ACIT, Central Circle - 2(3), Kolkata , Kolkata V. M/s. Abhani Securities Pvt. Ltd., , Kolkata

ITSSA 27/KOL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6279 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 08-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A K TULSIYAN; SM SIKHA AGA
• Section: 153A; 143(1); 68; 132; 139

Judgement Text

1 IT(SS)A NO. 27/KOL/2017 ABHANI SECURITIES PVT. LTD, AY 2009-10 , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T(SS).A. NO. 27/KOL/2017 ASSESSMENT YEAR: 2009-10 ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(3), KOLKATA VS. M/S . ABHANI SECURITIES PVT. LTD. (PAN: AAECA3154E) APPELLANT RESPONDENT DATE OF HEARING 21.01.2019 DATE OF PRONOUNCEMENT 25.01.2019 FOR THE APPELLANT SHRI A. K. SINGH, CIT, DR FOR THE RESPONDENT SHRI A. K. TULSIYAN, FCA & SM. SIKHA AGARWAL, AR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE REVENUE IS AGAINST THE ORDER OF THE LD. CIT(A)-20, KOLKATA DATED 21.03.2017 FOR AY 2009-10. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDER: 1. WHETHER, IN THE FACTS & CIRCUMSTANCES OF THE C ASE AS WELL AS IN THE LAW AND IN VIEW OF THE DISTINCTION OF FACTS OF THE INSTANT CASE (DISCUSSED ELABORATELY IN THE STATEMENT OF FACTS), THE LD. CIT(A)S ORDER IS JUSTIFIED IN ALLOWING RELIEF TO THE ASSESSEE. 2. THAT, THE REVENUE CRAVES LEAVE TO ADDUCE ADDITIO NAL GROUNDS, AND/OR TO MODIFY THE GROUND OF APPEAL DURING THE COURSE OF HEARING OF THE CASE. 3. AT THE OUTSET ITSELF, IT WAS BROUGHT TO OUR NOTI CE THAT A SEARCH HAS BEEN MADE AND PURSUANT TO 153A PROCEEDINGS THE ADDITION HAS BEEN MADE BY THE AO. ACCORDING TO LD. AR, ON 30.09.2009 RETURN OF INCOME WAS FILED U/S. 1 39 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) AND THE ASSE SSEE RETURNED AN INCOME OF RS.2,34,635/- WHICH HAS BEEN ACCEPTED U/S. 143(1) OF THE ACT. IT WAS BROUGHT TO OUR NOTICE THAT THE TIME 2 IT(SS)A NO. 27/KOL/2017 ABHANI SECURITIES PVT. LTD, AY 2009-10 LIMIT FOR ISSUANCE OF NOTICE U/S. 143(2) OF THE ACT ON 30.09.2010 AND SINCE NO NOTICE WAS ISSUED U/S. 143(2) AND SEARCH HAPPENED ON 07.11.201 3 THIS ASSESSMENT YEAR IS NOT PENDING BEFORE THE AO ON THE DATE OF SEARCH I.E. ON 07.11.2 013 AND, THEREFORE, IS UNABATED ASSESSMENT AND THE AO CAN ONLY REITERATE THE RETURN ED INCOME SHOWN BY THE ASSESSEE IN ITS RETURN AND CAN MAKE ADDITION ONLY WITH THE AID OF I NCRIMINATING MATERIAL FOUND DURING THE SEARCH QUA THE ASSESSEE FOR THE ASSESSMENT YEAR I.E . 2009-10. IT WAS BROUGHT TO OUR NOTICE THAT THE ONLY ADDITION IS MADE ON OCD OF RS.2.30 CR . WITHOUT ANY INCRIMINATING MATERIAL UNEARTHED DURING THE SEARCH SO, RELYING ON THE DECI SION OF HONBLE DELHI HIGH COURT IN CIT VS . KABUL CHAWLA (2016) 380 ITR 573 (DEL), WHEREIN THEIR LORDSHIPS HAVE HELD AS UNDER: SUMMARY OF LEGAL POSITION 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONED DE CISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHE D REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE TOTAL INCOME OF THE AFOREMENTIONED SIX YEARS IN S EPARATE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS IN WHICH BOTH THE D ISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHE R POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE E VIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RE LEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS S ECTION ONLY ON THE BASIS OF SEIZED MATERIAL. V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD ASSESS IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD REASSESS TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO O NE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATI NG MATERIAL UNEARTHED DURING THE COURSE OF PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH W ERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 3 IT(SS)A NO. 27/KOL/2017 ABHANI SECURITIES PVT. LTD, AY 2009-10 4. THE HON'BLE JURISDICTIONAL CALCUTTA HIGH COURT I N ITA NO. 661 OF 2008 COMMISSIONER OF INCOME TAX VS.VEERPRABHU MARKETING LTD. HAS ALSO HELD AS UNDER: WE AGREE WITH THE VIEW EXPRESSED BY THE KARNATAKA HIGH COURT THAT INCRIMINATING MATERIAL IS PRE-REQUISITE BEFORE POWER COULD HAVE BEEN EXERCISE D U/S 153(C) R.W SECTION 153(A). IN THE CASE BEFORE US, THE AO HAS MADE A DISALLOWANCE OF T HE EXPENDITURE, WHICH WAS HELD DISCLOSED, FOR ONE REASON OR THE OTHER, BUT SUCH DISALLOWANCES MADE BY THE AO WERE UPHELD BY THE LD.CIT(A) BUT THE LD. TRIBUNAL DELETED THESE DISALL OWANCE. WE FIND NO INFIRMITY IN THE AFORESAID ACT OF THE LD. TRIBUNAL. THE APPEAL IS, T HEREFORE, DISMISSED. 5. IN A SIMILAR CASE M/S. KURELE PAPER MILLS PVT. L TD. ADDITION WAS MADE BY THE AO (IN SEC. 153A PROCEEDINGS) WITHOUT INCRIMINATING MATERI AL UNEARTHED DURING SEARCH, THE SHARE CAPITAL RECEIVED BY THE ASSESSEE U/S. 68 OF THE AC T WAS DELETED BY THE TRIBUNAL, WHICH ORDER HAS BEEN UPHELD BY HONBLE DELHI HIGH COURT IN PR. CIT VS. KURELE PAPER MILLS PVT. LTD. (2016) 380 ITR 571 (DEL) WHICH DECISION HAS BEEN UP HELD BY HONBLE SUPREME COURT (2016) 380 ITR (ST.) 69-ED. 6. IN VIEW OF THE ABOVE, WE NOTE THAT THE LD. CIT(A ) HAS DECIDED THE APPEAL TAKING NOTE THAT THERE IS NO INCRIMINATING MATERIAL AGAINST THE ASSESSEE WAS FOUND DURING THE SEARCH FOR MAKING THE ADDITION, THEREFORE, THE LD. CIT(A) HAS RIGHTLY FOLLOWED THE JUDICIAL PRECEDENTS (CITED SUPRA) AND DELETED THE ADDITION, WHICH ACTIO N OF LD. CIT(A) DOES NOT CALL FOR ANY INTERFERENCE ON OUR PART. THEREFORE, THE APPEAL OF REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 25TH JANU ARY, 2019. SD/- SD/- (DR. A. L. SAINI) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25TH JANUARY, 2019 JD.(SR.P.S.) 4 IT(SS)A NO. 27/KOL/2017 ABHANI SECURITIES PVT. LTD, AY 2009-10 COPY OF THE ORDER FORWARDED TO: 1 APPELLANT ACIT, CENTRAL CIRCLE-2(3), KOLKATA 2 RESPONDENT M/S. ABHANI SECURITIES PVT. LTD., 7, S ARAT BOSE ROAD, LAJPAT RAI SARANI, KOLKATA-700 016. 3 4 5 CIT(A) -20, KOLKATA (SENT THROUGH E-MAIL) CIT , KOLKATA. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR