ITO WD -2(1), KOLKATA vs. UNICORN TOWNSHIP (P) LTD., KOLKATA

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ITA 2074/KOL/2024Status: DisposedITAT Kolkata02 December 2024AY 2011-12Bench: Shri Rajesh Kumar (Accountant Member), Shri Pradip Kumar Choubey (Judicial Member)4 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the assessment was unabated at the time of search, the AO's jurisdiction was limited to additions based on incriminating material found during the search. As no such material was found, the AO lacked jurisdiction to make the additions.

What were the facts?

The revenue appealed against the deletion of additions made by the AO on account of unexplained cash credit, commission, and expenses. These additions were made following a search action, but the AO relied on information furnished by the assessee without any specific incriminating material found during the search.

What were the issues?

Whether additions made by the AO in an unabated assessment, without any incriminating material found during a search, are valid. The jurisdiction of the AO in search cases when no incriminating material is found.

Which sections of the Income-tax Act were involved?

Section 68,Section 69C,Section 14A,Section 132,Section 153A

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA

Before: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Heard together (2 matters)

I.T.A. No. 2074/Kol/2024
C.O. No. 38/Kol/2024

Read from the judgment's own cause title. This page is filed under one of them.

ORDER / आदेश Per Rajesh Kumar, AM: This is an appeal preferred by the revenue and the cross objection preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-21, Kolkata (hereinafter referred to as the “Ld. CIT(A)”] dated 18.06.2024 for the AY 2011-12.

2.

At the outset, we note that there is a delay of 51 days in filing the appeal. After hearing both the sides and after considering the reasons as enumerated in the condonation petition and affidavit filed by the assessee, we find the reasons to be bonafide ,genuine and sufficient and accordingly condone the delay.

3.

The revenue has challenged the order passed by the Ld. CIT(A) deleting the addition of Rs. 60,00,000/- made by the AO on account of unexplained cash credit u/s 68 of the Act and also Rs. 30,000/- u/s 69C and Rs. 15,000/- u/s 14A. The revenue has challenged the deletion of addition on merit and the assessee has filed cross- objection supporting the order of Commissioner of Income Tax (Appeal).

4.

After hearing the rival contentions and perusing the material on record, we find that in this case, a search action u/s 132 of the Act was conducted on the assessee on 09.09.2015. During the course of search proceedings, several incriminating documents were found and seized. Accordingly notices u/s 153A was issued for six assessment years from 2010-11 to 2015-16 and which were made compliance thereto by filing a return of income. The AO has made addition of Rs. 60,00,000/- towards share capital/ share premium being an unexplained u/s 68 of the Act and Rs. 30,000/- u/s 69C @ 0.5% of the total share capital/share premium towards for arranging entries as commission beside addition of Rs. 15,000/- u/s 14A of the Act. We note that the AO has made addition on the basis of information furnished by the assessee meaning thereby that there was no incriminating material seized during search operation as there was no reference in the assessment order to that effect. Since the assessment under consideration is unabated assessment on the date of search, therefore the jurisdiction of the AO to make the addition is limited to those items qua which the incriminating material was found and seized during the course of search. Therefore, in present case the addition was made without any incriminating material and thus the Ld. CIT(A) deleted the same on the ground that there was no incriminating material.

5.

Considering the above facts and circumstances of the case, we are of the view that the case of the assessee is squarely covered by the decision of Hon’ble Supreme court in the case of Pr. CIT Vs. Abhiser Buildwell (P) Ltd. [2023] 149 taxmann.com 399 (SC) as there was no incriminating material found and seized during the course of search and therefore the AO has no jurisdiction to make additions. Consequently, we upheld the order of Ld. CIT(A) by dismissing the appeal of the revenue and the cross objection by the assessee becomes infructuous and is dismissed.

6.

In the result, the appeal of the revenue as well as the cross objection of the assessee are dismissed. Order is pronounced in the open court on 2nd December, 2024

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