[INCOME TAX APPELLATE TRIBUNAL
[ DELHI BENCH “E”: NEW DELHI ]

BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER
AND

SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
(Through Video Conferencing)

ITA. Nos. 3856 & 3857/Del/2015
(Assessment Years : 2009-10& 2010-11 )

ACIT, M/s. R. J. Corp Ltd.,
Central Circle : 07, Vs. F–2/7, Okhla Indl. Area,

New Delhi. Phase–I, New Delhi.
PAN: AAACA2573R

AND

C. O. Nos. 52 and 53 (Del) of 2016
[ in ITA. Nos. 3856 & 3857/Del/2015]
(Assessment Years: 2009-10 & 2010-11)

M/s. R. J. Corp Ltd., ACIT,
F–2/7, Okhla Indl. Area, Vs. Central Circle : 07,

Phase–I, New Delhi. New Delhi.
PAN: AAACA2573R
(Respondents)
(Appellants)

Assessee by : Shri Rajat Jain, C. A.;
Revenue by: Shri C. P. Pathak [CIT]–DR;
Date of Hearing
Date of pronouncement 19/01/2021
21/01/2021

O R D E R

PER BENCH :

1. These are two appeals for Assessment Years 2009-10 and
2010-11 filed by the ld AO and two cross objections in these
appeals filed by assessee, are remanded back to the file of the
co-ordinate bench by the Hon’ble Delhi High Court vide order

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dated 26.09.2010 in ITA. Nos. 853 and 854 (Del) of 2019 and 864
(Del) of 2019.
2. The co-ordinate bench has decided these appeals for Assessment
Years 2008-09 to 2010-11 in ITA. No. 3855 – 3857 (Del) of 2015
along with Cos by order dated 02nd April, 2019, which was
challenged by the assessee before the Hon’ble High Court.
3. The grievance of the assessee is that co-ordinate bench should
have itself proceeded to decide the said appeals including the
additional ground raised by the assessee with respect to the
validity of the notice under Section 153A of the Income Tax Act,
1961 (the Act) rather than remitting it back to the ld. CIT
(Appeals).
4. Therefore, the question of law was framed by Hon’ble High Court
that whether ITAT was justified in remanding the assessment
back to the CIT (Appeals) in respect of the aforesaid assessment
years.
5. The Hon’ble High Court set aside the order passed by the co-
ordinate bench dated 2.04.2019 with a direction to the Tribunal
to proceed to decide these appeals and the Cross Objections filed
before it on its own. Thus, these appeals are restored to the co-
ordinate bench and the rights and contentions of the parties are
left open to be considered. Thus, the appeals decided by the co-
ordinate bench for Assessment Years 2008-09 to 2010-11 are
restored back to the file of the Tribunal.
6. Before us, the appeals for Assessment Years 2009-10 and 2010-
11 are listed.
7. In ITA. No. 3854 (Del) of 2015 for Assessment Year 2009-10 the
ld. Assessing Officer has raised the grievance with respect to
deletion of the addition of Rs. 11,27,042/- on account of

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unexplained advertisement expenses deleted by the ld. CIT
(Appeals). The second grievance is wherein the disallowance
under Section 14A made by the ld. AO of Rs. 7,08,92,279/-
which was subsequently reduced by passing an order under
Section 154 of the Act to Rs. 3,44,32,432/-, out of which the ld.
CIT (Appeals) has deleted the addition of Rs. 2,49,74,701/-.
8. The assessee in the Cross Objection No. 52 (Del) of 2016 is
aggrieved with the order of the CIT (Appeals) wherein the
disallowance under Section 14A of Rs. 51,12,178/- is retained.
9. The assessee in the Cross Objection have also raised a legal
ground as narrated in para No. 9 of the order of the co-ordinate
bench dated 02nd April, 2019 that the additions made under
Section 153A of the Act are illegal as the same were not made
on the basis of incriminating material found during the course of
search. This ground was raised for all the three assessment
years before the co-ordinate bench at that point of time. In para
No. 12 of the order, these additional grounds were admitted by
the co-ordinate bench, but then setting aside it to the file of ld.
CIT (Appeals). It directed ld CIT (Appeals) to decide the additional
ground as per law. However, now the Hon’ble High Court has
directed the co-ordinate bench to decide this issue also.
10. The facts can be seen from the assessment order that a search
and seizure operation under Section 132 of the Act was carried
out on M/s. Jaipuria Group of cases on 27th March, 2012.
Warrant of authorization under Section 132 of the Act was also
issued in the name of the company. Therefore, notice under
Section 153A of the Act for AY 2009-10 was issued on
8.04.2013. The return was filed on 11.07.2013 at
Rs.11,75,90,460/-. An addition of Rs.11,27,042/- as well as

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disallowance under Section 14A of Rs.7,08,92,279/- was made
amongst several other disallowances and additions. The order
under Section 153A of the Act was passed on 28th March, 2014
where the total income of the assessee was assessed at
Rs.1,04,65,11,760/-.
11. As it is the mandate of the provisions of Section 153A of the Act
as held by the Hon’ble Delhi High Court in the case of CIT Vs.
Kabul Chawla 380 ITR 573 (Del.) that in case of an concluded
assessment the addition can be made only on the basis of
incriminating material found during the course of search.
Therefore, both these disallowances / additions are required to
be tested on the grounds that whether the disallowances are
made based on any incriminating material found during the
course of search. It is necessary to decide the additional
ground in his Cross Objection raised by the assessee before going
into the merits of the addition.
12. The Hon’ble Delhi High Court in CIT Vs. Kabul Chawla (supra) in
para No. 37(vii) has held that completed assessments can be
interfered with by the Assessing Officer, while making the
assessment under Section 153A of the Act, only on the basis of
some incriminating material un-earthed during the course of
search or recovery 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.
13. This assessment year i.e. AY 2009-10 is a concluded assessment
on the date of search i.e. 27/03/2012.
14. The first disallowance of Rs. 11,27,042/- was not based on any
incriminating material found during the course of search. There

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is only reference to some post-search investigation and assessee
was asked to furnish the details of advertisement expenses,
which was furnished. However, the address and PAN of the
parties were not provided and, therefore, these expenses were
held to be bogus and disallowed by the ld. Assessing Officer. We
do not find any reference to any material, which is incriminating
in nature found during the course of search, which has been
used by the ld. AO for making this disallowance.
15. Coming to the second disallowance under Section 14A, the
Assessing Officer noted that assessee has made an investment of
Rs.119 crores during the year and, therefore, he made the
disallowance of Rs. 7,08,92,279/- under that section. In that
case, also we do not find any reference to any incriminating
material found during the course of search. In view of this, we
find that both the disallowances in appeal before us are made by
the ld. Assessing Officer without any incriminating material
found during the course of search.
16. The ld DR could not show that any of these
additions/disallowances are made on the basis of incriminating
material found during the course of search.

17. In view of this, we allow the additional ground raised by the
assessee and hold that both the above additions made by the ld.
Assessing Officer are without any incriminating material found
during the course of search and hence not sustainable. In view
of this, the additional ground raised by the assessee in the Cross
Objection is allowed.

18. In view of our above finding, the grounds raised in the appeal of
the ld. Assessing Officer in ITA. No. 3856 (Del) of 2015 and in the

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Cross Objections of the assessee becomes redundant and hence
they are dismissed.
19. In the result, Cross Objection of the assessee was allowed partly
as indicated above.

ITA. No. 3857 (Del) of 2015 [Assessment Year 2010-11]
AND

C. O. No. 53 (Del) of 2016

20. For AY 2010-11, in response to notice under Section 153A of the
Act issued pursuant to the search, dated 27.03.2012 the
assessment under Section 153A of the Act was passed on 28th
March 2014. The only dispute is also on account of unexplained
advertisement expenditure and disallowance under Section 14A
of the Act. The facts are pari materia similar to the facts in
Assessment Year 2009-10.

21. The present assessment year is also a concluded assessment
year i.e. not pending as on the date of search i.e. 27th of March
2012. The disallowance on advertisement expenditure of Rs.
22,68,806/- was made in a similar manner as it was made in
Assessment Year 2009-10. There is no reference of any
incriminating material found during the course of search.
Similarly disallowance under Section 14A of the act of Rs.
9,65,39,770/- was also made which does not have any reference
of incriminating material.

22. The ld DR could not show that any of these
additions/disallowances are made on the basis of incriminating
material found during the course of search.

23. As the Assessment Year 2010-11 is also a concluded assessment
year, which could have been tinkered with only on the basis of
some incriminating material found during the course of search,

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which is absent in this case. Therefore, we allow the additional
ground in CO raised by the assessee with similar direction as in
Assessment Year 2009-10.
24. Accordingly, additional ground raised in the Cross Objection by
the assessee is allowed.
25. Therefore, the grievance of the AO in ITA as well as in other
grounds of the Cross Objection of the assessee becomes purely
academic in nature and does not deserve to be discussed and
hence dismissed.
26. In the result, the Cross Objection of the assessee for both the
years are allowed partly and appeals of the Assessing Officer are
dismissed for both the years.

Order pronounced in the open court on: 21/01/2021.

Sd/- Sd/-
( KUL BHARAT ) (PRASHANT MAHARISHI)
JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated : 21/01/2021.

*MEHTA*
Copy forwarded to

1. Appellants;
2. Respondents
3. CIT
4. CIT (A)
5. DR:ITAT

ASSISTANT REGISTRAR
ITAT, New Delhi

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Date of dictation 19.01.2021.

Date on which the typed draft is placed before 19.01.2021.

the dictating member

Date on which the typed draft is placed before 21.01.2021.

the other member

Date on which the approved draft comes to the 21.01.2021.

Sr. PS/ PS

Date on which the fair order is placed before the 21.01.2021.

dictating member for pronouncement

Date on which the fair order comes back to the 21.01.2021.

Sr. PS/ PS

Date on which the final order is uploaded on the 21.01.2021.

website of ITAT

date on which the file goes to the Bench Clerk 21.01.2021.

Date on which the file goes to the Head Clerk

The date on which the file goes to the Assistant

Registrar for signature on the order

Date of dispatch of the order

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