M/s ASSOCIATED MINING CO, Bellary v. DEPUTY COMMISSIONER OF INCOME TAX, Bangalore

ITA 1355/BANG/2014 | 2005-2006
Pronouncement Date: 18-10-2016 | Result: Allowed

Appeal Details

RSA Number 135521114 RSA 2014
Assessee PAN AAFHA3896P
Bench Bangalore
Appeal Number ITA 1355/BANG/2014
Duration Of Justice 1 year(s) 11 month(s) 12 day(s)
Appellant M/s ASSOCIATED MINING CO, Bellary
Respondent DEPUTY COMMISSIONER OF INCOME TAX, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 18-10-2016
Date Of Final Hearing 01-06-2016
Next Hearing Date 01-06-2016
Assessment Year 2005-2006
Appeal Filed On 05-11-2014
Judgment Text
ITA NO. 1355 TO 1360/B/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BANGALORE BEFORE SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NO. 1355 TO 1360/B/2014 ASSESSMENT YEARS 2005 06 TO 2010 11 THE DCIT CENTRAL CIRCLE 1 (3) BANGALORE VS M/S ASSOCIATED MINING CO. NO. 18/35 2 ND LINK ROAD PARAVTHINAGAR BELLARY 583101. PAN AAFHA3896P (RESPONDENT) (APPELLANT) SHRI MAYANK JAIN ADVOCATE ASSESSEE BY MS NEERA MALHOTRA CIT DR REVENUE BY 03 /0 8 /2016 DATE OF HEARING 18/10/2016 DATE OF PRONOUNCEMENT O R D E R PER BENCH: ALL THESE SIX APPEALS ARE FILED BY THE ASSESSEE AND THESE ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LEARNED CIT (A) VI BANGALORE BOTH DATED 29.04.2013. THE FIRST ORDER IS FOR TWO ASSESSMENT Y EARS I.E. 2005 06 & 2006 07 AND THE SECOND ORDER IS FOR REMAINING FOUR ASSES SMENT YEARS I.E. 2007 08 TO 2010 11. ALL THESE APPEALS WERE HEARD TOGETHER AN D ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. AT THE VERY OUTSET THIS WAS SUBMITTED BY THE LE ARNED AR OF THE ASSESSEE THAT IN THE PRESENT CASE THERE IS NO VALID SEARCH CARRIED OUT IN THE PRESENT CASE AND THEREFORE THE ORDERS PASSED BY THE A.O. U/S 15 3A ARE NOT VALID. IN THIS REGARD HE SUBMITTED THAT AS PER THE ASSESSMENT ORD ERS THE ALLEGED SEARCH WAS CARRIED OUT AT 18/35 SECOND LINK ROAD PARVATHINAG AR BELLARY AND AS PEER THE PANCHNAMA AVAILABLE ON PAGES 163 TO 193 ALSO THE SEARCH WAS CARRIED OUT AT THE ITA NO. 1355 TO 1360/B/2014 2 SAME ADDRESS. THEREAFTER HE SUBMITTED THAT IN THE ASSESSMENT ORDER ITSELF THE A.O. HIMSELF HAS NOTED THAT THE NEW ADDRESS OF THE FIRM AFTER RECONSTITUTION IS NO. 123/150 OPPOSITE KUMARSWAMY TEMPLE CLUB ROAD VEERANA GOUDA COLONY BELLARY. HE ALSO SUBMITTED THAT THE DATE OF RECONSTITUTION OF THE FIRM IS 01.08.2009 AS NOTED BY THE A.O. HIMSELF ON PAGE 2 O F THE ASSESSMENT ORDER. HE ALSO SUBMITTED THAT THE INCOME TAX RETURN OF THE AS SESSEE FIRM FOR A. Y. 2010 11 WAS FILED ON 15.10.2010 AS PER COPY OF RETURN AV AILABLE ON PAGE 130 OF THE PAPER BOOK. THEREAFTER HE SUBMITTED THAT ON PAGE 1 OF THE ASSESSMENT ORDER THE A.O. HAS NOTED THAT THE SEARCH IN QUESTION WAS CARR IED OUT ON 10.12.2010 ON THE STRENGTH OF SEARCH WARRANT DATED 09.12.2010 IN THE CASE OF SHRI K. M. VISWANATH GROUP OF CASES. THEREAFTER HE SUBMITTED THAT THE S WORN STATEMENT DATED 10.12.2010 OF MR. S. SREENIVAS MURTHY IS AVAILABLE ON PAGES 259 TO 262 OF THE PAPER BOOK AND IN REPLY TO QUESTION NO. 3 ABOUT NAM ES OF CONCERNS WHICH ARE CARRYING OUT BUSINESS FROM THE SEARCHED PREMISES H E STATED THAT PRESENTLY ONLY ONE CONCERN M/S K. M. PARVATHAMMA IS HAVING OFFICE IN THIS ADDRESS AND M/S ASSOCIATED MINING COMPANY WAS IN THIS PREMISES UP T O 31.07.20019 AND THEREAFTER THE SAID FIRM WAS TAKEN OVER BY SRI G. JANARDAN REDDY AND HIS WIFE AND HE WAS MANAGER FINANCE & ACCOUNTS OF M/S ASSOCI ATED MINING COMPANY. HE SUBMITTED THAT IN VIEW OF THESE FACTS IT IS CLE AR THAT NO SEARCH WAS CARRIED OUT IN THE CASE OF THE PRESENT ASSESSEE AND SIMPLY BECA USE OF THIS THAT THE NAME OF THE ASSESSEE FIRM IS THERE IN THE SEARCH WARRANT AN D PANCHNAMA IT CANNOT BE SAID THAT ANY VALID SEARCH WAS CARRIED OUT IN THE CASE O F THE ASSESSEE AND AS A CONSEQUENCE PROCEEDINGS U/S 153A CAN BE INITIATED AGAINST THE ASSESSEE. HE SUBMITTED THAT UNDER THESE FACTS IT SHOULD BE HELD THAT NO VALID SEARCH WAS CONDUCTED AGAINST THE ASSESSEE AND THEREFORE THE A SSESSMENTS ORDERS PASSED U/S 153A ARE NULL AND VOID. IN SUPPORT OF THIS CONTENTI ON HE PLACED RELIANCE ON THE TRIBUNAL ORDER RENDERED IN THE CASE OF J. M. TRADIN G CORPN. VS. ACIT AS REPORTED IN 20 SOT 489. ITA NO. 1355 TO 1360/B/2014 3 3. AS AGAINST THIS LEARNED DR OF THE REVENUE SUPPO RTED THE ORDERS OF THE AUTHORITIES BELOW. SHE ALSO SUBMITTED THAT IN PARA 18 OF THIS TRIBUNAL ORDER CITED BY THE LEARNED AR OF THE ASSESSEE IT WAS SHOWN BY THE ASSESSEE IN THAT CASE THAT THE PREMISES IN QUESTION WAS LET OUT TO A BUSINESS GROUP OF COMPANIES AND RENTAL INCOME WAS OFFERED TO TAX BY THE ASSESSEE BEING OWN ER OF THE PREMISES AND UNDER THESE FACTS THE TRIBUNAL HELD THAT THE SEARC H WAS NOT AGAINST THE ASSESSEE BUT IN THE PRESENT CASE THERE ARE NO SUCH FACTS AN D THEREFORE THIS TRIBUNAL ORDER IS NOT APPLICABLE IN THE PRESENT CASE. SHE ALSO SUBMI TTED THAT AFTER CARRYING OUT OF A VALID SEARCH INVOCATION OF SECTION 153A BY THE A .O. IS VALID AND THE ASSESSEE IN THE PRESENT CASE HAS NOT BEEN ABLE TO ESTABLISH THAT NO VALID SEARCH WAS CONDUCTED AGAINST THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIALS ON RECORD AND GONE THROUGH THE JUDGMENT CITED BY THE L EARNED AR OF THE ASSESSEE. THERE IS NO DISPUTE THAT IF A VALID SEARCH IS COND UCTED AGAINST THE ASSESSEE INVOCATION OF SECTION 153A BY THE A.O. IS VALID. HE NCE WE HAVE TO EXAMINE AS TO WHETHER THE SEARCH CONDUCTED AT 18/35 SECOND LI NK ROAD PARVATHINAGAR BELLARY IS A VALID SEARCH AGAINST THE ASSESSEE OR N OT. IN THIS REGARD WE FIND THAT AS PER THE ADDRESS GIVEN IN THE RETURN OF INCOME FI LED BY THE PRESENT ASSESSEE FOR A.Y. 2010 11 FILED ON 15.10.2010 THE ADDRESS IS DIFFERENT AND NOT OF THE SEARCHED PREMISES. THE A.O. HIMSELF IN THE ASSESSME NT ORDER HAS NOTED THAT THE NEW ADDRESS OF THE FIRM AFTER RECONSTITUTION IS NO. 123/150 OPPOSITE KUMARSWAMY TEMPLE CLUB ROAD VEERANA GOUDA COLONY BELLARY AND THE DATE OF RECONSTITUTION OF THE FIRM IS 01.08.20019 AS NOT ED BY THE A.O. HIMSELF ON PAGE 2 OF THE ASSESSMENT ORDER. THE ALLEGED SEARCH WAS CARRIED OUT AT 18/35 SECOND LINK ROAD PARVATHINAGAR BELLARY AND AS PER THE PANCHNAMA AVAILABLE ON PAGES 163 TO 193 ALSO THE SEARCH WAS CARRIED OU T AT THE SAME ADDRESS. ON PAGE 1 OF THE ASSESSMENT ORDER THE A.O. HIMSELF HA S NOTED THAT THE SEARCH IN ITA NO. 1355 TO 1360/B/2014 4 QUESTION WAS CARRIED OUT ON 10.12.2010 ON THE STREN GTH OF SEARCH WARRANT DATED 09.12.2010 IN THE CASE OF SHRI K. M. VISWANATH GROU P OF CASES. WHEN THE FIRM WAS RECONSTITUTED ON 01.08.2009 AND AFTER RECONSTIT UTION THE ADDRESS HAS CHANGED WHICH IS ON RECORD OF THE REVENUE IN THE RE TURN OF INCOME FOR A. Y. 2010 11 FILED BEFORE SEARCH AND THE PERSON FOUND AT THE SEARCHED PREMISES ALSO STATED ON THE DATE OF SEARCH ITSELF THAT THE IN THE SEARCHED PREMISES THERE IS NO OFFICE OF THE ASSESSEE FIRM IT CANNOT BE SAID THAT VALID SEARCH WAS CONDUCTED AGAINST THE ASSESSEE MERELY ON THIS BASIS THAT THE NAME OF THE ASSESSEE IS STATED IN THE SEARCH WARRANT AND PANCHNAMA. IN OUR CONSID ERED OPINION UNDER THESE FACTS THE TRIBUNAL ORDER RENDERED IN THE CASE OF J . M. TRADING CORPN. VS. ACIT (SUPRA) IS SQUARELY APPLICABLE. THE OBJECTION OF TH E LEARNED DR OF THE REVENUE IS THIS THAT THE SEARCHED PREMISES IN THAT CASE WERE LET OUT TO A DIFFERENT COMPANY IN THAT CASE AND RENTAL INCOME WAS OFFERED TO TAX AND SO ASSESSED AND SINCE IN THE PRESENT CASE THERE IS NO SUCH LET OUT THIS TR IBUNAL ORDER IS NOT APPLICABLE. IN THIS REGARD WE ARE OF THE CONSIDERED OPINION THAT THE REAL BASIS OF THAT TRIBUNAL ORDER IS THIS THAT THE SEARCHED PREMISES IN THAT CA SE WERE NOT IN OCCUPATION OF THE ASSESSEE AND FOR THIS REASON IT WAS HELD THAT THE SEARCH AT THAT PREMISES WAS NOT A SEARCH CONDUCTED AGAINST THE ASSESSEE. THE BASIS OF ESTABLISHING THAT THE SEARCHED PREMISES WERE NOT IN OCCUPATION OF THE ASS ESSEE WAS THE FACT OF LETTING OUT TO A DIFFERENT COMPANY. IN THE PRESENT CASE T HE SAME THING THAT THE SEARCHED PREMISES WERE NOT IN THE OCCUPATION OF THE ASSESSEE IS BEING ESTABLISHED BY THE ASSESSEE ON A DIFFERENT BASIS THAT THE FIRM WAS REC ONSTITUTED AND AFTER RECONSTITUTION THE ADDRESS CHANGED AND THE NEW ADD RESS WAS BROUGHT ON THE RECORD OF THE DEPARTMENT ALSO ON A DATE PRIOR TO SE ARCH BY FILING RETURN OF INCOME FOR A. Y. 2010 11 AND IN THE SWORN STATEMENT OF T HE PERSON FOUND AT THE TIME OF SEARCH ALSO THIS FACT WAS POINTED OUT THAT THIS ASSESSEE FIRM WAS NOT HAVING ANY OFFICE AT THAT ADDRESS AT THAT POINT OF TIME AN D HENCE IN OUR CONSIDERED OPINION AT LEAST AFTER KNOWING THIS FACT AT THE TI ME OF SEARCH THE DEPARTMENT ITA NO. 1355 TO 1360/B/2014 5 SHOULD HAVE CONDUCTED SEARCH AT THE CORRECT ADDRESS OF THE ASSESSEE IF THE DEPARTMENT WANTED TO SEARCH THE ASSESSEE AFTER FIND ING OUT THE PRESENT ADDRESS OF THE ASSESSEE AND AFTER OBTAINING SEARCH WARRANT FOR THAT ADDRESS. THIS IS VERY SURPRISING BECAUSE GENERALLY THE DEPARTMENT CARRIE S OUT DETAILED BUT SILENT ENQUIRIES BEFORE CONDUCTING THE SEARCH ABOUT NOT ON LY ADDRESS BUT ALSO THE SPOTS WHERE THEY CAN FIND MATERIAL AND IN SPITE OF THIS THE DEPARTMENT CARRIED OUT THE SEARCH AT THE OLD ADDRESS ONLY ALTHOUGH THE NEW ADD RESS WAS BROUGHT ON RECORD BY THE ASSESSEE BY FILING RETURN OF INCOME FOR A. Y . 2010 11 ON 15.10.2010 AND THE SEARCH WAS CONDUCTED ON 10.12.2010 I.E. AFT ER ALMOST TWO MONTHS. CONSIDERING THESE FACTS WE HOLD THAT THE PRESENT A SSESSMENT ORDERS ARE NULL AND VOID BY RESPECTFULLY FOLLOWING THE TRIBUNAL ORDER RENDERED IN THE CASE OF J. M. TRADING CORPN. VS. ACIT (SUPRA). 5. IN VIEW OF OUR DECISION IN THE ABOVE PARA NO OT HER GROUND IN ANY OF THE APPEALS REQUIRES ANY SEPARATE ADJUDICATION. 6. IN THE RESULT ALL THE SIX APPEALS OF THE ASSESS EE ARE ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) (SUNIL KUMAR YADAV) (A.K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18/10/2016 AM* COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R. I.T.A.T. BANGALORE ASSTT . REGISTRAR ITA NO. 1355 TO 1360/B/2014 6 1. DATE OF DICTATION 2. DATE ON WHICH TYPED DRAFT IS PLACED BEFORE THE DICT ATING MEMBER .. 3. !' # . $ %# / $ %# # & DATE ON WHICH THE APPROVED DRAFT COMES TO THE PS/SR .PS. 4. ''() & * + DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTAT ING MEMBER FOR PRONOUNCEMENT 5. * . %# / # . . %# # + DATE ON WHICH THE ORDER COMES BACK TO THE PS/SR.PS .. 6 * !' + DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. ! !' ' - ) IF NOT UPLOADED FURNISH THE REASON FOR DOING SO . 8. .% / 0 + DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. * 1'2 / 34 & 5 + DATE ON WHICH ORDER GOES FOR XEROX &ENDORSEMENT 10. 0 6 / + DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 11. * 7 & 0 8 + THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 12. !) * 9() & 0 9() /#5 . + THE DATE ON WHICH THE FILE GOES TO DESPATCH SECTION FOR DESPATCH OF THE TRIBUNAL ORDER 13. * 9() + DATE OF DESPATCH OF ORDER .