RAJ GOENKA,KOLKATA vs. D.C.I.T., CC-4(3), KOLKATA, KOLKATA

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ITSSA 114/KOL/2022Status: DisposedITAT Kolkata29 March 2023AY 2013-20145 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 issue is squarely covered in favour of the assessee by the decision of the Hon'ble Delhi High Court in CIT Vs Kabul Chawla, which was followed by the Hon'ble Gujarat High Court in PCIT Vs RSA Digi Prints, and also by decisions of the Hon'ble Bombay High Court in CIT Vs Continental Warehousing Corporation and the Hon'ble Calcutta High Court in PCIT Vs Salasor Stock Broking Ltd. The consistent view of these High Courts is that for assessments that have already been concluded, the AO is precluded from making additions on any issue except those relating to incriminating material found during the search. The AO cannot disturb a finalized assessment order unless material gathered during Section 153A proceedings establishes that the relief granted in the final assessment was contrary to facts unearthed during the Section 153A proceedings. The Tribunal found no merit in the revenue's contention that material already in the Department's possession before the search should be treated as incriminating. The assessment orders did not record any such material as incriminating. Therefore, the impugned additions were ordered to be deleted.

What were the facts?

The assessee, Raj Goenka, filed appeals against orders dated 30.11.2022 passed by the Commissioner of Income Tax (Appeals)-21, Kolkata, under Section 250 of the Income Tax Act. These appeals pertain to assessment years 2011-12, 2012-13, and 2013-14. The additions under challenge were made by the Assessing Officer (AO) in assessments framed under Section 153A of the Act, following search and seizure actions conducted at the assessee's premises on 17.03.2015 and 24.04.2015. The CIT(A) had confirmed these additions. The assessee contends that no incriminating material was found during the search, and for completed assessments not abated, additions under Section 153A are impermissible without such material.

What were the issues?

1. Whether, in the case of completed assessments (not abated) on the date of search, additions can be made under Section 153A of the Income Tax Act in the absence of any incriminating material found during the search action? Assessee's Contention: The assessee argued that as per settled law, in completed assessments not abated, additions under Section 153A are not permissible if no incriminating material is found during the search. The assessee relied on decisions from the Hon'ble Bombay High Court in "All Cargo Global Logistics Ltd." and the Hon'ble Delhi High Court in "CIT Vs. Kabul Chawla" and "Principal CIT Vs. Meeta Gutgutia Prop M/s Ferns ‘N’ Petals". Revenue's Contention: The revenue, through the CIT-DR, argued that material already in the Department's possession, which prompted the search, could be considered incriminating. The revenue did not dispute that the original assessments for the years under consideration were completed and not abated on the date of the search.

Which sections of the Income-tax Act were involved?

Section 153A,Section 250,Section 132

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH KOLKATA

Before: Shri Sanjay Garg & Dr. Manish Borad

आयकर अपील�य अ�धकरण, कोलकाता पीठ ‘ए’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH KOLKATA �ी संजय गग�, �या�यक सद�य एवं �ी मनीष बोरड, लेखा सद�य के सम� Before Shri Sanjay Garg, Judicial Member and Dr. Manish Borad, Accountant Member I.T.(SS)A Nos.112, 113 & 114/Kol/2022 Assessment years: 2011-12, 2012-13 & 2013-14 Raj Goenka.....................…………………...........................………...…..…Appellant 3rd Floor, Merlin Chambers, 18 British India Street, Dalhousie, Kolkata- 700 069. [PAN: ADLPG8181C] vs. DCIT, CC-4(3), Kolkata...……..…..…...................................…....…..…..Respondent Appearances by: Shri Miraj D. Shah, AR, appeared on behalf of the appellant. Shri Subhrajyoti Bhattacharjee, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : January 02, 2023 Date of pronouncing the order : March 29, 2023 आदेश / ORDER संजय गग�, �या�यक सद�य �वारा / Per Sanjay Garg, Judicial Member: The present appeals have been preferred by the assessee against the separate orders all dated 30.11.2022 of the Commissioner of Income Tax (Appeals)-21, Kolkata [hereinafter referred to as the ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). Since, common issues are involved in all the appeals, hence these have heard together and are being disposed of by this consolidated order. 2. The assessee, in these appeals, has contested the addition made by the Assessing Officer in the assessments framed u/s 153A of the Act

I.T.(SS)A Nos.112, 113 & 114/Kol/2022 Assessment years: 2011-12, 2012-13 & 2013-14 Raj Goenka pursuant to search action carried out at the premises of the assessee on 17.03.2015 and 24.04.2015. 3. The brief facts are that a search and seizure action was conducted at the premises of the assessee u/s 132 of the Act on 17.03.2015 and 24.04.2015. Thereafter the assessments were framed for six assessment years prior to the date of search u/s 153A of the Act and impugned additions were made. The Ld. CIT(A) confirmed the additions vide separate impugned orders all dated 30.11.2022 passed in assessee’s appeals relating to assessment years 2011-12, 2012-13 & 2013-14. The assessee, thus, has come in appeals before us. 4. At the outset, the ld. counsel for the assessee has submitted that no incriminating material was found during the search action and that as per the settled law, in the case of completed assessments, (not abated) on the date of search, in the absence of any incriminating material found during the search action, no additions can be made in an assessment framed u/s 153A of the Act of Act. The ld. counsel, in this respect, has relied on the various judicial decisions including the decision of the Hon'ble Bombay High Court in the case of “All Cargo Global Logistics Ltd.” 120 DTR 89 and of the Delhi High Court in the case of “CIT Vs. Kabul Chawla” 234 Taxman 300 ( Delhi) and in “Principal CIT Vs. Meeta Gutgutia Prop M/s Ferns ‘N’ Petals”, ITA 306/2017 and others decided vide order dated 25.5.2017. 5. The ld. DR, however, has submitted that as held by the CIT(A) the material which was already in possession of the Department prompting the search action was originally held by the CIT(A) as incriminating material. He has not disputed that the original assessments for the

I.T.(SS)A Nos.112, 113 & 114/Kol/2022 Assessment years: 2011-12, 2012-13 & 2013-14 Raj Goenka assessment year under consideration stood completed and not abated as on the date of search. 6. We have heard the rival submissions and perused the material on record. We find that the issue is squarely covered in favour of the assessee by the decision of the Hon'ble Delhi High Court in the case of CIT Vs Kabul Chawla (2016) 380 ITR 573 (Del) followed by the Hon'ble Gujrat High Court in the case of PCIT Vs RSA Digi Prints 2017 (9) TMI 530. Reliance in this respect can also be placed upon decision of Hon'ble Bombay High Court in the case of CIT Vs Continental Warehousing Corporation (2015) 374 ITR 645 (Bom.), decision of Hon'ble Calcutta High Court in the case of PCIT Vs Salasor Stock Broking Ltd. 2016 (8) TMI 1131 and decision of Hon'ble Delhi High Court in the case of ‘Principal CIT Vs. Meeta Gutgutia Prop M/s Ferns ‘N’ Petals”, ITA 306/2017 and others decided vide order dated 25.5.2017 wherein the Hon'ble High Courts have been unanimous to hold that in relation to the assessments which have already been concluded, the AO is precluded from making additions on any other issue except relating or concerning to the incriminating material found during the search action. The Assessing Officer cannot disturb the assessment order or reassessment order which has attained finality, unless the material gathered in the course of proceedings u/s 153A of the Act establishes that relief granted under the final assessment/reassessment was contrary to the fact unearthed during the course of 153A proceedings. 7. So far as the contention of the ld. DR that any material, which was already in possession of the Department before search, is to be treated as incriminating material is concerned, the above contention of the ld. DR, in the facts and circumstances of the case, has no merits. A perusal

I.T.(SS)A Nos.112, 113 & 114/Kol/2022 Assessment years: 2011-12, 2012-13 & 2013-14 Raj Goenka of the assessment orders show that the Assessing Officer has not mentioned in the assessment record of any such material in the case of the assessee which may be constituted as incriminating material. Moreover, the Department has other/additional remedies, in case, it is of the view that there was escapement of income of the assessee so far as the transactions in question pursuant to which additions have been made, the same were fully declared by the assessee in its return of income and the Assessing Officer has not referred to any incriminating material found during the search action for making the impugned addition. 8. In view of this, the proposition laid down in aforesaid case laws can be well applied to the present case. Thus, we do not find any justification on the part of the Assessing Officer for making the impugned addition in the already concluded assessments in the case of the assessee. Therefore, the impugned additions are ordered to be deleted. 9. In the result, the captioned appeals of the assessee are hereby allowed. Kolkata, the 29th March, 2023. Sd/- Sd/- [डॉ�टर मनीष बोरड /Dr. Manish Borad] [संजय गग� /Sanjay Garg] लेखा सद�य /Accountant Member �या�यक सद�य /Judicial Member Dated: 29.03.2023. RS

Copy of the order forwarded to: 1. Raj Goenka 2. DCIT, CC-4(3), Kolkata 3. CIT(A)-

I.T.(SS)A Nos.112, 113 & 114/Kol/2022 Assessment years: 2011-12, 2012-13 & 2013-14 Raj Goenka

4.

CIT- , 5. CIT(DR),

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

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