Case Law Details
DCIT Vs Anil Kumar Sharma; (ITAT Delhi)
The brief facts of the case shows that the assessee is an individual who is chief managing director of M/s. Ultra Home Construction Pvt. Ltd. Search u/s 132 of the Act was carried out in Amrapali Group of Cases on 09.09.2010 wherein, assessee was also covered.
During the assessment proceedings it was found that assessee has taken advance from Ultra Home Construction Pvt Ltd of Rs. 6307160/- where assessee is holding 39.6% shares as on 31.03.2006 and 36.66% as on 31.03.2007. The ld AO noted that lender company is not in the business of giving finance and therefore, according to him the provisions of section 2(22) (e) were hit. The ld Assessing Officer issued notice which remained unreplied and therefore, the addition of Rs. 6307160/- was made vide order dated 26.03.2013 passed u/s 143(3) read with Section 153A of the Income Tax Act.
Held by ITAT
The impugned Assessment Year before us is Assessment Year 2007-08. The assessee filed return of income on 22.10.2007. The notice u/s 143(2) of the Act could have been issued to the assessee up to 30.09.2008. No such notice was issued. Therefore, as on the date of search the assessment was completed assessment. Therefore, if any addition is made in the concluded assessment it has to be made only on the basis of incriminating material found during the course of search. If there is no incriminating material found then assessment u/s 153A of the Act was to be passed only on the returned income or earlier assessed income. In the present case, it is apparent that addition has been made on the basis of the same material, which was there prior to the date of search, and no incriminating material was mentioned in the assessment order or produce before us. Therefore, the issue is squarely covered by the decision of the Hon’ble Delhi High Court in case of CIT Vs. Kabul Chawla 380 ITR 573. In view of this we are of the opinion that addition of deemed dividend could not have been made in the hands of the assessee in absence of any incriminating material. In view of this ground No. 3 of the cross objection of the assessee the whole addition of Rs. 6307160/- made by the ld Assessing Officer is unsustainable in law.
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