GREEN VALLEY TOWER PVT. LTD.,NEW DELHI vs. DEPUTY COMMISSIONER OF INCOME-TAX, NEW DELHI

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ITA 1354/DEL/2015Status: DisposedITAT Delhi19 June 2018AY 2007-085 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 the assessment order was void ab initio as the assessment year in question had already been concluded before the search. No incriminating material was found to justify reopening the concluded assessment under Section 153C read with Section 153A.

What were the facts?

A search operation was conducted on the assessee's premises, leading to the discovery of a sale deed. The Assessing Officer issued a notice under Section 153A, making additions for interest on PDCs and disallowance under Section 40A(3).

What were the issues?

Whether an assessment order framed under Section 153C read with Section 153A is valid when the assessment year was already concluded and no incriminating material was found. Whether additions made in a reopened assessment can be sustained without reference to any new incriminating material.

Which sections of the Income-tax Act were involved?

Section 153C,Section 153A,Section 40A(3),Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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

Before: SH. N. K. BILLAIYA & SH. SUDHANSHU SRIVASTAVA

For Respondent: Smt. Meeta Singh, CIT DR
Hearing: 18/06/2018Pronounced: 19/06/2018

This appeal filed by the assessee is preferred against the order of the CIT (A)-XXX, New Delhi dated 24.11.2014 pertaining A. Y. 2007-08.

2.

The grievance of the assessee read as under :-

1.

That the orders passed by the Assessing Officer and Commissioner of Income Tax (Appeals)-XXX, New Delhi are bad in law and void ab- initio.

2. That on the facts and circumstances of the case and in law the CIT(A) has erred in holding that wherever the date of PDCs are extended, interest is to be taken to have been paid @ 15% p.a in cash outside the books of account and is to be treated as undisclosed income, thereby sustaining the addition to the extent of Rs.9,54,249/-.

3. That on the facts and circumstance of the case and in law the CIT(A) erred in sustaining the disallowance of Rs.12,31,160/- u/s 40A(3) of the IT Act despite the fact that no deduction in respect of said sum was claimed in the computation of income from business.

3.

The briefly stated the facts of the case are that a search and seizure operation was carried at the business premises as well as the residential premises of M/s. BPTP Group of cases on 07.12.2010. Copy of a sale deed dated 17.03.2005 was found which was between Sh. Rajan and the assessee for a piece of land at Kheri Kalam Farida for a consideration of Rs. 43,00,000/-.

4.

The Assessing Officer was of the firm believe that since the impound provisions of section 153C of the Act squarely applied and accordingly issued and served notice u/s. 153A of the Act. Following additions were made a addition on account of interest on PDC addition on account of disallowance u/s. 40 A(3) of the Act.

5.

As mentioned elsewhere the date of search is 07.12.2010 and assessment in the case of the assessee has complied u/s. 143 (3 ) of the Act vide order dated 30.12.2009. This means that on the date of the search assessment year 2007-08 stood concluded and therefore, if the Assessing Officer wanted to assess u/s. 153 C r/w 153 A of the Act. He could only make the assessment only on the basis of some incriminating material found at the time of the search. The Assessing Officer cannot disturb a concluded assessment without there being any reference to any incriminating material against the assessee. For this proposition we draw support from the decision of the Hon’ble Jurisdictional High Court of Delhi in the case of Kabul Chawla 380 ITR 573.

6.

Since no incriminating material has been referred in the assessment order framed u/s. 153 C/ 153 A of the Act. The entire assessment is avoid- ab-initio. Moreover a perusal of the assessment so framed show that the Assessing Officer has made the same additions which were made in the assessment framed u/s 143 (3) of the Act vide order dated 30.12.2009.

7.

Considering the facts of the case in totality in the light of the settled proposition of law the assessment order is quashed.

8.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 19.06.2018.

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