Income Tax Appellate Tribunal - Chandigarh
Dcit, Central Circle Ii, Chandigarh vs M/S Scm Fintrade Pvt. Ltd., New Delhi on 5 January, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH 'B', CHANDIGARH BEFORE MS.DIVA SINGH, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No.981/Chd/2017 (Assessment Year : 2007-08) & ITA No.982/Chd/2017 (Assessment Year : 2011-12) The D.C.I.T., Vs. M/s SCM Fintrade Pvt. Ltd., Central Circle-II, F-334, Sarita Vihar, Chandigarh. New Delhi.
PAN: AABCS6194B
(Appellant) (Respondent)
Appellant by : Shri Ashish Abrol, CI T DR
Respondent by : Shri Ashwani Kumar, CA
Date of hearing : 02.01.2018
Date of Pronouncement : 05.01.2018
O RDE R
PER BENCH:
B o t h t h e a p p e al s f i l e d b y t h e R e ve n u e r e l a t i ng t o s a m e a s s e s s e e h av e be e n p r e f e r re d a ga i n s t t h e s e pa r at e o r d e r s p a s s e d b y t h e Ld . C o m m i s s i on e r o f I n c o m e Ta x ( A p p e a l s ) -3 , Gurgaon ( h e re i na f t e r r e f e r re d to as ' C I T( A p p e al s ) ' ) both d a t e d 3 1 . 3 .2 0 1 7 r e l a t i n g t o as s es s m e n t y e a rs 2 00 7 - 0 8 a n d 2011-12.
I t w a s c om m o n g r o u n d b et w e e n b o t h t h e p a r t i es t h a t the issue i nv o l v e d in both the appeals w as identical. Th e r e f o r e , t h e y w e r e t a ke n u p to g e t h e r f o r h e ar i n g a n d a re b e i n g d i sp o s e d of f b y w a y o f th i s c o n s o l i d at e d o rde r .
2. The Revenue in both the appeals is aggrieved by the action of the Ld.CIT(Appeals) in deleting the additions 2 made by the Assessing Officer in assessment proceedings, conducted pursuant to search carried out at the premises of the assessee, merely for the reason that no incriminating material was found during the course of search. While the addition made in assessment year 2007- 08 pertains to unexplained cash credits with respect to share capital amounting to Rs.50 lacs, the addition made in assessment year 2011-12 is as per the provisions of section 56(2)(viia) of the Act, on account of shares purchased by the assessee of a company for consideration less than the fair value of the share and amounts to Rs.1,40,08,980/-. The Ld.CIT(Appeals) in both the cases found that at the time of search proceedings, assessments in the impugned years were not pending and had therefore not abated. He further found that no incriminating material or evidence was found and seized during the course of search, nor any addition made emanating out of search proceedings. Therefore, relying on various judicial pronouncements, the Ld.CIT(Appeals) held that the impugned additions could not have been made in the facts of the present case in the order passed u/s 153A of the Act. The Ld.CIT(Appeals) has relied upon the decision of the Coordinate Bench of the Tribunal in the case of M/s Mala Builders Pvt. Ltd. Vs. ACIT in ITA Nos.433 to 437/Chd/2014 wherein the Tribunal had further relied upon the decision of he Hon'ble Bombay High Court in the case of CIT Vs. M/s Murli Agro Products Pvt. Ltd. in ITA No.36 of 2009 and in the case of CIT Vs. Kabul Chawla, 3 234 Taxman 300 (Del) in which the Hon'ble High Court had unanimously held that in the absence of any incriminating material found during the course of search action when there was no pending assessment which could be said to have abated on the date of search the addition could not have been made.
3. Before us, the Ld. counsel for assessee placed copy of order passed by the I.T.A.T., Chandigarh Bench in the case of DCIT Vs. M/s Bharatnet Technology Ltd. in ITA Nos.983 & 984/Chd/2017 dated 13.11.2017 and stated that the present appeals were squarely covered by the aforesaid decision of the Tribunal also wherein identical grounds had been raised by the Revenue in its appeal. Besides, the Ld. counsel for assessee stated that the Ld.CIT(Appeals) had rightly deleted the additions made following the order of the Coordinate Bench in the case of M/s Mala Builders Pvt. Ltd. (supra) and the decision of the Hon'ble Delhi High Court in the case of Kabul Chawla (supra) since clearly, the additions in the impugned case were not based on any incriminating material found during the course of search.
4. The Ld. DR when confronted with the findings of the Ld.CIT(Appeals) fairly admitted that no incriminating material was found during the search action and the original assessment proceedings stood completed on the date of search. But at the same time he invited our attention to the ground No.(xi) taken by the Revenue 4 wherein it has been stated that the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Kabul Chawla (supra) has been distinguished by the Hon'ble Delhi High Court in the case of Smt.Dayawanti (supra).
5. We have heard the contentions of both the parties. We do not find any merit in the present appeal filed by the Revenue. The facts vis-à-vis both the appeal that search action was carried out on the assessee on 4.10.2012 and at the time of search action no assessment or re- assessment proceedings were pending is undisputed. It is also not disputed that no incriminating documents or record or any other evidence was found or seized during the course of search proceedings which resulted in any addition in the case of the assessee. Therefore, the Ld.CIT(Appeals), we hold, has rightly deleted the addition made following various judicial pronouncements in this regard. Further we do not find any merit in the contention of the Ld. DR that the decision of the Hon'ble Delhi High Court in the case of Kabul Chawla (supra) has been distinguished in the case of Smt.Dayawanti Vs. CIT inn ITA No.357/2015 & Others dated 27.10.2016, since we find that even this aspect has been dealt with by the ITAT Chandigarh Bench in the case of M/s Bharatnet Technology Ltd. (supra) in which it was observed that the case of Smt.Dayawanti (supra) was subsequently discussed by the Hon'ble Delhi High Court in the case of Principal CIT Vs. Meeta Gutgutia Prop. M/s Ferns 'N' Petals in ITA No.306/2017 & Other decision vide order 5 dated 25.5.2017, wherein it was held that in the case of Smt.Dayawanti (supra) incriminating material was found during search action, however, in the case of Principal CIT Vs. Meeta Gutgutia Prop. M/s Ferns 'N' Petals no incriminating material was found during search action and hence addition made was not justified. In view of the above, we do not find any infirmity in the order of the Ld.CIT(Appeals) while deleting the impugned additions in both the appeals filed by the Revenue.
6. I n t h e r e s u l t, bo t h t h e a p p e al s f i l e d b y t he R ev e n u e a r e , t h e re f o r e , d i s m i s s e d .
O r d e r p r on o u n c ed i n t h e o p e n cou r t .
Sd/- Sd/-
(DIVA SINGH) (ANNAPURNA GUPTA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated : 5 t h January, 2018
*Rati*
Copy to:
1. The Appellant
2. The Respondent
3. The CIT(A)s
4. The CIT
5. The DR
Assistant Registrar,
ITAT, Chandigarh