ROSY BLUE SECURITIES P.LTD,MUMBAI vs. ASST CIT CEN CIR 46, MUMBAI

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ITA 1201/MUM/2016Status: DisposedITAT Mumbai01 March 2018AY 2007-084 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the assessments under Section 153A were made without reference to any seized material and prior assessments under Section 143(3) had already been completed, the additions were not sustainable. The jurisdictional High Court's decision in CIT vs. Continental Warehousing Corporation was followed.

What were the facts?

The assessee appealed against the disallowance of depreciation on a BSE membership card and the computation of capital gains on the sale of BSE shares. The assessments were made under Section 153A following a search and seizure action.

What were the issues?

Whether additions made under Section 153A are sustainable when no seized material is relied upon and prior assessments under Section 143(3) were already completed.

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI SHAMIM YAHYA, AM & SHRI RAM LAL NEGI, JM

For Appellant: Shri Nitesh Josh, Shri Ram Tiwari
For Respondent: Shri Ram Tiwari

सुनवाई क� तार�ख / : 04.01.2018 Date of Hearing घोषणा क� तार�ख / : 01.03.2018 Date of Pronouncement आदेश / O R D E R Per Shamim Yahya, A. M.: These are appeals by the assessee against the respective orders of the ld. Commissioner of Income Tax (Appeals) passed for the concerned assessment years. Since the issues are common and connected and the appeals were heard together these are being disposed of by this common order.

(Appeals) erred in upholding the disallowance of deprecation on written down value of Bombay Stock Exchange membership card.

3.

Another issue raised in assessment year 2008-09 is that the ld. Commissioner of Income Tax (Appeals) erred in upholding the order of the ld. Commissioner of Income Tax (Appeals) in the computation of capital gains on the sale of shares of Bombay Stock Exchange.

4.

For both the assessment years, the assessee has raised one additional ground, which reads as under:

Additional ground for assessment year 2007-08: The denial of depreciation of Rs.15,04,143/- on BSE Membership card was illegal and bad in law in the assessment order under section 153A r.w.s. 143(3) of the Act dated 31st March, 2014 as such disallowance was already stood made in the assessment order passed under section 143(3) of the Act dated 4th December, 2009 which has not abated.

Additional ground for assessment year 2008-09: The denial of depreciation of Rs.9,38,281/- on BSE Membership card and addition due to adoption of cost for computing capital gains arising on sale of shares of Bombay Stock Exchange Limited at Rs.66,72,217/- instead of Rs.2,98,51,108/- was illegal and bad in law in the Assessment Order under section 153A r.w.s. 143(3) of the Act dated 31st March, 2014 as such disallowances were already stood made in the assessment order passed under section 143(3) of the Act dated 23rd November, 2010 which has not abated.

5.

We have heard both the counsel and perused the records, with regard to the admission of additional ground. Since the additional ground is an important legal matter, we admit the same. We note that in both the assessment years, the assessment order had already been completed u/s. 143(3) earlier, hence, these assessments have u/s.153A which is an assessment pursuant to search and seizure action, no seized material has been referred to for making of this addition. The Hon’ble jurisdictional High Court in the case of CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 374 ITR 645 (Bom) has expounded that in case of an assessment u/s. 153A pursuant to search and seizure action where assessment has already been done earlier, no addition can be made dehorse any seized material. The ld. Departmental Representative could not point out any incriminating material found in search and fairly agreed that the addition in the present case has not been made with reference to any seized material pursuant to search.

6.

Accordingly, since the present assessment u/s. 153A has been done dehorse any seized material and the earlier assessment has already been completed u/s. 143(3), respectfully following the precedent from the Hon'ble jurisdictional High Court in Continental Warehousing Corporation (Nhava Sheva) Ltd. (supra), we hold that the addition is not at all sustainable at the threshold. Accordingly, the additional ground raised by the assessee stands allowed.

7.

Since the assessment has been quashed by allowing the additional ground, the adjudication on the merits of the appeal is now only of academic interest and accordingly we are not engaging into the same.

4 & 1220/Mum/2016 M/s. Rosy Blue Securities Pvt. Ltd.

8.

In the result, these appeals by the assessee stand allowed. प�रणामतः �नधा�रती क� अपील �वीकृत क� जाती है । Order pronounced in the open court on 01.03.2018 Sd/- Sd/- (Ram Lal Negi) (Shamim Yahya) �या�यक सद�य / Judicial Member लेखा सद�य / Accountant Member मुंबई Mumbai; �दनांक Dated : 01.03.2018 व.�न.स./Roshani, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2. आयकर आयु�त(अपील) / The CIT(A) 3. आयकर आयु�त / CIT - concerned 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 5. गाड� फाईल / Guard File 6. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील�य अ�धकरण, मुंबई / ITAT, Mumbai Sr. No. Details Date Initials Designation 1 Draft dictation sheets are attached Yes Sr.PS/PS 2 Word processed in dragon software on 22.02.18 Sr.PS/PS 3 Draft Placed before author 22.02.18 Sr.PS/PS 4 Draft proposed & placed before the Second JM/AM Member 5 Draft discussed/approved by Second Member JM/AM 6 Approved Draft comes to the Sr.PS/PS Sr.PS/PS 7 Order pronouncement on Sr.PS/PS 8 File sent to the Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head clerk 10 Date on which file goes to the AR 11 Date of Dispatch of order

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