9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 236 - AT - Income TaxAssessment u/s 153A - incriminating materials have been found during the search or not? - HELD THAT - The date of search in the present case was on 26.08.2015 and the assessment for the assessment year 2012-13 has been completed u/s 143(3) and the amount received from M/s Cindy Goods Supply Pvt. Ltd. of ₹ 3,50,00,000/-, thus the assessment in question has to be treated as a completed assessment not as an assessment kept in abeyance which necessitates the requirement of incriminating material to make any addition u/s 153A. Keeping in view the fact that no incriminating materials have been found during the search which led to the addition, the fact that the lender company cannot be treated as a paper company owing to the returned income mentioned above, keeping in view the order of the Co-ordinate Bench of the Tribunal regarding the treatment of amounts received from M/s Cindy Goods Supply Pvt. Ltd. in the case of Nimbus India Ltd. which was also assessed u/s 153A and since the sources have been substantiated, we hereby hold that no addition is warranted in the case of the assessee. - Decided in favour of assessee.
Issues involved:
1. Validity of assuming jurisdiction under section 153A by the assessing officer. 2. Addition of unsecured loan under section 68 without incriminating material. 3. Requirement of valid approval under section 153D for assessment order. 4. Legal validity of additions made without incriminating material. Analysis: Issue 1: Validity of assuming jurisdiction under section 153A The appeal was filed against the order of the ld. CIT(A) confirming the action of the assessing officer in assuming jurisdiction under section 153A. The assessee contended that the jurisdiction assumed by the AO was incorrect. However, the CIT(A) upheld the action based on various court judgments. The Tribunal considered the argument and relied on the judgment in CIT Vs. Kabul Chawla, where it was held that additions made under section 153A without incriminating material are not legally valid. The Tribunal noted that no incriminating material was found during the search in this case, leading to the conclusion that the addition was not warranted. Issue 2: Addition of unsecured loan under section 68 without incriminating material The AO made an addition of ?1,50,00,000 on account of unexplained unsecured loans received from M/s Cindy Goods & Supply Pvt. Ltd. The assessee argued that the addition was made without any incriminating material, which is essential for assessment under section 153A. The Tribunal observed that the amount received from the lender company was substantiated, and no incriminating material was found during the search. Additionally, the Tribunal considered the returned income of M/s Cindy Goods & Supply Pvt. Ltd., which indicated that it was not a paper company. Based on these factors and the precedent set by the Co-ordinate Bench of the ITAT, the Tribunal held that no addition was warranted in the case of the assessee. Issue 3: Requirement of valid approval under section 153D The assessee raised a ground regarding the non-quashing of the assessment order passed by the AO without obtaining valid approval under section 153D. However, the Tribunal did not delve into this issue as the main focus was on the validity of the additions made without incriminating material. Issue 4: Legal validity of additions made without incriminating material The Tribunal extensively analyzed the legal validity of making additions without incriminating material. Relying on various case laws, including judgments from the Hon'ble Supreme Court, the Tribunal emphasized that additions made without incriminating material are not legally valid. The Tribunal highlighted the importance of incriminating material in assessments under section 153A and concluded that in the absence of such material, no addition could be justified. In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing that no addition was warranted due to the absence of incriminating material and the substantiation of the sources of the unsecured loan. The judgment was pronounced in favor of the assessee on 15/10/2020.
|
