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2018 (2) TMI 506 - AT - Income TaxAssessment u/s 153A - Additions on account of alleged investment in jewellery - Held that - As considered very facts from that case and variation in the gold jewellery in his case was to the extent of 269.10 grams. Similarly, variation in silver articles was of 13.43 kg. This was excess jewellry found at the time of search than the one disclosed in the wealth-tax returns filed by the assessees viz. Ganapat L. Chowdhary. Similarly, in the case of Smt.Parvati S. Chowdhary variation was of only 41.96 grams of gold jewellery. It suggests that details with regard to possession of jewellery were already disclosed to the department. No incriminating material was found which can justify action under section 153A of the Act. The AO has nothing to expose the assessee on account of jewellery which was already disclosed to the department, and with regard to that no incriminating material was found. This aspect has been considered by us in the order of Shripal Sampatraj Chowdhary extracted (2018 (2) TMI 423 - ITAT AHMEDABAD)(2018 (2) TMI 427 - ITAT AHMEDABAD). Following order of the Co-ordinate Bench, we allow all these appeals, and direct the AO to delete impugned additions. - Decided in favour of assessee.
Issues Involved:
1. Legality of additions made under section 153A of the Income Tax Act. 2. Consideration of wealth tax returns as incriminating material. 3. Validity of the assessment framed without incriminating material. Issue-wise Detailed Analysis: 1. Legality of Additions Made Under Section 153A: The primary grievance of the assessees was that the Commissioner of Income Tax (Appeals) [CIT(A)] erred in confirming additions on account of alleged investment in jewelry. A search and seizure operation was conducted at the residential premises of the assessees, and notices under section 153A were issued. The Assessing Officer (AO) directed the assessees to submit wealth tax returns and other supporting evidence. The AO was not satisfied with the explanations provided by the assessees and made additions. On appeal, the CIT(A) confirmed these additions, citing similar facts across different cases. 2. Consideration of Wealth Tax Returns as Incriminating Material: The Tribunal noted that in the case of Shripal Sampatraj Chowdhary, the issue was identical and had already been decided. The Tribunal observed that no incriminating material was found during the search proceedings, and the only evidence available was the wealth tax returns filed by the assessees. The Tribunal held that wealth tax returns cannot be considered as incriminating material. The Bombay High Court in the case of Continental Warehousing Corporation held that the AO could not disturb finalized assessments unless new material was unearthed during the 153A proceedings. 3. Validity of the Assessment Framed Without Incriminating Material: The Tribunal referenced multiple judgments, including those from the High Courts of Bombay and Delhi, which established that in the absence of incriminating material, assessments under section 153A cannot disturb completed assessments. The Delhi High Court in Kabul Chawla summarized the legal position, stating that completed assessments can only be interfered with based on incriminating material found during the search. The Tribunal concluded that the assessments made without any incriminating material were illegal and bad in law, thus quashing the additions made by the AO. Conclusion: The Tribunal allowed all the appeals of the assessees, directing the AO to delete the impugned additions. The assessments made without any incriminating material were deemed illegal and bad in law. Order Pronounced: The order was pronounced in the Court on 1st February 2018 at Ahmedabad.
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