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Shri Mukul Joshi, D-45, Second Floor, South Extension Part-2, New Delhi. Vs. The DCIT, Central Circle-19, Jhandewalan Extension, New Delhi.
November, 06th 2019
       IN THE INCOME TAX APPELLATE TRIBUNAL
              DELHI BENCHES "E" : DELHI

BEFORE SHRI BHAVNESH SAINI, J.M. & SHRI O.P. KANT, A.M.

               ITA.Nos.8 & 9/Del./2017
        Assessment Years 2012-2013 & 2013-2014

Shri Mukul Joshi,
                                The DCIT,
D-45, Second Floor,
                                Central Circle-19,
South Extension Part-2,    vs
                                Jhandewalan Extension,
New Delhi.
                                New Delhi.
PAN ADWPM8647E
       (Appellant)                     (Respondent)

             For Assessee : Shri M.R. Sharma, Advocate
              For Revenue : Shri F.R. Meena, Sr. D.R.

           Date of Hearing : 04.11.2019
   Date of Pronouncement : 05.11.2019

                          ORDER


PER BHAVNESH SAINI, J.M.


          Both the appeals by the Assessee are directed

against different Orders of the Ld. CIT(A)-28, New Delhi,

Dated 09.12.2016, for the A.Ys. 2012-2013 and 2013-2014.

In both the appeals, assessee challenged the additions of

Rs.36lakhs and Rs.1.50,000/- under section 69C of the I.T.

Act, 1961, stated to be pertaining to construction of house

belonging to HUF.
                               2
                                            ITA.Nos.8 & 9 /Del./2017
                                          Shri Mukul Joshi, New Delhi.


2.         Briefly the facts of the case are that a search and

seizure action under section 132 of the I.T. Act was carried

out on 15.02.2014 in the premises of assessee. Notice under

section 153A of the Act was issued and in compliance to the

same, the assessee filed return of income declaring total

income of Rs.11,95,710/- for the A.Y. 2012-2013 and

declared total income of Rs.9,68,750/- for the A.Y. 2013-

2014. The A.O. completed the assessments under section

153A/143(3) and made addition of Rs.36 lakhs in A.Y.

2012-2013 on account of undisclosed expenditure made by

assessee for construction of residential property at Noida

and   in   A.Y.   2013-2014,       A.O.   made      addition       of

Rs.37,50,000/- on account of the same which is reduced by

the Ld. CIT(A) to Rs.1,50,000/-.


3.         The assessee challenged both the additions before

the Ld. CIT(A). The Ld. CIT(A) reproduced the written

submissions of the assessee in the impugned orders. The

Ld. CIT(A) further noted that search and seizure action

under section 132 of the Act was carried on 15.02.2014 in

the case of AMG Group of cases at 17A Krishna Nagar,
                             3
                                         ITA.Nos.8 & 9 /Del./2017
                                       Shri Mukul Joshi, New Delhi.


Delhi. Property No.D-343, Sector-47, Noida is owned by the

assessee and residential Flat was being constructed on the

said plot. It is further noted that on the day of search

statement of Sri L.K.Yadav was recorded on oath, in which,

he has stated that the documents recovered from him

pertains to the assessee and in the said documents, the

detail of payment made by assessee to the contractor for the

construction of the house is recorded. The amounts were

paid partly by cheque and partly by cash. Certain other

documents were also found from Sri L.K.Yadav. The A.O. on

the basis of the statement of Sri L.K. Yadav made the above

additions against the assessee. The Ld. CIT(A) in A.Y. 2012-

2013 confirmed the addition of Rs.36 lakhs. However, in

A.Y. 2013-2014, the Ld. CIT(A) by giving benefit of addition

of Rs.36 lakhs restricted the addition to Rs.1.50,000/- in

assessment year under appeal.


4.        Learned Counsel for the Assessee, at the outset,

submitted that no incriminating material was found during

the course of search. Whatever documents were found, were

found during the course of search from Sri L.K. Yadav. Copy
                              4
                                          ITA.Nos.8 & 9 /Del./2017
                                        Shri Mukul Joshi, New Delhi.







of the show cause notice issued by the A.O. and seized

documents are placed on record. He has pointed-out that in

the seized paper it is mentioned "claimed but not paid". He

has submitted that in the seized document nothing is clear

whether assessee paid any amount to the Contractor ? He

has further submitted that since no incriminating evidences

were found during the course of search from the possession

of assessee, therefore, no addition could be made against

the assessee. He has relied upon the Judgments of Hon'ble

Delhi High Court in the case of CIT vs., Kabul Chawla 380

ITR 573 (Del.) and in the case of Pr. CIT vs., Meeta Gutgutia

395 ITR 526 (Del.).


5.        The Ld. D.R. on the other hand, relied upon the

Orders of the authorities below.


6.        We have considered the rival submissions and

perused the material on record. It is an admitted fact that

search was conducted in the case of assessee and no

incriminating material was found against the assessee.

However, some documents were found in search in the case

of Sri L.K. Yadav. The A.O. on the basis of those papers
                              5
                                          ITA.Nos.8 & 9 /Del./2017
                                        Shri Mukul Joshi, New Delhi.


recovered from third party inferred that assessee has made

payments by cheque and cash for construction of house.

Copy of the seized paper is available on record which

contains that "claimed but not paid". There is no other facts

stated in the seized document, therefore, it is clear that no

incriminating material was found and seized during the

course of search from the possession of assessee despite

search was conducted in the case of assessee also. The

Hon'ble Delhi High Court in the case of CIT vs., Kabul

Chawla (supra) held as under :


          "The issue that the Court proposes to address in

          these appeals is the same that was considered by

          the ITAT viz., "Whether the additions made to the

          income of the Respondent-Assessee for the said

          A.Ys under section 2(22)(e) of the Income Tax Act,

          1961 (`Act') were not sustainable because no

          incriminating material concerning such additions

          were found during the course of search and further

          no assessments for such years were pending on

          the date of search ?"
                                   6
                                                  ITA.Nos.8 & 9 /Del./2017
                                                Shri Mukul Joshi, New Delhi.



6.1.          Further, the Hon'ble Delhi High Court in the

above case as regards completed assessment held as under:


       "vii. Completed assessments can be interfered with by

              the A.O. while making the assessment under

              section   153A     only   on   the      basis    of   some

              incriminating material unearthed during the course

              of   search   or    requisition    of    documents         or

              undisclosed income or property discovered in the

              course of search which were not produced or not

              already disclosed or made known in the course of

              original assessment"


6.2.          The Hon'ble Delhi High Court in its recent

decision in the case of Pr. CIT vs. Meeta Gutgutia (supra) in

paras 69 to 72 has held as under :


       "69.        What weighed with the Court in the above

       decision was the "habitual concealing of income and

       indulging in clandestine operations" and that a person

       indulging in such activities "can hardly be accepted to
                          7
                                          ITA.Nos.8 & 9 /Del./2017
                                        Shri Mukul Joshi, New Delhi.







maintain meticulous books or records for long." These

factors are absent in the present case. There was no

justification at all for the AO to proceed on surmises and

estimates    without   there    being    any      incriminating

material qua the AY for which he sought to make

additions of franchisee commission.


70.         The   above       distinguishing       factors       in

Dayawanti Gupta (supra), therefore, do not detract from

the settled legal position in Kabul Chawla (supra) which

has been followed not only by this Court in its

subsequent decisions but also by several other High

Courts.


71.         For all of the aforementioned reasons, the

Court is of the view that the ITAT was justified in

holding that the invocation of Section 153A by the

Revenue for the AYs 2000-01 to 2003-04 was without

any legal basis as there was no incriminating material

qua each of those AYs.


Conclusion
                                 8
                                               ITA.Nos.8 & 9 /Del./2017
                                             Shri Mukul Joshi, New Delhi.



       72.   To conclude :

       (i) Question (i) is answered in the negative i.e., in favour

       of the Assessee and against the Revenue. It is held that

       in the facts and circumstances, the Revenue was not

       justified in invoking Section 153A of the Act against the

       Assessee in relation to AYs 2000-01 to AYs 2003-04."


6.3.         The Judgment in the case of Meeta Gutgutia

(supra) have been confirmed by the Hon'ble Supreme Court

by dismissing the SLP of the Department reported in 96

taxmann.com 468 (SC). In view of the above facts, we are fo

the view that the issue is covered by the Judgments of

Hon'ble Delhi High Court (supra). Therefore, no additions

could be made against the assessee. In this view of the

matter, we set aside the Orders of the authorities below and

delete both the additions in both the assessment years.

Appeals of Assessee are allowed.


7.           In the result, both the appeals of the Assessee are

allowed.
                              9
                                           ITA.Nos.8 & 9 /Del./2017
                                         Shri Mukul Joshi, New Delhi.


           Order pronounced in the open Court.


    Sd/-                               Sd/-
   (O.P. KANT)                        (BHAVNESH SAINI)
ACCOUNTANT MEMBER                    JUDICIAL MEMBER

Delhi, Dated 05th November, 2019

VBP/-

Copy to

1.   The appellant
2.   The respondent
3.   CIT(A) concerned
4.   CIT concerned
5.   D.R. ITAT "E" Bench
6.   Guard File


                       // BY Order //




            Asst. Registrar : ITAT Delhi Benches :
                             Delhi.

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