DCIT, CC-V, Kolkata, Kolkata V. Anil Jain, Kolkata

ITSSA 94/KOL/2011

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 7858 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 27-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M BHATTACHARYA
• Assessee Lawyers: R KUMAR; A K TULSYAN
• Keywords: Search and seizure
• Section: 143(3); 142(1); 153A; 139

Judgement Text

, ' , , IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH: KOLKATA ( ) , , . . , , ) [BEFORE SRI MAHAVIR SINGH, J.M. & SRI C.D. RAO, A. M.] / I.T.(SS)A NO. 94/KOL/2011 !' !' !' !' #$ #$ #$ #$ / ASSESSMENT YEAR : 2005-2006 DEPUTY COMMISSIONER OF INCOME TAX, -VS .- ANIL JAIN, KOLKATA CENTRAL CIRCLE-V, KOLKATA (PAN : ABTPJ 420 7 A) ( &' &' &' &' /APPELLANT ) ( ()&' ()&' ()&' ()&' / RESPONDENT ) FOR THE APPELLANT ( &' ) : SHRI M. BHATTACHARYA, D.R. FOR THE RESPONDENT ( ()&' ) : S/SHRI A.K. TULSYAN & R. KUMAR, A.R. *! + , *! + , *! + , *! + , /DATE OF HEARING : 12.12.2011 -# , -# , -# , -# , /DATE OF PRONOUNCEMENT : 14.12.2011 . / ORDER PER SHRI MAHAVIR SINGH, JUDICIAL MEMBER/ , :- THIS APPEAL BY REVENUE IS ARISING OUT OF THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS), CENTRAL-I, KOLKATA IN APPEAL NO. 213/CIT (A.), C-I/CC-V/09-10 DATED 14.03.2011. THE ASSESSMENT WAS FRAMED BY DCIT, CENTRAL CIRCLE-V , KOLKATA UNDER SECTION 153C R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER TO BE REFERRED TO AS THE ACT) FOR THE ASSESSMENT YEAR 2005-06 VIDE ORDER DATED 31.12.2009 . 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF LD. CIT(APPEALS) DELETING THE ADDITION OF LONG-TERM CAPITAL GAIN ASS ESSED AS INCOME FROM OTHER SOURCES BY THE ASSESSING OFFICER. FOR THIS REVENUE HAS RAISED FOLL OWING GROUNDS :- THAT THE LD. CIT(A.), C-I, KOL. IS ERRED IN DELET ING THE ADDITION OF RS.12,99,300/- SHOWN AS LTCG WHICH WAS PROVED TO BE A FALSE. THAT THE LD. CIT(A.), C-I, KOL. IS ERRED IN HOLDIN G THAT SEC. 153A IMPOSES A BAR ON MAKING SCRUTINY AFRESH UNDER SECTION 153A IN ASSESSED CASES. THAT THE LD. CIT(A.), C-I, KOL. IS ERRED IN NOT ADJ UDICATING THE ISSUE ON MERIT. 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE BRIEF FACTS ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE OFFICE IT(S.S.)A NO. 94/KOL./2011 2 PREMISES OF SHREE PARASNATH RE-ROLLING MILLS LTD. O N 07.09.2007. DURING THE COURSE OF SEARCH, CERTAIN DOCUMENTS WERE SEIZED FROM THE PREMISES OF THE ABOVE SAID COMPANY, WHOSE MANAGING DIRECTOR IS ASSESSEE. CONSEQUENT TO SEARCH ACTION ON THE ABOVE STATED ASSESSEES COMPANY WAS ALSO TAKEN FOR ISSUANCE OF NOTICE UNDER SECTION 153C AND NOTICE UNDER SECTION 153C DATED 12.08.2008 WAS SERVED ON THE ASSESSEE. I N RESPONSE TO THE ABOVE NOTICE, THE ASSESSEE FILED RETURN OF INCOME ADMITTING THE SAME INCOME AS DECLARED IN THE ORIGINAL RETURN FILED ON 04.08.2005 AT RS.18,08,890/-. SUBSEQUENTLY , NOTICES UNDER SECTION 143(2) DATED 30.07.2009 AND UNDER SECTION 142(1) DATED 31.08.200 9 WERE ISSUED AND SERVED UPON THE ASSESSEE AND ASSESSMENT PROCEEDINGS WERE TAKEN UP. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ON PERUSAL OF RE TURN OF INCOME NOTED THAT IT HAD REFLECTED LONG-TERM CAPITAL GAIN OF RS.12,99,300/- AND FROM T HE DETAILS FURNISHED BY ASSESSEE ON ACCOUNT OF THE LONG-TERM CAPITAL GAIN, ASSESSING OFFICER OB SERVED THAT THE CALCUTTA STOCK EXCHANGE VIDE THEIR LETTER DATED 26.10.2009 INTIMATED THAT T HE TRANSACTIONS NOTED IN THE CONTRACT NOTE ISSUED BY M/S. AHILYA COMM. PVT. LTD. OF THE SCRIP OF POONAM PHARMACEUTICAL LTD. AGAINST ORDER NOS. 3063 & 3064 AND TRADE NOS. 1458 & 1459 D ATED 19.04.2004 ARE NEVER TAKEN PLACE. ACCORDINGLY, HE TREATED THE LONG-TERM CAPITAL GAIN AS UNDISCLOSED INCOME OF THE ASSESSEE AND ASSESSED ACCORDINGLY. AGGRIEVED, THE ASSESSEE PREFE RRED APPEAL BEFORE LD. CIT(APPEALS). 4. LD. CIT(APPEALS) DELETED THE ADDITION BY GIVING FOLLOWING FINDING IN PARA 4.1 & 4.2 AS UNDER :- 4.1. IT HAS BEEN SUBMITTED BY THE LD. AR THAT SINC E THE RETURN OF INCOME U/S 139 OF THE ACT FOR THE AY 2005-06 WAS DULY FILE D BY THE ASSESSEE ON 04/08/2005 WHICH HAS BEEN ALREADY BEEN ASSESSED/ PR OCESSED. FURTHER, SINCE DURING THE COURSE OF SEARCH CONDUCTED ON THE ASSESSEE, NO MATERIAL WHATSOEVER, LEAVE ALONE INCRIMINATING MATERIALS WER E FOUND RELATING TO THE ADDITION MADE BY THE AO. ACCORDINGLY, IT WAS STATED THAT SINCE THE ORIGINAL ORDER PASSED IN THIS CASE HAS NOT BEEN ABATE, ASSES SMENT AS CONTEMPLATED U/S 153A OF THE ACT HAS TO BE NECESSARILY RESTRICTE D TO UNDISCLOSED INCOME UNEARTHED DURING SEARCH. RELIANCE WAS PLACED ON THE DECISIONS OF VARIOUS ITAT ON THE ISSUE. 4.2. IN THE ASSESSEES CASE, AS ON THE DATE OF SEAR CH, ASSESSMENT FOR THE YEAR UNDER CONSIDERATION HAD ALREADY BEEN COMPLETED . AT THE TIME OF ORIGINAL ASSESSMENT, THE INCOME DECLARED HAD BEEN A CCEPTED BY THE AO. IN COURSE OF THE SEARCH ACTION IN THE GROUP CASE, NOTH ING INCRIMINATING IN RESPECT OF SUCH ADDITION WAS FOUND. SINCE THE ABOVE CLAIMS HAD BEEN ACCEPTED IN COURSE OF NORMAL ASSESSMENTS, AND SINCE THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES COMPARED TO THE PAST, T HE AO WAS NOT JUSTIFIED IT(S.S.)A NO. 94/KOL./2011 3 IN REVIEWING THE COMPLETED ASSESSMENT OF THE SAID Y EAR MERELY BECAUSE A SEARCH ACTION HAS BEEN CARRIED OUT IN THE PREMISES OF THE COMPANY. S. 153A DOES NOT AUTHORIZE THE MAKING OF A DE NOVO ASS ESSMENT. WHILE UNDER THE 1 ST PROVISO, THE AO IS EMPOWERED TO FRAME ASSESSMENT F OR SIX YEARS, UNDER THE 2 ND PROVISO, ONLY THE ASSESSMENTS WHICH ARE PENDING ON THE DATE OF INITIATION OF SEARCH ABATE. THE EFFECT IS THAT C OMPLETED ASSESSMENTS DO NOT ABATE. SINCE ADDITION ON ACCOUNT OF DEEMED DIVI DEND DOES NOT EMANATE FROM INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, HENCE THE SAME CANNOT BE THE SUBJECT MATTER OF CONSIDERATION UNDER THE PROCEEDING UNDER SECTION 153A. HENCE, I MUST FOLLOW THE DECISI ON OF LMJ INTERNATIONAL VS.- DCIT (2008) 119 TTJ (KOL.) 214 TO MAINTAIN THE JUDICIAL DISCIPLINE, WHERE IT HAS BEEN HELD THAT WH ERE NOTHING INCRIMINATING IS FOUND IN THE COURSE OF SEARCH PROC EEDING RELATING TO ANY ASSESSMENT YEARS, THE COMPLETED ASSESSMENT FOR SUCH YEARS CANNOT BE DISTURBED. THEREFORE, THE ADDITION OF RS.12,99,300/ - MADE BY THE ASSESSEE CANNOT BE SUSTAINED, HENCE, DELETED. ACCORDINGLY, T HE ADDITIONAL GROUND TAKEN BY THE APPELLANT IS ALLOWED. CONSIDERING ABOV E GROUND NO. 1 TAKEN BY THE APPELLANT BECOME ACADEMIC, HENCE, NOT DECIDE D. 5. WE FIND THAT REVENUE COULD NOT BRING ANYTHING TH AT ANY MATERIAL WAS FOUND DURING THE COURSE OF SEARCH CONDUCTED ON SHREE PARASNATH RE-RO LLING MILLS LTD. ON 07.09.2007 QUA THE ASSESSEE AND PARTICULARLY QUA THESE TRANSACTIONS OF LONG-TERM CAPITAL GAINS. ONCE IT IS ESTABLISHED THAT THERE IS NO SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH, NO ACTION UNDER SECTION 153C CAN BE TAKEN. WE FURTHER FIND THAT THI S ISSUE IS SQUARELY COVERED BY COORDINATE BENCH DECISION OF THIS ITAT, E BENCH, KOLKATA IN THE CASE OF L.M.J. INTERNATIONAL LTD. VS.- DCIT (2008) 119 TTJ (KOL.) 214. RESPECTFULLY FOLLO WING THE DECISION OF KOLKATA BENCH IN THE CASE OF L.M.J. INTERNATIONAL LTD. (SUPRA) AND GOING THROUGH THE FACTS OF THIS CASE THAT THERE IS NO SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH, WHICH HAS NEXUS WITH THE ADDITION, WE CONFIRM THE ORDER OF LD. CIT(APPEALS) DELETING THE ADDITION. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. / 0 / 0 / 0 / 0 12 3 12 3 12 3 12 3 /4 /4 /4 /4 5 5 5 5 4 4 4 4 67 6767 67 ORDER PRONOUNCED IN THE OPEN COURT ON 14/ 12 /2011. * 8 9 . 14/12/2011. SD/- SD/- [C.D. RAO/ ( . . ] [MAHAVIR SINGH / ( )] ACCOUNTANT MEMBER/ JUDICIAL MEMBER/ DATED : 14/ 12/ 2011 IT(S.S.)A NO. 94/KOL./2011 4 COPY OF THE ORDER FORWARDED TO: 1. ANIL JAIN, 14C, M.D. ROAD, 3 RD FLOOR, KOLKATA-7 2 DCIT, CC-V, 5 TH FLOOR, PODDAR COURT, 18, RABINDRA SARANI, KOLKATA- 1 3. COMMISSIONER OF INCOME-TAX (APPEALS)- , KOLKATA 4. CIT- , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR, I.T.A.T., KOLKATA LAHA, SR. P.S.