DCIT CC-1(4),KOLKATA, KOLKATA V. PARVATI RESOURCES PVT LTD, KOLKATA

ITSSA 63/KOL/2024

AI Insights

The case involves multiple appeals by the revenue against the orders of the Ld. CIT(A), which pertained to different assessment years but involved similar issues regarding the additions made under section 68 of the Income Tax Act, 1961. The primary contention was the addition of Rs.1,35,00,000 concerning bogus unsecured loans and share capital/share premium. The Tribunal noted that the assessments in question were unabated at the time of the search, and no incriminating materials were found to justify the additions. The Tribunal referenced the Supreme Court's decision in 'Pr. CIT Vs. Abhiser Buildwell (P) Ltd.' to support its conclusion that additions in unabated assessments must be based on materials seized during the search.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 41198 (ITAT-KOLKATA)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-12-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Other Referred Cases: Pr. CIT Vs. Abhiser Buildwell (P) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHENDU DATTA
• Assessee Lawyers: MANISH TIWARI
• Keywords: Condonation of delay; Bogus
• Section: 143(2); 132; 153A; 139(1); 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA [Before Shri Rajesh Kumar, AM& Shri Pradip Kumar Choubey, JM] I.T(SS)A. No. 60/Kol/2024 Assessment Year: 2019-20 DCIT, Central Circle-1(4), Kolkata Vs. PS Primarc Projects LLP 6A, Elgin Road, Bhowanipore, Kolkata-700020. (PAN: AAQFP9146A) Appellant Respondent & I.T(SS)A. No. 66/Kol/2024 Assessment Year: 2017-18 DCIT, Central Circle-1(4), Kolkata Vs. Primarc Projects Pvt. Ltd. Primarc Square, 7th Floor, LA-1, Salt lake City, Broadway Road, Bidhan Nagar, North 24 Parganas-700098. (PAN: AADCP8058P) Appellant Respondent & I. T(SS).A. Nos. 63 & 67/Kol/2024 Assessment Years: 2014-15 & 2015-16 DCIT, Central Circle-1(4), Kolkata Vs. Parvati Resources Pvt. Ltd. 6A, Elgin Road, Bhowanipore, Kolkata-700020. (PAN: AACCP4827F) Appellant Respondent Date of conclusion of Hearing 18.12.2024 Date of Pronouncement 30.12.2024 For the Assessee Shri Manish Tiwari, FCA For the Revenue Shri Subhendu Datta, CIT, DR ORDER Per Shri Rajesh Kumar, AM All these captioned appeals filed by the revenue are against the separate orders of Ld. CIT(A), Kolkata-20 dated 27.12.2023 & 28.12.2023 for Assessment Years 2019-20 & 2017- 2 IT(SS)A No. 60,66,63& 67/Kol/2024 AYs 2019-20, 2017-18, 2014-15 & 2015-16 18 & dated 29.12.2023 for AYs 2014-15 & 2015-16 arising out of separate assessment orders passed u/s. 153A/143(3) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) by DCIT, Central Circle-1(4), Kolkata all evenly dated 31.03.2022. Since the appeals either relate to the same assessee or to a related entity and also involved common issues , therefore these are clubbed together and decided together by this common order for the sake of brevity and convenience. 2. At the outset we note that the revenue appeal for the Assessment Years 2014-15 and 2019-20 are time barred by 91 and 93 days respectively. Applications for condonation of delay have been filed by the revenue stating the administrative reasons for filing the appeals with delay. Considering the application of the revenue, we find the reasons to be sufficient , genuine and bona fide and accordingly we condone the delay and admit the appeals of the revenue for adjudication. ITA No.60/Kol/2024 A.Y.2019-20. 3. The revenue has filed appeal before us challenging the deletion of addition to the tune of Rs.1,35,00,000/- by Ld. CIT(A) as made by the AO u/s. 68 of the Act in respect of bogus unsecured loans. 4. The facts in brief are that the assessee filed the return of income u/s. 139(1) of the Act on 30.10.2019 declaring total income of Rs. 8,900/-. A search action u/s. 132 of the Act was conducted on 05.01.2021 and subsequent dates on the assessee. Accordingly notice u/s. 153A of the Act was issued which was duly served. The assessee complied with the said notice by filing a return of income declaring same income as was shown in the original return. Thereafter, statutory notices were issued along with questionnaires which were duly complied and replied by the assessee. Pertinent to state that the impugned assessment is an unabated assessment on the date of search as there were no pending proceeding on the date of search and also the time period prescribed under the Act for issuing notice u/s. 143(2) had also expired. The AO after taking into account the contentions and submissions of the assessee made two additions to the income of the assessee namely (i) in respect of share capital /share 3 IT(SS)A No. 60,66,63& 67/Kol/2024 AYs 2019-20, 2017-18, 2014-15 & 2015-16 premium of Rs.1,35,00,000/- and (ii) in respect of estimated commission for arranging bogus entries of share capital of Rs.67,500/-. 5. The Ld. CIT(A) in the appellate proceeding allowed the appeal of the assessee on legal issue as well as on merit. So far as the legal issue is concerned, Ld. CIT(A) directed the AO to delete the addition in respect of share capital/share premium and also in respect of estimated commission on the ground that the additions were not linked to any incriminating materials found and seized during the course of search but are based on post search enquiries and statements recorded during that enquiry. On merits ld. CIT(A) deleted the additions on the ground that the assessee has proved the necessary ingredients as envisaged u/s 68 of the Act and AO has not brought any substantive materials/evidences on records to the contrary. 6. After hearing the rival contentions and perusing the material available on record, we find that the return of income was filed u/s 139(1) of the Act on 30.10.2019. A search action u/s 132(1) was conducted on the assessee on 05.01.2021. So on the date of search there were no pending proceedings before the AO qua this assessment year and also that the time limit for issuing notice u/s 143(2) had already expired. Therefore the impugned assessment was unabated on the date of search or had attained finality in terms provisions of section 153A of the Act. Now the issue before us for adjudication is whether the AO has jurisdiction to make additions without there being any incriminating materials seized during the search. In our opinion the addition in case of unabated assessment can only be made with reference to incriminating materials seized during search and not otherwise. We note that in the appellate order, Ld. CIT(A) has clearly recorded a finding of fact that AO has not referred to any incriminating materials found during the course of search qua the share capital/share premium and qua commission paid on for arranging entries of share capital/share premium. Accordingly, we are in agreement with the Ld. CIT(A) that addition in case of unabated assessment year can only be made on the basis of search material found and seized during search. The case of the assessee is squarely covered by the decision of Hon’ble Supreme Courtin the case of “Pr. CIT Vs. Abhiser Buildwell (P) Ltd.” [2023] 149 taxmann.com 399 (SC), wherein the Hon’ble Supreme Court has held that in the case of non-abated/completed assessments, no addition can be made by the Assessing Officer in an assessment carried out 4 IT(SS)A No. 60,66,63& 67/Kol/2024 AYs 2019-20, 2017-18, 2014-15 & 2015-16 u/s.153A of the Act in the absence of any incriminating material found during the search action which has been respectfully followed by the ld. CIT(A) while deleting the additions. Accordingly, the order passed by the ld CIT(A) appears to be correct and therefore the appeal of the revenue is dismissed by upholding the order of ld. CIT(A). 7. The issues raised in all other appeals in ITA No. 63,67 & 66/Kol/2024 for A.Y. 2014- 15,2015-16 and 2017-18 are substantially similar as decided by us in ITA No. 60/Kol/2024 A.Y. 2019-20 , therefore our decision in ITA No. 60/Kol/2024 would apply, mutatis mutandis, to other appeals as well. Accordingly, all the appeals of the revenue are dismissed. 8. In the result, appeals of the revenue are dismissed. Order is pronounced in the open court on 30th December, 2024 Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) Judicial Member Accountant Member Dated: 30th December, 2024 JD, Sr. PS Copy of the order forwarded to: 1. Appellant–DCIT, Central Circle-1(4), Kolkata. 2. Respondent – PS Primarc Projects LLP, Primarc Projects Pvt. Ltd., Parvati Resources Pvt. Ltd. 3. CIT(A), Kolkata-20 4. Pr. CIT 5. DR, ITAT, Kolkata, True Copy By Order Assistant Registrar ITAT, Kolkata Bench, Kolkata "