DCIT, Central Circle II, Chandigarh V. M/s SCM Fintrade Pvt. Ltd., New Delhi

ITA 981/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5381 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 14-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH ABROL
• Keywords: Unexplained cash credit
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE MS.DIVA SINGH, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.981/CHD/2017 (ASSESSMENT YEAR : 2007-08) & ITA NO.982/CHD/2017 (ASSESSMENT YEAR : 2011-12) THE D.C.I.T., VS. M/S SCM FINTRADE PVT. LTD., CENTRAL CIRCLE-II, F-334, SARITA VIHAR, CHANDIGARH. NEW DELHI. PAN: AABCS6194B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHISH ABROL, CIT DR RESPONDENT BY : SHRI ASHWANI KUMAR, CA DATE OF HEARING : 02.01.2018 DATE OF PRONOUNCEMENT : 05.01.2018 ORDER PER BENCH : BOTH THE APPEALS FILED BY THE REVENUE RELATING TO S AME ASSESSEE HAVE BEEN PREFERRED AGAINST THE SEPARATE O RDERS PASSED BY THE LD. COMMISSIONER OF INCOME TAX(APPEAL S)-3, GURGAON (HEREINAFTER REFERRED TO AS CIT(APPEALS)) BOTH DATED 31.3.2017 RELATING TO ASSESSMENT YEARS 2007-0 8 AND 2011-12. IT WAS COMMON GROUND BETWEEN BOTH THE PARTIES THAT THE ISSUE INVOLVED IN BOTH THE APPEALS WAS IDENTICA L. THEREFORE, THEY WERE TAKEN UP TOGETHER FOR HEARING AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDE R. 2. THE REVENUE IN BOTH THE APPEALS IS AGGRIEVED BY THE ACTION OF THE LD.CIT(APPEALS) IN DELETING THE ADDIT IONS 2 MADE BY THE ASSESSING OFFICER IN ASSESSMENT PROCEED INGS, CONDUCTED PURSUANT TO SEARCH CARRIED OUT AT THE PRE MISES OF THE ASSESSEE, MERELY FOR THE REASON THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. WHILE THE ADDITION MADE IN ASSESSMENT YEAR 2007- 08 PERTAINS TO UNEXPLAINED CASH CREDITS WITH RESPEC T TO SHARE CAPITAL AMOUNTING TO RS.50 LACS, THE ADDITION MADE IN ASSESSMENT YEAR 2011-12 IS AS PER THE PROVISIONS OF SECTION 56(2)(VIIA) OF THE ACT, ON ACCOUNT OF SHARE S PURCHASED BY THE ASSESSEE OF A COMPANY FOR CONSIDER ATION LESS THAN THE FAIR VALUE OF THE SHARE AND AMOUNTS T O RS.1,40,08,980/-. THE LD.CIT(APPEALS) IN BOTH THE CASES FOUND THAT AT THE TIME OF SEARCH PROCEEDINGS, ASSES SMENTS IN THE IMPUGNED YEARS WERE NOT PENDING AND HAD THER EFORE NOT ABATED. HE FURTHER FOUND THAT NO INCRIMINATING MATERIAL OR EVIDENCE WAS FOUND AND SEIZED DURING TH E COURSE OF SEARCH, NOR ANY ADDITION MADE EMANATING O UT OF SEARCH PROCEEDINGS. THEREFORE, RELYING ON VARIOUS JUDICIAL PRONOUNCEMENTS, THE LD.CIT(APPEALS) HELD THAT THE IMPUGNED ADDITIONS COULD NOT HAVE BEEN MADE IN THE FACTS OF THE PRESENT CASE IN THE ORDER PASSED U/S 153A OF THE ACT. THE LD.CIT(APPEALS) HAS RELIED UPON THE DECIS ION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S MALA BUILDERS PVT. LTD. VS. ACIT IN ITA NOS.433 TO 437/CHD/2014 WHEREIN THE TRIBUNAL HAD FURTHER RELIE D UPON THE DECISION OF HE HON'BLE BOMBAY HIGH COURT I N THE CASE OF CIT VS. M/S MURLI AGRO PRODUCTS PVT. LTD. I N ITA NO.36 OF 2009 AND IN THE CASE OF CIT VS. KABUL CHAW LA, 3 234 TAXMAN 300 (DEL) IN WHICH THE HON'BLE HIGH COU RT HAD UNANIMOUSLY HELD THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH ACTION WHEN THERE WAS NO PENDING ASSESSMENT WHICH C OULD BE SAID TO HAVE ABATED ON THE DATE OF SEARCH THE AD DITION COULD NOT HAVE BEEN MADE. 3. BEFORE US, THE LD. COUNSEL FOR ASSESSEE PLACED COPY OF ORDER PASSED BY THE I.T.A.T., CHANDIGARH BENCH I N THE CASE OF DCIT VS. M/S BHARATNET TECHNOLOGY LTD. IN I TA NOS.983 & 984/CHD/2017 DATED 13.11.2017 AND STATED THAT THE PRESENT APPEALS WERE SQUARELY COVERED BY T HE AFORESAID DECISION OF THE TRIBUNAL ALSO WHEREIN IDE NTICAL GROUNDS HAD BEEN RAISED BY THE REVENUE IN ITS APPEA L. BESIDES, THE LD. COUNSEL FOR ASSESSEE STATED THAT T HE LD.CIT(APPEALS) HAD RIGHTLY DELETED THE ADDITIONS M ADE FOLLOWING THE ORDER OF THE COORDINATE BENCH IN THE CASE OF M/S MALA BUILDERS PVT. LTD. (SUPRA) AND THE DECISIO N OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL C HAWLA (SUPRA) SINCE CLEARLY, THE ADDITIONS IN THE IMPUGNE D CASE WERE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 4. THE LD. DR WHEN CONFRONTED WITH THE FINDINGS OF THE LD.CIT(APPEALS) FAIRLY ADMITTED THAT NO INCRIMINATI NG MATERIAL WAS FOUND DURING THE SEARCH ACTION AND THE ORIGINAL ASSESSMENT PROCEEDINGS STOOD COMPLETED ON THE DATE OF SEARCH. BUT AT THE SAME TIME HE INVITED O UR ATTENTION TO THE GROUND NO.(XI) TAKEN BY THE REVENU E 4 WHEREIN IT HAS BEEN STATED THAT THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWL A (SUPRA) HAS BEEN DISTINGUISHED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF SMT.DAYAWANTI (SUPRA). 5. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIE S. WE DO NOT FIND ANY MERIT IN THE PRESENT APPEAL FILE D BY THE REVENUE. THE FACTS VIS--VIS BOTH THE APPEAL THAT SEARCH ACTION WAS CARRIED OUT ON THE ASSESSEE ON 4.10.2012 AND AT THE TIME OF SEARCH ACTION NO ASSESSMENT OR RE- ASSESSMENT PROCEEDINGS WERE PENDING IS UNDISPUTED. IT IS ALSO NOT DISPUTED THAT NO INCRIMINATING DOCUMENTS O R RECORD OR ANY OTHER EVIDENCE WAS FOUND OR SEIZED DU RING THE COURSE OF SEARCH PROCEEDINGS WHICH RESULTED IN ANY ADDITION IN THE CASE OF THE ASSESSEE. THEREFORE, T HE LD.CIT(APPEALS), WE HOLD, HAS RIGHTLY DELETED THE A DDITION MADE FOLLOWING VARIOUS JUDICIAL PRONOUNCEMENTS IN T HIS REGARD. FURTHER WE DO NOT FIND ANY MERIT IN THE CON TENTION OF THE LD. DR THAT THE DECISION OF THE HON'BLE DELH I HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA) HAS BEEN DISTINGUISHED IN THE CASE OF SMT.DAYAWANTI VS. CIT INN ITA NO.357/2015 & OTHERS DATED 27.10.2016, SINCE WE FIND THAT EVEN THIS ASPECT HAS BEEN DEALT WITH BY T HE ITAT CHANDIGARH BENCH IN THE CASE OF M/S BHARATNET TECHNOLOGY LTD. (SUPRA) IN WHICH IT WAS OBSERVED TH AT THE CASE OF SMT.DAYAWANTI (SUPRA) WAS SUBSEQUENTLY DISCUSSED BY THE HON'BLE DELHI HIGH COURT IN THE CA SE OF PRINCIPAL CIT VS. MEETA GUTGUTIA PROP. M/S FERNS N PETALS IN ITA NO.306/2017 & OTHER DECISION VIDE ORD ER 5 DATED 25.5.2017, WHEREIN IT WAS HELD THAT IN THE CASE OF SMT.DAYAWANTI (SUPRA) INCRIMINATING MATERIAL WAS FO UND DURING SEARCH ACTION, HOWEVER, IN THE CASE OF PRINC IPAL CIT VS. MEETA GUTGUTIA PROP. M/S FERNS N PETALS NO INCRIMINATING MATERIAL WAS FOUND DURING SEARCH ACTI ON AND HENCE ADDITION MADE WAS NOT JUSTIFIED. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(APPEALS) WHILE DELETING THE IMPUGNED ADDITIO NS IN BOTH THE APPEALS FILED BY THE REVENUE. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE, THEREFORE, DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 5 TH JANUARY, 2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)S 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH