Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
ORDER
PER ANIL CHATURVEDI, AM:
This appeal filed by the Revenue is directed against the order dated 29.10.2019 passed by the Commissioner of Income Tax (Appeals)-27, New Delhi relating to Assessment Year 2011-12.
Brief facts of the case as culled out from the material on record are as under :-
Assessee is a company. AO has noted that a search and survey operation u/s 132/133A of the Act was conducted by the DCIT vs. KDS Corporation Pvt. Ltd. 2 Investigation Wing of the Department on 20.06.2014 in M/s. Alchemist Group of cases. The office premise of the assessee was also covered u/s 132(1) of the Act. Accordingly notice u/s 153A of the Act was issued to the assessee on 12.01.2015 and in response to which assessee filed return of income on 02.07.2015 declaring loss of Rs.3,50,45,467/-. The case was thereafter, taken up for scrutiny and consequently assessment was framed u/s 153A r.w.s 143(3) of the Act vide order dated 03.12.2018 and the total loss was determined at Rs.92,95,880/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 29.10.2019 in Appeal Nos.247 to 250/18-19 allowed the appeal of the assessee. Aggrieved by the order of CIT(A), Revenue is now in appeal and has raised the following effective grounds of appeal:
1. “On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,57,49,592/- made by the assessing Officer u/s 14A of Income- Tax Act, 1961.”
4. On the date of hearing none appeared on behalf of the assessee nor any adjournment application was filed despite the fact that the notice of hearing was issued to the assessee. The case file further reveals that in the past the matter was listed for hearing thrice but on those dates also there was no appearance from the side of assessee. In such a situation, we proceed to dispose of the appeal ex-parte qua the assessee, after considering the submissions of Learned DR and the material on record.
DCIT vs. KDS Corporation Pvt. Ltd. 3 5. AO has noted that during the year under consideration assessee has claimed exempt income of Rs.1,40,02,353/-. The assessee was asked to show-cause as to why the addition u/s 14A r.w.r 8D should not be made to which AO has noted that assessee had furnished the reply. AO did not accept the contentions of the assessee. He thereafter by applying formula given under Rules 8D worked out the disallowance u/s 14A of the Act at Rs.2,57,49,592/- and made its addition.
Aggrieved by the order of AO, assessee carried the matter before CIT(A). Before CIT(A), assessee challenged the framing of assessment u/s 153A of the Act in view of the decision of Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla [2015] 61 taxmann.com 412 (Delhi). CIT(A) after considering the submissions of assessee in para 5.2 of pages 10-11 of his order has given a finding that assessee had filed the original return of income for A.Y. 2011-12 on 28.09.2011 and the last date for issuing notice u/s 143(2) of the Act was 30.09.2012. On the date of search (i.e. on 20.06.2014), the assessment for the year under consideration was a completed assessment as the time period to issue notice u/s 143(2) had already expired on 30.09.2012 and thus the assessment were not abated assessments. He has further noted that Hon’ble Delhi High Court in the case of Kabul Chawla (supra) has noted the completed assessment can be interfered with by the AO while making the assessment u/s 153A of the Act only on the basis of some incriminating material found
DCIT vs. KDS Corporation Pvt. Ltd. 4 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. He has further given a finding that the additions that have been made by AO has been made on the basis of scrutiny of book results based on the entries of Profit and Loss account and Balance Sheet filed along with return of income in the regular course and not on the basis of any incriminating material. Since the assessment year under consideration was a completed assessment year, the addition could have been made by AO only on the basis of incriminating material/evidence found during the search proceedings. He thereafter, relying on the decision of Delhi High Court in the case of Kabul Chawla (supra) deleted the addition.
Aggrieved by the order of CIT(A), Revenue is now before us.
Before us, Learned DR supported the order of AO and submitted that the Revenue has preferred appeal before Hon’ble Apex Court wherein Revenue has challenged the decision in the case of Kabul Chawla (supra).
We have heard the Learned DR and perused the material on record. The issue in the present ground is with respect to the addition made by AO under the proceedings u/s 153A of the Act. We find that CIT(A) after relying on the decision of Hon’ble Delhi
DCIT vs. KDS Corporation Pvt. Ltd. 5 High Court in the case of Kabul Chawla (supra) has given a finding that on the date of search the assessment year under consideration was a completed assessment year and therefore, the additions could have been made only on the basis of incriminating material/evidences found during the course of search. We find that CIT(A) while deleting the addition has given a finding that the additions made are not based on any incriminating material or evidence found during the course of search. Before us, Revenue has not placed any material on record to point out any fallacy in the findings of CIT(A) nor has placed on record any contrary binding decision in its support. In such a situation, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed.
In the result, appeal of Revenue is dismissed.
Order pronounced in the open court on 22.03.2023