DCIT, CC-II, CHANDIGARH vs. M/S AKJ PORTFOLIO PVT. LTD., CHANDIGARH

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the Revenue against

the order dated 31/3/2017 of the Commissioner of Income Tax

[hereinafter referred to as CIT(A)]-3, Gurgaon.

in its appeal, but the Revenue is mainly aggrieved by the action of

the CIT(A) in deleting the addition made by the Assessing officer in

the assessment proceedings carried out u/s 153A of the Income-tax

Act, 1961 (in short 'the Act') on the ground that no incriminating

material was found during search action carried out at the premises

of the assessee on 26.5.2011 u/s 132 of the Act.

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the issue raised in this appeal of the Department is covered in favour

of the assessee by numerous decisions of the High Courts. He, in

this respect has brought our attention to the copy of the ‘Panchnama’

to say that no incriminating material warranting any addition was

found during the search action.

On the last date of hearing, the Ld. DR was directed to confirm

from the Assessing officer as to whether any incriminating material

was found during search action, to which the Ld. DR has relied upon

a letter dated 29.3.2018, which has been received from the Assessing

officer, wherein, it has been confirmed that the assessment u/s 153A

of the Act in this case is not based on any incriminating documents

found during the survey. The Ld. Counsel for the assessee has further

invited our attention to the impugned order of the CIT(A) and has

stated that the Ld. CIT(A) had deleted the addition so made by the

Assessing officer observing that pursuant to the filing of the return

by the assessee, the original assessment proceedings already stood

concluded on the date of search and that no assessment / re-

assessment was pending on the date of search. The Ld. CIT(A) has

relied upon the decision of the Coordinate Bench of the Tribunal in

the case of ‘M/s Mala Builders Pvt Ltd Vs. ACIT’ ITA Nos. 433 to

437/Chd/2014, wherein the Tribunal has further relied upon the

decision of 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)

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

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

wherein the Hon'ble High Courts have been unanimous to hold that in

the absence of any incriminating material found during the search

action, when there was no pending assessment which can be said to

have abated on the date of search, the additions cannot be made.

When Ld. DR was confronted to the above findings made by the Ld.

CIT(A), the Ld. DR has been fair enough to admit that no

incriminating material was found during the search action and that

the original assessment proceedings stood completed on the date of

search

by the decision of the Hon'ble Delhi High Court in the case of ‘CIT

Vs. Kabul Chawla’ [2016] 380 ITR 573 (Del) and further in the case

sof ‘Principal CIT Vs. Meeta Gutgutia’ [2017] 395 ITR 506, Hon'ble

Bombay High Court in the case of ‘CIT Vs. Continental Warehousing

Corporation’ [2015] 374 ITR 645 (Bom.), Hon'ble Calcutta High

Court in the case of PCIT Vs. Salasor Stock Broking Ltd 2016 (8)

TMI 1131 and the decision of the Hon'ble Delhi High Court in the

case of ‘Kabul Chawla’ (supra) has also followed by the Hon'ble

Gujarat High Court in the case of case of ‘PCIT Vs. RSA Digi Prints’

2017 (9) TMI 530. The Ld. Counsel has also referred to various

decisions of the coordinate Benches of the Tribunal on this issue.

do not find any infirmity in the order of the CIT(A) in holding that in

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the case of concluded assessments, in the absence of any incriminating material found during the search action, the impugned additions were not warranted. The appeal of the Revenue is, therefore, dismissed.

Order pronounced in the Open Court

Sd/- Sd/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 24.04.2018 Rkk

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