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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”: HYDERABAD
Before: SHRI SATBEER SINGH GODARA & SHRI LAXMI PRASAD SAHU
O R D E R PER L.P. SAHU, A.M.: This appeal filed by the assessee is directed against CIT(A) - 11 Hyderabad’s order dated 21/09/2021 for AY 2012-13 involving proceedings u/s 143(3) r.w.s 153A of the Income Tax Act, 1961 ; in short “the Act”.
The assessee has raised 9 ground of appeal, out of which 1 & 9 are general grounds, 2, 3, 6, 7 & 8 are technical
:- 2 -: Sri Lam Paul Sashikumar, Hyderabad. grounds and 4 & 5 are the grounds on merits regarding the addition of Rs. 10 lakhs.
Briefly the facts of the case are that a search and seizure operation was conducted u/s 132 of the IT Act, on 09/11/2017 in the case of M/s Goldstone Infratech Ltd and its other associated companies on 09/11/2017 and the assessee was one of the persons whose premise was covered u/s 132 of the Act. Accordingly, notices u/s 153A was issued to the assessee on 21/03/2018 and in response, assessee filed his return of income on 06/04/2018 declaring an income of Rs. 33,71,860/-. Subsequently, the other notices were issued to the assessee calling for information with detailed questionnaire.
3.1 On perusal/verification of various detailed submitted by the ld. AR of the assessee and from the submissions of bank account statement, the AO observed that there was a deposit of Rs. 10,00,000/- made on 24/06/2021 and Rs. 4,00,000/- made on 18/06/2011, which according to the assessee, Rs. 4,00,000/- was received by the assessee on 18/06/2011 towards ex-gratia and the same had been shown in Form No. 16 and offered to tax. In respect of Rs. 10 lakhs, the AR of the assessee furnished a copy of the bank statement, which was indicated that the amount was received from M/s Trinity Infraventures Ltd. for his personal needs. When asked whether the same had been :- 3 -: Sri Lam Paul Sashikumar, Hyderabad. returned or not, the ld. AR of the assessee submitted that the assessee had resigned from M/s Goldstone Infratech Ltd on 12th December, 2017. The AO noted that the assessee could not furnish any evidence regarding return of Rs. 10 lakhs till the date of assessment. The AO observed that there was no plausible explanation in regard to receipt of Rs. 10 lakhs from his employer and it was not offered as taxable income for the impugned AY. He, therefore, treated the sum of Rs. 10 lakhs in the impugned AY as other income in the hands of the assessee in the absence of satisfactory explanation from the assessee.
Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A) and took 10 grounds of appeal, in which grounds raised on both legal and as well as on merits of the case.
5. The CIT(A) after considering the submissions of the assessee as well as the order of the AO upheld the action of the AO without referring any incriminating material found in the search & seizure operation.
6. Aggrieved by the order of the CIT(A), the assessee is in appeal before the ITAT.
Before us, the ld. AR of the assessee submitted that the assessee had received money from his employer, which :- 4 -: Sri Lam Paul Sashikumar, Hyderabad.
was shown in the bank statement of the employer that the money was transferred to the assessee and to this effect, he submitted confirmation letters that the money was given to the assessee and there was opening balance which was to be recovered from the assessee by M/s Trinity Infraventures Ltd. He also submitted that there was no incriminating material found during the course of search, which can relied for making addition. Further, he submitted that the assessee has satisfied all the allegations made by the lower authorities with regard to the addition made u/s 68/69A, which proves that there is a genuine transaction and creditworthiness of the employer of the assessee. In support of his arguments, the ld. AR relied on various judgments, which are placed at pages 1 to 230 of the paper book, which is placed on record.
The ld. DR, on the other hand, besides relying on the orders of revenue authorities, submitted that the lower authorities were justified in making the addition of Rs. 10 lakhs in the hands of the assessee as the assessee could not explain properly in regard to the return of the money to the employer till the assessment as well as till appellate proceedings were completed. He submitted that there was a direct benefit to the assessee of Rs. 10 lakhs in the impugned AY.
:- 5 -: Sri Lam Paul Sashikumar, Hyderabad.
We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. We observe from the orders of revenue authorities that a search and seizure operation u/s 132 of the Act was conducted on 9th November, 2017 and the assessee has filed his return of income u/s 139(1) for AY 2012-13 on 06/04/2018 declaring income of Rs. 33,71,860/-. The AO has made the addition in the hands of the assessee of Rs. 10 lakhs, which has been received by the assessee from employer on 24/06/2011, which is clear form the bank statement of the assessee’s employer. In the instant case, assessment was framed u/s 153A and it is an unabated assessment and no assessments were pending on the date of search initiated upon the assessee. While perusing the assessment order, we find that nowhere the AO has referred any incriminating material found during the course of search relating to the receipt of Rs. 10 lakhs by the assessee and, therefore, it clearly shows that no incriminating material found during the course of search conducted u/s 132 of the Act on 09/11/2017 in respect of receipt of Rs. 10 lakhs. As held by the Hon’ble High Court of Delhi in the case of Kabul Chawla, [2015] 61 taxmann.com 412 that if no incriminating material found during the course of search for making addition in the unabated assessment, addition cannot be made. We, therefore, following the above judgment, set aside the order of the CIT(A) and direct the AO to delete the addition of Rs. 10
:- 6 -: Sri Lam Paul Sashikumar, Hyderabad. lakhs received by the assessee from his employer. Accordingly, the grounds raised by the assessee on this issue are allowed.
In the result, appeal of the assessee is allowed. Pronounced in the open court on 16th December, 2021.