9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (3) TMI 1159 - AT - Income TaxAssessment u/s 153A - Addition on the basis of statement recorded u/s 132(4) - Revenue has challenged finding of the Ld. CIT(A) that no addition could be made under section 153A of the Act on the basis of the statement recorded under section 132(4) of the Act as there was no incriminating material found during the course of the search - HELD THAT - No assessment was pending as on the date of the search - the assessee had filed his original return of income on 30/09/2009 declaring total income of ₹ 1,89,72,710/-. No notice under section 143(2) of the Act was issued till 30/09/2010, which was the limitation under which notice u/s 143(2) of the Act could have been issued. The search action in the case of assessee was carried out on 09/10/2014, therefore, no assessment proceeding was pending in the case of the assessee as on date of the search. This position has not been disputed by the Revenue also. Incriminating material found during the course of the search - We find that Hon ble Delhi High Court in the case of PCIT Vs Best Infrastructure Private Limited, 2017 (8) TMI 250 - DELHI HIGH COURT has held that statement under section 132(4) in the itself does not constitute incriminating material. As per HARJEEV AGGARWAL 2016 (3) TMI 329 - DELHI HIGH COURT statement of Sh. Mulchand Malu under section 132(4) of the Act alone cannot be considered as incriminating material unless any corroborating incriminating material is found during the course of the search from the premises of the assessee. We do not find any error in the order of the Ld. CIT(A) on the issue in dispute. Following the finding of the Hon ble Delhi High Court in the case of Kabul Chawal 2015 (9) TMI 80 - DELHI HIGH COURT we, accordingly, uphold the same. The ground No. 1 of the appeal of the Revenue is accordingly dismissed.
Issues Involved:
1. Whether additions can be made under Section 153A of the Income Tax Act based on statements recorded under Section 132(4) without any incriminating material found during the search. 2. Reliance on the decision of the Hon'ble Supreme Court in the case of CIT vs. Singhad Technical Education Society. 3. Failure of the assessee to produce the Directors of the company that provided accommodation entries. 4. Consideration of the statement of Sh. Mulchand Malu and its impact on the assessment. 5. Practicality of cross-examining persons involved in paper/jamakharchi companies. Detailed Analysis: 1. Additions Based on Statements Recorded Under Section 132(4): The primary issue is whether additions can be made under Section 153A based solely on statements recorded under Section 132(4) without any incriminating material found during the search. The Tribunal held that no additions could be made under Section 153A on the basis of statements alone, as there was no incriminating material found during the search. The Tribunal relied on the decision of the Hon'ble Delhi High Court in the case of Kabul Chawla, which states that additions under Section 153A can only be made if incriminating material is found during the search. The Tribunal also referred to the case of Harjeev Aggarwal, where it was held that statements recorded under Section 132(4) do not themselves constitute incriminating material unless corroborated by evidence found during the search. 2. Reliance on the Decision of CIT vs. Singhad Technical Education Society: The Revenue argued that the facts and circumstances of the instant case were different from those in CIT vs. Singhad Technical Education Society. However, the Tribunal did not find this argument persuasive, as the core issue was the absence of incriminating material found during the search, which was consistent with the principles laid down in Kabul Chawla. 3. Failure to Produce Directors: The Revenue contended that the assessee failed to produce the Directors of the company that provided accommodation entries, thereby failing to prove the genuineness and creditworthiness of the credits. The Tribunal noted that the Assessing Officer had conducted extensive inquiries, including issuing commissions and conducting surveys, but did not find any corroborating evidence to support the additions. The Tribunal emphasized that the burden of proof lies on the Revenue to establish the existence of incriminating material. 4. Statement of Sh. Mulchand Malu: The Tribunal considered the statement of Sh. Mulchand Malu, who admitted to unexplained credits in the assessee's books. However, the Tribunal noted that Sh. Mulchand Malu was neither a director nor an employee of the assessee company and had passed away, making cross-examination impossible. The Tribunal held that statements without corroborating evidence do not constitute incriminating material, as per the decision in Harjeev Aggarwal. 5. Practicality of Cross-Examination: The Revenue argued that it was impractical to cross-examine persons involved in paper/jamakharchi companies. The Tribunal, however, emphasized the importance of providing an opportunity for cross-examination, especially when the statements of third parties are relied upon for making additions. The Tribunal referred to the principle that the right to cross-examine is a fundamental aspect of natural justice. Conclusion: The Tribunal upheld the decision of the CIT(A) that no additions could be made under Section 153A based solely on statements recorded under Section 132(4) without any incriminating material found during the search. The Tribunal dismissed the appeals of the Revenue for all the assessment years involved (2009-10, 2011-12, and 2013-14), following the principles laid down in the case of Kabul Chawla and Harjeev Aggarwal. The Tribunal emphasized the necessity of incriminating material for making additions in assessments under Section 153A and the importance of the right to cross-examine witnesses.
|
