VINDHYA INDUSTRIES PVT. LTD. ,KOLKATA vs. DCIT, C.C-3(4), KOL, KOLKATA

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ITSSA 96/KOL/2023Status: DisposedITAT Kolkata19 February 2024AY 2009-103 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the impugned additions made by the Assessing Officer are not sustainable in law. The primary reasoning was based on the submission that no incriminating material was found during the search action conducted under section 132(1) of the Act. Furthermore, the Tribunal noted that the assessment year in question was 2009-10, and the time to issue a notice under section 143(2) of the Act had already elapsed on 03.09.2010, meaning there was no pending or unabated assessment. The Tribunal relied on the decision of the Hon'ble Supreme Court in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd. ([2023] 149 taxmann.com 399 (SC)), which held that in cases of non-abated or completed assessments, no additions can be made under section 153A in the absence of any incriminating material found during the search. Consequently, all impugned additions were ordered to be deleted. The appeal of the assessee was allowed.

What were the facts?

The assessee, Vindhya Industries Pvt. Ltd., is in appeal against the order dated 28.04.2023 of the Commissioner of Income Tax (Appeals) – 21, Kolkata. The assessment year in question is 2009-10. A search action under section 132(1) of the Income Tax Act was conducted at the assessee's premises on 23.12.2014, but no incriminating material was found. Subsequently, the assessment was framed under section 153A read with section 143(3) of the Act, leading to additions which were confirmed by the CIT(A). The assessee's grounds of appeal challenge these additions, including Rs. 45,00,000 under section 68, Rs. 17,514 under section 37(1), and Rs. 87,176 for PF and ESI contributions under section 36(1)(va). Additional grounds were raised concerning the validity of additions in the absence of incriminating material during search and in completed assessments.

What were the issues?

1. Whether the addition of Rs. 45,00,000 as share capital and share premium under section 68 of the Income Tax Act, 1961, is justified when the share application money was received through banking channels, and whether the CIT(A) erred in confirming this addition. The assessee contends that since the receipts were through banking channels, the addition is unjustified. The revenue's contentions are not recorded. 2. Whether the disallowance of business expenditure of Rs. 17,514 under section 37(1) of the Income Tax Act, on the grounds that it is not related to the company's business activity, is justified. The assessee argues that the expenditure should be allowed. The revenue's contentions are not recorded. 3. Whether the disallowance of contribution to PF and ESI amounting to Rs. 87,176 under section 36(1)(va) of the Income Tax Act, 1961, due to delays in depositing contributions, is justified. The assessee argues that the disallowance is unjustified and should be allowed. The revenue's contentions are not recorded. 4. Whether additions made under section 153A read with section 143(3) of the Act are sustainable when no incriminating material was found during the search, and the assessment year pertains to a completed assessment where the time to issue a notice under section 143(2) had elapsed. The assessee relies on the Supreme Court decision in PCIT vs. Abhisar Buildwell Pvt. Ltd. The revenue's contentions are not recorded.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 143(3),Section 68,Section 37(1),Section 36(1)(va),Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH KOLKATA

Before: Shri Sanjay Garg & Shri Rajesh Kumar

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH KOLKATA Before Shri Sanjay Garg, Judicial Member and Shri Rajesh Kumar, Accountant Member I.T(SS).A. No.96/Kol/2023 Assessment Year: 2009-10 Vindhya Industries Pvt. Ltd………..........................…………………….……Appellant P-32, Kasba Industrial Estate, Phase-I, “DD House”, Kolkata-700107. [PAN: AABCV2600B] vs. DCIT, C.C-3(4), Kolkata………..…..…….…..….........…........……...…..…..Respondent Appearances by: Shri Rites Goel, Advocate, appeared on behalf of the appellant. Shri S. Datta, CIT- Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : January 09, 2024 Date of pronouncing the order : February 19, 2024 ORDER Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 28.04.2023 of the Commissioner of Income Tax (Appeals) – 21, Kolkata [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).

2.

The assessee in this appeal has taken the following grounds of appeal:

“1. That the order of the Commissioner of Income-tax (Appeals) (hereinafter referred to as CIT(A) is opposed to law and facts of the case. 2. That the Ld. CIT (A) was wrong in confirming the addition of Rs. 45,00,000 u/s. 68 of the Income Tax Act, 1961 being the share capital and share Premium raised during the relevant financial year ending 31st March, 2009 without appreciating the fact that whenever the share application money was received the said was received through banking channels. Thus, addition made by Ld. A/O and confirmed by CIT(A) is unjustified and liable to be deleted 3. That the Ld. CIT(A) was not justified to confirming the disallowing the business expenditure of Rs. 17,514/ - u/s 37(1) of the Income Tax Act stating that the expenditure is not related to the business activity of the company which is totally unjustified and it should be allowed.

I.T(SS).A. No.96/Kol/2023 Assessment Year: 2009-10 Vindhya Industries Pvt. Ltd 4. That the Ld. CIT(A) was not justified to confirming the disallowance the contribution to PF and ESI amounting Rs. 87,176/- u/s 36(1) (va) of the Income Tax act, 1961 only observing from the Assessment Order. That the A/0 has tabulated the delays in depositing contributions to PF and ESI which is not justified. It should be allowed. 5. That the appellant humbly craves leave to add, amend, alter, withdraw, delete or substitute all or any of the ground(s) of appeal at the time of hearing.” 3. Apart from the aforesaid grounds of appeal, the assessee has taken the following additional grounds of appeal:

““1) For that CIT(A) erred in confirming the impugned order under section 153A/143(3) passed by learned Assessing Officer without incriminating materials found during the search and made additions taking into consideration other material in respect of completed assessment/unabated assessment which is totally unjustified and liable to be deleted. 2) For That on the facts and circumstances of the case NO addition can be made in respect of assessment which have become final if no incriminating material is found during the search or during the 153A proceedings.”

4.

The brief facts of the case are that a search action was carried out at the premises of the assessee u/s 132(1) of the Act on 23.12.2014, however, no incriminating material was found during the search action. Pursuant to that, the assessment was framed u/s 153A r.w.s. 143(3) of the Act, wherein, the impugned additions were made by the Assessing Officer which have been further confirmed by the CIT(A).

5.

At the outset, the ld. Counsel for the assessee has submitted that since no incriminating material was found during the search action and that the assessment year in this case being assessment year 2008-09 and the time to issue notice u/s 143(2) of the Act had already elapsed on 03.09.2010 and there was no pending assessment, therefore, no additions could have been made by the Assessing Officer in the assessment proceedings carried out u/s 153A of the Act. He in this respect has relied upon the latest decision of the Hon’ble Supreme Court 2

I.T(SS).A. No.96/Kol/2023 Assessment Year: 2009-10 Vindhya Industries Pvt. Ltd in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd. reported in [2023] 149 taxmann.com 399 (SC), wherein, the Hon’ble Supreme Court has held that in 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. 6. In view of the above, the impugned additions made by the Assessing Officer are not sustainable in the eyes of law and the same are ordered to be deleted. 7. In the result, the appeal of the assessee stands allowed. Kolkata, the 19th February, 2024.

Sd/- Sd/- [Rajesh Kumar] [Sanjay Garg] Accountant Member Judicial Member

Dated: 19.02.2024. RS Copy of the order forwarded to: 1. Vindhya Industries Pvt. Ltd 2. DCIT, C.C-3(4), Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar, Kolkata Benches

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