Morpan Merchant Private Limited Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that addition u/s 68 of the Income Tax Act towards share application money unsustainable since they are not based on any incriminating material found during the course of search.
Facts- The assessee herein belongs to Gauti Group. The assessee along with other group concerns/family members was subjected to search operations u/s. 132 of the Act on 09-03-2015 by the Investigation wing of the Income tax department. Consequent thereto, the assessments were completed in the hands of the assessee for the above said years u/s. 143(3) read with section 153A of the Act.
In the years under consideration, the assessing officer added the share application money received by the assessee as income of the assessee u/s 68 of the Act holding them to be accommodation entries. CIT(A) confirmed the same. Being aggrieved, the present appeal is filed by the assessee.
Conclusion- Held that the additions made by the Assessing Officer under section 68 of the Act towards Share Application money received by the assessee are liable to be deleted, since they are not based on any incriminating material found during the course of search. Accordingly, we set aside the orders passed by the Ld CIT(A) and direct the Assessing Officer to delete the impugned additions made in both these years.
Hon’ble Delhi High Court in the case of PCIT vs. Abhisar Buildwell P. Ltd. it is held that in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The assessee has filed these appeals challenging the orders passed by Ld CIT(A)-52, Mumbai and they relate to the AY2012-13 and 2013-14. In both these appeals the assessee is challenging the validity of additions made in the assessment completed under section 153A of the I.T. Act in the absence of any incriminating material on the ground that assessments of these years do not abate u/s 153A of the Act. Accordingly, both these appeals were heard on the above said legal ground and are being disposed of by this common order, for the sake of convenience.
2. The facts relating to the cases are stated in brief. The assessee herein belongs to Gauti Group. The assessee along with other group concerns/family members was subjected to search operations under section 132 of the Act on 09-03-2015 by the Investigation wing of the Income tax department. Consequent thereto, the assessments were completed in the hands of the assessee for the above said years under section 143(3) read with section 153A of the Act. In the years under consideration, the assessing officer added the share application money received by the assessee as income of the assessee u/s 68 of the Act holding them to be accommodation entries. The details of share application money assessed as income in each of the years are given below:-
