ROOP BANSAL,GURGAON vs. ACIT, NEW DELHI

The first ground is against the confirmation of addition of Rs.15,21,000/-. Facts apropos this issue are that a search and seizure operation u/s 132 was carried out in the case of the assessee on 12.09.2007. Pursuant to notice u/s 153A, the assessee filed return declaring income of Rs.1,86,884/-. During the course of assessment proceedings, it was observed by the Assessing Officer that the assessee had shown in his Statement of affairs, opening cash in hand on 01.04.2001 at Rs.17,21,000/-. On being called upon to justify the availability of cash in hand to this extent, the assessee submitted that he was a regular income-tax assessee for the past more than 15 years.

We have heard both the sides and perused the relevant material on record. It is an admitted position that the assessee filed his original return for the year under consideration on 20.08.2002. Intimation u/s 143(1) was issued on 31.01.2003, a copy of which is available on page 10 of the paper book. No notice u/s 143(2) was issued and the time limit for issuance of such notice expired on 31.08.2003. Thus, it is clear that as on the date of search, namely, 12.09.2007, no assessment for assessment year 2002-03 was pending, which got impliedly completed and stood abated. The Hon'ble Delhi High Court in CIT vs. Kabul Chawla (2016) 380 ITR 573 (Del) along with several other judgments, has held that completed assessments cannot be reviewed in the absence of any incriminating material found during the course of search. When we consider the facts and circumstances of the instant case in the light of the ratio laid down in Kabul Chawla (supra), it becomes apparent that the assessment for the year under consideration stood completed and abated at the time of search. In the absence of any incriminating material found during the course of search, there could have been no point in making addition for a sum of Rs.15,21,000/-. As regards the Assessing Officer’s contention of the availability of cash amounting to Rs.83,71,000/- at the time of search, it is an admitted position that the said sum was surrendered for the assessment year 2008-09. Thus, the availability of cash which was surrendered for the previous year relevant to the year of the search, has no connection with the availability of cash as on the beginning of the previous year relevant to assessment year 2002-03 under consideration. The ld. AR has placed on record a copy of the order passed by the Tribunal in the case of the assessee’s brother, namely, Basant Bansal. In this order dated 05.10.2017, in the Tribunal has deleted similar addition made by the Assessing Officer, who accepted opening cash in hand of Rs.2 lac as genuine and made addition for the remaining opening balance of Rs.11,06,458/-. As the facts and circumstances of the case under 4 consideration are mutatis mutandis similar to those of the assessee’s brother and, more specifically, when it was a case of a common search carried out at the assessee and his brother, respectfully following the precedent, we order to delete the addition of Rs.15,21,000/-.

The only other ground in this appeal is against sustenance of addition of Rs.74,332/- u/s 40A(3), being, 100% of purchases made by the assessee otherwise than through account payee cheques.

Having heard both the sides and perused the relevant material on record, it is found that the addition has been made and confirmed u/s 40A(3). There is no reference to any incriminating material found during the course of search casting shadow of doubt on the genuineness of the purchase transactions. Respectfully following the ratio decidendi in the case of Kabul Chawla (supra), we order to delete the instant addition as well since the same is not based on any incriminating material found during the course of search.

In the result, the appeal is allowed.