ACIT, New Delhi v. M/s. Bluebird Software Pvt. Ltd., New Delhi

ITA 966/DEL/2012 | 2005-2006
Pronouncement Date: 20-10-2016 | Result: Dismissed

Appeal Details

RSA Number 96620114 RSA 2012
Assessee PAN AACCB5605P
Bench Delhi
Appeal Number ITA 966/DEL/2012
Duration Of Justice 4 year(s) 7 month(s) 23 day(s)
Appellant ACIT, New Delhi
Respondent M/s. Bluebird Software Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 20-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 20-10-2016
Date Of Final Hearing 17-08-2016
Next Hearing Date 17-08-2016
Assessment Year 2005-2006
Appeal Filed On 27-02-2012
Judgment Text
1 ITA NO. 699/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G. D. AGRAWAL VICE PRESIDENT AND SMT SUCHITRA KAMBLE JUDICIAL MEMBER I.T.A .NO.-966/DEL/2012 (ASSESS MENT YEAR 2005-06) ACIT CENTRAL CIRLCE-22 NEW DELHI (APPELLANT) VS BLUEBIRD SOFTWARE PVT. LTD. 2A AVENUE CASSIA WESTEND GREENS RAJOKARI NEW DELHI AACCB5605P (RESPONDENT) APPELLANT BY SH. RAVI JAIN CIT DR RESPONDENT BY SH. SALIL KAPOOR ADV & MS. ARINITA KAPOOR ADV. ORDER PER SUCHITRA KAMBLE JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 8/12/2011 PASSED BY CIT(A)-III NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING TH E ADDITION OF RS.2 00 00 000/- MADE BY THE ASSESSING OFFICER U/S 68 OF THE INCOME TAX ACT 1961 ON ACCO UNT OF BOGUS SHARE APPLICATION MONEY/SHARE PREMIUM RECEIVE D BY THE ASSESSEE COMPANY. DATE OF HEARING 17.08.2016 DATE OF PRONOUNCEMENT 20.10.2016 2 ITA NO. 699/DEL/2012 2. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 3. THE ASSESSEE COMPANY WAS FORMED TO CARRY ON THE BUSINESS OF DEVELOPMENT OF COMPUTER SOFTWARE TO ESTABLISH AND RUN COMPUTER DATA PROCESSING/COMPUTER ENTRIES ETC. SEARCH AND SE IZURE ACTION WAS INITIATED ON THE ASSESSEE GROUP ON 6/11/2008 U/ S 132 OF THE INCOME TAX ACT 1961. A SEARCH WARRANT WAS ALSO ISS UED AND EXECUTED IN THE NAME OF THE APPELLANT. THE ORIGINA L RETURN OF INCOME U/S 139 OF THE ACT WAS FILED BY THE ASSESSEE ON 29/10/2005 AT A TOTAL INCOME OF RS. NIL. THEREAFT ER THE CASE OF THE ASSESSEE WAS CENTRALIZED IN CENTRAL CIRCLE-22 N EW DELHI AND NOTICE U/S 153A OF THE INCOME TAX ACT 1961 WAS ISS UED ON 30/10/2009 AND THE ASSESSEE FILED THE RETURN OF INC OME U/S 153A OF THE ACT ON 27/11/2009 DECLARING NIL INCOME WHILE THE INCOME OF THE ASSESSEE WAS ASSESSED AT RS.2 00 00 000/-. THE ASSESSING OFFICER MADE ADDITION TO THAT EXTENT. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). 4. THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. THE CIT(A) HELD IN PARA 3.2 (EXTRACTS FOR PERUSAL) THAT NOT ONLY IN THE PREVIOUS SCRUTINY ASSESSMENT THE GENUINENESS OF THE SHARE AP PLICATION MONEY HAS ACCEPTED BUT ALSO THAT DURING THE COURSE OF SEA RCH AT THE APPELLANTS PREMISES NOTHING INCRIMINATING WAS FOUN D REFERENCE TO THE IMPUGNED SHARE APPLICATION MONEY. THUS FOR THI S REASON TOO THE ADDITION MADE RS.2 00 00 000/- IS LIABLE TO BE DELE TED. IN A RESULT THE APPEAL IS ALLOWED. 3 ITA NO. 699/DEL/2012 5. THE LD. AR AT THE TIME OF HEARING SUBMITTED THAT THE PRESENT CASE IS SQUARELY COVERED BY CIT VS. KABUL CHAWLA 38 0 ITR 573. THE HONBLE HIGH COURT HELD IN PARA 37 AS UNDER: ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT READ WITH THE PROVISOS THERETO AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONE D DECISIONS THE LEGAL 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 MANDATORILY ISSUED TO THE PERSO N SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVI OUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. (II) ASSESSMENTS AND REASSESSMENTS PENDING ON THE D ATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPU TED BY THE AOS AS A FRESH EXERCISE. (III) THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE TOTAL INCOME OF THE AFORE MENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTH ER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. (IV) ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDIT IONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELA TED TO THE EVIDENCE FOUND IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR M ADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESS MENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL. (V) IN ABSENCE OF ANY INCRIMINATING MATERIAL THE C OMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. THE WORD ASSESS IN SECTION 153 A IS RELATABLE TO ABATED PR OCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD REASSESS TO COMPLETE D ASSESSMENT PROCEEDINGS. 4 ITA NO. 699/DEL/2012 (VI) INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUG HT ON THE RECORD OF THE AO. (VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF OR IGINAL ASSESSMENT. CONCLUSION THE PRESENT APPEALS CONCERN AYS 2002-03 2005-06 A ND 2006-07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPLETED . SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH NO ADDITI ONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 6. THE LD. DR RELIED UPON THE EARLIER ORDER PRIOR T O KABUL CHAWLA AND RELIED ON THE ORDER OF THE ASSESSING OFFICER. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD AND FROM THE CIT(A)S ORDER THE RE IS A CLEAR FINDING THAT NO INCRIMINATING DOCUMENT OR MATERIAL WAS FOUND RELATED TO THE PROPERTY WHICH CORROBORATES THE ALLE GATION MADE BY THE ASSESSING OFFICER. IN PARA 3.2 THE CIT(A) CLE ARLY MENTIONED THAT THE DOCUMENTS WERE FILED BEFORE THE ASSESSING OFFIC ER. THUS BESIDES THESE DOCUMENTS THERE WAS NOTHING INCRIMINA TING FOUND BY THE ASSESSING OFFICER. THE CIT(A) ALSO OBSERVED TH AT DURING THE COURSE OF SEARCH AT THE APPELLANTS PREMISES NOTHIN G INCRIMINATING WAS FOUND REFERENCE TO THE IMPUGNED SHARE APPLICATI ON MONEY. 5 ITA NO. 699/DEL/2012 THERE IS NO NEED TO INTERFERE WITH THE ORDER OF THE CIT(A). THE PRESENT CASE IS ALSO SQUARELY COVERED BY THE JUDGME NT OF THE HONBLE DELHI HIGH COURT IN CASE OF KABUL CHAWLA. 8. IN RESULT APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT 20TH OF OCTOBER 2016. SD/- SD/- (G. D. AGRAWAL) (SUCHITRA KAMBLE) VICE PRESIDENT JUDICIAL M EMBER DATED: 20/10/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 17.08.2016 PS 2. DRAFT PLACED BEFORE AUTHOR 18.08.2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 2 0 .10.2016 PS/PS 6 ITA NO. 699/DEL/2012 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 2 0 .10.2016 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.