Manoj Kumar Sahoo, Khurda V. ACIT, Central Circle-2, Bhubaneswar

ITSSA 87/CTK/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3728 (ITAT-CUTTACK)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 27-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAAD KIDWAI
• Assessee Lawyers: S K AGRAWALLA
• Keywords: Opportunity of being heard
• Section: 153A; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER IT (SS) A NO S . 87 / CTK/201 7 : ASSESSMENT YEAR : 20 08 - 2009 IT (SS) A NO S . 88/ CTK/201 7: ASSESSMENT YEAR : 20 09 - 2010 IT (SS) A NO S . 89/ CTK/201 7 : ASSESSMENT YEAR: 20 10 - 2011 IT (SS) A NO S . 90/ CTK/201 7: ASSESSMENT YEAR : 20 11 - 2012 IT (SS) A NO S . 91/ CTK/201 7: ASSESSMENT YEAR : 20 12 - 2013 IT (SS) A NO S . 92/ CTK/201 7: ASSESSMENT YEAR : 20 13 - 2014 MANOJ KUMAR SAHOO, PROP. MANOJ SEASON CENTRE, RAILWAY MARKET, JATNI, KHURDA VS. ACIT, CENTRAL CIRCLE - 2, BHUBANESWAR. PAN/GIR NO. AMYPS 7561 A (APPELLANT ) .. ( RESPONDENT ) IT (SS) A NO S . 94/ CTK/201 7: ASSESSMENT YEAR : 20 08 - 2009 IT (SS) A NO S . 95/ CTK/201 7: ASSESSMENT YEAR : 20 09 - 2010 IT (SS) A NO S . 96/ CTK/201 7 : ASSESSMENT YEAR : 20 11 - 2012 IT (SS) A NO S . 97/ CTK/201 7: ASSESSMENT YEAR : 20 12 - 2013 ACIT, CENTRAL CIRCLE - 2, BHUBANESWAR. VS. MANOJ KUMAR SAHOO, PROP. MANOJ SEASON CENTRE, RAILWAY MARKET, JATNI, KHURDA PAN/GIR NO. AMYPS 7561 A (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.K.AGRAWALLA, AR REVENUE BY : SHRI SAAD KIDWAI, CIT DR DATE OF HEARING : 2 5 / 0 4 / 201 8 DATE OF PRONOUNCEMENT : 2 6 / 0 4 / 201 8 O R D E R PER N.S.SAINI, AM THE CROSS APPEALS FOR THE ASSESSMENT YEARS 2008 - 09, 2009 - 2010, 2011 - 2 & 2012 - 13 FILED BY THE ASSESSEE AND THE REVENUE AND APPEALS FOR 2 THE ASSESSMENT YEARS 2010 - 11 & 2013 - 14 BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE CIT(A) - 3, BHUBANE SWAR ALL DATED 12 TH JUNE, 2017. T HE ISSUES INVOLVED IN ALL THESE APPEALS ARE COMMON , THEREFORE, THEY ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE IN HIS APPEALS HAS TAKEN TH E COMMON GROUNDS OF APPEAL EXCEPT FOR CHANGE IN FIGURES . WE, THEREFORE, REPRODUCE THE GROUNDS OF APPEAL TAKEN IN IT(SS) A NO.87/CTK/2017 FOR A.Y. 2008 - 09 AS UNDER: 1. THAT THE FORUM BELOW ARE ERRONEOUS AND WRONG IN MAKING ADDITIONS TO THE INCOME OF THE APPELLANT IN VIEW OF THE FACT THAT NO INCRIMINATING MATERIAL WERE FOUND EITHER AT THE TIME OF SEARCH OR ON THE POST SEARCH ENQUIRY, THEREFORE, THE TOTAL ADDITIONS ARE ILLEGAL AND LIABLE TO BE DELETED. 2. THAT THE CIT(A) ERRED IN FACT AND IN CIRCUMSTANCES IN RESTRICTING THE ADDITIONS OF RS. 5,25,740 / - IN VIEW OF THE FACT THAT NO INCRIMINATING MATERIAL WERE FOUND EITHER AT THE TIME OF SEARCH OR ON THE POST SEARCH ENQUIRY, THEREFORE, THE ADDITION IS ILLEGAL AND LIABLE TO BE DELETED. 3. THAT THE ASSESSMENT ORDER PASSED U/S.143(3)/153A OF THE ACT IS WITHOUT JURISDICTION FROM ONE AO TO ANOTHER AO NO OPPORTUNITY OF BEING HEARD GIVEN TO THE APPELLANT. THEREFORE, THE ASSESSMENT ORDER IS LIABLE TO BE QUASHED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A WHOLESALE DEALER OF SEASONAL STATIONARY ITEMS OF RAKHI, GREETINGS, FIREWORKS, HOLI COLOUR ETC . HE FILED HIS RETURN OF INCOME IN THE CAPACITY OF AN INDIVIDUAL. ON 7.11.2013 WHEN HE WAS TRAVELLING FROM BHUBANESWAR TO DELHI BY INDIGO FLIGHT AND AT DE L HI AIRPORT, HE WAS INTERCEPTED BY AIU TEAM NEW DELHI. DURING THE COURSE OF SEARCH PROCEEDINGS U/S.132, IT WAS FO U ND THAT 3 HE WAS CARRYING IN PERSON CASH WORTH RS.20 LAKHS OUT OF WHICH RS.19 LAKHS WAS SEIZED. ACCORDINGLY, THE A SSESSING OFFICER ISSUED NOTICE U/S 153A OF THE I.T. ACT, 1961 DATED 27.11.2013. IN PURSUANCE TO THIS NOTICE, A SSESSEE FILED RETURN OF INCOME ON 26.12.2013 SHOWING TOTAL INCOME OF RS. 1,90,220/ - FOR THE ASSESSMENT YEAR 2008 - 09, RS.2,52,830/ - FOR THE ASSESSMENT YEAR 2009 - 2010, RS.3,37,070/ - FOR THE ASSESSMENT YEAR 2010 - 2011, RS.6,39,420/ - FOR THE ASSESSMENT YEAR 2011 - 12, RS.7,66,040/ - FOR THE ASSESSMENT YEAR 2012 - 13 AND RS.8,46,670/ - FOR THE ASSESSMENT YEAR 2013 - 14. THEREAFTER, N OTICE U/S. 143(2) DATED 04.07.2014 WAS ISSUED . SUBSEQUENTLY, STATUTORY NOTICES U/S.142(1) OF THE I.T. ACT, 1961 WERE ISSUED TO THE A SSESSEE AND IN COMPLIANCE, THE A .R. OF THE A SSESSEE APPEARED FROM TIME TO TIME AND FILED VARIOUS DOCUMENTS . 4. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE WAS FOUND TO HAVE BEEN MAINTAINING TWO BANK ACCOUNTS, NAMELY CC ACCOUNT NO. 2210008700001612 AND CURRENT ACCOUNT NO. 2210002100009672 IN PUNJAB NATIONAL BANK, JATNI, MAIN ROAD - 752050. DEPOSITS DURING 01.04.2007 TO 31.03.2008 IN THE ABOVE BANK ACCOUNTS WER E RS. 74,28,900/ - AND RS. 30,13,000/ - RESPECTIVELY, TOTALING TO RS. 1,04,41,900/ - OUT OF WHICH RS.2,73,900/ - WAS DEPOSITED ON DIFFERENT DATES IN THESE TWO ACCOUNTS BY WAY OF TRANSFER/CHEQUE/DRAFT. THE BALANCE AMOUNT OF RS. 1,01,68,000/ - WAS CASH DEPOSITED BY THE A SSESSEE IN THE ABOVE TWO ACCOUNTS. THE A SSESSING OFFICER SHORTLISTED THE DATE AND AMOUNT OF CASH DEPOSITS IN THESE TWO ACCOUNTS TOTALING TO RS.1,01,68,000/ - . 4 5. FURTHER, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS DISCLOSED SALES IN AUDITED P&L ACCOUNT AT RS.49,34,653/ - AND AS AGAINST THIS, THE TOTAL DEPOSITS IN THE BANK ACCOUNTS BOTH BY CASH AND CHEQUE COMES TO RS.1,04,41,900/ - . THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE DISCREPANCY. THE ASSESSEE FURNISH ED THE PARTIAL RECO NCILIATION AND THE ASSESSING OFFICER EXAMINED THE SAME WITH REFERENCE TO BOOKS OF ACCOUNT PRODUCED AND TREATED RS.49,27,280/ - AS UNEXPLAINED. BASED ON THIS, THE A SSESSING OFFICER COMPLETED THE ASSESSMENT AT RS. 51,17,500/ - , INTER ALIA, MAKING ADDITION OF RS . 49,27,280/ - ON ACCOUNT OF UNDISCLOSED RECEIPTS FROM BUSINESS FOR THE ASSESSMENT YEAR 2008 - 09. 4. SIMILARLY, THE ASSESSING OFFICER MADE ADDITION IN RESPECT OF ASSESSMENT YEARS ON ACCOUNT OF UNDISCLOSED RECEIPTS FROM BUSINESS AS UNDER: YEAR ADDITION 2009 - 2010 36,52,784/ - 2010 - 2011 19,63,429/ - 2011 - 2012 53,73,166/ - 2012 - 2013 53,21,538/ - 2013 - 2014 31,66,463/ - 5. ON APPEAL, THE CIT(A) RESTRICTED THE DISALLOWANCE AS UNDER: YEAR ADDITION 2008 - 20 09 5,25,740/ - 2009 - 2010 4,41,256/ - 2010 - 2011 2,31,488/ - 2011 - 2012 6,10,928/ - 2012 - 2013 4,42,990/ - 2013 - 2014 2,86,881/ - 5 6. BEFORE US, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE RETURN S OF INCOME FOR ASSESSMENT YEAR S UNDER APPEAL WAS FILED BY THE ASSESSEE AS UNDER: ASST. YEAR DATE OF FILING OF RETURN DUE DT FOR ISSUANCE OF NOTICE U/S 139 U/S.143(2) 2008 - 09 24.9.2008 30.9.2009 2009 - 2010 2.9.2009 30.9.2010 2010 - 2011 22.8.2010 30.9.2011 2011 - 2012 13.9.2012 30.9.2012 2012 - 2013 9.8.2012 30.9.2013 2013 - 2014 12.9.2014 30.9.2014 7. THESE RETURNS WERE PROCESSED AND ACCEPTED BY THE DEPARTMENT AND NO NOTICE U/S.143(2) OF THE ACT WAS ISSUED ON OR BEFORE THE DUE DATE FOR ISSUANCE OF NOTICE IN RESPECT OF ASSESSMENT YEARS UNDER APPEAL . THUS, THE RETURNS OF INCOME ATTAINED FINALITY AND WERE ABATED ON THE DATE OF SEARCH CONDUCTED ON THE ASSESSEE ON 7.11.2013. HE SUBMITTED THAT THE ASSESSMENT FOR THE ASSESSMENT YEARS UNDER APPEAL U/S.143(3)/153A OF THE ACT HAS BEEN MADE AS BELOW: ASST. YEAR DATE OF ASSESSMENT ORD ER U/S.143(A)/153A 2008 - 2009 29.2.2016 2009 - 2010 29.2.2016 2010 - 2011 29.2.2016 2011 - 2012 29.2.2016 2012 - 2013 29.2.2016 2013 - 2014 4.3.2016 6 HE SUBMITTED THAT THE ASSESSMENT HAS BEEN MADE ON THE BASIS OF BOOKS OF ACCOUNT OF THE ASSESSEE WITHOUT REFERENCE TO ANY SEARCH MATERIAL FOUND DURING THE COURSE OF SEARCH, THEREFORE, THE ADDITION MADE CANNOT BE SUSTAINED IN LAW IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF THE DECISION DATED 28.8.2015 IN THE CASE OF CIT(CENTRAL) - III VS. KABUL CHAWLA IN ITA NO. 707/DEL/2014 WHEREIN THE HON BLE DELHI HIGH COURT HAS REITERATED THE SETTLED LEGAL PROPOSITION THAT SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASS ESSED. 8 . ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 9 . WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE APPEALS UNDER CONSIDERATION ARE IN PURSUANCE TO ASSESSM ENTS MADE U/S.153A OF THE ACT IN PURSUANCE TO A SEARCH CONDUCTED U/S.132 OF THE ACT ON 7.11.2013. FOR THE ASSESSMENT YEAR S UNDER APPEAL, THE ORIGINAL RETURNS OF INCOME FILED BY THE ASSESSEE IN RESPECTIVE ASSESSMENT YEARS ARE TABULATED AS UNDER: 7 ASST. YEAR DATE OF FILING OF RETURN DUE DT FOR ISSUANCE OF NOTICE U/S 139 U/S.143(2) 2008 - 09 24.9.2008 30.9.2009 2009 - 2010 2.9.2009 30.9.2010 2010 - 2011 22.8.2010 30.9.2011 2011 - 2012 13.9.2012 30.9.2012 2012 - 2013 9.8.2012 30.9.2013 2013 - 2014 12.9.2014 30.9.2014 1 0 . THUS, IT IS OBSERVED THAT THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR S UNDER APPEAL WAS ABATED IN PURSUANCE TO THE SEARCH. IT IS SETTLED POSITION OF LAW THAT IN CASE OF UN - ABATED ASSESSMENT, ADDITION CAN BE MADE IN AN ASSESSMENT MADE U/S.153A OF THE ACT ONLY ON THE BASIS OF INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH. THE ABOVE PROPOSITION OF LAW IS WELL SETTLED IN THE FOLLOWING DECISIONS: 1) PR. .CIT VS. MEETA GUTGUTIA PROP. M/S.FEMS 'N' PETALS [2017) 395 ITR 526 (DEL). 2) ALL CARGO GLOBAL LOGISTICS LTD. (2015) 374 1TR 645 (BOM) 3) PR. CIT - 2, KOLKATA VS M/S. SALASAR STOCK BROKING LTD., G.A.NO.1929 OF 2016(KOL) 4) PR. CIT VS. SOMAYA CONSTRUCTION PVT LTD., 387 ITR 529 (GUJ) 5) CIT VS. IBC KNOWLEDGE PARK PVT LTD., 385 ITR 346 (KAR) 6) CIT VS. GURINDER SINGH BAWA, 386 ITR 143 (BOM) 7) PR. CIT VS. DHARMAPAL PREMCHAND LTD. , IN ITA NO. 512, 513 & 514/2016 ORDER DATED 21.08.2017 (DELHI) 1 1 . COMING TO THE FACTS OF THE CASE UNDER APPEAL, IT IS OBSERVED THAT THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE DIFFERENCE BETWEEN TOTAL TURNOVER AND TOTAL DEPOSITS IN THE BANK ACCOUNT IN ALL THE ASSESSMENT YEARS UNDER APPEAL. THE ASSESSEE FURNISHED THE 8 RECONCILIATION AND THE ASSESSING OFFICER EXAMINED THE SAME WITH REFERENCE TO BOOKS OF ACCOUNT AND MADE ADDITION FOR DIFFERENCE AMOUNT AS UNEXPLAINED. LD D.R. COU LD NOT POINT OUT ANY MATERIAL WHICH WAS UNEARTHED BECAUSE OF THE SEARCH AND WHICH SHOWS THAT THE ASSESSEE HAD UNDISCLOSED INCOME IN RESPECT OF WHICH ADDITION WAS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). THUS, IT IS OBSERVED THAT THE ADDI TION S IN QUESTION WERE NOT BASED ON ANY SEARCH MATERIAL. RESPECTFULLY FOLLOWING THE ABOVE CITED DECISIONS, WE CANCEL THE ASSESSMENT ORDER S DATED 29.2. 2016 PASSED FOR THE ASSESSMENT YEAR S 2008 - 09 TO 2012 - 13 AND DATED 4.3.2016 FOR THE ASSESSMENT YEAR 2013 - 14. THUS, THE GROUNDS OF APPEAL IN ALL THESE APPEALS OF THE ASSESSEE ARE ALLOWED. 12. AS WE HAVE CANCELLED THE ASSESSMENT ORDERS ON JURISDICTIONAL ISSUE RAISED BY THE ASSESSEE, OTHER GROUNDS OF APPEAL TAKEN ON MERITS OF THE ADDITIONS HAVE BECOME INFRUCTUOUS AND, ACCORDINGLY, DISMISSED. 1 3 . SO FAR AS THE REVENUES APPEALS FOR THE ASSESSMENT YEARS 2008 - 09, 2009 - 2010,2011 - 12 & 2013 ARE CONCERNED, SINCE WE HAVE CANCELLED THE ASSESSMENTS PASSED U/S.143(3)/153A OF THE ACT WHILE DISPOSING THE APPEALS OF THE ASSESSEE, THE APPEALS OF THE REVENUE ARE ACCORDINGLY DISMISSED. 9 1 4 . IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED AND APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON 26 / 0 4 /201 8 . SD/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER CUTTACK; DATED 26 / 0 4 /201 8 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : MANOJ KUMAR SAHOO, PROP. MANOJ SEASON CENTRE, RAILWAY STATION, JATNI. 2. THE RESPONDENT. ACIT, CENTRAL CIRCLE - 2, BHUBANESWAR 3. THE CIT(A) - 3, BHUBANESWAR 4. PR.CIT - 3, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//