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2020 (2) TMI 158

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..... lready completed on 25.07.2009 by proceeding the return under section 143(1), therefore, issue is covered by Judgments of Hon’ble Delhi High Court in the case of CIT vs., Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] and Pr. CIT vs., Meeta Gut Gutia [2017 (5) TMI 1224 - DELHI HIGH COURT] . The Departmental appeal stand dismissed. - ITA.No.3589/Del./2016, Cross Objection No.284/Del./2016 Arising out of ITA.No.3589/Del./2016 - Dated:- 3-2-2020 - Shri Bhavnesh Saini, Judicial Member And Shri R.K. Panda, Accountant Member For the Assessee : Shri Krishna Sampath, Advocate. For the Revenue : Shri Sanjay Goel, CIT-D.R. ORDER PER BHAVNESH SAINI, J.M. The Departmental Appeal and Cross Objection by Assessee are directed against the Order of .....

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..... the following additions/disallowances. (i) Disallowance on account of brokerage - ₹ 1,80,84,869/- (ii) disallowance on account of compensation- ₹ 9,25,47,870/- 2.1. The assessee challenged the both the additions before the Ld. CIT(A) and it was submitted that both the additions are beyond the scope of provisions of Section 153A of the I.T. Act because the said disallowances are not based upon any documents/papers seized during the course of search held on assessee on 19.10.2010 and at the time of search, proceedings were completed and not abated. 2.2. The Ld. CIT(A) found that assessee filed original return of income on 17.09.2008, declaring loss of ₹ 1,94,170/-. The same was processed under section 143(1) of the Act on 2 .....

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..... nder section 143(1) was completed on 25.07.2009. It was also found that the impugned disallowances are not based on any documents found and seized during the course of search or emanating out of any undisclosed income, cash, or investment etc., not disclosed by the assessee. Nothing in this regard has also been mentioned by the AO in the assessment order. The disallowance has been made on the basis of enquiries made during the course of assessment proceedings under section 153A of the Act. Therefore, the ratio laid down by Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla 380 ITR 573 (Del.) is applicable in this case. Therefore, there was no justification by the A.O. to make additions under section 153A of the I.T. Act, 1961. .....

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..... ecent decision in the case of Pr. CIT vs. Meeta Gutgutia 395 ITR 526 (Del.), in which, following the Judgment in the case of Kabul Chawla (supra), it was held as under : 69. What weighed with the Court in the above decision was the habitual concealing of income and indulging in clandestine operations and that a person indulging in such activities can hardly be accepted to maintain meticulous books or records for long. These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission. 70. The above distinguishing factors in Dayawanti Gupta (supra), therefore, do .....

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