Sh. Ramesh Mittal, Panchkula V. ACIT, Chandigarh

ITA 232/CHANDI/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6550 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH ABROL
• Keywords: Unexplained cash credit; Search and seizure; Question of law
• Section: 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.232/CHD/2014 ASSESSMENT YEAR: 2003-04 SH. RAMESH MITTAL VS. THE DCIT H.NO. 515, SECTOR-16 CENTRAL CIRCLE-II PANCHKULA CHANDIGARH PAN NO. AFSPM4366A (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. NEERAJ JAIN REVENUE BY : SH. ASHISH ABROL DATE OF HEARING : 28/11/2017 DATE OF PRONOUNCEMENT : 30/11/2017 ORDER PER B.R.R. KUMAR A.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)(CENTRAL), GURGAON DT. 10/10/2013. 2. IN THIS APPEAL ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE ORDER OF LD. COMMISSIONER ON INCOME (APPEA L) (CENTRAL), GURGAON IS CONTRARY TO THE FACTS OF THE CASE AND LEGALLY INCOR RECT AND WITHOUT ANY BASIS OF PROPER JUSTIFICATION. 2. THAT THE LD. COMMISSIONER ON INCOME (APPEAL) (CENTR AL), GURGAON GROSSLY ERRED AND HIS ACTION IS UNJUSTIFIED AND ILLEGAL IN ADDITION OF RS. 1,09,200/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68, AS IN RE PLIED BY THE ASSESSEE THAT CERTAIN UNSECURED LOAN DID NOT PERTAIN TO THIS YEAR , RATHER THOSE WERE JUST CARRY FORWARD OF SOME OUTSTANDING UNSECURED LOANS, PROVID ED HIMSELF BY THE ASSESSEE. THERE WAS NO CREDIT DURING THE YEAR RELATING TO THO SE ENTRIES. MOREOVER SECTION 68 DID NOT APPLY TO ASSESSEE, BUT LD. CIT (A) IGNORED IT. SO, THIS ADDITION IS HIGHLY UNJUSTIFIED. THEREFORE, THE ADDITION OF RS. 1,09,20 0/- IS PRAYED TO BE DELETED. 3. THAT THE LD. COMMISSIONER ON INCOME (APPEAL) (CENTR AL), GURGAON GROSSLY ERRED AND HIS ACTION IS UNJUSTIFIED AND ILLEGAL IN ADDITION OF RS. 94,000/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 ON THE BASIS OF B ANK STATEMENT. AS IN REPLIED BY THE ASSESSEE THAT SECTION 68 DID NOT APPLY TO ASSES SEE, BUT LD. CIT (A) IGNORED IT. SO, THIS ADDITION IS HIGHLY UNJUSTIFIED. THEREFORE, THE ADDITION OF RS. 94,000/- IS PRAYED TO BE DELETED. 4. CHARGING INTEREST UNDER SECTION 234 A, 234 B AND 23 4 C ARE NOT WARRANTED DUE TO THE FACTS OF THE CASE. 5. INITIATION OF PENALTY UNDER SECTION 271 (I )(C ) IS ALSO NOT WARRANTED DUE TO THE FACT THAT NOTHING HAS BEEN CONCEALED AND THE ADDITI ON IS ONLY ON THE ARBITRARY 2 AND AD HOC BASIS WITHOUT ANY LEGAL JUSTIFICATION AN D PURELY ON THE IMAGINATION AND BASED ON PARTICULAR MINDSET OF LD. A.O. FOR ADD ITIONS IN THE CASE. 3. THE ASSESSEE HAS FILED ADDITION GROUNDS OF APPEA L FOR THE AY 2003-04 WHICH ARE AS UNDER: 1. THAT THE ISSUE OF NOTICE UNDER SECTION 153-A AND AS SESSMENT MADE IN PURSUANT THERETO IS BAD IN LAW AND INVALID AND ALSO NO ADDITIONS CAN BE MADE, WHEN DURING SEARCH, NO DOCUMENT MUCH LESS INCRIMINATING MATERIAL WAS FOUND AND ALSO NO ASSESSMENT FOR RELEVANT ASSESSMENT YEAR WAS PENDING ON THE DATE OF INITIATION OF SEARCH. 2. THAT THE ASSESSMENT UNDER SECTION 153-A ON THE BASI S OF SEARCH ACTION UNDER SECTION 132 CANNOT BE EQUATED TO REGULAR ASSESSMENT. 4. THE LD. AR ARGUED THAT THIS IS A NEW LEGAL GROUN D OF APPEAL WITH REGARD TO THE FACTS THAT, SINCE NO INCRIMINATING MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH AND AS SUCH NO ADDITION COULD BE MADE AS MADE BY THE AO. RELIANCE IS BEING PLACED ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT 229 ITR 383, IN WHICH, IT HAS BEEN HELD AS UNDER: APPEAL(TRIBUNAL)- ADDITIONAL GROUND- NOT RAISED B EFORE CIT(A)- TRIBUNAL DECLINED TO ENTERTAIN THE SAME-NOT JUSTIFIED- TRIBUNAL HAS J URISDICTION TO EXAMINE A QUESTION OF LAW WHICH ARISES FROM THE FACTS AS FOUND BY THE AUTHORITIES BELOW AND HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESSEE. 5. THE LD. DR OBJECTED TO THE ADDITIONAL GROUND TAK EN WHICH HAVE BEEN OVERRULED IN VIEW OF THE JUDGMENT OF THE HONBLE SU PREME COURT. 6. BRIEF FACTS OF THE CASE ARE THAT, A SEARCH UNDER SECTION 132(1) OF THE INCOME TAX ACT, 1961 WAS CONDUCTED ON M/S MITTAL GR OUP OF CASES ON 16/01/2009 BY THE INVESTIGATION WING OF INCOME TAX DEPARTMENT. AND THE ASSESSE RESIDENCE WAS ALSO COVERED DURING THE SEARC H. 7. DURING THE ASSESSMENT PROCEEDING UNDER SECTION 1 53A VIDE THE ASSESSMENT ORDER DT. 25/08/2011 THE ASSESSING OFFIC ER HAS MADE ADDITION ON ACCOUNT OF UNSECURED LOANS OF RS. 1,09,200/- AND RS . 94,000/- ON ACCOUNT OF DEPOSIT IN THE SAVING BANK ACCOUNT NO. 6270 MAINTAI NED BY THE ASSESSEE WITH THE BANK OF INDIA. 8. THE MATTER WENT BEFORE THE CIT(A) WHEREIN THE AD DITION ON ACCOUNT OF UNSECURED LOANS AND DEPOSIT IN SAVING BANK ACCOUNT HAVE BEEN CONFIRMED. 9. BEFORE US, THE LD. AR ARGUED THAT THE ADDITION M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNSECURED LOANS AND DEPOSIT I N THE SAVING BANK ACCOUNT DO NOT EMANATE FROM THE MATERIAL FOUND AND SEIZED D URING SEARCH AND SEIZURE OPERATION. THIS FACT COULD NOT BE CONTROVERTED BY THE REVENUE BY WAY OF ANY PRODUCTION OF SEIZED MATERIAL PERTAINING TO THE ADD ITIONS MADE. 3 10. WE HAVE HEARD THE SUBMISSIONS. WE FIND THAT IT IS NOT IN DISPUTE THAT THE ADDITIONS MADE WERE ON ACCOUNT OF ENTRIES DEPICTED IN THE BALANCE SHEET AND THE PASS BOOK AND ARE NOT BASED ON ANY INCRIMINATIN G MATERIAL SEIZED DURING THE SEARCH. IN THE FACE OF THESE FACTS WE FIND THAT THE ISSUE IS COVERED BY THE ENTIRE GAMUT OF SECTION 153(A), 153(B) AND 153(C), CASE OF CIT VS. KABUL CHAWLA, 61 TAXMANN.COM 412(DELHI), CIT VS. RRJ SECURITIES 3 80 ITR 612 AND PR. CIT VS. LATA JAIN IN ITA NO. 274/2016 DT. 29/04/2016 THE DECISIO N LAY DOWN THE PROPOSITION THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL F OUND DURING THE COURSE OF SEARCH AND WHERE THE ASSESSMENT PROCEEDING HAVING N OT BEEN ABATED AT THE TIME OF SEARCH, THE AO HAS NO JURISDICTION TO MAKE THE ADDITION UNDER SECTION 153A. THIS RATIO IS APPLICABLE IN THE CASE OF THE A SSESSEE FOR THE AY 2003-04. RELIANCE HAS ALSO BEEN PLACED ON THE ORDER OF ITAT CHANDIGARH BENCH IN ITA NO. 433 TO 437/CHD/2014 FOR AY 2008-09 IN THE CASE OF M /S MALA BUILDERS PVT. LTD. VS. ACIT WHEREIN THE ISSUE OF ADDITION OR DISALLOWANCE IN ASSESSMENT CAN BE MADE OR NOT IN THE ABSENCE OF THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH HAS BEEN EXTENSIVELY DISCUSSED. HENCE, THE A DDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNSECURED LOANS AND DEPOSIT IN SAVING BANK ACCOUNT IN THIS ASSESSMENT YEAR WHEREIN NO ASSESSME NT PROCEEDINGS WERE PENDING HITHERTO STANDS DELETED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (B.R.R.KUM AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30/11/2017 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR