INCOME TAX OFFICER, KOLKATA vs. UNICORN BUILDCON PVT. LTD., KOLKATA

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ITA 2104/KOL/2024Status: DisposedITAT Kolkata03 February 2025Bench: SHRI SANJAY GARG, JUDICIAL MEMBER SHRI SANJAY AWASTHI (Accountant Member)5 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 Income Tax Appellate Tribunal upheld the decision of the CIT(A), affirming that no additions could be made for a completed assessment under Section 153A without discovery of incriminating material during the search operation. The Tribunal relied on the Supreme Court's judgment in PCIT Vs. Abhisar Buildwell (P) Ltd.

What were the facts?

A search action under Section 132 of the Income Tax Act led to the issuance of notices under Section 153A. The Assessing Officer made additions for unexplained cash credit under Section 68, commission under Section 69C, and disallowance under Section 14A. The CIT(A) deleted these additions, noting that the assessment was completed and no incriminating material was found during the search.

What were the issues?

Whether additions can be made under Section 153A of the Income Tax Act for a completed assessment year when no incriminating material is found during the search operation.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 250,Section 68,Section 69C,Section 14A

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “A” BENCH KOLKATA

For Respondent: Shri Subhendu Datta, CIT-DR

Heard together (2 matters)

I.T.A. No. 2104/Kol/2024
C.O. No. 47/Kol/2024

Read from the judgment's own cause title. This page is filed under one of them.

Date of concluding the hearing : 12.12.2024 Date of pronouncing the order : 03.02.2025

CO No. 47/Kol/2024 Unicorn Buildcon Pvt. Ltd. O R D E R

Per Sanjay Garg, Judicial Member:

1.

The captioned appeal by the Revenue and the corresponding cross objections by the assessee have been directed against the order of the Ld. Commissioner of Income Tax (Appeals) (hereinafter “the Ld. CIT(A)], passed u/s 250 of the Income Tax Act, 1961 (hereinafter ‘the Act’) dated 18.06.2024.

2.

The Revenue in this appeal is aggrieved by the action of Ld. CIT(A) in deleting the addition of Rs. 1,05,00,000/- made by the AO on account of unexplained cash credit u/s 68 of the Act and also of Rs. 52,500/- u/s 69C of the Act and of Rs. 71,300/- u/s 14A of the Act. The Revenue has contested the action of the Ld. CIT(A) in deleting the addition on merit, whereas the assessee has filed the cross objections supporting the order of the Ld. CIT(A).

3.

The brief facts of the case are that a search action u/s 132 of the Act was conducted on the assessee on 09.09.2015. Accordingly notices u/s 153A was issued for six assessment years from 2010-11 to 2015-16 and which were made compliance thereto by filing a return of income for each of the assessment year for the year under consideration. The AO has made addition of Rs. 1,05,00,000/- towards share capital/ share premium being an unexplained u/s 68 of the Act and Rs. 52,500/- u/s 69C @ 0.5% of the total share capital/share premium towards for arranging entries as commission beside addition of Rs. 71,300/- u/s 14A of the Act.

4.

The Ld. CIT(A) however, deleted the addition so made by the AO observed that the assessment for the year under consideration stood completed and not abated on the date search action and no incriminating material was found during the course of search action. He relied upon the decision of the Hon’ble Supreme Court in the case of PCIT Vs. Abhisar

5.

We note that in relation to AY 2011-12, wherein, the identical additions have been made by the AO in an assessment carried out u/s 153A of the Act pursuant to the same search action. The matter travelled to the Tribunal, wherein, the Tribunal in the identical facts and circumstances, dismissed the appeal of the Revenue on merits and cross objections of the assessee having become infructuous. The relevant part of the order of the Tribunal is reproduced as under:

“3. The revenue has challenged the order passed by the Ld. CIT(A) deleting the addition of Rs. 60,00,000/- made by the AO on account of unexplained cash credit u/s 68 of the Act and also Rs. 30,000/- u/s 69C and Rs. 15,000/- u/s 14A. The revenue has challenged the deletion of addition on merit and the assessee has filed cross objection supporting the order of Commissioner of Income Tax (Appeal).

4. After hearing the rival contentions and perusing the material on record, we find that in this case, a search action u/s 132 of the Act was conducted on the assessee on 09.09.2015. During the course of search proceedings, several incriminating documents were found and seized. Accordingly notices u/s 153A was issued for six assessment years from 2010-11 to 2015-16 and which were made compliance thereto by filing a return of income. The AO has made addition of Rs. 60,00,000/- towards share capital/ share premium being an unexplained u/s 68 of the Act and Rs. 30,000/- u/s 69C @ 0.5% of the total share capital/share premium towards for arranging entries as commission beside addition of Rs. 15,000/- u/s 14A of the Act. We note that the AO has made addition on the basis of information furnished by the assessee meaning thereby that there was no incriminating material seized during search operation as there was no reference in the assessment order to that effect. Since the assessment under consideration is unabated assessment on the date of search, therefore the jurisdiction of the AO to make the addition is limited to those items qua which the incriminating material was found and seized during the course of search. Therefore, in present case the addition was made without any incriminating material and thus the Ld. CIT(A) deleted the same on the ground that there was no incriminating material.

5. Considering the above facts and circumstances of the case, we are of the view that the case of the assessee is squarely covered by the decision of Hon’ble Supreme court in the case of Pr. CIT Vs. Abhiser Buildwell (P) Ltd. [2023] 149 taxmann.com 399 (SC) as there was no incriminating material found and seized during the course of search and therefore the AO has no jurisdiction to make additions. Consequently, we upheld the order of Ld. CIT(A) by dismissing the appeal of the revenue and the cross objection by the assessee becomes infructuous and is dismissed.

6.

In the result, the appeal of the revenue as well as the cross objection of the assessee are dismissed.”

6. The Ld. DR could not point out any distinguishing facts for the year under consideration. Therefore, we do not find any infirmity in the order of

7.

The assessee in his cross objection has simply supported the order of Ld. CIT(A). No grievance has been raised against the order of the Ld. CIT(A). Therefore, the above cross objections do not need any adjudication and the same are also dismissed.

8.

In the result, appeal filed by the Revenue and cross objections filed by the assessee are dismissed.

Order pronounced in the court on 03.02.2025

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