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Facts
The revenue filed appeals against the orders of the CIT(A) for AY 2010-11 and 2015-16. The appeals pertained to additions made on account of share application money for AY 2010-11, and unexplained stock and cash for AY 2015-16, which were deleted by the CIT(A).
Held
For AY 2010-11, the additions on account of share capital were made without any incriminating material found during the search, hence the CIT(A)'s order was upheld. For AY 2015-16, the deletion of cash was upheld, but the issue of stock reconciliation was restored to the Assessing Officer for readjudication.
Key Issues
Whether additions made based on search without incriminating material are valid and whether stock reconciliation requires further verification.
Sections Cited
153A, 143(3), 142(1)
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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI GEORGE MATHAN & SHRI RATNESH NANDAN SAHAY
Assessee represented by Sri Devesh Poddar, A.R. Department represented by Smt. Rinku Singh, CIT-DR Date of hearing 10/06/2025 Date of pronouncement 10/06/2025 O R D E R PER: BENCH 1. These are the appeals filed by the revenue against the orders of the ld. CIT(A), Patna-3, Patna both dated 19/03/2021 for the A.Y. 2010-11 and 2015-16 respectively.
Smt. Rinku Singh, ld. CIT-DR is represented on behalf of the revenue and Sri Devesh Poddar, ld A.R. is represented on behalf of the assessee. It was submitted by the ld. CIT-Departmental Representative that there was a search on the business premises of the assessee on 03/09/2014. As a consequence to IT(SS)A No. 19/Ran/2021 & ACIT Vs M/s Jagat Jagdamba Flour Pvt. Ltd. the search, assessment came to be completed under Section 153A read with section 143(3) of the Act. Various additions have been made in respect of share application money received by the assessee. It was a submission that on appeal, the ld. CIT(A) had deleted the addition by applying the decision of Hon'ble Delhi High Court in the case of Kabul Chawla. It was a submission that as this is a case of share capital introduced which has bogus, the order of the ld. CIT(A) is liable to be reversed and that of the Assessing Officer reversed, 3. In reply, the ld. AR has submitted that in the course of assessment nor in the assessment proceedings, any seized material relating to the share capital or share premium has been found nor referred to. It was a submission that now in view of the decision of the Hon’ble Supreme Court in the case of Abhisar Buildwell reported in 459 ITR 212 (SC) as no seized material has or incriminating material relevant to the addition has been found or used in the course of assessment, the order of the ld. CIT(A) is liable to be upheld.
We have considered the rival submissions. A perusal of the assessment order clearly shows that the issue of share capital is being discussed in para 5 of the assessment order. The Assessing Officer has not referred to any incriminating material found in the course of search that relates to such issue of share capital and share premium. In fact, the Assessing Officer refers to a questionnaire issued alongwith notice issued under Section 142(1) of the Act dated 22/11/2016. Thus, clearly, there is no connection between any of the seized material found in the course of search to the additions which has been made in the assessment order. This being so, in view of the principles laid down by the Hon'ble Supreme Court in the case of Abhisar Buildwell (supra), the addition as IT(SS)A No. 19/Ran/2021 & ACIT Vs M/s Jagat Jagdamba Flour Pvt. Ltd. made by the Assessing Officer and the assessment order per se itself is rightly quashed by the ld. CIT(A). This being so, we find no reason to interfere in the order of ld. CIT(A) and the same stands upheld.
In the result, appeal of the revenue being IT(SS)A No. 19/Ran/2021 for the A.Y. 2010-11 stands dismissed. 6. In regard to it was a submission of the ld. CIT- Departmental Representative that this related to A.Y. 2015-16 wherein there was certain stock which was found to have been unexplained and also certain cash and other details. The Assessing Officer had made the addition in respect of the said stock and the cash found. It was a submission that the ld. CIT(A) deleted the addition on the basis of reconciliation statement filed by the assessee. It was a submission that the said reconciliation statement specially in regard to the stock was not made available to the Assessing Officer for his rebuttal. It was the prayer that the order of ld. CIT(A) be reversed and that of the Assessing officer restored.
In reply, the ld. AR submitted that the reconciliation had been filed before the Assessing Officer and the Assessing Officer had not considered the same and a perusal of the order of the ld. CIT(A) clearly shows that the ld. CIT(A) has extracted the submissions of the assessee that has been filed before the Assessing Officer. It was a submission that the order of the ld. CIT(A) is liable to be upheld.
We have considered the rival submissions. A perusal of the order of ld. CIT(A) shows that the ld. CIT(A) has deleted the addition in respect of stock and the cash on the basis of the reconciliation filed by the assessee as also the cash IT(SS)A No. 19/Ran/2021 &