Dimpy Malhotra, Faridkot v. DCIT, Ludhiana

ITA 646/CHANDI/2015 | 2009-2010
Pronouncement Date: 18-10-2016 | Result: Allowed

Appeal Details

RSA Number 64621514 RSA 2015
Assessee PAN AAACO3509R
Bench Chandigarh
Appeal Number ITA 646/CHANDI/2015
Duration Of Justice 1 year(s) 4 month(s)
Appellant Dimpy Malhotra, Faridkot
Respondent DCIT, Ludhiana
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted Not Allotted
Tribunal Order Date 18-10-2016
Date Of Final Hearing 19-09-2016
Next Hearing Date 19-09-2016
Assessment Year 2009-2010
Appeal Filed On 17-06-2015
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES CHANDIGARH BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA ACCOUNTANT MEMBER ITA NO. 643/CHD/2015 ASSESSMENT YEAR: 2007-08 M/S OASIS DISTILLERIES LIMITED VS. THE DCIT CENTR AL CIRCLE II INDORE (M.P.) LUDHIANA PAN NO. AAACO3509R ITA NO. 644/CHD/2015 ASSESSMENT YEAR: 2009-10 SH. GAURAV MALHOTRA VS. THE DCIT CENTRAL CIRCLE -II FARIDKOT LUDHIANA PAN NO. ABTPM2471M ITA NO. 646/CHD/2015 ASSESSMENT YEAR: 2009-10 MRS. DIMPY MALHOTRA VS. THE DCIT CENTRAL CIRCLE -II FARIDKOT LUDHIANA PAN NO. AIGPM9210L & ITA NO. 240/CHD/2015 ASSESSMENT YEAR: 2005-06 M/S PARABOLIC DRUGS LIMITED VS. THE DCIT CENTR AL CIRCLE-I FARIDKOT LUDHIANA PAN NO. AADCP3942J (APPELLANT) (RESPONDENT) ASSESSEE BY: S/SH.SUDHIR SEHGAL AND SH. AVANTA KUM AR JAIN ADV. DEPARTMENT BY : SH.SUSHIL KUMAR CIT-DR 2 DATE OF HEARING : 04.10.2016 DATE OF PRONOUNCEMENT : 18.10.2016 ORDER PER ANNAPURNA GUPTA A.M. THE APPEALS IN ITA NO.643 644 &646 HAVE BEEN FILED BY DIFFERENT ASSESSEES AGAINST SEPARATE ORDERS OF CIT(A)-5 LUD HIANA WHILE THAT IN ITA NO.240/CHD/2015 HAS BEEN FILED BY THE ASSESSEE AGAI NST THE ORDER OF CIT(A) -3 GURGAON. 2. IN ALL THE ABOVE FOUR APPEALS THE ASSESSEE RAIS ED BEFORE US A COMMON ADDITIONAL GROUND THEREFORE ALL THE FOUR APPEALS W ERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER. FOR TH E SAKE OF CONVENIENCE THE FACTS IN THE CASE OF OASIS DISTILLERIES LTD IN ITA NO. 643/CHD/2015 ARE BEING DISCUSSED. ITA NO. 643/CHD/2015 ( A.Y 2007-08) 3. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IN COME-TAX ACT 1961 (IN SHORT 'THE ACT') WAS CONDUCTED AT THE BUSINESS PREMISES OF THE COMPANY ON 21.10.2010. NOTICE U/S 153A OF THE ACT WAS ISSU ED AND ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR I.E A.Y 2007-08 WAS F RAMED VIDE ORDER DATED 26.3.2013 AT AN INCOME OF RS. 1 53 62 050/- AS AGAINST RETURNED INCOME OF THE ASSESSEE OF RS. 1 19 40 295/- AFTER M AKING ADDITIONS / DISALLOWANCE AMOUNTING TO RS. 34 21 750/-. THE LD. CIT(A) VIDE HIS ORDER DATED 31.3.2015 PARTLY ALLOWED THE ASSESSEES APPE AL. 3 4. AGGRIEVED BY THE SAME THE ASSESSEE FILED THE PR ESENT APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS:- 1. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMI NG THE DISALLOWANCE OF INTEREST WITH REFERENCE TO THE AMOUNT ADVANCED TO SHRI MACHI SINGH (RS.3 00 000/-) AND HA STIC BUILDERS (RS. 15 00 000/-). 2. THAT THE CIT(A) HAS FAILED TO APPRECIATE THE SUBMISSIONS MADE AT THE TIME OF ASSESSMENT PROCEEDI NGS AS WELL AS AT THE APPELLATE STAGE. 3. THAT THE LD. CIT(A) HAS WRONGLY TREATED UNSECURE D LOAN OF RS. 10 00 000/- OF PUMA INVESTMENT AS DEEME D INCOME U/S 68 OF THE INCOME-TAX ACT 1961 ARBITRARI LY. 4. THAT THE LD. CIT(A) HAS MISCONCEIVED THE FACTS ALLEGING THE LOAN AS UN GENUINE AND NON JUSTIFICATI ON OF RETURN THEREOF TILL DATE WHEREAS THE APPELLANT COMP ANY HAS PROVED ITS GENUINENESS WITH DOCUMENTARY EVIDENC E. 5. THEREAFTER LD.COUNSEL FOR THE ASSESSEE FILED AN APPLICATION DATED 06- 08-2016 REQUESTING FOR ADMITTING AN ADDITIONAL GROU ND OF APPEAL WHICH READ AS UNDER:- THAT THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ADDITIONS ON VARIOUS ISSUES AS PER GROUND OF APPEAL DESPITE THE FACT THAT NO INCRIMINATING EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH CONDUCTED ON 21/22 OCTO BER 2010 BY THE DEPARTMENT ON ACCOUNT OF VARIOUS ADDITI ONS WHICH HAVE BEEN CHALLENGED BY THE ASSESSEE. 6. THE LD. COUNSEL FOR THE ASSESSEE IN HIS APPLICAT ION STATED THAT SINCE THIS WAS A LEGAL GROUND AND NO FRESH FACTS WERE REQ UIRED TO BE INVESTIGATED 4 OR LOOKED INTO WHILE ADJUDICATING THE SAME THE GR OUND RAISED BE ADMITTED IN VIEW OF THE JUDGEMENT OF THE HON'BLE APEX COURT IN NTPC LTD VS. CIT (1998) 229 ITR 383 (SC). 7. WE FIND THAT THE ISSUE RAISED IN THE ADDITIONAL GROUND BEFORE US IS LEGAL IN NATURE AND NO FRESH FACTS ARE REQUIRED TO BE INVESTIGATED INTO FOR ADJUDICATING THE SAME WE THEREFORE ADMIT THE SAME FOLLOWING THE JUDGEMENT OF THE HON'BLE APEX COURT IN THE CASE OF NTPC LTD VS. CIT (SUPRA) 8. SINCE THE ADDITIONAL GROUND RAISED IS A JURISDIC TIONAL ISSUE WE ARE INCLINED TO ADJUDICATE IT FIRST.DURING THE COURSE O F HEARING BEFORE US LD. COUNSEL FOR THE ASSESSEE STATED THAT THE HON'BLE IT AT CHANDIGARH BENCH IN THE BUNCH OF CASES IN M/S MALA BUILDERS PVT LTD CH ANDIGARH VS. ACIT (ITA NOS. 433 TO 437/CHANDI/2014 RELATING TO ASSESS MENT YEARS 2004-05 TO 2008-09 & OTHER APPEALS VIDE ORDER DATED 23.08.201 6 HAS HELD THAT IN CASE OF COMPLETED ASSESSMENTS UNDER SECTION 143(3) /143(1) OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DUR ING THE COURSE OF SEARCH THE ASSESSING OFFICER HAS NO JURISDICTION TO MAKE ANY ADDITION UNDER SECTION 153A OF THE ACT.. THE LD. COUNSEL STA TED THAT IN THE PRESENT CASE NO ASSESSMENT PROCEEDINGS WERE PENDING ON THE DATE OF INITIATION OF SEARCH AND FURTHER THE LIMITATION FOR ISSUE OF NOTI CE U/S 143(2) HAD EXPIRED. FURTHER LD.COUNSEL SUBMITTED THAT THE ADDITIONS H AD BEEN MADE ON ACCOUNT OF DISALLOWANCE OF INTEREST U/S 36(I)(III) OF THE ACT ON AMOUNTS ADVANCED TO CERTAIN PERSONS AND OF DEEMED INCOME U/ S 68 OF THE INCOME TAX ACT ON ACCOUNT OF UNEXPLAINED LOANS FOUND CREDI TED IN THE BOOKS OF 5 THE ASSESSEE. LD. COUNSEL STATED THAT ALL THESE DIS ALLOWANCES AND ADDITIONS WERE NOT BASED ON ANY INCRIMINATING EVIDENCE FOUND DURING THE COURSE OF SEARCH BUT WERE BASED ON INVESTIGATION MADE OF THE BOOKS OF ACCOUNT OF THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS CARRIED OUT U/S 153A OF THE ACT. LD. COUNSEL THEREFORE STATED THAT IN VIEW OF THE DECISION OF THE CHANDIGARH BENCH OF THE ITAT IN M/S MALA BUILDERS PVT LTD CHANDIGARH VS. ACIT (SUPRA) THE IMPUGNED ADDITIONS / DISALLOW ANCE COULD NOT HAVE BEEN MADE. ON A QUERY TO THE REVENUE RAISED AT BAR AS TO WHAT WAS THE INCRIMINATING MATERIAL LEADING TO THE IMPUGNED ADDITIONS/DISALLOW ANCES THE LD. DR EXPRESSED HIS INABILITY TO PRODUCE ANY SUCH EVIDEN CE. WE HAVE HEARD THE ARGUMENTS AND GONE THROUGH THE OR DERS OF THE AUTHORITIES BELOW AND ALSO THE DOCUMENTS REFERRED T O BEFORE US. ADMITTEDLY THE ADDITIONS MADE IN THE PRESENT CASE ARE NOT BASE D ON ANY INCRIMINATING MATERIAL FOUND DURING SEARCH.THIS FACT IS EVIDENT ALSO FROM A BARE PERUSAL OF THE ASSESSMENT ORDER WHERE WE FIND NO REFERENCE OF ANY DOCUMENT / EVIDENCE FOUND DURING THE COURSE OF SEARCH LEADING TO THE IMPUGNED DISALLOWANCE / ADDITIONS . THE DISALLOWANCE OF INT EREST ON ACCOUNT OF INTEREST FREE ADVANCES MADE TO VARIOUS PARTIES HAS BEEN DEALT WITH BY THE ASSESSING OFFICER AT PARA 5 OF HIS ORDER WHEREIN WE FIND THAT THE ONLY REFERENCE MADE BY THE ASSESSING OFFICER IS TO THE A UDITED PROFIT AND LOSS ACCOUNT OF THE ASSESSEE WHICH REVEALED THE AMOUNT O F INTEREST PAID DURING THE YEAR AS ALSO THE INTEREST FREE ADVANCES GIVEN T O VARIOUS PARTIES DURING THE YEAR. NO REFERENCE OF ANY INCRIMINATING MATERIA L FOUND DURING THE COURSE OF SEARCH IS FOUND IN THE RELEVANT PARA OF T HE ASSESSMENT ORDER. 6 FURTHER THE ADDITION MADE U/S 68 OF THE ACT OF U NSECURED LOANS OF RS. 10 LAKHS RECEIVED FROM M/S PUMA INVESTMENT HAS BEEN D ISCUSSED AT PARA 6 OF THE ASSESSMENT ORDER WHERE AGAIN WE FIND NO REFEREN CE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE ASS ESSING OFFICER HAS MADE DISALLOWANCE FOR THE REASON THAT THE ASSESSEE HAS N OT BEEN ABLE TO ESTABLISH THE IDENTITY GENUINENESS AND THE CREDITWORTHINESS OF THE PARTIES FROM WHOM THE LOAN WAS RECEIVED. THEREFORE IT IS CLEAR THAT THE IMPUGNED DISALLOWANCE / ADDITION HAVE BEEN MADE WITHOUT REFE RENCE TO ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH. FURTHER IT IS NOT DISPUTED THAT NO ASSESSMENT PROCEEDINGS WERE PENDIN G ON THE DATE OF INITIATION OF SEARCH AND ALSO THE TIME LIMIT FOR IS SUANCE OF NOTICE U/S 143(2) HAD ELAPSED THUS ASSESSMENT IN THE IMPUGNED CASE WA S COMPLETED. THE CHANDIGARH BENCH OF THE ITAT IN THE CASE OF MALA B UILDERS PVT LTD & OTHERS (SUPRA) HAS RELYING UPON VARIOUS HIGH COU RT JUDGEMENTS CATEGORICALLY HELD THAT U/S / 153A OF THE ACT IN CASES WHERE ASSESSMENT PROCEEDINGS HAVE NOT ABATED NO ADDITION CAN BE MADE IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH. FOLLOWING THE SAME WE HOLD THAT THE DISALLOWANCE MA DE IN THE PRESENT CASE IS UNWARRANTED AND COULD NOT HAVE BEEN MADE. THE OR DER OF THE LD. CIT(A) IS THEREFORE SET ASIDE ON THIS COUNT ALONE. SINC E WE HAVE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THE LEGAL GROUND RAISED BEFORE US THERE IS NO NEED TO GO INTO THE MERITS OF THE CASE. IN VIEW OF THE ABOVE THE REMAINING GROUNDS RAISED BY THE ASSESSEE BECOME INFRUCTUOUS A ND ARE ACCORDINGLY REJECTED. 9. IN VIEW OF THE ABOVE THE APPEAL OF THE ASSESSEE IS ALLOWED. 7 ITA NO. 644/CHD/2015 (A.Y 2009-10) ITA NO. 645/CHD/2015 (A.Y 2009-10) ITA NO. 240/CHD/2015 (A.Y 2005-06) 10. IN THE ABOVE THREE APPEALS THE LD. REPRESENTA TIVES SUBMITTED THAT THE ISSUE PERTAINING TO THE ADDITIONAL LEGAL GROUND RAISED WAS IDENTICAL TO THAT IN ITA NO.643/CHD/2015 IN THE CASE OF M/S OAS IS DISTILLERIES LTD. MOREOVER THE FACTS AND CIRCUMSTANCES OF THE ABOVE T HREE CASES RELATING TO THE ADDITIONAL GROUND RAISED ARE SIMILAR TO THAT IN ITA NO.643/CHD/2015 AS IN ADDITIONS HAVE BEEN MADE IN ORDERS PASSED U/S 153A ADMITTEDLY NOT BASED ON ANY INCRIMINATIN G MATERIAL FOUND DURING THE COURSE OF SEARCH AND NO ASSESSMENT PRO CEEDINGS HAD ABATED. 11. IN THE APPEAL FILED IN ITA NO.644 & 646/CHD/201 5 THE ASSESSEE HAS CHALLENGED THE ADDITION MADE ON ACCOUNT OF DIS BELIEVING PART OF AGRICULTURAL INCOME RETURNED BY THE ASSESSEE AND TR EATING IT AS INCOME FROM OTHER SOURCES IN THE ABSENCE OF ANY JU STIFICATION GIVEN BY THE ASSESSEE OF THE SAME. NO REFERENCE TO ANY IN CRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH CONDUCTE D ON THE ASSESSEE FINDS MENTION IN THE ASSESSMENT ORDER. 12. IN ITA NO.240/CHD/2015 THE ASSESSEE HAS CHALLEN GED THE ADDITION MADE ON ACCOUNT OF DENIAL OF WEIGHTED DEDU CTION OF EXPENDITURE INCURRED ON SCIENTIFIC RESEARCH AND TRA INING IN THE ABSENCE OF APPROVAL FROM THE DESIGNATED AUTHORITY A S ALSO THE ALTERNATIVE CLAIM OF DEDUCTION U/S 37(1)/35(1)(IV) OF THE ACT. AGAIN 8 WE FIND THAT THERE IS NO REFERENCE IN THE ASSESSMEN T ORDER TO ANY INCRIMINATING MATERIAL FOUND DURING SEARCH. 13. OUR ABOVE FINDINGS COUPLED WITH THE INABILITY E XPRESSED BY THE LD. DR TO PRODUCE ANY SUCH EVIDENCE ON THE SPECIFIC DIRECTION OF THE BENCH LEADS TO THE UNREFUTABLE CONCLUSION THAT TH E ADDITIONS MADE IN THE ABOVE THREE APPEALS WAS NOT BASED ON ANY INCRIM INATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 14. FURTHER IT IS ALSO NOT DENIED THAT IN ALL THE A BOVE CASES NO ASSESSMENT PROCEEDINGS WERE PENDING ON THE DATE OF INITIATION OF SEARCH AND THE TIME LIMIT FOR ISSUE OF NOTICE U/S 1 43(2) HAD ALSO EXPIRED.THUS THERE WAS NO ABATEMENT OF ANY ASSESSME NT PROCEEDINGS ALSO. 15. IN VIEW OF THE SAME THE FINDINGS GIVEN BY US I N ITA NO.643/CHD/2015 ABOVE SHALL APPLY TO THESE CASES AL SO WITH EQUAL FORCE. 16. ACCORDINGLY THE ABOVE THREE APPEALS FILED BY T HE ASSESSEE STAND ALLOWED. 17. IN THE RESULT ALL THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :18 OCTOBER 2016 RKK 9 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR