Angad Exports, New Delhi v. ACIT, New Delhi

ITA 1461/DEL/2014 | 2007-2008
Pronouncement Date: 22-11-2017 | Result: Allowed

Appeal Details

RSA Number 146120114 RSA 2014
Assessee PAN AAEFA8954D
Bench Delhi
Appeal Number ITA 1461/DEL/2014
Duration Of Justice 3 year(s) 8 month(s) 12 day(s)
Appellant Angad Exports, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 22-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted A
Tribunal Order Date 22-11-2017
Date Of Final Hearing 18-05-2017
Next Hearing Date 18-05-2017
First Hearing Date 18-05-2017
Assessment Year 2007-2008
Appeal Filed On 11-03-2014
Judgment Text
1 ITA NO. 1461/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI N. K. SAINI ACCOUNTANT MEM BER AND MS SUCHITRA KAMBLE JUDI CIAL MEMBER ITA NO. 1461/DEL/201 4 ( A.Y 2007-08) ANGAD EXPORTS A-14 WESTEND NEW DELHI AAEFA8954D (APPELLANT) VS ACIT CENTRAL CIRCLE-10 NEW DELHI (RESPONDENT) APPELLANT BY SH. AMIT GOEL CA RESPONDENT BY SH. B. RAMANJANEGULU SR. DR ORDER PER SUCHITRA KAMBLE JM THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST T HE ORDER DATED 20/1/2014 PASSED BY CIT(A)-XXXII NEW DELHI FOR THE ASSESSMENT YEAR 2007- 08. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE ADDITION OF RS. 46 19 000/- MADE BY THE ASSESSING OFFICER O N ACCOUNT OF ALLEGED BOGUS PURCHASE IS BEYOND THE JURISDICTION O F PROVISIONS OF SECTION 153A OF INCOME TAX ACT 1961 AND COMMISSION ER OF INCOME TAX (APPEALS) ERRED IN NOT HOLDING SO. DATE OF HEARING 23.10.2017 DATE OF PRONOUNCEMENT 22.11.2017 2 ITA NO. 1461/DEL/2014 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONF IRMING THE ADDITION OF RS.46 19 000/- MADE BY THE ASSESSING OF FICER ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 3. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORT OF ARTIFICIAL JEWELLERY. ALTHOUGH THE ASSESS EES REGISTERED ADDRESS IS SOUTH INDUSTRIAL AREA KIRTI NAGAR NEW DELHI THE MAIN BUSINESS ACTIVITY OF THE FIRM IS CARRIED OUT FROM 49 UDYOG VIHAR PH-IV GUR GAON. BESIDES THE ASSESSEE FIRM IS ALSO USING PLOT NO. 110 SECTOR 8 MANESAR GURGAON HARYANA AS GO DOWN FOR STORING THE GOODS. A SEARCH AND SE IZURE OPERATION U/S 132 OF THE ACT 1961 WAS CONDUCTED BY THE INVESTIGATION WI NG OF THE DEPARTMENT IN M/S TEGH GROUP OF CASES ON 26/4/2010 AND SIMULTANEO USLY THE APPELLANTS BUSINESS PREMISES AT 49 UDYOG VIHAR PHAE-IV GURG AON HARYANA WAS ALSO COVERED U/S 132(1) OF THE INCOME TAX ACT 1961. A NOTICE U/S 153A OF THE IT ACT 1961 DATED 13/4/2011 WAS ISSUED AND SERVED UPO N THE ASSESSEE. IN RESPONSE TO WHICH THE ASSESSEE FILED RETURN ON 2/5/ 2011 DECLARING A TOTAL INCOME OF RS.38 07 540/-. SUBSEQUENTLY NOTICES U/ S 142(1) ALONG WITH A DETAILED QUESTIONNAIRE AND U/S 143(2) WERE ISSUED A ND SERVED UPON THE ASSESSEE. IN RESPONSE TO THE SAME THE ARS OF THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS FROM TIME TO TIME AND FILE T HE NECESSARY DETAILS INFORMATION AND DOCUMENTS WHICH WERE EXAMINED BY TH E ASSESSING OFFICER AND THE CASE WAS DISCUSSED. THEREUPON THE ASSESSMENT WAS COMPLETED IN TERMS OF AN ORDER U/S 153A READ WITH SECTION 143(3) DATED 22 /3/2013 AT A TOTAL INCOME OF RS.84 26 540/- AS AGAINST THE RETURNED INCOME OF RS.38 07 540/- WHEREIN THE ASSESSING OFFICER MADE AN ADDITION OF RS. 46 1 9 000/- ON ACCOUNT OF BOGUS PURCHASES MADE THROUGH ACCOMMODATION ENTRIES. 4. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). TH E CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE WHEREBY CONFIRMING THE ADDIT ION OF RS.46 19 000/- ON ACCOUNT OF BOGUS PURCHASES. 3 ITA NO. 1461/DEL/2014 5. THE LD. AR SUBMITTED THAT SEARCH AND SEIZURE OPE RATION U/S 132 OF THE INCOME-TAX ACT 1961 IS CARRIED OUT IN THE CASE OF THE ASSESSEE ON 26/4/2010 WHILE COMPLETING THE ASSESSMENT U/S 153A/143(3). T HE ASSESSING OFFICER MADE THE ADDITION ON ACCOUNT OF BOGUS PURCHASE. T HE LD. AR SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS BEYON D THE SCOPE OF JURISDICTION OF SECTION 153A OF THE ACT. THE LD. AR SUBMITTED T HAT NO INCRIMINATING MATERIAL OR EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH SO AS TO DOUBT THE PURCHASES. ON DATE OF SEARCH I.E. 26 TH APRIL 2010 NO ASSESSMENT PROCEEDINGS WERE PENDING FOR THE YEAR UNDER CONSIDERATION. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISTURBING T HE CONCLUDED ASSESSMENT WITHOUT THERE BEING ANY INCRIMINATING MATERIAL FOUN D DURING THE SEARCH. IN- FACT IN THE ENTIRE ASSESSMENT ORDER THE ASSESSING OFFICER HAS NOT REFERRED ANY SEIZED MATERIAL OR OTHER MATERIAL FOR THE YEAR UND ER CONSIDERATION HAVING FOUND. THUS THE ACTION OF THE ASSESSING OFFICER W AS BASED ON CONJECTURE AND SURMISES. THEREFORE THE ADDITION MADE BY THE ASSE SSING OFFICER ON ACCOUNT OF BOGUS PURCHASES IS NOT SUSTAINABLE. THE LD. AR REL IED UPON THE DELHI HIGH COURT DECISIONS IN CASE OF CIT VS. KABUL CHAWLA 61 TAXMAN.COM 412 & ALSO PCIT VS. MEETA GULGUTIA AS WELL AS ITAT DECISION IN CASE OF M/S TEGH INTERNATIONAL VS. ACIT (1462 & 1463/DEL/2014) ORDER DATED 27/5/2016. 6. THE LD. DR RELIED UPON THE ORDER OF THE ASSESSIN G OFFICER AND THE CIT(A). HE SUBMITTED THAT BOTH THE AUTHORITIES ARE PROPER I N MAKING AND SUSTAINING THE ADDITION MADE BY THE ASSESSING OFFICER. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. FROM THE ORDER OF THE ASSESSING OFFICER IT CAN BE CLEARLY SEEN THAT NO INCRIMINATING MATERIAL IS FOUND DURING THE SEARCH A CTIVITIES. IN-FACT THE GROUP IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND STA RTED THROUGH FLAG SHIP CONCERNED M/S TEGH INTERNATIONAL. IN-FACT THE ASS ESSMENT WAS LONG BACK CONCLUDED AND THE SAME WAS NOT DISPUTED BY THE REVE NUE AUTHORITIES. THE 4 ITA NO. 1461/DEL/2014 ITAT IN CASE OF M/S TEGH INTERNATIONAL (SUPRA) HAS ALLOWED THE APPEAL OF THE ASSESSEE THEREIN AND BY APPLYING THE RATIO OF THE H ONBLE DELHI HIGH COURT DECISION IN CASE OF KABUL CHAWLA THE RELEVANT FIND INGS ARE GIVEN IN PARA 8 AND 9 OF THE ORDER DATED 27.05.2016 WHICH READS AS UNDE R: 8. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RELEVANT AVAILABLE WITH US ESPECIALLY THE ORDERS OF THE REVENUE AUTHO RITIES AND THE CASES REFERRED BY THE LD. COUNSEL OF THE ASSESSEE IN THE SHAPE OF PAPER BOOK. WE FIND THAT THE ADDITIONS MADE BY THE AO ARE BEYON D THE SCOPE OF SECTION 153A OF THE INCOME TAX ACT 1961 BECAUSE NO INCRIM INATING MATERIAL OR EVIDENCE HAD BEEN FOUND DURING THE COURSE OF SEARCH SO AS TO DOUBT THE PURCHASES. IT WAS NOTICED THAT AS ON THE DATE OF SE ARCH I.E. 26.4.2010 NO ASSESSMENT PROCEEDINGS WERE PENDING FOR THE YEAR UN DER CONSIDERATION AND THE AO WAS NOT JUSTIFIED IN DISTURBING THE CONC LUDED ASSESSMENT WITHOUT THERE BEING ANY INCRIMINATING MATERIAL BEIN G FOUND IN SEARCH. IN FACT IN THE ENTIRE ASSESSMENT ORDER THE AO HAS NO T REFERRED TO ANY SEIZED MATERIAL OR OTHER MATERIAL FOR THE YEAR UNDER CONSI DERATION HAVING BEING FOUND DURING THE COURSE OF SEARCH IN THE CASE OF AS SESSEE LEAVE ALONE THE QUESTION OF ANY INCRIMINATING MATERIAL FOR THE YEAR UNDER APPEAL. THEREFORE IN OUT CONSIDERED OPINION THE ACTION OF THE AO IS BASED UPON CONJECTURES AND SURMISES AND HENCE THE ADDITIONS M ADE ON THE ASSESSED BOGUS PURCHASES IS NOT SUSTAINABLE IN THE EYES OF L AW BECAUSE THIS ISSUE IN DISPUTE IS NOW NO MORE RES-INTEGRA IN VIEW OF T HE DECISION DATED 28.8.2015 OF THE HONBLE DELHI HIGH COURT IN THE CA SE OF CIT VS. KABUL CHAWLA PASSED IN ITA NO. 707 709 AND 713/2014 WHERE IN THE HONBLE HIGH COURT OF DELHI HAS HELD AS UNDER:- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT READ WITH THE PROVISOS THERETO AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED ITA NOS. 707 709 AND 713 OF 2014 OF DECISIONS THE LEGA L POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORY ISSUED TO THE PERSON SEARCHED 5 ITA NO. 1461/DEL/2014 REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATE LY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES P LACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAV E TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEAR CH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE TOTAL INC OME OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESS MENT ORDER IN RESPECT OF EACH OF THE SIX AYS IN WHICH BOTH THE DISCLOSED AN D THE UNDISCLOSED ICNOEM WOULD BE BROUGHT TO TAX IV. ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIONS S HOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE O F THE SEARCH OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND IT DOES NOT MEAN THA T THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ITA NOS. 707 709 AND 713 OF 2014 OF ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL. V. IN ABSENCE OF ANY INCRIMINATING MATERIAL THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REAS SESSMENT CAN BE MADE. THE WORD ASSESS IN SECTION 153A IS RELATABL E TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEAR CH) AND THE WORD REASSESS TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UND ER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND A NY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON TH E BASIS OF SOME 6 ITA NO. 1461/DEL/2014 INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISC OVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCL OSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 38. THE PRESENT APPEALS CONCERN AYS 2002-03 2005-06 A ND 2006-07. ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALRE ADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURIN G THE SEARCH NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREAD Y ASSESSED. 9. RESPECTFULLY FOLLOWING THE PRECEDENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA AS AFORESAID WE ALLOW THE APPEAL OF THE ASSESSEE BECAUSE AO HAS COMPLETED TH E ASSESSMENT AND MADE THE ADDITION IN DISPUTE WITHOUT ANY INCRIMINAT ING MATERIAL FOUND DURING THE SEARCH AND SEIZURE OPERATION AND THE ADD ITION IN THIS CASE PURELY BASED ON THE MATERIAL ALREADY AVAILABLE ON R ECORD. HENCE THE ADDITION IN THE CASE IS DELETED AND THE GROUND RAIS ED BY THE ASSESSEE IN THE APPEAL IS ALLOWED. SO RESPECTFULLY FOLLOWING THE AFORESAID ORDER IN T HE CASE OF M/S. TEGH INTERNATIONAL (SUPRA) THE APPEAL OF THE ASSESSEE IS ALLOWED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND NOVEMBER 2017 . SD/- SD/- (N. K. SAINI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 22/11/2017 R. NAHEED * COPY FORWARDED TO: 7 ITA NO. 1461/DEL/2014 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 23/10/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 24/10/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS .11.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK .11.2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 8 ITA NO. 1461/DEL/2014