Neelachal Carbo Metalicks Pvt. Ltd., Bhubaneswar V. ACIT, Corporate Circle-2(2), Bhubaneswar

ITSSA 80/CTK/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3745 (ITAT-CUTTACK)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 08-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAAD KIDWAI
• Assessee Lawyers: S K HOTA
• Keywords: Search and seizure
• Section: 142(1); 153A

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 . 79 &80 /CTK/201 7 ( / ASSESSMENT YEAR : 20 07 - 20 08 & 2008 - 2009 ) NEELACHAL CARBO M ETALICKS (P) LTD. , PLOT NO.N - 4/158, IRC VILLAGE, NAYAPALLI, BHUBANESWAR - 751015, ODISHA VS. ACIT, CORPORATE CIRCLE - 1 (2), BHUBANESWAR ./ ./ PAN/GIR NO. : A ABCN 7333 D ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI S.K.HOTA , AR /REVENUE BY : SHRI SAAD KIDWAI, CITDR / DATE OF HEARING : 1 5 / 0 5 /201 8 / DATE OF PRONOUNCEMENT 17 / 05 /201 8 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : THE SE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 3 , BHUBANESWAR BOTH DATED 28.04.2017, PASSED IN IT. APPEAL NO.0135&0136/2015 - 16, U/S.153A(B)/250 OF THE ACT FOR THE ASSESSMENT YEARS 2007 - 08 & 2008 - 09. 2. AT THE TIME OF HEARING, SH RI S.K.HOTA, ADVOCATE APPEARED ON BEHALF OF THE ASSESSEE AND FILED AN ADJOURNMENT APPLICATION SEEKING ADJOURNMENT ON THE GROUND THAT HE HAS TO RECEIVE SOME DOCUMENTS FROM THE ASSESSEE TO ARGUE THE CASE, WHICH IN OUR OPINION, IS NOT A PLAUSIBLE ONE AND ACC ORDINGLY, WE REJECT THE ADJOURNMENT APPLICATION AND PROCEED TO DISPOSE OFF THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD . 3 . SINCE ISSUES IN BOTH THE APPEALS ARE COMMON, THEREFORE, THEY ARE HEARD TOGETHER AND DISPOSED OFF BY THIS CONSOLIDATED ORD ER. FOR THE SAKE IT (SS) A NO. 79 &80 /201 7 2 OF CONVENIENCE WE SHALL TAKE UP THE FACTS AND GROUNDS MENTIONED IN THE APPEAL FOR ASSESSMENT YEAR 2007 - 08 I.E. ITA NO.79/CTK/2017, WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - 1. THAT, THE LD. ASSESSING OFFICER IS WRONG IN MAKI NG OF AD HOC DISALLOWANCES OF RS.80,730 WHICH IS 10% OF THE EXPENSES DEBITED UNDER THE HEAD CONVEYANCE EXPENSES OF RS.1,31,321, STAFF WELFARE EXPENSES OF RS.2.28.677 & TRAVELLING & CONVEYANCES OF RS.4,47,302 TOTAL AMOUNTING TO RS.8,07,300 AND THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS WRONG IN CONFIRMING THE 5% OF THE EXPENDITURE IN VIEW OF THE FACT NO INCREMENTING MATERIALS FOUND DURING THE COURSE OF SEARCH AND POST SEARCH, THEREFORE THE ADDITIONS ARE LIABLE TO BE DELETED. 2. THAT, THE ASSESSME NT ORDER PASSED U/S.153A(A) OF THE ACT IS NOT SUSTAINABLE IN VIEW OF THE FACT THAT THE ORDER OF ASSESSMENT WERE APPROVED U/S.153D BY THE LD. ADDL. COMMISSIONER OF INCOME TAX BEFORE COMPLETION OF THE ASSESSMENT AND THEREFORE THE ASSESSMENT ORDER IS LIABLE TO BE QUASHED. 3. THAT, THE ASSESSMENT ORDER PASSED U/S.153A(A) OF THE ACT IS WITHOUT JURISDICTION IN VIEW OF THE FACT THAT THE HONBLE CBDT HAS PASSED THE ORDER BY CENTRALIZING THE SEARCH CASES AND THE LD. ASSESSING OFFICER DOES NOT HOLD THE JURISDICTION OVER THE CENTRAL CIRCLE AND THEREFORE THE ASSESSMENT ORDER IS VOID AB - INITIO. 4. THAT, THE ASSESSMENT ORDER PASSED U/S.153A(A) ARE BARRED BY LIMITATION AND LIABLE TO BE QUASHED. 4 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN MANUFACTUR ING AND TRADING OF COKE, TRADING OF COOKING COAL AND DUST AND THE ASSESSEE COMPANY HAS BEEN FUNCTIONING FOR MORE THAN 12 YEARS . THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED IN THE OFFICE AND FACTORY PREMISES OF THE ASSESSEE AND THE RESIDENTIAL PREMIS ES OF THE DIRECTORS ON 13.12.2012 AND SUBSEQUENTLY NOTICE U/S.153A OF THE ACT WAS ISSUED ON 04.04.2013. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED RETURN OF INCOME ON 07.05.2013 DISCLOSING TOTAL INCOME OF RS.10,91,880/ - IT (SS) A NO. 79 &80 /201 7 3 SUBSEQUENTLY NOTICE U/S.143(2) & 142(1) OF THE ACT WAS ISSUED TO THE ASSESSEE. IN COMPLIANCE, THE AR OF THE ASSESSEE APPEARED ALONG WITH DOCUMENTS AS REQUIRED FROM TIME TO TIME, WHEREAS THE AO ON PERUSAL OF THE FINANCIAL STATEMENTS FOUND THAT THE ASSESSEE HAS CLAIMED CONVEYANCE EXPENSES, STAFF WELFARE EXPENSES AND TRAVELLING EXPENSES AGGREGATING TO RS.8,07,300/ - AND SINCE THE VOUCHERS COULD NOT BE VERIFIABLE THE AO ESTIMATED THE EXPENSES AT 10% AND MADE ADDITION OF RS.80,730/ - AND PASSED ORDER U/S.153A(B) OF ACT, DATED 31.03.2015. 5 . ON A PPEAL, THE CIT(A) GRANTED PARTIAL RELIEF IN RESPECT OF DISALLOWANCE RESTRICTING TO 5% AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6 . THE CONTENTION OF LD. AR OF THE ASSESSEE IS THAT BECAUSE OF SEARCH AND SEIZURE OPERATION S MADE ON 13.12.2012 AND THE APPEALS FOR SUBSEQUENT ASSESSMENT YEARS ARE PENDING FOR DISPOSAL A T FIRST APPELLATE AUTHORITY AND THE CIT(A) HAS NOT GIVEN PROPER CONSIDERATION TO THE FACTS SUBMITTED IN HEARING PROCEEDING OF PRESENT APPEAL AND PRAYE D FOR ALLOWING THE APPEAL. CONTRA, LD. DR RELIED ON THE ORDER OF LOWER AUTHORITIES. 7 . WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SINCE THE MAIN DISPUTED ISSUE THAT THERE IS A SEARCH AND SEIZURE OPERATION AND NOTICE U/S. 153A WAS ISSUED TO THE ASSESSEE. IN COMPLIANCE TO THE SAME, THE ASSESSEE FILE RETURN OF INCOME AND THE AO COMPLETED THE ASSESSMENT PROCEEDINGS. LD.ARS CONTENTION IS THAT THE CIT(A) WHILE DEALING WITH THE DISPUTED ISSUE HAS NOT CONSIDERED CERTAIN FACTS WHI CH ARE VITAL FOR THE ASSESSEE AND ALSO SUBSEQUENT YEARS APPEALS IT (SS) A NO. 79 &80 /201 7 4 ARE PENDING DISPOSAL BEFORE THE FIRST APPELLATE AUTHORITY AND ALSO FACTS ARE INTERCONNECTED. W E CONSIDERING THE OVERALL ASPECTS AND CIRCUMSTANCES AND SUBMISSIONS, ARE OF THE OPINION THAT THE M ATTER NEEDS TO BE ADJUDICATED BY THE APPELLATE AUTHORITY. ACCORDINGLY , WE RESTORE THE MATTER BACK TO THE FILE OF CIT(A) WHO SHALL PASS THE ORDER AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE ASSESSEE IS DIRECTED TO COOPERAT E IN SUBMITTING THE INFORMATION FOR DISPOSAL OF THE APPEAL. THE GROUND OF APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8 . SIMILAR LY THE ASSESSEE HAS FILED AN APPEAL FOR THE ASSESSMENT YEAR 2008 - 09 IN ITA NO.80/CTK/2017 , WHICH HAS COMMON GROUNDS RELATING TO ASSESSMENT YEARS 2007 - 08. SINCE WE HAVE DECIDED THE APPEAL FOR ASSESSMENT YEAR 2007 - 08, CONSIDERING THE FACTS AND CIRCUMSTANCES, WE RESTORE THE MATTER TO THE FILE OF CIT(A) FOR RE - ADJUDICATION. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THI S PRESENT APPEAL FOR ASSESSMENT YEAR 2008 - 09 SHALL BE RESTORED TO THE FILE OF CIT(A) AS DISCUSSED IN THE ASSESSMENT YEAR 2007 - 08. THUS, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9 . IN THE RESULT, BOTH APPEAL S OF THE ASSESSEE I.E ITA NO.7 9&80/CTK/2017 ARE ALLOWED FOR STATISTICAL PURPOSES. O RDER PRONOU NCED IN THE OPEN COURT ON 17 / 05 / 201 8 . S D/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 17 / 05 /201 8 . . / PKM , SENIOR PRIVATE SECRETARY IT (SS) A NO. 79 &80 /201 7 5 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - NEELACHAL CARBO METALICKS (P) LTD., PLOT NO.N - 4/158, IRC VILLAGE, NAYAPALLI, BHUBANESWAR - 7510 15, ODISHA 2. / THE RESPONDENT - ACIT, CORP. CIRCLE - 1 (2), BHUBANESWAR 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. / /TRUE COPY//