KUSUM LATA,NOIDA vs. DCIT, CENTRAL CIRCLE , NOIDA
Facts
A search and seizure operation under Section 132 was conducted on November 21, 2014, covering the assessee Smt. Kusum Lata and her husband, leading to the seizure of incriminating documents. The Assessing Officer (AO) initiated assessment proceedings under Section 153A and made various additions for unexplained investments in agricultural land, shares, and immovable property, as well as disallowance of deduction under Section 54F, based on information gathered post-search. The assessee contested these additions, arguing that for unabated assessment years, additions could not be made without incriminating material found during the search.
Held
The Tribunal partly allowed the appeal. It ruled that additions for unabated assessment years can only be made if based on incriminating material found during the search, citing the Supreme Court's decision in `Abhisar Buildwell (P.) Ltd.`. While a direct link was found between search findings and payments for agri-land, the AO was directed to adjust the additions to the extent of funds withdrawn from the bank. However, for other additions (disallowance u/s 54F, unexplained investment in shares, and other immovable property), the Tribunal found no incriminating material and directed their deletion.
Key Issues
1. Whether additions made for unabated assessment years were valid without incriminating material found during the search. 2. Whether unexplained investments in agricultural land, shares, and other immovable property, and disallowance of deduction under Section 54F, were justified.
Sections Cited
132, 153A, 143(3), 69, 54F, 143(2), 142(1), 147, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘F’: NEW DELHI
per registered documents and circle rates as per the respective
lands. In our considered view, as discussed above, the assessee has
demonstrated that she has sources to make the investment and she
is eligible to get the investment made in the agricultural land to the
extent of declared sources. It is fact on record that the assessee has
18 ITA No.873 to 877/Del/2018 Kusum Lata vs. DCIT
withdrawn the cash and made the payment to the farmers, to the
extent of cash withdrawn by her from the bank for which she has
sufficient fund available in the bank. Therefore, we are directing the
AO to adjust the payments made from withdrawing from the bank
account. The other part of the addition after making the addition
may be sustained. In this regard, we are inclined to partly allow the
ground no 3 raised by the assessee.
Coming to the other additions made by the Assessing
Officer, we observed that all these information collected in post
search proceedings and there is no evidence to show that the
additions made by the assessing officer has bearing from the
material found during the search. As held in the case of Abhisar
Buildwell P. Ltd (supra), the Hon’ble Supreme Court held as under:
“11………… Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the 'total income' for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of
19 ITA No.873 to 877/Del/2018 Kusum Lata vs. DCIT
Section 153A of the Act, 1961, in case of a search under section 132 or requisition under section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the 'total income taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy.”
With the above observation, we are inclined to direct the
Assessing Officer to delete above mentioned additions made by him
in the assessment order. Accordingly, ground Nos 4 to 7 raised by
the assessee are allowed.
With regard to Ground no 8 is dismissed as not pressed as
no submissions were made during the hearing. Similarly, the
ground no 9 also dismissed as general.
20 ITA No.873 to 877/Del/2018 Kusum Lata vs. DCIT
In the result, the appeal filed by the assessee is partly allowed.
With regard to other appeals filed by the assessee relating to
Asst. Years. 2010-11, 2011-12, 2012-13 and 2013-14. The facts in
the above said appeals are exactly similar to the facts in the Asst.
Year 2009-10, the findings in Asst. Year 2009-10 (ITA
No.873/Del/2018) applicable mutatis mutandis to the appeal in the
above said Assessment Years. Accordingly, the appeals filed by the
assessee are partly allowed as indicated in Asst. Year 2009-10.
In the result, all the appeals filed by the assessee are partly
allowed.
Order pronounced in open Court on 30th April, 2024.
Sd/- Sd/- (VIMAL KUMAR) (S.RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 30/04/2024 Pk/sps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT
ASSISTANT REGISTRAR ITAT, NEW DELHI
