Sri kUNAL kUMAR CHOUDHARY, Ranchi V. DCIT CENT. CIRCLE-1, Ranchi

ITSSA 57/RAN/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9635 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 19-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDAN DAS J
• Section: 143(3); 153A; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER IT (SS) A NO. 57 - 58 / RAN / 201 6 ASSESSMENT YEARS :2003-04 & 2004-05 SRI KUNAL KUMAR CHOUDHARY, NORTH MARKET ROAD, UPPER BAZAR, RANCHI-834001 [ PAN NO. ABIPC 2615 A ] V/S . DCIT, CENTRAL CIRCLE- 1, RANCHI /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI DEVESH PODDAR, ADVOCATE /BY RESPONDENT SHRI CHANDAN DAS, JCIT-DR /DATE OF HEARING 10-01-2019 /DATE OF PRONOUNCEMENT 11-01-2019 / O R D E R PER BENCH:- THESE TWO ASSESSEES APPEALS FOR ASSESSMENT YEARS 2003-04 & 2004- 05 ARISE AGAINST THE COMMISSIONER OF INCOME TAX (A PPEALS)-3 PATNAS SEPARATE ORDERS ALL DATED 26.08.2016 PASSED IN CASE NOS.339-340/CIT(A)- 3/PAT/2010-11 INVOLVING PROCEEDINGS U/S 153C R.W.S 144 R.W.S 251, R.W.S 254 R.W.S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILES PERUSED 2. IT TRANSPIRES DURING THE COURSE OF HEARING THAT ASSESSEES SOLE SUBSTANTIVE GRIEVANCE CHALLENGES BOTH THE LOWER AUT HORITIES ACTION MAKING ESTIMATED PAYMENT ADDITION OF RS.89,000/- AND RS.1. 25 LAC ALLEGED TO HAVE IT(SS)A NO57-583/RAN/2016 A.YS.0 3-04 & 04-05 SRI KUNAL KR. CHOUDHARY VS. DCIT CC-1, RANCHI PAGE 2 BEEN MADE IN PANCHWATI PLAZA FLAT PURCHASED. THE RE LEVANT ASSESSMENT PROCEEDINGS ARE ADMITTEDLY U/S 153C OF THE ACT. THE DEPARTMENT HAD CARRIED OUT THE SEARCH IN QUESTION ON 16.09.2004 IN M/S CHO UDHARY GROUP OF CASES WHEREIN THE TAXPAYERS IS A MEMBER. HIS ONLY ARGUMEN T DURING THE COURSE OF HEARING IS THAT THE SEARCH HEREINABOVE DID NOT LEAD ANY INCRIMINATING MATERIAL FOUND OR SEIZED BY THE AUTHORIZED OFFICER. THIS CRU CIAL FACT HAS GONE UNREBUTTED FROM THE REVENUE SIDE. WE QUOTE AS (2016 ) 380 ITR 573 (DEL) CIT VS. KABUL CHAWLA AS WELL AS CIT VS. CONTINENTAL WAREHOUSING CORPORATION LTD. (2015) 374 ITR 645 (BOM) HAVE MADE IT CLEAR THAT S UCH AN ADDITION IN CASE OF A SEARCH ASSESSMENT IN ABSENCE OF ANY CORRE SPONDING INCRIMINATING MATERIAL CANNOT BE SUSTAINED. FORMER CASE LAW SUMMA RIES LEGAL POSITION AS FOLLOWS:- ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, REA D WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONE D DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: (I) ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR IN WHICH THE SEARCH TAKES PLACE. (II) ASSESSMENTS AND REASSESSMENTS PENDING ON THE D ATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH ASSESSMENT Y EARS WILL HAVE TO BE COMPUTED BY THE ASSESSING OFFICERS AS A FRESH EX ERCISE. (III) THE ASSESSING OFFICER WILL EXERCISE NORMAL AS SESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT A SSESSMENT YEAR IN WHICH THE SEARCH TAKES PLACE. THE ASSESSING OFFICER HAS THE POWER TO ASSESS AND REASONS THE TOTAL INCOME OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS, THERE WILL BE ONLY ONE ASSESSMENT ORDE R IN RESPECT OF EACH OF THE SIX ASSESSMENT YEARS IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. (IV) ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE O F THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOU SLY, AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF THE SEIZED MATERIAL . (V) IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, T HE COMPLETED ASSESSMENTS CAN BE REITERATED AND THE ABATED ASSESS MENT OR REASSESSMENT CAN BE MADE. THE WORD ASSESS IN SECTION 153A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD REASSESS TO THE COMPLETED ASSESSMENT PROCEEDINGS. IT(SS)A NO57-583/RAN/2016 A.YS.0 3-04 & 04-05 SRI KUNAL KR. CHOUDHARY VS. DCIT CC-1, RANCHI PAGE 3 (VI) IN SO FAR AS THE PENDING ASSESSMENTS ARE CONCE RNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH ASSESSMENT YEAR ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUG HT ON THE RECORD OF THE ASSESSING OFFICER. (VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING THE ASSESSMENT UNDER SECTION 1 53A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURI NG THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED I NCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT P RODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF OR IGINAL ASSESSMENT. CONCLUSION THE PRESENT APPEALS CONCERN THE ASSESSMENT YEARS 20 0-03, 2005-06 AND 2006-07. ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALRE ADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEA RCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. THE QUEST ION FRAMED BY THE COURT IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE APPEALS ARE, ACCORDINGLY, DISMISSED BUT IN THE CIRCUMSTANCES NO ORDERS AS TO COSTS. WE CONCLUDE IN THESE FACTS AND CIRCUMSTANCES THE IM PUGNED ADDITION(S) OF RS. 89,000/- & RS.1.25 LAC AS ESTIMATED PAYMENT ARE NOT SUSTAINABLE. THE ASSESSEE SUCCEEDS BOTH IN ITS SOLE SUBSTANTIVE GROU ND. 3. THESE TWO ASSESSEES APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 11/ 01/2019 SD/- SD/- ( ) ($% ) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) RANCHI, *DKP SR.P.S &- 11 / 01 /2019 RANCHI / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEESRI KUNAL KR CHOUDHARY, NORTH MARKET RD. UPPER BAZAR RANCHI- 834001 2. /REVENUE-DCIT, CENTRAL CIRCLE-1, RANCHI 3. 2 4 / CONCERNED CIT RANCHI 4. 4- / CIT (A) RANCHI 5. 7 %%2, 2, / DR, ITAT, RANCHI 6. = / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR.PS, I TAT, RANCHI