DCIT CEN CIR 14, MUMBAI v. SIDDHI TWINKLE ENTERPRISES, MUMBAI

ITA 2395/MUM/2013 | 2007-2008
Pronouncement Date: 30-09-2016 | Result: Dismissed

Appeal Details

RSA Number 239519914 RSA 2013
Assessee PAN ABAFS6316G
Bench Mumbai
Appeal Number ITA 2395/MUM/2013
Duration Of Justice 3 year(s) 6 month(s) 4 day(s)
Appellant DCIT CEN CIR 14, MUMBAI
Respondent SIDDHI TWINKLE ENTERPRISES, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 30-09-2016
Date Of Final Hearing 08-01-2015
Next Hearing Date 08-01-2015
Assessment Year 2007-2008
Appeal Filed On 26-03-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E B ENCH MUMBAI BEFORE SHRI RAJENDRA ACCOUNTANT MEMBER AND SHRI C.N. PRASAD JUDICIAL MEMBER / I .TA NO. 2395/MUM/2013 ( / ASSESSMENT YEAR: 2007-08 THE DCIT CENTRAL CIRCLE-14 R.NO. 1007 10 TH FLOOR OLD CGO ANNEXE BLDG. MUMBAI-400 020 / VS. M/S. SIDDHI TWINKLE ENTERPRISES 1304 ALLMANDA PRIDE PARK LAUUKAIM INDUSTRIES THANE (W)-400 067 C.O. NO. 115/MUM/2015 / I .TA NO. 2395/MUM/2013 ( / ASSESSMENT YEAR: 2007-08 M/S. SIDDHI TWINKLE ENTERPRISES 1304 ALLMANDA PRIDE PARK LAUUKAIM INDUSTRIES THANE (W)-400 067 / VS. THE DCIT CENTRAL CIRCLE-14 R.NO. 1007 10 TH FLOOR OLD CGO ANNEXE BLDG. MUMBAI-400 020 ./ ./ PAN/GIR NO. ABAFS 6316G ( / APPELLANT ) .. ( / RESPONDENT ) / ASSESSEE BY: SHRI MANJUNATHA SWAMY / DEPARTMENT BY: DR. SUNIL PATHAK SHRI SUBODH RATNAPARAKHI / DATE OF HEARING :19.07.2016 ! / DATE OF PRONOUNCEMENT :30.09.2016 / O R D E R PER C.N. PRASAD JM: ITA NO. 2395/M/2013 2 THIS APPEAL IS FILED BY THE REVENUE AND THE CROSS O BJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) -37 MUMBAI DATED 01.01.2013 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: (I) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD.C1T(A) ERRED IN HOLDING THAT THE A.O. COULD NOT MAKE ADDITION WITHOUT INCRIMINATING MATERIAL REGARDING THE CLAIM OF DEDUC TION U/S. 801B(10) OF THE ACT WITHOUT CONSIDERING THE FACT THAT ONCE THE ASSE SSMENT IS INITIATED U/S. 153A OR 153C OF THE ACT IT IS OPEN FOR THE AO TO MAKE A DDITION ON ANY ISSUE WHETHER ANY INCRIMINATING MATERIAL RELATED THAT IS FOUND IN THE COURSE OF SEARCH OR NOT'. (II)'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD.C1T(A) ERRED IN ALLOWING THE DEDUCTION U/S. 801B (10) OF THE ACT RELYING ON THE CASE OF VANDANA PROPERTIES IN RESPECT OF WHICH SLP FILED BY THE REVENUE IS REPORTED TO BE PENDING.' (III) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.C1T(A) ERRED IN DELETING THE ADDITION OF RS. 4 1 6 41 820/- REPRESENTING DEDUCTION CLAIMED U/S 801B(10) WITHOUT CONSIDERING THE FACT AND THE PROVISIONS OF SECTION 801B(10)(A) THAT THE ENTIRE P ROJECT A TO K WAS APPROVED ON 20.03.2002 BY THE LOCAL AUTHORITY VIDE COMMON PL AN CONSIDERED AS A SINGLE PROJECT AND ACCORDINGLY I & J WAS ONLY EXTENSION O F PROJECT A TO K REQUIRING COMPLETION BY 31.3.2008 WHICH WAS NOT FULFILLED IN THE CASE OF PROJECT I & J.' 3. BRIEFLY STATED THE FACTS ARE THAT THERE WAS A SE ARCH U/S. 132 OF THE OF THE ACT AT THE PREMISES OF ONE OF THE MEMB ERS OF THE ASSESSEE (AOP) ON 28.8.2008. SUBSEQUENTLY ASSESSMENT WAS CO MPLETED U/S. 143(3) R.W. SEC. 153A OF THE ACT ON 30.10.2010 BY T HE ASSESSING OFFICER ACCEPTING THE TOTAL INCOME DECLARED AT NIL BY THE ASSESSEE AFTER CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT O N THE HOUSING PROJECT. IT APPEARS THAT THE ASSESSING OFFICER EXA MINED THE ALLOWABILITY OF THE CLAIM OF THE ASSESSEE U/S. 80IB (10) AND ACCEPTED THE CLAIM OF THE ASSESSEE WHILE COMPLETING THE ASSE SSMENT. SUBSEQUENTLY SEARCH ACTION U/S. 132 HAS TAKEN PLACE IN THE CASE OF ITA NO. 2395/M/2013 3 ANOTHER MEMBER OF THE ASSESSEE (AOP) ALONGWITH OTHE R ASSOCIATED PERSONS AND GROUP COMPANIES. CONSEQUENT TO SEARCH N OTICE U/S. 153C WAS ISSUED REQUIRING THE ASSESSEE TO FILE RETURN OF INCOME. THE ASSESSEE FILED RETURN OF INCOME DECLARING NIL INCOM E IN RESPONSE TO NOTICE ISSUED U/S. 153C OF THE ACT. THE ASSESSMENT WAS COMPLETED U/S. 143(3) R.W. SEC. 153C ON 29.12.2011 DETERMININ G TOTAL INCOME AT RS. 4 16 41 820/- AS AGAINST NIL INCOME RETURNED. WHILE COMPLETING THE ASSESSMENT THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE U/S. 80IB(10) OF THE ACT BY OBSERVING THAT THE PROJECT DOES NOT FULFILL THE TWO VITAL CONDITIONS PRESCRIBED U/S . 80IB(10)(A)(I) AND 80IB(10)(B) OF THE ACT. 4. ON APPEAL THE LD. CIT(A) DELETED THE DISALLOWAN CE HOLDING THAT NO INCRIMINATING MATERIAL WAS FOUND IN RESPECT OF T HE CLAIM MADE U/S. 80IB OF THE ACT DURING THE COURSE OF SEARCH AND SEI ZURE PROCEEDINGS AND THEREFORE HE HELD THAT AFTER INITIATING THE PRO CEEDINGS THE ASSESSING OFFICER AT BEST SHOULD HAVE LIMITED HIMSE LF TO MAKING THE ASSESSMENT SAME AS THAT OF THE ORIGINAL ASSESSMENT FRAMED U/S. 143(3) OF THE ACT. FURTHER HE HAS HELD THAT EVEN OTHERWISE ON MERITS IT IS AN ADMITTED POSITION THAT THE ASSESSEES CLAI M IS DIRECTLY COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS VANDANA PROPERTIES. AGAINST THIS ORDER THE RE VENUE IS IN APPEAL BEFORE US. 5. THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY S UPPORTED THE ORDERS OF THE ASSESSING OFFICER IN DENYING THE CLAIM FOR DEDUCTION U/S. 80IB(10) OF THE ACT TO THE ASSESSEE ON THE HOU SING PROJECT. ITA NO. 2395/M/2013 4 6. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY SUPP ORTS THE ORDER OF THE LD. CIT(A). HE FURTHER SUBMITS THAT T HERE WAS NO INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARC H AND THEREFORE THE CLAIM WHICH WAS EXAMINED AND ALLOWED WHILE COMP LETING THE ASSESSMENT U/S. 143(3) AND ALSO U/S. 143(3) R.W. S ECTION 153A CANNOT BE DISALLOWED WHILE COMPLETING THE ASSESSMEN TS U/S. 153C OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIA L. HE SUBMITS THAT THERE IS NO PENDING PROCEEDINGS FOR THE ASSESSMENT YEAR 2007-08 AS ON THE DATE OF SEARCH AND THEREFORE THE ASSESSMENT FOR THE ASSESSMENT YEAR 2007-08 HAS NOT ABATED. HE FURTHER SUBMITS THAT DISALLOWANCE U/S. 80IB(10) IS NOT JUSTIFIED IN NON ABATED ASSESSMENT WHERE SEARCH U/S. 132 DID NOT REVEAL ANY INCRIMINA TING EVIDENCES TO SUGGEST THAT THERE IS UNDISCLOSED INCOME BY THE ASS ESSEE. FOR THIS PROPOSITION HE PLACES RELIANCE ON THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF CIT VS CONTINENTAL WAREHOUSING CORPN. (373 ITR 0645)(BOM) ALL CARGO GLOBAL LOGISTICS LTD VS DCIT (137 ITD 0287)(SB). HE FURTHER SUBMITS THAT EVEN ON MERITS THE ISSUE IS COVERED BY THE DECISION OF THE HONBLE JURISDICTION AL HIGH COURT IN THE CASE OF CIT VS VANDANA PROPERTIES (SUPRA) WHER EIN THE HONBLE HIGH COURT HELD THAT CLUSTER OF BUILDINGS FROM OUT OF A LARGE LAY OUT WOULD BE ELIGIBLE FOR DEDUCTION U/S. 80IB(10) OF TH E ACT. 7. HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDE RS OF THE LOWER AUTHORITIES AND THE DECISIONS RELIED ON. THE RE WAS A SEARCH U/S. 132 OF THE OF THE ACT AT THE PREMISES OF ONE OF THE MEMBERS OF THE ASSESSEE (AOP) ON 28.8.2008. SUBSEQUENTLY ASSE SSMENT WAS COMPLETED U/S. 143(3) R.W. SEC. 153A OF THE ACT ON 30.10.2010 BY THE ASSESSING OFFICER ACCEPTING THE TOTAL INCOME DECLAR ED AT NIL BY THE ITA NO. 2395/M/2013 5 ASSESSEE AFTER CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT. IT APPEARS THAT THE ASSESSING OFFICER EXAMINED THE ALLOWABILIT Y OF THE CLAIM OF THE ASSESSEE U/S. 80IB(10) AND ACCEPTED THE CLAIM O F THE ASSESSEE WHILE COMPLETING THE ASSESSMENT. SUBSEQUENTLY SEAR CH ACTION U/S. 132 HAS TAKEN PLACE IN THE CASE OF ANOTHER MEMBER O F THE ASSESSEE (AOP) ALONGWITH OTHER ASSOCIATED PERSONS AND GROUP COMPANIES. THE ASSESSEE FILED RETURN OF INCOME DECLARING NIL INCOM E IN RESPONSE TO NOTICE ISSUED U/S. 153C OF THE ACT. THE ASSESSMENT WAS COMPLETED U/S. 143(3) R.W. SEC. 153C ON 29.12.2011 DETERMININ G TOTAL INCOME AT RS. 4 16 41 820/- AS AGAINST NIL INCOME. WHILE COM PLETING THE ASSESSMENT THE ASSESSING OFFICER REJECTED THE CLAI M OF THE ASSESSEE MADE U/S. 80IB(10) OF THE ACT. THE ASSESSING OFFIC ER REJECTED THE CLAIM OF THE ASSESSEE U/S. 80IB(10) BY OBSERVING TH AT THE PROJECT DOES NOT FULFILL THE TWO VITAL CONDITIONS PRESCRIBED U/S . 80IB(10)(A)(I) AND 80IB(10)(B). 7.1. WE HAVE GONE THROUGH THE ASSESSMENT ORDER AND FIND THAT THERE IS NO WHISPER ABOUT THE INCRIMINATING MATERIA L FOUND BY THE ASSESSING OFFICER REGARDING THE CLAIM MADE BY THE A SSESSEE U/S. 80IB(10) OF THE ACT. IT APPEARS THAT THE DEDUCTION U/S. 80IB(10) HAS NOT BEEN DENIED BASED ON ANY SEIZED MATERIALS. BUT IT WAS DONE ONLY ON THE BASIS OF THE ASSESSEE NOT EXPLAINING WHY THE DEDUCTION U/S. 80IB(10) SHOULD BE ALLOWED. THE LD. CIT(A) HAS GIV EN A CATEGORICAL FINDING THAT NO INCRIMINATING MATERIAL WAS FOUND A ND NO DISALLOWANCE CAN BE MADE U/S. 80IB (10) STATING AS UNDER: IN VIEW OF THE ABOVE IT CANNOT BE SAID THAT THE A CTION INITIATED BY THE LD. CIT(A). A.O U/S. 153A WAS BAD IN LAW. HAVING SAID THAT IT IS ALSO IMPORTANT TO NOTE THAT IN THE VERY SAID DECISION IN ANIL BHATIA (SUPRA) HONBLE DELHI HIGH COURT TOOK ITA NO. 2395/M/2013 6 PAINS TO SUGGEST THAT IF THERE WAS NO INCRIMINATING MATERIAL FOUND THE ASSESSING OFFICER HAS TO STOP SHORT IN 1 53A PROCEEDINGS AND RESTRICT HIMSELF TO THE INCOME ALREADY DETERMIN ED/ASSESSED IN THE CONCLUDED PROCEEDINGS U/S. 143(3). IT IS AN ADMITTED FACT THAT NO INCRIMINATING MATERIAL WAS FOUND IN RESPECT OF 80IB CLAIM OF THE APPELLANT DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS AND THEREFORE AFTER INITIATING THE PROC EEDINGS THE ASSESSING OFFICER AT BEST SHOULD HAVE LIMITED HIMSE LF TO MAKING THE SAME ASSESSMENT AS IN THE ORIGINAL ASSESSMENT F RAMED U/S. 143(3). 7.2. IN THE CASE OF CIT VS CONTINENTAL WAREHOUSING (SUPRA) THE JURISDICTIONAL HIGH COURT HELD THAT IN THE ABSENCE OF ANY MATERIALS UNEARTHED DURING THE SEARCH U/S. 153A/C PROCEEDINGS TO SHOW THAT THE RELIEF ALLOWED TO THE ASSESSEE WAS ERRONEOUS T HE ASSESSING OFFICER WHILE PASSING THE ORDER U/S. 153A R.W. SECT ION 143(3) COULD NOT HAVE DISTURBED THE ASSESSMENT ORDER FINALIZED R ELATING TO THE RELIEF/DEDUCTION ALREADY ALLOWED BY THE ASSESSING O FFICER. SIMILAR IS THE VIEW OF THE SPECIAL BENCH RAJKOT DECISION IN T HE CASE OF ALL CARGO GLOBAL LOGISTICS (SUPRA). 8. IN THIS CASE ADMITTEDLY THERE IS NO INCRIMINAT ING MATERIAL FOUND IN THE COURSE OF SEARCH SUGGESTING THAT THE C LAIM OF THE ASSESSEE U/S. 80IB(10) IS FALSE OR WRONG. THE ASSE SSMENT FOR THE ASSESSMENT YEAR 2007-08 WAS COMPLETED U/S. 143(3) A ND ALSO U/S. 143(3) R.W. SECTION 153A AND THERE IS NO PENDING PR OCEEDING TO SHOW THAT THE ASSESSMENT IS ABATED HENCE IN THE ABSENCE OF ANY INCRIMINATING MATERIAL THE QUESTION OF DENYING DED UCTION U/S. 80IB(10) OF THE ACT TO THE ASSESSEE FOR THE ASSESSM ENT YEAR 2007-08 DOES NOT ARISE. HENCE WE HOLD THAT THE LD. CIT(A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE AND ACCORDINGLY HIS ORDER IS SUSTAINED. ITA NO. 2395/M/2013 7 9. SINCE WE ARE AFFIRMING THE ORDER OF THE LD. CIT (A) DELETING THE DISALLOWANCE U/S. 80IB (10) OF THE ACT THE C.O. FI LED BY THE ASSESSEE IS DISMISSED AS INFRUCTUOUSE. 10. IN THE RESULT THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER 2016. SD/- SD/- (RAJENDRA) (C.N. PRASAD ) ' / ACCOUNTANT MEMBER $ %' /JUDICIAL MEMBER MUMBAI; (' DATED 30 TH SEPTEMBER 2016 . % . ./ RJ SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+ %%-. -.! / DR ITAT MUMBAI 6. /01 / GUARD FILE. / BY ORDER *% //TRUE COPY// / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI