M/s. Bhaumik Shelters (P) Ltd., New Delhi V. DCIT, New Delhi

ITA 2404/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6826 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-07-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 21-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: ABHISHEK ANAND AVOCATES
• Keywords: Search and seizure
• Section: 40A(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : A : NEW DELHI BEFORE SHRI R.S. SYAL, AM & MS SUCHITRA KAMBLE, JM ITA NO.2404/DEL/2014 ASSESSMENT YEAR : 2007-08 BHAUMIK SHELTERS (P) LTD., C/O RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-1, NEW DELHI. PAN: AACCB7554K VS. DCIT, CENTRAL CIRCLE-4, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. RAKESH GUPTA, SHRI SOMIL AGARWAL & SHRI ABHISHEK ANAND, AVOCATES DEPARTMENT BY : SHRI S.K. JAIN, DR DATE OF HEARING : 27.07.2016 DATE OF PRONOUNCEMENT : 28.07.2016 ORDER PER R.S. SYAL, AM: THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF TH E ORDER PASSED BY THE CIT(A) ON 24.12.2013 IN RELATION TO THE ASSESSM ENT YEAR 2007-08. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF A SUM OF RS.8,40,000/- U/S 40A(3) O F THE ACT ON THE ITA NO.2404/DEL/2014 2 GROUND THAT THE AO DID NOT HAVE ANY JURISDICTION TO PASS THE ASSESSMENT ORDER U/S 153A. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS ENGAGED IN PURCHASE AND SALE, EXCHANGE, LEASE, ETC. OF IMMO VABLE PROPERTY AND MOVEABLE PROPERTY. A SEARCH AND SEIZURE OPERATION U /S 132 OF THE ACT WAS CARRIED OUT ON 21.1.2011 IN DS GROUP OF CASES. IN RESPONSE TO NOTICE U/S 153A ISSUED ON 9.1.2012, THE ASSESSEE FI LED A RETURN OF INCOME DECLARING A LOSS OF RS.23,399/-. THE AO NOTICED DU RING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE MADE CERTA IN CASH PAYMENTS FOR PURCHASE OF LAND. HE INVOKED THE PROVISIONS OF SEC TION 40A(3) OF THE ACT AND MADE DISALLOWANCE FOR A SUM OF RS.8,40,000/ -. THE LD. CIT(A) CONFIRMED THE ADDITION ON MERITS. 4. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSE SSEE CONTENDED THAT THE DISALLOWANCE U/S 40A(3) IS NOT BASED ON ANY INC RIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IT WAS SUBMITTE D THAT SUCH A DISALLOWANCE IS UNWARRANTED BECAUSE THE ASSESSMENT FOR THE INSTANT YEAR ALREADY STOOD COMPLETED ON THE DATE OF SEARCH. IN SUPPORT OF THIS ITA NO.2404/DEL/2014 3 PROPOSITION, HE RELIED ON THE JUDGMENT OF THE HONB LE DELHI HIGH COURT IN CIT VS. KABUL CHAWLA (2016) 380 ITR 573 (DEL). IN THE OPPOSITION, THE LD. DR RELIED ON THE IMPUGNED ORDER. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE HONBLE DELHI HIGH COURT I N THE CASE OF KABUL CHAWLA (SUPRA) HAS HELD THAT NO ADDITION CAN BE MADE TO THE INCOM E ALREADY ASSESSED IF NO INCRIMINATING MATERIAL IS FO UND DURING THE SEARCH. THE ASSESSEE IN THE INSTANT CASE FILED ORIGINAL RET URN OF INCOME U/S 139(1) OF THE ACT ON 24.10.2005. A COPY OF THE RETURN PHY SICALLY RECEIVED BY THE DEPARTMENT ON 05.11.2005, IS PLACED ON RECORD. THE LD. AR CONTENDED THAT NO NOTICE U/S 143(2) WAS ISSUED BY T HE AO FOR THE INSTANT YEAR. THIS CONTENTION REMAINED UNCONTROVERTED ON B EHALF OF THE REVENUE. THIS SHOWS THAT THE ASSESSEE FILED ITS RE TURN U/S 139(1) OF THE ACT WHICH WAS DULY PROCESSED U/S 143(1) OF THE ACT, THEREBY ASSIGNING FINALITY TO THE ASSESSMENT, BECAUSE NO NOTICE U/S 1 43(2) WAS ISSUED FOR COMPLETING ASSESSMENT U/S 143(3). IT INDICATES THA T THE ASSESSMENT FOR THE INSTANT YEAR STOOD COMPLETED ON THE DATE OF SEA RCH. GOING BY THE ITA NO.2404/DEL/2014 4 VERDICT GIVEN BY THE HONBLE DELHI HIGH COURT IN TH E CASE OF KABUL CHAWLA (SUPRA) THAT NO ADDITION CAN BE MADE OTHERWISE THAN THOSE BASED ON INCRIMINATING MATERIAL FOUND DURING THE COURSE O F SEARCH IN THE CASE OF COMPLETED ASSESSMENTS ON THE DATE OF INITIATION OF SEARCH, WE FIND THAT THE INSTANT DISALLOWANCE U/S 40A(3), WHICH IS NOT B ASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH, CANNOT BE SUSTAINED. WE, THEREFORE, ORDER FOR THE DELETION OF THE ADDITION ON THIS LEGAL GROUND. 6. IN VIEW OF THE ABOVE DECISION ON THE PRELIMINARY LEGAL ISSUE, THERE IS NO NEED TO TAKE UP THE DISALLOWANCE U/S 40A(3) O N MERITS. 7. IN THE RESULT, THE APPEAL IS ALLOWED IN ABOVE TE RMS. THE ORDER PRONOUNCED IN THE OPEN COURT ON 28.07.201 6. SD/- SD/- [SUCHITRA KAMBLE] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 28 TH JULY, 2016. DK ITA NO.2404/DEL/2014 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.