2023 (4) TMI 365 - AT - Income Tax

Addition u/s 69A - additional income in settlement before the Settlement Commission - HELD THAT - CIT(A) has deleted the addition u/s. 69A following the order in the case of M/s. Indiabulls Financial Services Ltd. 2022 (11) TMI 1164 - ITAT MUMBAI . The Co-ordinate Bench has upheld the findings of CIT(A) in deleting the addition on the ground the amount has already been considered in income of the assessee and other entities, before the Settlement Commission. Thus, in facts of the instant case, we do not find any infirmity in the findings of CIT(A) on this issue, hence, the same are upheld and ground No.1 to 3 of the appeal are dismissed. Assessment u/s 153A - Addition on account of accrued interest on FDR - HELD THAT - It is an undisputed fact that on the date of search no assessment was pending for the impugned assessment year. A bare perusal of the assessment order shows that there is no reference to any incriminating material. In the case of CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. 2015 (5) TMI 656 - BOMBAY HIGH COURT has held that where there is no pending assessment and no incriminating material is found during search, no addition can be made in assessment proceedings u/s. 153C r.w.s. 143(3) Addition invoking proviso to section 79 in assessment proceedings u/s 153C - Whether CIT(A) has erred in holding that it is a case of unabated assessment? - HELD THAT - The assessee is a subsidiary of Indiabulls group. A perusal of the assessment order would show that the addition made u/s. 79 of the Act is not based on any incriminating material found and seized during the course of search. In so far as the argument of the ld. Departmental Representative that it is a case of abated assessment, the same is unsubstantiated, hence rejected. In absence of any incriminating material coupled with the fact that it is a case of unabated assessment, no addition could have been made by the Assessing Officer based on any material which was already available on record at the time of regular assessment Re. CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. 2015 (5) TMI 656 - BOMBAY HIGH COURT Appeal by the Revenue is dismissed

Summary

Issues Involved:
- Appeal against order of Commissioner of Income Tax (Appeals) for Assessment Years 2011-12, 2017-18, and 2015-16.
- Time-barred appeals by the Revenue.
- Addition on account of unexplained cash under section 69A of the Income Tax Act 1961.
- Deletion of addition on account of accrued interest on Fixed Deposit Receipts (FDRs).
- Interpretation of provisions under section 153C read with section 143(3) of the Act.
- Application of proviso to section 79 of the Act regarding change in shareholding pattern.

Analysis:

Assessment Year 2011-12:
- The Revenue filed an appeal against the CIT(A)'s order for the Assessment Year 2011-12, challenging the deletion of additions related to unexplained cash and accrued interest on FDRs.
- The Revenue's appeal was time-barred by two days, but the delay was condoned.
- The CIT(A) deleted the additions based on findings that were consistent with a previous decision involving a related entity within the same group.
- The Tribunal upheld the CIT(A)'s decision, citing that the amount in question had already been considered in the income of the assessee and other entities before the Settlement Commission.
- The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision on both issues.

Assessment Year 2017-18:
- The Revenue appealed against the CIT(A)'s order for the Assessment Year 2017-18, challenging the deletion of additions related to unexplained cash under section 69A.
- The appeal was initially time-barred by 10 days, but the delay was condoned due to reasons explained by the Departmental Representative.
- The Tribunal dismissed the Revenue's appeal, applying the same reasoning and decision as in the Assessment Year 2011-12.

Assessment Year 2015-16:
- The Revenue appealed against the CIT(A)'s order for the Assessment Year 2015-16, challenging the deletion of additions related to unexplained cash under section 69A and invoking section 79 of the Act.
- The appeal was initially time-barred by 130 days, but the delay was condoned based on valid reasons.
- The Tribunal dismissed the Revenue's appeal, maintaining that the additions made by the Assessing Officer lacked incriminating material and were not justified in the absence of such evidence.
- The Tribunal rejected the argument of abated assessment and upheld the CIT(A)'s decision to delete the additions.
- The Tribunal dismissed the Revenue's appeal for this assessment year as well.

In conclusion, the Tribunal dismissed all three appeals by the Revenue for Assessment Years 2011-12, 2017-18, and 2015-16, upholding the decisions of the CIT(A) in deleting the additions on various grounds.