KUSUM LATA,NOIDA vs. DCIT, CENTRAL CIRCLE , NOIDA
Facts
A search and seizure operation under Section 132 of the Income Tax Act, 1961, was conducted on Smt. Kusum Lata (assessee) and her husband, revealing various incriminating documents and unaccounted cash/jewellery. The Assessing Officer (AO) concluded that the assessee, a housewife, acquired agricultural lands and other properties using undisclosed funds, leading to additions for unexplained investments under Section 69, denial of Section 54F deduction, and unexplained investment in shares and immovable property.
Held
The Tribunal, relying on the Supreme Court's decision in Abhisar Buildwell (P.) Ltd., held that additions in unabated assessment years are unsustainable if no incriminating material was found during the search. While acknowledging some information regarding land purchase emerged post-search, the assessee demonstrated sources for these investments. Consequently, Ground 3 (unexplained investment in land) was partly allowed with a direction to the AO for adjustment, and Grounds 4 to 7 (denial of S.54F, unexplained investment in shares and house construction) were fully allowed as they lacked incriminating material from the search.
Key Issues
The key legal issue was whether additions made by the AO in unabated assessment years, based on information collected post-search or submitted by the assessee, are valid if no incriminating material relevant to those additions was found during the initial search operation.
Sections Cited
153A, 143(3), 132, 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withdrawn the cash and made the payment to the farmers, to the
extent of cash withdrawn by her from the bank for which she has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
