Shiva Lokenath Rice Mills (P) Ltd., Dakshin Dinajpur V. DCIT, CC-XXVII, Kolkata, Kolkata

ITSSA 186/KOL/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3068 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-09-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 24-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Keywords: Search and seizure; Document seized; Corroborative evidences; Validity of assessment; Reason to believe; Documents seized
• Section: 143(3); 142(1); 133A; 153A; 80IB; 132; 15

Judgement Text

IN THE INCOME TAX A PPELLATE TRIBUNAL KOLKATA BENCH, K OLKATA (BENCH- B) BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER I.T.(SS) A. NO. 182 TO 185/KOL/2014 ASSESSMENT YEARS: 2006-07 TO 2009-10 & I.T.(SS) A. NO. 186 TO 187/KOL/2014 ASSESSMENT YEARS: 2011-12 TO 2012-13 FOR THE APPELLANT SHRI SUBHASH AGARWAL, ADVOCATE. FOR THE RESPONDENT SHRI NIRAJ KUMAR, CIT(DR) DATE OF HEARING 07.03.2017 DATE OF PRONOUNCEMENT 10.03.2017 ORDER PER BENCH ALL THESE APPEALS PREFERRED BY THE ASSESSEE ARISES OUT OF THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) CENTRAL-II, KOLKATA PASSED IN ITA NO.182/KOL/2014 FOR A.Y. 2006-07, DT. 10.09.2014, ITA NO.183/KOL/2014 FOR A.Y. 2007-08, DT. 10.09.2014, I TA NO.184/KOL/2014 FOR A.Y. 2008-09, DT. 10.09.2014, ITA NO.185/KOL/2014 F OR A.Y. 2009-10, DT. 12.09.2014 AND AGAINST THE ORDER PASSED BY THE COMM ISSIONER OF INCOME TAX (APPEALS)-21, KOLKATA, IN ITA NO.186/KOL/2014 FOR A .Y. 2011-12, DT. SHIVA LOKENATH RICE MILLS (P) LTD. [PAN :AAHCS6376B] -VS- D.C.I.T., CC-XXVII, KOLKATA (APPELLANT) (RESPONDENT) 2 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 2 28.11.2014, ITA NO.187/KOL/2014 FOR A.Y. 2012-13, D T. 28.11.2014 RESPECTIVELY. 2. ASSESSMENTS WERE FRAMED BY THE DCIT CENTRAL CIRC LE-XXVII, KOLKATA U/S 153A/143(3) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006-07 UP TO 2012-13, V IDE HIS SEPARATE ORDERS, ALL DATED 27.03.2014. SINCE SOME OF THE ISSUES ARE COMMON AND FACTS ARE IDENTICAL, WE DISPOSE OF ALL THESE APPEAL BY THIS C ONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. IN ITA NO.182/KOL/2014 FOR A.Y. 2006-07 THE GROUNDS OF APPEAL ARE AS FOLLOWS: 1. FOR THAT THE LD. CIT(A) OUGHT TO HAVE QUASHED TH E ENTIRE ASSESSMENT COMPLETED U/S.153A1143(3) BY THE A.O. VIDE ORDER DA TED 27.03.2014 SINCE THE SAID ORDER IS BAD IN LAW. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION O F THE A.O. IN ADDING BACK THE ITEMS OF REGULAR ASSESSMENT IN THE PROCEED INGS U/S.153A. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOW ANCE OF FREIGHT & TRANSPORT EXPENSES OF RS.75,85,981/- MADE BY THE A. O. BY WRONGLY INVOKING THE PROVISIONS OF SEC. 40(A)(IA) OF THE IN COME TAX ACT, 1961. 4. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.L 4,67,880/- MADE BY THE A.O. ON ACCOUNT OF GODOWN RENT BY WRONGLY INVOK ING THE PROVISIONS OF SEC. 40( A)(IA) OF THE INCOME TAX ACT , 1961. 5. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DIS MISSING THE GROUNDS IN CONNECTION WITH THE DISALLOWANCE OF GODOWN RENT BY STATING THAT THE SAME WAS NOT PRESSED. 6. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION O F THE A.O. IN DENYING THE DEDUCTION CLAIMED BY THE ASSESSEE U/S. 80IB OF THE INCOME TAX ACT. 3 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 3 7. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DIS MISSING THE GROUNDS IN CONNECTION WITH THE DENYING THE DEDUCTION CLAIMED U /S. 80IB BY STATING THAT THE SAME WAS NOT PRESSED. 8. FOR THAT THE LD. CIT(A) ERRED IN NOT GIVING PROP ER OPPORTUNITY TO THE ASSESSEE TO SUBMIT THE RELEVANT DOCUMENTS IN CONNEC TION WITH THE CLAIM OF DEDUCTION U/S. 80IB. 8. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DIS MISSING THE GROUNDS IN CONNECTION WITH THE CLAIM OF DEDUCTION U/S. 80IB BY STATING THAT THE SAME WERE NOT PRESSED. 9. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. IN ITA NO.183/KOL/2014 FOR A.Y. 2007-08 THE GROUNDS OF APPEAL ARE AS FOLLOWS: 1. FOR THAT THE LD. CIT(A) OUGHT TO HAVE QUASHED TH E ENTIRE ASSESSMENT COMPLETED U/S.153A/143(3) BY THE A.O. VIDE ORDER DA TED 27.03.2014 SINCE THE SAID ORDER IS BAD IN LAW. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION O F THE A.O. IN ADDING BACK THE ITEMS OF REGULAR ASSESSMENT IN THE PROCEED INGS ULS.153A. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOW ANCE OF CARRIAGE INWARD OF RS.1,29,11,564/- AND CARRIAGE OUTWARD OF RS.63,44,393/- MADE BY THE A.O. BY WRONGLY INVOKING THE PROVISIONS OF SEC. 40(A)(IA) OF THE INCOME TAX ACT, 1961. 4. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OFRS.11 ,16,849/- MADE BY THE A.O. ON ACCOUNT OF GODOWN RENT BY WRONGLY INVOK ING THE PROVISIONS OF SEC. 40(A)(IA) OF THE INCOME TAX ACT, 1961. 5. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DIS MISSING THE GROUNDS IN CONNECTION WITH THE DISALLOWANCE OF GODOWN RENT BY STATING THAT THE SAME WAS NOT PRESSED. 6. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION O F THE A.O. IN DENYING THE DEDUCTION CLAIMED BY THE ASSESSEE U/S. 80IB OF THE INCOME TAX ACT. 4 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 4 7. FOR THAT THE LD. CIT(A) ERRED IN NOT GIVING PROP ER OPPORTUNITY TO THE ASSESSEE TO SUBMIT THE RELEVANT DOCUMENTS IN CONNEC TION WITH THE CLAIM OF DEDUCTION U/S. 80IB. 8. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DIS MISSING THE GROUNDS IN CONNECTION WITH THE CLAIM OF DEDUCTION U/S. 80IB BY STATING THAT THE SAME WERE NOT PRESSED. 9. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. IN ITA NO.184/KOL/2014 FOR A.Y. 2008-09 THE GROUNDS OF APPEAL ARE AS FOLLOWS: 1. FOR THAT THE LD. CIT(A) OUGHT TO HAVE QUASHED TH E ENTIRE ASSESSMENT COMPLETED U/S.L53A/143(3) BY THE A.O. VIDE ORDER DA TED 27.03.2014 SINCE THE SAID ORDER IS BAD IN LAW. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION O F THE A.O. IN ADDING BACK THE ITEMS OF REGULAR ASSESSMENT IN THE PROCEED INGS ULS.153A. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOW ANCE OF CARRIAGE INWARD OF RS.69,36,04S/- AND CARRIAGE OUTWARD OF RS .23,67,505/- MADE BY THE A.O. BY WRONGLY INVOKING THE PROVISIONS OF SEC. 40(A)(IA) OF THE INCOME TAX ACT, 1961. 4. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.4 ,61,194/- MADE BY THE A.O. ON ACCOUNT OF GODOWN RENT BY WRONGLY INVOK ING THE PROVISIONS OF SEC. 40(A)(IA) OF THE INCOME TAX ACT, 1961. 5. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DIS MISSING THE GROUNDS IN CONNECTION WITH THE DISALLOWANCE OF GODOWN RENT BY STATING THAT THE SAME WAS NOT PRESSED. 6. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION O F THE A.O. IN DENYING THE DEDUCTION CLAIMED BY THE ASSESSEE U/S. 80IB OF THE INCOME TAX ACT. 5 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 5 7. FOR THAT THE LD. CIT(A) ERRED IN NOT GIVING PROP ER OPPORTUNITY TO THE ASSESSEE TO SUBMIT THE RELEVANT DOCUMENTS IN CONNEC TION WITH THE CLAIM OF DEDUCTION U/S. 80IB. 8.. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DI SMISSING THE GROUNDS IN CONNECTION WITH THE CLAIM OF DEDUCTION U/S. 80IB BY STATING THAT THE SAME WERE NOT PRESSED. 9. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. IN ITA NO.185/KOL/2014 FOR A.Y. 2009-10 THE GROUNDS OF APPEAL ARE AS FOLLOWS: 1. FOR THAT THE LD. CIT(A) OUGHT TO HAVE QUASHED TH E ENTIRE ASSESSMENT COMPLETED U/S.153/143(3) BY THE A.O. VIDE ORDER DAT ED 27.03.2014 SINCE THE SAID ORDER IS BAD IN LAW. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION O F THE A.O. IN ADDING BACK THE ITEMS OF REGULAR ASSESSMENT IN THE PROCEED INGS ULS.153A. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.7,46, 7801- MADE BY THE A.O. ON ACCOUNT OF ALLEGED UNDISCLOSED PURCHASES. 4. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.28,452/- MADE BY THE A.O. BY APPLYING GROSS PROFIT RATE TO COMPUT E ALLEGED UNDISCLOSED PROFIT EARNED FROM SALES. 5. WITHOUT PREJUDICE TO THE GROUND NO. 4, THE LD. C IT(A) OUGHT TO HAVE GIVEN A DIRECTION TO THE A.O. TO APPLY NET PROFIT R ATE TO DETERMINE THE PROFIT FROM SALE MADE OUT OF ALLEGED UNDISCLOSED PU RCHASES. 6. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOW ANCE OF CARRIAGE INWARD OF RS.82,53,657/- AND CARRIAGE OUTWARD OF RS .25,31,220/- MADE BY THE A.O. BY WRONGLY INVOKING THE PROVISIONS OF SEC. 40(A)(IA) OF THE INCOME TAX ACT, 1961. 7. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION O F THE A.O. IN DENYING THE DEDUCTION CLAIMED BY THE ASSESSEE U/S. 80IB OF THE INCOME TAX ACT. 6 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 6 8. FOR THAT THE LD. CIT(A) ERRED IN NOT GIVING PROP ER OPPORTUNITY TO THE ASSESSEE TO SUBMIT THE RELEVANT DOCUMENTS IN CONNEC TION WITH THE CLAIM OF DEDUCTION U/S. 80IB. 9. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DIS MISSING THE GROUNDS IN CONNECTION WITH THE CLAIM OF DEDUCTION U/S. 80IB BY STATING THAT THE SAME WERE NOT PRESSED. 10. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER O R DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. IN ITA NO.186/KOL/2014 FOR A.Y. 2011-12 THE GROUNDS OF APPEAL ARE AS FOLLOWS: 1. FOR THAT THE LD. CIT(A) OUGHT TO HAVE QUASHED TH E ENTIRE ASSESSMENT COMPLETED U/S.L53A/143(3) BY THE A.O. VIDE ORDER DA TED 27.03.2014 SINCE THE SAID ORDER IS BAD IN LAW. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION O F THE A.O. IN ADDING BACK THE ITEMS OF REGULAR ASSESSMENT IN THE PROCEED INGS ULS.153A. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS.1 0,68,784/- OUT OF THE TOTAL DISALLOWANCE OF RS.L3,3 5,980/- MADE BY THE A.O. ON ACCOUNT OF TRAVELLING & CONVEYANCE. 4. FOR THAT THE LD. CIT(A) OUGHT TO HAVE DELETED TH E ENTIRE DISALLOWANCE OF RS.13,35,980/- MADE BY THE A.O. UNDER THE HEAD T RAVELLING & CONVEYANCE EXPENSES. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. IN ITA NO.187/KOL/2014 FOR A.Y. 2012-13 THE GROUNDS OF APPEAL ARE AS FOLLOWS: 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS.39,08,980/- OUT OF THE TOTAL DISALLOWANCE OF 48, 86,225/- MADE BY THE A.O. ON ACCOUNT OF TRAVELLING & CONVEYANCE. 7 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 7 2. FOR THAT THE LD. CIT(A) OUGHT TO HAVE DELETED TH E ENTIRE DISALLOWANCE OF 48,86,225/- MADE BY THE A.O. UNDER THE HEAD TRAV ELLING & CONVEYANCE EXPENSES. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.L,08,397/- MADE BY THE A.O. BY APPLYING GROSS PROFIT RATE TO C OMPUTE ALLEGED UNDISCLOSED PROFIT EARNED FROM UNACCOUNTED SALES. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. 4. THAT FOR THE ASSESSMENT YEARS 2006-07 UP TO 2009 -10, THERE IS A DELAY IN 30 DAYS IN FILING OF THE APPEAL BY THE ASSESSEE. IN THE DELAY CONDONATION PETITION THE ASSESSEE HAS STATED I.E. THE ELDER BRO THER, SRI RANJIT KUMAR PAUL, WAS SUFFERING FROM SEVERE ILLNESS AND ACCORDINGLY T HE ASSESSEE WAS PRE- OCCUPIED WITH HIM IN THE TREATMENT AND WHICH EVENTU ALLY LED TO THE DELAY IN FILING THE APPEALS BEFORE THE TRIBUNAL BY 30 DAYS. THE LD. DR DID NOT HAVE ANY OBJECTION TO THE CONDONATION PETITION BEING ALLOWED . 5. WE FIND IT GENUINE REASONS AS STATED IN THE COND ONATION PETITION AND HENCE CONDONE THE DELAY AND ADMIT THE APPEALS FOR A DJUDICATION REGARDING ASSESSMENT YEARS 2006-07 UP TO 2009-10. 6. THE PRELIMINARY ISSUE TO BE DECIDED IN ALL THESE APPEALS IS AS TO WHETHER IN RESPECT OF UNABATED ASSESSMENTS (NO PENDING PROC EEDINGS) AS ON THE DATE OF SEARCH, THE LD. AO COULD FRAME THE SEARCH ASSESS MENT U/S 153A OF THE ACT BY MAKING CERTAIN ADDITIONS WITHOUT ANY INCRIMINATI NG MATERIALS FOUND DURING THE COURSE OF SEARCH. 8 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 8 7. THE BRIEF FACTS APPEARING IN THIS CASE ARE THAT THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED U/S 132(1) OF THE ACT I N THE PAUL GROUP OF CASES ON 17.01.2012 AND SUBSEQUENT DATES AT THE FOLLOWING PLACES: (I) THANA ROAD, GANGARAMPUR, DAKSHIN DINAJPUR, PIN- 733124. (II) RESIDENCE OF SHRI RANJAN KUMAR PAUL AND SMT. SHABARI PAUL AT NIVEDITA APARTMENT, 2 ND FLOOR, 135, N.S.C. BOSE ROAD, KOLKATA- 700103. (III) FACTORY PREMISES OF M/S SHIVA LOKENATH RICE M ILLS (P) LTD. AT JOTMALKHAN, KALIDIGHI, GANGARAMPUR. SURVEY U/S 133A WAS ALSO CONDUCTED ON 17.01.2012 IN THE FOLLOWING PREMISES: (I) M/S. SHRI BRINDABAN RICE MILLS, BANGALBARI, UTTAR D INAJPUR (II) M/S. BABA LOKENATH RICE MILLS, BABUPURA, HILLI, DAK SHIN DINAJPUR. 8. THE GROUP IS ENGAGED IN RICE AND FLOUR MILLING B USINESS, SUPPLY OF ESSENTIAL COMMODITIES TO GOVERNMENT OF WEST BENGAL. THE ASSESSEE COMPANY M/S SHIVA LOKENATH RICE MILLS (P) LTD. IS ONE OF TH E CONCERNS OF THE SAID GROUP AND WAS COVERED BY THE SEARCH OPERATION U/S 132 OF THE ACT ON 17.01.2012. THE ASSESSEE HAD ORIGINALLY FILED ITS RETURN OF INC OME FOR THE ASSESSMENT YEARS 2006-07, 2007-08, 2008-09 & 2009-10 ON 14.11.2007, 31.10.2007, 29.09.2008 & 30.09.2009 RESPECTIVELY AND THE MAXIMU M TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) OF THE ACT FOR THE RE SPECTIVE ASSESSMENT YEARS EXPIRED ON 30.11.2007, 31.10.2008, 30.09.2009 & 30. 09.2010 RESPECTIVELY. HOWEVER, NO ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT FOR THE ASSESSMENT 9 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 9 YEARS 2006-07, 2007-08, 2008-09 & 2009-10 ON THE OR IGINAL RETURNS FILED BY THE ASSESSEE. BUT AS ON THE DATE OF SEARCH ON 17.01 .2012, THESE FOUR ASSESSMENT YEARS BECOME UNABATED. HOWEVER THE TIME LIMIT FOR THE ISSUANCE OF NOTICE UNDER SECTION 143(2) IN RESPECT TO THE AS SESSMENT YEAR 2011-12, & 2012-13 WAS NOT EXPIRED AT THE TIME OF SEARCH THERE FORE THEY GOT ABATED. THE LD. AR HAS CHALLENGED THE ASSESSMENT PROCEEDING S FRAMED UNDER SECTION 153A OF THE ACT IN GROUND NO. 1 & 2. BUT AT THE TIM E OF HEARING THE LD. AR BEFORE US AGREED NOT TO CHALLENGE THE ISSUE RAISED IN GROUND NO. 1 FOR THE VALIDITY OF ASSESSMENT PROCEEDINGS UNDER SECTION 15 3A/143(3) OF THE ACT. HOWEVER THE LEARNED AR OBJECTED ON THE ADDITIONS MA DE BY THE AO IN THE ASSESSMENT YEARS 2006-07, 2007-08, 2008-09 & 2009-1 0 WHICH REPRESENTS THE ITEMS OF THE REGULAR ASSESSMENTS EXCEPT 1 ADDIT ION MADE AY 2009-10. AS PER THE AR THERE WAS NO INCRIMINATING MATERIAL FOUN D IN RESPECT OF UNABATED PROCEEDINGS THEREFORE NO ADDITIONS CAN BE MADE EXCE PT 1 ADDITION MADE IN THE ASSESSMENT YEAR 2009-10 IN RESPECT OF WHICH INCRIMI NATING MATERIALS WERE FOUND AT THE TIME OF SEARCH. HENCE THE VALIDITY OF ASSESSMENT U/S 153A/143(3) PASSED BY THE AO IS NOT THE SUBJECT MAT TER FOR THESE ASSESSMENT YEARS. IT IS IMPORTANT TO NOTE THAT FOR ASSESSMENT YEAR 2011-12 AND 2012-13, THE GROUNDS OF APPEAL DO NOT SPEAK OF THE LEGALITY OF THE ASSESSMENT PASSED U/S 153A/143(3) OF THE ACT. MOREOVER THESE ASSESSME NT YEARS WERE ABATED BY THE LOWER AUTHORITIES AND THE SAME WAS NOT CHALLENG ED. HENCE FOR THIS ASSESSMENT YEAR ALSO THE LEGAL ISSUE IS NOT A MATTE R OF CONCERN. THE 10 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 10 ASSESSMENTS WERE FRAMED U/S 153A/143(3) OF THE ACT AFTER MAKING THE FOLLOWING ADDITIONS/DISALLOWANCES AS DETAILED UNDER : S.I. NO. ASSESSMENT YEAR ADDITION U/S. REMARKS AMOU NT (RS.) 1 2006-07 40 (A)(IA) RS.75,85,981/- -ON ACCOUNT OF FREIGHT AND TRANSPORT 40 (A)(IA) RS.14,76,880/- -ON ACCOUNT OF GODOWN RENT 80IB RS.9,92,709/- -ON ACCOUNT OF CLAIM U/S 80IB. 2 2007-08 40 (A)(IA) RS.1,29,11,564/- ON ACCOUNT OF CARRIAGE INWARD 40 (A)(IA) RS.63,44,393/- ON ACCOUNT OF CARRIAGE OUTWARD 40 (A)(IA) RS.11,16,849/- ON ACCOUNT OF GODOWN RENT 80IB RS.23,98,036/- ON ACCOUNT OF CLAIM U/S 80IB 3 2008-09 40 (A)(IA) RS.69,36,048/- CARRIAGE INWARDS 40 (A)(IA) RS.23,67,505/- CARRIAGE OUTWARDS 40 (A)(IA) RS.4,61,194/- GODOWN RENT 80IB RS.26,83,962/- CLAIM U/S 80IB 4 2009-10 40 (A)(IA) RS.82,53,657/- CARRIAGE INWARD 40 (A)(IA) RS.25,31,220/- CARRIAGE OUTWARD 80IB RS.36,42,197/- CLAIM U/S 80IB 28 RS.7,46,780/- UNDISCLOSED PURCHASES. 28 RS.28,452/- GROSS PROFIT 5 2011-12 37 RS.10,68,784/- TOTAL: RS.13,35,980/- TRAVELLING AND CONVEYANCE 6 2012-13 37 RS.39,08,980/- TOTAL: RS.48,86,225/- TRAVELLING AND CONVEYANCE 28 RS.1,08,397/- ON ACCOUNT OF APPLYING GROSS PROFIT. (THIS GROUND IS NOT PRESSED BY THE ASSESSEE) 11 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 11 9. THE LD. AR STATED THAT THE LEGAL ISSUE QUESTIONI NG THE VALIDITY OF THE SECTION 153A ASSESSMENT AND ADDITIONS MADE THEREON, IN RESPECT OF UNABATED ASSESSMENT IN THE ABSENCE OF INCRIMINATING MATERIAL S WAS RAISED FOR THE FIRST TIME BY THIS TRIBUNAL. THE REASON FOR NOT RAISING I T BEFORE THE LD. CIT(A) WAS DUE TO THE PREVALENCE OF CONTRARY LEGAL DECISIONS R ENDERED BY VARIOUS JUDICIAL AUTHORITIES AND DUE TO THE INACCURACY IN THE INTERP RETATION OF THE ACT. THE LD. AR SUBMITTED THAT THESE GROUNDS RAISED BY THE TRIBU NAL, THOUGH FOR THE FIRST TIME, GOES INTO THE ROOT OF THE MATTER AND DOES NOT INVOLVE FRESH INVESTIGATION OF FACTS AND, THEREFORE, SHOULD BE ADMITTED. THE LD . AR PLACED RELIANCE ON THIS REGARD ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 ITR 383 (SC) . THE LD. AR FURTHER ARGUED IN RESPECT OF ASSESSMENT YEARS 2006-07, 2007 -08, 2008-09 & 2009-10 BEING UNABATED ASSESSMENTS, THE LD. AO HAS MADE DIS ALLOWANCE, FOR WHICH ABSOLUTELY NO INCRIMINATING MATERIALS WERE FOUND DU RING THE COURSE OF THE SEARCH. HENCE HE PRAYED FOR DELETION OF DISALLOWANC E MADE FOR ASSESSMENT YEARS 2006-07, 2007-08, 2008-09 & 2009-10. HE PLACE D RELIANCE ON THE DECISIONS OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF (I) COMMISSIONER OF INCOME-TAX KOLKATA III VS. VEERPRA BHU MARKETING LTD. [2016] 73 TAXMANN.COM 149 (CALCUTTA) . & IN THE DECISION OF HONBLE DELHI HIGH COURT IN (III) ITA NO. 707, 709 & 7013 OF 2014 CIT CENTRAL-III VS. KABUL CHAWLA. 12 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 12 10. THE LD. AR FURTHER ARGUED THAT FOR ASSESSMENT Y EAR 2006-07, 2007-08 & 2008-09, THE ASSESSMENT FRAMED U/S 153(A)/143(3) OF THE ACT SHALL NOT SUSTAIN BECAUSE THERE WAS NO INCRIMINATING MATERIAL S FOUND AND THE ASSESSMENT WAS BASED ON REGULAR ITEMS, WHEREAS FOR THE ASSESSMENT YEAR 2009-10 THERE WERE SOME UNDISCLOSED PURCHASES WHICH WERE DONE ON CREDIT BASIS. THESE PURCHASES DO NOT SHOW ANY UNDISCLOSED INVESTMENTS SINCE THE TRANSACTIONS WERE NO ON CASH BUT ON CREDIT BASIS. T HEREFORE, FOR ASSESSMENT YEAR 2009-10, EVEN THOUGH THE ASSESSMENT WAS COMPLE TED U/S153A, HOWEVER, THE ENTIRE ADDITION OF RS.7,46,780/- AS UNDISCLOSED PURCHASES WAS NOT WARRANTED. THAT REGARDING LEVY OF GP @ RS.28,452/- THIS GROUND NOT PRESSED. 11. THE LD. DR, ON THE OTHER HAND, ARGUED VEHEMENTL Y ON THE VALIDITY OF THE ASSESSMENT COMPLETED U/S 153A/143(3) OF THE ACT PLA CING RELIANCE ON THE ORDERS OF THE SUBORDINATE AUTHORITIES. THE LD. DR S UBMITTED THAT THE AO HAD CONDUCTED NECESSARY ENQUIRY AND THERE WAS EXISTENCE OF INCRIMINATING MATERIALS. THE EXPRESSION 'INCRIMINATING MATERIAL' IS NOT FOUND IN THE PROVISIONS OF THE ACT AND IT IS ONLY THE HON'BLE CO URTS WHICH HAD IMPORTED THOSE WORDS WHILE RENDERING THE DECISIONS. HE STATE D THAT THE HON'BLE COURTS ARE DIVIDED ON THIS ISSUE AND PLACED RELIANCE ON TH E DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING DEVELOPMENT CO VS DCIT REPORTED IN (2014) 49 TAXMANN.COM 98 (KAR HC) WHEREIN IT WAS HELD THAT SEARCH ASSESSMENTS COULD BE FRAMED EVEN WITHOUT THE EXISTENCE OF INCRIMINATING MATERIALS FOUND IN THE COURSE OF SEAR CH. HE ARGUED THAT THE 13 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 13 BASIC FOUNDATION FOR CONDUCTING THE SEARCH IS GOVER NED BY THE PROVISIONS OF SECTION 132 OF THE ACT WHICH HAS TO BE READ HARMONI OUSLY WITH SECTION 153A OF THE ACT. THERE ARE THREE CONDITIONS BASED ON WHI CH A SEARCH ACTION COULD BE INITIATED U/S 132 OF THE ACT ON AN ASSESSEE. THEY A RE:- SECTION 132(1) - IF THE CONCERNED AUTHORITY HAS IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION, HAS REASON TO BELIEVE THAT - (A) WHERE A PERSON FAILS TO PRODUCE THE BOOKS OF AC COUNTS AND OTHER DOCUMENTS IN RESPONSE TO NOTICE U/S 142(1) OR SUMMONS ISSUED U/S 131(1) OF THE ACT ; OR (B) WHERE A PERSON FAILS TO COMPLY WITH THE REQUIRE MENTS OF SUMMONS ISSUED U/S 131(1) OF THE ACT ; OR (C) WHERE A PERSON IS IN POSSESSION OF ANY MONEY, B ULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND SUCH ASSETS REPRESENT S EITHER WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN , OR WOULD NO T BE, DISCLOSED FOR THE PURPOSES OF THE ACT (HEREINAFTER REFERRED TO AS THE UNDISCLOSED INCOME OR PROPERTY) THEN THE OFFICER , SO AUTHORIZED COULD CONDUCT A SE ARCH AND PROCEED AS PER THE REQUIREMENTS LAID DOWN IN THE SAID SECTION. THE LD. DR ARGUED THAT THE AFORESAID THREE PRIMARY CONDITIONS FOR INVOKING SEA RCH PROCEEDINGS CANNOT BE GIVEN A GO BY WHILE FRAMING SECTION 153A ASSESSMENTS AND THE INSTANT CASE FALLS UNDER SECTION 132(1) (C ) OF THE ACT. THE PROVISIONS OF SECTION 153A OF THE ACT USE THE EXPRESSION 'ASSESS OR REASSESS TOTAL IN COME' AND HENCE THE SEARCH ASSESSMENT COULD BE FRAMED U/S 153 A OF THE ACT IRRESPECTIVE OF ANY INCRIMINATING MATERIALS. 14 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 14 12. WE HAVE PERUSED THE CASE RECORD, ANALYZED THE F ACTS AND CIRCUMSTANCES OF THE CASE AND HEARD THE RIVAL CONTENTIONS. WE FIN D THAT THE LEGAL GROUNDS RAISED BY THE ASSESSEE GO INTO THE VERY CRUX OF THE MATTER AND DOES NOT INVOLVE ANY FRESH INVESTIGATION OF FACTS. HENCE WE DEEM IT FIT AND PROPER TO ADMIT THE SAME EVEN THOUGH THE LOWER AUTHORITIES HAVE NOT APP RECIATED IN TOTALITY. RELIANCE IN THIS REGARD IS PLACED IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 ITR 383 (SC). WE FIND THAT IT WOULD BE NECESSARY TO ADDRESS THE PRELIMINARY ISSUE, WHETHER ASSESSMENT C OULD BE FRAMED U/S 153A OF THE ACT IN RESPECT OF CONCLUDED PROCEEDING WITHO UT THE EXISTENCE OF ANY INCRIMINATING MATERIALS FOUND DURING THE COURSE OF THE SEARCH. THE SCHEME OF THE ACT PROVIDES FOR ABATEMENT OF PENDING PROCEEDIN GS AS ON DATE OF SEARCH. IT IS NOT IS DISPUTE THAT THE ASSESSMENT FOR THE ASSES SMENT YEAR 2006-07 UP TO 2009-10 FALLS UNDER THE AMBIT OF UNABATED ASSESSMEN T AS ON THE DATE OF SEARCH. THERE IS NO DIFFERENTIATION AS FOUND IN THE INTENT OF THE LEGISLATURE TO DIFFERENTIATE WHETHER THE ASSESSMENTS WERE ORIGINAL LY FRAMED U/S 143(1) OR 143(3) OR 147 OF THE ACT. THEREFORE, IF ANY INCRIMI NATING MATERIAL IS NOT FOUND DURING THE COURSE OF SEARCH RELATED TO THOSE CONCLU DED YEARS, THE ACT DOES NOT CONFER ANY POWER ON THE LD. AO TO DISTURB THE FINDI NG GIVEN THEREON AND INCOME DETERMINED THEREON AS FINALITY HAS ALREADY B EEN REACHED AND NO PROCEEDINGS WERE PENDING ON THE DATE OF SEARCH. 13. WE FIND THAT THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT CENTRAL-III VS. KABUL CHAWLA REPORTED IN 2016 380 ITR 570 (DEL) HAS 15 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 15 DULY CONSIDERED VARIOUS DECISIONS AND THE DECISIONS THAT WERE REFERRED BY THE LD. DR WERE ALSO DISTINGUISHED. WE ALSO FIND THAT T HE HONBLE JURISDICTIONAL HIGH COURT RECENTLY IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX VS M/S. SALASAR STOCK BROKING LTD. IN G.A. NO. 1929 OF 2016 I.T.A.T. NO. 264 OF 2016 DT. 24.08.2016 HAS ENDORSED THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT CENTRAL-III VS. KABUL CHAWLA (SUPRA) AND ALSO PLACE RELIANCE ON ITS OWN DECISION IN THE CASE OF COMMISSIONER OF INCOME-TAX KOLKATA III VS. VEERPRABHU MARKETING LT D. (SUPRA) . WE FIND THAT PROVISION OF SECTION 132 OF THE ACT RELIED UPO N BY THE LD. DR BENCH WOULD BE RELEVANT ONLY FOR THE PURPOSE OF CONDUCTING SEAR CH ACTION. ONCE THE PROCEEDINGS U/S 153A OF THE ACT ARE INITIATED WHICH ARE SPECIAL PROCEEDINGS, THE LEGISLATURE PROVIDES DIFFERENT TREATMENTS FOR A BATED AND UNABATED ASSESSMENTS. 14. IN RESPECT OF ABATED ASSESSMENTS, FRESH ASSESSM ENTS ARE TO BE FRAMED BY THE AO U/S 153A OF THE ACT WHICH WOULD HAVE A BE ARING ON THE DETERMINATION OF THE TOTAL INCOME BY CONSIDERING AL L THE ASPECTS, WHEREIN EXISTENCE OF INCRIMINATING MATERIALS DO NOT HAVE AN Y RELEVANCE. HOWEVER, IN RESPECT OF UNABATED ASSESSMENTS THE LEGISLATURE HAS CONFERRED POWERS ON THE LD. AO TO JUST FOLLOW THE ASSESSMENTS ALREADY CONCL UDED UNLESS INCRIMINATING MATERIALS ARE FOUND IN THE COURSE OF SEARCH. 15. THAT FOR THE REASONS STATED ABOVE AND ON BASIS OF VARIOUS JUDICIAL PRONOUNCEMENTS, WE HOLD THAT THE VARIOUS DISALLOWAN CES MADE FOR THE 16 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 16 ASSESSMENT YEARS I.E. 2006-07, 2007-08 & 2008-09, W HICH WERE UNABATED/CONCLUDED ASSESSMENTS AS ON DATE OF SEARCH CANNOT BE MADE IN THE SEARCH ASSESSMENTS IN THE ABSENCE OF ANY INCRIMINAT ING MATERIAL FOUND IN THE COURSE OF SEARCH AND ACCORDINGLY ALL THOSE ADDITION S ARE DIRECTED TO BE DELETED. SINCE THE LEGAL ISSUES ARE ADDRESSED, WE REFRAIN TO GIVE OUR FINDINGS ON MERITS OF DISALLOWANCES UNDER THE PROVISIONS OF THE ACT. A CCORDINGLY GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMENT YEARS 2006-07, 2007- 08 & 2008-09 ARE ALLOWED. 16. THAT FOR THE ASSESSMENT YEAR 2009-10, FOR UNDI SCLOSED PURCHASES, THOUGH SEIZED DOCUMENTS (PAGE 13 OF ACP/4) WAS FOUND BY TH E DEPARTMENT, THE ASSESSMENT COMPLETED U/S 153A IS CORRECT AS PER LAW BUT SINCE THESE PURCHASES WERE MADE ON CREDIT, THERE IS NO QUESTION OF UNDISCLOSED INVESTMENTS AND HENCE, THE ADDITIONS MAY BE RESTRIC TED TO THE AMOUNT OF PROFIT INVOLVED IN THE PURCHASES AND NOT THE FULL A MOUNT I.E. RS.7,46,780/-. WE ORDER ACCORDINGLY. 17. THAT FOR THE ASSESSMENT YEARS 2011-12 AND 2012- 13 IT WAS OBSERVED THAT EDITIONS TOWARDS TRAVELLING AND CONVEYANCE EXP ENSES WERE MADE ON THE GROUND THAT THE ASSESSEE FAILED TO FURNISH THE NECE SSARY SUPPORTING EVIDENCE. HOWEVER THE LEARNED AR BEFORE US SUBMITTED THAT ENT IRE AMOUNT CANNOT BE DISALLOWED AND PRAYED TO RESTORE THE MATTER TO THE AO FOR FRESH ADJUDICATION. THE LD. DR RAISED NO OBJECTION. THEREFORE, BOTH THE MATTERS ARE SET ASIDE BACK TO THE FILE OF THE AO WITH THE DIRECTION FOR FRESH ADJUDICATION AS PER LAW. THE 17 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 17 LD. AR SHALL REPRODUCE THE NECESSARY DETAILS IN SUP PORT OF ITS CLAIM. HENCE BOTH THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLO WED FOR STATISTICAL PURPOSES. 18. WE SUMMARIZE THE RESULT AS UNDER:- ITA NO.182/KOL/2014 FOR A.Y. 2006-07, ITA NO.183/KO L/2014 FOR A.Y. 2007-08, ITA NO.184/KOL/2014 FOR A.Y. 2008-09, T HE APPEAL OF THE ASSESSEE IS ALLOWED. & IN ITA NO.185/KOL/2014 FOR A.Y. 2009-10, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. & IN ITA NO.186/KOL/2014 FOR A.Y. 2011-12 & ITA NO.187/K OL/2014 FOR A.Y. 2012-13, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 10/03/2017. SD/- SD/- [SHRI WASEEM AHMED] [ PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 10/03/2017 {SC SPS}/DKP* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT/ASSESSEE SHIVA LOKENATH RICE MILLS (P) LTD. THANA ROAD, GANGARAMPUR DAKSHIN DINAPUR 733 124 2. RESPONDENT DCIT, CC-XXVII 4. CIT , KOLKATA. 3. CIT(A)- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER AS STT.REGISTRAR, ITAT, KOLKATA 18 I.T.(SS) A. NO. 182 TO 187/KOL/2014 SHIVA LOKENATH RICE MILLS (P) LTD. ASSESSMENT YEARS: 2006-07 TO 2012-13 18 BENCHES DATE INITIAL 1. DRAFT DICTATED ON 07/03/17 10/03 SR.PS 2. DRAFT PLACED BEFORE AUTHOR /03 /17 (DICTATION PAD HAS BEEN ENCLOSED ALONG WITH ORIGINAL FILE) SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 10/03 -DO- AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 10/-3 -DO- AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 10/03/2017 SR.PS/ PS 6. KEPT FOR PRONOUNCEMENT ON 10/03 SR.PS 7. FILE SENT TO THE BENCH CLERK 10/03/2017 SR. PS 8. DATE ON WHICH FILE GOES TO THE H.C. 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER.