M/S. GOLDIES TRADING CO. LTD.,NEW DELHI vs. DCIT, FARIDABAD

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ITA 2564/DEL/2017Status: DisposedITAT Delhi10 August 2020AY 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 completed assessments cannot be interfered with under section 153C without any incriminating material found during the search. Therefore, the addition made by the AO was directed to be deleted.

What were the facts?

A search and seizure action was conducted on SRS Group of companies, leading to a notice under section 153C for AY 2009-10. The regular assessment for this year was already completed under section 143(3) and was not abated.

What were the issues?

Whether the Assessing Officer could assume jurisdiction and issue notice under section 153A/153C for a completed and non-abated assessment year without incriminating material. Whether disallowance of freight charges was justified.

Which sections of the Income-tax Act were involved?

Section 153A,Section 153C,Section 143(3),Section 37(1)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI

Before: Ms. Sushma ChowlaDr. B. R. R. Kumar

For Respondent: Ms. Nidhi Srivastava, CIT DR
Hearing: 30.07.2020Pronounced: 10.08.2020

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by the assessee against the order of the ld. CIT(A), Karnal dated 06.03.2017.

2. Following grounds have been raised by the assessee:

1. That having regard to the fact and circumstances of the case, ld. CIT (A) has erred in law and on facts in confirming the action of ld. AO in assuming jurisdiction and issuing of notice u/s 153A r.w.s. 153C of the Act, more so when the notice was issued in the name of non-existing entity.

2.

That in any case and in any view of the matter, the assessment framed under section 153A(1)(b) of the 2 Goldies Trading Co. Ltd. Act, is bad in law and against the facts and circumstances of the case.

3. That having regard to the facts and circumstances of the case, ld. CIT (A) has erred in law and on facts in confirming the action of the ld. AO in making disallowance of freight charges of Rs.23,28,723/- u/s 37(1) of the Income Tax Act, 1961, that too in the proceedings u/s 153C of the Act, and more-so by alleging failure of the assessee to produce bills and vouchers.

4. That in any case and in any view of the matter, action of ld. CIT (A) in confirming the action of ld. AO in making disallowance of Rs.23,28,723/- is bad in law and against the facts and circumstances of the case.

5. That having regard to the facts and circumstances of the case, ld. CIT (A) has erred in law and on facts in confirming the action of ld. AO in passing the impugned order without giving adequate opportunity of being heard.”

3.

Facts relevant to adjudication of the case are that a search & seizure action in the case of SRS Group of companies was conducted on 09.05.2012. The notice u/s 153C in the case of the assessed was issued on 18.09.2014 for the assessment year 2009-10. It is an undisputable fact that the assessment year 2009-10 is not an abated assessment as per provisions of Section 153A.

4.

The assessment for the assessment year 2009-10 has been completed u/s 143(3) vide order dated 26.12.2011.

5.

The Assessing Officer made an addition on account of freight charges owing to the reason that the assessee has not 3 Goldies Trading Co. Ltd. produced the bills and the transactions are within the group companies.

6.

In the background of the these facts that the regular assessment has already been completed u/s 143(3), the assessment has not been abated, the addition has not been made based on any incriminating material unearthed during the course of search or requisition of document or undisclosed income pertaining to the assessee found out during the search & seizure operation and in view of judgments in the case of CIT Vs Kabul Chawla 126 DTR 130 and CIT Vs Kurele Paper Mills Pvt. Ltd. 380 ITR 571 wherein it was held that the completed assessments cannot be interfered with by the AO while making the assessment u/s 153C in the absence of any incriminating material, the addition made by the AO is directed to be deleted.

7.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 10/08/2020.

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