ITA Nos. 8628, 8629, 8630, 8631, 8632, 8633, 9117, 9118, 9119 and 9120/M/2010, (Assessment Year: 2001-2002;2002-2003;2003-2004;2004-2005;2005-2006;2006-2007). Case: Dhananjay International Ltd. Vs DCIT, Circle-44. ITAT (Income Tax Appellate Tribunal)
| Case Number | ITA Nos. 8628, 8629, 8630, 8631, 8632, 8633, 9117, 9118, 9119 and 9120/M/2010, (Assessment Year: 2001-2002;2002-2003;2003-2004;2004-2005;2005-2006;2006-2007) |
| Counsel | For Appellant: Vijay Mehta and For Respondents: Rupinder Brar, CIT-DR |
| Judges | D. Karunakara Rao, Member (A) and Lalit Kumar, Member (J) |
| Issue | Income Tax Act |
| Judgement Date | October 12, 2015 |
| Court | ITAT (Income Tax Appellate Tribunal) |
Order:
D. Karunakara Rao, Member (A), (ITAT Mumbai 'D' Bench)
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There are 10 appeals under consideration. Out of them, 6 appeals are filed by the assessee and 4 appeals are filed by the Revenue involving the AYs 2001-02 to 2006-07. Since, the issues raised in all these appeals are inter-connected, as such there are cross appeals for the AYs 2001-02; 2002-03; 2003-04 and 2005-06, therefore, for the sake of convenience, they are clubbed, heard together and disposed-of in this consolidated order. Appeal wise adjudication is given in the following paragraphs of this order.
Firstly, we shall take up assessee's appeal for the AY 2001-02 as a lead appeal for adjudication.
I
ITA No. 8628/M/2010 (AY 2001-2002)
(By assessee) -
This appeal filed by the assessee on 10.12.2010 is against the order of the CIT (A)-36, Mumbai dated 27.1.2009 for the AY 2001-02. In this appeal, assessee raised the following grounds which read as under:
"1. The Ld. CIT(A) has erred in law and facts in passing the order u/s. 250 of the Act.
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The Ld. CIT(A) has erred in law and in facts in not holding that the assessment proceeding and consequential assessment order u/s. 143(3) r.w.s. 153C is without jurisdiction in the absence of issuance of issuance of mandatory legal notice u/s. 143(2) of the Act.
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The Ld. CIT(A) has erred in law and facts in not holding that the assessment proceeding and consequential assessment order u/s. 143(3) r.w.s 153C is without jurisdiction in the absence of valid notice u/s. 142 of the Act as one single common notice u/s. 142 dated 20.10.2008 was issued for the six assessment years ranging from AY 2001-2002 to 2006-07.
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The Ld. CIT(A) has erred in law and in facts in not holding that the assessment proceeding and the order passed u/s. 143(3) r.w.s. 153C is bad in law.
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The Ld. CIT(A) has erred in law and in facts in holding that the provisions of section 292BB are applicable in the present case and that the same are clarificatory in nature.
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The Ld. CIT(A) has erred in law and in facts in not holding that the addition amounting to Rs. 7 lakhs cannot be made in the proceedings u/s. 143(3) r.w.s. 153A of the Act as the same is not on the basis of evidence found during the course of search and hence beyond jurisdiction.
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The Ld. CIT(A) has erred in law and in facts in confirming an addition of Rs. 7 lakhs under section 68 of the Act in respect of share capital received by the appellant."
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Assessee also raised the Additional Grounds of appeal vide letter dated 8.2.2014 and the same read as under:
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The Ld. CIT(A) has erred in law and in facts in not holding that the initiation of assessment proceeding and order passed u/s. 143(3) r.w.s 153C is bad in law as there was no satisfaction recorded by the Assessing Officer of the search person for initiating proceeding u/s.153C of the Act.
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The Ld. CIT(A) has erred in law and in facts in not holding that the initiation of assessment proceeding and order passed u/s. 143(3) r.w.s 153C is bad in law as there was no money, bullion, jewellery etc. belonging to the assessee seized during the course of search nor any such assets have been handed over to the Assessing Officer of the assessee."
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Briefly stated relevant facts of the case are that the assessee is engaged in the business of Finance & Investment. Assessee filed the return of income declaring the total loss of Rs. 481/-. A search and seizure was carried out on 10.8.2006 in the case of M/s. Rohan Group including Directors of different associates and sister concerns as well as the assessee's case. Basing on the papers/documents found and seized during the said search and seizure action in the case of M/s. Rohan Group of cases related to the assessee company, notice u/s.153C of the Act was issued on 5.9.2008 and served on the assessee. In response, assessee filed the return of income declaring the total income of Rs. NIL. Subsequently, notice u/s.143(2) was issued on 20.10.2008 and the same was served on the assessee. Accordingly, AO completed the assessment u/s. 143(3) r.w.s 153C of the Act and the assessed income was determined at Rs. 31,99,519/-, which include the addition of Rs. 32 lakhs u/s. 68 of the Act on account of share application money received by the assessee. Aggrieved with the above decision of the AO, assessee is in appeal before the first appellate authority.
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During the proceedings before the first appellate authority, after considering the submissions of the assessee, CIT(A) partly allowed the appeal and confirmed the addition to the extent of Rs. 7 lakhs. Again aggrieved and not satisfied with the said decision of the CIT(A), assessee is in further appeal before the Tribunal by raising the abovementioned Grounds and also raised a legal ground that the addition made by the AO is not based on the incriminating material seized during the course of search.
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During the proceedings before us, Ld. Counsel for the assessee narrated the brief facts of the case. At the outset, Ld. Counsel for the assessee demonstrated that in all the 6 appeals of the assessee involving the AYs 2001-02 to 2006-07 have a common legal issue and submitted that issue relates to when the assessments involved are non-abated assessment (either regular assessments are completed u/s. 143(3) and the quantum proceedings are not pending or the due date for issue of notice u/s. 143(2) has expired, the additions, if any, in the search assessment can be made basing on any incriminating material seized u/s. 132 of the Act and forwarded to the concerned AO as per the procedure laid down in the Act. Drawing our attention to each of the assessment order and each of the additions made by the AO in all the 6 AYs, Ld. Counsel for the assessee demonstrated that there is no reference to the seized material in any of the additions made by the AO in all the 6 AYs. Further, he mentioned that the additions made were actually in the nature of routine additions which are made under regular assessment. Ld. Counsel for the assessee also argued that such additions are unsustainable in law. For this, Ld. Counsel for the assessee filed written submissions and the relevant portions from the said written submissions are extracted as under:
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"It is submitted that as per the decision of the Hon'ble Bombay High court in the case of CIT v. All Cargo Global Logistic (374 ITR 645) only the assessments pending on the date of search abate. In other words, the assessments not pending on the date of initiation shall not abate and the original assessment order passed u/s. 143(3) of the Act shall stand. It is submitted that as per the provisions of Section 153A of the Act, the Assessing Officer is duty bound to issue notice u/s. 153A and accordingly pass an...
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