Millennium Park Holdings Pvt. Ltd., Ahmedabad V. The Deputy Commissioner of Income Tax, Central Circle-1(2), Ahmedabad

ITSSA 156/AHD/2017

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4761 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 27-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return
• Section: 15; 143(3); 153A; 139(1); 153C

Judgement Text

, ‘A’ । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD (Convened through Virtual Court) BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR & SHRI WASEEM AHMED, ACCOUNTANT MEMEBR आयकर अपील (एस. एस.) सं./I.T.(SS ).A. Nos. 155 & 156/Ahd/2017 ( Assess ment Ye ars : 2 006-07 & 2007-08) M il le nn i u m P ar k Ho ld in gs Pvt . Lt d. B- 40 3, Sh ap at h- IV , Op p. Kar na va ti C lu b, S. G. Hi gh wa y, Ah me da b ad / V s . DC IT , Ce ntr al C ir cle – 1 ( 2), Ah me da bad यी ल सं./ ीआ आर सं./P A N / G IR N o . : A A C C M 9 6 4 8 R (अपील Appellant) . . ( य / Respondent) अपील र स /Appellant by : Sh ri Bi re n Sh ah , A. R. य क र स / Respondent by : Shri Vijaykumar Jaiswal, CIT. D.R. स क र! D a t e o f H e a r i n g 08/02/2022 "#$% क र! /D a t e o f P r o n o u n c e m e n t 18/04/2022 ORDER PER MAHAVIR PRASAD, JM: Both appeals have been preferred by the assessee against the respective orders of the Commissioner of Income Tax (Appeals)-11, Ahmedabad (‘CIT(A)’ in short) vide Appeal Nos. CIT(A)- 11/303/CC.1(2)/2014-15 dated 06.12.2016 & CIT(A)- 11/304/CC.1(2)/2014-15 dated 02.12.2016 arising in the assessment order both dated 28.03.2014 passed by the Assessing Officer (AO) under s. IT(SS)A Nos. 155 & 156/Ahd/2017 [Millennium Park Holdings Pvt. Ltd. vs. DCIT] A.Ys. 2006-07 & 2007-08 - 2 - 143(3) r.w.s. 153C of the Income Tax Act, 1961 (the Act) concerning AYs. 2006-07 & 2007-08. 2. Since, in both appeals facts & circu mstances and issues are co mmon, therefore, for the sake of brevity, we wo uld like to dispose of these matters b y wa y of a common order. IT(SS)A No. 155/Ahd/2017 for A.Y. 2006-07 is taken as lead case for disposal of the both appeals. 3. The ground of appeal raised by assessee in IT(SS) A No. 155/Ahd/2017 for A.Y. 2006-07 read as under: “ 1 . I n l a w a n d i n t h e f a c t s a n d c i r c u m s t a n c e s o f t he a p p e l l a n t ' s c a s e , t h e l e a r n e d C I T ( A ) h a s g r o s s l y e r r e d i n r e j e ct i n g t h e a p p e l l a n t ' s c h a l l e n g e t o t h e v a l i d i t y o f t h e a s s e s sm e n t o r d e r i m p u g n e d b e f o r e h i m o n t h e g r o u n d t h a t s u c h o r d e r is b a d i n l a w a n d d e s e r v e d t o b e d e l e t e d . 2 . I n l a w a n d i n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e a p p e l l a n t ' s c a s e , t h e l e a r n e d C I T ( A ) h a s g r o s s l y e r r e d i n n o t ap p r e c i a t i n g t h e a p p e l l a n t ' s c o n t e n t i o n t h a t i n t h e a b s e n c e o f in c r e m e n t i n g d o c u m e n t s f o u n d d u r i n g t h e c o u r s e o f s e a r c h w i t h r es p e c t t o d i s a l l o w a n c e o f R s . 3 8 , 7 0 , 8 7 6 / - , s u c h d i s a l l o w a n c e i s b e y o n d t h e s c o p e o f o r d e r p a s s e d u / s 1 5 3 C r . w . s . 1 4 3 ( 3 ) o f t h e A c t w h e n t h e e a r l i e r a s s e s s m e n t w a s a l r e a d y c o m p l e t e d u/ s 1 5 3 A r . w . s . 1 4 3 ( 3 ) o f t h e A c t . T h u s , t h i s d i s a l l o w a n c e de s e r v e s t o b e d e l e t e d . 3 . I n l a w a n d i n t h e f a c t s a n d c i r c u m s t a n c e s o f t he a p p e l l a n t ' s c a s e , t h e l e a r n e d C I T ( A ) h a s g r o s s l y e r r e d i n u p h o ld i n g t h e d i s a l l o w a n c e o f e x p e n d i t u r e o f R s . 3 8 , 7 0 , 8 7 6 / - , w h en h e h a s n o l e g a l j u r i s d i c t i o n t o m a k e o r r a t h e r t o r e p e a t th e s a m e a d d i t i o n / d i s a l l o w a n c e s i n t h e p r e s e n t a s s e s s m e n t , as t h e s a m e w a s a l r e a d y m a d e w h i l e p a s s i n g A s s e s s m e n t O r d e r u / s 1 4 3 ( 3 ) r . w . s . 1 5 3 C o f t h e A c t o n 2 8 / 0 3 / 2 0 1 4 . T h u s , t h i s a d d i t i o n / d i s a l l o w a n c e d e s e r v e s t o b e d e l e t e d . 4 . I n l a w a n d i n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e a p p e l l a n t ' s c a s e , t h e l e a r n e d C I T ( A ) h a s g r o s s l y e r r e d i n n o t de a l i n g g r o u n d N o . 4 r a i s e d b e f o r e h i m w h e r e i n i t w a s c l a i me d t h a t d i s a l l o w a n c e o f R s . 2 6 , 6 6 6 / - i n a n u n d e t e c t e d m a n n e r w i t h o u t a n y b a s e s i m p l y b y t a k i n g t h e d i f f e r e n c e o f e a r l i e r a s s e s s e d IT(SS)A Nos. 155 & 156/Ahd/2017 [Millennium Park Holdings Pvt. Ltd. vs. DCIT] A.Ys. 2006-07 & 2007-08 - 3 - i n c o m e a n d r e t u r n e d l o s s a s p e r t h e R e t u r n o f I n c o me i n r e s p o n s e t o n o t i c e u / s 1 5 3 C o f t h e A c t . 5 . I n l a w a n d i n t h e f a c t s a n d c i r c u m s t a n c e s o f th e a p p e l l a n t ' s c a s e , t h e l e a r n e d C I T ( A ) h a s g r o s s l y e r r e d i n d i s m is s i n g t h e a p p e l l a n t ' s g r o u n d c h a l l e n g i n g t h e l e v y o f i n t e r e s t u / s . 2 3 4 A , u / s . 2 3 4 B , u / s . 2 3 4 C a n d u / s . 2 3 4 D o f t h e I T . A c t . ” 3. The facts of the case are that the assessee filed its original return of income11.12.2006 u/s. 139(1) declaring the total loss at Rs.33,56,546/-. Thereafter the revised return was filed on 25.03.2008 u/s. 153A of the Act, declaring total loss of Rs.28,56,546/- and the total income of the assessee was assessed u/s. 143(3) vide order dated 31.12.2008 at Rs. 1,08,20,640/-. The various addition made in this order u/s.143(3) are as under: 1) Total expenses debited to P & L account Rs.38,70,876/-. 2) Unaccounted payments towards land purchase Rs.1,01,10,065/- Being aggrieved with the order, the assessee filed an appeal before CIT(A) who vide his order dated 28.02.2011 has deleted the addition of Rs. 1,01,10,065/- on account of unaccounted payments towards land purchase. Thus, the CIT (A) has confirmed the addition on account of expenses debited to P & L Account amounting to Rs.38,70,876/-. The Departmental as well as the assessee's appeals are pending before ITAT. Since the assessee has filed its return of income u/s.153A not accepting the confirmed additions, the same are hereby added. The total income for the year after giving effect to the order of CIT(A) is assessed as the income of the assessee even under these proceedings. Thus, the total income of the assessee is taken at Rs.7,10,576/- since this amounts to a total addition of Rs.38,97,502/- (being the difference between the returned loss of Rs.3186926/- and the assessed income of Rs.710576/-).” IT(SS)A Nos. 155 & 156/Ahd/2017 [Millennium Park Holdings Pvt. Ltd. vs. DCIT] A.Ys. 2006-07 & 2007-08 - 4 - 4. Against the assessment order, the assessee preferred first statutory appeal before the learned CIT(A) who dismissed the appeal of the assessee on the ground that while passing the assessment order, repeated the disallowance on account of expenses which is already sub-judice before the ITAT. Therefore, the AO did not have any jurisdiction to make or to repeat the same disallowance in the present assessment order. The issue would be ultimately decided by the Tribunal on merits. Therefore, any action taken by the lower authorities become functus officio with regard to those issues. 5. Now, assessee is before us. 6. We have gone through the relevant record and impugned order. In this case, a search action under s.132 of the Income Tax Act was conducted in case of in the case of Savy Group on 27.04.2011 and subsequent dates. The assessee filed its return of income in response to notice under s.153C of the Act on 15.07.2013 declaring total loss of Rs.31,86,926/-. The assessment order under s.143(3) r.w.s. 153C of the Act dated 28.03.2014, wherein total income had been assessed at Rs.7,10,576/- and same has been summarized as under: Particulars Amount (Rs.) Total loss as per return (-) 31,86,926 Add: Addiiton/Disallowance as per order u/s 143(3) 38,97,502 Total Assessed Income 7,10,576 7. In this case, assessee has already been assessed vide order under s.143(3) r.w.s. 153A of the Act on 31.12.2008. 8. Being aggrieved by the said order, assessee filed appeal before the CIT(A) vide order dated 23.02.2011 deleted the addition of IT(SS)A Nos. 155 & 156/Ahd/2017 [Millennium Park Holdings Pvt. Ltd. vs. DCIT] A.Ys. 2006-07 & 2007-08 - 5 - Rs.1,01,10,065/- unaccounted payment towards land purchase. However, the learned CIT(A) has confirmed the disallowance on account of expenses debited to P&L account amounting to Rs.38,70,876/-. 9. The learned AO while passing the impugned assessment order had repeated the disallowance on account of repeated the disallowance on account of expenses debited to P&L account amounting to Rs.38,70,876/-. 10. Now assessee is before us. 11. We have gone through the relevant record and impugned order. The learned AO has made disallowance of Rs.38,97,502/- by stating that same as per the order passed by the learned CIT(A) earlier order under s.143B r.w.s. 143A of the Act. It is pertinent to mention here that no incriminating materials were found pertaining to the assessee. When no incriminating material has been found, in such case disallowance cannot be made. In order to make disallowance, there has to be some incriminating materials available with the lower authorities. But, in the present case, learned AO has made disallowance on the basis that AO has made the disallowance on the basis of CIT(A)’s order in respect of earlier assessment proceedings. In the case of PACL India Limited (ITA No. 2637/Del/2010) dated 20.06.2013 wherein it is held as under: "......In the present case, neither any incriminating material was found nor any other material or document along with books of accounts were found, which were not produced before the AO while completing the assessment originally........Whenever the abated proceedings are merged with the proceedings u/s 153A then scope of assessment is wide and it will cover all issues arising from the original return and issue arising on the basis of incriminating documents, and assets found and seized during the search. Wherever the proceedings are completed prior to the search then nothing merges with proceeding u/s 153A of the Act and nothing abates. In such a situation, the AO has to respect the completeness of the proceedings. Admittedly, in the case of assessee, no incriminating documents were found and seized. The provisions of section 153A give power to assessing officer to assess and reassess the IT(SS)A Nos. 155 & 156/Ahd/2017 [Millennium Park Holdings Pvt. Ltd. vs. DCIT] A.Ys. 2006-07 & 2007-08 - 6 - income. The assessing officer is empowered to make addition on account of undisclosed income or income escaped assessment. In the case under consideration, there is no incriminating material found during the course of search relating to the assessment year under consideration........ The facts and circumstances of the assessee clearly show that no incriminating document found relating to the land development expenses debited in the books of accounts. No material was on the record on that basis which income of assessee could be further assessed by Assessing Officer. Therefore, the assessing officer has no jurisdiction to make or to resort to roving and fishing inquiries to find out whether any income has escaped assessment during these reassessment proceedings." In parity with the aforesaid order and respectfully following the judgment of Hon’ble Jurisdictional High Court in Pr.CIT vs. Saumya Constructions Pvt. Ltd. (2016) 387 ITR 529 (Guj) held as under: Where no incriminating material has been found by the Department relating to the assessee, in such case, no disallowance or addition can be made. 12. In the result, appeal filed by the assessee for AY 2006-07 is allowed. 13. Now we come to ITA No. 156/Ahd/2017 for A.Y. 2007-08. Since, similar facts and circumstances, we have granted relief to the assessee in connected appeal IT(SS)A No. 155/Ahd.2017, therefore, principle of merits and uniformity shall apply in this case as well. 14. In the result, appeals filed by the assessee are allowed. Sd/- Sd/- ( WASEEM AHMED) (MAHAVIR PRASAD) ACC OUNTANT MEMB ER JUDICIAL MEMBER Ahmedabad: Dated 18/04/2022 True Copy This Order pronounced in Open Court on 18/04/2022 IT(SS)A Nos. 155 & 156/Ahd/2017 [Millennium Park Holdings Pvt. Ltd. vs. DCIT] A.Ys. 2006-07 & 2007-08 - 7 - S.K.SINHA ेश ! " #े" / Copy of Order Forwarded to:- &. र / Revenue 2. आ दक / Assessee ). सं*ं+, आयकर आय - / Concerned CIT 4. आयकर आय - - अपील / CIT (A) 0. 1 2 3ीय 4 4 +,5 आयकर अपील!य अ+,कर%5 अ67द * द / DR, ITAT, Ahmedabad 8. 3 9: ; ल / Guard file. By order/आद श स 5 उप/स6 यक पं ीक र आयकर अपील!य अ+,कर%5 अ67द * द ।