TaxTMI 
TaxTMI 
2021 (4) TMI 155
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.... on facts. 2. On the facts and circumstances of the case, Ld. CIT(A) has erred in law in by relying upon the order of the Hon'ble High Court in the case of Kabul Chawla. 3. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law in quashing the assessment order framed u/s 153A of the Income-tax Act, 1961. 4. The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal. 2.2 Grounds of appeal of the assessee: (1) That the order dated 29-12-2017 passed u/s 250 of the Income-tax Act, 1961 (hereinafter called "the Act") by the Ld Commissioner of Income-tax (Appeals) 23, New Delhi is against law and facts on the file in as much as he was not justified to uphold the action of the Learned Assistant Commissioner of Income Tax, Central Circle-3, New Delhi in making an addition/disallowance of Rs. 14,00,06,089/- (comprised of alleged bogus Zinc purchased from M/s Hindustan Zinc Limited of Rs. 13,59,00,614/- and transport expenses paid to M/s Mewat Transport Company of Rs. 41,05,475/-') while computing the income under the normal computational provisions of the Act. (2) That the order dated 29-12-2017....
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....thereon, the assessee filed a copy return of income dated 10/11/2010. The scrutiny proceedings under section 153A of the Act were commenced and statutory notices under the Act were issued and complied with. In the assessment order under section 153A read with section 143(3) of the Act was passed on 30/12/2016 after making additions of Rs. 14,00,06,089/-. On further appeal, the Ld. CIT(A), not only upheld the addition on merit but also made enhancement, however, he allowed the legal grounds in favour of the assessee quashing the assessment. Aggrieved, both the Revenue and the assessee are in appeal before the Tribunal raising the grounds as reproduced above. 4. Before us, both the parties appeared through Video Conferencing facility. 5. At the outset, Learned Counsel of the assessee submitted that Ld. CIT(A) has allowed the legal ground, i.e., in absence of an incriminating material found during the course of search, no addition can be made u/s. 153A of the Act in the completed assessments, following the decision of the jurisdictional High Court in the case of CIT vs. Kabul Chawla (2016) 380 ITR 0573 (Del). The learned Counsel submitted that in view of no incriminating material fo....
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....since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed. This judgment has been considered in all the existing judgments on the matter, some of which have been referred to by the AR in his arguments. 10.3 Hon'ble Delhi High Court in a recent judgment delivered in case of Principal Commissioner of Income-tax, Central -2, New Delhi Vs. Meeta Gutgutia [2017] 82 taxmann.com 287 (Delhi) has held that invocation of section 153A by revenue for assessment years 2000- 01 to 2003-04 was without any legal basis where there was no incriminating material qua each of those assessment years. The relevant portion of the judgment is reproduced as under: "38. It appears that the seized cash was added to the income during the year of search and not in relation to any of the other AYs i.e., AYs 2000-01 to 2004-05. The documents as stated by the Revenue in its Memorandum of Appeal in ITA No. 306/2017 viz., Annexures A1, A3 to A5 stated to pertain to AY 2003-04, 2005-06, 2004-05, and 2005- 07 respectively have neither been described as such or in any detail by the Revenue either in these appeals. They have not been referred to....
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....on. In the said decision, the Hon'ble High Court has held that in absence of incriminating material found during the course of search, no addition can be made u/s 153A of the Act in completed assessments. Thus, for applicability of the ratio of the Kabul Chawla (supra), two conditions as under are required to be fulfilled: (i) No assessment proceedings were pending as on the date of the search. (ii) No incriminating material is found during the course of the search under section 132 of the Act. 7.2 As far as first condition is concerned, it is admitted position that no assessment was pending on the date of the search. The only dispute is regarding the second condition, i.e., no incriminating material was found during the course of the search. The fact that no incriminating material was found during the course of the search is evident from the order of lower authorities as under : (i) The Assessing Officer in para 4.1 of the assessment order has mentioned as how the said evidences were gathered through a tax evasion petition received during assessment proceedings. The relevant para of the assessment order is reproduced for ready reference: "4.1 During the course of assessm....