ACIT, Central Circle - 1(2), Kolkata, Kolkata V. Shri Raj Kumar Somani, Kolkata

ITSSA 125/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7477 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 06-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Assessee Lawyers: P
• Keywords: Search and seizure; Validity of assessment
• Section: 142(1); 153A; 132; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A, KOLKATA BEFORE SH. J.SUDHAKAR REDDY, ACCOUNTANT MEMBER & SH.S.S.VISWANETHRA RAVI, JUDICIAL MEMBER IT(SS)A NO.125/KOL/2017 (ASSESSMENT YEAR-2012-13) ORDER PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE AGAINST THE ORDER DATED 12.06.2017 PASSED BY CIT(A)-20, KOLKATA FOR AY 2012-13. 2. HEARD BOTH PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) WAS CONDUCTED ON INLAND GROUP ON 17.03.2015. ACCORDINGLY, NOTICE U/S 153A OF THE ACT WAS ISSUED AND IN RESPONSE TO WHICH THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.6,63,600/-. FURTHER, NOTICES U/S 143(2) & 142(1) OF THE ACT WAS ISSUED AND IN PURSUANCE TO WHICH AUTHORISED REPRESENTATIVE ON BEHALF OF THE ASSESSEE APPEARED. THE AO FURTHER ADDED AN AMOUNT OF RS.1,34,05,774/- U/S 68 OF THE ACT TO THE RETURN INCOME AND ASSESSED THE INCOME OF THE ASSESSEE TO RS.1,40,69,374/- VIDE ITS ORDER DATED 30.12.2016 U/S 153A/143(3) OF THE ACT. THE ASSESSEE CHALLENGED THE AFORESAID ASSESSMENT ORDER BEFORE THE CIT(A). A CONTENTION OF VALIDITY OF ASSESSMENT U/S 153A WAS RAISED BEFORE THE CIT(A) BY CONTENDING WHEN THERE WAS NO INCRIMINATING MATERIAL FOUND AND SEIZED DURING THE COURSE OF SEARCH, THE ABOVE SAID ASSESSMENT IS BAD IN LAW. THE CIT(A) BY PLACING RELIANCE IN THE CASE OF PCIT-2, KOLKATA VS SALASAR STOCK BROKING LTD. [ITAT ACIT, CENTRAL CIRCLE-1(2), KOLKATA-700107. VS SHRI RAJ KUMAR SOMANI, 143/1/1, COTTON STREET, KOLKATA-700107. P AN-AJFPS9668G (APPELLANT) (RESPONDENT) APPELLANT BY SH. A.K. NAYAK, CIT DR RESPONDENT BY SH. B.C.JAIN, FCA & RAKESH JAIN, FCA DATE OF HEARING 04.02.2019 DATE OF PRONOUNCEMENT 30 .0 4 .2019 IT(SS)A NO.125/KOL/2017 (ASSESSMENT YEAR-2012-13) 2 | P A G E NO.264 OF 2016 DATED 24.08.2016] & CIT, KOLKATA-III VS VEERPRABHU MARKETING LTD. REPORTED IN 73 TAXMANN.COM 149 [2016] (CALCUTTA) OF HONBLE HIGH COURT OF CALCUTTA QUASHED THE ASSESSMENT PASSED U/S 153A/143(3) OF THE ACT PASSED BY THE AO FOR THE REASONS STATED AS UNDER:- I HAVE CONSIDERED THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER, DIFFERENT CASE LAWS BROUGHT ON RECORD AND APPEAL ORDERS PASSED BY PREDECESSORS ON THIS LEGAL ISSUE. I FIND FROM THE ASSESSMENT ORDER THAT DURING THE SEARCH AND SEIZURE OPERATIONS CONDUCTED U/S 132 OF THE I T ACT, 1961, INCRIMINATING DOCUMENTS/PAPERS WERE NOT SEIZED. AT LEAST, ADDITIONS MADE BY THE AO IN THE ASSESSMENT ORDER PASSED U/S 153A/143(3) ARE NOT BASED ON ANY INCRIMINATING DOCUMENTS/PAPERS SEIZED DURING THE SEARCH OPERATION. IT WOULD ALSO NOT BE OUT OF CONTEXT TO MENTION HERE THAT IN THIS CASE, ON THE DATE OF SEARCH, NO ASSESSMENT FOR THIS YEAR WAS PENDING. THEREFORE, KEEPING IN VIEW THE RATIO DECIDED BY THE JURISDICTIONAL BENCH OF KOLKATA TRIBUNAL IN CASES REFERRED ABOVE AND THE RATIO DECIDED BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF VEER PRABHU MARKETING LTD. (SUPRA) IN THE LIGHT OF CBDTS DECISION OF NOT FILING SLP IN THIS CASE IN THE SUPREME COURT AND KEEPING IN VIEW THE APEX COURTS DECISION TO DISMISS SLP ON SIMILAR ISSUE IN THE CASE OF PR CIT VS KURELE PAPER MILLS PVT.LTD: SLP (C) NO.34554 OF 2015 DT. 07.12.2015, I AM OF THIS VIEW THAT IN ORDER TO MAINTAIN JUDICIAL CONTINUITY ON THIS ISSUE AND RESPECTFULLY FOLLOWING THE RATIO DECIDED BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF VEER PRABHU MARKETING LTD. (SUPRA), ASSESSEES APPEAL ON GROUND NO.2 & 3 ARE ALLOWED ON TECHNICAL GROUND. 3. BEFORE US, LD.DR PLACED RELIANCE IN THE CASE OF ST. FRANCIS CLAY DECOR TILES REPORTED IN 385 ITR 624 (KER.) AND E.N. GOPA KUMAR REPORTED IN 390 ITR 131 (KER.) OF HONBLE KERALA HIGH COURT AND ARGUED THAT INCRIMINATING DOCUMENTS ARE NOT NECESSARY TO COMPLETE ASSESSMENT U/S 153A PROCEEDINGS AND REFERRED TO PARA 5 OF THE E.N. GOPA KUMAR (SUPRA) CASE LAW AND SUBMITTED THAT THE ASSESSMENT PASSED BY THE AO U/S 153A OF THE ACT IS MAINTAINABLE. 4. WE FIND THAT THERE WAS NO REFERENCE NOR ANY RELIANCE PLACED BY THE AO DURING THE COURSE OF 153A PROCEEDINGS TO ANY INCRIMINATING MATERIAL THAT HAS BEEN FOUND DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS IN MAKING THE ADDITION U/S 68 OF THE ACT. IT IS SETTLED BY THE HONBLE HIGH COURT OF CALCUTTA IN THE CASES OF SALASAR STOCK BROKING LTD. & VEER PRABHU MARKETING LTD. (SUPRA) THAT WHEN THERE IS NO INCRIMINATING MATERIAL, THE ADDITIONS MADE THEREON IN 153A PROCEEDINGS ARE NOT MAINTAINABLE. FURTHER, THE HONBLE HIGH COURT OF CALCUTTA CONSIDERED THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF KABUL CHAWLA REPORTED IN 380 ITR 0573 (DEL.) HELD THAT WHEN NO INCRIMINATING MATERIAL /EVIDENCE WAS UNEARTHED DURING THE COURSE OF SEARCH, IT(SS)A NO.125/KOL/2017 (ASSESSMENT YEAR-2012-13) 3 | P A G E NO ADDITION COULD HAVE BEEN MADE TO THE TOTAL INCOME OF THE ASSESSEE. THEREFORE, FOR THE REASONS DISCUSSED HEREIN ABOVE AND FOR THE REASONS DISCUSSED BY THE CIT(A) IN IMPUGNED ORDER IN PAGE 15 WHICH IS REPRODUCED HEREIN ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A), THEREFORE, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.04.2019. SD/- SD/- (J.SUDHAKAR REDDY) (S.S.VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:- 30.04.2019 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT- ACIT, CENTRAL CIRCLE-1(2), KOLKATA-700107. 2. RESPONDENT- SHRI RAJ KUMAR SOMANI, 143/1/1, COTTON STREET, KOLKATA-700107. 3. CIT-KOLKATA 4. CIT(APPEALS)-KOLKATA 5. DR: ITAT -KOLKATA BENCHES BY ORDER AR/H.O.O ITAT, KOLKATA