ANJUT CHAWLA,NEW DELHI vs. ACIT, NEW DELHI

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ITA 1694/DEL/2013Status: DisposedITAT Delhi15 January 2016AY 2004-054 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that assessments framed under section 153A are not valid if no incriminating material is found during the search and the original assessment proceedings were not pending on the date of the search. Following a coordinate bench's decision and jurisdictional High Court's ruling, the Tribunal directed the deletion of the impugned additions.

What were the facts?

A search and seizure operation was conducted, and notices under section 153A were issued to the assessee. The Assessing Officer made additions to the assessee's income related to house properties and restricted a claimed exemption under section 54. The assessee argued that the assessments under section 153A were invalid as no incriminating material was found during the search and original assessments were complete.

What were the issues?

The primary issue was the validity of assessments framed under section 153A when no incriminating material was found during the search and original assessments were already completed. The secondary issue involved the correctness of additions made to house property income and the restriction of section 54 exemption.

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3),Section 139,Section 23(1)(a),Section 23(4),Section 54,Section 132,Section 133A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, DELHI BENCH ‘A’ : NEW DELHI

Before: SHRI A.T. VARKEY & SHRI L.P. SAHU

For Appellant: Shri Ved Jain, Advocate

These appeals, at the instance of the assessee, are filed against the order of the CIT (Appeals)-XXXII, New Delhi dated 20.12.2012 for the assessment years 2004-05 to 2009-10.

2.

Since the issues raised on the validity of assessment framed under section 153A read with sec. 143(3) of the Act on the basis that there was no assessment pending based on the original return of income filed as on the date of search and no incriminating material belonging to the assessee was found during the course of search, goes to the root of the matter, we prefer adjudication thereof first.

Act along with survey operation under section 133A of the Act were undertaken at various residential and business premises of Aseem Kumar Gupta & Group and other beneficiaries group of cases on 26.3.2010. It was alleged that Shri A.K. Gupta was providing accommodation entries to several beneficiaries with the help of several bank accounts opened in the name of several proprietary concerns and companies in which either he himself or his employees were directors or proprietors. The search and survey covered the premises of Shri A.K. Gupta, several associates/employees of Shri A.K. Gupta, several intermediatory companies and some beneficiaries including that of the assessee. Notice under sec. 153A of the Act was issued and in response thereto the assessee filed its return of income declaring the same income as shown in its original return of income filed under section 139 of the Act. The Assessing Officer thereafter being not satisfied with the explanation of the assessee made addition on account of income from some house properties owned by the assessee rejecting the contentions of the assessee that the provisions of section 23(1)(a) read with section 23(4) of the Act are applicable. Besides this addition, one more addition has been made in the assessment year 2009-10 by restricting the exemption claimed under sec.

54 of the Act at Rs.16,16,700 as against Rs.28,81,000 claimed by the assessee. These actions of the Assessing Officer were questioned by the assessee before the Learned CIT (Appeals) but the assessee could not succeed. The assessee had also raised the validity of assessment framed under section 153A read with section 143(3) of the Act besides others on the basis that there was no incriminating material found during the course of search and original assessment proceedings were completed on the date of on the date of search. The Learned CIT(Appeals) did not concur with this contention of the assessee and rejected the ground raised by the assessee in this regard.

4.

At the outset itself, the ld. AR pointed out that similar addition were made by the AO in the hands of the assessee’s husband, Shri Raj Kumar Chawla on 50:50 basis. The appeal preferred by the husband, Shri Raj Kumar Chawla has already been decided by the coordinate Bench of this Tribunal in 5087/Del/2012, 1698/Del/2013 & 1683/Del/2013 vide order dated 17.02.2015 wherein the Tribunal was pleased to delete the impugned addition. The ld. DR fairly conceded that the ITAT has deleted the similar addition made by the AO in the hands of the assessee’s husband. However, he relied on the order of the lower authorities below to sustain the addition.

5.

We have heard both the parties and perused the record. We have gone through the order of the coordinate Bench in respect of the assessee’s husband, Shri Raj Kumar Chawla. We find that similar addition has been made by the AO on 50:50 basis in the hands of the husband and wife (the present assessee before us). The Tribunal was pleased to delete the addition by observing as under :-

“19. In absence of rebuttal of this material fact by the Revenue in the present case before us that no incriminating material was found during the course of search relating to the assessee for the assessment year under consideration to justify the additions made in these years by the Assessing Officer and assessment based on the original return of income filed under sec. 139 of the Act was pending as on the date of search, we following the above cited decisions by the learned AR discussed above hold that the assessments framed under sec. 153A read with sec. 143(3) of the Income-tax Act, 1961 for the assessment years under consideration are not valid and the same are accordingly held as null and void. The related ground on the issue is thus allowed.”

4 to 1697 & 1699/Del/2013 ITA No.1684/Del/2013 The ld. DR could not bring to our notice any change in the facts which could have persuaded us to take a different view. Therefore, respectfully following the order of the coordinate Bench and relying on the Hon’ble jurisdictional High Court order in CIT V Kabul Chawla – 61 Taxmann.com 412 (Delhi) wherein the Hon’ble High Court has held that without incriminating material, no addition can be made in the assessment years where assessments are complete and not pending before AO on the date of search. So, we direct deletion of the impugned addition in all the assessment years.

6.

In view of the above findings, whereby we have held that no addition can be made without any incriminating material unearthed during search on assessment years completed and not pending before the AO on the date of search, the additions are ordered to be deleted. In view of the said order, the other grounds have become academic in nature, so not adjudicated. The same are being disposed off as such.

7.

In the result, all the appeals are allowed. Order pronounced in open court on this day of 15th January, 2016.

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