The DCIT, Central Circle-2(2), Ahmedabad V. Shri Manojkumar Babulal Agrawal (HUF), Banaskantha

ITSSA 58/AHD/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 5196 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-02-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 04-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 132; 153A; 40(a)(ia)

Judgement Text

IT(SS)A Nos.58, 59 & 60/Ahd/2018 A.Ys. 2008-09, 2009-10 & 2010-11 respectively Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH, AHMEDABAD BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT AND Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER (Conducted through Virtual Court) IT(SS)A Nos.58, 59 & 60/Ahd/2018 Assessment Years: 2008-09, 2009-10 & 2010-11 respectively Dy. Commissioner of Income Tax, vs. Shri Manojkumar Babulal Agrawal Central Circle-2(2), Ahmedabad. HUF, 40, APMC Market, Iqbalgadh, Dist. Banaskantha. [PAN – AACHA 5547 E] (Appellant) (Respondent) Appellant by : Shri Vijaykumar Jaiswal, CIT DR. Respondent by : None Date of hearing : 25.01.2022 Date of pronouncement : 15. 02.2022 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER : These three appeals are filed by the Revenue against a consolidated order dated 06.12.2017 passed by the CIT(A)-12, Ahmedabad for the Assessment Years 2008-09, 2009-10 & 2010-11. 2. Since these appeals filed by the Revenue pertain to the same assessee and the issues involved in all these appeals are identical and, therefore, we are taking up the appeal filed by the Revenue for the Assessment Year 2008-09 i.e. IT(SS)A No.58/Ahd/2018 as the lead matter and the grounds raised in this appeal which are common for all except for the amounts in dispute, are reproduced as under :- “1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in not appreciating the provisions of section 153A of the I.T. Act, 1961 which requires the total income to be brought under tax without any restrictions. IT(SS)A Nos.58, 59 & 60/Ahd/2018 A.Ys. 2008-09, 2009-10 & 2010-11 respectively Page 2 of 4 2. on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in holding that such assessment or re-assessment u/s.153A of the I.T. Act, 1961 is to be restricted only to the incriminating materials found during the search. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in quashing the assessment order passed by the Assessing Officer u/s.153A of the I.T. Act, 1961. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 5. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent.” 3. A search operation under Section 132 of the Income Tax Act, 1961 was carried out in the Manoj Agrawal & Group of cases on 27.09.2012 wherein the assessee was also the party. The assessee filed return of income for all the assessment years in response to notices issued under Section 153A of the Act. The details showing original return of income, date of filing such return of income, date of filing return of income in response to notice und Section 153A, details of additions made by the A.O. and assessed income for the assessment years are tabulated hereunder : A.Y. Original Return filing date Return u/s. 153A filing date Returned income in Rs. Gross Profit estimated @4% Disallowance u/s. 40(a)(ia) Assessed income in Rs. 2007-08 29/02/09 28/10/13 6,62,000 92,17,313 98,79,310 2008-09 26/09/08 28/10/13 9,12,760 2,13,32,409 1,36,317 2,23,81,490 2009-10 17/03/10 28/10/13 12,39,400 1,77,66,0523 1,89,05,450 2010-11 14/10/10 28/10/13 11,41,980 1,53,98,342 95,807 1,66,36,130 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee. 5. The ld. D.R. submitted that the CIT(A) erred in law thereby not appreciating the provisions of Section 153A of the Act which required total income to be brought under tax without any restriction. The ld. D.R. further submitted that the assessment under Section 153A of the Act is to be restricted only to the incriminating materials found during the search and in the present case there is incriminating material. Thus, the ld. D.R. relied upon the Assessment Order. IT(SS)A Nos.58, 59 & 60/Ahd/2018 A.Ys. 2008-09, 2009-10 & 2010-11 respectively Page 3 of 4 6. At the time of hearing none appeared on behalf of the assesee, therefore, we are taking cognisance of submissions of the assesse before the CIT(A) which stated that for assessment years 2008-09 till 2010-11 the Assessing Officer has not at all proceeded on the basis of any material which was seized during the search carried out in group of case of Agrawal Group. Thus the assessee relied upon the decision of jurisdictional High Court in the case of CIT vs. Soumya Construction (Tax Appeal No.24 of 2015 Gujarat High Court). 7. We have heard Ld. DR and perused all the relevant material available on record. During the search proceedings, no incriminating material was found in respect of the assessee and in fact no addition was made to that respect. In fact, the addition was made on the basis of difference between gross profit shown by the assessee and computed at 4% of sale, which was taken as addition. The same was very much filed in original return of income by the assessee. The reliance of the decision in case of Saumya Construction (supra) by the Ld. AR is apt in the present case. The Hon’ble Gujarat High Court held as under: “19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions and disallowance in respect of all the six assessment years. In the opinion of this court, the said contention does not merit acceptance, inasmuch as, the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, an assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India), Jodhpur v. Assistant Commissioner of Income Tax (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court in the case of Commissioner of Income-tax-1 v. Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; IT(SS)A Nos.58, 59 & 60/Ahd/2018 A.Ys. 2008-09, 2009-10 & 2010-11 respectively Page 4 of 4 however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed.” In the present case also, no incriminating documents were found and the only basis for the addition was made on the basis of difference between gross profit which was shown by the assessee in his original return of income and there was no new material relied upon by the Assessing Officer. Thus, the decision in the case of Soumya Construction is squarely applicable in the present case. Thus, the assessment itself is not just and proper. Hence, ITA No 58/Ahd/2018 is dismissed. 8. As regards ITA No.59/Ahd/2018 and 60/Ahd/2018 for assessment years 2009- 10 & 2010-11, both the appeals are on identical grounds to that of assessment year 2008-09. Hence, these appeals are also dismissed. 9. In the result, appeals of the Revenue are dismissed. Order pronounced in the open Court on this 15 th day of February, 2022. Sd/- Sd/- (P.M. JAGTAP) (SUCHITRA KAMBLE) Vice President Judicial Member Ahmedabad, the 15 th day of February, 2022 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad