M/S. EXHIBITS INDIA PVT. LTD.,KOLKATA vs. A.C.I.T., CC-4(1), KOLKATA

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ITSSA 142/KOL/2024Status: DisposedITAT Kolkata30 July 2025AY 2017-20183 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the impugned assessment was unabated on the date of the search. It noted that the time limit for issuing a notice under Section 143(2) of the Act had already expired, meaning no assessment was pending on the search date. In such a scenario, the Tribunal found that the AO cannot make an addition unless there is incriminating seized material to back it. The Tribunal considered the assessee's case to be squarely covered by the decision in PCIT v. Abhisar Buildwell P. Ltd. (2023) 454 ITR 212 (SC). Consequently, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition. The ratio decidendi is that in an unabated assessment, additions under Section 153A can only be made if there is incriminating material found during the search.

What were the facts?

The assessee, Exhibits India Private Ltd., is appealing an order dated 09.09.2024 by the Commissioner of Income-tax (Appeals), Kolkata-27, for Assessment Year 2017-18. The appeal was filed with a delay of 19 days, which the Tribunal condoned. A search under Section 132(1) of the Income-tax Act, 1961, and a survey under Section 133A were conducted on 10.02.2021, covering the assessee as a related entity to the Genesis group. Notice under Section 153A was issued, and the assessee filed a return declaring a total income of ₹48,89,450/-. During assessment, the Assessing Officer (AO) found incriminating material, including evidence of cash payments from external hard disks. The AO made an addition of ₹96,496/- for payments violating Section 40A(3), which was confirmed by the CIT(A).

What were the issues?

1. Whether the addition made by the AO is without jurisdiction in the assessment framed under Section 143(3)/153A of the Act, considering no incriminating material was found during the search under Section 132(1) in the case of an unabated assessment? Assessee's contention: The assessee argued that since the assessment was unabated on the date of the search and the time limit for issuing a notice under Section 143(2) had expired, the AO could not make any addition unless there was incriminating seized material to support it. The assessee relied on the case of PCIT v. Abhisar Buildwell P. Ltd. (2023) 454 ITR 212 (SC). Revenue's contention: The judgment does not record any specific contentions made by the Revenue on this issue.

Which sections of the Income-tax Act were involved?

Section 132(1),Section 133A,Section 143(3),Section 153A,Section 40A(3),Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM

For Appellant: Shri Jyoti Duggar, AR
For Respondent: Shri Raja Sengupta, DR
Hearing: 17.07.2025Pronounced: 30.07.2025

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Kolkata-27 (hereinafter referred to as the “Ld. CIT(A)”] dated 09.09.2024 for the AY 2017-18.

2.

It appears from the report of the registry that the appeal has been filed after a delay of 19 days. At the time of hearing the counsel of the assessee explained the reason for delay in filing the appeal. The Ld. A.R did not raise any objection in condoning the delay. Keeping in view, the submission made by the A.R. and we are of the view that the cause stated is reasonable and hence, we condone the delay and admit the appeal.

4.

The facts in brief are that the assessee filed the return of income on 30.10.2017, declaring total income at ₹48,89,450/-. A search u/s 132(1) of the Act and survey u/s 133A of the Act was conducted on 10.02.2021 and subsequent dates in the Genesis group of cases, who is engaged in the business of advertising and media. Since, the assessee is a related entity, was also covered in the said search. Notice u/s 153A of the Act was issued and served upon the assessee which was duly complied with by the assessee filing the return of income on 29.10.2021, declaring total income at ₹48,89,450/-. Thereafter, during the course of assessment proceedings, the AO noted that certain incriminating materials found in 2nd Floor, Block-B, 227 AJC Bose Road, Kolkata -700020 and according documents , backup of computers and other digital devices containing Books of Accounts of the assessee were inventorised and impounded. In External Hard disk bearing ID mark GAPL/HD/1, GAPL/HD/2 and GAPL/HD/3, there were evidences of cash payments by the assessee. Thereafter, the ld. AO noted that after analyzing the cash payments it was found that the assessee was paid total payment of ₹2,73,603/- in violation of Provision of Section 40A(3) of the Act and finally, made an addition of ₹96,496/- to the income of the assessee, in the assessment framed u/s 153A of the Act dated 06.03.2022, which was also confirmed by the ld. CIT (A).

6.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 30.07.2025.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 30.07.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata

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