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.
|