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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
आदेश / ORDER
PER VIKAS AWASTHY, JM
ITA No.1175/PUN/2015 for the assessment year 2005-06 has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)-1 & 2, Kolhapur dated 01.06.2015.
The Department has filed appeals in ITA Nos.1241 to 1243/PUN/2015 against aforesaid order of Commissioner of Income Tax (Appeals)-1 & 2, Kolhapur, common for the assessment years 2005-06, 2006-07 and 2007- 08.
Shri M.K. Kulkarni appearing on behalf of the assessee submitted at the outset that on instruction from assessee, he is not pressing the appeal and wishes to withdraw the same. The ld. Counsel filed a request letter to withdraw appeal in ITA No.1175/PUN/2015.
Shri S.B. Prasad representing the Department raised no objection in assessee’s withdrawal of appeal.
In view of the request made by ld. Counsel for the assessee, the appeal of the assessee in ITA No.1175/PUN/2015 is dismissed as withdrawn.
3 ITA No.1175/PUN/2015 ITA Nos. 1241 to 1243/PUN/2015
ITA No.1241/PUN/2015 (By Department) Assessment Year 2005-06
Brief facts of the case as emanating from records are: The assessee is a
Civil Engineer and Mechanical Contractor. A search and seizure action
u/s.132 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was
carried out at the premises of the assessee on 15.06.2010. Notice
u/s.153A(a) of the Act was issued to the assessee on 30.05.2011. The
assessee vide letter dated 19.07.2011 informed that the return already filed
u/s.139 of the Act be treated as return in response to notice u/s.153A(a) of
the Act. During the course of search action, cash aggregating to
Rs.2,73,70,860/- was found. Further, jewellery valued at Rs.46,82,110/-
was also found, out of which jewellery worth Rs.7,97,181/- was seized. The
statement of Shri Vijay Rajaram Shah and Shri Hemant Vijay Shah,
Directors of the assessee company were recorded u/s.132(4) of the Act. Shri
Hemant Vijay Shah admitted unaccounted income of assessee at
Rs.29,15,76,000/- and offered the same as income of the assessee for
assessment years as under:
Assessment year Amount
2009-10 7,00,00,000/-
2010-11 17,90,76,000/-
2011-12 4,25,00,000/- Total 29,15,76,000/-
As regards the assessment year 2005-06, no income was offered.
During the course of assessment proceedings, the Assessing Officer observed
that the assessee has claimed deduction u/s.80IA(4) on various
4 ITA No.1175/PUN/2015 ITA Nos. 1241 to 1243/PUN/2015
miscellaneous receipts which are not eligible for claiming deduction.
Consequently, the Assessing Officer disallowed deduction u/s.80IA(4) in
respect of miscellaneous receipts aggregating to Rs.1,28,59,681/-. Apart
from above disallowance of deduction u/s.80IA(4) of the Act, no other
addition was made in the hands of the assessee for the assessment year
2005-06.
Aggrieved by the assessment order dated 07.03.2013 passed u/s.
143(3) r.w.s.153A(b) of the Act, the assessee filed appeal before the
Commissioner of Income Tax (Appeals) challenging the addition on two
grounds:
a. No incriminating material was found during the search for the
assessment year 2005-06, therefore, no addition can be made.
b. Original assessment for assessment year 2005-06 was completed
before date of search. Since the assessee had claimed deduction
u/s.80IA(4) in the return of income filed u/s.139 of the Act, the
issue had reached finality, therefore, cannot be raked up again in
assessment proceedings u/s.153A of the Act in the absence of any
incriminating material.
The Commissioner of Income Tax (Appeals) after examining the facts of
case came to the conclusion that no incriminating material was found during
search and seizure operation for the assessment year 2005-06. The
assessment for assessment year 2005-06 was completed u/s.143(3) of the
Act. The assessee had claimed deduction u/s.80IA(4) in return of income
filed u/s.139 of the Act and after examining assessee’s claim, the same was
allowed by the Commissioner of Income Tax (Appeals). Since at the time of
5 ITA No.1175/PUN/2015 ITA Nos. 1241 to 1243/PUN/2015
search, no assessment was pending, the Assessing Officer could not have
made any addition in proceedings u/s.153A of the Act.
7.1 Dehors, the legal position, the Commissioner of Income Tax (Appeals)
examined alleged miscellaneous receipts on which deduction u/s.80IA(4) was
disallowed by the Assessing Officer and came to the conclusion that assessee
was eligible to claim deduction u/s.80IA(4) of the Act on all such receipts.
Thus, Commissioner of Income Tax (Appeals) allowed the claim of assessee
and deleted the addition.
Aggrieved by the order of the Commissioner of Income Tax (Appeals),
the Revenue has filed appeal before the Tribunal by raising following
grounds:
“1) On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the AO had not jurisdiction u/s 153A for the impugned Assessment Years once Assessment was completed for those years, when the return of income filed in response to notice u/s 153A can be assessed or reassessed by the AO u/s 153A(b) of the Act. 2) On the facts and the circumstances of the case and in law. the Ld. CIT(A) has erred in propounding that availability of incriminating material was prelude to assess u/s.153A once assessments had been completed for the impugned Assessment Years. 3) On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the assessee’s contention that completed assessments could not be revisited whereas as per Section 153A(2) of the Act has given the mandate to revisit cases annulled by higher judicial authorities. 4) On the facts and the circumstances of the case and in law, the Ld.CIT(A)has erred while allowing the assesses appeal or eligibility of miscellaneous Receipts of Rs.1,28,59,681/- without controverting the facts enumerated by the AO in his order and further erring in treating the said receipts as profits and gains derived from eligible business as required by Section 80IA(4) of the Act.
The order of the Ld.CIT(A) may be vacated and that of the Assessing Officer be restored. 6. The appellant craves leave to add, alter, amend and modify any of the above grounds of appeal.”
6 ITA No.1175/PUN/2015 ITA Nos. 1241 to 1243/PUN/2015
The ld. Counsel for the assessee vehemently supporting the order of
Commissioner of Income Tax (Appeals) submitted at the outset that the case
of the assessee is squarely covered by the decision of Hon'ble Bombay High
Court in the case of CIT Vs. Continental Warehousing Corporation (Nhava
Sheva) reported as 374 ITR 645. It is an undisputed fact that assessment for
assessment year 2005-06 was completed at the time of search and seizure
operation. No incriminating material whatsoever was found by the
Department for the impugned assessment year. The assessee in its return of
income filed u/s.139 of the Act had claimed deduction u/s.80IA(4) of the Act.
The return of the assessee was subject to scrutiny and the Assessing Officer
found the claim of the assessee in order and allowed the same. Now the
assessment proceedings consequent to search, Assessing Officer cannot
fiddle with the assessee’s claim of deduction u/s.80IA(4), where assessment
has not abated and no incriminating material is found.
On the other hand, Shri S.B. Prasad representing the Department
vehemently defended the action of Assessing Officer in disallowing
assessee’s claim u/s.80IA(4) in respect of miscellaneous receipts. The ld. DR
in support of his submissions placed reliance on the decision of Hon'ble
Kerala High Court in the case of E.N.Gopakumar Vs. CIT-Central, 75
taxmann.com 15 (Kerala).
We have heard the submissions made by the representatives of rival
sides and have perused the orders of the Authorities below. The un-rebutted
facts in the instant case are:
7 ITA No.1175/PUN/2015 ITA Nos. 1241 to 1243/PUN/2015
- No incriminating material was found during the course of search and
seizure action carried out by the Department against the assessee for
the assessment year 2005-06.
- In the return of income filed u/s.139 of the Act, the assessee had
claimed deduction u/s.80IA(4) of the Act, hence assessment for
assessment year 2005-06. The assessment under regular provisions
was completed in the case of the assessee and claim of the assessee
was accepted by the Assessing Officer.
- There was no pending assessment when search and seizure action
was carried out by the Department.
It is a well settled law that when there is no incriminating material, no
addition can be made where original assessments have not abated. The
Hon'ble Jurisdictional High Court in the case of CIT Vs. Continental
Warehousing Corporation (Nhava Sheva) (supra.) has held that no addition
can be made in respect of assessments which have become final if no
incriminating material is found during search.
The Hon'ble Bombay High Court in the case of CIT Vs. Murli Agro
Products Ltd. reported as 49 taxmann.com 172 has held as under:
“12) Once it is held that the assessment finalized on 29.12.2000 has attained finality, then the deduction allowed under section 80 HHC of the Income-tax Act as well as the loss computed under the assessment dated 29-12-2000 would attain finality. In such a case, the A.O. while passing the independent assessment order under Section 153A read with Section 143(3) of the I.T. Act could not have disturbed the assessment/ reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under Section 153A of the Income-tax Act establish that the reliefs granted under the finalized assessment/reassessment were contrary to the facts unearthed during the course of 153 A proceedings.”
8 ITA No.1175/PUN/2015 ITA Nos. 1241 to 1243/PUN/2015
The ld. DR has placed reliance on the decision of Hon’ble Kerala High
Court in the case of E.N. Gopakumar Vs. CIT- Central (Supra.). We are of
considered view that the aforesaid decision would not support the cause of
Revenue, as there is binding decisions of Hon'ble Jurisdictional High Court
directly on the issue in hand.
In view of the facts of the case and the decisions of the Hon'ble
Bombay High Court, we do not find any infirmity in the order of the
Commissioner of Income Tax (Appeals), resultantly the same is upheld. The
appeal of the Revenue for the assessment year 2005-06 is dismissed
being devoid of any merit.
ITA Nos. 1242 & 1243/PUN/2015 (By Department) Assessment years 2006-07 & 2007-08
The Revenue in both the aforesaid appeals has assailed the order of
Commissioner of Income Tax (Appeals) by raising identical grounds as were
raised in the assessment year 2005-06. Both sides are unanimous in stating
that the facts in assessment years 2006-07 and 2007-08 are identical to the
facts in assessment year 2005-06. Since grounds of appeal in the appeals by
the Department for the assessment years 2006-07 and 2007-08 are identical
to grounds of appeal in assessment year 2005-06 and facts are also
identical, the findings given by us in assessment year 2005-06 would
mutatis-mutandis apply to the appeals of the Revenue for assessment years
2006-07 and 2007-08. Accordingly, both the appeals of the Revenue i.e.
appeals for the assessment years 2006-07 and 2007-08 are dismissed.
9 ITA No.1175/PUN/2015 ITA Nos. 1241 to 1243/PUN/2015
To sum up, appeal filed by assessee for assessment year 2005-06 is dismissed as withdrawn. The appeals by Revenue for assessment years 2005-06 to 2007-08 are dismissed.
Order pronounced on Wednesday, the 27th day of February, 2019.
Sd/- Sd/- (डी. क�णाकरा राव/D. KARUNAKARA RAO) (�वकास अव�थी /VIKAS AWASTHY) लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER
पुणे / Pune; �दनांक / Dated : 27th February, 2019 SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :
अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT (Appeals)-1 & 2, Kolhapur. 4. The CIT-I & II, Kolhapur, �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “ए” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
// True Copy // आदेशानुसार / BY ORDER,
�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.
10 ITA No.1175/PUN/2015 ITA Nos. 1241 to 1243/PUN/2015
Date 1 Draft dictated on 15.02.2019 Sr.PS/PS 2 Draft placed before author 25.02.2019 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order