M/s. Sainath Colonizers, Bhopal V. THE ACIT (CENTRAL) II, Bhopal

ITSSA 290/Ind/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2885 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 10-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: S S DESH
• Section: 143(3); 153A; 80IB; 132; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON'BLE V. DURGA RAO, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA(SS) NOS.289 TO 291/IND/2017 ASSESSMENT YEARS 2008-09 TO 2010-11 REVENUE BY SMT. ASHIMA GUPTA, CIT - DR ASSESSEE BY SHRI S.S. DESHPANDE , C A DATE OF HEARING 27.0 2 . 201 9 DA TE OF PRONOUNCEMENT 28 . 0 2 .2 01 9 O R D E R PER BENCH: THE ABOVE CAPTIONED THREE APPEALS FILED AT THE INST ANCE OF ASSESSEE PERTAINING TO ASSESSMENT YEAR 2008-09 TO 2010-11 ARE DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-3 (IN SHORT LD.CIT(A)], INDORE DATED 1 4.09.2017 WHICH ARE ARISING OUT OF THE ORDER U/S 153A R.W.S 143(3) OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 26.02.2016 FRAME D BY ACIT (CENTRAL)-II, BHOPAL. SAINATH COLONISERS 20-21, SUN VILLA, CHUNA BHATTI, BHOPAL VS A CIT ( CENTRAL ) - II , BHOPAL ( APPELLANT ) (RESPONDENT ) PAN NO. ABFFS9665P SAINATH COLONISERS ITA(SS) NO.189 TO 291/IND/2017 2 THE ASSESSEE HAS RAISED FOLLOWING COMMON GROUNDS OF ALL THREE APPEALS; 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE OF THE ASSESSEE THE LD. COMMISSIONER OF INCOME TAX(A) WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING ADDITION IN THE YEARS WHERE THE ASSESSMENT PROCEEDINGS WERE NOT PENDING AND NO INCRIMINATING M ATERIAL WAS FOUND DURING THE COURSE OF SEARCH. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE OF THE ASSESSEE THE LD. COMMISSIONER OF INCOME TAX(A) WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSING OFFICER WAS JUSTIFIED IN DISALLOWING THE EXEMPTION CLAIMED U/S 80IB(10). 2. AS THE ISSUES RAISED IN THESE APPEALS ARE COMMON , THEY ARE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE FIRM IS A MEMBER OF SIGNATURE GROUP OF BHOPAL, ENGAGED IN THE BUSINESS OF SALE AND PURCHASE OF REA L ESTATE. SEARCH & SEIZURE OPERATIONS U/S 132 OF THE ACT WAS CARRIED OUT ON 29.01.2014 AT THE BUSINESS PREMISES OF THE ASSESSEE FIRM AS WELL AS ON THE PREMISES OF OTHER CONCERNS/BUSINESS ASSOCIAT ED. NOTICE U/S 153A OF THE ACT WAS ISSUED TO THE ASSESSEE ON 12.09 .2014. IN COMPLIANCE TO THE NOTICES ASSESSEE FILED RETURN OF INCOME FOR THE SAINATH COLONISERS ITA(SS) NO.189 TO 291/IND/2017 3 BLOCK PERIOD DECLARING NIL INCOME AFTER CLAIMING DE DUCTION U/S 80IB(10) AT RS.8,92,452/-, RS.2,66,948/- AND RS.2,4 4,417/- FOR ASSESSMENT YEAR 2008-09 TO 2010-11 RESPECTIVELY. L D. A.O ON VERIFICATION OF RECORDS OBSERVED THAT THE ASSESSEE FAILED TO PRODUCE THE COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITI ES REQUIRED FOR CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT. HE ACCO RDINGLY DISALLOWED THE CLAIM AND ADDED TO THE INCOME DISCLO SED BY THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFOR E LD. CIT(A) BUT FAILED TO SUCCEED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 5. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE REFER RING TO THE LEGAL COMMON GROUND SUBMITTED THAT, AS NO INCRIMINATING M ATERIAL WAS FOUND DURING THE COURSE OF SEARCH U/S 132 OF THE AC T CONDUCTED ON 29.1.2014 AT THE ASSESSEES PREMISES, NO ADDITION W AS CALLED FOR IN THE ASSESSMENT YEARS 2008-09 TO 2010-11 AS THEY FAL L UNDER THE CATEGORY OF NON ABATED ASSESSMENTS AS HELD BY HIGH COURT OF GUJARAT IN THE CASE OF PCIT VS. DESAI CONSTRUCTION REPORTED IN 387 ITR 552 (2016). RELIANCE ALSO PLACED ON THE JUDGME NT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S CONTINENTA L SAINATH COLONISERS ITA(SS) NO.189 TO 291/IND/2017 4 WAREHOUSING CORPORATION (NHAVA SHEVA) LTD AND ALL C ARGO GLOBAL LOGISTICS LTD 374 ITR 634, BOMBAY (2015). 6. PER CONTRA DEPARTMENTAL REPRESENTATIVE PLACED TH E RELIANCE OF FOLLOWING JUDGMENTS SUBMITTING THAT THE ADDITIONS C AN BE MADE DURING THE BLOCK PERIOD ASSESSMENTS PURSUANT TO ISS UANCE OF NOTICE U/S 153A/153C OF THE ACT WITHOUT ANY INCRIMINATING MATERIAL BEING FOUND AGAINST THE ASSESSEE DURING THIS COURSE. (I) KANARA HOUSING DEVELOPMENT CO. V/S DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I(1), BH ANGLORE 274 CTR 122 ( H.C OF KARNATAKA) (II) E.N. GOPAKUMAR VS. COMMISSIONER OF INCOME TAX (CENTRAL) 390 ITR 1331 (KERALA HIGH COURT) 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE COMMON LEGAL ISSUE RAISED IN ALL THESE THREE APPEALS IS THAT WHETHER THE ADDITIONS IN UNABATED ASSESSMENTS CAN BE MADE WITHOUT ANY INCRIMINATING MATERIAL FOUN D DURING THE COURSE OF SEARCH U/S 132 OF THE ACT. REVENUE HAS NOT DISPUTED THE FACT THAT NO INCRIMINATING MATERIAL WAS FOUND D URING THE COURSE OF SEARCH AT THE PREMISES OF THE ASSESSEE AND THE ADDITION/DISALLOWANCE RELATING TO DENIAL OF DEDUCTI ON U/S 80IB(10) SAINATH COLONISERS ITA(SS) NO.189 TO 291/IND/2017 5 OF THE ACT WAS PURELY ON THE BASIS OF INFORMATION C ALLED DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 153A R.W.S. 14 3(3) OF THE ACT. 8. WE OBSERVE THAT THE ASSESSEE HAS FILED REGULAR R ETURN OF INCOME U/S 139 OF THE ACT FOR ASSESSMENT YEAR 2008- 09 TO 2010-11 ON 30.9.08, 31.3.2010 AND 12.10.2010 AFTER CLAIMING DEDUCTION U/S 80IB(10) AT RS.8,92,452/-, RS.2,66,948/- AND RS.2,4 4,417/- RESPECTIVELY. THE TIME LIMIT FOR ISSUANCE OF NOTIC ES U/S 143(2) OF THE ACT STOOD EXPIRED IN RELATION TO THE ASSESSMENT YEA R 2008-09 TO 2010-11 MUCH BEFORE THE DATE OF CONDUCTING THE SEAR CH I.E. 29.1.2014 AND THEREFORE THESE THREE ASSESSMENT YEAR S FALLS UNDER THE CATEGORY OF UNABATED/NON ABATED ASSESSMENTS. NOW IN THE GIVEN FACTS LD. COUNSEL FOR THE ASSESSEE HAS RELIED FEW JUDGMENTS AND LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED TO F EW JUDGMENTS IN ITS FAVOUR. HOWEVER, THE HON'BLE APEX COURT IN THE CASE OF CIT V/S VEGETABLE PRODUCTS LTD 88 ITR 192 HAS HELD THAT IF TWO REASONABLE CONSTRUCTION OF A TAXING PROVISIONS ARE POSSIBLE, T HEN THAT CONSTRUCTION WHICH FAVOURS THE ASSESSEE MUST BE ADO PTED. IN THE LIGHT OF ABOVE JUDGMENT OF HON'BLE APEX COURT WE HA VE GONE THROUGH THE JUDGMENTS REFERRED AND RELIED BY BOTH T HE PARTIES AND SAINATH COLONISERS ITA(SS) NO.189 TO 291/IND/2017 6 ARE INCLINED TO FOLLOW THE VIEW TAKEN BY HON'BLE CO URTS ON THE ISSUE IN QUESTION BEFORE US FAVOURING THE ASSESSEE. 9. THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF PCIT VS. DESAI CONSTRUCTION (SUPRA) CONFIRMED THE VIEW TAKEN BY THE TRIBUNAL UPHOLDING THE CONTENTION OF THE ASSESSEE T HAT AS NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH WHICH COULD HAVE ENABLED THE ASSESSING OFFICER TO RE-EXAM INE ITS CLAIM FOR DEDUCTION U/S 80IB WHICH WAS PART OF THE ASSESSMEN T PRIOR TO THE SEARCH AND SUCH ASSESSMENT UNABATED. SIMILARLY HON 'BLE HIGH COURT OF BOMBAY IN THE CASE OF CONTINENTAL WAREHOUS ING CORPORATION AND ALL CARGO GLOBAL LOGISTICS LTD (SU PRA) CONFIRMED THE VIEW TAKEN BY THE SPECIAL BENCH OF I.T.A.T. MUM BAI BENCH DECIDED IN FAVOUR OF ASSESSEE DISMISSING THE REVENU ES APPEAL HOLDING THAT THERE WAS NO INCRIMINATING MATERIAL FOUND DURI NG THE COURSE OF SEARCH, THE TRIBUNAL WAS RIGHT IN HOLDING THE POWER CONFERRED U/S 153A BEING NOT EXPECTED TO BE EXERCIS ED ROUTINELY, SHOULD BE EXERCISED IF THE SEARCH REVEALED ANY INCR IMINATING MATERIAL. IF THAT WAS NOT FOUND THEN IN RELATION TO THE SECON D PHASE OF THREE YEARS, THERE WAS NO WARRANT FOR MAKING AN ORDER WIT HIN THE MEANING OF THIS PROVISION. 10. SIMILAR VIEW WAS ALSO TAKEN BY THE HON'BLE HIGH CO URT OF DELHI IN THE CASE OF KABUL CHAWLA (2015) 61 TAXMANN 412. SAINATH COLONISERS ITA(SS) NO.189 TO 291/IND/2017 7 11. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANC ES OF THE CASE AND RESPECTFULLY FOLLOWING THE JUDGMENTS REFERRED A ND RELIED BY THE LD. COUNSEL FOR THE ASSESSEE ARE OF THE CONSIDERED VIEW THAT NO ADDITION/DISALLOWANCE WAS CALLED FOR ASSESSMENT YE AR 2008-09 TO 2010-11 AS NO INCRIMINATING MATERIAL WAS FOUND DURI NG THE COURSE OF SEARCH AT THE PREMISES OF THE ASSESSEE AS THE TI ME LIMIT OF ISSUANCE OF NOTICE U/S 143(2) OF THE ACT STOOD EXPI RED MUCH BEFORE THE DATE OF CONDUCTING SEARCH U/S 132 OF THE ACT. ACCORDINGLY ALL THE THREE APPEALS OF THE ASSESSEE ARE ALLOWED. 12. IN THE RESULT, APPEAL OF THE ASSESSEE FOR A.Y. 2008-09 TO 2010- 11 ARE ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 28.02.2 019. SD/- SD/- (V. DURGA RAO) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 28 TH FEBRUARY, 2019 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CI T(A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE