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B.P.MUNDRA

Mundra House, 822-A, Shivaju Nagar, Civil Lines, jaipur-302006 9314501680, 9314501791


Since no incriminating material was unearthed by AO during the course of search ‎operation under section 132, therefore no addition could be made during the ‎relevant assessment year under section 153A. Mona Agarwal & Anr. v. ACIT

B.P.Mundra > Income Tax > Cases Income tax > 132 > Since no incriminating material was unearthed by AO during the course of search ‎operation under section 132, therefore no addition could be made during the ‎relevant assessment year under section 153A. Mona Agarwal & Anr. v. ACIT

admin November 16, 2019

132, 153A, Delhi, incriminating material

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Income Tax Act, 1961, Section 153A Search and seizure–‎

Assessment under section 153A– ‎

Since no incriminating material was unearthed by AO during the course of search ‎operation under section 132, therefore no addition could be made during the ‎relevant assessment year under section 153A by reopening the assessment on the ‎matter, which was examined earlier during original assessment concluded under ‎section 143(3).‎

Followed: ‎

CIT v. Kabul Chawla (2016) 380 ITR 573 (Del) and CIT v. Vegetable Products ‎Ltd. (1973) 88 ITR 192 (SC).‎

Relied: ‎

Smt. Dayawanti & Ors. v. CIT (2016) 390 ITR 496 (Del), E.N. Gopakumar v. ‎CIT (Central) (2017) 390 ITR 131 (Ker), CIT v. Kesarwani Zarda Bhandar [ITA ‎No. 270, 269, 268 of 2014 & 15, 16, 17 of 2015, dt. 6-9-2016] and CIT v. ‎Sinhgad Technical Education Society (2017) 397 ITR 344 (SC).‎

IN THE ITAT, DELHI BENCH

AMIT SHUKLA, JM & PRASHANT MAHARISHI, AM

Mona Agarwal & Anr. v. Asstt. CIT ITA No. 684 (Del) of 2015 16 July, ‎‎2018‎

Assessee by: ‎ P.S. Kashyap, F.C.A.‎
Department by: ‎ Shefali Swaroop, CIT (DR)‎

ORDER

Prashant Maharishi, A.M.‎

This appeal is preferred by assessee against the order of Commissioner (Appeals)–‎‎3, Gurgaon, dated 10-12-2014, for assessment year 2008-09 wherein the assessee ‎has raised following grounds :–‎

‎“ 1. ‎ That the learned assessing officer erred in law and on facts by completing ‎assessment under section 153A(1)(b) of The Act, 1961 vide order dated 28-‎‎12-2011. The learned assessing officer passed the order without finding any ‎incriminating evidence against the appellant is totally wrong, unjustified & ‎illegal and same deserves to be quashed.‎
‎2. ‎ That on facts and in law disallowing expenses of Rs. 1,54,988 in totality ‎without raising any question, without affording reasonable opportunity of ‎being heard and without issuing the mandatory show cause notice is totally ‎wrong, unjustified & illegal and same deserves to be allowed in full.‎

‎3. ‎ That without prejudice to the above, the learned Commissioner (Appeals) ‎erred in law and on facts in not admitting additional evidence under rule ‎‎46A. The additional evidence was adduced due to the fact that no query ‎was raised by the learned assessing officer before making the disallowance, ‎without affording opportunity of being heard to the appellant. Therefore, ‎the basis taken for not allowing the admission of additional evidence is ‎totally wrong, unjustified, illegal and deserves to be admitted.‎

‎4. ‎ That the Appellant craves leave to add any more grounds of appeal and ‎modify / alter any of the grounds or withdraw any of the grounds before or ‎at the time of hearing of the appeal. ”‎

‎2. ‎ The brief facts of the case is that assessee is a director in one of the ‎company. Search and seizure under section 132 of the Act were conducted ‎at the residential premises of the assessee on 6-11-2009. For assessment ‎year 2008-09 the assessee filed her return of income of Rs. 92,93,960. In ‎the return of income assessee has shown commission income of Rs. ‎‎1,19,250 on net basis.‎

‎3. ‎ The learned assessing officer on examination of the details noted that ‎assessee has earned total receipt of Rs. 2,74,238 as commission and ‎brokerage, other claim deduction of expenses of Rs. 1,54,988 and shown ‎profit of Rs. 1,19,250. During the course of assessment proceedings the ‎assessee could not submit the supporting documents and bills etc. of the ‎expenditure claimed of Rs. 1,54,988 and, therefore, the learned assessing ‎officer disallowed the same. Vide order dated 28.12.2011 the learned ‎assessing officer determined the total income of the assessee at Rs. ‎‎94,48,948.‎

‎4. ‎ The assessee preferred appeal before the learned Commissioner (Appeals) ‎and submitted that assessee has paid a sum of Rs. 1,54,988 to Mr. Vikas ‎Babbar and further sum towards reimbursement of expenses incurred by ‎him. Assessee submitted the confirmation and PAN number of the recipient ‎of the income. The learned Commissioner (Appeals) was also requested to ‎admit the above evidence under rule 46A of the Act. The assessee also ‎raised an additional ground of appeal submitting that in absence of any ‎incriminating documents found during the course of search, no addition can ‎be made. The learned Commissioner (Appeals) obtained the remand report ‎of the assessing officer wherein it was submitted that search was conducted ‎on 6-11-2009 and the impugned assessment year is 2008-09 and, therefore, ‎during the course of search unaccounted cash was found and, therefore, the ‎same is incriminating material. On the merits of the case the assessing ‎officer submitted that in the absence of the details of expenses same cannot ‎be accepted. The assessee submitted the rejoinder and submitted that for ‎assessment year 2008-09 the assessment is concluded. Assessee further ‎submitted that assessee submitted return under section 139(1) on 29-3-2008 ‎and, therefore, in absence of any notice under section 143(2) on the date of ‎search i.e. on 6-11-2009 the assessment was completed. On the merits the ‎additional evidence was requested for admission.‎

‎5. ‎ The learned Commissioner (Appeals) dismissed the application of ‎additional evidence of the assessee and further relying on the Bangalore ‎Bench decision dismissed the additional ground. On the merits he also ‎dismissed the appeal of the assessee. Therefore, assessee is in appeal before ‎us.‎

‎6. ‎ The learned authorized representative submitted a brief synopsis. He also ‎submitted that as on the date of search, assessment year 2008-09 was a ‎concluded assessment. Such assessment can be disturbed only when ‎incriminating evidences were found during the course of search. He ‎submitted that no incriminating evidences were found during the course of ‎search. With respect to the merits of the case, he submitted that details were ‎not considered by the learned Commissioner (Appeals) though requested by ‎filing supportive application and evidences.‎

‎7. ‎ The learned Departmental Representative submitted that even in the ‎absence of incriminating evidences the addition can be made. She relied on ‎the decision of Hon’ble Kerala High Court in E. N. Gopakumar v. CIT ‎‎(2017) 390 ITR 131 (Ker). She further relied upon the decision of the ‎Allahabad High Court in case of CIT v. Raj Kumar Arora (2014) 367 ITR ‎‎517 (All) and CIT v. Kesarwani Zarda Bhandar [ITA No. 270, 269, 268 of ‎‎2014 & 15, 16, 17 of 2015, dt. 6-9-2016]. She further relied upon the ‎decision of Hon’ble Delhi High Court in the case of Smt. Dayawanti v. CIT ‎‎(2016) 390 ITR 496 (Del.) and Filatex India Ltd. v. CIT (2015) 229 ‎Taxman 555 (Del). The main argument of the learned Commissioner (DR) ‎was that as assessee is situated in Faridabad, the decision of the Hon’ble ‎Delhi High Court in the case of CIT v. Kabul Chawla 380 ITR 573 ‎‎(Del.) does not apply to the assessee.‎

‎8. ‎ We have carefully considered the rival contentions as also perused the ‎orders of the lower authorities. Admittedly the facts of the case that ‎impugned assessment year involved 2008-09 for which the return was filed ‎under section 139(1) on 29-9-2008 and the due date for issue of the notice ‎under section 143(2) of the Act was up to 30-9-2009, no such notice was ‎issued to the assessee. On 6-11-2009 search under section 132(1) was ‎carried out at the residence of the assessee. Admittedly during the course of ‎search some cash seizure was made. However, with respect to the ‎disallowance made admittedly no incriminating documents were found. As ‎it is held by Hon’ble Delhi High Court and several other High Courts that ‎in case of concluded assessment same can be disturbed, consequent to ‎search only if there are certain incriminating documents found with respect ‎to that addition. In nut shell, concluded assessment can only be disturbed ‎pursuant to search if there are incriminating documents found related to that ‎assessment year. Such a view has been taken by the Hon’ble Delhi High ‎Court, Hon’ble Gujarat High Court, Hon’ble Karnataka High Court, ‎Hon’ble Bombay High Court. However, contrary view has also been taken ‎by the Hon’ble Kerala High Court in 309 ITR 131 (Ker). Admittedly ‎neither the assessee nor the Revenue could provide us any pronouncement ‎by the Hon’ble Punjab & Haryana High Court, which is the jurisdictional ‎High Court of the assessee. No such decision could be found on our ‎research too. The Hon’ble Supreme Court in the case of CIT v. Sinhgad ‎Technical Education Society (2017) 397 ITR 344 (SC) though in case of ‎‎153C has held that only those assessment years for which incriminating ‎evidences were found during the course of search in case of other persons ‎concluded assessments can be disturbed. Furthermore, Hon’ble Supreme ‎Court in CIT v. Vegetable Products Ltd. (1973) 88 ITR 192 (SC) has held ‎that if the court find that the language of a taxing provision is ambiguous or ‎capable of more meaning than one, then the court has to adopt the ‎interpretation which favours the assessee, more particularly show where ‎provision relates to imposition of a penalty. Therefore, even in case of the ‎assessment or on the issue of addition the interpretation which favours the ‎assessee, in case of ambiguity shall be followed. In view of this, the ‎balance of scale is tilted in favour of the assessee. Therefore, respectfully ‎following the decision of Hon’ble Delhi High Court, Hon’ble Bombay High ‎Court, Hon’ble Gujarat High Court and Hon’ble Karnataka High Court, we ‎also state that in the present case without any incriminating material, ‎addition cannot be made. Admittedly there are no incriminating materials ‎found with respect to the disallowance of expenditure made by the ‎assessing officer. In view of this, ground No. 1 of the appeal of the assessee ‎is allowed.‎

‎9. ‎ The other grounds of appeal becomes infructuous in view of our decision ‎with respect to ground No. 1 hence, they are dismissed.‎

‎10. ‎ In the result, appeal of the assessee is allowed.‎

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