Desai Construction Pvt.Ltd., Ahmedabad V. The ACIT.,Cent.Circle-2, Surat

ITSSA 12/AHD/2012

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0789 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-07-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 23-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGADISH
• Keywords: Retrospective amendment
• Section: 143(3); 153A; 234B; 32; 263; 132; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD , BEFORE SHRI SHAILEND RA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI , ACCOUNTANT MEMBER . IT (SS) A. NO S . 12 & 13 /AHD/20 1 2 (ASSESSMENT YEAR S : 2004 - 05 & 2005 - 06 ) DESAI CONSTRUCTION P. LTD., CONSTRUCTION HOUSE, OPP. FALAH HOTEL, N. H. NO. 8, VALSAD APPELLANT VS. ACIT, CENTRAL CIRCLE - 2, SURAT RESPONDENT PAN: AAACD8502F / BY APP ELLANT : SHRI TEJ SHAH, A.R. / BY RESPONDENT : SHRI JAGADISH, CIT D.R. / DATE OF HEARING : 01 .0 7 .2015 / DATE OF PRONOUNCEMENT : 22 . 0 7 .2015 2 IT(SS)A NOS. 12 & 13/AHD/12 FOR A.Y. 04 - 05 & 05 - 06 DESAI CONSTRUCTION P. LTD. VS. ACIT ORDER PER SHAILENDRA KUMAR YADAV, J.M : THESE TWO APPEALS ARE ARISING OUT FORM THE CONSOLIDATED ORDER OF CIT(A) - II , AHMEDABAD, DATED 24.11.2011 FOR BOTH ASSESSMENT YEAR S ON SIMILAR ISSUE . SO, THEY ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN IT (SS) A NO. 12 /AHD/20 12, ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUND S : 1) THAT THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS ) ERRED IN LAW AND IN THE FACTS OF THE CASE IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN FRAMING ASSESSMENT U/S.143(3) R.W.S. 153A OF THE ACT PARTICULARLY WHEN NO MATERIAL IS FOUND SHOWING UNDISCLOSED INCOME FOR THE YEAR UNDER CONSIDERATION. 2) THAT THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS ) ERRED IN LAW AND IN THE FACTS OF THE CASE IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN FRAMING ASSESSMENT U/S.143(3) R.W.S. 153A OF THE ACT EVEN THOUGH THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION IS NOT PENDING ON THE DATE OF INITIATION OF SEARCH U/S. 132 OF THE ACT AND HENCE THE ORIGINAL ASSESSMENT HAS NOT ABATED. 3) THAT THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS ) ERRED IN LAW AND IN THE FACTS OF THE CASE IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN NOT ALLOWING DEDUCTION U/S.80IA(4) AMOUNTING TO RS.61,82,292 FOR A.Y. 2004 - 05. 4) THAT THE LEARNED COMMI SSIONER OF INCOME - TAX (APPEALS ) ERRED IN LAW AND IN THE FACTS OF THE CASE IN 3 IT(SS)A NOS. 12 & 13/AHD/12 FOR A.Y. 04 - 05 & 05 - 06 DESAI CONSTRUCTION P. LTD. VS. ACIT CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN CHARGING INTEREST U/S. 234B OF THE ACT. 3 . ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF RS. 61,82,292/ - AND RS.47,31,665/ - FOR A.Y. 04 - 05 & 05 - 06 RESPECTIVELY. MATTER WAS CARRIED BEFORE THE CIT(A), WHEREIN ASSESSEE RAISED VARIOUS CONTENTIONS WITH REGARD TO HIS CLAIM AS DETAILED IN PARA 5 OF CIT(A)S ORDER. HAVING CONSIDERED THE SAME, CIT(A) CONFIRMED THE ORDER OF ASSESSING OFFIC ER. 3. 1 SAME HAS BEEN OPPOSED BEFORE US INTER ALIA SUBMITTING THAT CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER IN FRAMING ASSESSMENT U/S. 143 R.W.S. 153A OF THE ACT, PARTICULARLY, WHEN NO MATERIAL WAS FOUND SHOWING UNDISCLOSED INCOME FOR T HE YEAR UNDER CONSIDERATION. CIT(A) ERRED IN LAW AND IN FACTS OF THE CASE IN CONFIRMING THE ORDER OF ASSESSING OFFICER IN FRAMING ASSESSMENT U/S. 143(3) R.W.S. 153A OF THE ACT. EVEN THOUGH ASSESSMENT FO R THE YEAR UNDER CONSIDERATION WA S NOT PENDING ON TH E DATE OF INITIATION OF SEARCH U/S. 132 AND HENCE, THE ORIGINAL ASSESSMENT HAS NOT ABATED. IN VIEW OF THIS, CIT(A) ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ORDER OF ASSESSING OFFICER IN NOT ALLOWING CLAIM OF ASSESSEE. AS PRAYED, SAME SHOULD B E ALLOWED. FOR THIS, ASSESSEE PLACED RELIANCE ON VARIOUS JUDICIAL PRONOUNCEMENTS WHICH HAS BEEN DISCUSSED IN FOLLOWING PARA. ON OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT IN LIGHT OF RETRO SPECTIVE INSERTION OF EXPLANATION BELOW : SECTION 80IA (13) ASSESSEE WAS NOT ELIGIBLE 4 IT(SS)A NOS. 12 & 13/AHD/12 FOR A.Y. 04 - 05 & 05 - 06 DESAI CONSTRUCTION P. LTD. VS. ACIT FOR DEDUCTION U/S. 80IA(4). THIS SECTION INTRODUCED BY FINANCE ACT, 2009 WITH RETROSPECTIVE EFFECT FROM 01.04.2000, PROVIDES THAT : FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y DECLARED THAT NOTHING CONTAINED IN THIS SECTION I.E. SECTION 80IA SHALL APPLY IN RELATION TO A BUSINESS REFERRED TO IN SUB - SECTION (4) WHICH IS IN NATURE OF WORKS CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNMENT) AND EXECUTED BY THE UNDERTAKING OR ENTERPRISE REFERRED TO IN SUB - SECTION (1). ASSESSEE HAVING MERELY EXECUTED TWO CONTRACTS FOR INFRASTRUCTURE DEVELOPMENT AS AWARDED TO HIM. IN VIEW OF ABOVE, AUTHORITIES BELOW HAVE RIGHTLY DECLINED DEDUCTION U/S. 80IA TO ASSESSEE. SAME SHOULD BE UPHELD. 3 . 2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT ISSUE BEFORE US IS IN BOTH THE YEARS REGARDING FRAMING ASSESSMENT U/S. 143(3) R.W.S. 153A OF THE ACT WHEREBY ASSESSEES CLAIM HAS BEEN DISALLOWED U/S. 80IA. STAND OF ASSESSEE HAS BEEN THAT IN ABSENCE OF ANY MATERIAL FOUND SHOWING UNDISCLOSED INCOME FOR THE YEAR UNDER CONSIDERATION FRAMING ASSESSMENT U/S. 143(3) R.W.S. 153A IS NOT JUSTIFIED. AS A MATTER OF FACT, FOR THE YEAR UNDER APPEAL ORIGINAL ASSESSMENTS WERE COMPLETED U/S. 143(3) WHEREIN AFTER DUE CONSIDERATION OF THE SUBMISSION OF ASSESSEE , ALONG WITH EVIDENCE PLACED ON RECORD, ASSESSEE WAS GRANTED DEDUCTION U/S. 80IA IN RESPECT OF DEVELOPMENT OF AN INFRASTRUCTURE PROJECT AWARDED TO ASSESSEE BY NHAI. TH E ORIGINAL ORDER HAS BEEN PLACED BY ASSESSEE ON RECORD AT AGE NO. 165 - 170 OF THE PAPER BOOK. SUBSEQUENTLY, SEARCH WAS 5 IT(SS)A NOS. 12 & 13/AHD/12 FOR A.Y. 04 - 05 & 05 - 06 DESAI CONSTRUCTION P. LTD. VS. ACIT CONDUCTED AT THE PREMISES OF ASSESSEE ON 24.09.2008, WHEREIN ASSESSEE ADMITTED UNDISCLOSED INCOME IN RESPECT OF ITS OTHER ACTIVITIES FOR THE YEARS 2008 - 09 AND 09 - 10, WHICH IS EVIDENT FROM THE IMPUGNED ASSESSMENT ORDERS. THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY OTHER EVIDENCE INCLUDING ANY INCRIMINATING MATERIAL WAS FOUND DURING COURSE OF SEARCH FOR THE RELEVANT ASSESSMENT YEARS IN RE SPECT OF CLAIM U/S. 80IA OF THE ACT. IN THIS BACKGROUND, IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING SEARCH, NO ADDITION CAN BE MADE IN RESPECT OF UNABATED ASSESSMENTS AND WHICH HAVE BECOME FINAL AS ON THE DATE OF SEARCH. THE COMPLETED ASSESSMEN TS FOR THE YEARS UNDER APPEAL HAVE BECOME FINAL AND ARE NOT ABATED SINCE THEY ARE NOT PENDING AS ON THE DATE OF SEARCH. THEREFORE, EVEN THOUGH PURSUANT TO ISSUE OF NOTICE U/S. 153A, ASSESSMENTS FOR 6 YEARS IMMEDIATELY PRIOR TO THE DATE OF SEARCH ARE TO BE FRAMED U/S. 153A, BUT IN RESPECT OF UNABATED ASSESSMENTS WHICH HAVE BECOME FINAL AND NO INCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH FOR THOSE YEARS, NO ADDITION COULD BE MADE IN RESPECT OF SUCH UNABATED ASSESSMENTS. IN THIS REGARD, HONBL E BOMBAY HIGH COURT IN CASE OF CONTINENTAL WAREHOUSING CORPORATION (58 TAXMANN.COM 78) HAS HELD AS UNDER: 'EVEN OTHERWISE, WE AGREE WITH THE DIVISION BENCH WHEN IT OBSERVES AS ABOVE WITH REGARD TO THE AMBIT AND SCOPE OF THE POWERS CONFERRED UNDER SECTION 1 53 A OF THE ACT. SINCE WE ARE NOT REQUIRED TO TRACE OUT THE HISTORY AND WE CAN DO NOTHING BETTER THAN TO REPRODUCE THE OBSERVATIONS AND CONCLUSIONS AS ABOVE THAT WE ARE NOT REPEATING THE 6 IT(SS)A NOS. 12 & 13/AHD/12 FOR A.Y. 04 - 05 & 05 - 06 DESAI CONSTRUCTION P. LTD. VS. ACIT SAME. EVEN IF THE EXERCISE OF POWER UNDER SECTION 153A IS PERMISSIBLE STILL THE PROVISION CANNOT BE READ IN THE MANNER SUGGESTED BY MR. PINTO. NOT ONLY THE FINALISED ASSESSMENT CANNOT BE TOUCHED BY RESORTING TO THOSE PROVISIONS, BUT EVEN WHILE EXERCISING THE POWER CAN BE EXERCISED WHERE A SEARCH IS INITIATED UNDER SECTION 1 32 OR B OOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER 31ST MARCH, 2003. THERE IS A MANDATE TO ISSUE NOTICES UNDER SECTION 153(1) (A) AND ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PREC EDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. THUS, THE CRUCIAL WORDS 'SEARCH' AND 'REQUISITION' APPEAR IN THE SUBSTANTIVE PROVISION AND THE PROVISOS. THAT WOULD THROW LIGHT ON THE ISSUE O F APPLICABILITY OF THE PROVISION. IT BEING ENACTED TO A SEARCH OR REQUISITION THAT ITS CONSTRUCTION WOULD HAVE TO BE ACCORDINGLY. THAT IS THE CONCLUSION REACHED BY THE DIVISION BENCH IN MURLI AGRO PRODUCTS LTD. (SUPRA) WITH WHICH WE RESPECTFULLY AGREE. THE SE ARE THE CONCLUSIONS WHICH CAN BE REACHED AND UPON READING OF THE LEGAL PROVISIONS IN QUESTION. WE DO NOT SEE AS TO HOW WHILE ALLOWING THE APPEAL OF THE ASSESSEE AND SETTING ASIDE THE ORDER OF THE COMMISSIONER UNDER SECTION 263 COULD THE JUDGMENT BE SAI D TO BE LAYING DOWN A PROPOSITION AND AS CANVASSED BY MR. PINTO* TRUE IT IS THAT THE ASSESSMENT WHICH HAS TO BE MADE IN PURSUANCE OF THE NOTICE IS IN RELATION TO THE SIX YEARS. AN ORDER WILL HAVE TO BE MADE IN THAT REGARD. WHILE MAKING THE ORDER THE INCOME OR THE RETURN OF INCOME FILED FOR ALL THESE ASSESSMENT YEARS IS TO BE TAKEN INTO ACCOUNT. A REFERENCE WILL HAVE TO BE MADE TO THE INCOME DISCLOSED THEREIN. HOWEVER, THE SCOPE OF ENQUIRY, THOUGH NOT CONFINED AS HELD BY THE HIGH COURT OF KARNATAKA, IT ESSEN TIALLY REVOLVES AROUND THE SEARCH OR THE REQUISITION UNDER SECTION 132A AS THE CASE MAY BE. WE DO NOT FIND ANYTHING IN THESE OBSERVATIONS AND REPRODUCED ABOVE WHICH WOULD ENABLE US TO CONCLUDE THAT THE DIVISION BENCH JUDGMENT OF THIS COURT IN THE CASE OF M URLI AGRO PRODUCTS LTD, (SUPRA) REQUIRES RECONSIDERATION OR DOES NOT LAY DOWN A CORRECT PRINCIPLE OF LAW. WE CANNOT, THEREFORE, 7 IT(SS)A NOS. 12 & 13/AHD/12 FOR A.Y. 04 - 05 & 05 - 06 DESAI CONSTRUCTION P. LTD. VS. ACIT ACCEDE TO THE SUBMISSIONS OF MR. PINTO AND REVISIT ANY OF THE CONCLUSIONS RENDERED BY THE DIVISION BENCH OF THIS COURT. ' WHILE HOLDING SO, THE COURT ALSO APPROVED THE DECISION OF THE SPECIAL BENCH OF ITAT IN CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (23 TAXRAANN.COM 103) AND DECISION OF HONBLE DELHI H IGH C OURT IN CASE OF ANILKUMAR BHATIA. THE SP ECIAL BENCH IN THE CASE OF ALL CARGO HELD AS UNDER: 'WHEREIN THE CASE OF UNABATED ASSESSMENTS IN ADDITI ON TO INCOME THAT HAS ALREADY BE EN ASSESSED, ASSESSMENT U/S . 153A WILL BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIA L. SIMILAR VIEW HAS ALSO BEEN HELD BY THE PUNE ITAT IN THE CASE OF SRJ PEETY STEELS PVT. LTD. (137 TTJ 627) AND THE DELHI ITAT CASE OF SANJAY AGGARWAL (47 TAXMANN.COM 210) . I N VIEW OF BINDING PRECEDENTS, REVENUE AUTHORITIES WERE NOT JUSTIFIED IN MAKING DISALLOWANCE CLAIMED U/S. 80IA IN RESPECT OF UNABATED ASSESSMENTS BECAUSE THERE WAS NO INCRIMINATING DOCUMENT FOUND DURING SEARCH WHICH COULD SUGGEST THAT CLAIM U/S. 80IA IS NOT PERMISSIBLE EVEN THOUGH ASSESSMENT U/S. 153A CAN BE MADE. WE HOLD SO . ACCORDINGLY, SAME IS QUASHED AND CLAIM OF ASSESSEE U/S.80IA(4) AMOUNTING TO RS.61,82,292/ - CANNOT BE NEGATED. ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 4 . SIMILAR ISSUE AROSE IN A.Y. 2005 - 06. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, WE QUASH THE SAME. SINCE, WE ARE DECIDING THE ISSUE ON PRELIMINARY STAGE AS DISCU SSED ABOVE, SO, WE ARE REFRAINING TO COMMENT ON MERIT 8 IT(SS)A NOS. 12 & 13/AHD/12 FOR A.Y. 04 - 05 & 05 - 06 DESAI CONSTRUCTION P. LTD. VS. ACIT OF THE ISSUE AT HAND. SAME MAY BE AGITATED AS AND WHEN SITUATION ARISES FOR THE SAME IN BOTH YEARS UNDER CONSIDERATION . 5 . AS A RESULT, BOTH APPEAL S FILED BY ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF JU LY , 201 5 . SD/ - SD/ - (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 22 /07 /2015 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO: - 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. BY ORDER / , / ,