DCIT, NEW DELHI V. M/S. GANPATI FINCAP PVT LTD., NEW DELHI

ITA 6232/DEL/2015

AI Insights

The case involves appeals by the Department of Revenue against Ganpati Fincap Pvt. Ltd. concerning the additions made to the company's income for the assessment years 2008-09 to 2010-11. The additions were initially made by the Assessing Officer following a search and seizure operation under section 132 of the Income Tax Act, 1961, and a subsequent survey under section 133A. The Commissioner of Income Tax (Appeals) later deleted these additions, leading to the Department's appeal. The Tribunal's decision was based on the absence of incriminating material and the fact that no assessments were pending at the time of the search.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312895 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Other Referred Cases: Abhisar Buildwell (P.) Ltd. vs. CIT, CIT vs. Kabul Chawla
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAHESH KUMAR
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Corroborative evidences; Unexplained expenditure; Document seized; Documents seized; Search and seizure
• Section: 132; 153A; 133A

Judgement Text

" 1 ITA No. 6232, 6233 & 6234/Del/2015 C.O. Nos. 464, 465 & 466/Del/2015 DCIT M/s GanpatiFincap Pvt. ltd. Vs. IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘G’ NEW DELHI) BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SH. YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 6232/Del/2015 (A.Y. 2008-09) ITA No. 6233/Del/2015 (A.Y. 2009-10) ITA No. 6234/Del/2015 (A.Y. 2010-11) DCIT Central Circle- 18, room No. 102, ARA Centre, E-2, Jhandewalan Extension, New Delhi Vs. Ganpati Fincap Pvt. Ltd. 2-D, MIG DDA Flats, Gulabi Bagh New Delhi PAN: AAACG3466H Appellant Respondent C.O No. 464/Del/2015 in ITA No. 6232/Del/2015) C.O No. 465/Del/2015 in ITA No. 6233/Del/2015) C.O No. 466/Del/2015 in ITA No. 6234/Del/2015) Ganpati Fincap Pvt. ltd. 2-D, MIG DDA Flats, GulabiBagh New Delhi PAN: AAACG3466H Vs. DCIT Central Circle- 18, Room No. 102, ARA Centre, E-2, Jhandewalan Extension, New Delhi Appellant Respondent Assessee by Dr. Rakesh Gupta, Advocate and Sh. Deepesh Garg, Advocate Revenue by Sh. Mahesh Kumar, CIT(DR) Date of Hearing 28/04/2025 Date of Pronouncement 30/04/2025 2 ITA No. 6232, 6233 & 6234/Del/2015 C.O. Nos. 464, 465 & 466/Del/2015 DCIT M/s GanpatiFincap Pvt. ltd. Vs. ORDER PER YOGESH KUMAR, U.S. JM: All the above captioned Appeals and Cross Objections are filed by the Department of Revenue and the Assessee respectively against the order of the Commissioner of Income Tax (Appeals), (‘Ld. CIT(A)’ for short) Delhi dated 28/09/2015 for the Assessment Years2008-09 to 2010-11 respectively. 2. In all the above Appeals are having identical issues except the amount of the additions made thereon and the facts of the case are also identical, for the sake of convenience, brief facts of the case as mentioned in the order of the Ld. CIT(A) for Assessment Year 2008-09 are considered and which are reproduced as under:- “2. The brief facts of the case, as culled out from the assessment order, are That appellant is a private limited company incorporated on 9th Jan, 1996 and, has its registered office at 2-D, MIG, DDA Flats, GulabiBagh, New Delhi-110007. That for the captioned assessment year 2012-13, the appellant company had filed return of income on 29.10.2013 declaring an income of Rs.33,06,787/-. The return of income dated 29.10.2013 was duly filed along with Audit Report, Balance Sheet, Profit & Loss Account for the financial year 2011-12. The case was selected for scrutiny and the learned AO issued notice u/s 143(2) of the Act on 26.07.2014. The impugned assessment order was passed on 02nd March, 2015 on an income of Rs.2,40,65,672/- wherein following addition was made:- (a) Unexplained expenditure claimed Rs. 12,02,279/- in the P & L account (b) Unexplained Deposits Rs. 1,95,56,696/-” 3 ITA No. 6232, 6233 & 6234/Del/2015 C.O. Nos. 464, 465 & 466/Del/2015 DCIT M/s GanpatiFincap Pvt. ltd. Vs. 3. The Ld. A.O. has also passed assessment ordersfor Assessment Year 2009-10 and 2010-11by making similar additions vide assessment orders dated 02/03/2015. 4. Aggrieved by the assessment orders dated 02/03/2015 for Assessment Years 2008-09 to 2011-12, the Assessee preferred Appeals before the Ld. CIT(A). The Ld. CIT(A) vide order dated 28/09/2015,deleted the additions made by the A.O. by allowing all the Appeals. As against the orders of the Ld. CIT(A) dated 28/09/2015, the Department of Revenue preferred the abovecaptioned Appeals. 5. The Assessee has also filed Cross-Objections by challenging the assumption of jurisdiction u/s 153C/143(3) of the Act for Assessment Year 2008-09 and 2009-10 and challenged assumption of jurisdiction in framing assessment u/Section 147/143(3) of the Act in A.Y 2010-11. 6. The Ld. Departmental Representative vehemently submitted that the order of the Ld. CIT (A) is erroneous as the Ld. CIT(A) erred in holding that proceedings u/s 153C of the Act were bad in law, further submitted that there were sufficient material available to initiate the proceedings u/s 153C of the Act, therefore, the Ld. CIT(A) committed error in deleting the addition. Thus, the Ld. Department's Representative sought for allowing the Appeal. 4 ITA No. 6232, 6233 & 6234/Del/2015 C.O. Nos. 464, 465 & 466/Del/2015 DCIT M/s GanpatiFincap Pvt. ltd. Vs. 7. Per contra, the Ld. Assessee's Representative submitted that the proceedings u/s 153C has been initiated de-hors any incriminating material found and seized during the search conducted u/s 132 of the Act and also a survey u/s 133A of the Act undertaken at residential and business premises of Raj Kumar and Anju Chawla. The Ld. Counsel has also made arguments on the cross objections filed by the Assessee and sought for dismissal of the Appeals filed by the Revenue and also sought for allowing the Cross-Objection filed by the Assessee. 8. We have heard both the parties and perused the material available on record. In the present case a search and seizure action u/s 132 of the Act also a survey u/s 133A of the Act were undertaken at the residential and business premises of Raj Kumar Chawla and Anju Chawla. A noticeu/s 153C of the Act was issued on 09/12/2010 which was received by the Assessee on 27/12/2010. The satisfaction has been recorded in the case of the Assessee by referring the documents at Page 13-14 page 15-16 and page 17-20 of Annexure-A, which are made the basis for initiating the assessment proceedings. 9. The Assessee has produced the seized documents along with the paper book before us. As could be seen from the seized document, copies of the schedules to Balance sheet and profit and loss account of 5 ITA No. 6232, 6233 & 6234/Del/2015 C.O. Nos. 464, 465 & 466/Del/2015 DCIT M/s GanpatiFincap Pvt. ltd. Vs. the Assessee Company as per books of Assessee company, which cannot be termed as incriminating documents. Page No. 21-25 and 26 are unsigned MOU between Subodh Kumar Gupta and Raj Kumar Chawla as guarantee for transferring Assessee Company. Since the those documents have no signature, which cannot be given any evidentiary value or infer against the Assessee and make addition in the absence of any other corroborative evidences. 10. As could be seen from the assessment order, the additions have been made on account of unexplained expenditure claimed in P &L account, unexplained deposits in bank and accounts and unexplained receipt of share application money and share premium etc., however, those additions have been made de-hors the incriminating material found during the course of search. 11. The Hon’ble Apex Court in the case of Abhisar Buildwell (P.) Ltd.[2023] 149 taxmann.com 399 (SC) dated 24.04.2023upheld the view of the Jurisdictional High Court in the case of CIT Vs. Kabul Chawla (61 Taxmann.com 412) (Delhi),that in the absence of any incriminatory seized material found during the course of search, no addition can be made in an assessment made u/s 153A of the Act where, on the date of search, no assessment is pending for the relevant Assessment Year. 6 ITA No. 6232, 6233 & 6234/Del/2015 C.O. Nos. 464, 465 & 466/Del/2015 DCIT M/s GanpatiFincap Pvt. ltd. Vs. 12. In the present case, the A.O. has not referred any incriminating material found during the course of search, which could be the basis for the impugned additions and the addition has been made de-hors any incriminating material found during the search. Taking into consideration that as on the date of search, no assessment proceedings were pending for the years under consideration, in our opinion, the Ld. CIT (A) has committed no error in quashing the assessment proceedings. By relying on the ratio laid down in the case of Kabul Chawla (supra), which has been upheld by the Hon'ble Supreme Court in the case of Abhisar Buildwell (supra), we find no merits in the Grounds of Appeal of the Revenue, accordingly, Appeal of the Revenue in ITA No. 6232/2015, 6233/Del/2015 and 6235/Del/2015 for Assessment Year 2008-09 to 2010-11are dismissed. 13. Since we have dismissed the captioned Appeals of Revenue, the Cross-Objection filed by the Assessee in C.O 464 to 466/Del/2015, are dismissed for having become in-fructuous. Order pronounced in the open court on 30th April , 2025 Sd/- Sd/- (M. BALAGANESH) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 30.04.2025 R.N, Sr.P.S* 7 ITA No. 6232, 6233 & 6234/Del/2015 C.O. Nos. 464, 465 & 466/Del/2015 DCIT M/s GanpatiFincap Pvt. ltd. Vs. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "