SHRI KAMAL KISHORE KOTWANI,BHOPAL vs. THE ACIT 1(2), BHOPAL

PER KUL BHARAT, J.M. : This bunch of six appeals by the assessee in respect of

different assessment years are directed against the

common order of ld. CIT(A)-2, Bhopal dated 30.06.2016. Since common grounds are raised, all the appeals were

taken up together and are being disposed of by this consolidated order.

there is a delay of two days in filing the appeals. The assessee has filed an application seeking condonation of

delay alongwith affidavit. 3. At the time of hearing, the Ld. Counsel for the

assessee reiterated the submissions as made in the application seeking condonation of delay on the reasons

stated in the application. We find that the assessee had

-: 3 :- Shri Kamal Kishore Kotwani, Bhopal reasonable cause. The delay of two days is condoned.

Apppeals are taken up for hearing.

pertaining to the assessment year 2000-01

appeal :-

the Ld. CIT(A) was not justified in holding that the

assessment made u/s 153A/144 was valid, which

was made pursuant to the notice u/s 143(2)

served after prescribed time limit. The assessment

order be kindly quashed.

the Ld. CIT(A) was not justified in upholding the

assessment order, which was passed by the AO

without providing adequate opportunity to the

appellant. The same be kindly cancelled.

-: 4 :- Shri Kamal Kishore Kotwani, Bhopal 3. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in charging Rs.

60,000/- from the five concerns of the same name

and in confirming the addition of Rs. 60,000/-

towards the same. 6. Briefly stated, facts are that a search & survey

operation u/s 132k was carried out in the Madhur Group

of cases and warrant of authorization u/s 132(1) of the

Income-tax Act, 1961, (hereinafter referred to as the ‘Act’)

was executed in the case of the assessee on 21.12.2005.

Subsequently, a notice u/s 153A was issued, in response

thereto, the return was filed declaring income of Rs.

1,58,000/-. It is ob served by the AO that notice u/s 143(2)

and 142(1) of the Act were issued on 31.08.2007, to be

replied before 17.09.2007, in response thereto, no one

attended. Another notice was issued on 29.11.2007. The

notice was not replied. In these circumstances, the AO

-: 5 :- Shri Kamal Kishore Kotwani, Bhopal proceeded to make assessment u/s 153A read with Section

144 of the Act. The AO observed that consequent to search

operation Shri Mohan Lal Kotwani, the head of Madhur

Group. In the statement recorded u/s 132(4) of the Act, on

22.12.2005, admittedly, undisclosed income of the group in

the case of the assessee at Rs. 5,00,000/- was admitted on

account of profit earned from the courier business and not

reflected in the books of account. The AO made addition of

Rs. 1 lakh on account of unsecured loan and income from

Cargo business at Rs. 60,000/-.

assessee submitted that the Ld. CIT(A) was not justified in

confirming the addition of Rs. 60,000/-. He submitted that

the addition is not based upon any incriminating material.

orders of the lower authorities and placed a letter dated

26.06.18, wherein it has been categorically stated that the

-: 6 :- Shri Kamal Kishore Kotwani, Bhopal addition is not based on any incriminating material or

statement.

perused the material available on record. The Revenue has

admitted in letter dated 26.06.2018 that the impugned

addition of Rs. 60,000/- is not based upon any

incriminating material. We derive support from the

judgement of Hon'ble Delhi High Court in the case of CIT

vs. Kabul Chawla, (2016) 380 ITR 573 (Del), in which the

Hon'ble Court held as under :-

“Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed.”

In view of these facts, respectfully following the judgment of

the Hon'ble Delhi High in the case of CIT vs. Kabul Chawla,

(supra), we delete the addition of Rs. 60,000/- and allow

ground nos. 1 to 3.

-: 7 :- Shri Kamal Kishore Kotwani, Bhopal 10. In the result, the appeal of the assessee for the assessment year 2000-01 is allowed.

I.T.(SS)A.No. 187/Ind/2016 – A.Y. 2001-02 : 11. The assessee has raised the following grounds of

appeal :- 1. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in holding that the assessment made u/s 153A/144 was valid, which

was made pursuant to the notice u/s 143(2) served after prescribed time limit. The assessment

order be kindly quashed. 2. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in upholding the assessment order, which was passed by the AO

without providing adequate opportunity to the appellant. The same be kindly cancelled.

-: 8 :- Shri Kamal Kishore Kotwani, Bhopal 3. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in charging Rs.

1,92,000/- from sixteen concerns of the same name and in confirming the addition of Rs.

1,92,000/- towards the same. 4. On the facts and in the circumstances of the

case, the Ld. CIT(A) was not justified in upholding the addition of Rs. 1,65,000/- towards the fresh

security deposits from the concerns of the same name, which were appearing in the final accounts

filed with the return u/s 139(1) and in confirming the addition of Rs. 1,65,000/- towards the same. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the

action of the AO of examining the credit of Rs. 1,65,000/- in the final accounts filed with the

return u/s 139 in the proceedings u/s 153A.

-: 9 :- Shri Kamal Kishore Kotwani, Bhopal

186/Ind/2016 for assessment year 2000-01. The Ld.

Departmental Representative vide his letter dated

26.06.2018 has categorically mentioned that the additions

are not based on any incriminating material.

delete the additions and allow grounds no. 1 to 5.

assessment year 2001-02 is allowed.

I.T.(SS)A.No. 188/Ind/2016 – A.Y. 2002-03: 15. The assessee raised the following grounds of appeal

:- 1. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in holding that the

assessment made u/s 153A/144 was valid, which

was made pursuant to the notice u/s 143(2)

-: 10 :- Shri Kamal Kishore Kotwani, Bhopal served after prescribed time limit. The assessment order be kindly quashed. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the

assessment order, which was passed by the AO without providing adequate opportunity to the

appellant. The same be kindly cancelled. 3. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in charging Rs. 2,16,000/- from eighteen concerns of the same

name and in confirming the addition of Rs. 2,16,000/- towards the same. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding

the addition of Rs. 30,000/- towards the fresh security deposits from the concerns of the same

name, which were appearing in the final accounts

-: 11 :- Shri Kamal Kishore Kotwani, Bhopal filed with the return u/s 139(1) and in confirming the addition of Rs. 30,000/- towards the same. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the

action of the AO of examining the credit of Rs. 30,000/- in the final accounts filed with the

return u/s 139 in the proceedings u/s 153A. 6. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in upholding that the unsecured loan of Rs. 1,05,000/- in the

names of Neera Kotwani at Rs. 55,000/- and Amit Tiwari at Rs. 50,000/- appearing in the account

books was unexplainable and in confirming the addition towards the same at Rs. 1,05,000/- u/s

69 of the Income-tax Act, 1961. 16. Facts are identical in this appeal as in I.T.(SS)A.No.

186/Ind/2016 for assessment year 2000-01. The Ld.

-: 12 :- Shri Kamal Kishore Kotwani, Bhopal Departmental Representative vide his letter dated

26.06.2018 has categorically mentioned that the additions

are not based upon any incriminating material. 17. Following the same reasoning as in para 9 above, we

delete the additions and allow grounds no. 1 to 6. 18. In the result, the appeal of the assessee for the

assessment year 2002-03 is allowed.

I.T.(SS)A.No. 189/Ind/2016 – A.2003-04:

the Ld. CIT(A) was not justified in holding that the

assessment made u/s 153A/144 was valid, which

was made pursuant to the notice u/s 143(2)

served after prescribed time limit. The assessment

order be kindly quashed. 2. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in upholding the

-: 13 :- Shri Kamal Kishore Kotwani, Bhopal assessment order, which was passed by the AO without providing adequate opportunity to the

appellant. The same be kindly cancelled. 3. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in charging Rs. 2,64,000/- from sixteen concerns of the same

name and in confirming the addition of Rs. 2,64,000/- towards the same. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding

the addition of Rs. 50,000/- towards the fresh security deposits from the concerns of the same

name, which were appearing in the final accounts filed with the return u/s 139(1) and in confirming

the addition of Rs. 50,000/- towards the same. 5. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in upholding the

-: 14 :- Shri Kamal Kishore Kotwani, Bhopal action of the AO of examining the credit of Rs.

50,000/- in the final accounts filed with the

return u/s 139 in the proceedings u/s 153A.

186/Ind/2016 for assessment year 2000-01. The Ld.

Departmental Representative vide his letter dated

26.06.2018 has categorically mentioned that the additions

are not based on any incriminating material. 21. Following the same reasoning as in para 9 above, we

delete the additions and allow grounds no. 1 to 5. 22. In the result, the appeal of the assessee for the

assessment year 2003-04 is allowed. I.T.(SS)A.No. 190/Ind/2016 – A.Y. 2004-05 :

appeal :-

-: 15 :- Shri Kamal Kishore Kotwani, Bhopal 1. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in holding that the

assessment made u/s 153A/144 was valid, which was made pursuant to the notice u/s 143(2)

served after prescribed time limit. The assessment order be kindly quashed. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the

assessment order, which was passed by the AO without providing adequate opportunity to the

appellant. The same be kindly cancelled. 3. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in charging Rs. 3,12,000/- from twenty six concerns of the same

name and in confirming the addition of Rs. 3,12,000/- towards the same.

-: 16 :- Shri Kamal Kishore Kotwani, Bhopal 4. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding

the addition of Rs. 60,000/- towards the fresh security deposits from the concerns of the same

name, which were appearing in the final accounts filed with the return u/s 139(1) and in confirming

the addition of Rs. 60,000/- towards the same. 5. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in upholding the action of the AO of examining the credit of Rs.

60,000/- in the final accounts filed with the return u/s 139 in the proceedings u/s 153A. 6. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding that

the unsecured loan of Rs. 90,000/- in the names of Deepa Kotwani at Rs. 40,000/- and Sadhumal

Laxmandas at Rs. 50,000/- appearing in the

-: 17 :- Shri Kamal Kishore Kotwani, Bhopal account books was unexplainable and in

confirming the addition towards the same at Rs.

90,000/- u/s 69 of the Income-tax Act, 1961. 24. Facts are identical in this appeal as in I.T.(SS)A.No.

186/Ind/2016 for assessment year 2000-01. The Ld.

Departmental Representative vide his letter dated

26.06.2018 has categorically mentioned that the additions

are not based upon any incriminating material.

delete the additions and allow grounds no. 1 to 6.

assessment year 2004-05 is allowed.

I.T.A.No. 1019/Ind/2016 – A.Y. 2006-07 : 27. The assessee has raised the following grounds of

appeal :- 1. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in upholding the

-: 18 :- Shri Kamal Kishore Kotwani, Bhopal order u/s 144 passed by the AO, which was

illegal, invalid and untenable in law. The

assessment order be kindly quashed. 2. On the facts and in the circumstances of the case,

the Ld. CIT(A) was not justified in upholding the

assessment order, which was passed by the AO

without providing adequate opportunity to the

appellant. The same be kindly cancelled.

the Ld. CIT(A) was not justified in charging Rs.

3,12,000/- from twenty six concerns of the same

name and in confirming the addition of Rs.

3,12,000/- towards the same. 4. No ground taken.

the Ld. CIT(A) was not justified in upholding that the

receipt of Rs. 5,00,000/- from M/s. Aramax Courier

-: 19 :- Shri Kamal Kishore Kotwani, Bhopal appearing in the account books was unexplainable and in confirming the addition of Rs. 5,00,000/-

towards the same.

year 2000-01. The Ld. Departmental Representative vide his letter dated 26.06.2018 has categorically mentioned

that the additions are not based upon any incriminating material. 29. Following the same reasoning as in para 9 above, we delete the additions and allow grounds no. 1 to 3. 30. The assessee has not taken ground no. 4. 31. Ground no. 5 relates to the upholding the receipt of

Rs. 5,00,000/- by the Ld. CIT(A) from M/s. Aramax Courier appearing in the account books was unexplainable.

-: 20 :- Shri Kamal Kishore Kotwani, Bhopal 32. The Ld. Departmental Representative vide his letter dated 26.06.2018 has mentioned that the addition was

made as no books of account related to Aramax were found during the course of search. Shri Mohanlal Kotwani

in the statement recorded u/s 132(4) of the Act, on 22.12.2005 admitted Rs. 5,00,000/- undisclosed income in

the case of Shri Kamal Kishore Kotwani. Since the same was not offered to tax in return of income filed, therefore,

addition of Rs. 5,00,000/- was made on account of unexplained income from M/s. Aramax Courier. 33. The Ld. Counsel for the assessee could not point out whether the cross examination was sought. 34. Since the addition is based upon incriminating material discovered during the course of search. The

addition of Rs. 5 lakhs is sustained. 35. In the result, the appeal of the assessee for the

assessment year 2006-07 is partly allowed.

-: 21 :- Shri Kamal Kishore Kotwani, Bhopal 36. Consequently, the appeals filed by the assessee in I.T.(SS)A.Nos.186 to 190/Ind/2016 for assessment years 2000-01 to 20004-05 are allowed and I.T.A.No. 1019/Ind/2016 for assessment year 2006-07 is partly allowed. The order pronounced in the open court on 04.07.2018.

Sd/- Sd/- (मनीष बोरड) (कुल भारत) लेखा सद�य �या�यक सद�य (KUL BHARAT) (MANISH BORAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore; �दनांक Dated : 04/07/2018 CPU*/SPS Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Private Secretary/DDO, Indore