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Income Tax Appellate Tribunal, DELHI BENCHES “E” : DELHI
Before: SHRI BHAVNESH SAINI, J.M. & SHRI O.P. KANT, A.M.
PER BHAVNESH SAINI, J.M.
Both the appeals by the Assessee are directed against different Orders of the Ld. CIT(A)-28, New Delhi, Dated 09.12.2016, for the A.Ys. 2012-2013 and 2013-2014. In both the appeals, assessee challenged the additions of Rs.36lakhs and Rs.1.50,000/- under section 69C of the I.T. Act, 1961, stated to be pertaining to construction of house belonging to HUF.
2 ITA.Nos.8 & 9 /Del./2017 Shri Mukul Joshi, New Delhi. 2. Briefly the facts of the case are that a search and seizure action under section 132 of the I.T. Act was carried out on 15.02.2014 in the premises of assessee. Notice under section 153A of the Act was issued and in compliance to the same, the assessee filed return of income declaring total income of Rs.11,95,710/- for the A.Y. 2012-2013 and declared total income of Rs.9,68,750/- for the A.Y. 2013- 2014. The A.O. completed the assessments under section 153A/143(3) and made addition of Rs.36 lakhs in A.Y. 2012-2013 on account of undisclosed expenditure made by assessee for construction of residential property at Noida and in A.Y. 2013-2014, A.O. made addition of Rs.37,50,000/- on account of the same which is reduced by the Ld. CIT(A) to Rs.1,50,000/-.
The assessee challenged both the additions before the Ld. CIT(A). The Ld. CIT(A) reproduced the written submissions of the assessee in the impugned orders. The Ld. CIT(A) further noted that search and seizure action under section 132 of the Act was carried on 15.02.2014 in the case of AMG Group of cases at 17A Krishna Nagar,
3 ITA.Nos.8 & 9 /Del./2017 Shri Mukul Joshi, New Delhi. Delhi. Property No.D-343, Sector-47, Noida is owned by the assessee and residential Flat was being constructed on the said plot. It is further noted that on the day of search statement of Sri L.K.Yadav was recorded on oath, in which, he has stated that the documents recovered from him pertains to the assessee and in the said documents, the detail of payment made by assessee to the contractor for the construction of the house is recorded. The amounts were paid partly by cheque and partly by cash. Certain other documents were also found from Sri L.K.Yadav. The A.O. on the basis of the statement of Sri L.K. Yadav made the above additions against the assessee. The Ld. CIT(A) in A.Y. 2012- 2013 confirmed the addition of Rs.36 lakhs. However, in A.Y. 2013-2014, the Ld. CIT(A) by giving benefit of addition of Rs.36 lakhs restricted the addition to Rs.1.50,000/- in assessment year under appeal.
Learned Counsel for the Assessee, at the outset, submitted that no incriminating material was found during the course of search. Whatever documents were found, were found during the course of search from Sri L.K. Yadav. Copy
4 ITA.Nos.8 & 9 /Del./2017 Shri Mukul Joshi, New Delhi. of the show cause notice issued by the A.O. and seized documents are placed on record. He has pointed-out that in the seized paper it is mentioned “claimed but not paid”. He has submitted that in the seized document nothing is clear whether assessee paid any amount to the Contractor ? He has further submitted that since no incriminating evidences were found during the course of search from the possession of assessee, therefore, no addition could be made against the assessee. He has relied upon the Judgments of Hon’ble Delhi High Court in the case of CIT vs., Kabul Chawla 380 ITR 573 (Del.) and in the case of Pr. CIT vs., Meeta Gutgutia 395 ITR 526 (Del.).
The Ld. D.R. on the other hand, relied upon the Orders of the authorities below.
We have considered the rival submissions and perused the material on record. It is an admitted fact that search was conducted in the case of assessee and no incriminating material was found against the assessee. However, some documents were found in search in the case of Sri L.K. Yadav. The A.O. on the basis of those papers
5 ITA.Nos.8 & 9 /Del./2017 Shri Mukul Joshi, New Delhi. recovered from third party inferred that assessee has made payments by cheque and cash for construction of house. Copy of the seized paper is available on record which contains that “claimed but not paid”. There is no other facts stated in the seized document, therefore, it is clear that no incriminating material was found and seized during the course of search from the possession of assessee despite search was conducted in the case of assessee also. The Hon’ble Delhi High Court in the case of CIT vs., Kabul Chawla (supra) held as under :
“The issue that the Court proposes to address in these appeals is the same that was considered by the ITAT viz., “Whether the additions made to the income of the Respondent-Assessee for the said A.Ys under section 2(22)(e) of the Income Tax Act, 1961 (‘Act’) were not sustainable because no incriminating material concerning such additions were found during the course of search and further no assessments for such years were pending on the date of search ?”
6 ITA.Nos.8 & 9 /Del./2017 Shri Mukul Joshi, New Delhi.
6.1. Further, the Hon'ble Delhi High Court in the above case as regards completed assessment held as under:
“vii. Completed assessments can be interfered with by the A.O. while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment”
6.2. The Hon'ble Delhi High Court in its recent decision in the case of Pr. CIT vs. Meeta Gutgutia (supra) in paras 69 to 72 has held as under :
“69. What weighed with the Court in the above decision was the “habitual concealing of income and indulging in clandestine operations” and that a person indulging in such activities “can hardly be accepted to
7 ITA.Nos.8 & 9 /Del./2017 Shri Mukul Joshi, New Delhi. maintain meticulous books or records for long.” These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission.
The above distinguishing factors in Dayawanti Gupta (supra), therefore, do not detract from the settled legal position in Kabul Chawla (supra) which has been followed not only by this Court in its subsequent decisions but also by several other High Courts.
For all of the aforementioned reasons, the Court is of the view that the ITAT was justified in holding that the invocation of Section 153A by the Revenue for the AYs 2000-01 to 2003-04 was without any legal basis as there was no incriminating material qua each of those AYs.
Conclusion
8 ITA.Nos.8 & 9 /Del./2017 Shri Mukul Joshi, New Delhi.
To conclude :
(i) Question (i) is answered in the negative i.e., in favour of the Assessee and against the Revenue. It is held that in the facts and circumstances, the Revenue was not justified in invoking Section 153A of the Act against the Assessee in relation to AYs 2000-01 to AYs 2003-04.”
6.3. The Judgment in the case of Meeta Gutgutia (supra) have been confirmed by the Hon’ble Supreme Court by dismissing the SLP of the Department reported in 96 taxmann.com 468 (SC). In view of the above facts, we are fo the view that the issue is covered by the Judgments of Hon’ble Delhi High Court (supra). Therefore, no additions could be made against the assessee. In this view of the matter, we set aside the Orders of the authorities below and delete both the additions in both the assessment years. Appeals of Assessee are allowed.
In the result, both the appeals of the Assessee are allowed.
9 ITA.Nos.8 & 9 /Del./2017 Shri Mukul Joshi, New Delhi. Order pronounced in the open Court.
Sd/- Sd/- (O.P. KANT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER Delhi, Dated 05th November, 2019 VBP/- Copy to
The appellant 2. The respondent 3. CIT(A) concerned 4. CIT concerned 5. D.R. ITAT “E” Bench 6. Guard File
// BY Order //
Asst. Registrar : ITAT Delhi Benches : Delhi.