DCIT,CC-XXV, KOLKATA, Kolkata V. Shri Vivek Goenka, Kolkata

ITSSA 140/KOL/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3408 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 29-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G MALLIKARJUNA
• Assessee Lawyers: J P KHAITAN SR
• Keywords: Gift; Search and seizure; Cost of acquisition; Fair market value
• Section: 143(3); 153A; 132; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA [BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER] I.T(SS). A. NO. 140/KOL/2014 ASSESSMENT YEAR: 2006-07 D.C.I.T.-CC-XXV, KOLKATA.. ..APPELLANT 110, SHANTI PALLY 5 TH FLOOR, ROOM NO. 515 AAYAKAR BHAWAN PURVA KOLKATA 700 107 SRI VIVEK GOENKA..... ..RESPONDENT 6, ALIPORE PARK PLACE SIYA GARDEN KOLKATA - 700027 [PAN : AFEPG 8673 E] APPEARANCES BY: SHRI J.P. KHAITAN, SR. AR, APPEARING ON BEHALF OF T HE ASSESSEE. SHRI G. MALLIKARJUNA, CIT, SR. DR, APPEARING ON BEH ALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : AUGUST 07, 2017 DATE OF PRONOUNCING THE ORDER : AUGUST 23, 2 017 O R D E R PER J. SUDHAKAR REDDY :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-III, KOLKATA ( HEREINAFTER THE LD. CIT(A)), DT. 07/07/2014, PASSED U/S 250 OF THE INC OME TAX ACT, 1961 (THE ACT), FOR THE ASSESSMENT YEAR 2006-07, ON THE FOL LOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. C.I.T.(A) ERRED IN HOLDING THAT THE AO HAS REVISITED THE ISSUE OF C APITAL GAIN WHILE FRAMING ASSESSMENT ORDER U/S 153A/143(3) OF THE I.T . ACT, 2 I.T(SS). A. NO. 140/KOL/2014 ASSESSMENT YEAR: 2006-07 SRI VIVEK GOENKA WITHOUT CONSIDERING THE FACT THAT THE ISSUE UNDER D ISPUTE IN THE ASSESSMENT ORDER U/S 143(3) OF THE I.T. ACT WAS PER IOD OF HOLDING OF THE IMMOVABLE PROPERTY SOLD, WHEREAS THE ISSUE U NDER CONSIDERATION BY THE AO AT THE TIME OF ASSESSMENT P ROCEEDING U/S 153A/ 143(3) OF THE I.T. ACT WAS THE VALUATION OF T HE SAID PROPERTY AS ON 01.04.1981. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. C.I.T.(A) HAS WRONGLY OBSERVED THAT THE AO HAS TRANSGRESSED HIS J URISDICTION AT THE TIME OF PROCEEDINGS U/S LS3A/143(3) OF THE LT. ACT, IN SPITE OF HAVING CONTENDED THAT THE ASSESSMENT WAS NOT TECHNI CALLY BED IN LAW AS THE ASSESSING OFFICER HAS THE JURISDICTION T O ASSESS OR RE- ASSESS THE TOTAL INCOME AS PER PROVISIONS OF SEC.15 3A OF THE I.T. ACT. 3. THE APPELLANT CRAVES THE LEAVE TO MAKE ANY ADDIT ION, ALTERATION, MODIFICATION AND REMODELING OR WITHDRAW ING OF THE GROUNDS. 2. THE FACTS LEADING TO THE ADDITION ARE BROUGHT OU T AT PARA 1.2. OF THE LD. CIT(A)S ORDER, WHICH ARE EXTRACTED HEREIN FOR READ Y REFERENCE:- 1.2 A BRIEF HISTORY OF THE ASSESSMENT/ APPEALS AND PRESENT STATUS THEREOF IN THIS CASE FOR THIS SAME AY 2006-07 IS RE QUIRED AS, IN ESSENCE, THE MAIN ISSUE IS THE LEGAL ISSUE OF JUDIC IAL HIERARCHY AND MERGING OF ORDERS. IN THIS CASE REGULAR ASSESSMENT U/S 143(3) HAD BEEN MADE ON 1.12.2008 BY THE THEN JURISDICTIONAL ASSESSING O FFICER - ITO WARD 29(4) KOLKATA. IN THE ASSESSMENT, AN ADJUSTMEN T WAS MADE 3 I.T(SS). A. NO. 140/KOL/2014 ASSESSMENT YEAR: 2006-07 SRI VIVEK GOENKA REGARDING MANNER OF COMPUTATION OF LONG TERM CAPITA L GAIN FROM THE TRANSFER OF A LANDED PROPERTY. THIS WAS THE ONL Y ADJUSTMENT MADE THEN; AND NOW AGAIN IS THE ONLY IMPUGNED ADJUS TMENT MADE - BUT BY REVISITING THE ALREADY ADJUDICATED ISSUE A FRESH, AND FURTHER SANS NO MATERIAL FROM THE SEARCH. THE ASSESSEE CLAIMED THAT THE CONCERNED LANDED PROP ERTY WAS RECEIVED AS GIFT ON 28.04.2003. THE ASSESSEE SO LD, I.E. TRANSFERRED, THE PROPERTY ON 02.12.2005, AND THUS T HE LONG TERM CAPITAL GAINS. THE ADJUSTMENT MADE IN THE ORIGINAL ASSESSMENT U/S 143(3) WAS REGARDING THE DATE/DEEMED DATE OF ACQUISITION O F THE PROPERTY, AND CONSEQUENTLY THE COST OF ACQUISITION, WHICH IN EFFECT WAS TO BE REGARDING THE BASE YEAR FOR THE COST INFL ATION INDEX TO BE APPLIED. FOR COMPUTATION OF THE LONG TERM CAPITAL G AINS, THE ASSESSEE CLAIMED THE COST OF ACQUISITION TO BE THE FAIR MARKET VALUE AS ON 01.04.1981 BY VIRTUE OF SECTION 49 (1)(II) R. W.S. 55(2)(B), AND THEREBY THE BASE YEAR FOR THE COST INFLATION INDEX AS 1981; WHEREAS THE CONTENTION OF THE ASSESSING OFFICER WAS THAT TH E ASSESSEE BECAME THE ABSOLUTE OWNER OF THE PROPERTY ONLY ON 2 8.04.2003, AND THEREFORE THAT THE BASE YEAR SHOULD BE THE YEAR 2004 BY REFERRING TO EXPLANATION (II) OF SECTION 48 AND IN TERPRETING THUS SO, AND THUS SO, THE ADJUSTMENT WAS MADE IN THE ASSESSM ENT U/S 143(3). THE ASSESSEE TOOK THE MATTER IN APPEAL BEFORE THE T HEN JURISDICTIONAL CIT (APPEAL)- XVI KOLKATA BEING APPE AL NO. 253 OF 4 I.T(SS). A. NO. 140/KOL/2014 ASSESSMENT YEAR: 2006-07 SRI VIVEK GOENKA 2008-09. THE LEARNED CIT (APPEAL) BY APPELLATE ORDE R DATED 22.06.2009 ALLOWED THE APPEAL. THE REVENUE PREFERRED APPEAL TO THE HONBLE ITAT CA LCUTTA BENCH AGAINST THE APPELLATE ORDER OF THE CIT (APPEA L), BEING APPEAL ITA NO. 1630/KOL/2009. THE HON'BLE ITAT BY O RDER DATED 11.01.2010 DISMISSED THE REVENUE'S APPEAL. THE REVENUE BEING AGGRIEVED BY THE ORDER OF THE HON B1E ITAT FILED APPEAL TO THE HON'BLE HIGH COURT AT CALC UTTA BEING ITAT NO. 8.0 OF 2011, GA NO'S 862 AND 863 OF 2011. THE A PPEAL HAS BEEN ADMITTED, AND AS ON DATE, IS PENDING FOR ADJUDICATI ON. 2.1. THE LD. FIRST APPELLATE AUTHORITY, DELETED TH E ADDITION BY HOLDING THAT THE ASSESSING OFFICER EXCEEDED HIS JURISDICTION BY REVISITING AN ISSUE, WHICH IS ALREADY ADJUDICATED IN THE EARLIER ROUND OF ASSE SSMENT. HE HELD THAT THE TRANSGRESSION WAS BEYOND THE SCOPE OF SECTION 153A. 3. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 4. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH BASE D ON WHICH THE ADDITION IN QUESTION HAS BEEN MADE. THE ORIGINAL AS SESSMENT IN THIS CASE HAS NOT ABATED AS IT WAS COMPLETED U/S 143(3) ON 31 /12/2008 I.E. PRIOR TO THE DATE OF SEARCH, WHICH WAS ON 27/01/2011. THE HO NBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA 380 ITR 573 HAD HELD AS FOLLOWS:- 5 I.T(SS). A. NO. 140/KOL/2014 ASSESSMENT YEAR: 2006-07 SRI VIVEK GOENKA SEARCH AND SEIZURENEW SCHEME OF ASSESSMENT IN SEAR CH CASES SEARCH WAS CARRIED OUT U/S 132 ON A LEADING REAL ES TATE DEVELOPER OPERATING ALL OVER INDIA AND SOME OF ITS GROUP COMP ANIESSEARCH WAS ALSO CARRIED OUT IN THE PREMISES OF THE ASSESSEEPU RSUANT TO THE SEARCH A NOTICE U/S 153A(1) WAS ISSUED TO ASSESSEE AND THEREAFTER HE FILED RETURNSAS ON THE DATE OF THE SEARCH, NO ASSE SSMENT PROCEEDINGS WERE PENDING FOR RELEVANT AYS AND FOR SAID AYS, ASS ESSMENTS WAS ALREADY MADE U/S 143(1), ASSESSEE FILED AN APPLICAT ION U/S 154 SEEKING RECTIFICATION OF THE ASSESSMENTS ON THE GROUND THAT THE ACCUMULATED PROFITS OF THE COMPANIES PAYING THE DIVIDEND WERE L ESS THAN THE AMOUNT OF LOAN OR ADVANCE GIVEN BY THEM TO THE RECIPIENT C OMPANIESAO DECLINED TO RECTIFY THE ASSESSMENTSCIT ALSO HELD T HAT ADDITION NEED NOT BE RESTRICTED ONLY TO THE SEIZED MATERIALITAT ON APPEAL HOWEVER DELETED ADDITION ON GROUNDS THAT THE ADDITIONS MADE FOR RELEVANT AYS U/S 2(22)(E) WERE NOT BASED ON ANY INCRIMINATING MA TERIAL FOUND DURING SEARCH OPERATION AND SAME WAS NOT SUSTAINABL E IN LAWISSUE WAS WHETHER THE ADDITIONS MADE TO THE INCOME OF THE ASSESSEE FOR THE SAID AYS U/S 2(22)(E) WAS NOT SUSTAINABLE BECAUSE N O INCRIMINATING MATERIAL CONCERNING SUCH ADDITIONS WERE FOUND DURIN G THE COURSE OF SEARCH AND FURTHER NO ASSESSMENTS FOR SUCH YEARS WE RE PENDING ON THE DATE OF SEARCHHELD, PRESENT APPEALS CONCERNED AYS, 2002-03, 2005- 06 AND 2006-07ON THE DATE OF THE SEARCH THE SAID A SSESSMENTS ALREADY STOOD COMPLETEDSINCE NO INCRIMINATING MATE RIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAV E BEEN MADE TO THE INCOME ALREADY ASSESSEDQUESTION FRAMED BY THE COUR T WAS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUER EVENUES APPEAL DISMISSED. 6 I.T(SS). A. NO. 140/KOL/2014 ASSESSMENT YEAR: 2006-07 SRI VIVEK GOENKA 4.1. THE JURISDICTIONAL HIGH COURT HAS TAKEN A SIMI LAR VIEW IN THE CASE OF CIT VS VEERPRABHU MARKETING LTD REPORTED IN (2016) 73 TAXM ANN.COM 149 (CAL HC), WHILE ADJUDICATING AN ISSUE THAT AROSE IN AN ASSESSMENT U /S 153C R.W.S. 153A R.W.S. 144 OF THE ACT. 4.2. THE HONBLE DELHI HIGH COURT IN THE CASE OF PR. COMMISSIONER OF INCOME TAX CENTRAL-2 NEW DELHI VS. MEETA GUTGUTIA PROP. M/ S FERNS N PETALS, JUDGEMENT DT. 25TH MAY, 2017, EXPLAINED THE ENTIRE LAW FOR ASSESSMENTS U/S 153A A ND RE- ITERATED ITS DECISION IN THE CASE OF KABUL CHAWLA (SUPRA). 4.1.1. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD T HE FINDING OF THE LD. FIRST APPELLATE AUTHORITY, ON THIS ISSUE. 5. THE LD. SENIOR COUNSEL SUBMITTED THAT, THE DOCTR INE OF MERGER APPLIES UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND U NDER THOSE CIRCUMSTANCES THE ASSESSING OFFICER CANNOT RE-ASSESS THE ISSUE. HE PO INTED OUT THAT THE VERY SAME ADDITION MADE BY THE ASSESSING OFFICER IN THE ORIGI NAL ASSESSMENT HAS BEEN CARRIED OUT IN SUBSEQUENT APPEALS AND THE HONBLE I TAT HAS ADJUDICATED ON THE SAME AND NOW THE MATTER LIES WITH THE HONBLE HIGH COURT. FOR THESE PROPOSITIONS, HE RELIED ON THE JUDGEMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF OIL INDIA LTD. VS COMMISSIONER OF INCOME-TAX [1982] 138 ITR 836 CAL, WHEREIN IT WAS HELD THAT THE ITOS ORDER IN THAT CA SE HAD MERGED WITH THAT OF THE AAC AND HENCE THE COMMISSIONER HAS NO JURISDICTION TO REVISE ANY PART OF THE ITOS ORDER. 7 I.T(SS). A. NO. 140/KOL/2014 ASSESSMENT YEAR: 2006-07 SRI VIVEK GOENKA 5.1. IN OUR VIEW, UNDOUBTEDLY, THE ISSUE AS MERGED WITH THE ORDER OF THE HONBLE ITAT AND HENCE CANNOT BE REOPENED BY THE AS SESSING OFFICER IN A DIFFERENT PROCEDURE. IN VIEW OF THESE DISCUSSIONS, WE DISMISS THIS APPEAL OF THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. KOLKATA, THE 23 RD DAY OF AUGUST, 2017. SD/- SD/- [S.S. VISWANETHRA RAVI] [ J. SUDHAKAR REDDY ] JUDICIAL MEMBER ACCOU NTANT MEMBER DATED : 23.08.2017 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. D.C.I.T.-CC-XXV, KOLKATA 110, SHANTI PALLY 5 TH FLOOR, ROOM NO. 515 AAYAKAR BHAWAN PURVA KOLKATA 700 107 2. SRI VIVEK GOENKA 6, ALIPORE PARK PLACE SIYA GARDEN KOLKATA - 700027 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES