Naavkar Ispat Ltd, Mumbai vs Assessee

M/s. Naavkar Ispat Ltd., ACIT, 229, Bokadia Mansion, Central Circle - 13, Mumbai, 3rd Floor, Princess Street, Vs. Old CGO Bldg. (Annex), Mumbai - 400 021 11th Floor, PAN: AADCA 3051D M.K. Road, Mumbai - 400020 (Appellant) (Respondent)

Assessee by : Shri Deepak Tralshwala, A.R. Revenue by : Shri S.J. Singh, CIT-D.R.

Date of Hearing : 14.01.2015 Date of Pronouncement : 31.03.2015

ORDER

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 27.02.2012 of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as CIT(A)] relevant to assessment year 2007-08.

2. The assessee has agitated the confirmation of disallowance of Rs.19,24,209/- in relation to purchases made from Jena Enterprises, disallowance of Rs.67,603/- under section 40(a)(ia) of the Act and further the levy of interest under section 234B.

3. The brief facts of the case are that in the case of the assessee assessment under section 143(3) was completed on 30.12.09 determining total loss of Rs.2,11,79,256/- against the returned loss of Rs.2,55,59,182/-. A search action 2 ITA No.3005/M/2012 M/s. Naavkar Ispat Ltd.

was conducted under section 132 of the Act in the business premises of one Prakash Steelage Group on 09.02.09. During the course of search and survey, certain incriminating material pertaining to the assessee was found and seized. Notice under section 153C was issued to the assessee. Thereafter, the assessment was completed by the Assessing Officer (hereinafter referred to as the AO) under section 143(3) read with section 153C of the Act without making any addition and determining the same income as was assessed during the original assessment proceedings. The assessee, however, preferred the appeal agitating the disallowances which were made during the original assessment proceedings and further were retained as such by the AO during the assessment proceedings under section 153C of the Act.

4. An application for additional evidence under rule 46A was also moved by the assessee before the Ld. CIT(A). The Ld. CIT(A), however, considering the submissions of the assessee and as per the detailed discussions made in the impugned order, dismissed the application for additional evidence as well as the appeal on merits. The assessee has, thus, come in appeal before us.

5. We find that the original assessment proceedings under section 143(3) of the Act have already been completed in this case and have attained finality. No fresh additions have been made by the AO during the assessment proceedings under section 153C read with section 143(3) of the Act. The assessee through the present appeal has tried to agitate the disallowances, which have already attained finality, on the ground that the assessee has a right to contest the same as if assessment under section 153C has given a further inning to the assessee to contest the same. We find that the Hon'ble Rajasthan High Court in the case of "Jai Steel (India) v. ACIT" (2013) 259 CTR 281 has held that in case nothing incriminating is found on account of search or requisition, the question of reassessment of the concluded assessment does not 3 ITA No.3005/M/2012 M/s. Naavkar Ispat Ltd.

arise. Under such circumstances, it is not open to the assessee to seek deduction or claim expenditure which has not been claimed in the original and already concluded assessment, in the case of assessment u/s. 153A in pursuance of search action. Hon'ble High Court rejected the argument of the learned counsel for assessee to the effect that once the notice u/s. 153A is issued, the assessments for six years are at large both for the AO and the assessee. It has been further held by the Hon'ble High Court that the provisions of section 153A to 153C cannot be interpreted to be further innings to the AO and/or assessee beyond the provisions of section 139(return of income), 139(5) (revised return of income), 147 (income escaping assessment) and 263( revision of orders) of the Act. The Hon'ble High Court has further observed that the words "assess" or "re-assess" have been used at more than one place in the section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used in the context of abated proceedings and 'reassess' has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only on the basis of the incriminating material found during the course of search or requisition of documents. The Hon'ble High Court while reproducing the proposition of law laid down by the Hon'ble Supreme Court in the case of "K P Varghese v. ITO" (1981) 24 CTR 358 "that it is recognized rule of construction that a statutory proviso must be so construed, if possible, that absurdity and mischief may be avoided" has observed that if the argument of the counsel for the assessee was to be accepted, it would mean that even in case where the appeal arises out of the completed assessment has been decided by the CIT(A) or Tribunal and the High Court, on a notice issues u/s. 153A of the Act, the AO would have power 4 ITA No.3005/M/2012 M/s. Naavkar Ispat Ltd.

to undo what has been concluded by the High Court. Any interpretation which leads to such conclusion has to be repelled and/or avoided as held by the Hon'ble Supreme Court in the case of K P Varghese (supra).

6. In view of above stated legal position, the assessee cannot be allowed to re-agitate the disallowances which have already attained finality in the original assessment proceedings and there being no additions made by the AO in the assessment proceedings under section 153C read with section 143(3) of the Act. There is no merit in the appeal of the assessee and the same is accordingly dismissed.

Order pronounced in the open court on 31.03.2015.

Sd/- Sd/- (B.R. Baskaran) (Sanjay Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 31.03.2015. * Kishore, Sr. P.S.

Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [

By Order

Dy/Asstt. Registrar, ITAT, Mumbai.