Income Tax Appellate Tribunal - Mumbai
Mangal Prabhat Lodha, Mumbai vs Dcit Cen Cir 7(3) (Erestwhile Cen Cir ... on 12 July, 2017
आयकर अपीऱीय अधिकरण, मुंबई न्यायपीठ "ऐ" मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM AND SHRI RAJESH KUMAR, AM आमकय अऩीर सं./ I.T.A. No.3455/Mum/2015 (निर्धारण वषा / Assessment Year :2007-08) Magalprabhat Lodha, Dy. Commissioner of Income 412, 4th floor, 17G, Tax -Circle 7(3), Room Vardhgaman Chamber, फनाभ/ No.655, Aayakar Bhavan, M K Cawasji Patel Road, Vs. Road, Horniman Circle, Fort, Mumbai-400020 Mumbai-400001 अऩीराथी /Appellant प्रत्मथी /Respondent PAN: AABPL6198F आमकय अऩीर सं./ I.T.A. No.3460 & 3461/Mum/2015 (निर्धारण वषा / Assessment Years :2006-07 & 2007-08) Abhinandan Lodha, Dy. Commissioner of Income 412, 4th floor, 17G, Tax -Circle 7(3), Room Vardhgaman Chamber, फनाभ/ No.655, Aayakar Bhavan, M K Cawasji Patel Road, Vs. Road, Horniman Circle, Fort, Mumbai-400020 Mumbai-400001 अऩीराथी /Appellant प्रत्मथी /Respondent PAN: ABWPL7722P आमकय अऩीर सं./ I.T.A. No.3463 & 3464/Mum/2015 (निर्धारण वषा / Assessment Years :2006-07 & 2007-08) Manjula Magalprabhat Lodha, Dy. Commissioner of Income 412, 4th floor, 17G, Tax -Circle 7(3), Room Vardhgaman Chamber, फनाभ/ No.655, Aayakar Bhavan, M K Cawasji Patel Road, Vs. Road, Horniman Circle, Fort, Mumbai-400020 Mumbai-400001 अऩीराथी /Appellant प्रत्मथी /Respondent PAN: ACCPL5846M 2 I.T.A. No.3455 and other four appeals-Lodha Gr.
अऩीराथी की ओय से / Appellant by : Shri Vijay Mehta and Shri Anuj Kishnadwala प्रत्मथी की ओय से/Revenue by : Shri R P Meena सुनवाई की तायीख /Date of Hearing : 28.4.2017 घोषणा की तायीख /Date of : 12.7.2017 Pronouncement आदे श / O R D E R PER BENCH:
The captioned are appeals by the different assessees pertaining to assessment years 2006-07 and 2007-08. The appeals are directed against the common order of the CIT(A)-48, Mumbai, dated 1.4.2015 which in turn has arisen from orders passed by the Assessing Officer of respective dates under section 143(3) r.w.s.153A of the Income Tax Act, 1961(in short 'the Act). Since issue involved in all these appeals are common, therefore these appeals are clubbed together, heard together and are being decided by this consolidated order, for the sake of convenience.
I.T.A. No.3455/Mum/2015
2. The grounds of appeal taken by the assessee are as under :
"1) On the facts and circumstances of the case and in law, the learned CIT(A) erred in not appreciating the fact that the additions for this year has to be restricted on the basis of evidence found in the books and documents found during the search as per the decision of the ITAT Mumbai ,Special Bench in the case of 'All Cargo Global Logistics 3 I.T.A. No.3455 and other four appeals-Lodha Gr.
Ltd 23 taxmann.com 103 (Mum)SB, which has now been upheld by Bombay High Court by their decision delivered on 21st April 2015, in appeal No ITX 1969 of 2013.
2) On the facts and circumstances of the case and in law, the learned CIT(A) erred in upholding the Assessment order as the PAN was not transferred to the new jurisdiction even on the date of the order.
3) On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of notional rent of Rs.1,17,600/-"
3. The first issue raised by the assessee in the grounds of appeal is against the order of the ld.CIT(A) upholding the addition made by the AO which are not based on the incriminating material found during the course of search conducted at the business/residential premises of the assessee including business concern.
4. The facts of the case are that the assessee filed his return of income on 31.10.2010 u/s 139(1) of the Act declaring a total income of Rs.35,41,673/-. No notice u/s 143(2) was issued to the assessee till the last date within which the notice could have been issued i.e. 31.10.2008 and therefore the return filed by the assessee attained finality on the date of search which was conducted on10.1.2011 u/s 132 of the Act on the Lodha Group of cases including the assessee. Thereafter the notices u/s 143(2) and 142(1) were issued and served upon the assessee. The assessee complied with the notices by filing return of income u/s 153A on 26.12.2011 declaring the same income as declared by the assessee u/s 139(1) of the 4 I.T.A. No.3455 and other four appeals-Lodha Gr.
Act. Thereafter, the AO completed the assessment u/s 143(3) r.w.s.153A of the Act vide order dated 30.3.2013 by making the addition of Rs.1,17,600/- towards rental value of the property by assessing the income at Rs.36,59,273/-.
5. Aggrieved assessee filed appeal before the First Appellate Authority who also confirmed the action of the AO. Further aggrieved, the assessee is in appeal before us.
6. Now, the question before us is whether the addition in respect of house property could be made in the assessment framed u/s 153A r.w.s 143(3) of the Act when there is no incriminating material found during the course of search qua the said addition particularly when the assessment has already attained finality on the date of search. The Ld CIT(A) confirmed the order of AO by holding that there was no prior order u/s 143(3) of the Act and accordingly, there is no infirmity in the order passed by the AO u/s 153A r.w.s.143(3) of the Act as the addition made by the AO is within his jurisdiction.
7. We have heard the rival contentions and perused the records placed before us including the orders of authorities below and case law relied upon by the parties. The undisputed facts are that in this case the date of search i.e. 10.1.2011 conducted under section 132 of the Act, the assessment has 5 I.T.A. No.3455 and other four appeals-Lodha Gr.
attained finality. It is evident, only addition made by the AO is of rental income. Admittedly, during the course of search, no incriminating material was found with respect to the rental income of the immovable property in respect of which the addition of notional rent was made by the AO. After perusing the provisions of section 153A of the Act, we are of the view that the AO has very limited jurisdiction to make addition qua those assessment years in which the assessments have attained finality on the date of search and that too based on searched material and not otherwise. The provisions of section provides that the only those assessments or reassessments which are pending on the date of search shall abate and the AO has same jurisdiction to frame the assessments as u/s 143(3) of the Act but the assessments which have already attained finality shall not abate and the AO has the jurisdiction to make only those additions which are based upon the seized materials. In the present case, the search party did not found any incriminating material with respect to the addition made by the AO. The case of the assessee is also squarely covered by the decisions of the various high courts including the jurisdictional high Court. The Hon'ble Jurisdictional High Court in the case of CIT V/s All Cargo Global Logistics Ltd. (2015) 374 ITR 645 (Bom), has held that the addition in respect of the completed assessment on the date of search could only be made on the basis of search material and AO has no jurisdiction u/s 153A to re-assess the already 6 I.T.A. No.3455 and other four appeals-Lodha Gr.
completed assessment if there is no incriminating material. In the case of CIT vs. Murli Agro Products Ltd (Bombay High Court) in INCOME TAX APPEAL NO.36 of 2009 dated 29/10/2010., the same view has been affirmed by the Hon'ble Jurisdictional High Court . Having regards to the facts of the instant case in the light of the ratio laid down by the decisions of the jurisdictional High Court in the case laws referred to above , we set aside the order of the ld.CIT(A) and direct the AO to delete the addition as there is no jurisdiction to make addition u/s 153A of the Act without incriminating materials being found during search when the assessment has attained finality on the date of search. Since we have already decided the legal and technical issue raised by the assessee inn his favour, the other grounds raised on merit become academic in nature and therefore require no adjudication. The appeal of the assessee stands allowed.
8. The facts of other appeals in respect of other similarly placed assessees are identical to one which has been decided by us in favour of the assessee in ITA No.3455/Mum/2015, on the legal issue. Therefore, our decision in ITA No.3455/Mum/2011 would ,mutatis mutandis, apply to these appeals as well. Accordingly, the AO is directed to delete the additions. Since we have decided these appeal on legal and technical issue, the other grounds raised by the assessees on merits become only academic and required no adjudication.
7
I.T.A. No.3455 and other four appeals-Lodha Gr.
9. In the result, all the appeals filed by the assessees are allowed.
Order pronounced in the open court on 12th July, 2017 Sd sd (SAKTIJIT DEY) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक Dated :12.7.2017 SRL,Sr.PS आदे श की प्रततलरपऩ अग्रेपषत/Copy of the Order forwarded to :
1. अऩीराथी / The Appellant
2. प्रत्मथी / The Respondent
3. आमकय आमक् ु त(अऩीर) / The CIT(A)
4. आमकय आमक् ु त / CIT - concerned
5. पवबागीम प्रतततनधध, आमकय अऩीरीम अधधकयण, भफ ंु ई / DR, ITAT, Mumbai
6. गार्ड पाईर / Guard File आदे शानस ु ाय/ BY ORDER, True copy उऩ/सहामक ऩंजीकाय (Dy./Asstt. Registrar) आमकय अऩीरीम अधधकयण, भुंफई / ITAT, Mumbai