DCIT, Central Circle - XXVIII, Kolkata, Kolkata V. M/s. Merlin Project Ltd., Kolkata

ITSSA 138/KOL/2011

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9623 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 15-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SWETABH SUMAN
• Assessee Lawyers: B C JAIN
• Keywords: Business income
• Section: 143(3); 153A; 80IB

Judgement Text

I.T.(SS)A. NO.: 138/KOL./2011 ASSESSMENT YEAR : 2005-06 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA CORAM : SHRI R.S. SYAL, (ACCOUNTANT MEMBER) AND SH. GEORGE MATHAN (JUDICIAL MEMBER) I.T.(S.S.)A. NO.: 138/KOL./ 2011 ASSESSMENT YEAR : 2005-2006 DEPUTY COMMISSIONER OF INCOME TAX,............... .......APPELLANT CENTRAL CIRCLE-XXVIII, KOLKATA, 18, RABINDRA SARANI, 8 TH FLOOR, PODDAR COURT, KOLKATA-700 001 -VS.- M/S. MERLIN PROJECT LTD, ................,......... ............................RESPONDENT 79, SAMBHUNATH PANDIT STREET, KOLKATA-700 020, [PAN : AACCM 0505 B] APPEARANCES BY: DR. SWETABH SUMAN, CIT (D.R.), FOR THE APPELLANT SHRI B.C. JAIN, FCA, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : NOVEMBER 13, 2013 DATE OF PRONOUNCING THE ORDER : NOVEMBER 14, 2013 O R D E R PER R.S. SYAL : 1. THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-I, KO LKATA DATED 21 ST OCTOBER, 2011 IN RELATION TO THE ASSESSMENT YEAR 20 05-06. 2. BOTH THE GROUNDS RELATE TO GIVING DIRECTION FOR TREATING INTEREST INCOME AS BUSINESS INCOME AND RESULTANTLY ALLOWING DEDUCTION UNDER SECTION 80IB BY OBSERVING THAT NO ADDITION COULD BE MADE UNDER SECTION 153A WHERE REGULAR ASSESSMENTS HAVE BEEN COMPLETED AND NO INCRIMINATING MATERIAL WAS FOUND IN THE COURSE OF S EARCH & SEIZURE OPERATION. I.T.(SS)A. NO.: 138/KOL./2011 ASSESSMENT YEAR : 2005-06 PAGE 1 OF 3 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT A SEARCH & SEIZURE OPERATION WAS CONDUCTED IN THE PREMISES OF MERLIN G ROUP OF CASES ON 11.09.2008. THE ASSESSEE IS A FLAGSHIP COMPANY OF T HIS GROUP. NOTICE UNDER SECTION 153A WAS ISSUED REQUIRING THE ASSESSE E TO FILE ITS RETURN IN RESPECT OF THE RELEVANT ASSESSMENT YEARS INCLUDING THE ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSEE FILED THE RETURN DECLARING INCOME OF RS.21,30,977/-, BEING THE SAME AMOUNT FOR WHICH RET URN WAS FILED ORIGINALLY UNDER SECTION 139(1) OF THE ACT. IN SUCH FRESH ASSESSMENT, THE ASSESSING OFFICER HELD THAT ASSESSEE WAS NOT ELIGIB LE FOR DEDUCTION UNDER SECTION 80IB IN RESPECT OF INTEREST INCOME. THE LD. CIT(APPEALS) REVERSED THE ACTION OF ASSESSING OFFICER BY HOLDING THAT ORI GINAL ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTION 143(3) AND THERE B EING NO INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARC H IMPINGING THE ALLOWABILITY OR OTHERWISE OF DEDUCTION UNDER SECTIO N 80IB, THE ASSESSING OFFICER WAS NOT COMPETENT TO DISALLOW THE AMOUNT OF DEDUCTION. THE REVENUE IS IN APPEAL AGAINST THIS DIRECTION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE UNDISPUTED FACT ABOUT THIS CASE IS THAT THE ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED UNDE R SECTION 143(3) IN WHICH DEDUCTION WAS ALLOWED IN ENTIRETY UNDER SECTI ON 80IB OF THE ACT INTER ALIA ON THE AMOUNT OF INTEREST INCOME. IT IS ALSO UNDISPUTED THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH CASTING DOUBT ABOUT THE ALLOWABILITY OR OTHERWISE OF SUCH D EDUCTION UNDER SECTION 80IB. THIS FACT HAS BEEN FAIRLY ADMITTED BY LD. D.R. DURING THE COURSE OF PROCEEDINGS BEFORE US AS WELL. 5. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. PRATIBHA INDUSTRIES (2013) 141 ITD 151 (MUM.) HAS HELD, INTER ALIA, THAT HAVING DONE ORIGINAL ASSESSMENT U/S 143(3), IF NO INCRIMIN ATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH, THEN IT IS NOT P ERMISSIBLE TO MAKE ANY ADDITION IN THE ASSESSMENT UNDER SECTION 153A PURSU ANT TO SEARCH ACTION. I.T.(SS)A. NO.: 138/KOL./2011 ASSESSMENT YEAR : 2005-06 PAGE 1 OF 3 THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF AL L CARGO GLOBAL LOGISTICS LIMITED VS. DCIT (2012) 137 ITD 217 (SB)(MUM.) HAS ALSO HELD TO THE SAME EXTENT. IN VIEW OF THE FOREGOING DISCUSSION, W E ARE OF THE CONSIDERED OPINION THAT NO EXCEPTION CAN BE FOUND TO THE VIEW TAKEN BY CIT(APPEALS) FOR DECIDING THIS ISSUE IN ASSESSEES FAVOUR. 6. BEFORE PARTING WITH THIS MATTER, WE WANT TO MAKE IT CLEAR THAT OUR DECISION IS BASED IN THE BACKDROP OF THE FACTS THAT THE DEDUCTION UNDER SECTION 80IB COULD NOT HAVE BEEN TINKERED WITH BECA USE NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH ON T HIS ISSUE WHEN ORIGINAL ASSESSMENT GRANTING DEDUCTION ON THIS ISSU E WAS COMPLETED UNDER SECTION 143(3). WE HAVE NOT EXPRESSED ANY OP INION ON THE MERITS OF THE CASE ABOUT THE ALLOWABILITY OR OTHERWISE OF DEDUCTION UNDER SECTION 80IB ON INTEREST INCOME ARISING IN THE PRESENT FACT S AND CIRCUMSTANCES. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH DAY OF NOVEMBER, 2013. SD/- SD/- GEORGE MATHAN R.S. SYAL (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 14 TH DAY OF NOVEMBER, 2013 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.