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TMI Blog2021 (7) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... n CIT vs Kabul Chawala (2016) 380 ITR 573; CIT vs Muralidhar Dr. S and Vibhu Bakhru JJ. (2016) 384 ITR 543. 2) That the Impugned order is not maintainable in law as the Ld. CIT(A)- Kanpur vide Impugned Order has reversed the judgment and order of his predecessor CIT(A)~ Meerut, who vide order dated 22-07-2011 deleted the addition made by the Ld. AO even though there is no fresh material brought on record by the Ld. CIT(A)-Kanpur and/or the Ld. AO in remand proceedings. 3) That the Impugned Order is not tenable in law in so far as the Ld. CIT(A) has taken a different view and went on to confirm the addition relating to S.No. 1 even though the provisions of Rule 46A of IT Rules, 1962 were not applicable in respect of the additions made. In other words, on the same facts and evidence, the Ld. AO has reversed the judgment of his predecessor without even conducting any further enquiry whatsoever and bringing any fresh evidence on record. 4) That on facts and in law, the addition of Rs. 65,000/- under section 69 of the Income Tax Act, 1961 being unexplained investment in the PPF A/c of the assessee is unjustified, illegal and unwarranted. The assessee made investment in PPF Accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the file of Ld.CIT(A) for admitting the additional evidences and decide the appeal afresh. Hence, in the second round of litigation, Ld.CIT(A) after considering the submissions and evidences placed on record, deleted the addition related to gift and loan amounting to Rs. 60,000/- & Rs. 15,50,000/- respectively. The only addition sustained was related to cash deposit in PPF account of Rs. 65,000/-. 9. Against this, the assessee has preferred the appeal before the Tribunal. 10. Ground Nos. 1 & 2 raised by the assessee are legal grounds and have been raised against the validity and legality of the assessment framed by the Assessing Officer. 11. At the outset, Ld. Counsel for the assessee submitted that there was no fresh material before the Assessing Officer. Moreover, no incriminating material was found in the search operation as such no addition could have been made. He further submitted that the assessment has been framed contrary to the ratio laid down by the judgements of Hon'ble Delhi High Court in the case of Kabul Chawla [2016] 380 ITR 573 [Del.] and Pr. CIT vs Lata Jain [2016] 384 ITR 543 [Del.]. He submitted that in the light of aforesaid judgements of Hon'ble Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously, an assessment has to be made under this section only on the basis of seized material." v. In the absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. In so far as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each Assessment Year on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer. vii. Completed assessments can be interfered with by the Assessing Officer while making the assessment under Section 153A only on the basis of some incriminating material unearthed during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade investment in PPF Account out of known sources and out of income chargeable to tax. Therefore, on grounds taken, basis adopted and on facts as well as in law the addition of Rs. 70,000/- is unjustified, illegal and unwarranted and the same deserves to be deleted. 5) That on facts and in law, the addition of Rs. 60,000/- under section 69 of the Income Tax Act, 1961 being unexplained cash deposits in banks is unjustified, illegal and unwarranted. The assessee deposited the amount in the bank account out of known sources. Therefore, on grounds taken, basis adopted and on facts as well as in law, the addition of Rs. 60,000/- is unjustified, illegal and unwarranted and the same deserves to be deleted. 6) That on facts and in law, the addition of Rs. 50 lakhs under section 2 (22) (e) of the Income Tax Act, 1961 is illegal and unjustified. The provisions of section 2(22) (e) are not applicable and the Ld. Assessing Officer did not apply its mind to the facts brought to his notice. Therefore, on grounds taken and basis adopted and on facts and in law, the addition of Rs. 50,00,000/- is unjustified and unwarranted and the same deserves to be deleted. 7) That on facts and in law tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-05. In this year as well the assessment had been completed hence the assessment was not abated and additions have no nexus with the incriminating material found during the course of search. In the Assessment Year 2004-05, we have quashed the assessment on the ground that same has not been framed on the basis of incriminating material found during the course of search. By following the judgement of Hon'ble Delhi High Court rendered in the case of CIT vs Kabul Chawla (supra). The Revenue has not pointed out any change into the facts and circumstances, therefore, taking a consistent view, the assessment for the year under appeal is hereby quashed being contrary to the law laid down by the Hon'ble Jurisdictional High Court of Delhi in the case of Kabul Chawla (supra). Ground Nos. 1 & 2 raised by the assessee in this appeal are allowed. 24. Rests of the grounds are on the merit of additions since we have already quashed the assessment order. The other grounds have become academic in nature only hence, are not adjudicated. Therefore, the appeal of the assessee in ITA No.3154/Del/2017 pertaining to Assessment Year 2005-06 is allowed in terms indicated above. 25. Now, we take up ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- under section of the Income Tax Act, 1961 is unjustified and illegal. The assessee duly discharged the onus under section 68 and no adverse inference was called for. Therefore, on grounds taken and basis adopted and on facts and in law, the addition of Rs. 2,00,000/- is illegal and unwarranted and same deserves to be deleted in toto. 26. At the outset, it was also noticed in this appeal that there was a typographical error in the Ground No.1. The error was pointed to the Ld. Counsel for the assessee who subsequently modified the ground. The Ground No.1 of the appeal now reads as under:- i. "The impugned assessment order is invalid as there was no incriminating material for the assessee found/unearth during the search and assessment order for assessment year 2004-05 already stood completed. Therefore, no addition could have been made to the income already assessed. Reliance is placed on the judgement of Hon'ble Delhi High Court in CIT vs Kabul Chawla (2016) 380 ITR 573." 27. The facts are identical as were in ITA No.3154/del/2017 pertaining to Assessment Year 2005-06. In this year, Ld.CIT(A had sustained the additions of Rs. 70,000/- and Rs. 2,50,000/- made on account of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record by the Ld. CIT(A)- Kanpur and/or the Ld. AO in remand proceedings. iii) That the Impugned Order is not tenable in law in so far as the Ld. CIT(A) has taken a different view and went on to confirm the addition relating to S.No. 2 & 3 even though the provisions of Rule 46A of IT Rules, 1962 were not applicable in respect of the additions made. In other words, on the same facts and evidence, the Ld. AO has reversed the judgment of his predecessor without even conducting any further enquiry whatsoever and bringing any fresh evidence on record. This is nothing but a change of opinion by the Ld. CIT(A) which is not permissible in law. iv) That on facts and in law, the addition of Rs. 20 lakhs under section 2 (22) (e) of the Income Tax Act, 1961 is illegal and unjustified. The provisions of section 2(22)(e) are not applicable and the Ld. CIT(A) did not apply its mind to the facts brought to his notice. Therefore, on grounds taken and basis adopted and on facts and in law, the addition of Rs. 20,00,000/- is unjustified and unwarranted and the same deserves to be deleted. v) That on facts and in law, the addition of Rs. 2,00,00,000/- on account of benefit derived on purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that in the said company, the assessee was having share holding/voting power of 33.33%. Therefore, treating the credit in the account of the assessee as the loan from M/s. ATS infrastructure Ltd. The Assessing Officer made addition by invoking the provision of section 2(22)(e) of the Act. The assessee carried the matter before the Ld.CIT(A) who in the second round of the litigation sustained this addition. Hence, the assessee is in further appeal before this Tribunal. 39. It is pertinent to note that the impugned addition was infact deleted by Ld.CIT(A) in the original proceedings. However, when the matter was remanded by this Tribunal for fresh adjudication, Ld.CIT(A sustained this addition. Ld. Counsel for the assessee reiterated the submissions as made before the Ld.CIT(A). Ld. Counsel for the assessee submitted that in the original proceedings, Ld.CIT(A), Meerut had infact deleted this addition. He drew our attention to the findings of Ld.CIT(A), Meerut who vide order dated 10.03.2011 in para 9.5 held that the sum of Rs. 20 Lakhs received by the assessee on 17.05.2006 from M/s. ATS infrastructure Ltd. represents repayment of pre-existing liability by M/s. ATS infrastr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of M/s ATS Infrastructure Ltd along with the bank account statement of HDFC Bank Ltd from which the payment of Rs. 20 Lac was made by the assessee to M/s ATS Infrastructure Ltd. Considering the evidence placed on record I am of the view that the sum of Rs, 20 Lacs received by the assessee on 17/05/06 from M/s ATS Infrastructure Ltd represents a repayment of pre-existing liability by M/s ATS infrastructure Ltd and therefore, the same is not covered u/s 2(22)(e) of the Income Tax Act, 1961. The addition of Rs. 20 lac is therefore deleted." 42. However, vide order dated 31.03.2017, addition was sustained by observing as under:- "It may be seen from the assessment order that it is undisputed fact that appellant has more than 10% shares in the company. Moreover, it is also undisputed fact that the amount has flown from the account of the company to the account of appellant. In support of his claim appellant could not furnish any agreement between M/s. ATS infrastructure Ltd. and himself with respect of sale of property for which appellant has claimed to have paid booking amount to the company. In this situation, it emerges that the story put by appellant to explain the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition. It is contended that the Assessing Officer erred in adopting market price at Rs. 3.5 crore in utter disregard to the fact that the value adopted by Stamp Valuation Authority is much lower than the value as disclosed by the assessee. Ld. Counsel for the assessee has also filed written note which is reproduced here under for ready-reference:- 1. "The addition of Rs. 2 crore on account of benefits derived on allotment of flat was made by the income tax department in the case of the assessee as well as the other co-directors of ATS Infrastructure Limited viz. Mr. Geetambar Anand and Anil Kumar Saha, by using the exact language. 2. In the case of co-director Mr. Geetambar Anand, the income tax department has accepted the deletion of addition of Rs. 2 crore on account of benefits derived on allotment of flat. The copy of the original assessment order dt. 29-12-2009, CIT (Appeals) orders dt. 09-03-2011 and 13-01-2014 and ITAT orders dt. 28-06-12 and 16-06-2017 in case of co-director Mr.Geetamber Anand have been placed on records. The CIT (Appeals) vide order dated 13-01-2014 in Appeal No.: 297/13-14 (in pursuance of order of the ITAT dated 28-06-2012 in ITA No. 2707/DELl2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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