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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-2’, NEW DELHI
Before: SHRI J. SUDHAKAR REDDY
These are the appeals filed by the Assessee against the separate Orders both dated 10.12.2014 passed by the Ld.CIT(A)-XXVII, New Delhi for Assessment Years 2008-09 & 2009-10. Since the issues invovled in both the appeals are common and indentical, we are disposing these appeals by passing a common order for the sake of brevity, by dealing with (AY 2008-09).
The brief facts of the case are brought out in the Ld. CIT(A)’s order vide para no. 2 which is extracted below for ready reference. “ 2. The brief facts of the case as culled out from the assessment order are that the appellant, an individual, derived income from 'salary' and 'other sources'. A search and seizure operation u/s 132 of the I. T. Act, 1961 was conducted by the Investigation Wing of the department in Nussli (Switzerland) Ltd. group of cases on 19.10.2010 and simultaneously the appellant premises were also searched. The case of the appellant was centralized u/s 127 of the I. T. Act, 1961 vide order F. No. C.I.T.- &502/Del/2015 A.Yrs. 2008-09 & 2009-10 XV/Centralization /2012-13/1556 dated 02.01.2013 and the jurisdiction over the appellant's case was assigned to the present Assessing Officer, Central Circle-8, New Delhi. Thereafter, a notice u/s 153A of the I. T. Act, 1961 dated 8.01 .2013 was issued and -served upon the appellant, in response to which the appellant filed his return of income on 30.03.2009 declaring a total income of Rs.2,23,051/-. Subsequently, notices us 143(2) and 142(1) along with detailed questionnaire were issued and served upon the appellant. In response to the same, the AR of the appellant attended the assessment proceedings and filed the required details and information, which were examined and discussed by the Assessing Officer. Thereupon, the assessment was completed in terms of order u/s 153A read with section 143(3) dated 11.03.2013 at a total income of Rs.8,23,050/- as against the returned income of Rs.2,23,051/- wherein the Assessing Officer made the following additions:
Addition u/s 69C on account of Low house hold withdrawals Rs. 3,90,000/-
2. Addition u/s 69C on account of foreign trip expenses Rs. 2,10,000/-“
The First Appellate Authoirty had confirmed the order of the AO.
4. Aggrieved, the assessee is in appeal on the following grounds:- 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 153A/143(3) without assuming jurisdiction as
per law and without serving the valid notices as per law and without recording
requisite satisfaction as per law and without obtaining requisite approval as
per law and without complying with other mandatory conditions under the Act &502/Del/2015 A.Yrs. 2008-09 & 2009-10
and without serving the mandatory notices uls 143(2) and 142(1) of Income
Tax Act, 1961.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making notional addition of Rs.2,10,000/- on account of foreign travel uls 69C and that too by disregarding the evidences/submissions filed by the assessee and by recording incorrect facts and findings and in any case impugned addition is beyond the scope and jurisdiction of the impugned assessment order.
3. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs.2,10,000/- on account of foreign travel and framing the impugned assessment order is contrary to law and facts, void ab initio, and without giving adequate opportunity of hearing, by recording incorrect facts and findings and the same is not sustainable on various legal and factual grounds. 4. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.
I have heard Sh. Tarun Kumar, Ld. Counsel of the Assessee and Ld. DR, Mrs. Rakhi Vimal on behalf of the Revenue.
Admittedly no incirminating material was found or seized during the cousre of search and seizure operation u/s. 132 of the Act in the case of the assessee. It is also not in dispute, that the assessment for both these assessment years have not abated. Under the circumstances, I find that the issue is covered in favour of the assesee and against the Revenue by the decision dated 28.8.2015 of the Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla passed in 709 and 713/2014 held has under:-
“37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned 709 and 713 of 2014 of decisions, the legal position that emerges is as under: &502/Del/2015 A.Yrs. 2008-09 & 2009-10 i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six Ays immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs “in which both the disclosed and the undisclosed income would be brought to tax”. iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment “can be arbitrary or made without any relevance or nexus with the seized material. Obviously an 709 and 713 of 2014 of assessment has to be made under this Section only on the basis of seized material.” v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.
The present appeals concern AYs, 2002-03, 2005-06 and 2006-07.On the date of the search the said assessments already stood completed. Since no incriminating &502/Del/2015 A.Yrs. 2008-09 & 2009-10 material was unearthed during the search, no additions could have been made to the income already assessed.”
Respectfully following the precedent of the Hon’ble Jurisdictional High Court as aforesaid, I allow the appeal of the Assessee, as the assessments in both these cases passed u/s. 153A r.w.s. 143(3) were not made, based on any incriminating material found or seized during the course of search of thereafter. The addtions are purely based on the material already avaiblae on record. Hence, all the additions in both the cases are deleted and the ground raised by the assessee in both the appeals are allowed.
In the result, both the Appeals filed by the Assessee stands allowed. Order pronounced in the Open Court on 19th October,2015.