DY. C.I.T. CENTRAL CIR2(2), NAGPUR vs. M/S SHREE AGRAWAL COAL INDIA PVT. LTD., NAGPUR

97 t INTHEINCQME TAX APPELLATE TRIBLNAL NAGPUR BENCH NAGPUR BEFQRESHRI PK BANSAL_VICE PRESIDENT AND SHRI AMARIISINGH_JUQICIAL MEMBER ITA no ZOLNag./2016 (Assessment Year 2005-06} Dy. Commissioner of Income Tax, Central Circle-2(2), Nagpur Appellant vs Shree Agrawal Coal India Pvt- Ltd. 216, Devi Kripa Society Wardhman Nagar, Nagpur PAN AAFCS67O9L Respondent ITA n21/Nag/2016 (Assessment Year : 2006_-QZ) Dy. Commissioner Of Income Tax, Central Circle-2(2), Nagpur Appellant vs Shree Agrawal Coal India Pvt Ltd, 216, Devi Kripa Society Wardhman Nagar, Nagpur PAN AAFCS67O9L Respondent ITAno_22/Nag [2016 (Assessment Year 200Z_QB) Dy. Commissioner of Income Tax, Central circle-2(2), Nagpur Appellant vs Shree Agrawal Coal India Pvt. Ltd. 216, Devi Kripa Society, Wardhman Nagar, Nagpur PAN AAFCS670gL Respondent Revenue by Assessee by Shri A.R Minawe Shri J.M. Ranade Date of Hearing 19.06.2017 Date 0f Order 21.06,2017 2 98_ 2 Shree Agrawal Coal India Pvt_ Ltd, ORDER PERAMARJIL SINGH_LM The present appeals filed by the Revenue are directed against the impugned common order dated 22nd December 2015_ passed by the learned Commissioner (Appeals)-3, Nagpur-, for the assessment years 2005-06, 2006-07 and 2007-08 respectively , the findings of which wiil apply to the remaining appeals also_ 2 Since all the three appeals pertain to the same assessee involving common issue arising out of identical set of facts and circumstances, except variation in figures, therefore, as a matter of canvenience, these appeals were heard together and are being disposed off by way f this consolidated order. However, in order to understand the implication, it would be necessary to take note of the facts of one appeal, We are; accordingly, narrating the facts, as they appear in the appeal in ITA no 2O/Ng./2016, for assessment Year 2005-06. 3, Grounds raised by the Revenue for the assessment year 200S-06 are reproduced below: 1 On the facts and circumstances of the case; the learned CIT(A) erred in holding that the notice and action u/s 153A of the IT Act Was bad in Iaw; even though the Assessing Officer had recorded his satisfaction that the documents seized from .various premises; belonged to the assessee, which is the only pre- 39 3 Shree Agrawal Coal India Pvt Ltd. condition for issue af notice under Section 153A of the Income-tax Act; 19617 of the case; the learned 2 _ On the Facts and circumstances the addition made on account of CIT(A) has erred in deleting unsecured loans amounting to Rs. 76,32,827/- af the case; the learned 3. On the facts and circumstances in deleting the addition made on account of CIT(A) has erred of expenses of Rs. 13,96,415/- out of expenses disallowance and remission and six other heads claimed on account of rebate of the case, the learned 4_ On the facts and circumstances the addition made on account of CITIA) has erred in deleting_ account of bad debts and disallowance of expenses n exchange fluctuation charges of Rs. 3,46,714/- the assessee filed its return of income 4 Brief facts of the case are; 139/1) of the Income Tax Act; 1961 (for short "the Act" under section total income to the tune of { on 30th October 2005, declaring under consideration, the assessee was 30,13,900. During the year of trading and liaisoning of coal and wind engaged in the business was conducted at the office A search and seizure operation power. premises of the directors an their premises as well a5 residential In the group cases of Shree Agrawal Coal India Pvt. family members 3 IN assessee company on 16th March 2011_ Ltd,, Nagpur, including the of search, books of account and other documents of During the course and seized. Thereafter , notice under assessee company were found 3rd 2012 and served upon the 1534, was issued on Aprii section 7th April 2012. Subsequently, notice under section 142(1) assessee on on 20th November 2012 which with questionnaire was issued along Shree Agrawal Coal India Pyt: Ltd, was served upon asse5sc2 on 235d November 2012_ The assessee, in response to the notice under section 1534, filed its return of income deciaring total income to the tune of ? 30,13,900 along with copy of audited Profit 8& Loss account and Balance Sheet on 26th November 2012 The Assessing Officer noticed that the assessee during the year has accepted new Ioan of { 76,32,827 The Assessing Officer stated that the assessee has not produced the books of account and has also not furnished the necessary details such as PAN details, address, identity of the creditor, details of transactions and creditworthiness of the creditors to enable the assessee to explain the genuineness of this loan. The Assessing Officer, therefore, added the said amount of % 76,32,827 to the total income of the assessee, During the first R> ppellate authority , the learned Commissioner (Appeals) allowed the M of the assessee for all the assessment under consideration; Being aggrieved, the Revenue is in appeal before uS for the all the impugned assessment years; ISSVNQ1 5 The learned Departmental Representative has argued before uS that the Assessing Officer has rightly invoked the provisions of section 132 of the Act and issued notice under section 153A_ He submitted that the Assessing Officer has rightly assessed the unexplained receipt Ioo Pni F8t Shree Agrawal Coal India Pvt. Ltd, to the tune of { 76,32,827. The learned Commissioner (Appeals) has wrongly set aside the assessment under section 153A of the Act. Therefore, the order passed by the learned Commissioner (Appeals} is not justifiable and is liable to be set aside 6. The learned Counsel for assessee on the other hand argued that the case of the assessee is duly covered by the decision of the Tribunal, Nagpur Bench, rendered in DCIT vs Shri Dharampal RS Agrawal, vide order dated 19t December 2016. Therefore, the learned Commissioner (Appeals) has rightly decided the order in question ad, hence, the appeal of the Revenue is liable to be dismissed. 7 We have heard the rival contentions and perused the material available on record Before proceeding further, it is necessary to advert the findings of the learned Commissioner (Appeals) on this issue_ Accordingly , the observations Qf the learned Commissioner (Appeals} on this issue are reproduced below for better appreciation of facts; - "3, Since the additional ground raised by the assessee raised legal issues, the same Is dealt with first; The additional ground raised by the assessee concerns the assessment made uls 153A af the [T Act r.W.s. 14303}. The judgment In the case of CIT Vs. Continental Warehousing Corporation (Bombay High Court) (Appeal No; 523 of 2013) & CIT VS. Murli Agro Products Ltd. (Nagpur Bench of Bombay High Court} (Appeal No.36 of 2009) relied upon by the assessee; the Courts have held that the AC cannot make an assessment order or the additions therein which are not based On the 63 Shree Agrawal Coal [ndia Pvt. Ltd. incriminating matertal Found Or seized during search for the assessment years for which the asessment proceedings have become final An exception has been made for those assessment years in which the assessment proceedings have not become Final or for which the assessments have been abated. In Continental Warehousing Corporation (Nhava Sheva) Ltd. (supra); the Bombay High Court answered the question Framed by it as under; 3. In assessments that are abated, the A.O. retains the original jurisdiction a5 well a5 jurisdiction conferred on him u/s 153A for which assessments shall be made for each of the six assessment years separately; b. In other cases, in addition to the income that has already been assessed; the assessment u/s 153A wil be made on the basis Of incriminating material, which in the context of relevant provisions means (W) books Of account; other documents; found In the course of search but not produced in the Course of original assessment; and (Wl) undisclosed income or property discovered in the course of search The Hon'ble High Court referred to the decisions of Hon'ble Nagpur Bench of Bombay High Court in the case of Murli Agro Products Ltd. and of Special Bench of ITAT, Mumbai in the case of All Cargo Global Logistics Ltd. 14, For AY 2008-09, the time for issue 0f notice uJs 143(2} is aver: The Hon'ble ITAT; Mumbai has held in the case of Gurinder Singh Bawa Vs DCIT as under: "The Specia} bench in the case of Alcargo Global Logistics Ltd. (supra); has held that provisions Of section 1534 come into operation if a search 0r requisition Is initiated after 31.5.2003 and on satisfaction Of thls condition, the AO is under obligation to issue notice to the person requiring him to furnish the return of income for six years immediately preceding the year of search. The Special Bench further held that in case assessment has abated; the Ap retains the original jurisdiction 35 well <5 jurisdiction under section 153A for which assessment shall be made for each assessment year separately. Thus in case where assessment has abated the AO can make additions in the assessment; even if no incriminating material has been found. But in other cases the Special Bench held that the assessnent under section 153A can be made on the basis of Incriminating material which in the context of relevant provisions means books of account and other documents Found in the course (03 7 Shree Agrawal Coal India Pvt. Ltd. of search but not produced in the course of original assessment and undisclosed income or property disclosed during the course of search. In the present case, thc assessment had been completed under summary scheme under section 14301} ad time limit for issue of notice under section 143(2) had expired on the date of search. Therefore, there was no assessment pending in this case and in such & case there was no question of abatement; Therefore, addition could be made only on the basis of Incriminating material found during search, The judgment follows the ratio laid down by the Hon High Court in the case Qf CIT VS, Continental Warehousing Corporation (Bombay High Court) (Appeal No, 523 OF 2013) & CIT VS, Murli Agro Products Ltd. (Nagpur Bench of Bombay High Court) (Appeal No.36 of 2009) The Hon'ble ITAT has held in the case referred above that if the date pf issue of notice uls 143(2} had expired for 3 certain assessment Year and notice ufs 14362} was not issued as on the date pf search, no assessment was pending and there was No question 0f abatement; 15. The assessee also relied on the decision af Rajasthan High Court in the case of Jai Steel (India) VS. ACIT (2013) 259 CTR 0281 (Raj) It was held by Hon'ble Rajasthan High Court in Para 21 a5 under: - "21, Now there can be cases where at the time when the search is initiated Qr requisition i5 made, the assessment or reassessment proceedings relating to any assessment year falling within the period of the Six assessment Years mentioned above, may be pending. In such a case, the second proviso to sUb section (1) of Section 1534 says that such proceedings "shall abate" The reason is not far to seek, Under section 153A, there is na room for multiple assessment Orders in respect of any Of the six assessment years under consideration. That Is because the Assessing Officer has to determine not merely the undisclosed Income of the assessee; but alsp the 'total income of the assessee in whose case & search or requisition has been Initiated, Obviously there cannot be several orders for the same assessment year determining the total income gf the assessee. In order to ensure this state 0f affairs namely, that in respect of the Six assessment years preceding the assessment year relevant to Ene Year in which the search took place there is only one determination pf the total income; it has been provided in the second proviso of sub 'section (1) of Section 1534 that any proceedings for Jassessment or reassessment of the assessee which are pending on the date of initiation of the search Or making requisition "shall abate Once those proceedings abate; the decks are cleared, for the Assessing Officer tQ pass assessment I4 Shree Agrawal Coal India Pvt; Ltd, orders for each of those six vears determining the total income of assessee which could includc both the income declared in the the if furnished by the assessee a5 weli a5 the returns; any, undisclosed If any; unearthed during the search income; Or The position thus emerging i5 that the search is requisition, initiated or requisition is made; they will abate making Way for the Assessing Officer to determine the total income of the assessee in which the undisclosed income would also be included, but in case where the assessment 0r reassessment proceedings have already completed and assessment orders have been passed been determining the assessee's total income ad such orders subsisting at the time when the search or the requisition is made, there is no of any abatement since no proceedings are pending. In question situation; the Assessing Officer wfl} reopen the this latter assessments or reassessments already made (without having the follow the strict provisions or complying with the strict need to conditions of Sections 147, 148 and 151) and determine the total Income of the assessce: Such determination in the orders passed under Section 1534 would be similar to the orders passed in any reassessment, where the total income determined in the priginal assessment order and the income that escaped assessment are clubbed together &nd assessed as the total income: In such 3 case; to reiterate; there is no question of ay abatement of the earlier for the simple reason that no proceedings for proceedings Issessment Or reassessment were pending since they had already Ulminated in assessment or reassessment orders when the search was initiated or the requisition vas made.

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