SMT. MANJU GUPTA, Bhopal V. THE ACIT 1(2), Bhopal

ITSSA 47/IND/2015

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3058 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 28-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Search and seizure
• Section: 143(3); 142(1); 153A; 131; 132; 139; 92

Judgement Text

SMT. MANJU GUPTA V. ACIT 1(2) /I.T.A. NO. 47/IND/20 15/A.Y. 08-09 PAGE 1 OF 9 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE . . , . . , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER SMT. MANJU GUPTA E-1/207 ARERA COLONY BHOPAL V. ACIT 1(2) BHOPAL / APPELLANT / RESPONDENT . . ./ PAN: AAYPG 5958 P / APPELLANT BY S/SHRI ANIL KUMAR KHABYA, SUMIT KUMAR KHABYA CA`S / RESPONDENT BY SHRI LAL CHAND CIT (DR) / DATE OF HEARING 21.03.2017 ' / DATE OF PRONOUNCEMENT 22.03.2017 / O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S)-I, BHOPAL[IN SHORT THE CIT(A)] DATED 06.02.2013 PER TAINING TO ASSESSMENT YEAR 2008-09, WHICH IN TURN HAS ARISEN F ROM THE ORDER DATED 26-03-2013 PASSED BY ACIT -1(2) BHOPAL (IN SHORT THE AO) UNDER SECTION 153A READ WITH SECTION 143 (3) OF INCOME . . ./ I.T.A. (S.S)NO. 47/IND/2015 ,- - / ASSESSMENT YEAR:2008-09 SMT. MANJU GUPTA V. ACIT 1(2) /I.T.A. NO. 47/IND/20 15/A.Y. 08-09 PAGE 2 OF 9 TAX ACT,1961 (IN SHORT THE ACT). THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LEARNED CIT(A) ERRED IN HOLDING THAT, IN T HE FACTS AND CIRCUMSTANCES OF THE CASE, THE PROCEEDINGS OF ASSESSMENT U/S. 153A WERE NOT WITHOUT JURISDICTION AS NO INCRIMINATING DOCUMENT WAS FOUND AS RESULT OF SEARC H. 2.THAT, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN MAINTAINING ADDITION OF RS. 18,00,000/- TOWARDS UNEXPLAINED INVESTMENT IN PURCH ASE OF LAND. 2. GROUND NO. 1 AND 2 STATES THAT AS ON DATE OF SEARCH , AS NO ASSESSMENT WAS PENDING, HENCE IT IS A CASE OF NO N-ABATED ASSESSMENT AND THEREFORE, IN ABSENCE OF ANY INCRIMI NATING MATERIAL THE ADDITION OF RS.18 LAKH MADE U/S.69 OF THE ACT ON ACCOUNT OF INVEST IN PURCHASE OF LAND MAY BE DEL ETED. 3. BRIEFLY, STATED THE FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL, AND IS DIRECTOR OF M/S. STAR DELTA PVT. LTD. AND M/S. BHOPAL WIRES PVT. LTD. ENGAGED IN THE BUSINESS OF MANUFACTURING OF TRANSFORMERS AND ALLIED PRODUCTS. THE ASSESSEE F URNISHED HER ORIGINAL RETURN OF INCOME ON 31.07.2008 U/S. 139 O F THE INCOME-TAX ACT, 1961FOR ASSESSMENT YEAR UNDER CONSI DERATION, DECLARING AN INCOME OF RS.7,30,655/-, WHICH WERE DE EMED TO HAVE BEEN ACCEPTED UNDER SECTION 143(1) OF THE ACT AS NO ACTION SMT. MANJU GUPTA V. ACIT 1(2) /I.T.A. NO. 47/IND/20 15/A.Y. 08-09 PAGE 3 OF 9 WAS TAKEN BY WAY OF ISSUE OF NOTICE UNDER SECTION 1 43(2) OR 142(1) OF THE ACT, WITHIN THE TIME LIMIT AVAILABLE. A SEARCH U/S 132 (1) WAS CONDUCTED ON 28-10-2010 IN THE CASE OF THE ASSESSEE. ACCORDINGLY, NOTICE UNDER SECTION 153A WAS ISSUED O N 16-01- 2012. IN COMPLIANCE, TO THE NOTICE UNDER SECTION 1 53A, THE ASSESSEE, FURNISHED HER RETURN OF INCOME ON 03-02-2 012 FOR A.Y. 2008-09, DECLARING THE SAME INCOME OF RS.7,30,655/ - AS WAS DECLARED BY HIM IN THE ORIGINAL RETURN FURNISHED U/ S. 139 ON 31- 07-2008. THE ASSESSMENT WAS MADE UNDER SECTION 153A READ WITH SECTION 143(3) OF THE ACT BY DETERMINING TOTAL INCOME AT RS.27,30,655/- BY MAKING ADDITION OF RS.20,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF LAND BY TH E ASSESSEE. THE ASSESSEE CARRIED MATTER BEFORE THE LD. CIT (A), WHO HAS UPHELD THE FINDING OF THE AO., BUT REDUCED THE ADDI TION TO RS. 18,00,000/- BY DELETING ADDITION OF RS.2,00,000/-. 4. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEF ORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ADDITION OF RS. 18 LAKH WAS MADE IN RESPECT UNE XPLAINED INVESTMENT IN PURCHASE OF LAND FROM SMT. MUMTAZ BEG UM, WHICH WAS MADE WITHOUT ANY REFERENCE TO SEIZED MATERIAL. THE LEARNED COUNSEL SUBMITTED THAT THE AO MENTIONED IN THE ASSE SSMENT SMT. MANJU GUPTA V. ACIT 1(2) /I.T.A. NO. 47/IND/20 15/A.Y. 08-09 PAGE 4 OF 9 ORDER THAT ADDITION OF RS. 20 LAKH WAS MADE ON THE BASIS OF STATEMENT UNDER SECTION 131 RECORDED POST SEARCH PR OCEEDING. NO INCRIMINATING DOCUMENT WAS FOUND AS A RESULT OF SEA RCH. IT IS A SETTLED PROPOSITION THAT ADDITION CAN BE MADE IN AN ASSESSMENT U/S. 153A ONLY ON THE BASIS OF INCRIMINATING DOCUME NT FOUND AS A RESULT OF SEARCH. WHEREAS NO MATERIAL FOUND AND S EIZED DURING THE COURSE OF SEARCH. THE LEARNED COUNSEL FOR THE A SSESSEE, SUBMITTED THAT AS PER SECTION 153A OF THE ACT, THE ASSESSMENT IN THE CASE OF ASSESSMENT YEARS THAT HAVE ATTAINED FIN ALITY CAN BE INTERFERED ONLY ON BASIS OF SOME INCRIMINATING MATE RIAL, DOCUMENTS UNEARTHED DURING SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WAS NOT PRODUCED OR NOT ALREADY DISCLO SED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. IN SUPP ORT OF THIS PROPOSITION, THE LEARNED COUNSEL HAS PLACED RELIANC E IN THE CASE OF ANANT STEEL PVT. LTD. [IT (SS) 28 TO 31/IND/201 0] OF INDORE TRIBUNAL,, PR. CIT V. MS. LATA JAIN 384 ITR 543 (DE LHI), PR. CIT V. SAUMYA CONSTRUCTION (P) LTD. 387 ITR 529(GUJ), CIT V. GURINDER SINGH BAWA 386 ITR 483(BOM). THE LD. A.R. FURTHER SUBMITTED THAT ADDITION MADE MERELY ON THE BASIS OF TESTIMONY OF SELLER RECORDED UNDER SECTION 131 OF THE ACT. NO ADDITION CAN BE MADE SMT. MANJU GUPTA V. ACIT 1(2) /I.T.A. NO. 47/IND/20 15/A.Y. 08-09 PAGE 5 OF 9 ONLY ON THE BASIS OF STATEMENT OF SELLER WITHOUT AN Y CORROBORATIVE EVIDENCE TO SUPPORT SUCH STATEMENT. SALE AND PURCHA SE OF PROPERTY IN QUESTION WAS EVIDENCED BY A DULY REGIST ERED WRITTEN DEED AND SAME COULD NOT BE DISBELIEVED ON THE BASIS OF ANY ORAL STATEMENT MADE BY THE ASSESSEE OR ANY OTHER PERSON. THE LEARNED COUNSEL REFERRED SECTION 91 AND 92 OF INDIAN EVIDEN CE ACT, 1872 TO CONTEND THAT THE AO CANNOT ACCEPT ORAL EVIDENCE WHICH IS CONTRARY TO A WRITTEN DOCUMENT. THE SELLER IS NOT A N INCOME-TAX ASSESSEE. SHE HAD NOT SUFFERED ANY TAX OR COST ON ACCOUNT OF HER ALLEGED ACCEPTANCE OF CASH RECEIPT. THE AO OUGHT TO HAVE UNDERTAKEN INDEPENDENT ENQUIRY BY REFERRING THE M ATTER TO DVO AS HELD BY HON`BLE MADRAS HIGH COURT IN THE CASE OF P.V KALYANSUNDRAM [2006] 282 ITR 259(MAD) WHICH HAS BEE N APPROVED BY HON`BLE SUPREME COURT REPORTED IN 294 I TR 49(SC). 5. THE LD. D.R. RELIED ON THE ORDERS OF LOWER AUTHORIT IES . THE LD. CIT (DR) ALSO RELIED IN THE CASE OF SMT. DAYAWA NTI V. CIT [2016] 75 TAXMANN.COM 308(DELHI) WHEREIN IT WAS LAI D DOWN THAT STATEMENT RECORDED DURING SEARCH OPERATION COULD BE RELIED UPON TO MAKE ADDITION AND WHERE INFERENCE DRAWN IN RESPE CT OF UNDECLARED INCOME OF ASSESSEE WERE PREMISES ON MAT ERIALS FOUND AS WELL AS STATEMENTS RECORDED BY THE ASSESSEE`S SO N IN COURSE OF SMT. MANJU GUPTA V. ACIT 1(2) /I.T.A. NO. 47/IND/20 15/A.Y. 08-09 PAGE 6 OF 9 SEARCH OPERATIONS AND NOT BEEN ABLE TO SHOW AS TO HOW ESTIMATION MADE BY THE ASSESSING OFFICER BY REJECTI NG BOOKS OF ACCOUNTS WAS JUSTIFIED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT FOR THE YEARS 2008-09, ASSESSM ENT ORDERS ARE BAD IN LAW SINCE NO INCRIMINATING DOCUMENTS WERE FO UND DURING THE COURSE OF SEARCH. THE ASSESSMENT YEAR 2008-09 I S NON-ABATED AS THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) /142(1) HAD ALREADY EXPIRED. THE ASSESSEE HAD ALREADY FILED THE RETURN FOR THIS ASSESSMENT YEAR IN TIME AND SUBMITTED ALL THE DETAI LS. THEREFORE, WITHOUT FINDING ANY INCRIMINATING MATERIAL DURING T HE COURSE OF SEARCH, NO ADDITIONS CAN BE MADE BASED ON ENTRIES I N THE BOOKS OF ACCOUNT, WHICH WERE ALREADY RECORDED AND INCORPO RATED IN THE BALANCE SHEET. IN THE PRESENT APPEALS, WE FIND THAT THE ASSESSING OFFICER HAS MADE ADDITIONS ON THE BASIS OF SELLERS STATEMENT WHICH WAS RECORDED POST SEARCH ENQUIRY AS COULD BE SEEN FROM THE FINDING AS GIVEN IN ASSESSMENT ORDER AT PARA 13 , WHEREIN THE AO HAS MENTIONED THAT ASSESSEES HAS PURCHASED LAND FROM SMT. MUMTAJ BEGUM ON 8-11-2007 AT VILLAGE CHHOLA, TEHSIL HUJUR KHASRA IN THE NAME OF SMT. MANJU GUPTA. ON ENQUIRY IT WAS SMT. MANJU GUPTA V. ACIT 1(2) /I.T.A. NO. 47/IND/20 15/A.Y. 08-09 PAGE 7 OF 9 FOUND THAT ASSESSEES HUSBAND HAS PAID RS. 18 LAKHS TO SMT. MANJU GUPTA. HOWEVER, NO SUCH EVIDENCE WAS FOUND DU RING THE COURSE OF SEARCH AND SEIZURE OPERATION. EVEN PURCHA SED DEED OF PROPERTY WAS ALSO NOT FOUND DURING SEARCH. IN OTHER WORDS, IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT ANY INCR IMINATING MATERIAL WAS FOUND BY HIM DURING THE COURSE OF SEAR CH PROCEEDINGS WHICH COULD HAVE BEEN MADE A VALID BASI S FOR MAKING ANY ADDITION. ON THE OTHER HAND, LD. DRS HAV E DEFENDED THE ACTION OF THE REVENUE AUTHORITIES AS ABOVE BUT COULD NOT CONTROVERT THE FACTUAL SUBMISSION MADE BY THE LEARN ED COUNSEL OF THE ASSESSEE. 7. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED IN THE CASE OF ANANT STEEL PVT. LTD. [IT (SS) 28 TO 31/IND/2010] DTD. 18-11- 2015 WHEREIN IT WAS HELD BY THIS BENCH THAT IN THE ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH, THE ASSESSING OFFICER CANNOT PASS ORDER U/S 153A R.W.S. SEC. 143(3) OF THE I.T. ACT. THE AO IS THEREFORE, NOT JUSTIFIE D IN MAKING THE ADDITION IN NON-ABATED ASSESSMENT ORDER WHILE PASSI NG ORDER U/S. 153A READ WITH SECTION 143(3) OF THE ACT. THE LD. A.R. HAS RELIED ON THE DECISION OF HON`BLE GUJARAT HIGH COUR T IN THE CASE OF PRINCIPAL CIT VS. SAUMYA CONSTRUCTION P LTD. (20 16) 387 ITR SMT. MANJU GUPTA V. ACIT 1(2) /I.T.A. NO. 47/IND/20 15/A.Y. 08-09 PAGE 8 OF 9 529(GUJ) WHEREIN THE HON`BLE HIGH COURT HAS FOLLOWE D THE DECISION OF HON`BLE RAJASTHAN HIGH COURT IN THE CAS E OF JAI STEEL (INDIA) VS. CIT [2013] 259 CTR 281(RAJ). THE HON`BL E GUJARAT HIGH COURT ALSO APPROVED THE DECISION OF CIT VS. KA BUL CHAWLA [2016] 380 ITR 573 (DEL.)/ [2015] 61 TAXMANN.COM 41 2 (DEL). THUS, FOLLOWING THE DECISIONS OF THIS BENCH OF TRIB UNAL AND VARIOUS HON`BLE HIGH COURTS AS CITED ABOVE, WE ALLO W THE PRESENT APPEAL FOR THE ASSESSMENT YEAR 2008-09, ON THE ISSU E OF SECTION 153A READ WITH SECTION 143(3) OF INCOME TAX ACT,196 1 WHEREIN IT HAS BEEN HELD THAT IN ABSENCE OF ANY INCRIMINATING DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH, THE A SSESSING OFFICER IS NOT JUSTIFIED IN MAKING ADDITIONS IN NON -ABATED ASSESSMENT WHILE PASSING ASSESSMENT ORDER U/S. 153A RWS143(3) OF THE ACT. THUS, WE HOLD THAT THE MAKING OF ADDITI ON IN NON- ABATED ASSESSMENT FOR THE ASSESSMENT YEAR 2008-09 I S VOID-AB- INITIO. CONSEQUENTLY, ADDITIONS MADE IN PRESENT ASS ESSMENT YEAR ARE DELETED. WE FIND THAT THE LD. D.R. HAS RELIED O N THE DECISION IN THE CASE OF SMT. DAYAWANTI V. CIT [2016] 75 TAXM ANN.COM 308 (DELHI), HOWEVER, SAID DECISION IS NOT APPLICABLE T O THE FACTS OF THE CASE. IN THE SAID CASE THERE WAS SOME DOCUMENTS WER E SEIZED WHICH WERE REFLECTING SOME UNACCOUNTED TRANSACTIONS . FURTHER SMT. MANJU GUPTA V. ACIT 1(2) /I.T.A. NO. 47/IND/20 15/A.Y. 08-09 PAGE 9 OF 9 THE SON OF THE ASSESSEE HAS ADMITTED UN ACCOUNTED C ASH SALES AND PURCHASE AND STATEMENT, WHICH WERE MADE VOLUNTA RY UNDER OATH AND THE ASSESSEE HAVE RETRACTED FROM SAID STAT EMENT ONLY THROUGH RETURN OF INCOME. WHEREAS IN THE PRESENT CA SE NO SUCH DOCUMENT WERE FOUND NOR ANY STATEMENT ADMITTING ANY UNDISCLOSED INCOME OR UNEXPLAINED INVESTMENT WAS MA DE HENCE, THIS CASE IS DISTINGUISHABLE ON FACTS. WE HAVE CONS IDERED THE ABOVE CASE LAWS AND FOLLOWING THE ABOVE ORDER OF TH IS BENCH, ALLOW THE APPEALS FILED BY THE ASSESSEE ON THE ISSU E OF SECTION 153A R.W.S. SECTION 143(3) OF THE I.T. ACT WHEREIN WE HAVE ALREADY HELD THAT IN ABSENCE OF ANY INCRIMINATING DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH, THE ASSESSING O FFICER IS NOT JUSTIFIED IN MAKING THE ADDITIONS IN NON-ABATED ASS ESSMENT ORDERS WHILE PASSING THE ORDERS U/S 153A R.W.S. 143 (3) OF THE ACT. THUS, WE QUASH THE NON-ABATED ASSESSMENT ORDERS FOR THE A.Y 2008-09. ACCORDINGLY, THE ASSESSEES APPEAL IS ALLO WED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS AL LOWED. 9. THE ORDER PRONOUNCED IN THE OPEN COURT ON 22-03-201 7. SD/- SD/- ( .. ) /(C.M. GARG) (..) /(O.P.MEENA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER DTD. 22 ND MARCH, 2017