ASSTT. CIT, CENTRAL CIRCLE, CUTTACK V. KHIROD NATH, CUTTACK

ITSSA 1/CTK/2025

AI Insights

The case involves appeals by the revenue against the CIT(A)'s decisions which favored the assessee, Khirod Nath, over several assessment years. The core issue was the absence of incriminating documents during a search operation that led to the initiation of proceedings under section 153C of the Income Tax Act. The CIT(A) had allowed Nath's appeals, citing the Supreme Court's precedent that without incriminating documents in non-abated assessment years, no additions could be made to the income. The Tribunal agreed with the CIT(A)'s application of the Supreme Court's decision and dismissed the revenue's appeals, noting that the Assessing Officer could consider actions under other provisions like section 148 if permissible by limitation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 30020 (ITAT-CUTTACK)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-01-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Other Referred Cases: Pr.CIT Vs. Abhisar Buildwell (P.) Ltd., [2023] 149 taxmann.com 399 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAROJ KUMAR DUBEY
• Assessee Lawyers: AMBIKA PRASAD MOHANTY
• Keywords: Depreciation; Bogus
• Section: 148

Judgement Text

" आयकर आयकर आयकर आयकर अपीलीय अपीलीय अपीलीय अपीलीय अिधकरण अिधकरण अिधकरण अिधकरण, कटक कटक कटक कटक \u0001यायपीठ \u0001यायपीठ \u0001यायपीठ \u0001यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER IT IT IT IT( ( ( (SS SS SS SS) ) ) )A A A A Nos.01 to 05/CTK/2025 (िनधा\u0005रण िनधा\u0005रण िनधा\u0005रण िनधा\u0005रण वष\u0005 वष\u0005 वष\u0005 वष\u0005 / A.Y : 2015-16, 2016-17, 2017-18, 2018-19, & 2019-20) ACIT, Central Circle, Cuttack Vs Khirod Nath, New Industrial Estate, Jagatpur, Cuttack-754021 PAN No. :ADTPN 7544 A (अपीलाथ\u000f अपीलाथ\u000f अपीलाथ\u000f अपीलाथ\u000f /Appellant) .. (\u0010\u0011यथ\u000f \u0010\u0011यथ\u000f \u0010\u0011यथ\u000f \u0010\u0011यथ\u000f / Respondent) िनधा\u0005\u0013रती िनधा\u0005\u0013रती िनधा\u0005\u0013रती िनधा\u0005\u0013रती क\u0016 क\u0016 क\u0016 क\u0016 ओर ओर ओर ओर से से से से /Assessee by : Shri Ambika Prasad Mohanty, CA राज\u0018व राज\u0018व राज\u0018व राज\u0018व क\u0016 क\u0016 क\u0016 क\u0016 ओर ओर ओर ओर से से से से /Revenue by : Shri Saroj Kumar Dubey, CIT-DR सुनवाई क\u0002 तारीख / Date of Hearing : 28/01/2025 घोषणा क\u0002 तारीख/Date of Pronouncement : 28/01/2025 आदेश आदेश आदेश आदेश / O R D E R Per Bench : These are the appeals filed by the revenue against the separate orders, passed by the CIT(A), Bhubaneswar-2, all dated 13.11.2024, in respective appeals for the assessment years 2015-2016, 2016-2017, 2017-2018 & 2018-2019. 2. In all the appeals the revenue has challenged the action of the ld. CIT(A) in allowing the appeals of the assesee on the ground that no incriminating paper was found as a result of search, thus, no addition could be made. The ld. CIT(A) has followed the decision of the Hon’ble Supreme Court in the case of Pr.CIT Vs. Abhisar Buildwell (P.) Ltd., reported in [2023] 149 taxmann.com 399 (SC). Since the issue involved in all the appeals is common, therefore, the same are dealt together for the sake of convenience. 3. Brief facts of the case are that based on the information from the Bhubaneswar Police that Rs.30 lakhs of cash was seized from one Shri IT(SS)A No.01-05/CTK/2025 2 Mahaveer Prasad Dash, a warrant of authorization u/s.132A of the Act issued on 25.11.2020 was executed. During the course of verification it was found that the real owner of this cash was Shri Khirod Nath, the assesee. Therefore, the proceedings u/s.153C of the Act was initiated in the case of assesee after recording proper satisfaction. Thereafter the notice u/s.153C of the Act were issued for all the years where the assesee has declared the income as declared in the original return. The assessments for all the years were completed wherein the additions were made on account of loans as well as bogus liabilities as appearing in the final accounts of the assesee. In some year, the depreciation was also disallowed. In first appeal, the ld. CIT(A) observed that except the seizure of cash, there no incriminating documents were found and seized. The assessments were completed and the additions were made based on the entries available in books of accounts and other details furnished during the course of assessment proceedings without referring to any incriminating material found and seized as a result of search. Since the assessment years involved i.e. from A.Y.2015-2016 to 2019-2020 are non-abated years as on the date of search, therefore, if no incriminating documents is found, no addition could be made in view of the judgment of the Hon’ble supreme Court in the case of Abhisar Buildwell (supra). Accordingly, the ld. CIT(A) has deleted the additions and allowed the appeals of the assesee for all the years under consideration. Now, the revenue is in appeals before us. IT(SS)A No.01-05/CTK/2025 3 4. Before us, ld. Sr. DR has fairly admitted that no incriminating paper was referred to or relied upon by the AO for making the additions for all the years. It is also relevant to state that in the instant case requisition u/s.132A of the Act was made as a result of seizure of cash by the police authorities which is the sole satisfaction recorded for issue of warrant, therefore, there is no incriminating material available with the AO for making any addition in all these years which are non-abated assessment i.e. assessment proceedings were not pending when the search was carried out, therefore, the jurisdiction of the AO is limited to the incriminating documents found during the course of search. Admittedly no incriminating material was found, therefore, no addition could have been made in the assessment completed u/s.153C of the Act as has been held by the Hon’ble Supreme Court in the case of Abhisar Buildwell (supra), however, the Hon’ble Apex Court further held that the AO is at liberty to take necessary action available under the other provisions of the Act such as Section 148 etc. if limitation permits. Therefore, by respectfully following the decision of the Hon’ble Supreme Court in the case of Abhishar Buildwell (supra), we find no error in the order of the ld. CIT(A) in allowing the appeals of the assesee for all the years under consideration, however, the AO is at liberty to take necessary action u/s.148 of the Act for those years where limitations are available with the department for taking such action. Thus, the sole ground raised in all the appeals of the revenue for all the years under consideration is dismissed. IT(SS)A No.01-05/CTK/2025 4 5. In the result, all the appeals of the revenue are dismissed. Order dictated and pronounced in the open court on 28/01/2025. Sd/- (MANISH AGARWAL) Sd/- (GEORGE MATHAN) लेखा सद\bय/ ACCOUNTANT MEMBER \u0001याियक \u0001याियक \u0001याियक \u0001याियक सद\bय सद\bय सद\bय सद\bय / JUDICIAL MEMBER कटक कटक कटक कटक Cuttack; \u0003दनांक Dated 28/01/2025 Prakash Kumar Mishra, Sr.P.S. आदेश आदेश आदेश आदेश क\u0002 क\u0002 क\u0002 क\u0002 \u0003ितिलिप \u0003ितिलिप \u0003ितिलिप \u0003ितिलिप अ\tेिषत अ\tेिषत अ\tेिषत अ\tेिषत/Copy of the Order forwarded to : आदेशानुसार आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, (Assistant Registrar) आयकर आयकर आयकर आयकर अपीलीय अपीलीय अपीलीय अपीलीय अिधकरण अिधकरण अिधकरण अिधकरण, कटक कटक कटक कटक/ITAT, Cuttack 1. अपीलाथ\u0007 / The Appellant- ACIT, Central Circle, Cuttack 2. \b\tयथ\u0007 / The Respondent- Khirod Nath, New Industrial Estate, Jagatpur, Cuttack-754021 3. आयकर आयु\u0006(अपील) / The CIT(A), 4. आयकर आयु\r / CIT 5. िवभागीय \u0010ितिनिध, आयकर अपीलीय अिधकरण, कटक कटक कटक कटक / DR, ITAT, Cuttack 6. गाड\u0010 फाईल / Guard file. स\tयािपत \bित //True Copy// "