DCIT, CC-31, New Delhi V. Trishul Homes and Infrastructure Pvt. Ltd, New Delhi

ITA 1614/DEL/2021

AI Insights

The case involves an appeal by the Revenue against the decision of the CIT (A) which had deleted an addition of Rs.29,23,50,000 made by the AO on account of unsecured loans taken by the assessee, Trishul Homes and Infrastructure Pvt. Ltd. The addition was initially made by the AO following a search operation under section 153A of the Income-tax Act, 1961. The CIT (A) found that the addition was not based on any incriminating material found during the search, referencing the decision in CIT vs. Kabul Chawla. The Revenue contested this decision, citing an ongoing Supreme Court review of the Kabul Chawla case, but the Tribunal upheld the CIT (A)'s decision, emphasizing the lack of incriminating evidence and the completed nature of the assessment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 114003 (ITAT-DELHI)
• Duration Of Justice: 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 11-12-2022
• Assessment Year: misc
• Appeal Filed On: 01-12-2022
• Other Referred Cases: CIT vs. Kabul Chawla, APAR Industries Ltd. vs. CIT, Meeta Gutgutia vs. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 68; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘H’ : NEW DELHI) SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER and SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.1614/Del./2021 (ASSESSMENT YEAR : 2014-15) DCIT, CC – 31, vs. Trishul Homes and Infrastructure Pvt. Ltd., New Delhi. 101-102, Rohit House, 3, Tolstoy Marg, Connaught Place, New Delhi – 110 001. (PAN : AAECT5592R) CO No.150/Del/2022 (in ITA No.1614/Del./2021) (ASSESSMENT YEAR : 2014-15) Trishul Homes and Infrastructure Pvt. Ltd., vs. DCIT, CC – 31, 101-102, Rohit House, New Delhi. 3, Tolstoy Marg, Connaught Place, New Delhi – 110 001. (PAN : AAECT5592R) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Ved Jain, Advocate Shri Aman Garg, CA Ms. Richa Mishra, Advocate REVENUE BY : Shri Kailash Dan Ratnoo, CIT DR Date of Hearing : 12.12.2022 Date of Order : 15.12.2022 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the Revenue and cross objection by the assessee is directed against the order of the ld. CIT (Appeals)-30, New Delhi dated 27.08.2021 for the assessment year 2014-15. ITA No.1614/Del./2021 2 2. The grounds of appeal taken by the Revenue read as under :- “1. That on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.29,23,50,000/- made by the AO on account of unsecured loan, taken by the assessee. 2. That on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law and on facts in deleting the addition relying on the decision of Kabul Chawla, without appreciating the fact that the Hon'ble Supreme Court of India has admitted SLP vide Diary No. 37848/2015 in the case of APAR Industries Ltd. decided by Hon'ble Bombay High Court in ITA No. 1669 of 2013 dated 08.05.2015 which is a led cases tagged with more than 115 issues on the issue of restriction of additions only to incriminating materials found during search. Therefore, withdrawal of SLP in the case of Kabul Chawla on account of Low Tax Effect leading to reporting of dismissal SLP by Hon'ble Supreme Court is mitigated by admission SLP by Hon'ble Supreme Court in the case of APAR Industries Ltd as mentioned above, tagged with 115 cases as a lead case. 3. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law. 4. That the grounds of appeal are without prejudice to each other.” 3. Brief facts of the case are that a search was conducted on 14.09.2017 at the business premises of the assessee. Pursuant thereto, notice under section 153A of the Income-tax Act, 1961 (for short 'the Act') was sent. AO asked the assessee to file details of advances received amounting to Rs.29,23,50,000/-. In response, assessee gave the details and also submitted that no incriminating documents regarding these have been found during the course of search and assessee also referred to the decision of Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla 380 ITR 173 (Del.). However, AO was not convinced. He held that assessee has not submitted the ITR, Bank statement, confirmation, etc. and hence assessee has not proved the genuineness and creditworthiness of the lenders who have given advances to the assessee and proceeded to make the impugned addition. AO also noted that SLP ITA No.1614/Del./2021 3 has been admitted in the Hon’ble Supreme Court against the Hon’ble Delhi High Court decision in the case of CIT vs. Kabul Chawla. 4. Upon assessee’s appeal, ld. CIT (A) accepted the contention that no incriminating material was found pertaining to the addition made by the AO u/s 153A. That this was completed assessment and hence de hors any incriminating material, no addition can be made. Ld. CIT (A) referred to case laws and finally concluded as under :- “To summarize, in the judgement of Hon'ble Delhi High Court in case of CIT vs Kabul Chawla reported as 380 ITR 573(Delhi) as referred above, it has been held that completed assessments can be interfered with by the A.O. while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of document or undisclosed incomes or property-discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. The Hon'ble Supreme Court in the case of MeetaGutgutia [2018] 96 taxmann.com 468(SC) upheld the decision of the Hon’ble High Court of Delhi on the issue in the case of MeetaGutgutia, reported as 395 ITR 526 (Delhi), order dated 25.05.2017 on the same issue. The aforesaid judgement has lucidly pronounced that the case of completed assessment may be interfered only on the basis of some incriminating material found during the course of search. I find that the addition u/s 68 of the Act amounting to Rs.29,23,50,000/- made on account of advances received by the appellant during the year under consideration is not based upon any incriminating material or documents found during the course of search. In fact, the assessment order does not refer to any seized or incriminating material found during the course of search in respect of the addition of Rs.29,23,50,000/- made on account of advances received by the appellant during the year under consideration. The position of law that addition can be made only on the basis of incriminating material etc. found during the course of search has been laid down by the Hon'ble jurisdictional High Court. As discussed above, the AO has not referred to any incriminating material which was impounded during the course of search proceedings relating to the said addition of Rs.29,23,50,000/-. The year under consideration i.e., AY 2014- 15 is a completed assessment. Respectfully following the judgements as ITA No.1614/Del./2021 4 elaborated above, I hold that since no incriminating documents was found during the course of search, pertaining to the said addition made by the A.O., therefore the said addition is not sustainable. Accordingly, the addition of Rs.29,23,50,000/- by the AO is hereby deleted.” 5. Against the above order, Revenue is in appeal before us and assessee has filed cross objections. We have heard both the parties and perused the records. 6. In the grounds of appeal itself, Revenue has contended that Revenue has not accepted the decision of Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) and SLP in this regard has been admitted by Hon’ble Supreme Court. The same was reiterated by the ld. CIT DR who also insisted that provisions of section 153A do not bar the applicability of other sections i.e. section 68 in this case and AO has been correct in invoking the provisions of section 68 for the advances received. 7. Per contra, ld. Counsel for the assessee submitted that the issue is squarely covered by the decision of Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra). 8. Upon careful consideration, we note that filing of SLP and admission thereof by the Hon’ble Supreme Court cannot permit us to depart from the decision of Hon’ble Delhi High Court decision in the case of CIT vs. Kabul Chawla whose operation has not been stayed by the Hon’ble Supreme Court. It is an admitted fact of this case that addition ITA No.1614/Del./2021 5 was made de hors of incriminating material found during search and it was a completed assessment, hence it was an unabated assessment. In such factual background, the ratio of the abovementioned case of Hon’ble jurisdictional High Court applies on all fours. In this view of the matter, we do not find any infirmity in the order of the ld. CIT (A). Accordingly, we uphold the same. 9. The grounds raised in the cross objections filed by the assessee read as under :- “On the facts and circumstances of the case, the assessment order is null and void as the same is in violation of CBDT Circular No.19/2019 requiring mandatory DIN.” 10. At the outset, ld. Counsel for the assessee submitted that he is not pressing the cross objections. Hence, cross objection filed by the assessee is dismissed as not pressed. 11. In the result, both the appeal filed by the Revenue and the cross objections filed by the assessee are dismissed. Order pronounced in the open court on this 15 th day of December, 2022. Sd/- sd/- (ANUBHAV SHARMA) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated the 15 th day of December, 2022 TS ITA No.1614/Del./2021 6 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A)-32, New Delhi. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.