| The Tax Publishers2020 TaxPub(DT) 1033 (Chd-Trib) : (2020) 080 ITR (Trib) 0117 INCOME TAX ACT, 1961
Section 153A Section 132(4)
Where no incriminating material was found during the course of search from the possession of assessee, the third parties statement under section 132(4) could not be used by AO to make the impugned addition for unabated assessment(s).
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Search and seizure - Assessment under section 153A - No incriminating material found during course of search - Third parties statement under section 132(4)
Assessee had challenged the jurisdiction of the AO in initating the proceedings under section 153A when no incriminating material was found during the course of search. AO made the addition under section 68 on the basis of material found in the search which took place in the case of SCS, R.K. Kedia and Pintu, however, name of the assessee was not mentioned on the documents found during the course of aforesaid search. The AO took action under section 153A on the basis of third party statements under section 132(4). the CIT(A) confirmed the order of AO.Held: In the present case it was an admitted fact that the appeals under consideration relates to the years prior to the search and the assessments framed were unabated. In the present case no incriminating material was found during the course of aforesaid search and even earlier when the search took place on 3-3-2010 and survey took place on 27-12-2012, no incriminating material was found from the business/residential premises of the assessee. The present assessment was framed under section 153A. It is well-settled that addition under section 153A can be made only on the basis of the incriminating material found during the course of search. In the instant case the AO proceeded to utilize the statements of the third parties for making the addition while framing the assessment under section 153A, however, no opportunity to cross examine those parties was provided to the assessee. In the present case, the CIT(A) himself admitted at page No. 176 of the impugned order that no incriminating material was found from the possession of the assessee during the course of search. So, following the order, dated 31-10-2018 in the case of Brij Bhushan Singal & Ors. v. Asstt. CIT ITA Nos. 1412 to 1414/Del/2018 for the assessment years 2010-11 to 2012-13, the additions made by the AO under section 153A read with section 143(3) and sustained by the CIT(A) in the absence of any incriminating material found during the course of search under section 132(1) in respect of unabated assessment year i.e. the assessment years 2008-09, 2010-11 and 2012-13 were not justified. Accordingly, the same were deleted.
Followed:Shri Brij Bhushan Singal & Ors. v. Asstt. CIT ITA Nos. 1412-1414, 1476-1478, 1482, 1485-1487/Del/2018 vide Order, dated 31-10-2018. Applied:Mysore Minerals Ltd. v. CIT (1999) 239 ITR 775 (SC) : 1999 TaxPub(DT) 1421 (SC), UOI & Ors. v. Omkar S. Kanwar & Ors. (2002) 258 ITR 761 (SC) : 2002 TaxPub(DT) 1664 (SC) and CIT, West Bengal I v. Vegetable Products Ltd. (1973) 88 ITR 192 (SC) : 1973 TaxPub(DT) 421 (SC). Relied:CIT v. Kabul Chawla (2015) 61 Taxmann.com 412 (Del) : (2015) 61 Taxmann.com 412 (Del) : 2015 TaxPub(DT) 3486 (Del-HC).
REFERRED : Andaman Timber Industries v. CCE (2015) 62 Taxmann.com 3 (SC) : (2015) 52 GST 355 (SC) : (2015) 281 CTR 241(SC) : 2015 TaxPub(DT) 5186 (SC), ITO v. Softline Creations (P) Ltd. in ITA No. 744/Del/2012 : 2016 TaxPub(DT) 4648 (Del-Trib), CIT v. Gangeshwari Metal (P) Ltd. (2014) 264 CTR 277 (Del) : 2013 TaxPub(DT) 1319 (Del-HC), Devansh Exports v. Asstt. CIT [ITA No. 2178/Kol/2017 : 2018 TaxPub(DT) 6747 (Kol-Trib), Adhesive (P) Ltd. v. ITO ITA No. 3133/Del/2018, CIT v. Fair Invest Ltd. (2013) 357 ITR 146 (Del HC) : 2013 TaxPub(DT) 912 (Del-HC), Pr. CIT & Ors. v. Meeta Gutgutia Prop. Ferns 'N' Petals & Ors. (2017) 395 ITR 526 (Del) : 2017 TaxPub(DT) 1767 (Del-HC), Shri Brij Bhushan Singal & Ors. v. Asstt. CIT ITA Nos. 1412-1414, 1476-1478, 1482, 1485-1487/Del/2018 vide Order, dated 31-10-2018, All Cargo Logistics Ltd. v. DCIT (2012) 18 ITR 106 (SB) : (2012) 137 ITD 287 (SB) : 2012 TaxPub(DT) 2464 (Mum-Trib), CIT v. (1) Continental Warehousing Corporation (Nhava Sheva) Ltd., (2) All Cargo Global Logistics Ltd. reported in (2015) 374 ITR 645 (Bom) : 2015 TaxPub(DT) 2182 (Bom-HC), CIT (C)-III v. Kabul Chawla (Delhi) (2015) 61 Taxmann.com 412 (Del) : (2015) 234 Taxman 300 (Delhi) : (2016) 380 ITR 573 (Delhi) : 2015 TaxPub(DT) 3486 (Del-HC), Rajasthan High Court in Jai Steel (India), Jodhpur v. Asstt. CIT (2013) 259 CTR 281 (Raj) : (2013) 219 Taxman 223 (Raj) : 2013 TaxPub(DT) 1647 (Raj-HC), Pr. CIT & Ors. v. Meeta Gutgutia Prop. Ferns 'N' Petals & Ors. (2017) 395 ITR 526 (Del) : 2017 TaxPub(DT) 1767 (Del-HC), Pr. CIT v. Meeta Gugutia (2018) 96 taxmann.com 468 (SLP Civil Diary Nos. 18121of 2018)(SC) : 2018 TaxPub(DT) 4130 (SC), Pr. CIT v. Kurele Paper Mills (P) Ltd, ITA No. 369 of 2015 Pel HC) : 2016 TaxPub(DT) 1068 (Del-HC), CIT v. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) : 2017 TaxPub(DT) 3941 (SC), Pr. CIT v. Saumya Construction (P) Ltd. (2016) 387 ITR 529(Guj) : 2016 TaxPub(DT) 3466 (Guj-HC),Pr. CIT v. Devangi alias Rupa (2017) 98 CCH 51(Guj) : 2017 TaxPub(DT) 1376 (Guj-HC), Pr. CIT v. Ram Avtar Verma (2017) 395 ITR 252 (Del) : 2017 TaxPub(DT) 1854 (Del-HC),Kota Dall Mill v. Dy. CIT (ITA No. 997 to 1002/JP/2018 : 2019 TaxPub(DT) 454 (Jp-Trib), Pr. CIT, Delhi 2 v. Best Infrastructure (India) (P) Ltd. & Ors. ITA Nos. 11/2017 to 22/2017 : 2017 TaxPub(DT) 3839 (Del-HC), Dharampal Satyapal Ltd. v. Dy. CIT (ITA Nos. 3877 to 3881/Del/2016), Pr. CIT v. Dharampal Premchand Ltd. (2017) 99 CCH 202 (Del) : 2018 TaxPub(DT) 5159 (Del-HC),CIT v. S. Khader Khan Son (2008) 300 ITR 157 (Mad) : 2008 TaxPub(DT) 0787 (Mad-HC), CIT v. Sri P. Balasubramanium (2013) 354 ITR 116 (Mad) : 2013 TaxPub(DT) 1356 (Mad-HC),CIT & Ors, v. Meeta Gutgutia Prop. Ferns 'N' Petals & Ors., Krishna v. Kurukshetra University, AIR 1976 SC 376,K.T.M.M. Mohd. v. UOI: (1992) 197 ITR 196 (SC) : 1992 TaxPub(DT) 1274 (SC),Vinod Solanki v. UOI Civil Appeal No. 7407 of 2008 : 2009 TaxPub(EX) 36 (SC), Trancis Stanly @ Stalin v. Intelligence Officer, Narcotic Control Bureau Thiruvanthapuram (2006) 13 SCC 210, S. Khadar Khan (2008) 300 ITR 157 (Mad) : 2008 TaxPub(DT) 0787 (Mad-HC), Ratan Corporation (2005) 196 CTR 536 (Guj) : 2005 TaxPub(DT) 1494 (Guj-HC),Ashok Manilal Thakkar v. ACIT: (2005) 97 ITD 361(Ahd-Trib) : (2005) 279 ITR 143 (AT)(Ahd) : 2005 TaxPub(DT) 1808 (Ahd-Trib) and Govind Ram Chhugani (2002) 77 TTJ 339 (Jodh-Trib) : 2002 TaxPub(DT) 1656 (Jod-Trib).
FAVOUR : In assessee's favour.
A.Y. :
IN THE ITAT, CHANDIGARH BENCH
N.K. SAINI & SANJAY GARG, JJ.
Sanjay Singhal v. DCIT
ITA Nos. 706, 707, 709, 712, 713 & 715/Chd/2018
7 February, 2020
In favour of assessee.
Appellant by: S.K. Tulsiyan, Advocate, Ashwani Kumar, C.A, Abha Aggarwal, C.A., Bhoomija Verma, Advocate, Aditya Kumar, C.A
Respondent by: G.C. Srivastava, Special Counsel
Per Bench
All the above appeals filed by the different Assessees are arising out of the common Order, dated 31-3-2018 passed by the learned Commissioner (Appeals)-3, Gurgaon.
2. These appeals were earlier heard on 1-10-2019, at that time, one of the contention of the learned Counsel for the Assessee was that these appeals are squarely covered vide Order, dated 31-10-2018 of the ITAT Delhi Bench in the case of Shri Brij Bhushan Singal & Ors. v. ACIT in ITA Nos. 1412-1414, 1476-1478, 1482, 1485-1487/Del/2018. To clarify this fact that as to whether the said order has been confirmed or reversed by the higher forum, these cases was fixed for clarification on 4-2-2020 i.e. the date on which another cases of the same group to which these assessees belong are fixed. The learned Counsel for the assessee clarified that the Departmental appeals against the said Order, dated 31-10-2018, were belated by approximately 200 days and till date those appeals had not been admitted by the Hon'ble Jurisdictional High Court and as such the said Order, dated 31-10-2018 in the case of another persons belonging to the same group and decided by the ITAT Delhi Bench, is intact.
2.1 Since the issues involved are common having similar facts in all these appeals which were heard together, so these are being disposed off by this consolidated order for the sake of convenience and brevity.
3. At the first instance we will deal with the appeal in ITA No. 706/Chd/2018 wherein following grounds have been raised :--
1. That Order, dated 31-3-2018 passed under section 250(6) of the Income Tax Act, 1961 (hereinafter called the 'Act') by the learned Commissioner (Appeals)-3, Gurgaon is against law and facts on the file in as much as he was not justified to uphold the action of the learned assessing officer in initiating proceedings under section 153A of the Act despite the fact that no incriminating material was found during the course of search under section 132 conducted on 21-2-2014 whereby the order passed is without jurisdiction, bad in law and void ab-initio.
2. That the learned Commissioner (Appeals)-3, Gurgaon gravely erred in upholding the action of the learned assessing officer in making an addition of Rs. 40,05,419 representing the sale proceeds of listed equity shares held by the Appellant for more than 12 months by invoking the provisions of section 68 of the Act by ignoring the relevant specific facts and circumstances of the case and by relying on extraneous arguments and evidences, including in particular, circumstantial evidence, which has no bearing and applicability to the case.
3. That the learned Commissioner (Appeals)-3, Gurgaon was not justified to uphold the action of the learned assessing officer in treating the transactions relating to purchase and sale of equity shares as ingenuine transactions.
4. That the learned Commissioner (Appeals)-3, Gurgaon further gravely erred in upholding the action of the learned assessing officer in making an addition of Rs. 2,40,956 on account of alleged commission expenses paid by the Appellant for arranging the alleged entries in respect of Long Term Capital Gains by invoking the provisions of section 69C of the Act on sheer presumptive basis.
5. That the learned Commissioner (Appeals)-3, Gurgaon while adjudicating the appeal, has dismissed various grounds of appeal raised by the Appellant by relying on statements of various persons and data without affording any opportunity to cross examine such persons thereby ignoring the basic principles of natural justice despite the fact that a specific ground was raised to this effect.
4. The ground nos. 1 & 5 are legal grounds vide which the assessee had challenged the jurisdiction of the assessing officer in initiating the proceedings under section 153A of the Act when no incriminating material was found during the course of search. These legal grounds were argued at the first instance by both the parties.
5. Facts relating to the issue as emerging from the order of the authorities below in brief are that a search and seizure operation under section 132(1) of the Income Tax Act (here-in-after referred as 'Act'), was carried out by the Department at the business premises of the assessee Group i.e.; Bhushan Power & Steel Group (BPSL in short) alongwith residential/business premises of its Directors and other related entities & persons on 3-3-2010.
6. During the course of search certain incriminating documents, papers, books of accounts etc. were found and seized. The assessing officer mentioned that the assessee being the Director and key person of the Group filed Letter, dated 18-6-2010 before the Investigation Wing surrendering an amount of Rs. 302 Crores in the hands of various Group Companies, his wife and himself as undisclosed income emanating from the seized documents. The surrender was made as under :--
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