO HAS TAKEN A VIEW SIMPLY BECAUSE YOUR HONOUR HAS TAKEN A DIFFERENT VIEW PROVISIONS OF SECTION 263 CANNOT BE APPLIED. IN THE INSTANT CASE, THE AO HAD ERRONEOUSLY OMITTED TO COMPUTE THE DISALLOWANCE MAD E U/S. 14A READ WITH RULE 8D(2)(II) OF THE INCOME TAX RULES. IN THIS CONNECTI ON, IT IS PERTINENT TO MENTION THAT THE PROCEEDING U/S. 263 HAS NOT BEEN INITIATED CHAL LENGING THE ENQUIRY AND FINDINGS OF THE ASSESSING OFFICER ON THE AFOREMENTIONED GROUND THAT DISALLOWANCE BE MADE ON ACCOUNT OF SECTION 14A READ WITH RULE 8D OF THE IN COME TAX RULES. THUS, IT IS CLEARLY EVIDENT THAT THE VIEW OF THE AO IS NOT SUBSTITUTED. THE PROCEEDINGS U/S. 263 SIMPLY RELATES TO THE ERRONEOUS APPLICATION OF LAW BY THE AO. THE ASSESSING OFFICER HAD ERRONEOUSLY OMITTED TO COMPUTE THE DISALLOWANCE MAD E UNDER RULE 8D(22)(II) OF THE INCOME TAX RULES, WHICH CASCADED IN SUBSEQUENTLY ER RONEOUS COMPUTATION OF THE ITA NO.865-866/KOL/2017 A.YS 09-10 & 10-11 M/S AMBICA CAPITL MARKETS LTD. VS. DCIT CC-2(1 ) KOL. PA GE 5 DISALLOWANCE MADE U/S. 14A READ WITH RULE 8D AS RS. 10,56,000/- WHEREAS IT SHOULD HAVE BEEN CORRECTLY COMPUTED AT RS.84,06,049/-. THE REFORE THE ASSESSING OFFICER PASSED BY THE AO, IN CONTRAVENTION OF RULE 8D(2)(II ) OF THE INCOME TAX RULES IS CLEARLY ERRONEOUS, THUS, SUFFERS FROM INFIRMITY ON THE ABOVE GROUND. 6. THE ASSESSEE FURTHER STATED THAT NO AMOUNT OF LOAN WAS USED FOR MAKING THE INVESTMENT AND SINCE NO FRESH LOAN WAS OBTAINED DUR ING THE YEAR AND IN EARLIER YEARS IT WAS DULY ACCEPTED THAT THE LOANS HAVE BEEN TAKEN FO R BUSINESS PURPOSES.. IT APPEARS THAT THIS ISSUE WAS NOT POINTED OUT TO THE AO DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS AND THUS, WAS NOT EXAMINED BY THE AO DU RING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3)/153A. THE AO SHOULD HAVE ENQ UIRED INTO THE MATTER TO ASCERTAIN THE NATURE OF LOAN AND THEIR SUBSEQUENT U TILIZATION TO DETERMINE THE SCOPE AND QUANTUM OF DISALLOWANCES TO BE MADE IN THE ASSE SSMENT ORDER. IN LIGHT OF THE ABOVE DISCUSSION AS NARRATED ABOVE, I SET ASIDE THE ASSESSMENT ORDER U/S. 143(3)/153A DATED 30.03.2015, ON THE AFORESAID POIN TS, FOR THE AY 2009-10 AND DIRECT THE AO TO PASS FRESH ASSESSMENT ORDER BY MAKING PRO PER AND ADEQUATE VERIFICATION AND ENQUIRY IN RESPECT OF THE ISSUES AS ELABORATE A BOVE, IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME TAX ACT AND INCOME TAX RUL ES. THE AO IS DIRECTED TO PASS FRESH ASSESSMENT ORDER IN THE CASE OF THE ASSESSEE FOR THE AY 2009-10, AFTER ALLOWING THE ASSESSEE A FAIR AND REASONABLE OPPORTUNITY OF B EING HEARD AND ACCORDING TO THE PROVISIONS OF LAW. BEING AGGRIEVED BY THIS ORDER OF LD. PR. CIT ASSESS EE CAME IN APPEAL BEFORE US. 7. AT THE OUTSET, LD. AR FOR THE ASSESSEE CHALLENGE D THE VERY INITIATION OF ADDITIONS MADE UNDER THE PROCEEDINGS U/S 143(3)/153 A OF THE ACT ON THE GROUND THAT NO SUCH INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH PERTAINING TO THE YEAR UNDER CONSIDERATION WHICH IS UNABATED ASSESSME NT YEAR. THEREFORE, THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT CANNOT BE D ISTURBED U/S. 153A OF THE ACT WITHOUT HAVING FOUND ANY INCRIMINATING MATERIAL. ON CE THE ADDITIONS ARE NOT SUSTAINABLE THEN THERE IS QUESTION OF REVISING THE ORDER PASSED U/S 143(3)/153A OF THE ACT U/S 263 OF THE ACT. THE LD. AR REITERATED THE A RGUMENTS THAT WERE MADE BEFORE LD. PR. CIT U/S. 263 OF THE ACT WHEREAS LD. DR VEHE MENTLY RELIED ON THE ORDER OF LD. CIT. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTI ES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES AND THE CASE LAWS RELIED UPON BY THE ASSESSEE. IN THE I NSTANT CASE THE UNDISPUTED FACT IS THAT THE DISALLOWANCES WERE MADE BY THE AO UNDER BOTH TH E ORDERS I.E. 143(3) AND 153A FOR THE AY 2009-10 ON THE IDENTICAL COUNTS AS DISCU SSED ABOVE. BUT THE LD. PR. CIT CHOSE TO REVISE THE ORDER PASSED UNDER SECTION 153A OF THE ACT DESPITE THE FACT THAT THE ITA NO.865-866/KOL/2017 A.YS 09-10 & 10-11 M/S AMBICA CAPITL MARKETS LTD. VS. DCIT CC-2(1 ) KOL. PA GE 6 IMPUGNED DISPUTE IS ARISING FROM THE ASSESSMENT ORD ER PASSED UNDER SECTION 143(3) OF THE ACT. IN SUCH A SITUATION THE LD. PR. CIT IF WISHES TO RE VISE THE ORDER U/S 263 OF THE ACT THEN HE CAN DO SO IN RELATION TO THE ORDER PASSED UNDER SECTION 143(3) OF THE ACT. THUS IN OUR CONSIDERED VIEW THE LD. PR. CIT ERRED IN REVISI NG THE ORDER PASSED UNDER SECTION 153A OF THE ACT ON THE GROUND OF NON-DISALLOWANCE O F INTEREST EXPENSES UNDER SECTION 14A READ WITH RULE 8D OF INCOME TAX RULES 1962. IN HOLDING SO, WE FIND GUIDANCE AND SUPPORT FROM TH E JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MURLI AGRO PRODUCTS LIMITED 49 TAXMANN.COM 172 WHEREIN IT WAS HELD AS UNDER : 13. IN THE PRESENT CASE, THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY MATERIAL WAS UNEARTHED DURING THE SEARCH OR DURING THE 153A PROC EEDINGS WHICH WOULD SHOW THAT THE RELIEF UNDER SECTION 80HHC WAS ERRONEOUS. IN SU CH A CASE, THE A.O. WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 153A READ WITH S ECTION 143(3) COULD NOT HAVE DISTURBED THE ASSESSMENT ORDER FINALISED ON 29.12.2 000 RELATING TO SECTION 80HHC DEDUCTION AND CONSEQUENTLY THE C.I.T. COULD NOT HAV E INVOKED JURISDICTION UNDER SECTION 263 OF THE ACT. BESIDES THE ABOVE, WE ALSO FIND THAT THERE WAS NO I NCRIMINATING MATERIAL UNEARTHED DURING SEARCH PROCEEDINGS QUA TO THE DISALLOWANCE M ADE U/S 14A OF THE ACT. THUS, THE ADDITIONS MADE U/S 14A OF THE ACT ARE NOT SUSTAINAB LE IN THE PROCEEDINGS FRAMED U/S 143(3)/153A OF THE ACT AND ACCORDINGLY NO REVISIONA RY PROCEEDINGS U/S 263 OF THE ACT CAN BE INITIATED. IN HOLDING SO, WE FIND GUIDANCE AND SUPPORT FROM TH E JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX KOLKATA III VS. VEERPRABHU MARKETING LTD. [2016] 73 TAXMANN.COM 149 (CAL) WHEREIN IT WAS HELD AS UNDER : THUS, WHERE NO MATERIAL BELONGING TO A THIRD PARTY IS FOUND DURING A SEARCH, BUT ONLY AN INFERENCE OF AN UNDISCLOSED INCOME IS DRAWN DURING THE COURSE OF ENQUIRY, DURING SEARCH OR DURING POST-SEARCH ENQUIRY, SECTIO N 153C WOULD HAVE NO APPLICATION. THUS, THE DETECTION OF INCRIMINATING M ATERIAL LEADING TO AN INFERENCE OF UNDISCLOSED INCOME IS A SINE QUA NON FOR INVOCATION OF SECTION 153C. IN VIEW OF THE ABOVE, WE HOLD THAT THE VALIDITY OF THE ORDER U/S. 263 OF THE ACT IS INVALID. IT IS BECAUSE THE SUBJECT MATTER OF REVISI ON IN THE INSTANT CASE IS EMANATING FROM THE ORDER OF AO PASSED UNDER SECTION 143(3) OF THE ACT. THE AO WHILE FRAMING ITA NO.865-866/KOL/2017 A.YS 09-10 & 10-11 M/S AMBICA CAPITL MARKETS LTD. VS. DCIT CC-2(1 ) KOL. PA GE 7 THE ASSESSMENT U/S 153A OF THE ACT HAS JUST COPIED THE DISALLOWANCE MADE UNDER THE ORIGINAL ASSESSMENT ORDER U/S 143(3) OF THE ACT. WE , THEREFORE, HOLD THAT ORDER PASSED U/S 263 OF THE ACT DATED 22.03.2017 FOR THE YEAR UN DER CONSIDERATION IS INVALID AND ACCORDINGLY QUASHED. THUS, THE APPEAL BEING ITA NO. 865/KOL/2017 IS ALLOWED. COMING TO ASSESSEES APPEAL IN ITA NO.866/KOL/2017 FOR A.Y. 10-11 . 13. IN THIS APPEAL, SINCE THE FACTS ARE EXACTLY IDE NTICAL, BOTH THE PARTIES ARE AGREED WHATEVER VIEW TAKEN IN THE ABOVE APPEAL OF ASSESSEE IN ITA NO.865/KOL/2017 MAY BE TAKEN IN THIS APPEAL ALSO, WE HOLD ACCORDINGLY. 14. IN THE RESULT, BOTH THE APPEAL OF ASSESSEE STAND AL LOWED. ORDER PRONOUNCED IN OPEN COURT ON 30/08/2017 SD/- SD/- ((!) ($!) (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP-SR.PS *+, - 30/08/2017 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-M/S AMBICA CAPITAL MARKETS LTD., 3HAREN M UKHERJEE ROAD, BELUR, HOWRAH, W EST BENGAL-711202 2. ! /REVENUE-DCIT, C.C. 2(1), 110, SHANTI PALLY, E.M.BY E PASS, NR. RUBY HOSPITAL, KOLKATA-107 3. ++- . / CONCERNED CIT 4. . - / CIT (A) 5. /01 ((- , - / DR, ITAT, KOLKATA 6. 123 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO - ,
