Case Law Details
Mr. Trilok Chand Chaudhary Vs ACIT (ITAT Delhi)
Conclusion: AO made assessment under section 153A in case of assessee by using the material found in the course of search at the premise of third party which was not permitted in view of the express provision of the law as proceedings should be initiated u/s 153C and failure to do so rendered the addition in the section 153A assessment void-ab-initio
Held: During search proceeding at the premise of A certain document was seized which contained a list of valuables. According to AO, daughter of assessee had been married to the son of A and these items were given by assessee as dowry on marriage of his daughter. But, since this document was found from the premises of A and due to no explanation by him, addition was made by AO in his hand on substantive basis and on protective basis in the case of assessee. But CIT(A) upheld addition in the case of assessee on substantive basis. It was held assessment under section 153C could have been made after completion of the assessment under section 153A. The Act has provided separate provisions for making assessment in case of material found in the course of the search from the premises of assessee as well as the material found in the course of search at the premises of the third party. AO was required to follow the procedure laid down in the Act for making the assessment and he could not devise his own procedure for shortcut methods. When the case of assessee was covered under the provision of section 153 of the Act and if reliance is placed on the incriminating material found during the course of search of third-party, then provision of section 153C would be applicable and had to be adhered to. Thus, in the instant case, AO was required to first complete the proceedings under section 153A in hand, which were initiated by way of notice dated 30/06/2014 and thereafter, he was at liberty to take action under section 153C for bringing the material found from the premise of A to tax in the hands of the assessee. In the instant case, separate search warrant had been issued in the case of assessee as well in the case of A and AO had used the material found in the course of search at the premise of A which was not permitted in view of the express provision of the law. The addition made by AO in violation of the procedure provided in the Act was bad in law and void-ab-initio and could not be sustained.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is directed against order dated 27/06/2017 passed by the Ld. Commissioner of Income-tax (Appeals)-31, New Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2009-10, raising following grounds:
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