The ACIT, Central Circle-2(2), Ahmedabad V. John Energy Ltd., Mehsana

ITSSA 23/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2578 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 30-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Set aside
• Section: 143(3); 153A; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT AT AHMEDABAD) BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT, AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ IT(SS)A NO. 23/AHD/2019 / ASSTT. YEAR: 2014-2015 A.C.I.T., CIRCLE-2(2), AHMEDABAD. VS. JOHN ENERGY LTD., PLOT NO.220, GIDC ESTATE, NAGALPUR, MEHSANA-384002. PAN: AAACJ5184F (APPLICANT) (RESPONDENT) REVENUE BY : SHRI VINOD TANWANI, CIT. D.R ASSESSEE BY : SHRI TUSHAR HEMANI, SR. ADVOCATE /DATE OF HEARING : 15/09/2021 /DATE OF PRONOUNCEMENT: 13/10/2021 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-12, AHMEDABAD, DATED 28/11/2018 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (HERE-IN-AFTER REFERRED TO AS 'THE ACT') RELEVANT TO THE ASSESSMENT YEAR 2014-2015. IT(SS)A NOS.23/AHD/2019 ASSTT. YEAR 2014-15 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE PROVISIONS OF SECTION 153A OF THE IT. ACT, 1961 WHICH REQUIRES THE TOTAL INCOME TO BE BROUGHT UNDER TAX WITHOUT ANY RESTRICTIONS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT SUCH ASSESSMENT OR RE-ASSESSMENT U/S.153A OF THE IT. ACT, 1961 IS TO BE RESTRICTED TO THE INCRIMINATING MATERIAL FOUND DURING THE SEARCH. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD, CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS. 1,67,67,946/- MADE BY THE AO U/S.36(1)(III) OF THE ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF INCOME DIFFERENCE AS PER 26AS OF RS.5,81,982/- MADE BY THE AO. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF INTEREST ON IDS OF RS.7,55,727/- MADE BY THE AO. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF INTEREST U/S.36(1)(III) ON INTEREST FREE LOANS AND ADVANCES GIVEN TO RELATED PARTIES OF RS.4,36,974/- MADE BY THE AO. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF PAYMENT MADE TO SHREE LALGURU ENTERPRISE OF RS.7,24,711/- MADE BY THE AO. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE U/S.14A OF RS.46,677/- MADE BY THE AO. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO PF OF RS.29,47,659/- MADE BY THE AO. 10. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF INTEREST ON IT REFUND OF RS.1,07,63,279/- MADE BY THE AO. 11. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CLT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF WEALTH TAX EXPENSES OF RS.1,30,000/- MADE BY THE AO. 12. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. 13. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. IT(SS)A NOS.23/AHD/2019 ASSTT. YEAR 2014-15 3 3. THE FIRST ISSUE RAISED BY THE REVENUE IN GROUNDS NOS. 1 AND 2 IS THAT THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ADDITION IN THE ASSESSMENT OR REASSESSMENT UNDER SECTION 153A OF THE ACT BE RESTRICTED TO THE INCRIMINATING MATERIAL FOUND DURING THE SEARCH PROCEEDINGS. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS A LIMITED COMPANY AND ENGAGED IN THE ACTIVITY OF SUPPLYING DRILLING RIGS AND GAS COMPRESSOR ON CHARTERED HIRE SERVICES. THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED UNDER SECTION 132 OF THE ACT DATED 8 TH MARCH 2016. AS A RESULT OF SEARCH, THE AO INITIATED THE PROCEEDINGS BY ISSUING NOTICE UNDER SECTION 153A OF THE ACT. THE ASSESSEE IN RESPONSE TO SUCH NOTICE FILED RETURN OF INCOME UNDER SECTION 153A OF THE ACT. HOWEVER, THE ASSESSEE CONTENDED THAT THERE CANNOT BE ANY ADDITION TO THE INCOME DECLARED BY IT IN THE ABSENCE OF ANY INCRIMINATING DOCUMENT FOUND DURING THE SEARCH PROCEEDINGS. THE ASSESSEE IN SUPPORT OF HIS CONTENTION RELIED ON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF PR. CIT VS. SAUMYA CONSTRUCTION (P.) LTD. REPORTED IN 81 TAXMANN.COM 292. 4.1 HOWEVER, THE AO DISAGREED WITH THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THE REVENUE HAS CHALLENGED THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT PASSED IN THE CASE OF SAUMAYA CONSTRUCTION (SUPRA) WHICH IS PENDING FOR ADJUDICATION BEFORE THE HONBLE SUPREME COURT. THEREFORE, THERE CANNOT BE MADE ANY REFERENCE TO SUCH JUDGMENT. FURTHERMORE, THERE IS NO PROVISION UNDER SECTION 153A OF THE ACT REQUIRING TO FRAME THE ASSESSMENT IN THE CASE OF SEARCH PROCEEDINGS ONLY ON THE BASIS OF INCRIMINATING DOCUMENTS/MATERIALS. THUS THE AO FRAMED THE ASSESSMENT AFTER MAKING VARIOUS ADDITIONS TO THE TOTAL INCOME OF THE ASSESSEE. 4.2 ON APPEAL, THE LEARNED CIT (A) DELETED ALL THE ADDITIONS MADE BY THE AO BY OBSERVING THAT THE YEAR UNDER CONSIDERATION IS UNABATED ASSESSMENT YEAR. AS PER THE LEARNED CIT (A), THE ADDITIONS WITH RESPECT TO UNABATED ASSESSMENT YEARS CAN BE MADE ONLY IN THE EVENT THERE WERE UNEARTHED INCRIMINATING MATERIALS DURING THE IT(SS)A NOS.23/AHD/2019 ASSTT. YEAR 2014-15 4 SEARCH. ACCORDINGLY, IN THE ABSENCE OF INCRIMINATING DOCUMENTS/MATERIALS FOUND DURING THE SEARCH, NO ADDITION OF REGULAR ITEMS DISCLOSED IN THE BOOKS OF ACCOUNTS CAN BE MADE. 5. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), THE REVENUE IS IN APPEAL BEFORE US. 6. BOTH THE LEARNED DR AND THE AR, BEFORE US, VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AS FAVOURABLE TO THEM. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ADMITTEDLY, THE YEAR UNDER CONSIDERATION IS UNABATED ASSESSMENT YEAR. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SAUMYA CONSTRUCTION (SUPRA) HAS HELD THAT THERE CANNOT BE ANY ADDITION OF REGULAR ITEMS SHOWN IN THE BOOKS OF ACCOUNTS UNTIL AND UNLESS THERE WERE CERTAIN MATERIALS OF INCRIMINATING NATURE FOUND DURING THE COURSE OF SEARCH. THE WORD INCRIMINATING HAS NOT BEEN DEFINED UNDER THE ACT BUT IT REFERS TO THOSE MATERIALS/ DOCUMENTS/ INFORMATION WHICH WERE COLLECTED DURING THE SEARCH PROCEEDINGS AND SIMULTANEOUSLY THESE DOCUMENTS HAD BEARING ON THE TOTAL INCOME OF THE ASSESSEE. AT THE TIME OF HEARING, THE LEARNED DR HAS NOT BROUGHT ANYTHING ON RECORD CONTRARY TO THE FINDING OF THE LEARNED CIT (A). ACCORDINGLY, WE HOLD THAT THERE CANNOT BE ANY ADDITION OF THE REGULAR ITEMS WHICH WERE DISCLOSED BY THE ASSESSEE IN THE REGULAR BOOKS OF ACCOUNTS. IN HOLDING SO WE DRAW SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN CASE OF SAUMYA CONSTRUCTION (P.) LTD (SUPRA) WHEREIN IT WAS HELD AS UNDER: THUS, WHILE IN VIEW OF THE MANDATE OF SUB-SECTION (1) OF SECTION 153A IN EVERY CASE WHERE THERE IS A SEARCH OR REQUISITION, THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICE TO SUCH PERSON TO FURNISH RETURNS OF INCOME FOR THE SIX YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED OR REQUISITION IS MADE, ANY ADDITION OR DISALLOWANCE CAN BE MADE ONLY ON THE BASIS OF MATERIAL COLLECTED DURING THE SEARCH OR REQUISITION. IN CASE NO INCRIMINATING MATERIAL IS FOUND, THE EARLIER ASSESSMENT WOULD HAVE TO BE REITERATED. IT(SS)A NOS.23/AHD/2019 ASSTT. YEAR 2014-15 5 7.1 IN VIEW OF THE ABOVE WE HOLD THAT THERE CANNOT BE ANY ADDITION TO THE TOTAL INCOME OF THE ASSESSEE OF THE REGULAR ITEMS AS MADE BY THE AO IN THE PRESENT CASE. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (A). HENCE, WE UPHOLD THE SAME. THUS THE GROUND OF APPEAL OF THE REVENUE IS HEREBY DISMISSED. 7.2 AS WE HAVE HELD THAT THERE CANNOT BE ANY ADDITION OF REGULAR ITEMS OF DISALLOWANCE/ADDITION TO THE TOTAL INCOME OF THE ASSESSEE WHICH HAVE ONLY BEEN DISCLOSED IN THE BOOKS OF ACCOUNTS. ADMITTEDLY ALL THE ADDITIONS/DISALLOWANCES MADE BY THE AO REPRESENT THE REGULAR ITEMS. ACCORDINGLY, WE DO NOT FIND ANY REASON TO ADJUDICATE THE ISSUE RAISED BY THE REVENUE ON MERIT. AS SUCH, ALL THE ISSUES RAISED BY THE REVENUE ON MERIT BECOME ON INFRUCTUOUS. HENCE, WE DISMISS THE SAME AS INFRUCTUOUS. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 13/10/2021 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) (WASEEM AHMED) VICE PRESIDENT ACCOUNTANT MEMBER (TRUE COPY) AHMEDABAD; DATED 13/10/2021 MANISH