HITCHKI CREATION PVT. LTD.,DELHI V. DCIT, CENTRAL CIRCLE , NOIDA

ITA 8192/DEL/2018

AI Insights

Hitchki Creation Pvt. Ltd. appealed against the order of the CIT(A)-IV, Kanpur, which confirmed the additions made by the Assessing Officer (AO) under section 68 of the Income Tax Act. The additions pertained to unexplained investments in immovable property and disallowances of interest on loans, totaling Rs. 65,57,300 and Rs. 60,000 respectively. The Tribunal noted that these items were disclosed in the company's balance sheet and no incriminating material was found during the search operation that could justify the additions. The Tribunal relied on the Supreme Court's decision in CIT vs. Abhisar Buildwell Pvt. Ltd., emphasizing that incriminating material is essential for assessments under section 153A.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31589 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Other Referred Cases: CIT vs. Abhisar Buildwell Pvt. Ltd. 454 ITR 212 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Unexplained investment; Principle of natural justice; Search and seizure; Bogus
• Section: 143(3); 142(1); 143(2); 132; 153A; 68; 153C; 101

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA NO. 8192/Del/2018 A.YR. : 2011-12 HITCHKI CREATION PVT. LTD. 1ST FLOOR, PLOT NO. 09, 101 COMMUNITY CENTRE, SIKKA COMPLEX, PREET VIHAR, DELHI – 92 (PAN: AACCH4195C) VS. DCIT, CENTRAL CIRCLE, MEERUT AAYAKAR BHAWAN, 3RD FLOOR, BHAINSALI GROUND, MEERUT, UP - 250001 (APPELLANT) (RESPONDENT) Assessee by : Dr. Rakesh Gupta, Adv. & Sh. Somil Agarwal,, Adv. & Ms. Shilpa Gupta, CA Department by : Shri Dayainder Singh Sidhu, CIT(DR) Date of hearing : 20.03.2025 Date of pronouncement : 26.03.2025 ORDER PER SHAMIM YAHYA, AM : Assessee has filed the Appeal against the order dated 20.5.2019 passed by the Ld. CIT(A)-IV, Kanpur relating to assessment year 2011-12 on the following grounds:- 1. That having regard to the fact and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of Ld. AO in assuming jurisdiction u/s 153C and passing the impugned order is bad in law and void-ab-initio and that too when the jurisdictional conditions under section 153C of the Act were not met. 2) That in any case and in any view of the matter, the assessment framed under section 153C of the Act, is bad in law and against the facts and circumstances of the case. 2 3) That having regard to the facts and circumstances of the case CIT (A) has erred in law and on facts in confirming the action of the Ld. A.O. in making an addition of Rs.65,57,300/- u/s 68 of the Act, vide para 6 of the assessment order and more so when there was no incriminating material found as a result of search and that too without proper appreciation of facts on records and by recording incorrect facts and finding & making allegations without any basis, material or evidence. 4) That in any view of the matter and in any case the action of Ld. CIT (A) in confirming the action of Ld. AO in making an addition of Rs. 65,57,300/- is bad in law and against the facts and circumstances of the case. 5) That having regard to the fact and circumstances of the case Ld. A.O. has erred in law and on facts in holding that interest on loan debited to profit & loss account are not genuine and thus making an addition of Rs.60,000/- by stating incorrect facts and without any basis and more so when there was no incriminating material found as a result of search. 6) That in any view of the matter and in any case the action of Ld. CIT (A) in confirming the action of Ld. (AO) in making an addition of Rs. 60,000/- is bad in law and against the facts and circumstances of the case. 7) That having regard to the facts and circumstances of the case, Ld. CIT(A) has confirming the action of Ld. AO in passing the impugned assessment order without there being requisite approval in terms of section 153D and in any case approval if any is mechanical without application of mind and is no approval in the eyes of law. 8) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in passing the impugned order and that too without giving adequate opportunity of hearing and without observing the principle of natural justice. 9) That the appellant craves the leave to add, alter or amend the grounds of appeal at any stage and all the grounds are without prejudice to each other. 2. Brief facts of the case are that a search and seizure operation u/s 132 was conducted on 27.11.2014 in the case of Maconns, Meenu and Yadav Singh Group wherein certain incriminating documents were found & seized relating to the assessee. Thereafter, notice u/s 153C was issued on 27.06.2016. In response, assessee filed its return showing income of Rs. 4,57,650/-. Subsequently, notices u/s 143(2) and 142(1) were issued and 3 AO completed assessment by making addition of Rs. 65,57,300/-on account of unexplained investment in immoveable property u/s 68 of the Act & disallowance of Rs. 60,000/- on interest on loan. AO noted that the registered sale deed pertaining to immovable property was found. He referred the information about the share application money obtained by the assessee and observed that since the share applicants and lenders are found bogus /non-existent, therefore, the entire share application money / loan amounting to Rs. 65,57,300/- as unaccounted / unexplained investment u/s. 68 of the Act. Further AO noted that during the year under consideration, under the head administrative expenses, the assessee has debited Rs. 60,000/- as interest on loan, however, the loans are not found genuine and hence, claim of interest on the same was treated as bogus and accordingly disallowed. As a result, the income of the assessee was assessed at Rs. 70,74,950/-. u/s. 153C r.w.s. 143(3) of the Act. Aggrieved with the aforesaid, assessee preferred the appeal before the Ld. CIT(A), who vide his impugned order has confirmed the additions. 3. Against the above order, assessee is in appeal before us. 4. We have heard both the parties and perused the records. At the time of hearing, ld. Counsel for the assessee pleaded that the assessment was completed u/s. 153C without referring to any seized material on the basis of which the addition u/s. 68 of the Act has been made for share capital and interest on loan. He submitted that all these details were duly available in the balance sheet of the assessee, hence, he pleaded that addition on account of share application money and interest on unsecured loan is not being dehors the seized material found at the time of search. As regards property deed found is concerned, Ld. Counsel for the assessee submitted that the same was relating to building of the assessee which was also duly reflected in the balance sheet. 5. Per contra, Ld. DR could not controvert the submissions of the assessee. 4 6. Upon careful consideration, we find that in this case addition has been made on account of share application and unsecured loan interest relating to purchase of property. All these items were duly disclosed by the assessee in the balance sheet, hence, the submission of the ld. Counsel for the assessee is correct as no seized material was found on the basis of which the addition has been made. In this regard, we rely upon the decision of the Apex Court in the case of CIT vs. Abhisar Buildwell Pvt. Ltd. 454 ITR 212 (SC), wherein, the Hon’ble Apex Court has expounded that for assessment u/s. 153A incriminating material is a sine quo non and in the absence of incriminating material as referred, the assessment is bad in law. We hold and direct accordingly. 7. Since we have decided the aforesaid appeal on the legal ground only, in favour of the assessee therefore, the other Grounds raised by the Assessee have become academic and do not require any adjudication. 8. In the result, the appeal of the assessee is allowed. Order pronounced on 26/03/2025. Sd/- Sd/- (SUDHIR PAREEK) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER SRBhatnagar Copy forwarded to:- 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT Assistant Registrar "