KANWALJEET SINGH TOOR,PUNJAB vs. DCIT, NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “D” : DELHI

BEFORE SHRI BHAVNESH SAINI, J.M. AND SHRI O.P. KANT, A.M.

ITA.No.6249, 6250 & 6251/Del./2014 Assessment Years 2005-06, 2006-07 & 2007-08

Shri Kanwaljeet Singh Toor, The DCIT, Central Circle-4 House No.1026, Phase-X, vs. Jhandewalan Exim, Mohali (Punjab) PANAAQPT2132C New Delhi. (Appellant) (Respondent)

For Assessee : Shri M.R. Sharma, Advocate. For Revenue : Shri Vinay Verma, CIT-D.R.

Date of Hearing : 08.11.2017 Date of Pronouncement : 21.11.2017

ORDER PER BHAVNESH SAINI, J.M. All the appeals by the same assessee are directed against

the common order of the Ld. CIT(A)-XXXIII, New Delhi, dated 14th

July, 2014, for the A.Y. 2005-2006, 2006-2007 and 2007-2008.

parties and perused the material on record.

The assessee filed an application for condonation of delay and it is

explained that appeal papers were singed by assessee on 29th

October, 2014 and appeal fees was deposited on 05.11.2014. The

2 ITA.Nos.6249, 6250 & 6251/Del./2014 Shri Kanwaljit Singh Toor, Mohali, Punjab. same appeals were handed over to the Counsel to file the same before

the Tribunal who filed the appeals on 14.11.2014. In the process

there is a delay of 03 days. Considering the explanation of assessee,

we are of the view that nominal delay in filing the appeals shall have

to be condoned. We are satisfied with the explanation of assessee that

assessee was prevented by sufficient cause in not filing the appeals

within the period of limitation. The delay in filing all the appeals are

condoned.

operation under section 132 of the I.T. Act was carried out at various

business and residential premises of the Directors and important

employees of the Pearl Group on 22.03.2010. This group, in the

recent past, diversified into multifarious activities and apart from

land sale and purchase, it has entered into the field of construction

of integrated township, Group Housing, building commercial malls -

cum- complexes, multiplexes, Education and hospitals, print and

visual media, manufacture of spices etc. The residence of the

assessee was also covered under section 132 of the I.T. Act. In

response to the statutory notice under section 153A issued on 30th

3 ITA.Nos.6249, 6250 & 6251/Del./2014 Shri Kanwaljit Singh Toor, Mohali, Punjab. December, 2010, assessee filed his return of income on 08th June,

2011. The A.O. issued statutory notices for completion of the

assessments under section 153A of the I.T. Act.

loan of Rs.8 lakhs received from M/s. Assurance Buildtech Ltd. In

A.Y. 2006-2007, similarly, it was noticed that assessee has taken

loan of Rs.12 lakhs from M/s. Assurance Buildtech Ltd., and

Rs.11,53,077 from M/s. Shoveller Infracon Ltd., totaling to

Rs.23,53,077/-. In A.Y. 2007-08, assessee had taken loan of

Rs.73,60,000/- from M/s. Assurance Buildtech Ltd., Rs.49 lakhs

from M/s. Shoveller Infracon Ltd., and Rs.69,20,000/- from M/s.

P.P.Syntex (P) Ltd., totaling to Rs.1,91,80,000/-. Confirmations of the

same loans were filed. The A.O. however, was not satisfied with the

explanation of assessee and made all the above additions against the

assessee under section 68 of the I.T. Act.

5.1. The assessee challenged all the three additions before

the Ld. CIT(A) on merits. The assessee also challenged the order of

the A.O. under section 153A of the I.T. Act because no addition could

be made in the absence of any incriminating material found during

4 ITA.Nos.6249, 6250 & 6251/Del./2014 Shri Kanwaljit Singh Toor, Mohali, Punjab. the course of search. The Ld. CIT(A) noted from the assessment order

that it appears that there is no incriminating evidence found during

the course of search relating to additions under section 68 of the I.T.

Act. The Ld. CIT(A) followed the decision of the Hon’ble Delhi High

Court in the case of CIT vs. Anil Kumar Bhatia in ITA.No.1626, 1632,

1998, 2006, 2010 and 2020 of 2010 dated 07.08.2012, that the A.O.

has full power to assess total income under section 153A irrespective

of incriminating evidence for each one assessment year for the entire

period of search assessment. The Ld. CIT(A) accordingly, rejected the

legal ground of the assessee. The Ld. CIT(A) also dismissed the

appeals of assessee on merit.

additions of Rs.8 lakhs, Rs.23,53,077 and addition of Rs.1,91,80,000

under section 68 of the I.T. Act. The assessee has also challenged the

orders of the authorities below in making and confirming the above

additions on account of unexplained cash credits in proceedings

under section 153A of the I.T. Act, without any incriminating material

or otherwise relating to these cash credits were found during the

course of search.

5 ITA.Nos.6249, 6250 & 6251/Del./2014 Shri Kanwaljit Singh Toor, Mohali, Punjab. 7. The Learned Counsel for the Assessee submitted that for

A.Y. 2005-2006, the assessee filed original return of income on 30th

July, 2005, for A.Y. 2006-2007, original return was filed on 27th July,

2006 and for A.Y. 2007-2008 original return was filed on 31st July,

2007. He has therefore, submitted that on the date of search the

assessments have got completed because no notice under section

143(2) have been issued to the assessee in all the assessment years

under appeals. He has submitted that since no incriminating

material was found during the course of search about the cash

credits of which additions have been made in the assessment years

under section 153A of the I.T. Act, therefore, no additions could be

made in proceeding under section 153A of the I.T. Act. He has

submitted that the issue is covered in favour of the assessee by the

Judgment of the Hon’ble Delhi High Court in the case of CIT vs. Kabul

Chawla 380 ITR 573.

authorities below. The Ld. D.R. submitted that Revenue has already

made a request to the effect that in case the Tribunal comes to a

conclusion that this addition cannot be made under section 153A,

6 ITA.Nos.6249, 6250 & 6251/Del./2014 Shri Kanwaljit Singh Toor, Mohali, Punjab. then a direction under section 150(1) should be issued for taxing this

amount under section 148 of the I.T. Act, 1961. Such point can be

raised orally at the time of hearing if it goes to root of the matter.

Delhi High Court in the case of CIT vs. Kabul Chawla 380 ITR 573

held as under :

“Completed assessments can be interfered with by Assessing

Officer while making assessment under section 153A only on

basis of some incriminating material unearthed during course of

search which was not produced or not already disclosed or made

known in course of original assessment.”

decision, it is clear that during the course of search, no incriminating

material was found in respect of assessment years under appeals so

as to make additions of unexplained cash credits under section 153A

of the I.T. Act. The A.O. made additions of unexplained cash credits

in all the assessment years under appeals without there being

recovery of any incriminating material found during the course of

search. All the original returns had already been filed prior to the

7 ITA.Nos.6249, 6250 & 6251/Del./2014 Shri Kanwaljit Singh Toor, Mohali, Punjab. search and the last date of issue of notice under section 143(2) had

already expired on the date of search. Therefore, on the date of search

on 22nd March, 2010, no assessments were pending for assessment

years under appeals. In the facts and circumstances of the case, it is

clear that A.O. was not justified in invoking the provisions of Section

153A of the Act against the assessee for assessment years under

appeals because no incriminating material qua assessment years

under appeals were found during the course of search. It may also

be noted here that Ld. CIT(A) in his findings has specifically

mentioned on perusal of the assessment records that there is no

incriminating evidence found during the course of search relating to

the additions under section 68 of the I.T. Act. The issue is therefore,

covered in favour of the assessee by the judgment of the Hon’ble Delhi

High Court in the case of CIT vs. Kabul Chawla (supra). Same view is

taken by Hon’ble Delhi High Court in the case of CIT vs. Meeta

Gutgutia 395 ITR 526 following its earlier decision in the case of

Kabul Chawla (supra). In view of the above, we set aside the orders

of the authorities below and delete all the additions under section 68

8 ITA.Nos.6249, 6250 & 6251/Del./2014 Shri Kanwaljit Singh Toor, Mohali, Punjab. of the I.T. Act in the proceedings under section 153A of the I.T. Act

in all assessment years under appeals.

decided against the Revenue by holding that this addition cannot be made

under section 153A, then the direction under section 150(1) should be

issued for taxing this amount under section 148 of the I.T. Act, 1961. We

are afraid to accept this contention of the Ld. D.R. because it is the sole

prerogative of the A.O. to initiate re-assessment proceedings after

satisfying the conditions of Section 148 and recording the reasons for the

same. The jurisdiction of the A.O. cannot be ushered-up in the present

proceedings. Since the appeals have already been allowed in favour of the

assessee, therefore, what remedy is available to the Revenue for proceeding

further against the assessee cannot be raised in the present proceedings.

The scope of the proceeding cannot be enlarged to give a different colour

to proceed against the assessee. Once assessment orders have been set

aside under section 153A of the I.T. Act and additions have been deleted,

Revenue is at liberty to take any action as per Law, if so, advised in

accordance with Law. Therefore, no direction is required under section

150(1) of the I.T. Act. The contention of Ld. D.R. is rejected.

9 ITA.Nos.6249, 6250 & 6251/Del./2014 Shri Kanwaljit Singh Toor, Mohali, Punjab. 12. In the result, all the appeals of the assessee are allowed.

Order pronounced in the open Court

Sd/- Sd/- (O.P. KANT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Delhi, Dated 21st November, 2017

VBP/-

Copy to

// By Order //

Asst. Registrar : ITAT Delhi Benches : Delhi.