ACIT, Central Circle-6, New Delhi V. KAD Housing Pvt. Ltd., Delhi

ITA 5636/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5219 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 04-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVANI SINGH
• Keywords: Unexplained cash credit; Search and seizure
• Section: 153A; 153; 22; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 5636/DEL/2017 : ASSTT. YEAR : 2009-10 ACIT, CENTRAL CIRCLE-6, NEW DELHI-110055 VS KAD HOUSING PVT. LTD., 151, SAVITA VIHAR, DELHI-110092 (APPELLANT) (RESPONDENT) PAN NO. AA CCK4705B CO NO. 28/DEL/2018 : ASSTT. YEAR : 2009-10 KAD HOUSING PVT. LTD., 151, SAVITA VIHAR, DELHI-110092 VS ACIT, CENTRAL CIRCLE-6, NEW DELHI-110055 (APPELLANT) (RESPONDENT) PAN NO. AACCK4705B ASSESSEE BY : SH. RAJESH JAIN, CA REVENUE BY : MS. SHIVANI SINGH, CIT DR DATE OF HEAR ING: 15 . 0 9 .20 2 1 DATE OF PRONOUNCEMENT: 22 .0 9 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A ND THE CROSS OBJECTION BY THE ASSESSEE AGAINST THE ORDER O F LD. CIT(A)- 24, NEW DELHI DATED 29.06.2017. 2. FOLLOWING GROUND HAVE BEEN RAISED BY THE REVENUE : 1. THE ORDER OF LD. CIT (A) IS NOT CORRECT IN LAW AND FACTS. ITA NO. 5636/DEL/2017 CO NO. 28/DEL/2018 KAD HOUSING PVT. LTD. 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW IN BY RELYING UPON THE ORD ER OF THE HONBLE HIGH COURT IN THE CASE OF KABUL CHAW LA. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW BY HOLDING THAT ADDITION U /S 153A CANNOT BE MADE WITHOUT INCRIMINATING MATERIAL GATHERED DURING THE COURSE OF SEARCH. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW IN DELETING THE ADDITION O F RS.2,66,00,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 3. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IN COME TAX ACT, 1961 WAS CARRIED OUT ON SANTOHS/KM/VMI GROUP B Y THE INVESTIGATION WING, NEW DELHI OF THE DEPARTMENT ON 27.06.2013. WARRANT OF AUTHORIZATION WAS ALSO ISSUE D IN THE CASE OF THE ASSESSEE. NOTICE U/S 153A WAS ISSUED ON 14.11.2014. IN COMPLIANCE WITH THE NOTICE U/S 153A, THE ASSESSEE FILED RETURN DECLARING INCOME OF RS.28,41, 290/- ON 11.04.2015. 4. PERTINENT FACTS OF THE CASE ARE THAT SINCE THE S EARCH WAS CONDUCTED ON 27.06.2013 RELEVANT TO THE A.Y. 2014-1 5, THE ASSESSMENT FOR THE A.Y. 2009-10 IS DEEMED TO BE AN UNABATED ASSESSMENT LEADING TO A LEGAL PROPOSITION THAT NO A DDITION CAN BE MADE IN THE ABSENCE OF ANY DOCUMENTS OR ANY OTHE R INCRIMINATING MATERIAL FOUND AND SEIZED DURING THE SEARCH. FROM THE ASSESSMENT ORDER, WE FIND THAT THE ASSESSMENT H AS BEEN BASED ON THE DETAILS FILED IN THE BALANCE SHEET ON ACCOUNT OF UNSECURED LOANS FOR WHICH NO DOCUMENTS OR ANY OTHER MATERIAL HAS BEEN FOUND AND SEIZED DURING THE SEARCH. ITA NO. 5636/DEL/2017 CO NO. 28/DEL/2018 KAD HOUSING PVT. LTD. 3 5. THE LD. CIT (A) WHILE DELETING THE ADDITION RELI ED ON THE LEGAL PROPOSITION OF THE HONBLE JURISDICTIONAL HIG H COURT IN THE CASE CIT VS KABUL CHALWA 61 TAXMANN 412 AND HELD TH AT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL NO ADDITION C OULD BE MADE FOR THE INSTANT YEAR. 6. IN THE SAID JUDGMENT, THE HONBLE HIGH COURT OF DELHI HAS PARTICULARLY REFERRED TO ITS EARLIER DECISIONS IN T HE CASE OF CIT VS. ANIL KUMAR BHATIA (213) 352 ITR 493, MADUGULA V ENU VS. DIT (213) 29 TAXMANN.COM 200 (DELHI), CIT VS. CHETA N DAS LACHMAN DAS IN ITA 2021/2010 DATED 07.08.2012 AND F ILATEX INDIA LTD. VS. CIT (2014) 49 TAXMANN.COM 465. IT HA S ALSO DEALT WITH CERTAIN OTHER DECISIONS SUCH AS M/S CANARA HOU SING DEVELOPMENT COMPANY VS. DCIT ITA NO. 38/2014 DATED 25.07.2014, CIT VS. KURELE PAPERS MILLS PVT. LTD. I TA NO. 369/2015 DATED 06.07.2015, JAI STEEL (INDIA), JODHP UR VS. ACIT (2013) 36 TAXMANN.COM 523 AND CIT VS. CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) 58 TAXMANN.CO M 78. AFTER CONSIDERING ALL THE LAW AS EXPLAINED IN THESE DECISIONS, THE HONBLE DELHI HIGH COURT, IN ITS JUDGMENT IN THE CA SE OF KABUL CHAWLA, HAS LAID DOWN THE SUMMARY OF THE LEGAL POSI TION AS BELOW: SUMMARY OF THE LEGAL POSITION 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX A.YS. IMMEDIATELY PRECE DING ITA NO. 5636/DEL/2017 CO NO. 28/DEL/2018 KAD HOUSING PVT. LTD. 4 THE PREVIOUS YEAR RELEVANT TO THE A. Y. IN WHICH TH E SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME F OR SUCH A.YS. WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVAN T A.Y. IN WHICH THE SEARCH TAKES PLACE. THE AO HAS TH E POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS TH ERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EAC H OF THE SIX A.YS IN WHICH BOTH THE DISCLOSED AND T HE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. IV. ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHE R POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT D OES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL. V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABAT ED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEAR CH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AN D THE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH A. Y. ON THE BASIS OF THE FINDINGS OF THE SEAR CH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. ITA NO. 5636/DEL/2017 CO NO. 28/DEL/2018 KAD HOUSING PVT. LTD. 5 VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATER IAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME 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. 7. SINCE, THE DECISION OF THE LD. CIT (A) IS IN CON SONANCE WITH THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COU RT, WE HEREBY DECLINE TO INTERFERE WITH THE ORDER OF THE L D. CIT (A). 8. AS REGARDS TO THE CROSS OBJECTION FILED BY THE A SSESSEE IS CONCERNED, SINCE WE HAVE ALREADY DISMISSED THE APPE AL OF THE REVENUE, THE CROSS OBJECTION FILED BY THE ASSESSEE BECOMES INFRUCTUOUS AND HENCE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/09/2021. SD/- SD/- (AMIT SHUKLA) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 22/09/2021 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR