K.P.CONSTRUCTION,CHENNAI V. DCIT, CENTRAL CIRCLE-1(4), CHENNAI

ITA 2401/CHNY/2024

AI Insights

The case involves M/s. K.P. Construction, which appealed against the order of the CIT(A) concerning the assessment year 2017-18. The appeal was based on a search and seizure operation conducted on Mr. P. Janakar, where documents belonging to the assessee were found. Subsequently, notices under section 153C were issued, leading to various additions in the assessment. The primary legal contention was regarding the jurisdiction of the AO to pass the order under section 143(3) without complying with the provisions of section 153C, which was contested by referencing a Supreme Court judgment. The Tribunal found that the assessment was correctly passed under section 153C read with section 143(3) and not merely under section 143(3) as alleged by the assessee. Additionally, the Tribunal directed the deletion of a specific addition made in the assessment due to insufficient opportunity and lack of further enquiry by the AO.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396828 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: .V. SREENIVASAN
• Assessee Lawyers: P.M. KATHIR
• Keywords: Income from undisclosed sources; Search and seizure
• Section: 143(3)

Judgement Text

" आयकर अपीलीय अिधकरण, ‘बी ’ \u000fा यपीठ, चे\u0014ई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘B’ BENCH, CHENNAI \u0016ी मनु क ुमा र िग\u001bर ,\u000fा ियक सद एवं \u0016ी जगदीश , लेखा सद क े सम& BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A.No.2401/Chny/2024 (िनधा\u0005रण वष\u0005 / Assessment Year: 2017-18) M/s. K.P. Construction, 19/10, F2, Rangarajapuram, 4th Street, Saidapet, Chennai-600 015. Vs The DCIT Central Circle-1(4) Chennai. PAN: AAIFK-7611-H (अपीलाथ\u000f/Appellant) (\u0010\u0011यथ\u000f/Respondent) अपीलाथ\u000fक\u0014ओरसे/ Appellant by : Mr. P.M.Kathir, Advocate \u0010\u0011यथ\u000fक\u0014ओरसे/Respondent by : Mr.AR.V.Sreenivasan, Addl.CIT सुनवाईक\bतारीख/Date of hearing : 06.03.2025 घोषणाक\bतारीख /Date of Pronouncement : 27.05.2025 आदेश आदेश आदेश आदेश / O R D E R PER MANU KUMAR GIRI, JM: This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), Chennai-18 [CIT(A)] dated 28.08.2024 for Assessment Year 2017-18. 2. Briefly stated, the facts of the case are that a search and seizure action was conducted in the case of Mr. P. Janakar on 10.05.2016. In the search, documents belonging to the assessee were found and seized. Accordingly, notice u/s 153C was issued on 10.09.2018 after recording of satisfaction. On the basis of the same, assessment was made making various additions u/s 115BBE, sundry credit, unaccounted income and chit transaction etc. 3. Aggrieved, the assessee went in appeal before the ld. CIT(A) who partly allowed the grievance. 2 ITA No.2401/Chny/2024 4. The aggrieved assessee is in appeal before us. By Ground No.2 of this appeal, assessee challenges the jurisdiction of the AO to pass the order u/s 143(3) of the Act without complying with the provisions of section 153C of the Act. 5. Before us, the ld. counsel for the assessee vehemently stated in the light of the Hon’ble Supreme Court judgment in the case of CIT Vs Jasjit Singh [458 ITR 437 (SC)] that the year of search in this case would be AY 20192- and not 2017-18. It is only the AY 2019-20 that can be framed u/s 143(3) of the Act and the six years preceding the year of search have to be necessarily be conducted u/s 153C of the Act. 6. On the other hand, the ld. DR relied upon the orders of the AO and CIT(A). 7. We have heard the rival submissions and have perused the relevant material on record. We find that the assessment order has been passed u/s 153C r.w.s 143(3) of the Act and not simplicitor u/s 143(3) of the Act as alleged. The ld. CIT(A) has categorically recorded in his order that the AO issued notice u/s 153C on 10.09.2018 after recording satisfaction. Hence, in the light of above factual matrix, the case law relied by the assessee in the case of the Hon'ble Supreme Court in the case of CIT Vs. Jasjit Singh 458 ITR 437(SC) is dehors the facts of this present case therefore, not applicable. Hence, legal ground No.2 of the assessee is rejected accordingly. 3 ITA No.2401/Chny/2024 8. With regard to the part addition sustained by the CIT(A) of Rs.14,98,720/-, the assessee submitted that the said notebook was maintained by the partner Sri P. Narasimhan to record details of expenditure incurred in certain civil construction supervision work undertaken by him in his individual capacity, for which he was getting consultancy fee. Further the said notebook was maintained by his nephew Sri D. Siva. It was categorically explained by the assessee that entries relating to such consultancy work noted in the notebook did not relate to the appellant. 9. Per contra, the ld. DR relied upon the order of the CIT(A). 10. We have gone through the orders of the lower authorities and perused the record. We find that before making addition, the AO has not given further sufficient opportunity to the assessee to explain the entries in the notebook. We also find that the AO has not conducted further enquiry to check the veracity of the assessee’s contentions with concerned parties Sri P. Narasimhan (Partner), Sri D. Siva. Hence, we are of the considered view that the explanation given by the assessee cannot be ruled out when no further enquiry has been done by the AO. Therefore, in the above factual matrix, we direct the AO to delete the part addition sustained by the CIT(A). 11. In the result, Appeal of assessee is partly allowed. Order pronounced in the open court on 27th May, 2025 Sd/- Sd/- ( जगदीश ) ( मनु क ुमार िग\u001bर ) ( Jagadish ) ( Manu Kumar Giri) लेखा लेखा लेखा लेखा सद\u0003य सद\u0003य सद\u0003य सद\u0003य / Accountant Member \u000fाियक सद / Judicial Member चे\u0019ई/Chennai, 4 ITA No.2401/Chny/2024 \u001bदनांक/Date:27.05.2025 DS आदेश क\u0007 \bितिलिप अ\u000eेिषत/Copy to: 1. Appellant 2. Respondent 3. आयकर आयु\u0013/CIT Chennai/Coimbatore 4. िवभागीय \bितिनिध/DR 5. गाड फाईल/GF. "