TMI Blog2021 (9) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... hus assessment of the respondents had attained finality prior to the date of search and no incriminating documents or materials had been found and seized at the time of search. Consequently, no addition can be made under Section 153A of the Act as the cases of respondents are of non-abated assessments. - Decided in favour of assessee. - ITA 81/2020, ITA 143/2020& CM APPL. 7615/2020, ITA 93/2020& CM APPL. 5457/2020, ITA 94/2020& CM APPL. 5461/2020, ITA 120/2020& CM APPL. 6638/2020, ITA 77/2020, ITA 79/2020, ITA 99/2020, ITA 105/2020, ITA 1027/2019 & CM APPL. 55503/2019 - - - Dated:- 9-9-2021 - HON'BLE MR. JUSTICE MANMOHAN AND HON'BLE MR. JUSTICE NAVIN CHAWLA Appellant Through : Mr. Ajit Sharma, Advocate. Respondent Through : Mr. Gautam Jain, Advocate. MANMOHAN, J. (Oral) The hearing has been done by way of video conferencing. BACKGROUND 1. Present appeals have been filed under Section 260A of the Income Tax Act, 1961 (for short the Act ) challenging the order dated 30th April, 2019 passed by the Income Tax Appellate Tribunal (for short ITAT ) for Assessment Years 2008-09, 2009-10 and 2010-11. 2. Appellant seeks framing of substantial q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Learned counsel for the appellant/Revenue states that the ITAT has erred in confirming the orders of the Commissioner Income Tax (Appeal) and directing the Assessing Officers to delete the additions made under Section 68 of the Act on account of unexplained credits and under Section 69C of the Act on account of unexplained expenses. He submits that the impugned orders are perverse and passed without independently analyzing the decision of this Court in the case of CIT vs Kabul Chawla, (2016) 380 ITR 573 and without adverting to the merits of the cases. He emphasises that the ITAT has erred in deleting the additions made by the AO in the assessments framed under Section 153A of the Act without appreciating the fact that the decision of this court in the case of CIT v. Kabul Chawla (supra) had not been accepted by the department and the Special Leave Petition preferred by the department had been dismissed due to low tax effect and not on merit. He submits that finality on the impugned issue of law has not been attained till date as SLPs are pending before the Apex Court impugning the same issue in the case of CIT V. M/s Continental Warehousing Corporation Ltd. 235 Taxman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal without any evidence. Section 260A is akin to Section 100 of the CPC, 1908. [See: Sampath Iyengar s Law of Income Tax]. THE ASSESSMENT OF THE RESPONDENTS HAD ATTAINED FINALITY PRIOR TO THE DATE OF SEARCH. 8. A perusal of the paper book reveals that Income Tax Returns in the present batch of matters had been duly accepted and intimation under Section 143(1) of the Act had been issued. Neither notices under Section 143(2) of the Act nor reassessment notices under Section 148 of the Act had been issued. Consequently, the assessment of the respondents had attained finality prior to the date of search. BOTH THE CIT (A) AS WELL AS ITAT HAVE GIVEN CONCURRENT FINDINGS OF THE FACT THAT NO INCRIMINATING MATERIALS HAD BEEN SEIZED IN THE SEARCHES. THE TRIBUNAL S FINDING THAT IT IS AN ADMITTED FACT THAT IN THE SEARCH ACTION UNDER SECTION 132 OF THE ACT, NO INCRIMINATING DOCUMENT/MATERIAL WAS FOUND AND SEIZED AT THE TIME OF SEARCH IS CORRECT AND SUFFERS FROM NO PERVERSITY. CONSEQUENTLY, IT IS NOT OPEN TO THE APPELLANT TO CONTEND THAT INCRIMINATING DOCUMENTS/MATERIALS HAD BEEN FOUND AND SEIZED DURING SEARCHES. 9. As far as the contention of learned counsel for the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identity, creditworthiness and genuineness of the transactions of investment in shares application money/premium of the appellant company. (f) All the 4 persons/directors in some of the investor companies, which have subscribed in the share capital of the investor company of the appellant, whose alleged statements were recorded during the survey action u/s 133A of the Act, on 18.6.2013 and were relied upon by the A.O. in drawing an adverse inference against the appellant, in their subsequent statements recorded by the A.O. on 22.3.2016 and sworn in affidavits dated 21.3.2016 filed during the assessment proceedings of the investor company, have categorically submitted that earlier no statements were recorded and their signatures were obtained on the print-outs of the alleged appellant. Further, they have confirmed about investment made by their companies in the investor company of the appellant. (g) In the search action u/s 132 of the Act, no corroborative evidences were found, substantiating the alleged statements of Shri Vimal Kumar Dugar, the director in the Investor company of the appellant, recorded u/s 132(4) of the Act, on the date of search on 18.6.2013. (h) I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contend that incriminating documents/materials had been found and seized during searches. IN CIT VS KABUL CHAWLA, (2016) 380 ITR 573 IT HAS BEEN HELD THAT IF NO INCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF THE SEARCH IN RESPECT OF AN ISSUE, THEN NO ADDITION IN RESPECT OF SUCH AN ISSUE CAN BE MADE IN THE ASSESSMENT UNDER SECTIONS 153A AND 153C OF THE ACT. 11. A learned predecessor Division Bench of this Court in Kabul Chawla (supra) has held that if no incriminating material is found during the course of the search in respect of an issue, then no addition in respect of such an issue can be made in the assessment under Sections 153A and 153C of the Act. The legal position summarized in Kabul Chawla (supra) is reproduced hereinbelow:- 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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