SHRI RAM PRAKASH PANDEY ,KOLKATA V. DCIT, CENTRAL CIRCLE - 3(3), KOLKATA , KOLKATA

ITSSA 82/KOL/2018

AI Insights

The case involves Shri Ram Prakash Pandey, the appellant, contesting the additions made to his income by the Deputy Commissioner of Income Tax, the respondent, following a search and seizure operation at the premises of Prakash Group. The additions included disallowances related to agricultural income and undisclosed receipts from the sale of shares. The Tribunal examined whether these additions were sustainable under section 153A of the Income Tax Act, 1961, given that no seized material was found to substantiate the claims made by the Assessing Officer. The Tribunal's decision was influenced by a recent Supreme Court judgment emphasizing that additions should be based on seized material found during the search.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473255 (ITAT-KOLKATA)
• Duration Of Justice: 6 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-08-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 03-09-2018
• Other Referred Cases: Pr. CIT, Central -3 -vs.- Abhisar Buildwell (P) Ltd. [2023] 149 taxmann.com 399 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Earning of tax free income; Rule 8D
• Section: 271(1)(c); 153A; 14A

Judgement Text

" IT(SS)A No. 82/KOL/2018 (A.Y. 2013-2014) Shri Ram Prakash Pandey 1 THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President (KZ) & Shri Rajesh Kumar, Accountant Member I.T.(S.S.)A. No. 82/KOL/2018 Assessment Year: 2013-2014 Shri Ram Prakash Pandey,..…………….……Appellant P-214, Block-A, Lake Town, Kolkata-700089, West Bengal [PAN:AEXPP8028G] -Vs.- Deputy Commissioner of Income Tax,.……Respondent Central Circle-3(3), Aayakar Bhawan Poorva, 110, Shanti Pally, Kolkata-700107 Appearances by: Shri Miraj D. Shah, A.R., appeared on behalf of the assessee Shri Rakesh Kumar Das, CIT(D.R.), appeared on behalf of the Revenue Date of concluding the hearing: August 12, 2024 Date of pronouncing the order: October 07, 2024 O R D E R Per Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals)-21, Kolkata dated 14th June, 2018 passed for Assessment Year 2013- 14. IT(SS)A No. 82/KOL/2018 (A.Y. 2013-2014) Shri Ram Prakash Pandey 2 2. The assessee has taken six grounds of appeal. However, his grievances revolve around two issues, namely- (a) whether additions made by the ld. Assessing Officer in an assessment order passed under section 153A is sustainable or not? because no seized material was found during the course of search; (b) whether addition of Rs.96,000/- made on account of disallowance of agricultural income and Rs.4,67,963/- added on account of undisclosed receipts of sale of shares are sustainable? 3. With the assistance of ld. Representatives, we have gone through the record carefully. A search and seizure operation was carried out at the premises of Prakash Group on 21/22-11-2013. A notice under section 153A was issued upon the assessee and in response to that assessee has filed his return of income on 07.08.2015 declaring total income of Rs.2,29,060/-. The ld. Assessing Officer has framed the assessment order under section 153A/143(3) of the Income Tax Act, 1961 on 29.03.2016. He made the following additions:- (a) Addition of Rs.11,74,115/- under section 14A (b) Rs.96,000/- disallowance out of the claim of agricultural income (c) Addition of Rs.4,67,963/- on account of undisclosed sale proceeds of the shares IT(SS)A No. 82/KOL/2018 (A.Y. 2013-2014) Shri Ram Prakash Pandey 3 4. Dissatisfied with this disallowance, the assessee carried the matter in appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) deleted the first disallowance made with the aid of section 14A read with Rule 8D on the ground that exempt income claimed by the assessee is only of Rs.762/-. The ld. CIT(Appeals) has restricted the disallowance to this extent. The assessee has not challenged this issue in appeal because substantial part has already been deleted by ld. CIT(Appeals). This aspect has been referred to appreciate the angle with which ld. Assessing Officer has passed the search assessment. 5. The ld. CIT(Appeals) with regard to disallowance of agricultural income observed that claim of the assessee is that he has already added back an income of Rs.52,450/-, which is required to be re-verified. 6. The finding of the ld. Assessing Officer on the third addition is required to be noted, which reads as under:- “Sale of undisclosed shares- On perusal of the ITS details downloaded from the departmental online system, it is observed that the assessee sold shares of LUPIN for Rs.2,60,085/- & CIPLA for Rs.2,07,878/- during the year. These shares were not shown in the balance sheet of earlier years the assessee was asked through a show- cause letter dated 04.03.2016 to submit the details, but he failed to explain the same with supporting evidence. Hence, the total amount shown as receipt from shares sold for Rs.4,67,963/- (260085 + 207878) is treated as undisclosed transaction in the hands of the assessee and added to the total income. IT(SS)A No. 82/KOL/2018 (A.Y. 2013-2014) Shri Ram Prakash Pandey 4 Penalty proceedings u/s 271(1)(c) is initiated separately”. 7. On due consideration of the above finding, we are of the view that ld. Assessing Officer has not supplied any document to the assessee. On whose basis, he has arrived at the conclusion that assessee sold shares. His only case is that in the Portal of the Income Tax Department, sale of certain shares is reflected. It is for the ld. Assessing Officer to show that the assessee has purchased those shares in earlier years and those were sold by the assessee in this year. There is nothing possessed by the ld. Assessing Officer. Hence, this addition is not sustainable. 8. As far as disallowance of agricultural income is concerned, the Revenue Officers have failed to demonstrate as to how the assessee has claimed this agricultural income. The stand of the assessee is that he has shown agricultural income at Rs.52,450/- , which was added back and in fact, not claimed. This aspect has not been verified by either of the authorities but ld. Assessing Officer has made the addition without proper understanding of the facts and circumstances. 9. Apart from the above, all these three additions are not made on the basis of any seized material. These are the routine disallowances. Therefore, these are otherwise not sustainable in view of the latest judgment of the Hon’ble Supreme Court in the case of Pr. CIT, Central -3 -vs.- Abhisar Buildwell (P) Ltd. [2023] 149 taxmann.com 399 (SC). The Hon’ble Supreme Court has propounded that additions are to be made on the basis of seized IT(SS)A No. 82/KOL/2018 (A.Y. 2013-2014) Shri Ram Prakash Pandey 5 material found during the course of search. The ld. Assessing Officer has nowhere referred to any seized material regarding any of the additions. Therefore, we allow this appeal and delete all these additions. 10. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 07/10/2024. Sd/- Sd/- (Rajesh Kumar) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 7th day of October, 2024 Copies to :(1) Shri Ram Prakash Pandey, P-214, Block-A, Lake Town, Kolkata-700089, West Bengal (2) Deputy Commissioner of Income Tax, Central Circle-3(3), Aayakar Bhawan Poorva, 110, Shanti Pally, Kolkata-700107 (3) Commissioner of Income Tax (Appeals)-21, Kolkata; (4) CIT - , Kolkata; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. "