ACIT CENTRAL CIRCLE 1(4), CHENNAI vs. M.KIRAN KUMAR, CHENNAI

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ITA 1055/CHNY/2018Status: DisposedITAT Chennai19 December 2018AY 2009-104 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that in the absence of any material found during a search operation, no addition can be made under Section 153A of the Income-tax Act. When there are conflicting High Court views, the view favorable to the assessee should be followed.

What were the facts?

The Revenue filed appeals against the CIT(A)'s order for assessment years 2009-10 and 2011-12. The appeals were based on a Kerala High Court judgment, while the assessee relied on a contrary Supreme Court judgment.

What were the issues?

Whether additions can be made under Section 153A in the absence of incriminating material found during a search, especially when there are conflicting High Court judgments.

Which sections of the Income-tax Act were involved?

Section 153A

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, ‘A’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN

For Appellant: Shri S. Bharath, CIT
Hearing: 20.11.2018Pronounced: 19.12.2018

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

Both the appeals of the Revenue are directed against the common order passed by the Commissioner of Income Tax (Appeals)-18, Chennai, dated 28.12.2017 and pertain to assessment years 2009-10 and 2011-12. The assessee has filed cross-objections for both the assessment years. Since common issue arises for consideration in both the appeals and cross- objections, we heard the appeals of the Revenue and the cross- objections of the assessee together and disposing of the same by this common order.

2.

We heard Shri S. Bharath, the Ld. Departmental Representative and Sh. T. Banusekar, the Ld. representative for the assessee. Admittedly, there was no material found during the course of search operation. The Revenue filed the appeals on the basis of judgment of Kerala High Court in CIT v. M/s St. Francis Clay Décor Tiles (2016) 385 ITR 624. The assessee has now produced a copy of judgment of Apex Court in Principal CIT v.

Meeta Gutgutia (2018) 96 taxmann.com 468. The Special Leave Petition arose out of the judgment of Delhi High Court which has taken a contrary view as that of Kerala High Court. Now, admittedly, there are two High Court judgments, one is in favour of Revenue and another one is in favour of assessee. The Special Leave Petition filed by the Revenue against the judgment of Delhi High Court was dismissed. Even though the order on the Special Leave Petition may not lay down any law, however, prima facie the Apex Court approved the judgment of Delhi High Court.

Moreover, when there are two conflicting views, this Tribunal is of the considered opinion that the view in favour of assessee has to be followed. Therefore, in the absence of material found in the course of search operation, there cannot be any addition under Section 153A of the Income-tax Act, 1961 (in short 'the Act'). Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

3.

The cross-objections filed by the assessee become infructuous, therefore, stand dismissed.

4.

In the result, both the appeals of the revenue and both the cross-objections of the assessee are dismissed.

Order pronounced in the court on 19th December, 2018 at Chennai.

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