The case of Harvansh Chawla, New Delhi, against the ACIT, Central Circle-5, New Delhi, pertains to the assessment year 2013-14. The appeal was filed on June 21, 2021, under case number ITA 765/DEL/2021. The final tribunal order was pronounced on September 9, 2021.
The appellant, Harvansh Chawla, had appeals against a consolidated order by the Commissioner of Income Tax (Appeals) – 24, New Delhi, dated May 27, 2021. These appeals pertained to the assessment years 2011-12, 2012-13, and 2013-14, following a search and seizure operation conducted on April 7, 2016, under section 132 of the Income-tax Act, 1961.
Subsequently, statutory notices under section 153A of the Act were issued, and the appellant filed his return of income. The assessment was completed with additions on account of disallowance of depreciation and interest expenses.
On September 9, 2021, the hearing was conducted via video conferencing before the Delhi ‘C’ Bench of the Income Tax Appellate Tribunal. The case was presented by Shri Amit Goel, C.A., representing the assessee, and Ms. Sunita Singh, CIT-DR, representing the revenue.
The main legal principle in this case revolved around the provisions of section 153A of the Income-tax Act, which deals with assessments in cases where a search is initiated. The Hon’ble High Court of Delhi has established that any additions or disallowances in such assessments must have a direct nexus with incriminating material found during the search.
This principle was reinforced by the High Court in the cases of Kabul Chawla (380 ITR 573) and Meeta Gutgutia Prop. M/s. Ferns ‘N’ Petals (ITA No.306 to 308/2017).
The tribunal found that the additions made by the assessing officer were not based on any incriminating material found during the search. Consequently, in light of the decisions of the Hon’ble Jurisdictional High Court of Delhi, these additions were directed to be deleted.
Specifically, for the assessment year 2013-14 (ITA No. 765/DEL/2021), an addition of Rs. 2,02,548/- was made on a protective basis. The assessing officer had already made a substantive addition of this amount under the provisions of the Black Money Act. The tribunal noted that making the same addition under the Income-tax Act would amount to double addition, rendering the protective addition otiose.
In conclusion, all three appeals (ITA Nos. 763, 764, and 765/DEL/2021) were allowed. The order was pronounced in the open court on September 9, 2021, in the presence of both parties.
The detailed judgment underscores the necessity for a direct link between the search findings and the additions made during the assessment. The tribunal’s decision to delete the additions serves as a significant reference for future cases involving similar circumstances.
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