M/s. Orisons Minerals & Properties, Bhubaneswar V. DCIT, Central Circle-1, Bhubaneswar

ITSSA 31/CTK/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3746 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 10-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASIT KUMAR MOHAPATRA
• Assessee Lawyers: MANOJ KUMAR PATRA
• Keywords: Search and seizure
• Section: 139

Judgement Text

1 IT(SS)A NOS.31 TO 34 /CTK/2017 ASSESSMENT YEARS : 2007 - 08, 2008 - 09, 2009 - 10, 2010 - 11, IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER IT (SS) A NO S . 31 TO 34 & /CTK/201 7 ASSESSMENT YEAR S : 20 07 - 08 , 2008 - 09, 2009 - 10 & 2010 - 11 ORISON MINERALS & PROPERTIES, PLOT NO. - MIG - 19, STAGE - II , LAXMISAGAR,BHUBANESWAR. VS. DCIT, CENTRAL CIRCLE - 1, BHUBANESWAR. PAN/GIR NO. AABFO 6559 P (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI MANOJ KUMAR PATRA, AR REVENUE BY : SHRI ASIT KUMAR MOHAPATRA, CIT DR DATE OF HEARING : 0 8 / 0 5 / 201 8 DATE OF PRONOUNCEMENT 17 / 0 5 / 201 8 O R D E R PER N.S.SAINI, AM TH ESE ARE APPEAL S FILED BY THE ASSESSEE AGAINST SEPARATE ORDER S OF THE CIT(A) - 3, BHUBANESWAR ALL DATED 7 TH JUNE, 2016 FOR THE ASSESSMENT YEAR S 2007 - 08 TO 2010 - 2011, RESPECTIVELY. 2. THE SOLE ISSUE INVOLVED IN ALL THESE APPEALS IS THAT THE ADDITION MADE ON ESTIMATE BASIS AS BOGUS EXPENDITURE AMOUNTING TO RS.8 ,53,176 / - FOR THE ASSESSMENT YEAR 2007 - 08, RS.31,25,558/ - FOR THE AS SESSMENT YEAR 2008 - 09, RS.80,42,406/ - FOR THE ASSESSMENT YEAR 2009 - 2010 AND RS.25,01,682/ - FOR THE ASSESSMENT YEAR 2010 - 2011 IS BAD IN LAW AS THE EXPENDITURE WAS ENTIRELY INCURRED TOWARDS TRANSPORTATION CHARGES OF THE 2 IT(SS)A NOS.31 TO 34 /CTK/2017 ASSESSMENT YEARS : 2007 - 08, 2008 - 09, 2009 - 10, 2010 - 11, BUSINESS OF THE ASSESSEE FIRM AND THE RELEVANT BILLS AND DOCUMENTS WERE AVAILABLE WITH THE ASSESSEE FIRM. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DEBITED RS.85,31,760/ - FOR THE ASSESSMENT YEAR 2007 - 08, RS.3 ,12,55,579/ - FOR THE ASSESSMENT Y EAR 2008 - 09, RS. 8,04,24,058 / - FOR THE ASSESSMENT YEAR 2009 - 2010 AND RS.2 ,50,16,821 / - FOR THE ASSESSMENT YEAR 2010 - 2011 TOWARDS TRANSPORTATION CHARGES. A SEARCH AND SEIZURE OPERATION U/S.132 OF THE I.T.ACT WAS CONDUC T ED IN THE OFFICE PREMISES AND RESIDENTIAL PREMISES OF THE ORISON GROUP OF COMPANIES ON 11.4.2012. DURING THE COURSE OF SEARCH OPERATION, INCRIMINATING DOCUMENTS, BOOKS OF ACCOUNT, WERE FOUND AND SEIZED BELONGS TO THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSEE WAS ASKED TO PRODUCE THE SUPPORTING DOCUMENTS FOR SUCH EXPENSES. HOWEVER, THE ASSESSEE HAS PRODUCED ONLY LEDGER COPY BUT NO BILLS AND VOUCHERS WERE PRODUCED. IN THE CIRCUMSTANCES, THE AUTHENTICITY OF SUCH EXPENSES IS NOT ASCERTAINED . ALSO, THE SAME WAS PRODUCED QUITE LATE I.E. ON 19.3.2015. SINCE, IT WAS A TIME BARRING CASE, IT WAS NOT POSSIBLE TO GIVE FURTHER OPPORTUNITY AT THIS STAGE. THEREFORE, THE ASSESSING OFFICER WAS COMPELLED TO DISALLOW 10% OF SUCH EXPENSES I.E. RS.8,53,176/ - FOR THE ASSESSMEN T YEAR 2007 - 08, RS.3,12,555/ - FOR THE ASSESSMENT YEAR 2008 - 09, RS.80,42,406/ - FOR THE ASSESSMENT YEAR 2009 - 2010 AND RS.25,01,682/ - FOR THE ASSESSMENT YEAR 2010 - 2011. 3 IT(SS)A NOS.31 TO 34 /CTK/2017 ASSESSMENT YEARS : 2007 - 08, 2008 - 09, 2009 - 10, 2010 - 11, 4. ON APPEAL, THE CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER BY OBSERVING THAT THE TRIP WISE TRANSPORTATION DETAILS OF EACH TRANSPORTER WITH CONSIGNMENT NOTES AND LORRY CHALLAN FOR EACH LORRY USED FOR TRANSPORTATION, TRANSIT PASS ISSUED BY DEPUTY DIRECTOR OF MINES, VOUCHES OF OTHER EXPENSES, LORRY HIRE CONTRACT, WERE NEITHER KEPT NOR FOU ND IN COURSE OF SEARCH OR THESE WERE NOT PRODUCED FOR VERIFICATION IN ANY PROCEEDINGS UNDER THE ACT. THE QUANTITATIVE DETAILS AVAILABLE FROM TRANSPORTATION BILLS DIFFER FROM QUANTITATIVE DETAILS OF PURCHASES GIVEN IN THE AUDIT REPORT. DEDUCTION OF TAX AT SOURCE ON PAYMENT OF TRANSPORTATION CHARGES THOUGH CLAIMED TDS STATEMENTS WERE NOT FURNISHED. PERCENTAGE OF PROFIT IS AT LOWER SIDE OF THE TURNOVER I.E. 1.85% FOR THE ASSESSMENT YEAR 2007 - 08, 1.55% FOR THE ASSESSMENT YEAR 2009 - 10 AND 2.60% FOR THE ASSESSM ENT YEAR 2010 - 2011 WHEREAS, IT HAS SHOWN NET PROFIT AT 4.65% OF THE TURNOVER IN A.Y.2008 - 09. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HELD THAT THE CORRECTNESS OF THE TRANSPORTATION CHARGES DEBITED TO THE P &. L A/C. COULD NOT BE FULLY VERIFIED FROM THE DOCUMENTS ADDUCED BY THE LD. A.R. AND HENCE, CONFIRMED THE DISALLOWANCE OF 10% OF THE TRANSPO RTATION CHARGES. 5. BEFORE US, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE ORIGINAL RETURNS OF INCOME FOR ASSESSMENT YEARS 2007 - 08 TO 2010 - 2011 WERE FILED BY THE ASSESSEE WITHIN THE TIME PRESCRIBED UNDER SECTION 139(1) OF THE I.T.ACT, 1961. 4 IT(SS)A NOS.31 TO 34 /CTK/2017 ASSESSMENT YEARS : 2007 - 08, 2008 - 09, 2009 - 10, 2010 - 11, 6 . THESE RETURNS WERE PROCESSED AND ACCEPTED BY THE DEPARTMENT AND NO NOTICE U/S.143(2) OF THE ACT WAS ISSUED ON OR BEFORE THE DUE DATE FOR ISSUANCE OF NOTICE IN RESPECT OF ASSESSMENT YEARS UNDER APPEAL . THUS, THE RETURNS OF INCOME ATTAINED FINALITY AND WERE ABATED ON THE DATE OF SEARCH CONDUCTED ON THE ASSESSEE ON 11.4.2012 . HE SUBMITTED THAT THE ASSESSMENT FOR THE ASSESSMENT YEARS UNDER APPEAL U/S.143(3)/153 C OF THE ACT HAS BEEN MADE ON 30.3.2015. HE SUBMITTED THAT THE ASSESSMENT HAS BEEN MADE ON THE BASIS OF BOOKS OF ACCOUNT OF THE ASSESSEE WITHOUT REFERENCE TO ANY SEARCH MATERIAL FOUND DURING THE COURSE OF SEARCH, THEREFORE, THE ADDITIO N MADE CANNOT BE SUSTAINED IN LAW IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF THE DECISION DATED 28.8.2015 IN THE CASE OF CIT(CENTRAL) - III VS. KABUL CHAWLA IN ITA NO. 707/DEL/2014 WHEREIN THE HON BLE DELHI HIGH COURT HAS REITERATED T HE SETTLED LEGAL PROPOSITION THAT SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 7 . ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 8 . WE HAVE HEARD T HE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE APPEALS UNDER CONSIDERATION ARE IN PURSUANCE TO ASSESSMENTS MADE U/S.153 C OF THE ACT IN PURSUANCE TO A SEARCH CONDUCTED U/S.132 OF THE ACT ON 11.4.2012 . F OR THE ASSESSMENT YEARS UNDER APPEAL, THE ORIGINAL RETURNS OF INCOME FILED BY THE ASSESSEE IN RESPECTIVE ASSESSMENT YEARS ARE TABULATED AS UNDER: 5 IT(SS)A NOS.31 TO 34 /CTK/2017 ASSESSMENT YEARS : 2007 - 08, 2008 - 09, 2009 - 10, 2010 - 11, ASST. YEAR DATE OF FILING OF RETURNED INCOME DUE DT. OF NOTICE RETURN U/S 139 U/S.143(2) 2007 - 2008 1.11.2007 RS.4,75,840/ - 30.9.2008 2008 - 2009 5.11.2008 RS. 20,98,558/ - 30.9.2009 2009 - 2010 30.9.2009 NIL 30.9.2010 2010 - 2011 15.10.2010 RS.27,42,080/ - 30.9.2011 9. THUS, IT IS OBSERVED THAT THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEARS UNDER APPEAL WAS ABATED IN PURSUANCE TO THE SEARCH. IT IS SETTLED POSITION OF LAW THAT IN CASE OF UN - ABATED ASSESSMENT, ADDITION CAN BE MADE IN AN ASSESSMENT MADE U/S.153 C OF THE ACT ONLY ON THE BASIS OF INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARC H. THE ABOVE PROPOSITION OF LAW IS WELL SETTLED IN THE FOLLOWING DECISIONS: 1) PR. .CIT VS. MEETA GUTGUTIA PROP. M/S.FEMS 'N' PETALS [2017) 395 ITR 526 (DEL). 2) ALL CARGO GLOBAL LOGISTICS LTD. (2015) 374 1TR 645 (BOM) 3) PR. CIT - 2, KOLKATA VS M/S. SALASAR STOCK BROKING LTD., G.A.NO.1929 OF 2016(KOL) 4) PR. CIT VS. SOMAYA CONSTRUCTION PVT LTD., 387 ITR 529 (GUJ) 5) CIT VS. IBC KNOWLEDGE PARK PVT LTD., 385 ITR 346 (KAR) 6) CIT VS. GURINDER SINGH BAWA, 386 ITR 143 (BOM) 7) PR. CIT VS. DHARMAPAL PREMCHAND LTD. , IN ITA NO. 512, 513 & 514/2016 ORDER DATED 21.08.2017 (DELHI) 1 0 . COMING TO THE FACTS OF THE CASE UNDER APPEAL, IT IS OBSERVED THAT THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE THE SUPPORTING DOCUMENTS FOR THE EXPENSES INCURRED FOR TRANSPORTATION CHARGES. THE ASSESSEE PRODUCED LEDGER COPY. THEREFORE, THE ASSESSING OFFICER DISALLOWED 10% OF THE TOTAL EXPENSES, WHICH WAS CONFIRMED BY THE 6 IT(SS)A NOS.31 TO 34 /CTK/2017 ASSESSMENT YEARS : 2007 - 08, 2008 - 09, 2009 - 10, 2010 - 11, CIT(A). LD D.R. COULD NOT POINT OUT ANY MATERIAL WHICH WAS UNEARTHED BECAUSE OF THE SEARCH. THUS, IT IS OBSERVED THAT THE ADDITION MADE ON ESTIMATE BASIS WAS NOT BASED ON ANY SEARCH MATERIAL. RESPECTFULLY FOLLOWING THE ABOVE CITED DECISIONS, WE DELETE THE ADDITION OF RS.8,53,176/ - FOR THE ASSESSMENT YEAR 2007 - 08, RS.31,25,558/ - FOR THE ASSESSMENT YEAR 2008 - 09, RS.80,42,406/ - FOR THE ASSESSMENT YEAR 2009 - 2010 AND RS.25,01,682/ - FOR THE ASSESSMENT YEAR 2010 - 2011. THUS, THE GROUNDS OF APPEAL IN ALL THESE APPEALS OF THE ASSESSEE ARE ALLOWE D. 1 1 . IN THE RESULT, APPEALS ARE ALLOWED. ORDER PRONOUNCED ON 17 / 0 5 /201 8 . SD/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER CUTTACK; DATED 17 / 0 5 /201 8 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : ORISON MINERALS & PROPERTIES, PLOT NO. - MIG - 19, STAGE - II, LAXMISAGAR,BHUBANESWAR 2. THE RESPONDENT: DCIT, CENTRAL CIRCLE - 1, BHUBANESWAR. 3. THE CIT(A) - 3, BHUBANESWAR 4. PR.CIT - 3, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//