Case Overview: ITA No. 4487/DEL/2019
Appellant: JCIT Spl. Range-12, New Delhi
Respondent: Pawan Kumar Agarwal, New Delhi
Assessment Year: 2010-11
Case Filed On: 2019-05-16
Order Type: Final Tribunal Order
Date of Order: 2022-06-27
Pronounced On: 2022-06-27
Introduction
This case analysis pertains to ITA No. 4487/DEL/2019, where JCIT Spl. Range-12, New Delhi, appealed against Pawan Kumar Agarwal, proprietor of M/s Supreme Gold, New Delhi, for the Assessment Year 2010-11. The appeal was consolidated with ITA Nos. 4488 and 4489/DEL/2019 for Assessment Years 2011-12 and 2012-13, respectively. The case involves the scrutiny of additions made based on entries in regular books of accounts and the lack of incriminating material found during search operations.
Background of the Case
A search and survey were conducted at the business premises of the assessee, Pawan Kumar Agarwal, where certain cash was found and seized. Subsequent to this, the assessment orders were made under sections 153A/143(3) of the Income Tax Act on 31.12.2017. The assessing officer made additions based on the entries in the regular books of accounts, citing the assessee’s failure to provide details of expenses and produce bills and vouchers.
Proceedings Before the CIT(A)
Pawan Kumar Agarwal appealed against the assessment orders before the Commissioner of Income Tax (Appeals)-12, New Delhi. The CIT(A) allowed the appeals and deleted the additions/disallowances made by the Assessing Officer. The CIT(A) concluded that the assessment could not be arbitrary or made without any relevant or nexus with the seized material. The completed assessments could only be interfered with based on some incriminating material unearthed during the search or requisition of documents, which was not the case here.
Tribunal’s Findings
The Revenue department challenged the CIT(A)’s order before the Income Tax Appellate Tribunal (ITAT). The ITAT examined the case and observed that the Assessing Officer had made additions based on regular book entries without finding any incriminating material during the search and seizure action. The ITAT upheld the CIT(A)’s decision, citing the jurisdictional High Court’s judgment in CIT vs. Kabul Chawla and PCIT vs. Meeta Gutgutia, which held that completed assessments could only be interfered with based on incriminating material found during the search.
Conclusion
The ITAT dismissed the Revenue’s appeals, affirming that the additions/disallowances made by the Assessing Officer were not sustainable in the absence of any incriminating material. The tribunal’s decision aligns with the established legal precedents that emphasize the necessity of incriminating evidence for making additions in assessments under section 153A.
Case Implications
This case reinforces the principle that assessments under section 153A can only be altered based on incriminating material found during search operations. The tribunal’s reliance on jurisdictional High Court judgments underscores the importance of adherence to legal precedents in tax litigation.
Final Judgment
Order: The appeals filed by the Revenue stand dismissed.
Order Pronounced: 27/06/2022
Bench: Shri Anil Chaturvedi (Accountant Member) and Shri N.K. Choudhary (Judicial Member)
Conclusion: The ITAT’s decision to dismiss the Revenue’s appeals highlights the necessity of incriminating evidence for justifying additions in assessments under section 153A. This case serves as a significant precedent for similar cases involving search and seizure operations.
