DCIT CC-1(4), KOLKATA, KOLKATA vs. NORFIOX VINCOM PVT LTD, KOLKATA

PDF · subscribers
ITSSA 65/KOL/2024Status: DisposedITAT Kolkata04 March 2025AY 2007-083 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the CIT(A) and dismissed the Revenue's appeal. The Tribunal agreed with the CIT(A)'s conclusion that in an unabated assessment year, additions can only be made on the basis of seized incriminating material found during the search. The Tribunal noted that the AO relied solely on post-search inquiries to make the addition of ₹2,15,00,000/-. The Tribunal found that the assessment year in question was unabated at the time of the search and that no incriminating material pertaining to the share capital was found during the search. Therefore, the AO had no jurisdiction to make the addition. The Tribunal explicitly stated that the case is squarely covered by the decision of the Hon'ble Apex Court in PCIT v. Abhisar Buildwell P. Ltd. (supra), which was followed by the CIT(A). No issue was left undecided.

What were the facts?

The Revenue is in appeal against the order of the CIT(A) for AY 2007-08. The Assessing Officer (AO) made an addition of ₹2,15,00,000/- under Section 153A of the Income-tax Act, 1961, on account of bogus share capital. A search action under Section 132(1) was conducted on the assessee on 18.09.2012. Notice under Section 153A was issued on 27.11.2013 and served on 29.11.2013. The assessee filed a return on 28.01.2014. The AO's addition was based on post-search investigations, including statements recorded during a survey at other companies and from an entry operator, Mr. Praveen Agarwal, indicating that the companies providing share capital were controlled by him. The CIT(A) deleted the addition, holding that no incriminating material was found during the search concerning the share capital.

What were the issues?

1. Whether the addition made by the AO under Section 153A of the Income-tax Act, 1961, on account of alleged bogus share capital is valid when no incriminating material was found during the search in an unabated assessment year? Assessee's Contention: The assessee argued, and the CIT(A) held, that since the assessment year was unabated and no incriminating material was found during the search, the AO lacked jurisdiction to make additions based solely on post-search inquiries. The CIT(A) relied on the Hon'ble Supreme Court's decision in PCIT v. Abhisar Buildwell P. Ltd. Revenue's Contention: The Revenue appealed against the deletion of the addition made by the AO on account of bogus share capital. The specific arguments of the Revenue are not detailed in the judgment, but their appeal implies a disagreement with the CIT(A)'s finding regarding the validity of the addition based on post-search investigations.

Which sections of the Income-tax Act were involved?

Section 153A,Section 132(1),Section 133A,Section 131

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI SONJOY SARMA, JM

For Appellant: Shri Miraj D Shah, AR
For Respondent: Shri Raghuveer Madanappa, DR
Hearing: 30.01.2025Pronounced: 04.03.2025

Per Rajesh Kumar, AM:

This is an appeal preferred by the Revenue against the order of the Commissioner of Income-tax (Appeals), Kolkaa-21 (hereinafter referred to as the “Ld. CIT(A)”] dated 15.02.2024 for the AY 2007-08.

2.

The only issue raised by the Revenue is against the deletion of addition of ₹2,15,00,000/- by the ld. CIT (A) as made by the ld. AO u/s 153A of the Income-tax Act, 1961 (the Act) on account of bogus share capital.

3.

The facts in brief are that a search action u/s 132(1) of the Act was conducted on assessee on 18.09.2012. Notice u/s 153A of the Act was issued on 27.11.2013, which was served upon the assessee on 29.11.2023. The notice was complied with by the assessee by filing

4.

In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee by holding that there is no incriminating material found during the course of search qua the said share capital issued by the assessee. The ld. CIT (A) noted that since the instant assessment year was an unabated assessment year and there being no incriminating material found during the course of search and therefore, the ld. AO has no jurisdiction to make the addition. The ld. CIT (A) while allowing the appeal of the assessee followed the decision of Hon'ble Supreme Court in the case of PCIT v. Abhisar Buildwell P. Ltd. (2023)454 ITR 212(SC).

5.

After hearing the rival contentions and perusing the materials available on record including the appellate order passed by the ld. CIT

6.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court on 04.03.2025.

Sd/- Sd/- (SONJOY SARMA) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 04.03.2025 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

More judgments on Section 153A

All 18,957 judgments and leading authorities on Section 153A →

Recent GST High Court judgments

Search GST case law →