M/S OASIS DISTILLERIES LTD.,INDORE vs. DCIT, CC-II, LUDHIANA

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ITA 1349/CHANDI/2017Status: DisposedITAT Chandigarh11 May 2018AY 2009-105 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 if no incriminating material is found during a search, additions cannot be made under section 153A for an already concluded assessment. The lower authorities' decision to make additions was not justified.

What were the facts?

The assessee's assessment for the year 2009-10 was completed. A search action was conducted, but no incriminating material was found. Subsequently, additions were made under section 153A based on share capital.

What were the issues?

Whether additions can be made under Section 153A when no incriminating material is found during a search for an already concluded assessment year.

Which sections of the Income-tax Act were involved?

Section 68,Section 132,Section 153A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, DIVISION BENCH, CHANDIGARH

Before: SHRI SANJAY GARG & Ms. ANNAPURNA GUPTA

For Appellant: Shri Ashok Goyal, CA
Hearing: 11.05.2018Pronounced: 11.05.2018

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee

against the order dated 19/06/2017 of the Commissioner of

Income Tax (Appeals)-5, Ludhiana [hereinafter referred to as

CIT(A)].

2.

The assessee has raised the following grounds:- 1. That the Ld. CIT(A) has erred in confirming the addition of Rs. 10,00,000/- in respect of share capital u/s 68 as per para 4.2 of the order.

2.

That the Ld. CIT(A) has failed to adjudicate the legal ground of appeal as taken before him during the course of hearing that since no incriminating

ITA No.1349/Chd/2017- M/s Oasis Distilleries Ltd., Indore 2

material had been found during the course of search conducted on 21/22 October, 2010 and, as such, the addition of Rs. 10 lacs as confirmed on account of unsecured loan is not called for.

3.

That the Ld. CIT has failed to appreciate the judgement of the jurisdictional ITAT, Chandigarh Bench and of the various High Courts including the case of Kabul Chawla and others and if no incriminating material found during the course of search, then, the addition cannot be made. \ 4. Notwithstanding the above said ground of appeal, the ld CIT(A) has erred in confirming the addition of Rs. 10 lacs as per para 4.2 of the order.

5.

That the confirmation of addition as made by the CIT(A) is against the facts and circumstances of the case.

3.

At the outset, the Ld. Counsel for the assessee has

submitted that the facts and issue involved in this appeal are

relating to the additions made which were not based on any

incriminating material found during the search are squarely

covered by the decision of the Tribunal in the own case of the

assessee relating to assessment year 2007-08 in ITA No.

643/Chd/2015 & others.

4.

The Ld. Counsel for the assessee has submitted that the

original return in this case was processed u/s 143(1) of the Act.

Thereafter, a search action was carried out at the premises of

the assessee u/s 132 of the Income-tax Act, 1961 (in short 'the

Act') on 21.10.2010 but no incriminating material was found

during the search. Thereafter, the assessment proceedings were

ITA No.1349/Chd/2017- M/s Oasis Distilleries Ltd., Indore 3

carried out u/s 153A of the Act and the Assessing officer has

made the impugned additions but not based on any incriminating

material found during the search action. The Ld. counsel, has

submitted that since the original assessment proceedings already

stood completed in this case on the date of search and that since

no incriminating material was found during the search action,

the Assessing officer was precluded from making any addition

or opening up an issue, in relation to already concluded

assessment proceedings and, hence, no additions were warranted

in the year under consideration in the assessment proceedings

carried out u/s 153A of the Act. He in this respect has relied

upon various judicial decisions including the decision of the in

the Hon'ble Bombay High Court in the case of ‘CIT Vs. Murli

Agro Products Pvt Ltd’, (2014) 49 taxman.com 172 (Bom.), ITA

No.36 of 2009 and in the case of ‘CIT Vs. Continental

Warehousing Corporation’ ITA No. 523 of 2013 reported in

(2015) 279 CTR 0389 (Bombay) and of the Hon'ble Delhi High

Court in the case of ‘CIT Vs. Kabul Chawla’ 234 Taxman 300

(Delhi) and subsequent decision of the Delhi High Court in the

case of ‘Principal CIT Vs. Meeta Gutgutia Prop M/s Ferns ‘N’

Petals”, ITA 306/2017 and others decided vide order dated

25.5.2017.

5.

The Ld. DR has also been fair enough to admit that no

incriminating material was found in the case during the search

ITA No.1349/Chd/2017- M/s Oasis Distilleries Ltd., Indore 4

action and that the facts and issue involved are squarely covered

by the aforesaid decisions.

6.

We find force in the contention of the Ld. AR.

Admittedly, the assessment for the year under consideration

stood completed on the date of search. No incriminating

material whatsoever in relation to the share application money

was found. It has been time and again held by the various

High Courts that if no incriminating material is found during

the search action, the addition in the case of already concluded

assessment cannot be made while framing assessment u/s 153A

of the Act. Reliance in this respect can be placed in the case of

‘CIT Vs. Continental Warehousing Corporation’ ITA No. 523 of

2013 reported in (2015) 279 CTR 0389 (Bombay) and of the

Hon'ble Delhi High Court in the case of ‘CIT Vs. Kabul Chawla’

234 Taxman 300 (Delhi).

7.

We find that the case of the assessee is squarely covered

by the aforesaid decisions. The aforesaid decisions have been

further affirmed by the decision of the Delhi High Court in the

case of ‘Principal CIT Vs. Meeta Gutgutia Prop M/s Ferns ‘N’

Petals”, ITA 306/2017 and others decided vide order dated

25.5.2017. The aforesaid case laws can be well applied to the

facts and circumstances of the case in hand. In view of this, we

do not find any justification on the part of the lower authorities

for making addition on account of share application money for

the year under consideration.

ITA No.1349/Chd/2017- M/s Oasis Distilleries Ltd., Indore 5

In view of this, the appeal of the assessee is hereby allowed

Order pronounced in the Open Court

Sd/- Sd/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 11.05.2018 Rkk

Copy to: • The Appellant • The Respondent • The CIT • The CIT(A) • The DR

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