DCIT, New Delhi v. M/s. Candy Properties Pvt. Ltd., New Delhi

ITA 167/DEL/2014 | 2004-2005
Pronouncement Date: 22-11-2017 | Result: Dismissed

Appeal Details

RSA Number 16720114 RSA 2014
Assessee PAN AABCC6993J
Bench Delhi
Appeal Number ITA 167/DEL/2014
Duration Of Justice 3 year(s) 10 month(s) 14 day(s)
Appellant DCIT, New Delhi
Respondent M/s. Candy Properties Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 22-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 22-11-2017
Date Of Final Hearing 09-05-2017
Next Hearing Date 09-05-2017
First Hearing Date 09-05-2017
Assessment Year 2004-2005
Appeal Filed On 08-01-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : B NEW DELHI SHRI P.K. BANSAL V.P. AND SHRI C.M. GARG JM ITA NO: 1 6 7 /DEL/201 4 AY : 200 4 - 05 DY.CIT CENTRAL CIRCLE 5 VS. CANDY PROPERTIES PVT.LTD. NEW DELHI 12 RING ROAD LAJPAT NAGAR IV NEW DELHI 110 024 PAN: AABCC 6993 J (APPELLANT) (RESPONDENT) APPELLANT BY : MS. RACHNA SINGH CIT D.R. RESPONDENT BY : SHRI RAJIV SAXENA ADV. O R D E R PER C.M. GARG JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD.CIT(A) - X XX I NEW DELHI PERTAINING TO THE ASSESSMENT YEAR (AY) 200 4 - 05 . 1 . 1 . THE REVISED GROUNDS RAISED BY THE REVENUE READ AS FOLLOWS. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) HAS FAILED TO APPRECIATE THE FACTS MENTIONED IN THE ASSESSMENT ORDER. 2. THE LD.CIT(A) SEEMS TO HAVE IGNORED THE FACTS THAT THE CASE LAWS RELIED UPON ARE ON THE ASSESSMENT COMPLETED AS PER PROVISIONS OF SECTION 153A WHEREAS IN THE CASE OF THE PRESENT ASSESSEE THE ASSESSMENT WAS COMPLETED U/S 153C. 3. THE LD.CIT(A) HAS FAILED TO APPRECIATE THAT THE FA CTS OF THE CASE OF CIT VS. ANIL KUMAR BHATIA (2012) 211 TAXMAN 453 (DELHI) ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE OF THE ASSESSEE. ITA 167/DEL/2014 A.Y. 2004 - 05 CANDY PROPERTIES P.LTD. NEW DELHI 2 4. THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.37 00 000/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT. 2. WE HAVE HEARD ARGUMENTS FROM BOTH SIDES AND CAREFULLY PERUSED RELEVANT MATERIAL PLACED ON RECORD. THE LD.CIT D.R. SUPPORTING THE ASSESSMENT ORDER FRAMED U/S 153 R.W.S.143(3) OF THE INCOME TAX ACT 1961 (FOR SHORT THE ACT ) AN D SUBMITTED THAT THE ASSESSING OFFICER (A.O.) HAS VALID JURISDICTION TO FRAME SET ASIDE ORDER AND IN MAKING ADDITION ON ACCOUNT OF UNEXPLAINED EXPENDITURE ON CASH CREDITS. THE LD.CIT D.R. FURTHER SUBMITTED THAT THE LD.CIT(A) HAS FAILED TO APPRECIATE THE FACTS NOTED BY THE A.O. AND HE HAS ALSO IGNORED THE VITAL FACT THAT THE CASE LAWS RELIED UPON BY HIM ARE ON THE COMPLETED ASSESSMENT U/S 153A OF THE ACT WHEREAS IN THE PRESENT CASE ASSESSMENT WAS COMPLETED U/S 153C OF THE ACT. THE LD.CIT D.R. VEHEMENT LY POINTED OUT THAT THE LD.CIT(A) HAS FAILED TO APPRECIATE THAT THE FACTS OF THE CASE OF CIT VS. ANIL KUMAR BHATIA (2012) 211 TAXMAN 453 (DEL) ARE NOT APPLICABLE TO THE PRESENT CASE. THE LD. DR REITERATED HER WRITTEN SUBMISSIONS AND SUBMITTED THAT THE LD.CIT(A) WAS NOT CORRECT IN HOLDING THAT THE ASSESSMENT ORDER PASSED BY THE A.O. WAS WITHOUT JURISDICTION AND LIABLE TO BE QUASHED AS THE ADDITION MADE BY THE A.O. WITHOUT DRAWING SUPPORT FROM THE DOCUMENTS SEIZED U/S 132 OF THE ACT CANNOT BE SUSTAINED . 3. REPLYING TO THE ABOVE PLACING RELIANCE ON VARIOUS DECISIONS INCLUDING RECENT DECISION OF HON BLE SUPREME COURT IN THE CASE OF CIT VS. SINGHAD TECHNICAL EDUCATION SOCIETY REPORTED IN 84 TAXMAN.COM 290 (S.C.) THE LD.COUNSEL FOR THE ASSESSEE SUBMIT TED THAT WHETHER THE DOCUMENTS FOUND AND SEIZED FROM THE ASSESSEE DID NOT ESTABLISH CORRELATION DOCUMENT WISE WITH THE ASSESSMENT YEA R IN QUESTION THEN NOTICE ISSUED U/S 153C OF THE ACT HAS RIGHTLY BEEN QUASHED AND SET ASIDE. THE LD.COUNSEL HAS ALSO PL ACED RELIANCE ON THE FOLLOWING DECISIONS. I. CIT VS. RRJ SECURITIES LTD. REPORTED IN 380 ITR 612 II. CIT VS. INDEX SECURITIES P.LTD. IN ITA 566/2017 III. CIT VS. SARWAR AGENCY P.LTD. IN ITA 422/2017 ITA 167/DEL/2014 A.Y. 2004 - 05 CANDY PROPERTIES P.LTD. NEW DELHI 3 IV. CIT VS. KABUL CHAWLA REPORTED IN 380 ITR 573 (DEL.) 4. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSIONS AND MATERIAL PLACED ON RECORD OF THE TRIBUNAL INTER ALIA SUBMISSIONS FILED BY THE REVENUE AND CASE LAWS RELIED UPON BY BOTH SIDES AT THE VERY OUTSET WE OBSERVE THAT IN THE PRESENT CASE WHILE FRAMING ASSESSMENT ORDER U/S 153C OF THE ACT THE A.O. HAS MADE ONLY ADDITION U/S 68 OF THE ACT. WE ALSO NOTE THAT IN THE PRESENT ASSESSMENT YEAR 2004 - 05 THE ASSESSMENT WAS NOT ABATED HENCE THE A.O. HAS LIMITED POWER IN COMPLETING THE ASSESSMENT. AS PER RATIO OF VARIOUS DECISIONS OF HON BLE SUPREME COURT AND HIGH COURT THE A.O. IS REQUIRED TO RESTRICT HIMSELF TO THE SEIZED MATERIAL WHILE MAKING ADDITION OR DISALLOWANCE DURING ASSESSMENT U/S 153C OF THE ACT IN COMPLETED ASSESSMENT ON THE DATE OF SEARCH. ON BEING ASKED BY THE BENCH THE LD.CIT DR COULD NOT CONTROVERT THIS FACT THAT WHILE MAKING ADDITION U/S 68 OF THE ACT THE A.O. HAS NOT RELIED UPON ON ANY DOCUMENT SEIZED U/S 132 OF THE ACT FOR MAKING IMPUGNED ADDITION U/S 68 OF THE ACT. THE LD.CIT(A) HAS ALSO CONSIDERED THE REMAND REPORT OF THE A.O. DATED 27.8.2013 SUBMITTED TO THE LD.CIT(A) CLEARLY STATED THAT THE A.O. HAS NOT MADE ANY USE OF THE SEIZED MATERIAL FOR MAKING ADDITIONS IN THE ASSESSMENT ORDER. IN THIS SCENARIO AND BACK DROP OF THE ABOVE NOTED FACT WE SAFELY PRESUME THAT THE SOLE ADDITION HAS NOT BEEN MADE BY USING SEIZED MATERIAL U/S 132 OF THE ACT. 5. IN THE RECENT DECISION OF HON BLE SUPREME COURT IN THE CASE OF CIT VS. SINGHA D TECHNICAL EDUCATIONAL SOCIETY THEIR LORDSHIP S SPEAKING FOR THE APEX COURT HELD THAT WHETHER DOCUMENTS FOUND AND SEIZED FROM THE ASSESSEE DID NOT ESTABLISH CORRELATION DOCUMENT WISE WITH ASSESSMEN T YEARS IN QUESTION THEN NOTICE ISSUED U/S 153 CIT(A) OF THE ACT HAS RIGHTLY BEEN QUASHED AND SET ASIDE. IN THE PRESENT CASE ALSO FROM THE REMAND REPORT OF THE A.O. SUBMITTED TO THE LD.CIT(A) DATED 27.8.2013 IT IS CLEAR THAT THE A.O. HAS NOT MADE ANY USE OF SEIZED MATERIAL FOR MAKING SOLE ADDITION IN A.Y. 2004 - 05 THEREFORE BENEFIT OF RATIO OF DECISION OF HON BL E SUPREME COURT IN THE CASE OF SINGHA D TECHNICAL EDUCATIONAL SOCIETY (SUPRA) IS APPLICABLE IN FAVOUR OF THE ASSESSEE ON ALL FOUR CORNERS. FURTHER IN THE CASE OF CIT VS. RRJ SECURITIES LTD. (SUPRA) THE HON BLE JURISDICTIONAL HIGH COURT ITA 167/DEL/2014 A.Y. 2004 - 05 CANDY PROPERTIES P.LTD. NEW DELHI 4 HAS HELD THAT IN TERMS OF S.153C OF THE ACT CONCLUDED ASSESSMENT OF THE ASSESSEE CANNOT BE INTERFERED WITH U/S 153A OF THE ACT UNLESS INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE HAS BEEN SEIZED IN COURSE OF SEARCH OF ANY OTHER PERSON. IT IS NOT OUT OF CONTEXT TO MENT ION THAT IN THE ASSESSMENT PROCEEDINGS U/S 153C OF THE ACT THE ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH PROVISIONS OF S.153A OF THE ACT M EANI NG THEREBY IN THE ASSESSMENT PROCEEDINGS U/S 153C OF THE ACT THE A.O. HAS TO ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON AS PER PROVISIONS OF S.153A OF THE ACT. THE WORD ASSESS HAS BEEN USED FOR ABATED ASSESSMENT AND THE WORD REASSESS HAS BEEN USED FOR THE COMPLETED ASSESSMENT. UNDISPUTEDLY THE PRESENT CASE IS PERTAINING TO THE COMPLETED ASSESSMENT FOR A.Y. 2004 - 05 ON THE DATE OF SEARCH THEREFORE AS PER RATIO LAID DOWN BY HON BLE DELHI HIGH COURT IN THIS CASE THE COMPLETED ASSESSMENT CANNOT BE INTERFERED UNLESS INCRIMINATING MATERIAL BELONGED TO THE ASSESSEE HAS BEEN SEIZED IN THE COURSE OF SEARCH OF ANY OTHER PERSON. 6. THE SAME PROPOSITION HAS BEEN LAID DOWN BY HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA WHEREIN AFTER CONSIDERING THE RATIO OF DECISIONS AT THAT POINT OF TIME THEIR LORDSHIPS HELD THAT A COMPLETED ASSESSMENT CAN BE INTERFERED WITH BY THE A.O. UNLESS ON THE BASIS OF SOME INCRIMINATING MATERIAL DURING THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT UNEARTHED DISCLOSED OR NOT MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. THE RATIO OF THIS DECISION ALSO SQUARELY APPLIES TO THE PRESENT CASE IN FAVOUR OF THE ASSESSEE. 7. ON THE BASIS OF FOREGOING DISCUSSION WE REACH TO A LOGICAL CONCLUSION THAT TH E CONCLUSION DRAWN BY THE LD.CIT(A) THAT ADDITION MADE BY THE A.O. WITHOUT DRAWING SUPPORT FROM THE DOCUMENTS SEIZED U/S 132 OF THE ACT CANNOT BE SUSTAINED IS QUITE CORRECT AND JUSTIFIED. WE ARE UNABLE TO SEE ANY VALID REASON TO INTERFERE WITH THE SAME. HENCE WE UPHOLD THE SAME. ACCORDINGLY THE GROUNDS OF REVENUE BEING DEVOID OF MERIT ARE DISMISSED. ITA 167/DEL/2014 A.Y. 2004 - 05 CANDY PROPERTIES P.LTD. NEW DELHI 5 8. IN THE RESULT THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 2 RD NOVEMBER 2017. SD/ - SD/ - (P.K. BANSAL) (C.M. GARG) VICE PRESIDENT JUDICIAL MEMBER DATED: THE 2 2 RD NOVEMBER 2017. @ MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT DELHI BENCHES DELHI