TMI Blog2021 (8) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be considered an incriminating material in order to make addition in an unabated assessment year - Decided in favour of assessee. - ITA No.4007/M/2019 - - - Dated:- 27-7-2021 - Shri Rajesh Kumar, Accountant Member And Shri Ravish Sood, Judicial Member For the Assessee : Shri Ritu Kamal Kishor, A.R. For the Revenue : Shri T.S. Khalsa, D.R. ORDER PER RAJESH KUMAR, ACCOUNTANT MEMBER: The present appeal has been preferred by the assessee against the order dated 29.03.2019 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2008-09. 2. The grounds raised by the assessee are as under: 1. On the facts and in the circumstances of the appellant's case and in law the Ld. CIT(A) erred in confirming AO's action of making addition u/s. 2(22)(e) despite the fact that during the course of search no incriminating material or evidence was found relating to deemed dividend and as on the date of search no assessment or reassessment was pending for the AY 2008-09 that could be abated. 2. On the facts and in the circumstances of the appellant's case and in law the Ld. CIT(A) erred in not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1 is against the order of Ld. CIT(A) upholding the assessment framed under section 143(3) read with section 153A of the Act by ignoring the fact that no incriminating material was found and seized during the course of search action and therefore no addition can be made in absence of any seized incriminating material as the assessment has attained finality and was unabated on the date of search. 4. The facts in brief are that the search action under section 132 of the Act was carried out on 14.03.2013 by DDIT (Inv.), Unit 4, Mumbai at private offices, site office, residence of main persons of M/s. Enercon (India) Ltd. now known as M/s. Wind World India Ltd. and other related companies promoted by Mr. Yogesh Jogendranath Mehra and Mr. Ajay Mehra. The assessee was also covered under the said search. Consequent to the search a notice under section 153A of the Act dated 28.01.2014 was issued and duly served upon the assessee which was complied with by the assessee by filing the return of income on 11.08.2014 declaring total income at ₹ 1,08,67,617/-. The AO noted that search team during the course of search operation has noticed that loans and advances have been given by M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the issue involved in the present appeal is squarely covered by the decision of the coordinate bench in assessee own case ITA No.4006/M/2019 A.Y. 2007-08 and therefore the appeal of the assessee may be decided accordingly following the said decision. 6. After hearing both the sides and perusing the order of the coordinate bench in ITA No. No.4006/M/2019 A.Y. 2007-08, we find that the similar issue is decided by the coordinate bench in assessee own case the operative part whereof is extracted below: 8. We have heard the rival submissions of both the parties and perused the material on record including the orders of authorities below and various decisions cited before us. It is undisputed that during the course of search proceedings on the assessee no incriminating materials were found in respect of the assessee except the copies of assessee ledger accounts which are part of books of accounts and statement recorded during the search action u/s 132(4) of the Act. In the instant case, the assessee filed the original return of income under section 139(1) of the Act on 30.07.2007 whereas the search was conducted under section 132(1) of the Act on14.03.2013 almost after more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the co-ordinate bench of the Tribunal in the case of DCIT vs. Shivali Mahajan others (supra). The relevant paras are reproduced below: 3 . During the course of search, statement of Shri Lalit Mahajan i.e., the assessee in appeal No.5590/Del/2015 was recorded, in which, he admitted of cash investment by him and other family members in respect of booking of space in Indirapuram Habitat Centre 4. .. 7. Learned DR, on the other hand, stated that during the course of search of Aerens Group who is the builder and developer of Indirapuram Habitat Centre .. .. That the statement under Section 132(4) has a legal sanctity and that by itself constitutes an evidence and addition can be made on the basis of assessee s statement 8. .. 9. We have carefully considered the arguments of both the sides and perused the material placed before us. After considering the facts of the case and the rival submissions, we find that in these appeals, following two questions arise for our consideration : (i) Whether any material found in the search of any other person than the assessee in appeal can be considered in the assessment under Section 153A of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the date of search, no addition can be made without incriminating seized materials. The case of the assessee is covered by the following decisions: a) In CIT v. Continental Warehousing Corporation (Nhava Sheva) Ltd. (2016) 374 ITR 645 (Bom)(HC) wherein it was held that no addition can be made in respect of assessments which have become final if no incriminating material is found during search. b) In CIT v. Gurinder Singh Bawa [2017] 79 taxmann.com 398 (Bom) where it was held that where no incriminating material was found during course of the search, entire proceedings under section 153A of the Act were without jurisdiction. c) In CIT v. Deepak Kumar Agarwal [2017] 86 taxmann.com 3 (Bom) wherein it was held that Assessment under section 153A of the Act can be made only on basis of incriminating material found in search under section 132 of the Act and only income related to incriminating documents found during search can be considered in the assessment. d) The ITAT Special Bench in the case of All Cargo Global Logistics Ltd. v. DCIT [2012] 18 ITR(T) 106 (Mum) (SB) (Page 1-20 of PB - II) (Para 7 at page 16) it was held that in case of assessments which do not abate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g account between the two sister concerns wherein there is a continuous exchange of transactions and the account was squared up during the year, no part of the said amounts could be treated as being attributed to the shareholders. We find that in the case of the assessee, the facts are exactly same as the funds were transferred to various entities inter se out of commercial expediency in order to purchase land in the name of these entities in various states in view of the Land Ceiling Act in vogue in those states. As the installation of windmills and sales thereof is the business of the assessee and the necessary adjustments are made after purchase of land by these entities and therefore the advancing of loans is out of business and commercial consideration. Similarly, in the case of Akruti City Ltd. vs. DCIT (supra) the identical issue was decided in favour of the assessee by holding that financial transactions out of business expediency between two sister concerns can not be called as loans or advances for the purpose of invoking section 2(22)(e) of the Act. The same view as held by the Hon ble High Court of Punjab Haryana in the case of CIT vs. Suraj Dev Dada (supra) wherein i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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