Anil Mahavir Gupta vs. ACIT (ITAT Mumbai)

DATE: August 31, 2016 (Date of pronouncement)
DATE: September 20, 2016 (Date of publication)
AY: 2002-03
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S. 153A: Even in a case where only a s. 143(1) assessment is made, additions cannot be made without the backing of incriminating material if the s. 143(1) assessment has not abated

(i) The making of an addition in an assessment under section 153A of the Act, without the backing of incriminating material, is unsustainable even in a case where the original assessment on the date of search stood completed under section 143(1) of the Act, thereby resulting in non-abatement of such assessment in terms of the Second Proviso to section 153A(1) of the Act. It is well settled that additions could not have been made in the assessment finalized under section 143(3) r.w.s. 153A(1) of the Act considering the absence of any incriminating material having been found in the course of search qua the impugned additions and the original assessment not having abated in terms of Second Proviso to section 153A(1) of the Act. (CIT vs. Continental Warehousing Corporation (NHAVA SHEVA) Ltd, 374 ITR 645 (Bom), CIT vs. Kabul Chawla in ITA 707/2014 dated 28/08/2015, Jai Corp [2013 36 523 (Rajasthan) and Govind Agarwal in ITA No.3389&3390/Mum/2011 dated 10/01/2004,

(ii) The parties have not denied making of sales to the assessee, but the aforesaid parties had made purchases from certain other parties who stated that they had issued only accommodation bills in favour of the aforesaid parties. This aspect has not been disputed by the Revenue before us, and in any case, the further finding of the CIT(A) that no particular purchase effected by the assessee has been linked to such accommodation bills obtained by the suppliers has also not being disputed before us. In fact, it is for this reason that the Assessing Officer chose to treat the maximum credit balance standing in the aforesaid eight creditors as unexplained within the meaning of section 68 of the Act. The said approach of the Assessing Officer is itself suspect because what is expected to be assessed under section 68 of the Act are the particular credits which are found to be unexplained.

(iii) The seized paper in question was found from the premises of Mr. Bharat G. Shah, who is an employee of the assessee. Therefore, the primary onus was on Mr. Bharat G. Shah to explain the contents of the document so as to justify the inference of the Assessing Officer that it reflected unaccounted transactions of the assessee, and, such an onus does not appear to have been discharged, having regard to the material on record. Even otherwise, there is no material to connect the assessee with such loose papers. Therefore, under these circumstances, we find no reasons to interfere with the conclusion of the CIT(A) in deleting the impugned addition.

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