2018 (12) TMI 1890 - AT - Income Tax

Tribunal rules in favor of assessee on Section 153A additions, citing lack of material

The Assistant Commissioner of Income Tax, Central Circle – 1 (4), Chennai Versus Shri M. Kiran Kumar

The Tribunal upheld the lower authority's decision, ruling that no addition could be made under Section 153A of the Income-tax Act, 1961, due to ... Addition u/s 153A - Conflicting views - HELD THAT:- Admittedly, there was no material found during the course of search operation. When there are two conflicting views, this Tribunal is of the considered opinion that the view in favour of assessee has to be followed. Therefore, in the absence of material found in the course of search operation, there cannot be any addition under Section 153A. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. The cross-objections filed by the assessee become infructuous, therefore, stand dismissed. Issues:1. Appeal against common order of Commissioner of Income Tax for assessment years 2009-10 and 2011-12.2. Conflicting judgments of Kerala High Court and Delhi High Court regarding addition under Section 153A of the Income-tax Act, 1961.3. Consideration of conflicting views by the Tribunal.4. Dismissal of cross-objections filed by the assessee.Analysis:1. The judgment addresses the appeals by the Revenue against the common order of the Commissioner of Income Tax for assessment years 2009-10 and 2011-12. The assessee also filed cross-objections for both years, leading to a joint consideration of the appeals and cross-objections due to a common issue.2. The Tribunal deliberated on conflicting judgments of different High Courts regarding the addition under Section 153A of the Income-tax Act, 1961. The Revenue relied on the Kerala High Court judgment in CIT v. M/s St. Francis Clay Décor Tiles (2016) 385 ITR 624, while the assessee presented the judgment of the Apex Court in Principal CIT v. Meeta Gutgutia (2018) 96 taxmann.com 468, arising from a contrary view of the Delhi High Court. The Tribunal noted the dismissal of the Revenue's Special Leave Petition against the Delhi High Court judgment, indicating a prima facie approval by the Apex Court.3. Considering the conflicting views of the High Courts, the Tribunal concluded that in such instances, the view favoring the assessee should prevail. As no material was found during the search operation, the Tribunal determined that no addition could be made under Section 153A of the Income-tax Act, 1961. Consequently, the Tribunal upheld the order of the lower authority, confirming no interference was necessary.4. The cross-objections filed by the assessee were deemed infructuous and subsequently dismissed by the Tribunal. Ultimately, both the appeals by the Revenue and the cross-objections by the assessee were dismissed in the judgment delivered on 19th December 2018 in Chennai.This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's reasoning behind its decision, ensuring a thorough understanding of the legal complexities and implications discussed in the case.