ACIT, CENTRAL CIRCLE- 4, NEW DELHI vs. ANAND PERSHAD JAISWAL, NEW DELHI

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ITA 3160/DEL/2018Status: DisposedITAT Delhi27 July 2021AY 2012-136 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 CIT(A)'s decision to delete the addition, agreeing that no incriminating material was found during the search proceedings to support the addition. The assessment was based solely on external information.

What were the facts?

A search and seizure operation was conducted on the Jaiswal group, leading to a notice under section 153A of the Income Tax Act. During assessment, the AO made an addition of Rs. 1.50 crores on account of deemed dividend under section 2(22)(e) based on information received from another tax officer.

What were the issues?

Whether an addition under section 153A can be made without incriminating material found during search, and if a loan received by a shareholder from a company where they hold significant shares constitutes deemed dividend under section 2(22)(e) without supporting seized material.

Which sections of the Income-tax Act were involved?

Section 153A,Section 2(22)(e)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI ‘A’ BENCH,

Before: SHRI N.K. BILLAIYA, & SHRI K.N. CHARY

For Appellant: Shri Pradeep Chand, CA
For Respondent: Shri Satpal Gulati, CIT-DR
Hearing: 27.07.2021Pronounced: 27.07.2021

PER N.K. BILLAIYA, ACCOUNTANT MEMBER,

1.

This appeal by the Revenue is preferred against the order of the CIT(A) - 23, New Delhi dated 28.02.2018 pertaining to A.Y 2012-13.

2.

The grievances of the Revenue read as under:

1.

“The order of the Ld. CIT(A) is not correct in law and facts.

2. On the facts and in the circumstances of the case, the Id.CIT(A) erred in deleting the addition made under section 153A of the Income Tax Act, 1961 by holding that the assessing officer had no power to interfere with a completed assessment in the absence of incriminating seized material, when there is no such restriction placed on the power of the assessing officer under section 153A of the Income-Tax Act, 1961.

3.

On the facts and in the circumstances of the case, the Id.CIT(A) has erred in law in quashing the assessment order framed u/s 153A of the Income Tax Act, 1961.

4.

On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs.1,50,00,000/- made by AO on account of deemed dividend u/s 2(22)(e) of the Income Tax Act, 1961.

5.

The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal.”

3. Briefly stated, the facts of the case are that a search and seizure operation was conducted on Jaiswal group of cases on 06.05.2014 and accordingly, notice u/s 153A of the Income-tax Act, 1961 [hereinafter referred to as 'The Act'] was issued and served upon the assessee.

Pursuant to the notice, return of income declaring an income of Rs. 5,07,35,650/-was filed.

7.

During the course of scrutiny assessment proceedings, on the basis of information received from the Income tax Officer, Ward -5(1), New Delhi, it was brought to the notice of the Assessing Officer that in the company M/s Blossom Investment Pvt Ltd there is only one share holder having more than 10% of share holding. In fact, the share holding was 95% and since the assessee has taken loan/advance of Rs. 1.50 crores, the Assessing Officer treated the same as deemed dividend u/s 2(22)(e) of the Act and made addition accordingly.

8.

The assessee agitated the matter before the ld. CIT(A) and vehemently contended that no incriminating material was found during the course of search proceedings qua the addition. Therefore, the ratio laid down by the Hon'ble Jurisdictional High Court of Delhi in the case of Kabul Chawla 61 Taxmann.com 412 and Meeta Gutgutia 395 ITR 526 squarely apply.

9.

The ld. CIT(A) was convinced with the submissions of the assessee and quashed the assessment order.

10.

Before us, the ld. DR fairly conceded that qua the addition, no incriminating material was found during the course of search proceedings.

11.

Per contra, the ld. DR relied upon the findings of the ld. CIT(A).

12.

We have carefully perused the assessment order and the order of the first appellate authority. The undisputed fact is that no incriminating material was found during the search proceedings and addition has been made only on the basis of information received from the Income tax Officer, Ward -5(1), New Delhi. Considering the totality of the facts, we do not find any reason to interfere with the findings of the ld. CIT(A).

13.

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

The order is pronounced in the open court in the presence of both the rival representative on 27.07.2021.

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