The ACIT, Central Cirxle-2(4), Ahmedabad V. Shri Hiralal Dayaram Thakkar, Ahmedabad

ITSSA 48/AHD/2021

AI Insights

The case involves appeals by the Revenue against the orders of the CIT(A) which had deleted the additions made by the Assessing Officer following a search operation under Section 132 of the Income Tax Act, 1961. The search was conducted on the Dharmadev Group on 15.10.2013, and incriminating documents were seized. The assessee, Shri Hiralal D. Thakkar, filed returns in response to notices under Section 153A, declaring incomes which were contested by the AO leading to additions. The CIT(A) found that these additions were not based on any incriminating material found during the search, leading to their deletion. The Tribunal, referencing various judicial precedents, agreed with the CIT(A)'s decision, emphasizing that in the absence of incriminating material, no addition could be sustained in an unabated assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124714 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-01-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-01-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 27-04-2021
• Other Referred Cases: PCIT vs. Saumya Construction, CIT-II, Thane vs. Continental Warehousing Corporation (Nhava Sheva) Ltd., CIT (Central)-III v. Kabul Chawla
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 132; 143(3); 153A; 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER & Ms. MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./ I. T(SS). A. Nos. 48 & 49/Ahd/202 1 ( नधा रण वष / A ss es sment Years : 2010 -1 1 & 20 11-12) A s s t t . Co mm is s i on e r o f I n co me- t a x C e n tr a l C ir cle - 2 ( 4) , A h me da ba d बनाम/ Vs . Sh r i H ir al al Da y a r a m T h a k k a r S at ka r G u es t H o us e , S w a min ar a ya n Ku ti r, S. G . H i gh w a y, O p p . Y M C A C l u b, N r . N ir m a F a r m, A h m e da b ad -3 80 0 5 1 थायी लेखा सं./जीआइआर सं./P A N/ G I R N o . : A A N P T 3 7 2 1 E (अपीलाथ /Appellant) . . ( यथ / Respondent) अपीलाथ ओर से /Appellant by : Shri Vijay Kumar Jaiswal, CIT.D.R. यथ क ओर से/Respondent by : Shri Vivek Chavda & Shri Nishit Jesur, A.Rs. स ु नवाई क तार ख / D a t e o f H e a r i ng 12/01/2023 घोषणा क तार ख /D a t e o f P ro n o u nc e me n t 01/02/2023 O R D E R PER Ms. MADHUMITA ROY - JM: The instant appeals filed by the Revenue are directed against the orders both dated 10.02.20219 passed by the Ld. Commissioner of Income Tax (Appeals)-12, Ahmedabad arising out of the order dated 30.03.2016 passed by the ACIT, Central Circle-2(4), Ahmedabad under section 143(3) r.w.s. 153A IT(SS)A Nos. 48 & 49/Ahd/2021 (ACIT vs. Shri Hiralal D. Thakkar) A.Ys.– 2010-11 & 2011-12 - 2 - of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) for Assessment Years 2010-11 & 2011-12. 2. The deletion of addition made by the Ld. AO under Section 143(3) r.w.s. 153A of the Act is under challenge before us. 3. We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record and considered the judicial pronouncements on this issue by different judicial forum. 4. The brief facts leading to the case is this that a search under Section 132 of the Act was carried out in the group cases of Dharmadev Group on 15.10.2013 wherein certain incriminating documents were seized pertaining to the assessee. A notice under Section 153A of the Act was issued to the assessee on 27.08.2014 to file return of income within 30 days of receipt of said notice. Return was filed by the assessee in response to the same on 07.10.2014 declaring total income of Rs.4,25,340/- and the assessment was finalized upon making addition of very many counts, which was, in turn, deleted by the Ld. CIT(A). Hence, the instant appeal before us. 5. The short point involved in this particular case as to whether the addition is sustainable in an unabated assessment without having reference to any incriminating material seized during the course of search. The Ld. AR appearing for the assessee submitted before us that there was no reference of any incriminating material while making adding and the issue is squarely covered by the judgment passed by the Hon’ble Jurisdictional High Court in IT(SS)A Nos. 48 & 49/Ahd/2021 (ACIT vs. Shri Hiralal D. Thakkar) A.Ys.– 2010-11 & 2011-12 - 3 - the case of PCIT vs. Saumya Construction, reported in (2016) 387 ITR 529 (Guj.). Apart from that he has further relied upon the judgment of Mumbai Tribunal in the case of CIT-II, Thane vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. (2015) 58 taxmann.com 78 and the judgment passed by the Hon’ble Delhi High Court in case of CIT (Central)-III v. Kabul Chawla [2016] 380 ITR 573 (Delhi). Such submissions made by Ld. AR was not able to be controverted by the Ld. DR. Under these circumstances, upon considering the judgments relied upon by the Ld. AR, the settled principle of law is this that in the absence of any incriminating material unearth during the course of search no addition could have been made to income already assessed. In this particular case, it is an admitted position that the assessment years in question had already been completed on the date of search. Moreso, we do not find any reference to any incriminating material in the order passed by the Ld. AO. We further find that having regard to this particular aspect of the matter, the Ld. CIT(A) while granting relief to the assessee by deleting the addition observed as follows: “7.6 It is an undisputed fact that on the date of initiation of the search no assessment proceedings were pending in this assessment year. Therefore, the proceedings were not abated in the case as mentioned in the second proviso to section 153A (1) of the Act. It seems that the AO lost sight of the fact that he was not making an assessment under section 153A (1) of the Act read with its second proviso. As discussed hereinabove, there is no indication in the contents of the assessment order that the addition was made on the basis of any incriminating material found and seized in search. 7.7 In view of the aforesaid findings and respectfully following the judgments/decisions of Jurisdictional High Court, Jurisdictional Tribunal and other Courts, wherein it has been held that in absence of incriminating material/ evidence, addition cannot be sustained within the pale of section 153A of the Act. The sole basis of additions in this year are entries in books of accounts, AIR / ITS information for sale of land / plots, estimation of suppression of profit on sale of land and estimation of profit of projects on percentage basis. In my considered opinion, the action of the AO for making additions under various heads is part of the regular books of accounts and not based upon any incriminating IT(SS)A Nos. 48 & 49/Ahd/2021 (ACIT vs. Shri Hiralal D. Thakkar) A.Ys.– 2010-11 & 2011-12 - 4 - documents found during the course of search hence the additions made are not justified. Accordingly, the additions made in assessment completed u/s. 153A are deleted. In the result, the legal ground of appeal is allowed.” 6. As there is no reference of any incriminating material found during the course of search in the assessment order made by Ld. AO which is main criteria in making the addition in an unabated assessment like the assessment in hand, the deletion of addition in the absence of incriminating material, the addition not found sustainable in terms of the provisions of Section 153A of the Act by the Ld. CIT(A) is found to be absolutely just and proper so as to warrant interference. Hence, the appeal preferred by the Revenue is found to be devoid of any merit and, thus, dismissed. 7. The same will also apply mutatis mutandis in IT(SS)A No. 49/Ahd/2021 for A.Y. 2011-12. 8. In the combined result, both appeals filed by the Revenue are dismissed. This Order pronounced on 01/02/2023 Sd/- Sd/- (ANNAPURNA GUPTA) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 01/02/2023 S. K. SINHA True Coy आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं%धत आयकर आय ु 'त / Concerned CIT 4. आयकर आय ु 'त(अपील) / The CIT(A)- 5. *वभागीय -त-न%ध, आयकर अपील य अ%धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड3 फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील$य अ%धकरण, अहमदाबाद / ITAT, Ahmedabad