DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), KOLKATA, KOLKATA vs. UNITECH PAPER MILLS PRIVATE LIMITED, KOLKATA

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ITSSA 42/KOL/2024Status: DisposedITAT Kolkata17 December 2024AY 2012-133 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 Ld. CIT(A) and dismissed the appeal filed by the Revenue. The Tribunal noted that the Ld. CIT(A) had deleted the addition of Rs. 2,40,00,000/- made by the AO under Section 68. The reasoning provided by the Ld. CIT(A), and accepted by the Tribunal, was that no incriminating materials were found during the search action relevant to the assessment year. The disallowances were made based on a statement recorded under Section 132(4)/131 and information from post-search inquiries. The Tribunal relied on the decision of the Hon'ble Supreme Court in the case of Pr. CIT Vs. Abhiser Buildwell (P) Ltd. [2023] 149 taxmann.com 399 (SC). This precedent held that in cases of non-abated/completed assessments, no addition can be made under Section 153A in the absence of incriminating material found during the search. Therefore, the addition was not sustainable as it was not based on seized incriminating material. The Tribunal found no infirmity in the order of the Ld. CIT(A) and upheld it.

What were the facts?

The Revenue (DCIT, Centra Circle-1(2), Kolkata) filed an appeal against the order of the Ld. CIT(A), Kolkata-20, dated 24.01.2024, for Assessment Year 2012-13. The appeal was filed 26 days after the due date, and the Tribunal condoned the delay. The assessment order under challenge was passed under Section 153A of the Income Tax Act, 1961, by the ACIT, Central Circle-1(2), Kolkata, on 29.12.2017. The assessee, Unitech Paper Mills Private Limited, had initially filed a return declaring Rs. 58,92,820. A search action was conducted on the assessee on 06.10.2015, leading to the issuance of a notice under Section 153A. The Assessing Officer (AO) made an addition of Rs. 2,40,00,000/- on account of share capital/share premium, noting that no incriminating material was found during the search, but inferences were drawn based on other materials and a statement recorded.

What were the issues?

1. Whether the addition made by the Assessing Officer under Section 68 of the Income Tax Act, 1961, is sustainable in the absence of any incriminating material found during the search action, for Assessment Year 2012-13? Assessee's Contention: The assessee argued that the addition was made without any incriminating material found during the search. The Ld. CIT(A) allowed the appeal by noting that no incriminating materials were found and the disallowances were based on a statement recorded under Section 132(4)/131 and post-search inquiries. Revenue's Contention: The revenue's appeal challenges the deletion of the addition made by the AO under Section 68. The specific arguments of the revenue are not explicitly detailed in the judgment, but the appeal itself implies a disagreement with the CIT(A)'s deletion.

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3),Section 68,Section 132(4),Section 131

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]

Pronounced: 17.12.2024

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA [Before Shri Rajesh Kumar, AM& Shri Pradip Kumar Choubey, JM] I.T(SS)A. No. 42/Kol/2024 Assessment Year: 2012-13 DCIT, Centra Circle-1(2), Kolkata Vs. Unitech Paper Mills Private Limited 53A, Rafi Ahmed Kidwai Road, 3rd Floor, Kolkata-700016. (PAN: AAACU3795M) Appellant Respondent

Date of conclusion of Hearing 16.12.2024 Date of Pronouncement 17.12.2024 For the Assessee Shri Tanmoy Kar, CA & Shri Deepak Mundhra, ACA For the Revenue ShriSubhendu Datta, CIT,DR

ORDER Per Shri Rajesh Kumar, AM

Theappeal filed by the revenue is against theorder of Ld. CIT(A), Kolkata-20dated 24.01.2024for AY 2012-13 arising out of assessment order passed u/s. 153A of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) by ACIT, Central Circle-1(2), Kolkata dated 29.12.2017.

2.

At the outset we note that the revenue appeal is time barred by 26 days. An application for condonation of delay has been filed by the revenue stating the administrative reasons for delay in filing the appeal by 26 days. Considering the application of the revenue, we find merit and accordingly condone the delay and admit the appeal of the revenue for adjudication.

3.

The only issue raised in this ground of appeal by the revenue is against the deletion of addition by Ld. CIT(A) as made by the AO u/s. 68 of the Act.

4.

The facts in brief are that the assessee filed the return of income on 27.09.2012 declaring total income of Rs.58,92,820/-. The case of the assessee was assessed u/s. 143(3)

IT(SS)A No. 42/Kol/2024 Unitech paper Mills P. ltd.., AY 2012-13

of the Act on a total income of Rs.1,27,36,348/-. Thereafter, a search action was conducted on the assessee on 06.10.2015 and notice u/s. 153A of the Act was issued. The assessee complied with the said notice by filing the return of income on 15.04.2017 declaring total income of Rs.58,92,820/-. Thereafter, the proceedings were conducted from time to time by filing necessary details and information as called for by the AO. Finally, the AO noted at page no. 5 para 1 even though no incriminating material was found in the course of search and further noted that inferences were drawn in respect of undeclared income based on the material found as well as statement recorded of Shri Sailesh Gupta and thereafter made addition in respect of share capital/share premium to the tune of Rs.2,40,00,000/- in the assessment framed u/s. 153A read with section 143(3) vide order dated 29.12.2017.

5.

The Ld. CIT(A) allowed the appeal of the assessee by directing the AO to delete the addition by noting that no incriminating materials were found during the course of search against the assessee relevant to the assessment year under consideration and the disallowances have been made on the basis of statement recorded u/s. 132(4)/131 of the Act and information gathered from post search enquiries and finally by following the decision of Hon’ble Supreme Court in the case of “Pr. CIT Vs. AbhiserBuildwell (P) Ltd.” [2023] 149 taxmann.com 399 (SC) allowed the appeal, wherein the Hon’ble Supreme Court has held that in the case of non-abated/completed assessments, no addition can be made by the Assessing Officer in an assessment carried out u/s.153A of the Act in the absence of any incriminating material found during the search action. In view of the aforesaid addition is not sustainable as the same is not based on the incriminating meterials seized during search and accordingly, we find no infirmity in the order of the Ld. CIT(A) and the same is hereby upheld. The appeal of the revenue is, therefore, dismissed.

6.

In the result, appeal of the revenue is dismissed.

Order is pronounced in the open court on 17th December, 2024 Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) Judicial Member Accountant Member Dated: 17th December, 2024

IT(SS)A No. 42/Kol/2024 Unitech paper Mills P. ltd.., AY 2012-13

JD, Sr. PS Copy of the order forwarded to: 1. Appellant–DCIT, Central Circle-1(2), Kolkata. 2. Respondent – Unitech Paper Mills Pvt. Ltd. 3. CIT(A), Kolkata-20 4. Pr. CIT 5. DR, ITAT, Kolkata, True Copy By Order Assistant Registrar ITAT, Kolkata Bench, Kolkata

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