DCIT, New Delhi V. Sh. Gaurav Arora, New Delhi

ITA 2032/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3300 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 13-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Deemed dividend
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER AND SH. L. P. SAHU, ACCOUNTANT MEMBER ITA NO. 2032/DEL/2016 (ASSESSMENT YEAR: 2009-10) DEPARTMENT BY : MS. RACHNA SINGH, CIT DR ASSESSEE BY : MS. RANO JAIN, CA DATE OF HEARING : 15.11.2017 DATE OF PRONOUNCEMENT : 17.11.2017 O R D E R PER BHAVNESH SAINI, J.M : 1. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(A)XXX, NEW DELHI, DATED 22.01.2016 FOR ASS ESSMENT YEAR 2009-10. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ORIGINAL RE TURN OF INCOME WAS FILED ON 15.03.2010 DECLARING INCOME AT RS. 1,0 7,26,905/-. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 1 43(2) WAS ISSUED ON 01.09.2010. ASSESSMENT U/S 143(3) WAS COM PLETED VIDE ORDER DATED 13.12.2011 AT RETURNED INCOME OF RS. 1, 07,26,905/-. SUBSEQUENTLY, SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT TOOK PLACE ON 30.03.2012 AND NOTICE U/S 153A WAS ISSUED ON 05.08.2013. IN RESPONSE TO THE NOTICE U/S 153A, RET URN OF INCOME WAS FILED ON 06.09.2013, DECLARING TOTAL INCOME AT RS. D CIT CENTRAL CIRCLE 29, ROOM NO. 318, 3 RD FLOOR, ARA CENTRE, JHALDEWALAN EXTN. NEW DELHI VS. GAURAV ARORA FA-45 SHIVAJI ENCLAVE NEW DELHI GIR/PAN: ADQPA7169R (APPELLANT) (RESPONDENT) 2 ITA NO. 2032/DEL/2016 1,07,26,905/-. ASSESSMENT U/S 153A WAS COMPLETED VI DE ORDER DATED 31.03.2015 AT TOTAL INCOME OF RS. 19,06,41,60 0/- AFTER MAKING ADDITION ON ACCOUNT OF DEEMED DIVIDEND U/S 2 (22)(E) OF THE IT ACT OF RS. 17,19,14,701/-. THE ASSESSEE CHALLENG ED THE VALIDITY OF THE ASSESSMENT AND ABOVE ADDITION BEFORE LD. CIT (A). THE ASSESSEE APART FROM MAKING VARIOUS SUBMISSIONS SUBM ITTED THAT ADDITION U/S 2(22)(E) OF THE ACT AS DEEMED DIVIDEND WOULD NOT BE MADE IN THE HANDS OF THE ASSESSEE IN THE ABSENCE OF INCRIMINATING DOCUMENTS FOUND DURING THE SEARCH AND SEIZURE ACTIO N. THE ASSESSEE RELIED UPON THE DECISION OF DELHI HIGH COU RT IN THE CASE OF CIT VS. KABUL CHAWLA 380 ITR 573. 3. LD. CIT(A) CONSIDERING EXPLANATION OF THE ASSESSEE FOUND THAT SINCE ORIGINAL ASSESSMENT U/S 143(3) WAS COMPLETED ON 13.12.2011 PRIOR TO THE SEARCH THEREFORE, ASSESSMENT WAS COMPL ETED AND NO ASSESSMENT WAS PENDING ON THE DATE OF SEARCH. IT WA S ALSO FOUND THE ADDITION MADE BY THE AO IS NOT BASED ON ANY INC RIMINATING DOCUMENTS/SEIZED MATERIAL FOUND DURING THE SEARCH A ND SEIZURE ACTION U/S 132 OF THE ACT ON 30.03.2012. LD. CIT(A) , THEREFORE, FOUND THAT SINCE NO ASSESSMENT WAS PENDING AT THE T IME OF INITIATION OF ACTION U/S 132 ON 30.03.2012 AND ALSO ADDITION U/S 2(22)(E) OF THE IT ACT IS NOT BASED ON ANY INCRIMIN ATING DOCUMENTS, THEREFORE, ISSUE IS COVERED AGAINST THE REVENUE BY JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABU L CHAWLA (SUPRA), THE APPEAL OF THE ASSESSEE WAS ACCORDINGLY ALLOWED. 4. AFTER CONSIDERING THE RIVAL CONTENTION, WE ARE O F THE VIEW THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY JUDGM ENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA ( SUPRA ) IN WHICH IT WAS HELD : 3 ITA NO. 2032/DEL/2016 IT: COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y ASSESSING OFFICER WHILE MAKING ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATIN G MATERIAL UNEARTHED DURING THE COURSE OF SEARCH WHIC H WAS NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN COURSE OF ORIGINAL ASSESSMENT. 5. SINCE IN THIS CASE, ORIGINAL ASSESSMENT WAS COMP LETED ON THE DATE OF SEARCH AND NO INCRIMINATING MATERIAL WAS FO UND DURING THE COURSE OF SEARCH TO MAKE ADDITION U/S 2(22)(E) OF THE IT ACT, LD. CIT (A) CORRECTLY DELETED THE ADDITION. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.11.2017. SD/- SD/- (L. P. SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 17.11.2017 @M!T