DCIT, CC-XVI, Kolkata, Kolkata V. M/s. Darsananand Ltd., Kolkata

ITSSA 111/KOL/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7438 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 03-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: L N MALIK RESP
• Keywords: Tax effect
• Section: 153A

Judgement Text

I.T.(SS)A. NO.: 111, 112 & 113 /KOL/2011 ASSESSMENT YEARS : 2003-04, 2004-05 & 2005-06 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI C.D. RAO (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.(SS)A. NOS.: 111 , 112, 113/ KOL. / 2011 ASSESSMENT YEARS : 2003-04, 2004-05 & 2005-06 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-XVI, KOLKATA .APPELLANT VS. M/S. DARSANANAND LTD., 11, QUEENS PARK, KOLKATA-700 019 RESPONDENT [ PAN : AABCD 7645 L] APPEARANCES BY: SRI A.K. SINGH, FOR THE APPELLANT SRI SATISH KHOSLA AND SRI L.N. MALIK , FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : MAY 22, 2012 DATE OF PRONOUNCING THE ORDER : MAY 22, 2012 O R D E R PER BENCH : 1. THESE ARE THE APPEALS FILED BY THE REVENUE AGAIN ST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX(APPEALS), CENTRAL-II , KOLKATA IN APPEAL NOS.185, 186 & 187/CIT(A.),C-II/CC-XVI/10-11 DATED 28.07.2011 FOR THE ASSESSMENT YEARS 2003-04, 2004-05 AND 2005- 06 RESPECTIVELY. 2. IN THE REVENUES APPEALS, THE ISSUES ARE IDENTIC AL AND CONSEQUENTLY ALL THE THREE APPEALS ARE BEING DISPOS ED OF BY THIS COMMON ORDER. 3. IN THE REVENUES APPEALS, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- I.T.(SS)A. NO.: 111, 112 & 113 /KOL/2011 ASSESSMENT YEARS : 2003-04, 2004-05 & 2005-06 PAGE 2 OF 4 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES IN TH E CASE, THE LD. CIT(A) HAS ERRED IN LAW IN HOLDING THAT WHERE N OTHING INCRIMINATING IS FOUND IN THE COURSE OF SEARCH PROC EEDING, THE COMPLETED ASSESSMENT CAN NOT BE DISTURBED, WITHOUT CONSIDERING THAT THE PROVISION OF SEC.153A OF THE A CT EMPOWERS THE A.O. TO ASSESS OR REASSESS THE TOTAL I NCOME OF SIX ASSESSMENT YEARS PRIOR TO THE YEAR OF SEARCH. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES IN TH E CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITIO N OF RS.3,60,000/= IN RESPECT OF INCOME FROM HOUSE PROPE RTY BY HOLDING THAT THE ADDITION DOES NOT EMANATE FROM ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH WITH OUT CONSIDERING THAT THE A.O. HAD MADE THE ADDITION ON THE BASIS OF THE FINDING OF THE SEARCH REGARDING OCCUPATION OF T HE PROPERTY UNDER CONSTRUCTION. 3. THAT THE PRESENT APPEAL IS BEING FILED IN SPITE OF THE TAX EFFECT BEING LESS THAN RS.3,00,000/= FOR THE REASON THAT THE CONSTITUTION VALIDITY OF PROVISION OF SEC.153A OF T HE ACT IS UNDER CHALLENGE. 4. SHRI A.K. SINGH, LD. SR. D.R. APPEARED FOR THE R EVENUE AND SHRI SATISH KHOSLA AND SRI L.N. MALIK, LD. COUNSEL APPEA RED FOR THE ASSESSEE. 5. ON MERITS, IN REGARD TO GROUND NO. 2, IT WAS SUB MITTED BY THE LD. D.R. THAT IN THE COURSE OF SEARCH ON THE ASSESSEE, IT WAS NOTICED THAT THE ASSESSEE DID NOT HAVE ANY BUSINESS OTHER THAN OWNIN G RESIDENTIAL HOUSES. IT WAS THE SUBMISSION THAT IT WAS NOTICED T HAT A PORTION OF RESIDENTIAL PROPERTY SITUATED AT 11, QUEENS PARK, B ALLYGUNGE, KOLKATA- 700 019, WHICH WAS OWNED BY THE ASSESSEE-COMPANY WA S BEING USED AS RESIDENCE BY THE UPADHYAYS FAMILY MOST SPECIFICALL Y THE MANAGING DIRECTOR OF THE ASSESSEE-COMPANY. IT WAS FURTHER SU BMISSION THAT AS THE ASSESSEE HAD NOT SHOWN ANY RENTAL INCOME IN RESPECT OF THE PORTION OF THE PROPERTY, WHICH WAS UNDER THE OCCUPATION OF THE MANAGING I.T.(SS)A. NO.: 111, 112 & 113 /KOL/2011 ASSESSMENT YEARS : 2003-04, 2004-05 & 2005-06 PAGE 3 OF 4 DIRECTOR, THE ASSESSING OFFICER HAD ESTIMATED RENT OF RS.3,60,000/- PER ANNUM AND HAD MADE THE ADDITION. IT WAS THE SUBMISS ION THAT THE LD. CIT(APPEALS) HAD DELETED THE ADDITION BY HOLDING TH AT NO INCRIMINATING MATERIAL HAD BEEN FOUND IN THE COURSE OF SEARCH FOR MAKING THE ADDITION. IT WAS THE SUBMISSION THAT THE ORDER OF LD. CIT(APPEALS) WAS LIABLE TO BE REVERSED AND THAT OF THE ASSESSING OFFICER RESTORED. IT WAS ALSO THE SUBMISSION THAT T HE WORDINGS OF THE PROVISIONS OF SECTION 153A DID NOT PROVIDE FOR ANY INCRIMINATING MATERIAL BEING FOUND IN THE COURSE OF SEARCH FOR TH E PURPOSE OF MAKING ADDITION. LD. SR. D.R. VEHEMENTLY SUPPORTED THE ORD ER OF ASSESSING OFFICER. 6. IN REPLY, THE LD. A.R. SUBMITTED THAT THE ISSUE OF THERE BEING NO INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARC H, WAS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF LMJ INTERNATIONAL VS.- DCIT REPORTED IN (2 008) 119 TTJ (KOL.) 214. IT WAS THE FURTHER SUBMISSION THAT NO COMPARIS ON HAS BEEN MADE NOR EVIDENCE PRODUCED AS TO HOW THE ASSESSING OFFIC ER HAS ESTIMATED THE RENT WHICH HAS BEEN ADDED. IT WAS THE SUBMISSIO N THAT ON BOTH COUNTS THE ORDER OF LD. CIT(APPEALS) WAS LIABLE TO BE SUSTAINED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ON MER ITS, PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THERE IS NO EVIDENCE AVAILABLE WITH THE ASSESSING OFFICER FOR ESTIMATING THE RENTA L INCOME IN RESPECT OF THE PORTION OF THE BUILDING USED BY THE MANAGING DIRECTOR. NO METHOD PROVIDED IN THE ACT HAS ALSO BEEN ADOPTED BY THE ASSESSING OFFICER FOR ARRIVING AT THE SAID RENTAL INCOME OF R S.3,60,000/- PER ANNUM. IN FACT, PERUSAL OF THE PROVISIONS OF SECTIO N 23, FOR THE PURPOSE OF DETERMINING THE ANNUAL VALUE SHOWS THAT THE WORD S USED ARE ACTUALLY I.T.(SS)A. NO.: 111, 112 & 113 /KOL/2011 ASSESSMENT YEARS : 2003-04, 2004-05 & 2005-06 PAGE 4 OF 4 RECEIVED OR RECEIVABLE. IN THE CIRCUMSTANCES, ON TH E FACTS OF THE CASE AS NO EVIDENCE HAS BEEN SHOWN FOR ARRIVING AT THE RENT AL INCOME OF RS.3,60,000/- THE ADDITION AS MADE BY THE ASSESSING OFFICER TO THE RENTAL INCOME STANDS DELETED. WE MAY ALSO MENTION H ERE THAT THE LD. CIT(APPEALS) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF T HIS TRIBUNAL IN THE CASE OF LMJ INTERNATIONAL (SUPRA). W ITHOUT GOING INTO TECHNICALITY OF THE SAID DECISION AND ONLY DECIDING ON THE FACTS IN SO FAR AS THE ASSESSING OFFICER HAS NOT FOLLOWED ANY SCIENTIFIC M ETHOD PROVIDED UNDER THE ACT FOR DETERMINING THE RENTAL INCOME, TH E ADDITION STANDS DELETED. 8. IN THE RESULT, APPEALS OF THE REVENUE STAND DISM ISSED. THE ORDER IS DICTATED AND PRONOUNCED IN THE OPEN COURT IMMEDIATELY UPON CONCLUSION OF HEARING TODAY ON 22 ND DAY OF MAY, 2012. SD/- SD/- C.D. RAO GEORGE MATHAN (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, THE 22 ND DAY OF MAY, 2012 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.