Income Tax Appellate Tribunal - Indore
M/S. Sainath Colonizers, Bhopal vs The Acit (Central) Ii, Bhopal on 28 February, 2019
आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर
IN THE INCOME TAX APPELLATE TRIBUNAL,
INDORE BENCH, INDORE
BEFORE HON'BLE V. DURGA RAO, JUDICIAL MEMBER
AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER
ITA(SS) Nos.289 to 291/Ind/2017
Assessment Years 2008-09 to 2010-11
Sainath Colonisers ACIT (Central)-II,
20-21, Sun Villa, Vs Bhopal
Chuna Bhatti, Bhopal
(Appellant) (Respondent )
PAN No.ABFFS9665P
Revenue by Smt. Ashima Gupta, CIT-DR
Assessee by Shri S.S. Deshpande, CA
Date of Hearing 27.02.2019
Date of Pronouncement 28.02.2019
ORDER
PER BENCH:
The above captioned three appeals filed at the instance of assessee pertaining to Assessment Year 2008-09 to 2010-11 are directed against the orders of Ld. Commissioner of Income Tax (Appeals)-3 (in short 'Ld.CIT(A)'], Indore dated 14.09.2017 which are arising out of the order u/s 153A r.w.s 143(3) of the Income Tax Act 1961(In short the 'Act') dated 26.02.2016 framed by ACIT (Central)-II, Bhopal.
Sainath Colonisers ITA(SS) No.189 to 291/Ind/2017 The assessee has raised following common grounds of all three appeals;
1. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax(A) was not justified in holding that the Assessing Officer was justified in making addition in the years where the assessment proceedings were not pending and no incriminating material was found during the course of search.
2. That on the facts and in the circumstances of the case of the assessee the ld. Commissioner of Income Tax(A) was not justified in holding that the Assessing Officer was justified in disallowing the exemption claimed u/s 80IB(10)."
2. As the issues raised in these appeals are common, they are heard together and are being disposed off by this common order for the sake of convenience and brevity.
3. Brief facts of the case as culled out from the records are that the assessee firm is a member of Signature Group of Bhopal, engaged in the business of sale and purchase of real estate. Search & Seizure operations u/s 132 of the Act was carried out on 29.01.2014 at the business premises of the assessee firm as well as on the premises of other concerns/business associated. Notice u/s 153A of the Act was issued to the assessee on 12.09.2014. In compliance to the notices assessee filed return of income for the 2 Sainath Colonisers ITA(SS) No.189 to 291/Ind/2017 block period declaring NIL income after claiming deduction u/s 80IB(10) at Rs.8,92,452/-, Rs.2,66,948/- and Rs.2,44,417/- for Assessment Year 2008-09 to 2010-11 respectively. Ld. A.O on verification of records observed that the assessee failed to produce the completion certificate from the local authorities required for claiming deduction u/s 80IB(10) of the Act. He accordingly disallowed the claim and added to the income disclosed by the assessee. Aggrieved assessee preferred appeal before Ld. CIT(A) but failed to succeed.
4. Now the assessee is in appeal before the Tribunal.
5. At the outset Ld. Counsel for the assessee referring to the legal common ground submitted that, as no incriminating material was found during the course of search u/s 132 of the Act conducted on 29.1.2014 at the assessee's premises, no addition was called for in the assessment years 2008-09 to 2010-11 as they fall under the category of non abated assessments as held by High Court of Gujarat in the case of PCIT Vs. Desai Construction reported in 387 ITR 552 (2016). Reliance also placed on the judgment of Hon'ble Bombay High Court in the case of CIT V/s Continental 3 Sainath Colonisers ITA(SS) No.189 to 291/Ind/2017 Warehousing Corporation (Nhava Sheva) Ltd and All Cargo Global Logistics Ltd 374 ITR 634, Bombay (2015).
6. Per contra Departmental Representative placed the reliance of following judgments submitting that the additions can be made during the block period assessments pursuant to issuance of notice u/s 153A/153C of the Act without any incriminating material being found against the assessee during this course.
(i) Kanara Housing Development Co. V/s Deputy Commissioner of Income Tax, Central Circle-I(1), Bhanglore 274 CTR 122 ( H.C of Karnataka)
(ii) E.N. Gopakumar vs. Commissioner of Income Tax (Central) 390 ITR 1331 (Kerala High Court)
7. We have heard rival contentions and perused the records placed before us. The common legal issue raised in all these three appeals is that "whether the additions in unabated assessments can be made without any incriminating material found during the course of search u/s 132 of the Act". Revenue has not disputed the fact that no incriminating material was found during the course of search at the premises of the assessee and the addition/disallowance relating to denial of deduction u/s 80IB(10) 4 Sainath Colonisers ITA(SS) No.189 to 291/Ind/2017 of the Act was purely on the basis of information called during the course of assessment proceedings u/s 153A r.w.s. 143(3) of the Act.
8. We observe that the assessee has filed regular return of income u/s 139 of the Act for Assessment Year 2008-09 to 2010-11 on 30.9.08, 31.3.2010 and 12.10.2010 after claiming deduction u/s 80IB(10) at Rs.8,92,452/-, Rs.2,66,948/- and Rs.2,44,417/- respectively. The time limit for issuance of notices u/s 143(2) of the Act stood expired in relation to the assessment year 2008-09 to 2010-11 much before the date of conducting the search i.e. 29.1.2014 and therefore these three assessment years falls under the category of unabated/non abated assessments. Now in the given facts Ld. Counsel for the assessee has relied few judgments and Ld. Departmental Representative has relied to few judgments in its favour. However, the Hon'ble Apex Court in the case of CIT V/s Vegetable Products Ltd 88 ITR 192 has "held that if two reasonable construction of a taxing provisions are possible, then that construction which favours the assessee must be adopted". In the light of above judgment of Hon'ble Apex Court we have gone through the judgments referred and relied by both the parties and 5 Sainath Colonisers ITA(SS) No.189 to 291/Ind/2017 are inclined to follow the view taken by Hon'ble courts on the issue in question before us favouring the assessee.
9. The Hon'ble High Court of Gujarat in the case of PCIT Vs. Desai Construction (supra) confirmed the view taken by the Tribunal upholding the contention of the assessee that as no incriminating material was found during the course of search which could have enabled the Assessing Officer to re-examine its claim for deduction u/s 80IB which was part of the assessment prior to the search and such assessment unabated. Similarly Hon'ble High Court of Bombay in the case of Continental Warehousing Corporation and All Cargo Global Logistics Ltd (Supra) confirmed the view taken by the Special Bench of I.T.A.T. Mumbai Bench decided in favour of assessee dismissing the revenue's appeal holding that there was no incriminating material found during the course of search, the Tribunal was right in holding the power conferred u/s 153A being not expected to be exercised routinely, should be exercised if the search revealed any incriminating material. If that was not found then in relation to the second phase of three years, there was no warrant for making an order within the meaning of this provision".
10. Similar view was also taken by the Hon'ble High Court of Delhi in the case of Kabul Chawla (2015) 61 taxmann 412. 6
Sainath Colonisers ITA(SS) No.189 to 291/Ind/2017
11. We therefore in the given facts and circumstances of the case and respectfully following the judgments referred and relied by the Ld. Counsel for the assessee are of the considered view that no addition/disallowance was called for Assessment Year 2008-09 to 2010-11 as no incriminating material was found during the course of search at the premises of the assessee as the time limit of issuance of notice u/s 143(2) of the Act stood expired much before the date of conducting search u/s 132 of the Act. Accordingly all the three appeals of the assessee are allowed.
12. In the result, appeal of the assessee for A.Y. 2008-09 to 2010- 11 are allowed.
The order pronounced in the open Court on 28.02.2019.
Sd/- Sd/-
(V. DURGA RAO) (MANISH BORAD)
JUDICIAL MEMBER ACCOUNTANT MEMBER
दनांक /Dated : 28th February, 2019
/Dev
Copy to: The Appellant/Respondent/CIT concerned/CIT(A)
concerned/ DR, ITAT, Indore/Guard file.
By Order,
Asstt.Registrar, I.T.A.T., Indore
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