Poonam Promoters and Developers Pvt. Ltd. Vs ACIT (ITAT Delhi)
Summary: ITAT Delhi allowed the assessee’s appeal and directed deletion of an addition of ₹50 lakh made in assessment proceedings under Section 153A for AY 2005-06, holding that the addition was not based on any incriminating material found during the search. A search and seizure operation was conducted on BPTP Limited, its group concerns and associated persons on 07.12.2010 and concluded on 05.02.2011. The Tribunal noted that notice under Section 148 was issued only on 29.03.2012 and therefore the Assessing Officer’s observation that the reassessment proceedings had abated was factually incorrect.
The Tribunal relied upon its decision in the group case of USG Buildwell Private Limited, where, following the Delhi High Court ruling in CIT v. Kabul Chawla, it was held that completed assessments could be interfered with under Section 153A only on the basis of incriminating material unearthed during search.
In the present case, the ₹50 lakh addition relating to entries credited in the books as sale of investments to Narmata Marketing Private Limited and Passion Chits Private Limited was not based on incriminating search material. The Tribunal observed that the issue stood settled in favour of the assessee by the Supreme Court in PCIT v. Abhisar Buildwell Pvt. Ltd., 454 ITR 212. Respectfully following the coordinate Bench decision and the Supreme Court ruling, ITAT Delhi directed the Assessing Officer to delete the impugned addition and allowed the assessee’s appeal.
Cases Discussed
- USG Buildwell Private Limited, ITA No. 2155/Del/2015 and ITA No. 1351/Del/2015, AYs 2005-06 and 2006-07 (ITAT Delhi) — Coordinate Bench decision followed on an identical situation for holding that where no incriminating material was found during search, addition could not be made in respect of the completed assessment.
- CIT v. Kabul Chawla, 380 ITR 573 (Delhi High Court) — Relied upon in the coordinate Bench decision for the proposition that completed assessments can be interfered with under Section 153A only on the basis of incriminating material unearthed during search.
- PCIT v. Abhisar Buildwell Private Limited, (2023) 454 ITR 212 (Supreme Court) — Followed by the Tribunal in holding that the issue concerning addition in a completed assessment without incriminating search material stood settled in favour of the assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
