M/S kausal Kumar singh HUF, Jamshedpur V. DCIT CENTRAL CIRCLE-3, Ranchi

ITSSA 62/RAN/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9629 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 5 month(s) 30 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: 2008-2009
• Appeal Filed On: 06-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL J
• Section: 153A; 234B; 132

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. 62 - 63 / RAN / 201 6 ASSESSMENT YEAR :2008-09 & 2006-07 M/S KAUSHAL KUMAR SINGH (HUF), 17, CH AREA (EAST), BISTUPUR, JAMSHEDPUR-831001 [ PAN NO.AAFHK 1434 H ] V/S . DCIT, CENTRAL CRICLE- 3, RANCHI /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI DEVESH PODDAR, ADVOCATE /BY REVENUE SHRI P.K. MONDAL, JCIT-DR /DATE OF HEARING 1 0-01-2019 /DATE OF PRONOUNCEMENT 11-01-2019 / O R D E R PER BENCH:- THESE TWO ASSESSEES APPEALS FOR ASSESSMENT YEAR(S ) 2008-09 & 2006- 07 ARISE AGAINST THE COMMISSIONER OF INCOME TAX (A PPEALS)-3 PATNAS COMMON ORDER DATED 29.08.2016 PASSED IN CASE NOS.59 & 60/CIT(A)- 3/PAT/11-12/ INVOLVING PROCEEDINGS U/S 153C 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.53,302/- AND RS.25 ,34,737/-ALLEGED TO HAVE BEEN MADE IN CAPITAL GAINS. THE RELEVANT ASSESSMENT PROCEEDINGS ARE ADMITTEDLY U/S 153C OF THE ACT. THE DEPARTMENT HAD CARRIED OUT THE SEARCH IN QUESTION ON 07.11.2008 IN AASTHA GROUP OF CASES WHE REIN THE TAXPAYERS IS A IT(SS)A NO.62-63/RAN/2016 A.YS.0 8-09 &06-07 M/S KAUSHAL KR. SINGH (HUF) VS. DCIT CC-3, RANCHI PAGE 2 MEMBER. HIS ONLY ARGUMENT DURING THE COURSE OF HEAR ING IS THAT THE SEARCH HEREINABOVE DID NOT LEAD ANY INCRIMINATING MATERIAL FOUND OR SEIZED BY THE AUTHORIZED OFFICER. THIS CRUCIAL FACT HAS GONE UNRE BUTTED 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 SUCH AN ADDITION IN CASE OF A SEARCH ASSESSMENT IN ABSENCE OF ANY CORRESPONDING INCRIMINATING MATERIAL CANNOT BE SUSTAINED. FORMER CASE LAW SUMMARIES 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. (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. IT(SS)A NO.62-63/RAN/2016 A.YS.0 8-09 &06-07 M/S KAUSHAL KR. SINGH (HUF) VS. DCIT CC-3, RANCHI PAGE 3 (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. 53,302/- & RS.25,34,737/- AS ESTIMATED PAYMENT ARE NOT SUSTAINABLE. THE ASSESSEE SUCCEEDS BOTH IN ITS SOLE SUBSTANTIVE GROU ND. SECTION 234B INTEREST IS DIRECTED TO BE CALCULATED AFRESH AS PER HON'BLE JURISDICTIONAL HIGH COURTS DECISION IN ITO VS. AJAY PRAKASH VERMA IN CR NO.66 OF 2013 DATED 01.09.2015. 3. THESE TWO ASSESSEES APPEALS ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT 11/01/2 019 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. /ASSESSEE-M/S KAUSHAL KR. SINGH (HUF), 17, CH AREA (EAST), BISTUPUR JAMSHEDPUR-831001 2. /REVENUE-DCIT, CENTRAL CIRCLE-3, RANCHI 3. 2 4 / CONCERNED CIT RANCHI 4. 4- / CIT (A) RANCHI 6. 9 / GUARD FILE. 5. = %%2, 2, / DR, ITAT, RANCHI BY ORDER/ , SR.PS, ITAT, RANCHI