SHRI AMISH MODI,MUMBAI vs. DCIT CC-2(1), MUMBAI

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ITA 4584/MUM/2018Status: DisposedITAT Mumbai20 August 2019AY 2009-104 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that for AY 2010-11 and 2011-12, additions made without incriminating material found during search were not permissible, following the jurisdictional High Court's decision. The appeal for AY 2009-10 was dismissed as infructuous.

What were the facts?

The assessee filed appeals against orders for assessment years 2009-10, 2010-11, and 2011-12. For AY 2009-10, no additions were made by the AO. For AY 2010-11 and 2011-12, additions were made for cash credits and commission income.

What were the issues?

Whether additions made under Section 68 and for commission income are sustainable without incriminating material found during search, especially when the assessment year is not abated.

Which sections of the Income-tax Act were involved?

Section 68,Section 153C,Section 271(1)(c)

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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai

Before: Shri Shamim Yahya (AM)

For Respondent: Shri Chaitanya Anjaria
Hearing: 8.7.2019Pronounced: 20.7.2019

Heard together (3 matters)

I.T.A. No. 4584/Mum/2018
I.T.A. No. 4585/Mum/2018
I.T.A. No. 4586/Mum/2018

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

These are appeals by the assessee against separate orders of learned CIT(A) for respective assessment years. Since issues are common and connected and appeals were heard together these are being consolidated and disposed of by the common order for the sake of convenience.

A.Y. 2009-10

2.

The assessee has raised various grounds of appeal, however I note that for A.Y. 2009-10, no addition was done by the Assessing Officer in assessment order u/s. 143(3) read with section 153C of the Act. The income returned was for Rs. 3,92,662/- and no addition was done. Learned CIT(A) has taken note thereof and has also noted that no addition was done in this regard. Hence, he has treated grievance of the assessee to be infructuous. I find myself fully in agreement with the above. Since no addition was done by the Assessing Officer, this appeal by the assessee is dismissed as infructuous.

3. For A.Y. 2010-11, the issue in dispute is addition of Rs. 8,00,000/- as cash credit u/s. 68 and addition of Rs. 1,00,275/- as commission income.

4. One of the grievances raised by the assessee is that original assessment in this case was already completed on the date of initiation of search and hence these additions do not get abated. Hence, it is the plea that dehorse incriminating material found no addition is permissible. I note that addition in A.Y. 2010-11 has been done on account of cash credit u/s. 68 of Rs. 8,00,000/- and commission of Rs. 1,00,275/-. I note that while dealing with the addition the Assessing Officer has mentioned that addition u/s. 68 was done on examination of balance-sheet. Similar is the position of addition of commission income. There is no whisper in the assessment order that any incriminating material was seized in respect of addition which has been done. It is clear that search was conducted on 27.10.2014 and assessment year involved A.Y. 2010-11 was not abated assessment. Hence on the touchstone of Hon'ble Jurisdictional High Court decision in the case of Continental Warehousing Corporation (374 ITR 645), no addition was permissible dehorse incriminating material found. Since no incriminating material has been mentioned with respect to addition made, I set aside the orders of the authorities below and delete the addition.

A.Y. 2011-12 5. In this appeal the assessee is aggrieved by the addition of Rs. 30,743/- as commission income and Rs. 12,36,000/- in respect of amount debited in the bank account as unexplained deposit u/s. 68 of the Act.

6.

It is noted that in the assessment order the Assessing Officer has only mentioned the following :- The assessee vide letter dated 17/11/2016 vide para 3 was asked by the commission Income for providing accommodation entries through Shri Rashmikant Jhaveri's proprietary concern to M/s. Navjeevan Charitable Trust of Rs. 30.743/- should not be taxed as your income. The assessee vide his letter dated 23/11/2016 confirmed to consider

commission income in his computation of income. The commission income offered was not disclosed in the return of income therefore the same is taxed as undisclosed income of the assessee. Penalty proceedings u/s. 271(1)(c) Of the Act are initiated separately for furnishing inaccurate particulars of income.

7.

From the above it is apparent that no incriminating material was found with regard to addition made. Furthermore, from where addition of Rs. 12,36,000/- for A.Y. 2011-12 has been done is not clear from the assessment order. Moreover, there is no mentioned of any incriminating material found with regard to addition made. Assessment year involved is A.Y. 2011-12, search was conducted on 27.10.2014 hence this is also not a case of abated assessment. In these circumstances, in my considered opinion decision of Hon'ble Jurisdictional High Court in the case of Continental Warehousing Corporation (supra) is squarely applicable. Since addition has not been based upon any incriminating material found during search no addition dehorse any incriminating material is sustainable. Hence the orders of authorities below are set aside and the addition is deleted.

8.

In result, assessee’s appeal for A.Y. 2009-10 is dismissed as infructuous and assessee’s appeals for A.Ys. 2010-11 & 2011-12 are allowed.

Order has been pronounced in the Court on 20.7.2019.

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