DCIT, New Delhi V. M/s. Landcraft Developers Pvt. Ltd., Delhi

ITA 459/DEL/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 8284 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 29-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUMIT GOEL CAS
• Keywords: Unexplained cash credit; Income from undisclosed sources; Document seized; Documents seized
• Section: 143(3); 142(1); 153A; 133(6); 68; 132

Judgement Text

1 ITA NO. 459/DEL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NO. 459/DEL/2016 ( A.Y 2009-10) DCIT CENTRAL CIRCLE-18, ROOM NO. 327, 3 RD FLOOR, ARA CENTRE, E-2, JHANDEWALAN EXTN. NEW DELHI (APPELLANT) VS LANDCRAFT DEVELOPERS PVT. LTD. 309, 3 RD FLOOR, PLOT NO. 13, PARMESH CORPORATE TOWERS COMMUNITY CENTRE, KARKARDOOMA, DELHI AABCL1391F (RESPONDENT) APPELLANT BY MS. RACHNA SINGH, CIT DR RESPONDENT BY SH. RAJ KUMAR & SH. SUMIT GOEL, CAS ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 26/11/2015 PASSED BY CIT(A)-29, DELHI FOR ASSESSMENT YEAR 2009 -10. 2. THE GROUNDS FOR APPEAL ARE 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. 6,65,00,000/- U/S 68, MADE ON ACCOUNT OF UNEXPLAINED SHARE APPLICATIO N MONEY BY THE AO, WITHOUT DISCUSSING THE MERIT OF THE CASE. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE HONBLE ALLAHABAD HIG H COURT HAS HELD IN THE CASE OF COMMISSIONER OF INCOME TAX, CENTRAL KANPUR V. RAJ KUMAR ARORA DATE OF HEARING 28.08.2018 DATE OF PRONOUNCEMENT 03.10.2018 2 ITA NO. 459/DEL/2016 [2014] 52 TAXMANN. COM 172 (ALLAHABAD), AFTER CONSI DERING THE JUDGEMENT GIVEN BY THE HONBLE DELHI HIGH COURT IN THE CASE O F CIT V. ANIL KUMAR BHATIA [2012] 211 TAXMAN 453/24 TAXMANN. COM 98, TH AT THE AO HAS POWER TO REASSESS RETURNS OF ASSESSEE NOT ONLY FOR UNDISCLOSED INCOME, WHICH WAS FOUND DURING SEARCH OPERATION BUT ALSO WI TH REGARD TO MATERIAL THAT WAS AVAILABLE AT TIME OF ORIGINAL ASSESSMENT. 3. 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. 50,00,000/-, ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN U/S 68, AND A DDITION OF RS. 77,71,138/- ON ACCOUNT OF INTEREST EARNED ON UNSECU RED LOANS, MADE VIDE THE ORIGINAL ASSESSMENT ORDER DATED 30.12.2011. 4. THAT THE ORDER OF THE CIT(A) IS PERVERSE, ERRONEOU S AND IS NOT TENABLE ON FACTS AND IN LAW. 5. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE T O EACH OTHER. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALT ER OR FORGO ANY GROUND(S) OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 3. SEARCH & SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT ON 23.8.20129 IN M/S LAND CRAFT GROUP O F CASES. THE CASE OF THE ASSESSEE WAS ALSO COVERED U/S 132(1). SUBSEQUENTLY, THE CASE WAS CENTRALIZED WITH CENTRAL CIRCLE - 27, DELHI (ERSTWHILE CENTRAL CIRCLE - IS) VIDE ORDER DATED 5.12.2012 PASSED BY THE CIT-II, NEW DELHI ALONGWITH SOME OTHER GROUP CASES. NOTICE U/S 153A WAS ISSUED TO THE ASSESSEE ON 5 201 4. HR RESPONSE TO THIS NOTICE, RETURN DECLARING TOTAL INCOME OF RS. NIL WA S FILED ON 10.6.2014. ORIGINAL RETURN IN THIS CASE WAS FILED ON 30.12.2011 DECLARI NG TOTAL INCOME AT RS. NIL. THE SAME WAS PROCESSED U/S 143(1). THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY. NOTICES U/S 143(2) AND 142(1) ALONGWITH Q UESTIONNAIRE WERE ISSUED TO THE ASSESSEE. IN RESPONSE TO ABOVE NOTICES, CA, ATT ENDED THE PROCEEDINGS BEFORE ASSESSING OFFICER. REQUISITE INFORMATION/DETAILS WE RE FILED BY THEM. THE CASE WAS EXAMINED AND DISCUSSED. AS PER INFORMATION PROV IDED BY THE ASSESSEE, THE COMPANY IS ENGAGED IN THE BUSINESS OF DEVELOPMENT & SALES OF VARIOUS TYPES OF LAND AND BUILDING. IN THIS CASE, ORIGINAL ASSESSMEN T U/S 143(3) WAS PASSED BY ITO, WARD-4(3) NEW DELHI ON 30.12.2011 VIDE WHICH T OTAL INCOME WAS ASSESSED AT AN INCOME OF RS. RS. 1,33,86,230/- AFTER MAKING ADDITION OF RS. 3 ITA NO. 459/DEL/2016 1,33,86,230/-. THE ASSESSEE FILED APPEAL AGAINST TH E ORDER PASSED BY THE ASSESSING OFFICER BEFORE CIT(A), NEW DELHI. THE CIT (A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. THE REVENUE FILED AP PEAL AGAINST THE ORDER OF CIT(A) BEFORE THE TRIBUNAL. THE APPEAL OF THE DEPAR TMENT WAS PENDING BEFORE TRIBUNAL AT THE TIME OF 153A PROCEEDING. DURING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE QUESTIONNAIRE DATED 24.11.2014 AND 30.12.2014 WHICH HAVE BEEN PLACED ON RECORD, ASSESSEE WAS ASKED TO FILE V ARIOUS DETAILS WITH REGARD TO SHARE CAPITAL RECEIVED BY IT DURING THE YEAR UNDER ASSESSMENT. FROM THE REPLIES FILED BY THE ASSESSEE IT WAS OBSERVED THAT IT HAD R ECEIVED AN AMOUNT OF 6,65,00,000/ - AS UNSECURED LOAN WHICH WAS TRANSFER RED TO SHARE APPLICATION ACCOUNT IN A.Y.2010-11 FROM M/S RAFFLE MERCANTILE P VT. LTD. IN SUPPORT OF THE SAME ASSESSEE HAD PRODUCED A CONFIRMATION, BANK STA TEMENT OF M/S RAFFLE MERCANTILE, COPY OF BALANCE SHEET OF THE RAFFLE ALO NG WITH RELEVANT SCHEDULE - 4 OF RAFFLE FOR A.Y. 2009 - 2010 (SHOWING ADVANCES OF RS. 6.65 CR. TO ASSESSEE.) AND B/S. OF RAFFLE FOR A.Y. 2010 - 2011. (SHOWING I NVESTMENT IN SHARE APPLN. MONEY OF RS. 7.40 CR.) AFTER ANALYZING THE DOCUMENT S SUBMITTED BY THE ASSESSEE AND GIVING IT AMPLE OPPORTUNITY TO PROVE T HE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE ABOVE SHARE CAPITAL A S HOW CAUSE NOTICE DATED 20.3.2015 WAS SERVED VIDE WHICH THE ASSESSEE WAS AS KED TO SHOW CAUSE WHY THE SAID AMOUNT MAY NOT BE ADDED TO ITS TOTAL INCOM E BEING UNEXPLAINED CREDITS U/S 68 OF THE I. T. ACT, 1961. IN THIS REGA RD, THE ASSESSEE FILED REPLY DATED 26.03.2015. THE REPLY OF THE ASSESEE HAS BEEN DULY CONSIDERED AND IT HAS BEEN FOUND THAT INVESTMENT IN M/S LANDCRAFT DEV ELOPERS PVT. LTD. HAS BEEN ROUTED THROUGH A SHAM ENTERPRISE, M/S RAFFLE M ERCANTILE PVT. LTD. WHICH IS REGISTERED OUT OF KOLKALTA. ON ENQUIRY ITS CREDE NTIALS ARE FOUND TO BE DUBIOUS AS THE MONEY OR THE FUNDS WHICH WERE UTILIZED BY M/ S RAFFLE MERCHANTILE PVT. LTD TO INVEST IN LANDCRAFT DEVELOPERS WERE ARRANGED FROM BOGUS/FICTITIOUS ENTRY PROVIDING COMPANIES WHICH ARE BASED OUT OF KOLKATA. THUS, THE ASSESSING OFFICER PASSED ASSESSMENT ORDER DATED 31.03.2015 UN DER SECTION 153A R.W.S 143(3) OF THE INCOME TAX ACT, 1961. 4 ITA NO. 459/DEL/2016 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL O F THE ASSESSEE. 5. THE LD. DR SUBMITTED THAT THE ASSESSMENT PROCEED INGS WERE PROPERLY TAKEN OUT BY THE ASSESSING OFFICER AND CIT(A) ERRE D IN DELETING THE ADDITION OF RS.6,65,000/- ON ACCOUNT OF UNEXPLAINED SHARE APPLI CATION MONEY BY THE ASSESSING OFFICER WITHOUT DISCUSSING THE MERIT OF THE CASE. THE LD. DR SUBMITTED THAT THE PROVISIONS OF SECTION 153A OF TH E ACT IS CLEAR AND DO NOT MANDATE REQUIREMENT OF INCRIMINATING DOCUMENTS FOR PURPOSE OF FINALIZING ASSESSMENT OR REASSESSMENT UNDER SECTION 153A OF TH E ACT. THE LD. DR RELIED UPON THE DECISIONS OF THE HONBLE DELHI HIGH COURT IN CASE OF SMT. DAYAWANTI VS. CIT (2017) 390 ITR 496, CIT VS. ANIL KUMAR BHAT IA 252 ITR 493, FILATEX INDIA LTD. VS. CIT 49 TAXMANN.COM 465 AS WELL AS NA VODAYA CASTLE PVT. LTD. VS. CIT (2015-TIOL-314-SC-IT), CIT VS. NR PORTFOLIO PVT . LTD. 206 (2014) DLT 97. 6. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A) A ND ALSO THAT OF THE ASSESSEES OWN ORDER IN ASSESSMENT YEAR 2010-11 AND ALSO FOR ASSESSMENT YEAR 2009-10 FOR ORIGINAL ASSESSMENT U/S 143(3). TH E LD. AR SUBMITTED THAT THE CIT(A) IN PARA 1.9 OF THE ORDER HELD THAT THE A SSESSMENT PROCEEDINGS WERE ALREADY COMPLETED AND UNABATED AND NO INCRIMINATING EVIDENCE FOUND. THEREFORE, THE CASE OF KABUL CHAWLA RELIED BY THE A SSESSEE IS APPLICABLE TO THE FACTS OF THE CASE. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT T HE CASE LAWS RELIED UPON BY THE LD. DR WILL NOT BE APPLICABLE IN THE PRESENT CASE A S EACH CASE HAS ITS DISTINCT FACTS. IN PRESENT CASE, THE ASSESSMENT PROCEEDINGS WERE ALREADY COMPLETED AND UNABATED AND NO INCRIMINATING EVIDENCE FOUND. THUS, THE REVENUE COULD NOT DIFFER FROM THE FACT THAT THERE WAS NO INCRIMINATIN G EVIDENCE FOUND IN THE 5 ITA NO. 459/DEL/2016 PRESENT CASE. IN FACT, IN ASSESSEES OWN CASE FOR A .Y. 2010-11, THE TRIBUNAL WHILE DISMISSING THE APPEAL OF THE REVENUE HELD AS UNDER: 5. AFTER HEARING THE SUBMISSIONS OF BOTH THE SIDES AND PERUSING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE SEARCH WAS CONDUCTED ON 23.08.2012, BUT THE CASE RELATES TO TH E ASSESSMENT YEAR 2010-11. WE OBSERVE FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAS NOT REFERRED ANY INCRIMINATING MATERIAL FOUND IN THE SEARCH. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE T HE LD. CIT (A), THE LD. CIT(A) SPECIFICALLY ASKED THE ASSESSING OFFICER FOR CLARIFYING THE STATUS OF ASSESSMENT ON THE DATE OF SEARCH FOR THE IMPUGNE D ASSESSMENT YEAR. THE ASSESSING OFFICER VIDE HIS REPLY DATED 16 .10.2015 MENTIONED 'AFTER PERUSAL OF RECORD, IT IS OBSERVED THAT AS ON THE DATE OF SEARCH, ASSESSMENT IN THIS CASE WAS NOT PENDING, HENCE, IT WAS UNABATED'. THE CASE LAW RELIED BY THE ASSESSEE, AS NOTED ABOVE IS FULLY APPLICABLE. THE LD. CIT (A) HAS MADE A REASONED ORD ER. THE FINDINGS REACHED BY THE LD. CIT (A) ARE AS UNDER : I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY AO AND THE APPELLANT. AS REPORTED, NO NOTICE UNDER SECTION 143(2) IS AVAILABLE ON RECORD, THOUGH IT HAS BEEN MENTIONED IN THE ASSE SSMENT ORDER AND ORDER SHEET. IT IS A SETTLED LAW NOW THAT THERE IS NO NEED TO ISSUE A SEPARATE NOTICE UNDER SECTION 143(2) FOR PROCEEDING S RELATED TO 153A OF THE ACT. ACCORDINGLY, LOOKING TO THE PROVISIONS OF SECTION 153A OF THE ACT AND ALSO RESPECTFULLY FOLLOWING THE JUDGMENT IN THE CASE OF ASHOK CHADDA VS. INCOME TAX OFFICER, AS CITED ABOVE, THE PROCEEDINGS UNDER SECTION 153A READ WITH SECTION 143(3) IS HELD TO BE VALID AS IT IS NOT NECESSARY TO ISSUE AND SERVE NOTICE UNDER SECTI ON 143(2) OF THE ACT. THUS, THE ASSESSMENT PROCEEDINGS ARE FOUND TO BE IN ORDER AND THIS GROUND OF APPEAL IS NOT MAINTAINABLE. 6 ITA NO. 459/DEL/2016 10. AS PER GROUND NO. 2,4(A/B,C,D,E AND F) AND 5(A, B,C,D,E AND F), THE APPELLANT RAISED THE ISSUE REGARDING ADDITION O F RS.75 LACS AND RS.1.30 CRORES RESPECTIVELY, MADE UNDER SECTION 68 OF THE ACT, CONSIDERING THE UNSECURED LOAN/SHARE APPLICATION MO NEY RECEIVED FROM M/S RAFFLE MERCANTILE P. LTD. AND M/S PURISHOTTAM V INIMAY P. LTD. AS UNEXPLAINED. THE ADDITION HAS BEEN DISPUTED ON LEGA L GROUND AS WELL AS ON THE MERITS. 10.1 THE APPELLANT HAS RAISED THE LEGALITY OF THE A DDITION MADE BY STATING THAT THESE TWO ADDITIONS AMOUNTING TO RS.2. 05 CRORES ARE NOT EMANATING FROM ANY INCRIMINATING MATERIAL FOUND/SEI ZED DURING SEARCH, THEREFORE THESE ADDITIONS ARE OUTSIDE THE S COPE OF ASSESSMENT UNDER SECTION 153A OF THE ACT, SINCE THE PROCEEDING S FOR THE AY 2010- 11 STANDS COMPLETED AND UNABATED AT THE DATE OF SEA RCH. 10.2 SEARCH WAS CONDUCTED IN THIS CASE ON 23.08.201 2. ORIGINAL RETURN WAS SUBMITTED BY THE APPELLANT ON 15.10.2010, DECLA RING NIL INCOME. THIS WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. 10.3 LOOKING TO THE ARGUMENT PUT FORTH BY THE APPEL LANT THAT ASSESSMENT PROCEEDINGS WERE COMPLETE AND UNABATED T HE AO WAS SPECIFICALLY ASKED TO CLARIFY THE STATUS OF ASSESSM ENT ON THE DATE OF SEARCH. VIDE HIS REPLY DATED 16.10.2015 IT HAS BEEN MENTIONED BY THE AO I.E. ACIT, CENTRAL CIRCLE-27 THAT:- Y ' .'AFTER PERUSAL OF RECORDS, 'IT IS OBSERVED THA T AS ON THE DATE -OF SEARCH, ASSESSMENT IN THIS CASE WAS NOT PENDING. HE NCE, IT WAS UNABATED/'. 10.4 FROM THE ABOVE SUBMISSIONS OF THE AO IT IS CLE AR THAT THE ASSESSMENT PROCEEDINGS WERE COMPLETE ON THE DATE OF SEARCH AND HENCE THE PROCEEDINGS ARE UNABATED. 7 ITA NO. 459/DEL/2016 10.5 WITH RESPECT TO THE FACT THAT WHETHER THIS ADD ITIONS OF RS.2.05 CRORES ARE EMANATING FROM ANY INCRIMINATING MATERIA L FOUND/SEIZED DURING SEARCH, NOWHERE IT HAS BEEN MENTIONED IN THE ASSESSMENT ORDER THAT ANY SUCH SEIZED MATERIAL OR OTHERWISE HAS BEEN FOUND DURING SEARCH TO CONCLUDE THAT THIS AMOUNT TS UNEXPLAINED CASH CREDIT IN THE HANDS OF THE COMPANY. FURTHER, NOTHING HAS BEEN MEN TIONED IN THE ASSESSMENT ORDER TO SHOW THAT DURING SEARCH ANY UNA CCOUNTED INCOME, CASH, JEWELLERY OR ANY OTHER ASSET HAS BEEN FOUND/SEIZED. NO TRACE OF ANY GENERATION OF UNACCOUNTED INCOME HAS A LSO BEEN POINTED OUT. THEREFORE, AO WAS SPECIFICALLY ASKED WHETHER T HE ADDITION MADE IN ASSESSMENT ORDER IS ARISING OUT OF ANY INCRIMINA TING MATERIAL FOUND/SEIZED DURING THE SEARCH, AS NOTHING HAS BEEN MENTIONED IN THE ASSESSMENT ORDER. 10.6 VIDE LETTER DATED 16.10.2015 IT WAS SUBMITTED THAT 'WITH REGARD TO POINT 2 OF YOUR LETTER, IT IS SUBMITTED THAT AN ADDITION OF RS.2.05 CRORES WAS MADE ON THE GROUNDS THAT THE ASSESSEE SI MPLY FILED COPY OF CONFIRMATION AND BANK STATEMENT OF M/S RAFFLE MERCA NTILE P. LTD. AND PURSHOTTAM VINIMAY P, LTD. BUT FAILED TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION. ALTHOUGH THE N UMBER OF OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE TO EXPL AIN THE TRANSACTIONS. ON EXAMINATION OF THE BANK STATEMENT SUBMITTED BY THE ASSESSEE, IT WAS OBSERVED THAT FUNDS WERE TRANSFERR ED M/S LANDCRAFT DEVELOPERS P. LTD. AFTER THE RECEIPTS OF FUNDS FROM ANOTHER ENTITY WITHIN A FEW DAYS OF DEPOSIT DURING THE COURSE OF ASSESSME NT PROCEEDINGS, IT WAS OBSERVED BY THE AO THAT M/S RAFFLE MERCANTILE P . LTD. WAS REGISTERED IN KOLKATA AND IT WAS OBSERVED BY THE AO THAT M/S RAFFLE MERCANTILE P, LTD. USED TO ARRANGE BOGUS ENTRIES FO R THE DIFFERENT COMPANIES. NOTICES UNDER SECTION 133(6) WERE ISSUED IN M/S RAFFLE MERCANTILE P. LTD. FOR THE AY 2011-12. HOWEVER, THE REPLY WAS NOT FOUND SATISFACTORY. SINCE THE COMPANY INVOLVED IS S AME, IT WAS HELD BY 8 ITA NO. 459/DEL/2016 THE AO THAT THE CREDENTIALS OF THE COMPANY ARE DUBI OUS/' HOWEVER NO SUCH SEIZED MATERIAL OR INCRIMINATING DOCUMENT WAS REFERRED BY THE AO, BASED ON WHICH THE ADDITION HAS BEEN MADE. 10.7 IN ITS REJOINDER DATED 05.11.2015 IT WAS STATE D BY THE APPELLANT THAT ALL THE RELEVANT INFORMATION AND DOCUMENTS WER E FURNISHED TO THE AO AS WELL AS TO THE INVESTIGATION WING AND THE DIR ECTOR OF RAFFEL WAS ALSO PRODUCED. INFORMATION UNDER SECTION 133(6) OF THE ACT WAS ALSO FURNISHED BY RAFFEL AND PURUSHOOTAM VINIMAY P. LTD. AND NO DISCREPANCY HAS BEEN FOUND EVEN THOUGH THE SOURCE O F SGURTS 1 HAS BEEN EXPLAINED. THEREFORE, NOTHING IS AVAILABLE WIT H THE AO IN THE FORM OF SEIZED DOCUMENTS OR ANY OTHER EVIDENCE WHICH FOR MED THE BASIS FOR SUCH ADDITIONS. 10.8 IT HAS ALSO BEEN STATED BY THE APPELLANT THAT IN PARAGRAPH 5.4 AND 6.3 OF THE ASSESSMENT ORDER AO HAS MENTIONED AB OUT THE 'UNQUALIFIED ADMISSION OF THE ASSESSEE COMPANY' REG ARDING THE ADDITION, WHICH IS INCORRECT. NO SUCH ADMISSION HAS BEEN MADE BY ANYBODY ON BEHALF OF THE COMPANY AND THEY ARE VIGOR OUSLY CONTESTING THE ADDITION. 10.9 THE AO IN HIS REPORT HAS STATED THAT THIS EXPR ESSION IN THE ASSESSMENT ORDER IS WITH RESPECT TO THE INTRODUCTIO N OF SHARE CAPITAL OF RS.2.05 CRORES, NOT FOUND SATISFACTORY BY THE AO AN D USED IN THAT CONTEXT WHICH IS OTHERWISE NOT CONNECTED WITH ANY T YPE OF ADMISSION BY THE APPELLANT. THEREFORE, THE SAID EXPRESSION OF AO IN THE ASSESSMENT ORDER IS NOT CONSIDERED AS ANY SUCH ADMI SSION OF UNDISCLOSED INCOME BY THE APPELLANT. 10.10 FROM THE ABOVE DISCUSSIONS IT IS CLEAR THAT T HERE IS NO MATERIAL OR EVIDENCE FOUND OR SEIZED DURING THE COURSE OF SEARC H PROCEEDINGS OF THE APPELLANT NOR ANY EVIDENCE FOUND FOR GENERATION OF UNACCOUNTED 9 ITA NO. 459/DEL/2016 INCOME NOR ANY UNDISCLOSED/UNACCOUNTED ASSET, CASH, JEWELLERY AND INVESTMENT ETC. HAS BEEN DISCOVERED. 1.0.11 THEREFORE, LOOKING TO THE FACTS OF THIS CASE WHERE THE ASSESSMENT PROCEEDINGS WERE ALREADY COMPLETED AND U NABATED AND. NO SUCH INCRIMINATING MATERIAL OR EVIDENCE FOUND/SE IZED DURING SEARCH TO CONCLUDE THE GENERATION OF' UNDISCLOSED INCOME O F THE APPELLANT, THE DECISION ,OF HON'BLE DELHI HIGH COURT RELIED UPON B Y THE APPELLANT IN THE CASE OF KABUL CHAWLA VS. CIT DATED 28.08.2015 I S APPLICABLE IN THIS CASE. 10.12 ACCORDINGLY, RESPECTFULLY FOLLOWING THE DECIS ION OF THE JURISDICTIONAL HIGH COURT WHERE IT HAS BEEN HELD TH AT IN AN UNABATED ASSESSMENT UNDER SECTION 153A OF THE ACT, THE ADDIT ION CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND A ND SEIZED DURING THE COURSE OF SEARCH, WHEREAS THE ADDITION MADE IN THE PRESENT CASE IS WITHOUT HAVING ANY INCRIMINATING MATERIAL/SEIZED DO CUMENT IS NOT SUSTAINABLE. 10.13 THEREFORE, THE ADDITION CANNOT BE SUSTAINED I N VIEW OF THE LEGAL PROVISIONS AS DEFINED BY THE HON'BLE JURISDICTIONS! HIGH COURT IN THE ABOVE -EFERRECI CASE LAW. 10.14 SINCE, THE ISSUE HAS BEEN DECIDED ON THE LEGA L GROUNDS REGARDING JURISDICTION OF AO TO MAKE SUCH ADDITIONS UNDER SECTION 153A OF THE ACT AND THE ADDITION HAS NOT BEEN SUSTA INED, THE GROUND RELATING TO THE MERIT OF THIS CASE HAS NOT BEEN CON SIDERED. 6. IN VIEW OF THE ABOVE FINDINGS, WE DISMISS THE AP PEAL OF THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 10 ITA NO. 459/DEL/2016 THUS, THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE. HENCE, APPEAL OF THE REVENUE I S DISMISSED. 8. IN RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD OCTOBER, 2018 . SD/- SD/- (N. K. SAINI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 03 /10/2018 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 11 ITA NO. 459/DEL/2016 DATE OF DICTATION 28.08.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29.08.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 03.10.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 03.10.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 03.10.2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER