M/S OSWAL FAB KNITS LTD.,LUDHIANA V. DCIT, CC- 1, LUDHIANA

ITA 425/CHANDI/2021

AI Insights

The case involves multiple appeals related to the Oswal Group, which were the result of a search action conducted on 10.05.2012. The primary issue in these appeals was the addition made by the AO under Section 68 of the Income Tax Act, 1961, concerning share application money received by the assessee, which was treated as unaccounted income. The Tribunal noted that no incriminating material was found during the search, and the assessments were completed prior to the search. The Tribunal referenced a Supreme Court decision in PCIT Vs Abhisar Buildwell (P) Ltd., which held that no addition can be made in the absence of incriminating material during a non-abated/completed assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 36617 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-08-2024
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2021
• Other Referred Cases: PCIT Vs Abhisar Buildwell (P) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K.MEHBOOB ALI KHAN
• Assessee Lawyers: GAURAV SHARMA
• Keywords: Income from undisclosed sources
• Section: 143(2); 68

Judgement Text

"आयकर अपील य अ\u000bधकरण,च\u0010डीगढ़ \u0014यायपीठ, च\u0010डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 425,426/CHD/2021 \u000bनधा\u000fरण वष\u000f / A.Y.: 2009-10,2010-11 M/s Oswal Fab Knits Ltd., Office No.23, # B 20-350, New Shopping Center, Ghuman Mandi, Ludhiana. Vs The DCIT, Central Cuircle-1, Ludhiana. \u0013थायीलेखासं./PAN NO: AAAC09876B अपीलाथ\u0017/Appellant \u0019\u001aयथ\u0017/Respondent आयकर अपील सं./ITA No. 427,428/CHD/2021 \u000bनधा\u000fरण वष\u000f / A.Y.: 2009-10, 2010-11 M/s Oswal Trends P.Ltd., Office No.23, # B 20-350, New Shopping Center, Ghuman Mandi, Ludhiana. Vs The DCIT, Central Cuircle-1, Ludhiana. \u0013थायीलेखासं./PAN NO: AABCO0431D अपीलाथ\u0017/Appellant \u0019\u001aयथ\u0017/Respondent आयकर अपील सं./ITA No. 430,431/CHD/2021 \u000bनधा\u000fरण वष\u000f / A.Y.: 2009-10, 2010-11 M/s Oswal Apparels P.Ltd., Office No.23, # B 20-350, New Shopping Center, Ghuman Mandi, Ludhiana. Vs The DCIT, Central Cuircle-1, Ludhiana. \u0013थायीलेखासं./PAN NO: AAACO9177H अपीलाथ\u0017/Appellant \u0019\u001aयथ\u0017/Respondent आयकर अपील सं./ITA No. 25/CHD/2022 \u000bनधा\u000fरण वष\u000f / A.Y.: 2010-11 The ACIT, Central Cuircle-1, Ludhiana. Vs M/s Oswal Apparels P.Ltd., Office No.23, # B 20-350, New Shopping Center, Ghuman Mandi, Ludhiana. \u0013थायी लेखा सं./PAN NO: AAACO9177H अपीलाथ\u0017/Appellant \u0019\u001aयथ\u0017/Respondent ITA Nos.425,426,427,428/CHD/2021 ITA Nos.430,431/CHD/2021 & ITA 25/CHD/2022 A.Y. 2009-10, 2010-11 2 \u000bनधा\u000f\u001bरती क\u001d ओर से/Assessee by: Shri Gaurav Sharma, CA राज\u0013व क\u001d ओर से/ Revenue by : Shri K.Mehboob Ali Khan,CIT DR सुनवाई क\u001d तार\"ख/Date of Hearing : 21.08.2024 उदघोषणा क\u001d तार\"ख/Date of Pronouncement : 04.11.2024 PHYSICAL HEARING आदेश/Order Per Sanjay Garg, Judicial Member: The captioned appeals are outcome of the same search action carried out at the Oswal Group of cases on 10.05.2012. Since common facts and issues are involved in these appeals, therefore, same were heard together and are being disposed of by this common order. 2. The common issue involved in all the appeals is relating to the addition made by the AO under Section 68 of the Income Tax Act, 1961 treating the share application money received by the assessee as unaccounted income of the assessee. 3. At the outset, the ld. Counsel for the assessee has brought our attention to the relevant Paper Book pertaining to ITA No. 427/CHD/2021 for assessment year 2009-10 in the ITA Nos.425,426,427,428/CHD/2021 ITA Nos.430,431/CHD/2021 & ITA 25/CHD/2022 A.Y. 2009-10, 2010-11 3 case of Oswal Trends P.Ltd. At page 11 of the said Paper Book, there is a copy of the acknowledgement of filing of the return of income. A perusal of the said acknowledgement reveals that the return of income for the said assessment year 2009-10 was filed by the assessee on 01.09.2009. 3.1 Similarly, the ld. counsel has further invited our attention to the copy of acknowledgement for assessment year 2009-10 in the case of Oswal Apparels (ITA No. 430/CHD/2021) and the return for the said assessment year was filed on 31.08.2009. 3.2. Similarly, in the case of Oswal Fab Knits Ltd. (I TA No. 25/CHD/2021), the return for assessment year 2009-10 was filed on 26.10.2009. 3.3. In all the aforesaid cases, the limitation to issue notice under Section 143(2) of the Income Tax Act as per the relevant provisions was six months from the end of the Financial Year in which the return of income was filed, which comes to 30.09.2010. 4. The ld. Counsel for the assessee has further invited our attention to the relevant acknowledgement of return in the case of the assessees for assessme nt year 2010-11. The ITA Nos.425,426,427,428/CHD/2021 ITA Nos.430,431/CHD/2021 & ITA 25/CHD/2022 A.Y. 2009-10, 2010-11 4 return of income in the case of Oswal Trends (ITA 428/CHD/2021) was filed on 21.09.2010. 4.1. The return in the case of Oswal Apparels (ITA 431/CHD/2021) was filed on 05.10.2010 and in ITA 426/CHD/2021 in the case of Oswal Fab Knits was filed on 21.09.2010. 4.2. The last date to issue notice under Section 143(2) in relation to the afore said cases was 30.09.2011. 5. Admittedly, search action was carried out in the case of the assessee on 10.05.2012. On the said date of search, the assessment in all the captioned cases was non abated/completed. 6. A perusal of the assessment order in all these cases would reveal that a common assessment order has been passed by the AO in all these cases. Only the quantum of additions differ for each assessee and assessment year. The additions, as observed above, have been made treating the share application money received by the assessee as unaccounted income of the assessee. These additions have been made by the AO by way of re-appre ciating the information and evidences on record. No incriminating ITA Nos.425,426,427,428/CHD/2021 ITA Nos.430,431/CHD/2021 & ITA 25/CHD/2022 A.Y. 2009-10, 2010-11 5 material, whatsoever, was found during the course of search action. The issue is squarely covered by the recent decision of the Hon'ble Supreme Court in the case of PCIT Vs Abhisar Buildwell (P) Ltd. (2023) 149 taxmann.com 399, wherein it has been held by the Hon'ble Supreme Court that no addition can be made in the absence of any incriminating material found during the course of the search action in the case of non abated/completed assessment on the date of search. In view of the said law laid down by the Hon'ble Supreme Court, the impugned additions are not sustainable in these cases. 7. I TA No.25/CHD/2022 is the appeal filed by the Revenue. The AO had deleted the addition of Rs.2,39,40,000/- on account of share application money received by the assessee. It is pe rtinent to mention here that out of the total addition made by the AO of Rs.5,59,40,000/-, the ld. CIT(A) had sustained the addition to the extent of Rs.3,20,00,000/- and deleted the re maining addition of Rs.2,39,40,000/-. The assessee had filed the appeal against the order of the ld. CIT(A) against the sustenance of the addition whereas the Revenue had come in appeal against the action of the ld. CIT(A) in deleting the addition. ITA Nos.425,426,427,428/CHD/2021 ITA Nos.430,431/CHD/2021 & ITA 25/CHD/2022 A.Y. 2009-10, 2010-11 6 8. In view of our observations above, since no incriminating material was found during the course of search action and the assessment in all these cases stood completed/ non-abated on the date of search action, therefore, the impugned additions made by the AO are not sustainable in view of the law laid down by the Hon'ble Supre me Court in case of PCI T Vs Abhisar Buildwell P.Ltd. (supra). 9. In view of this, the appeals of the assessee stand allowed and the appeal of the Revenue stand dismissed. Order pronounced on 04.11.2024. Sd/- Sd/- ( KRINWANT SAHAY) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam” आदेश क\u001d \u0019\u000bत(ल)प अ*े)षत/ Copy of the order forwarded to : 1. अपीलाथ\u0017/ The Appellant 2. \u0019\u001aयथ\u0017/ The Respondent 3. आयकर आयु+त/ CIT 4. आयकर आयु+त (अपील)/ The CIT(A)+ 5. )वभागीय \u0019\u000bत\u000bन.ध, आयकर अपील\"य आ.धकरण, च0डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड\u000f फाईल/ Guard File "