ADIT, New Delhi V. Sh. Gobind Gulati, New Delhi

ITA 5967/DEL/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5903 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 05-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJAY BHAGWANI
• Keywords: Search and seizure; Cost of acquisition; Surrender of tenancy right
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.5967/DEL/2014 ASSESSMENT YEAR: 2005-06 ACIT, CENTRAL CIRCLE-23, NEW DELHI. V. SHRI GOBIND GULATI, HOUSE NO.16, ROAD NO.19, EAST PUNJABI BAGH, NEW DELHI. TAN/PAN: AALPG3453E (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI AMIT JAIN, SR.D.R. RESPONDENT BY: SHRI AJAY BHAGWANI, CA DATE OF HEARING: 01 03 2018 DATE OF PRONOUNCEMENT: 30 05 2018 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE IMPUGNED ORDER DATED 14.07.2017 PASSED BY CIT (APPEALS)-XXXIII, NEW DELHI FOR THE QUANTUM OF ASSE SSMENT PASSED U/S.153A/143(3). IN THE GROUNDS OF APPEAL, T HE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION BY HOLDING THE A DDITIONS MADE WITHOUT ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH ARE OUTSIDE THE SCOPE OF SECTION 153A OF THE ACT, WHEN SECTION 153A MANDATES THE AO TO ASSESS OR REASSESS THE TOTAL INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN NOT DECIDING THE ISSUE OF ADDITION OF RS. 1.10 CRORES MADE IN THE ASSESSMENT ORDER ON MERITS. I.T.A. NO.5967/DEL/2014 2 3. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TEN ABLE ON FACTS AND IN LAW. 2. THE FACTS IN BRIEF ARE THAT ASSESSEE HAS FILED ITS RETURN OF INCOME U/S. 139(1) ON 30.03.2006 FOR THE ASSESSMENT YEAR 2005-06. A SEARCH AND SEIZURE ACTION WAS CARRIED OU T ON 15.11.2007 AND ACCORDINGLY, NOTICE U/S.153A WAS ISS UED FOR THE ASSESSMENT YEAR 2005-06 ON 02.12.2008, IN RESPO NSE TO WHICH, ASSESSEE HAS FILED HIS RETURN OF INCOME. IN THE RETURN OF INCOME FILED ON 30.03.2006 AND AGAIN ON 29.01.20 09, ASSESSEE HAS INCLUDED LONG TERM CAPITAL GAIN OF RS. 1.10 CRORE AGAINST WHICH EXEMPTION U/S.54F WHICH WAS CLAIMED I N THE FOLLOWING MANNER:- AMOUNT SALE CONSIDERATION OF SURRENDER OF TENANCY RIGHT 1,10,00,000/- (LAND AT VIALLGE SARHAUL, GURGAON) LESS: COST OF ACQUISITION (06.01.99) - LONG TERM CAPITAL GAIN 1,10,00,000/- LESS: EXEMPTION U/S.54F 1,10,00, 000/- (AMOUNT INVESTED IN RS.1,10,00,000/-) TAXABLE CAPITAL GAIN 3. THE ASSESSING OFFICER ON THE PERUSAL OF THE SAME COMPUTATION OF INCOME FILED ALONG WITH ORIGINAL RET URN OF INCOME, HAS HELD THAT CLAIM OF DEDUCTION U/S.54F IS NOT AVAILABLE, BECAUSE THE AMOUNT WHICH WAS RECEIVED BY THE ASSESSEE FOR A SUM OF RS.1,10,00,000/- ON ACCOUNT O F SURRENDER OF TENANCY RIGHTS AND FURTHER TO PROVE TH E ALLEGED TENANCY RIGHTS, ASSESSEE COULD NOT GIVE PLAUSIBLE E XPLANATION AND ACCORDINGLY, HE HELD THAT INCOME IS TO BE ASSES SED AS INCOME FROM OTHER SOURCES. I.T.A. NO.5967/DEL/2014 3 4. BEFORE THE LD. CIT (A), IT WAS CHALLENGED THAT T HE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COUR SE OF SEARCH, AND THEREFORE, THE IMPUGNED ADDITION IS BEY OND THE SCOPE OF SECTION 153A, BECAUSE THE ASSESSMENT FOR T HE ASSESSMENT YEAR 2005-06 HAD ATTAINED FINALITY MUCH BEFORE THE DATE OF SEARCH. RELIANCE WAS PLACED ON CATENA O F DECISIONS WHICH HAS BEEN NOTED BY THE LD. CIT (A) IN THE IMPU GNED ORDER. LD. CIT (A) HAS DELETED THE ADDITION ON THE GROUND THAT, SINCE THERE IS NO INCRIMINATING MATERIAL FOUND IN T HE COURSE OF SEARCH, THEREFORE, ADDITION CANNOT BE MADE U/S.153A . THE RELEVANT FINDING OF THE LD. CIT (A) IS REPRODUCED H EREUNDER:- I HAVE PERUSED THE ASSESSMENT ORDERS. THE ENTIRE A DDITION IS ON ACCOUNT OF SURRENDER OF TENANCY RIGHT SHOWN AS CAPI TAL GAIN CLAIMED AS EXEMPT U/S.54F OF THE IT ACT, WHICH IS ASSESSED AS INCOME FROM OTHER SOURCE. NOWHERE, THERE IS REFERENCE OF INCRIMINATING MATER IAL/EVIDENCES SEIZED DURING THE ACTION U/S 132 IN THE ASSESSMENT ORDER. THEREFORE, IT IS APPARENT THAT THERE IS NO INCRIMIN ATING MATERIAL SEIZED IN THE HANDS OF THE APPELLANT COMPANY AS A R ESULT OF SEARCH ACTION U/S 132 OF L.T. ACT. LD. AR HAS RELIED UPON VARIOUS DECISIONS OF HONBLE ITAT, DELHI CITED SUPRA EVEN AFTER CONSIDERING THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF ANIL BHATIA CITED SUP RA, WHERE HONBLE ITAT HAS HELD THAT NO ADDITION CAN BE MADE U/S 153A IN RESPECT OF ASSESSMENT WHICH WERE NOT PENDING AT THE TIME OF IN ITIATION OF SEARCH. I.T.A. NO.5967/DEL/2014 4 I HAVE PERUSED THE DECISION OF HONBLE JURISDICTION AL HIGH COURT OF DELHI IN THE CASE OF ANIL BHATIA CITED SUPRA. IN TH E SAID JUDGMENT, IN MY VIEW, HONBLE HIGH COURT HAS EMPOWERED THE ASSES SING OFFICER TO ASSESS TOTAL INCOME IRRESPECTIVE OF SEIZED MATER IAL FOR VARIOUS ASSESSMENT YEAR U/S 153A PROVIDED IN ANY ASSESSMENT YEAR. SOME INCRIMINATING MATERIAL IS FOUND. HONBLE HIGH COURT HAS NOT GIVEN OPINION WHEN THERE IS NO SEIZED INCRIMINATING DOCUM ENTS/EVIDENCES FOR ANY ASSESSMENT YEAR COVERED UNDER THE SEARCH. T HE RELEVANT PORTION OF JUDGMENT IS REPRODUCED AS UNDER:- 23 WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRI MINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED DURI NG UNDER SECTION 132 OF THE ACT. WE, THEREFORE, EXPRESS NO O PINION AS TO WHETHER SECTION 153A CAN HE INVOKED EVEN IN SUCH A SITUATION. THAT QUESTION IS THEREFORE LEFT OPEN. IN PRESENT CASE, APPARENTLY THERE IS NO INCRIMINATI NG SEIZED INCRIMINATING DOCUMENT FOR ANY OF THE ASSESSMENT YE AR COVERED U/S 153 A. THEREFORE, THE DECISION IN THE CASE OF ANIL KUMAR BHATIA DOES NOT EMPOWER THE ASSESSING OFFICER TO MAKE THE ADDITION U/S 153A. HONBLE ITAT, DELHI IN SERIES OF DECISION RELIED BY LD. AR SUCH PARIVAR PROPERTIES (P) LTD. PACL INDIA LTD., M/S. M ARIGOLD MERCHANDISE (P) LTD. CITED SUPRA AFTER CONSIDERING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT HAVE HELD THAT AD DITION U/S 153A CANNOT BE MADE WITHOUT INCRIMINATING EVIDENCES IN C ASE OF ASSESSMENT WHICH ARE NOT ABATED. RELYING ON THE DECISION OF HON'BLE ITAT, NEW DELHI IN ABOVE CITED CASE, IN MY VIEW, IN PRESENT CASE, ADDITION CANNOT BE MADE U/S 153A IN CASE WHERE THE ASSESSMENT ARE NOT ABATED OR CLOSED ASSESSMENTS, AS NO INCRIMINATING EVIDENCES WERE FOU ND AS A RESULT OF SEARCH AND SEIZURE OPERATION U/S 132 OF THE IT A CT, ACCORDINGLY, I.T.A. NO.5967/DEL/2014 5 THE ADDITION MADE IS HEREBY DELETED. GROUNDS OF APP EAL ARE ALLOWED. 5. AFTER HEARING BOTH THE PARTIES, WE FIND THAT ON THE DATE OF SEARCH, I.E., 15.11.2007, THE ASSESSMENT FO R THE ASSESSMENT YEAR 2005-06 WAS NOT PENDING AND HENCE I T CANNOT BE RECKONED AS ABATED ASSESSMENT IN TERMS OF 2 ND PROVISO TO SECTION 153A. IT IS NOW A WELL SETTLED LAW BY T HE HON'BLE JURISDICTIONAL HIGH COURT THAT IN CASE OF U NABATED ASSESSMENT, IF NO INCRIMINATING MATERIAL HAS BEEN F OUND OR SEIZED DURING THE COURSE OF SEARCH, THEN NO ADDITIO N CAN BE MADE MERELY BASED ON INFORMATION ALREADY AVAILABLE ON RECORD, I.E., IN THE RETURN OF INCOME FILED ORIGINA LLY/ORIGINAL ASSESSMENT. THE ASSESSING OFFICER HIMSELF IN THE IM PUGNED ASSESSMENT ORDER HAS NOT REFERRED TO ANY SEIZED DOC UMENTS OR INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH ALBEIT HAS PROCEEDED ON THE PERUSAL OF THE COMPUTATION OF INCOME FILED IN THE ORIGINAL RETURN OF INCOME. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA, REPORTED IN (2016) 380 ITR 573 (DEL.) AFTER CONSIDERING CATENA OF DECISION HAS HELD THAT IF IN RELATION TO ANY ASSESSMENT YEAR, NO INCRIMINATING MATERIAL IS F OUND THEN NO ADDITION OR DISALLOWANCE CAN BE MADE IN RELATION TO THAT ASSESSMENT YEAR IN EXERCISE OF POWER U/S.153A. THIS PRINCIPLE HAS BEEN REITERATED BY THE HON'BLE JURISD ICTIONAL HIGH COURT IN THE CASE OF PR.CIT VS. MEETA GUTGUTIA, REPORTED IN (2017), 395 ITR 526 AND AGAIN IN THE CASE OF I.T.A. NO.5967/DEL/2014 6 PR.CIT VS. BEST INFRASTRUCTURE (INDIA) PVT. LTD. ( 2017) 84 TAXMANN.COM 287 (DEL.). IN VIEW OF THE BINDING JUDICIAL PRECEDENT OF THE HON'BLE JURISDICTIONAL HIGH COURT, WE HOLD THAT NO ADDITION CAN BE ROPED IN THE ASSESSMENT MAD E U/S.153A IN ABSENCE OF ANY INCRIMINATING FOUND DURI NG THE COURSE OF SEARCH, ESPECIALLY IN THE CASE OF UNABATE D ASSESSMENT. THUS, THE OBSERVATION AND THE FINDING O F THE LD. CIT (A) IS AFFIRMED AND THE APPEAL OF THE REVENUE I S DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MAY, 2018. SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH MAY, 2018