Maniben Chhadwa, Mumbai vs Assessee

Mrs. Maniben Chhadwa Asst. CIT, Central Circle-8, 602/B, 3rd Floor, Captain House, Mumbai Dr. Ambedkar Road, Matunga (CR), बनाम/ Mumbai-400 019 Vs.

थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AACPC 9095 K (अपीलाथ" /Appellant) : (#$यथ" / Respondent)

अपीलाथ" क% ओर से / Appellant by : Shri Vijay Mehta

#$यथ" क% ओर से/Respondent by : Shri S. J. Singh

सनु वाई क% तार+ख / : 13.01.2015 Date of Hearing घोषणा क% तार+ख / : 11.03.2015 Date of Pronouncement

आदे श / O R D E R Per Sanjay Garg, Judicial Member :

The present appeal has been preferred by the assessee against the order of the ld. CIT(A) dated 14.09.2010. The assessee inter alia has contested the validity of the additions made by the Assessing Officer (A.O.) pursuant to the assessment u/s.143(3) r/w s. 153A of the Income Tax Act, 1961 ('the Act' hereinafter).

2. The facts in brief are that a search and seizure action u/s. 132(1) of the Act was carried out in the group cases of M/s. Sea Lifestyles Pvt. Ltd. including residential 2 ITA No. 8574/Mum/2010 (A.Y. 2003-04) Mrs. Maniben Chhadwa vs. Asst. CIT

premises of the assessee on 11.04.2007. Notice u/s.153A was issued and served upon the assessee and thereafter the reassessment was done u/s.143(3) r/w s. 153A of the Act. The A.O. added a sum of Rs.13,08,326/- being gift received by the assessee by way of SBI Resurgent India Bonds worth US # 20,000/- from one Mr. Minesh Shah. The assessee had contended before the ld. CIT(A) that the above said addition was not based upon any incriminating material found during the course of search and that the reassessment of already concluded assessment in the absence of any incriminating material could not be done under law. However, the said contention of the assessee was rejected. The A.O. held that the assessee could not prove with cogent and convincing evidence, the receipt of the said amount of Rs.13,08,326/- and made the addition u/s.68 of the Act. The ld. CIT(A) also confirmed the addition so made by the A.O. The assessee has thus came in appeal before us.

3. At the outset, the ld. AR of the assessee has submitted that no incriminating material was found during the search action, hence the reassessment in this case of the already concluded assessment was not valid. He has also relied upon the decision of the tribunal in the case of family member of the assessee, namely Mrs. Rakesha Chaddwa, wherein the additions were made on identical facts and pursuant to the same search action and also in respect of the gift of SBI Resurgent India Bonds, valuing at Rs.6,54,138/-. He has contended that the tribunal in the case of family member of the assessee, on identical facts and in relation to the same search action has deleted the addition on the ground that no incriminating material was found against the assessee during the search action.

4. We have gone through the decision of the tribunal passed in ITA Nos. 8576 and 8577/Mum/2010 order dated 17.10.2014. The tribunal on the identical facts has deleted the addition in the case of family member of the assessee Mrs. Rakesha Chaddwa, observing as under:

'5. We have heard the rival contentions and carefully perused the record. There is no dispute with regard to the fact that both the assessment years under consideration fall in the category of "concluded assessments". In the various case 3 ITA No. 8574/Mum/2010 (A.Y. 2003-04) Mrs. Maniben Chhadwa vs. Asst. CIT

law relied upon by the Id. AR of the Assessee, it has been held that the AO would be entitled to make any addition in the case of concluded assessments only on the basis of incriminating materials found during the course of search, since the concluded assessments do not abate by virtue of section 153A of the Act. The said view is also supported by the decision of Mumbai Special bench of IT AT rendered in the case of All Cargo Global Logistics Ltd (ITA NO.5108 to 5022/Mum/2010 dated 06-07-2012). Further, in the case of Shri Govind Agarwal (supra) relied upon by the assessee, we notice that the Tribunal has placed reliance on the decision rendered by the Hon'ble Rajasthan High Court in the case of Jai Steel (India), Jodhpur Vis ACIT [2013] 36 taxmann.com 523, wherein the Hon'ble Rajasthan High Court has held that "in case, nothing incriminating is found on account of such search or requisition, then the question of reassessment of the concluded assessments does not arise, which would require more reiteration and it is only in the context of the abated assessment under second proviso which is required to be assessed". For the sake of convenience, we extract below the relevant observations made by the Co- ordinate Bench of the Tribunal in the case of Shri Govind Agarwal (supra):

"17. Rajasthan High Court judgment in the case of Jai Steel (India) (supra), vide para 18, it is categorically mentioned that "the requirement of assessment or reassessment under the said section (153A) has to be read in the context of sections 132 or 132A of the Act, inasmuch as, in case nothing incriminating is found on account of search or requisition, then the question of reassessment of the concluded assessments does not arise, which would more reiteration ...........". Thus, the judgment of Hon'ble High court in the case of Jai Steel Ltd, supra and above decisions of the Tribunal are categorical in concluding that, in case of the concluded assessments like the present one, the additions are made only based on the incriminating material discovered during the search action. he facts of the Jai Steel Ltd (supra) are identical to the present one i.e., AO made additions by reassessing u/s 153A on the completed assessment u/s 143(1) of the Act. Thus, considering the judgment in the case of the Jai Steel Ltd (supra), the arguments on the legal issue raised before us stands covered. Therefore, considering the Rajasthan High Court's judgment in the case of Jai Steels Ltd, supra, we have no difficulty in (i) upholding the issue of notice u/s 153A of the Act and (2) in disapproving the making of the impugned additions u/s 68 and 14A of the Act, which are not backed by the incriminating materials. In the absence of incriminating material, the role of the AO is only to reiterate the returned income filed in response to the notice u/s 153A of the Act. Accordingly, in substance, the common legal issue raised in the grounds for both the appeals of the assessee (ITA Nos. 3389 & 3390/M/2011) is allowed"

4 ITA No. 8574/Mum/2010 (A.Y. 2003-04) Mrs. Maniben Chhadwa vs. Asst. CIT

6. In the instant cases also, there is no dispute with regard to the fact that the additions made by the AO in assessment years 2003-04 and 2005-06 are not based upon any incriminating material found during the course of search. Further, both the above said assessment years fall in the category of concluded assessments. Hence, by following the consistent view taken by the various benches of Tribunal, we hold that the impugned additions made in both the years under consideration are liable to be deleted. Accordingly, we set aside the orders passed by the Id. CIT(A) in both the years and direct the AO to delete the impugned additions made in both the years.

7. In the result, the appeals filed by the assessee are allowed.'

5. The facts of the case in hand are identical. Additions in this case have also been made in relation to gift of SBI Resurgent India Bonds for the identical reasons. Admittedly no incriminating material was found during the search action against the assessee. Hence, the reassessment in this case in the absence of any incriminating material legally could not have been done of the already concluded assessment. Being in agreement and respectfully following the decision of the tribunal on identical facts in the case of family member of the assessee, we do not find any justification in the action of the lower authorities in making the impugned additions. The reassessment in this case is held to be invalid and the same is set aside. The additions so made pursuant to the reassessment u/s.153A in this case are, therefore, ordered to be deleted.

6. In the result, the assessee's appeal is hereby allowed.

प1रणामतः नधा 1रती क% अपील वीकृत क% जाती है ।

Order pronounced in the open court on March 11, 2015

Sd/- Sd/- (B. R. Baskaran) (Sanjay Garg) लेखा सद य / Accountant Member या यक सद य / Judicial Member

मुंबई Mumbai; 7दनांक Dated : 11.03.2015

व. न.स./Roshani, Sr. PS 5 ITA No. 8574/Mum/2010 (A.Y. 2003-04) Mrs. Maniben Chhadwa vs. Asst. CIT

आदे श क" # त%ल&प अ'े&षत/Copy of the Order forwarded to :

1. अपीलाथ" / The Appellant

2. #$यथ" / The Respondent

3. आयकर आय8 ु त(अपील) / The CIT(A)

4. आयकर आय8 ु त / CIT - concerned

5. ;वभागीय # त न<ध, आयकर अपील+य अ<धकरण, मंब ु ई / DR, ITAT, Mumbai

6. गाड फाईल / Guard File आदे शानस ु ार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai