Smt. Aradhana Kashyap, New Delhi V. DCIT, New Delhi

ITA 982/DEL/2014

• Counselvise Citation: 98220114 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 27-07-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 19-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH MEENA
• Keywords: Gift; Search and seizure; Reassessment proceedings
• Section: 143(3); 153A; 132; 2; 15; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC - I NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, A CCOUNTANT MEMBER ITA NO: 982 & 983 /DEL/20 1 4 A.Y.: 200 4 - 05 AND 2005 - 06 SMT. ARADHANA KASHYAP VS. DCIT, CC 17 223, SUKHDEV VIHAR NEW DELHI NEW DELHI PAN: AAOPK 0394 H (APPELLANT) (RESPONDENT) A PPELLANT BY : SH.SAURAV ROHTAGI, C.A. & SH. MOHIT JAIN, C.A. RE SPONDENT BY : SH. OM PRAKASH MEENA, SR.D.R. O R D E R BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND ARE DIRECTED AGAINST SEPARATE BUT IDENTICAL ORDERS OF THE LD.CIT(A) - III, NEW DELHI DATED 30.12.2013 FOR THE A.Y. 2004 - 05 AND DATED 23.12.2013 FOR THE A.Y. 2005 - 06. AS THE ISSUES ARISING IN BOTH THE APPEALS ARE COMMON, FOR THE SAKE OF CONVENIENCE, THEY ARE HEARD TOGETHER AND ARE DISPOSED OF BY W AY OF THIS CONSOLIDATED ORDER. 2. A SEARCH AND SEIZURE OPERATION U/S 13 2 OF THE INCOME TAX ACT, 1961 (THE ACT ) WAS CONDUCTED ON 19.2.2008 IN THE CASE OF M/S BL KASHYAP & SONS GROUP OF C ASES . NOTICE U/S 1 5 3A OF THE ACT WAS ISSUED TO THE ASSESSEE ON 24.12 .2008 FOR THE AY 2004 - 05 AND FOR THE AY 2005 - 06. THE ASSESSEE FILED RETURN U/S 153A OF THE ACT ON 24.3.2009 DECLARING AN INCOME OF RS.53,965/ - FOR THE AY 2004 - 05 AND RS.1,51,354/ - FOR THE AY 2005 - 06. THE ITA NOS. 982 & 983/DEL/2014 A.YS: 2004 - 05 AND 2005 - 06 SMT. ARADHANA KASHYAP, NEW DELHI 2 AO COMPLETED THE ASSESSMENT U/S 153A R.W.S. 143(3 ) OF THE ACT DETERMINING THE TOTAL INCOME AT RS.4,40,910/ - . ADDITION WAS MADE ON THE GROUND THAT : (A) ESTIMATED INCOME OF THE ASSESSEE TO COVER EXPENSES OF FOREIGN TRAVEL; (B) NON FURNISHING OF EVIDENCE IN RESPECT OF DIVIDEND INCOME; (C ) CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE, AND (D) GIFT RECEIVED. 3. BEFORE THE FIRST APPELLATE AUTHORITY THE ASSESSEE CONTENDED THAT THE ASSESSMENTS HAVE NOT ABATED FOR THE REASON THAT, THE RETURN OF INCOME WAS PROCESSED U/S 143(1), TIME FOR ISSUE OF NOTICE U/S 143( 2 ) WAS OVER AND AS NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH , ADDITIONS MADE, WERE BAD IN LAW. 3.1. ON MERITS FOR THE AY 2004 - 05 IT WAS ARGUED THAT THE AMOUNT WAS RECEIVED AGAINST SALE OF IMMOVABLE PROPERTY WHICH WAS DEPOSITED IN THE BANK ACCOUNT AS PER DETAILS MENTIONED IN THE CASH BOOK . THE REJECTION OF THIS ARGUMENT OF THE ASSESSEE BY THE FIRST APPELLATE AUTHORITY FOR NOT FURNISHING THE SALE DEED WAS NOT CORRECT . ON DIVIDEND INCOME FOR BOTH THE AYS, IT WAS SUBMITTED THAT THE ASSESSEE WAS NOT ABLE TO FILE EVIDENCE FOR RS.2 9 ,878/ - AS AGAINST TOTAL DIVIDEND INCOME OF RS. 1,36,695 / - FOR THE A.Y. 2004 - 05 AND COULD NOT FILE EVIDENCE OF RS.1,95,048/ - OUT OF TOTAL DIVIDEND OF RS.2,14,193/ - AS THE MATTER WAS QUITE OLD. 3.2. THE LD.D.R. RELIED ON THE ORDER O F THE FIRST APPELLATE AUTHORITY AND SUBMITTED THAT THERE IS NO REQUIREMENT OF FINDING INCRIMINATING MATERIAL AT THE TIME OF SEARCH, TO RE - OPEN AND RE - ASSESS THE INCOME OF THE ASSESSEE. HE RELIED ON A NUMBER OF CASE LAWS IN SUP PORT OF HIS CONTENTIONS. ON MERITS HE ITA NOS. 982 & 983/DEL/2014 A.YS: 2004 - 05 AND 2005 - 06 SMT. ARADHANA KASHYAP, NEW DELHI 3 SUBMITTED THAT THE ADDITION WAS MADE AS THE ASSESSEE FAILED TO GIVE EVIDENCES. 4. WE HAVE HEARD RIVAL CONTENTIONS. WE FIND THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME U/S 139 FOR THE A.Y. 2004 - 05 ON 11.8.2004. T HE SAME WAS ACCEPTED U/S 143(1) OF THE ACT. SIMILARLY FOR THE A.Y. 2005 - 06 THE ASSESSEE FILED ITS RETURN OF INCOME U/S 139 OF THE ACT ON 27.9.2005. THIS WAS ALSO ACCEPTED U/S 143(1) OF THE ACT. TIME FOR ISSUAL OF NOTICE U/S 143(2) OF THE ACT HAS EXPIRED . HENCE THE ASSESSMENTS FOR THESE ASSESSMENT YEARS HAVE NOT ABATED. THE LD.CIT(A) HAS NOT CONTROVERTED THE CLAIMS OF THE ASSESSEE THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. THE LD.D.R. HAS ALSO NOT DRAWN OUR ATTENTION TO ANY S EIZED MATERIAL. THE CLAIMS OF THE ASSESSEE REMAIN UNCONTROVERTED. 4.1. UNDER THESE CIRCUMSTANCES THE PROPOSITION OF LAW IS LAID DOWN IN THE CASE OF KABU L CHAWLA VS. ACIT (ITAT DELHI) WHEREIN IT WAS HELD AS FOLLOWS. CIT(A) HAS NOT CONTROVERTED THE CONTE NTION ADVANCED ON BEHALF OF THE ASSESSEE DESPITE THE FACT THAT THE ASSESSEE CATEGORICALLY STATED THAT NO INCRIMINATING MATERIAL WAS FOUND ON THIS SCORE DURING THE SEARCH OPERATION. EVEN THE LD.DR HAS ALSO NOT INVITED OUR ATTENTION TOWARDS ANY SUCH MATERIA L. IN VIEW OF THE FOREGOING DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT THESE ADDITIONS MADE U/S 2(22)(E) OF THE ACT ARE NOT SUSTAINABLE SINCE THESE WERE MADE WITHOUT REFERENCE TO ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND FURT HER THE ASSESSMENTS FOR THESE THREE YEARS WERE NOT PENDING ON THE DATE OF SEARCH. ERGO, THE IMPUGNED ORDERS FOR THESE YEARS ON THIS ISSUE ARE SET ASIDE4 AND THE ADDITIONS ARE DIRECTED TO BE DELETED. ITA NOS. 982 & 983/DEL/2014 A.YS: 2004 - 05 AND 2005 - 06 SMT. ARADHANA KASHYAP, NEW DELHI 4 4. 2 . WHEN AN ASSESSMENT FOR A PARTICULAR YEAR HAS NOT ABATED AND WHEN THERE IS NO INCRIMINATING MATERIAL FOUND, THE PROPOSITION OF LAW, IN THE FOLLOWING CASE LAWS IS THAT NO ADDITION CAN BE MADE. I. ANJOO KASHYAP VS. DCIT, ITA 1209/DEL/13, DELHI A BENCH ORDER DT. 19.12.2014 II. KUSUM GUPTA VS. DCIT, DELHI D BENCH OF ITAT ORDER DT. 28.3.2013 (2013) 35 CCH 432 DELTRIB III. ACIT VS. ASHA KATARIA (2013) 36 CCH 082 (DELHI A BENCH OF THE TRIBUNAL) ORDER DT. 20.5.2013. IV. ACIT VS. PRADEEP KUMAR KUMRA, DELHI ITAT F BENCH ORDER DT. 7 .11.2013 V. ACIT VS. PRITHVI SOUND PRODUCTS CO.PVT.LTD. DELHI F BENCH OF ITAT ORDER DT. 17.4.2014 VI. ACIT VS. RASHMI CHATURVEDI DELHI F BENCH OF ITAT ORDER DT. 11.4.2014 VII. MGF AUTOMOBILES LTD. VS. ACIT, DELHI E BENCH OF ITAT ORDER DT. 28.6.2013 VIII. DCIT VS. KURELE PAPER MILLS P.LTD. DELHI D BENCH OF ITAT ORDER DT. 14.11.2014 IX. DCIT VS. PRESTIGE BUILDWELL PVT.LTD. DELHI F BENCH OF ITAT ORDER DT. 30.06.2015 X. DCIT VS. AGGARWAL PLAZA P.LTD. DELHI A BENCH OF ITAT ORDER DT. 29.5.2015 4. 3 . THE ORDER OF THE SPECIAL BENCH OF ITAT , IN THE CASE OF CARGO GLOBAL LOGISTICS LTD. VS. DCIT (2012) REPORTED IN 1 37 ITD 287 (MUM)(SB) , HAS BEEN UPHELD BY THE HON BLE BOMBAY HIGH COURT . THE HON BLE HIGH COURT CONSIDERED TWO ISSUES: (I) WHETHER SCOPE OF ASSESSME NT U/S 153A OF THE ACT IN RESPECT OF COMPLETED ASSESSMENTS IS LIMITED TO ONLY UNDISCLOSED INCOME AND UNDISCLOSED ASSETS DETECTED DURING SEARCH, AND (II) WHETHER IN VIEW OF ITA NOS. 982 & 983/DEL/2014 A.YS: 2004 - 05 AND 2005 - 06 SMT. ARADHANA KASHYAP, NEW DELHI 5 THE CBDT CIRCULAR NO.10/2005 THE ASSESSEE WAS ENTITLED TO DEDUCTION U/S 80 IA(4). T HE HON BLE BOMBAY HIGH COURT HELD AS UNDER: (I) ON A PLAIN READING OF SECTION 153A OF THE INCOME - TAX ACT, IT BECOMES CLEAR THAT ON INITIATION OF THE PROCEEDINGS UNDER SECTION 153A, IT IS ONLY THE ASSESSMENT / REASSESSMENT PROCEEDINGS THAT ARE PENDING ON THE DATE OF CONDUCTING SEARCH UNDER SECTION 132 OR MAKING REQUISITION UNDER SECTION 132A OF THE ACT STAND ABATED AND NOT THE ASSESSMENTS/REASSESSMENTS ALREADY FINALISED FOR THOSE ASSESSMENT YEARS COVERED UNDER SECTION 153A OF THE ACT. BY A CIRCULAR NO. 8 O F 2003 DATED 18 - 9 - 2003 (SEE 263 ITR (ST) 61 AT 107) THE CBDT HAS CLARIFIED THAT ON INITIATION OF PROCEEDINGS UNDER SECTION 153A, THE PROCEEDINGS PENDING IN APPEAL, REVISION OR RECTIFICATION PROCEEDINGS AGAINST FINALISED ASSESSMENT/REASSESSMENT SHALL NOT AB ATE. IT IS ONLY BECAUSE, THE FINALISED ASSESSMENTS/REASSESSMENTS DO NOT ABATE, THE APPEAL REVISION OR RECTIFICATION PENDING AGAINST FINALISED ASSESSMENT/REASSESSMENTS WOULD NOT ABATE. THEREFORE, THE ARGUMENT OF THE REVENUE, THAT ON INITIATION OF PROCEEDING S UNDER SECTION 153A, THE ASSESSMENTS/REASSESSMENTS FINALISED FOR THE ASSESSMENT YEARS COVERED UNDER SECTION 153A OF THE INCOME - TAX ACT STAND ABATED CANNOT BE ACCEPTED. SIMILARLY ON ANNULMENT OF ASSESSMENT MADE UNDER SECTION 153A (1) WHAT STANDS REVIVED I S THE PENDING ASSESSMENT / REASSESSMENT PROCEEDINGS WHICH STOOD ABATED AS PER SECTION 153A(1); (II) ONCE IT IS HELD THAT THE ASSESSMENT HAS ATTAINED FINALITY, THEN THE AO WHILE PASSING THE INDEPENDENT ASSESSMENT ORDER UNDER SECTION 153A READ WITH SECTION 1 43 (3) OF THE I.T. ACT COULD NOT HAVE DISTURBED THE ASSESSMENT / REASSESSMENT ORDER WHICH HAS ATTAINED FINALITY, UNLESS THE MATERIALS GATHERED IN THE COURSE OF THE PROCEEDINGS UNDER SECTION 153A OF THE INCOME - TAX ACT ESTABLISH THAT THE RELIEFS GRANTED UNDE R THE FINALISED ASSESSMENT! REASSESSMENT WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153A PROCEEDINGS. IF THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY MATERIAL WAS UNEARTHED DURING THE SEARCH OR DURING THE 153A PROCEEDINGS, THE AO WHILE PAS SING ORDER UNDER SECTION 153A READ WITH SECTION 143(3) CANNOT DISTURB THE ASSESSMENT ORDER; (III) A PERUSAL OF S. 80 - IA(4) WOULD INDICATE AS TO HOW THE LEGISLATURE HAD IN MIND DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM INDUSTRIAL UNDERTAKINGS OR ENTER PRISES ENGAGED IN THE INFRASTRUCTURE DEVELOPMENT ETC. WE ARE CONCERNED WITH SUB - SECTION (4) AND AS IT READ AT THE RELEVANT TIME. IT SAYS THAT THIS SECTION APPLIES TO ANY ENTERPRISE CARRYING ON THE BUSINESS OF DEVELOPING OR OPERATING AND MAINTAINING ANY INF RASTRUCTURE FACILITY WHICH FULFILLS ALL THE CONDITIONS, NAMELY, IT IS OWNED BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM OF SUCH COMPANIES OR BY AN AUTHORITY OR A BOARD OR A CORPORATION OR ANY OTHER BODY ESTABLISHED OR CONSTITUTED UNDER ANY CENTRAL OR STATE ACT, IT HAS ENTERED INTO AN AGREEMENT WITH THE CENTRAL GOVERNMENT OR A LOCAL ITA NOS. 982 & 983/DEL/2014 A.YS: 2004 - 05 AND 2005 - 06 SMT. ARADHANA KASHYAP, NEW DELHI 6 AUTHORITY OR ANY OTHER STATUTORY BODY FOR DEVELOPING OR OPERATING AND MAINTAINING OR DEVELOPING, OPERATING AND MAINTAINING A NEW INFRASTRUCTURE FACILITY AND IT HAS STARTE D OR STARTS OPERATING AND MAINTAINING THE INFRASTRUCTURE FACILITY ON OR AFTER 1ST DAY OF APRIL, 1995. THE EXPLANATION DEFINES THE INFRASTRUCTURE FACILITY TO MEAN, INTER ALIA, A PORT, AIRPORT, INLAND WATERWAY, INLAND PORT OR NAVIGATIONAL CHANNEL IN THE SEA. THE WORD 'INLAND PORT' WAS ALWAYS THERE IN CLAUSE (D). WHAT WAS THERE PRIOR TO ITS SUBSTITUTION BY FINANCE ACT OF 2007 WITH EFFECT FROM 1ST APRIL, 2008, WERE THE WORDS 'OR INLAND PORT'. NOW THE WORD 'OR' IS DELETED, BUT THE WORDS ARE 'INLAND PORT OR NAVIG ATIONAL CHANNEL IN THE SEA'. THUS, AN 'INLAND PORT' WAS ALWAYS WITHIN THE CONTEMPLATION OF THE LEGISLATURE AND IT IS TREATED SPECIFICALLY AS A INFRASTRUCTURAL FACILITY (COMMISSIONER OF INCOME TAX (CENTRAL) NAGPUR VS. M/S. MURLI AGRO PRODUCTS LIMITED IN INC OME TAX APPEAL NO.36 OF 2009 FOLLOWED; ANIL KUMAR BHATIA CANARA HOUSING DEVELOPMENT CO (KAR) (HC) DISTINGUISHED . 4. 4 . RESPECTFULLY FOLLOWING THESE DECISIONS, WE UPHOLD THE CONTENTION OF THE ASSESSEE, THAT IN THE ABSENCE OF INCRIMINATING MATERIAL MENTIONED, ADDITIONS FOR THESE A.YS WHERE ASSESSMENT PROCEEDINGS HAVE NOT ABATED, IS BAD IN LAW. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. 5 . IN THE RESULT THE APPEAL S OF THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH AUGUST, 2015 . SD/ - (J.SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED: THE 05 TH AUGUST, 2015 *MANGA ITA NOS. 982 & 983/DEL/2014 A.YS: 2004 - 05 AND 2005 - 06 SMT. ARADHANA KASHYAP, NEW DELHI 7 COPY OF THE ORDER FORWARDE D TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR