KAUSHAL MITTAL,NEW DELHI vs. DCIT, CENTRAL CIRCLE, KARNAL

order passed by the Ld. CIT(A)-3, Gurgaon of different dates arising out of the orders passed by the DCIT, Central Circle, Karnal under Section to 1893/Del/2021 Kaushal Mittal Vs. DCIT, CC (AYs. 2011-12, 2012-13, 2014-15 & 2015-16)

143(3) read with section 153A(1)\(b) of the Income Tax Act, 1961 (hereinafter referred as “Act”) for assessment years 2011-12, 2012-13, 2014-15 & 2015-16 respectively. Since the issues involved in these appeals are inter-connected, hence, the appeals were heard together and disposed of by this common order for the sake of convenience, by dealing with the facts of the assessment year 2011-12, as a lead case.

The required documents and the source of such investments was directed to be furnished by the Assessee. Further, show cause as to why the said amount of Rs. 10 lacs would not be added in the hands of the assessee also issued and in response thereto the assessee replied that investment of Rs. 10 lacs with M/s India Treat Ltd. was made in the form of share capital and the same is also appearing in the balance sheet of M/s Kushal Impex for the year under consideration, copy thereof was duly submitted before the AO. Further that the copy of the ledger account of the said party namely Indian Treat Ltd., share account shown in Kushal Impex books was also furnished before the AO, in order to establish this particular fact that the investments so made by the assessee was duly disclosed in equity shares capital of Indian Treat Ltd. However, this particular case made out by the assessee was not found to be tenable, as the ledger account of India Treat Ltd. though filed, but not supported by the bank accounts statement, neither the assessee furnished the source of Rs. 10 lacs claimed to have been transferred to M/s Indian Treat Ltd.. Hence, treating the same as undisclosed to 1893/Del/2021 Kaushal Mittal Vs. DCIT, CC (AYs. 2011-12, 2012-13, 2014-15 & 2015-16) investment in the hands of the assessee, addition under Section 69 of the Act was made.

Rather, the said investigation made by the assessee was duly recorded in the books of account maintained by the assessee. Having regard to this particular aspect of the matter, factually we are satisfied that the assessment order was finalized by making additions in hands of the assessee, is without jurisdiction particularly, in view of the ratio laid down in judgements passed by the Hon’ble Supreme Court in the case of PCIT vs. Abhisar Buildwell (Supra), Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla (Supra) and Hon’ble Gujarat High Court in the case of Saumya Construction (P.) Ltd, that in case no incriminating material is found during the course of search, the AO cannot assess or reassess taking into consideration the other material in support of complete assessment / unabated assessment. As no reference of any incriminating material has been made by the AO in the order of assessment impugned before us, it appears that no incriminating material has been found by the Revenue in order to justify the additions against the assessee. Hence, respectfully following the ratio laid down to 1893/Del/2021 Kaushal Mittal Vs. DCIT, CC (AYs. 2011-12, 2012-13, 2014-15 & 2015-16) by the Hon’ble Supreme Court of India in the case of Abhisar Buildwell (Supra), we find that the impugned order of assessment before us is not sustainable in the eyes of law the same is thus, liable to be quashed with the aforesaid observations. We therefore, quash the impugned assessment made by the AO.

Order pronounced in the open court on 21.02.2025