ACIT Vs M/s. Samor Properties Pvt. Ltd. (ITAT Ahmedabad)
It is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs.11,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition.
Once it is no in dispute that the additions in questions are not based on any incriminating material found during the search operation, as is the undisputed factual position in this case, the very foundation of the additions ceases to be sustainable in law.
FULL TEXT OF THE ITAT JUDGEMENT
The instant appeal filed by the revenue is directed against the order dated 31.10.2016 passed by the Commissioner of Income Tax (Appeals)-12, Ahmedabad under section 143(3) r.w.s 153A(1)(b) of the Income Tax Act, 1961 (in short ‘the Act’) arising out of the order dated 30.03.2014 passed by the Deputy Commissioner of Income Tax, Central Circle – 2(3), Ahmedabad for the Assessment Year 2009-10.
2. The facts leading to this case is this that in the case of Jayesh Steel Group, search operation u/s 132 of the Act was conducted on 13.10.2011. The assessee’s case was also covered in the said search action. Subsequently, notice u/s 153A was served upon the assessee upon which return of income on 27.12.2013 for A.Y. 2009-10 was filed declaring total income at Rs.28,240/-and book profit under Section 115JB of the Act at Rs.28,240/-.
Notice dated 17.09.2013 u/s 143(2) was served upon the assessee followed by a further notice u/s 143(2) dated 02.12.2013 and 142(1) along with a questionnaire. The AO during the assessment proceeding observed that the share capital of the assessee has increased by Rs.1,79,25,000/- (Rs.20,00,000/-for A.Y. 2010-11). The details/evidences were called upon from the appellant with regard to the same and after considering the same the Learned AO concluded that the “share capital introduced by the assessee company in this year is its unexplained cash credit and the same is added u/s 68”. The AO also additionally brought to tax the commission @ 0.5% of the amount so introduced, thus resulting into total additions as under:
