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Income Tax Appellate Tribunal, DELHI BENCH ‘G’ NEW DLEHI
Before: SHRI PRASHANT MAHARISHI & SHRI K. NARASIMHA CHARY
PER K. NARASIMHA CHARY, J.M. Aggrieved by the orders dated 27.04.2018 passed by the Commissioner of Income Tax (Appeals)-30, New Delhi ("Ld. CIT(A)") in the cases of Surendra Hanumanmal Chhajer(“the assessee”) for the assessment years 2009-10, 2012-13 & 2013-14, the Revenue preferred these appeals.
Since the issues involved in all these appeals are substantially similar in the identical facts, the same are being disposed of by this common order. For convenience, we will take the case for the assessment year 2009-10 as leading case.
Brief facts of this case are that the assessee is an individual. He filed his return of income for the assessment year 2009-10 on 29.09.2009 declaring an income of Rs.40,19,474/-. Order u/s. 143(3) of the Income-tax Act, 1961 (“the Act” for short) was passed on 30.12.2011 at an income of Rs.64,29,583/- after making addition of Rs.24,10,109/- on account of suppression of production on the basis of information received from the department of Central Excise and Customs.
Subsequently, there was search and seizure operation u/s. 132 of the Act on 09.10.2014 at various business and residential premises of M/s. Kuber Group of cases including the premises of the assessee. Notice u/s. 153A of the Act was issued on 16.05.2016 and the assessee filed the return of income on 15.06.2016 declaring the same income of Rs.40,19,474/-.
During the course of assessment, ld. Assessing Officer noticed that the assessee received certain unsecured loans to the tune of Rs.1,30,81,941/- and on the ground that the assessee failed to provide the details in proof of the credits in his books of account, ld. Assessing Officer made an addition of Rs.1,30,81,941/- u/s. 68 of the Act.
Aggrieved by such an act of the ld. Assessing Officer, the assessee preferred an appeal and among other grounds, by way of additional ground, contended that the addition cannot be sustained because it was made in the absence of any incriminating material found during the course of search. Since this ground is of legal nature and go to the root of the matter of jurisdiction, ld. CIT(A) admitted the additional ground after hearing the above. On an appraisal of the record, ld. CIT(A) recorded the finding of fact that the assessment order does not speak of any incriminating material or document found during the search nor does the assessment refers to any such incriminating material. Then, learned CIT(A) applied the ratio of the decision in CIT vs. Kabul Chawla, 380 ITR 573(Del) and held that the addition made by the ld. Assessing Officer not being based upon any seized material or incriminating material found in the search, is not sustainable. Learned CIT(A), accordingly allowed the appeal and deleted the addition. Aggrieved by such finding of the ld. CIT(A), the Revenue preferred this appeal before us.
When the matter was called, there was none on behalf of the assessee to represent the case. It could be seen from the record that the notice was sent to the address given in form No. 36. If the assessee is available in such address, such notice should have been served on the assessee. If for any reason, the assessee is not available there, it is for the assessee to make arrangements for service of such notice by furnishing the address where the assessee would be available, or to deliver it to some authorised person, or by making request to the postal department to detain the mail till the assessee claims the same. Since the assessee does not seem to have adopted any of these methods, we are of the considered opinion that no time could be granted. Basing on the record we proceed to hear the counsel for Revenue and decide the matter on merits.
It is contended by the ld. DR that there is no restriction with the powers of the Assessing Officer to assess or re-assess total income of the assessee u/s. 153A of the Act to the material found during the search and therefore in the absence of assessee producing convincing material to establish the identity and creditworthiness of the creditor and genuineness of the transactions, the additions made u/s. 68 of the Act cannot be interfered with.
Before the ld. CIT(A), it was the submission of the assessee that at no point of time, the Revenue co-related any seized material with the additions made qua the assessment year and therefore, the decisions of the Hon’ble jurisdictional High Court in the cases of CIT vs. Kabul Chawla (supra), Pr. CIT vs. Kurele Papers Mills Pvt. Ltd., 380 ITR 571(Del) and Pr. CIT vs. Meeta Gutgutia, 395 ITR 526 (Del) are applicable.
We have gone through the record and we find that the assessment order does not refer to any documents, whatsoever, found during the search, much less incriminating in nature. It is the settled principle of law in view of the decisions in CIT vs. Kabul Chawla (supra), Pr. CIT vs. Kurele Papers Mills Pvt. Ltd. (supra) and Pr. CIT vs. Meeta Gutgutia (supra) that addition u/s. 153A/153C can be made only on the basis of incriminating material found during the search qua assessment year. Further, Hon’ble Supreme Court in the case of CIT vs. Sinhgadh Education Society (2017) 84 taxman.com 290 (SC) held that one of the jurisdictional conditions precedent to the issue of a notice u/s. 153C of the Act is that money, bullion, jewellery or other valuable article or thing or any books of account or document must be seized or requisitioned for the relevant assessment year for issue of notice u/s. 153C of the Act.
In view of the undisputed facts and settled position of law, any addition made without any incriminating material found during the search qua the assessment year, cannot be sustained and has to be deleted. We, therefore, do not find anything illegality or irregularity in the conclusions reached by the ld. CIT(A) and consequently hold the grounds of appeal as devoid of merits and the order of the ld. CIT(A) is upheld. & 4804/Del/2018 (A.Yrs. 2012-13 & 2013-14):
The facts in both these years are substantially the same as involved in the assessment year 2009-10. Therefore, in view of our findings given in appeal for the assessment year 2009-10, the grounds raised in these appeals are also held devoid of merits and are, accordingly, dismissed.