The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, held that no additions can be made de hors any incriminating material for assessment under Section 153A of the Income Tax Act.
The aforesaid observation was made by the Delhi ITAT, when appeals were filed before it by the assessee, as against the four separate orders of the CIT (Appeals), New Delhi, all dated 29.08.2019 for Assessment Years 2011-12, 2013-14, 2014-15 7 2015-16.
The common thread running through the assessee’s appeals being that additions had been made de hors any incriminating material as it is an assessment under Section 153A of the Income Tax Act, 1961 pursuant to search, the brief facts of the case were that a search & seizure operation and survey operation under Section 132/132A of the Income Tax Act was conducted by the Investigation Wing of the Department on 18.11.2016 in Nayyar Group of cases.
In the said operation, the assessee’s residential premise was also covered. And, a notice under Section 153A of the Income Tax Act was issued.
In ITA No.8721/Del/2019 (AY 2011-12), the assessee was aggrieved by the addition of Rs.85,300/- by the CIT (A), wherein the plea of the assessee was that the addition is not based upon any incriminating material found but that the AO had made the assessment on the basis of bank statement of assessee, submitted during the course of assessment. Hence, it was pleaded by the assessee that this addition is not based upon incriminating material and, therefore that, the same is not sustainable in law.
Thereafter, the CIT (A) further made a cash inflow & outflow statement on the basis of assessee’s submission only and made an addition of Rs.85,300/, while it was pleaded by the counsel of the assessee that there is no incriminating material found in this regard.
He also added that It is only the documents submitted during the course of assessment proceedings and that it is based on the above, addition had been arrived at.
In ITA No.8722/Del/2019 (AY 2013-14), the assessee was aggrieved by the addition of Rs.53,500/- on account of deposit in the bank account. In this case also, assessee’s plea was similar that no incriminating material was found and that addition is based upon assessee’s submission made during the assessment proceedings.
In ITA No.8723/Del/2019 (AY 2014-15), the assessee was aggrieved by the addition of Rs.4,60,653/-, Rs.37,180/-, Rs.67,617/- & Rs.10,070/- on account of deposit made in the bank account being long term capital gain on the sale of jewellery, on account of cash transactions, on account of accumulated rental income & on account of investments respectively. Here again, the assessee’s plea was that the addition is based upon documents submitted by the assessee during the course of the assessment and that it was not that any incriminating material was found.
In ITA No.8724/Del/2019 (AY 2015-16), the assessee was aggrieved by the addition of Rs.64,602/-, Rs.2,73,270/- & Rs.1,34,520/- on account of a deposit made in the bank account being capital gain on the sale of jewellery, on account of cash transactions & on account of accumulated rental income respectively. Here again, the assessee’s plea was the same that the addition was made de hors any incriminating material found but from the documents submitted by the assessee during the course of the assessment.
Hearing the opposing contentions of both sides as submitted by Shri Anil Jain, CA, on behalf of the assessee, and by Ms Sarita Kumari, the CIT DR, on behalf of the Revenue, the ITAT observed:
“We have carefully considered the submissions and perused the orders of the authorities below. The undisputed fact is that all the assessment years are completed assessments. It is not disputed that the impugned additions are devoid of any incriminating material whatsoever found during the course of search. There is no mention of incriminating material found at the time of search on the basis of which the addition has been made. The ratio laid down by the Hon’ble High Court of Delhi in the case of Kabul Chawla (supra) squarely apply on the facts of the case.”
“We find that facts in the present case are similar to the above case of Hon’ble Delhi High Court and moreover, in similar circumstances, in the assessee’s son case in ITA Nos.20 to 24/Del/2020 for AYs 2011-12 to 2015-16, ITAT has deleted the similar additions vide order dated 21.06.2022. Ld. DR for the Revenue could not dispute the proposition that these additions are made de hors of any incriminating material”, the coram of Astha Chandra, the Judicial Member, and Shamim Yahya, the Accountant Member added.
Thus, the Delhi ITAT finally held:
“Hence, we set aside the orders of the authorities below and delete the additions in all the four appeals. In the result, all the four appeals filed by the assessee are allowed.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
