Jawahar B. Purohit Vs. Asst. CIT & Ors. (ITAT Mumbai)
Hon’ble Bombay High Court in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd. (supra), wherein considering the judgment of the Special Bench of the Mumbai Tribunal in the case of All Cargo Global Logistics 137 ITD 287(SB) (Mum), considered this issue that, whether there is scope of assessment under section 153A of the Act in respect to completed assessment which is limited only to undisclosed income and undisclosed assets found during the course of search or not? Hon’ble High Court held that on a plain reading of section 153 of the Act it becomes clear that on initiation of the proceedings under section 153A of the Act, it is only the assessment/reassessment proceedings that are pending on the date of search under section 132 of the Act stand abated and not the assessments/reassessments already final for those assessment years which are covered under section 153A of the Act. Hon’ble High Court discussed the CBDT Circular No. 8 of 2003, date 18-9-2003 in 263 ITR (st.) 61 at page 107 wherein CBDT has clarified that on initiation of proceedings under section 153A of the Act the proceedings pending in appeal, revision or rectification proceedings against final assessment shall not abate. It is only because the final assessments do not abate the appeal, revision or rectification pending against final assessments would not abate.
Therefore, Hon’ble High Court rejected the arguments of the Revenue that on initiation of proceedings under section 153A of the Act, the reassessment final for assessment years covered under section 153A of the Act stands abated. Only the pending assessments get revived under section 153A of the Act. Hon’ble High Court further held that once assessment has attained finality, then the assessing officer while passing independent assessment order under section 153A/143(3) of the Act could not disturb the assessment order which has attained finality unless the material gathered in the course of search under section 132/153A of the Act established that the finality attained in the assessment were contrary to the facts unearthed during the course of search.
RELEVANT EXTRACT OF ITAT JUDGMENT
These appeals of different assessee’s are arising out of the different orders of Commissioner (Appeals)-39 Mumbai, in appeal Nos. Commissioner (Appeals)-39/IT-86, 88, 89, 90, 91, 2, 80, 81, 82, 83, 85/2012-13, date 6-9-13, 12-9-2013, 8-11-2012, 1-2-2013. The Assessments were framed by ACIT Center Circle-22, Mumbai for the assessment years 2004-05, 2005-06, 2006-07, 2007-08, 2008-09, 2009-10 & 2010-11 vide different orders dated 21-6-2012 under section 143(3) read with section 153A/C of the Income Tax Act, 1961 (hereinafter ‘the Act’).
First we will deal with ITA No. 790/Mum/2013 assessee’s appeal and ITA No. 1144/Mum/2013 Revenue’s appeal for assessment year 2005-06 in the case of M/s. M.R. Construction.
2. The first common issue in these cross appeals is as regards to the dis allowance made by assessing officer and partly restricted by Commissioner (Appeals) on account of remuneration under section 40(b) of the Act and also expenses for non deduction of TDS under section 194C of the Act on account of transport charges by invoking the provisions of section 40a(ia) of the Act. For this Revenue has raised following ground Nos. 1 & 2 :–
“1. That the learned Commissioner (Appeals) has erred in law and on facts in deleing the additions of Rs. 10,00,000 & Rs. 1,00,000 made under section. 40(a)(ia) on account of non- TDS on payment for labour charges & professional charges respectively without appreciating that the ratio of the decision of the Hon’ble Supreme Court in the case of Hindustan Coca Cola Beverages (P) Ltd. v. CIT 293 ITR 226 is only in respect of section 201 & not in respect of section 40(a)(ia).
2. The appellant craves to leave to add, to amend and/to alter any of the ground of appeal, if need be.”
Assessee has also raised following ground No. 1
“1. That the learned Assessing authority (Assistant Commissioner- Central Circle -22, Mumbai) and has grossly erred in making dis allowance of Rs. 33,05,310 by reducing the value of work-in-progress. As per following Particulars and the learned Commissioner (Appeals)-39, Mumbai has grossly erred in confirming the dis allowances of Rs. 22,05,310. As per the following particulars :–
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