Sri Tirupati Choudhury, Bhubaneswar V. ACIT, Corporate Circle-1(2), Bhubaneswar

ITSSA 52/CTK/2016

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3451 (ITAT-CUTTACK)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 26-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUNAL SINGH
• Assessee Lawyers: B D OJHA
• Keywords: Unexplained investment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ./ IT ( SS) A NO. 52 / CTK /20 1 6 ( / ASSESSMENT YEAR : 2003 - 2004 ) SRI TIRUPATI CHOUDH URY , PLOT NO. A /103, SAHEED NAGAR, BHUBANESWAR - 751007 VS. ACIT, CIRCLE - 1 (2), BHUBANESWAR ./ PAN NO. : A CPPC 7818 M ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI B.D.OJHA , AR /REVENUE BY : SHRI KUNAL SINGH , CITDR / DATE OF HEARING : 12 / 10 /201 7 / DATE OF PRONOUNCEMENT 12/10 /201 7 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 3 , BHUBANESWAR DATED 29.07.2016 FOR THE ASSESSMENT YEAR 2003 - 2004, ON THE FOLLOWING GROUNDS : - 1. BECAUSE THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS - 3) ERRED IN LAW AS WELL AS IN FACT BY CONFIRMING THE ADDITION OF RS.188000/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT IN HOUSE PROPERTY IGNORING THE SUBMISSIONS MADE WITH REGARD TO COST OF CONSTRUCTION OF THE HOUSE PROPERTY SITUATED IN A LOCALITY HAVING POPULATION OF LESS THAN 5.00 LAKHS. 2. BECAUSE THAT THE LD. COMMISSIONER OF INCOME T AX(APPEALS - 3) ERRED IN LAW AS WELL AS IN FACT BY CONFIRMING THE ADDITION OF RS.10,00,000/ - ON ACCOUNT OF INVESTMENT IN IMMOVABLE PROPERTY PURCHASED IN THE NAME OF HIS WIFE WHICH IS BASED ON SURMISES AND CONTRARY TO THE WEIGHT OF EVIDENCE ON RECORD. HOWEV ER, DURING THE COURSE OF HEARING, LD. AR OF THE ASSESSEE FILED FOLLOWING ADDITIONAL GROUNDS : - BECAUSE THAT THE LEARNED ASSESSING OFFICER ERRED IN LAW AS WELL AS IN FACT BY MAKING ADDITIONS TO THE TOTAL INCOME TO THE ASSESSEE WHICH ARE NOT BASED ON ANY S EIZED MATERIAL AS THE ASSESSMENT FOR THE IMPUGNED YEAR WAS COMPLETED U/S.143(1) OF THE ACT AND THE SRI TIRUPATI CHOUDHURY 2 TIME LIMIT FOR ISSUING THE NOTICE U/S.143(2) OF THE ACT HAS EXPIRED ON THE DATE OF SEARCH. 2 . FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINES S OF TRADING IN MEDICINES . THERE WAS A SEARCH A ND SEIZURE OPERATION S CONDUCTED IN THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 30.09.2005 AND ASSESSMENT U/S.153A(B) OF THE ACT WAS COMPLETED ON 31.12.2007 ON A TOTAL INCOME OF RS. 83,23,960 / - . IN APPEAL, THE C IT(A) CONFIRMED THE ORDER OF AO AND THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 10.10.2013 SET ASIDE THE ASSESSMENT TO THE FILE OF AO WITH A DIRECTION TO FRAME DE - NOVO ASSESSMENT AS PER LAW. SUBSEQUENTLY, THE AO MADE THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN HOUSE PROPERTY AND ASSESSED THE TOTAL INCOME OF ASSESSEE AT RS. 1 4 ,71,316 / - AND PASSED THE ORDER U/S.153A (B) /254 OF THE ACT DATED 30.03.2015. 3 . AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN A PPEAL BEFORE THE CIT(A), HOWEVER, THE CIT(A) PARTLY ALLOWED THE APPEAL OF ASSESSEE. 4 . AGAINST THE ORDER OF CIT(A), THE ASSESSEE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. 5 . BEFORE US THE LD. AR SUBMITTED , THIS ADDITIONAL GROUND PLAYS A VITAL ROLE AND HAV E A BEARING ON THE ASSESSMENT WHERE THE ASSESSMENT HAS BEEN MADE BY THE AO WITH ADDITIONS NOT BASED ON THE SEIZED MATERIAL AND ALSO THE TIME LIMIT FOR ISSUE OF NOTICE U/S.143(2) OF THE ACT WAS EXPIRED ON THE DATE OF SEARCH. THE LD. AR FURTHER SUBSTANTIATED HIS ARGUMENTS AND SUBMITTED COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME FILED FOR THE SRI TIRUPATI CHOUDHURY 3 ASSESSMENT YEAR 2003 - 2004 AND PRAYED FOR ADMITTING THE ADDITIONAL GROUND AND ALLOW THE APPEAL. CONTRA, LD. DR OPPOSED TO THE GROUND AND THE MATERIAL FILED AND RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD., (1998) 229 ITR 383 (SC) ON THE FACTS EMERGED OUT OF THE ASSESSMENT PROCEEDINGS. 6 . WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WITHOUT GOING INTO THE MERITS OF THE CASE, AT THIS STAGE, WE CONSIDER IT APPROPRIATE FIRST TO DECIDE THE LEGAL GROUND OF ISSUE OF NOTICE U/S.143(2) OF THE ACT RAISED BEFORE US AS ADDITIONAL GROUND BY THE ASSESSEE. PRIMA FACIE, THE LD. AR SUPPORTED HIS ARGUMENTS BY PROVIDING THE COPIES OF THE INCOME TAX RETURN FILED AND EXPLAINED THAT THE TIME LIMIT FOR ISSUE OF NOTICE U/S.143(2) OF THE ACT HAS EXPIRED ON THE DATE OF SEARCH WHEREAS LD. DR HAS OPPOSED TO THIS ADDITIONAL GROUND. ACCORDINGLY, WE CONSIDERING THE DECISION OF HONB LE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD (SUPRA) ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE TRIBUNAL AND REMIT THIS ADDITIONAL GROUND TO THE FILE OF CIT(A) TO ADJUDICATE AND PASS A SPEAKING ORDER ON MERITS. IT IS ALSO RELEVANT TO MENTION HERE THAT IF THE CIT(A) FOUND THE NOTICE U/S.143(2) OF THE ACT HITS THE QUESTION OF LIMITATION, THEN THE ADDITIONS MADE BY THE AO WILL HAVE NO LEGS TO STAND, HOWEVER, THE ADDITIONS CAN BE MADE ON THE BASIS OF SEIZE D MATERIAL. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ARGUMENTS RAISED BY THE LD. AR, WE ARE OF THE VIEW THAT THE ADJUDICATION OF GROUNDS OF APPEAL RAISED BY THE ASSESSEE AGAINST THE ADDITIONS BY THE AO AND SRI TIRUPATI CHOUDHURY 4 CONFIRMED BY THE CIT(A) ARE NOT NECESSARY AT THIS STAGE AND THE ISSUE IS REMITTED TO THE FILE OF CIT(A) AND THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPO S ES . 7 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE O PEN COURT ON THIS 12/10 /201 7 . SD/ - (N. S. SAINI) SD/ - ( PAVAN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 12/10 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, C UTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTAC K 6. / GUARD FILE. //TRUE COPY//