DCIT, Central Circle - 2(1), Kolkata, Kolkata V. M/s. Amrit Cement & Industries Ltd., Kolkata

ITSSA 32/KOL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4380 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 15-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SRIHARI
• Assessee Lawyers: A K TULSIAN; SH IKHA AG
• Section: 143(3); 153A; 132

Judgement Text

1 IT(SS)A NO. 32/KOL/2017 AMRIT CEMENT & INDUSTRIES LTD., AY 2010-11 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) BEFORE . . , /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] I.T(SS).A. NO. 32/KOL/2017 ASSESSMENT YEAR: 2010-11 DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(1), KOLKATA. VS. M/S. AMRIT CEMENT & INDUSTRIES LTD. (PAN: AAGCA9080R) APPELLANT RESPONDENT DATE OF HEARING 26.09.2018 DATE OF PRONOUNCEMENT 31.10.2018 FOR THE APPELLANT SHRI P. K. SRIHARI, CIT, DR FOR THE RESPONDENT SHRI A. K. TULSIAN, FCA & MS. SH IKHA AGARWAL, ACA 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 22.03.2017 FOR AY 2010-11. 2. THE MAIN GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF LD. CIT(A) IN DELETING THE ADDITIONS BY TAKING NOTE THAT IN SEC. 153A PROC EEDINGS WHEN THE ADMITTED FACT WAS ON THE DATE OF SEARCH, THIS ASSESSMENT WAS NOT PENDING BEFORE THE AO, NO ADDITION CAN BE MADE WITHOUT THE AID OF INCRIMINATING MATERIAL. 3. FOR ADJUDICATING THE ACTION OF THE LD. CIT(A) AS AFORE-STATED, WE NOTE THAT SEARCH WAS CONDUCTED U/S. 132(1) OF THE ACT ON ASSESSEE ON 30. 08.2012. FOR THIS ASSESSMENT YEAR 2010- 11, THE ASSESSEE HAD FILED RETURN OF INCOME ON 30.0 9.2010 AND THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S. 143(2) EXPIRED ON 30.09.2011 AND UNDISP UTEDLY AO HAD NOT ISSUED ANY NOTICE U/S. 143(2) BEFORE THE EXPIRY OF THE SAID DATE, SO THE ASSESSMENT YEAR 2010-11 WAS NOT PENDING BEFORE THE AO ON THE DATE OF SEARCH CONDUCT ED ON 30.08.2012. SO, THE ASSESSMENT UNDER QUESTION WAS AN UNABATED ASSESSMENT BEING NOT PENDING BEFORE AO ON THE DATE OF 2 IT(SS)A NO. 32/KOL/2017 AMRIT CEMENT & INDUSTRIES LTD., AY 2010-11 SEARCH AND THE AO CAN MAKE ANY ADDITION ONLY WITH T HE AID OF INCRIMINATING MATERIAL UNEARTHED DURING SEARCH OR THE AO HAS TO REITERATE THE ASSESSMENT U/S. 143(1) OR 143(3) AND CANNOT DISTURB THE SAME AS HELD BY THE HONBLE DELH I 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. 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. 3 IT(SS)A NO. 32/KOL/2017 AMRIT CEMENT & INDUSTRIES LTD., AY 2010-11 5. WE NOTE THAT THE LD. CIT(A) HAS MADE A FINDING O F FACT THAT AO HAS NOT MADE THE IMPUGNED ADDITION BASED ON INCRIMINATING MATERIALS SEIZED DURING SEARCH OPERATION, WHICH FINDING OF FACT HAS NOT BEEN ASSAILED BEFORE US BY THE DEPARTMENT, THEREFORE, THE LD. CIT(A) HAS RIGHTLY FOLLOWED THE JUDICIAL PRECEDENTS (CITED SUPRA) AND DELETED THE ADDITION, WHICH ACTION OF LD. CIT(A) DOES NOT CALL FOR ANY INTERFER ENCE ON OUR PART. THEREFORE, THE APPEAL OF REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31/10/201 8 SD/- SD/- (M. BALAGANESH) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31ST OCTOBER, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 APPELLANT DCIT, CENTRAL CIRCLE-2(1), KOLKATA 2 RESPONDENT M/S. AMRIT CEMENT & INDUSTRIES LTD., T RINITY TOWER, 6 TH FLOOR, 226/1, A.J.C. BOSE ROAD, KOLKATA-700 020. 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, SR. PVT. SECRETARY