Search and Seizure Operation u/s 132 of the Income-tax Act, 1961

This case involves appeals against orders confirming additions made by the Assessing Officer following a search and seizure operation under Section 132 of the Income-Tax Act, 1961. The assessee argued that the Assessing Officer's order was invalid and that Section 153C was applied without proper jurisdiction. The appeals also contested additions made on account of bank deposits and unexplained purchases, with the assessee arguing for the application of the 'peak theory' and claiming double additions.

IN THE INCOME TAX APPELLATE TRIBUNAL
“C” BENCH : BANGALORE

BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT
AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER

ITA Nos.289 to 292/Bang/2020
Assessment years : 2008-09 to 2011-12

Smt. K.N. Nandini,
Opp. APMC Yard,
Dam Road,
Hospet – 583 201.
Bellary.
PAN: ABCPN 5042Q
APPELLANT 

Vs. 

The Assistant Commissioner
of Income Tax,
Central Circle 2(1),
Bangalore.
RESPONDENT

Appellant by : Shri H.N. Khincha, CA
Respondent by : Shri Pradeep Kumar, CIT(DR)(ITAT), Bengaluru.

Date of hearing : 06.07.2021
Date of Pronouncement : 12.07.2021

O R D E R

Per Chandra Poojari, Accountant Member

 These appeals by the assessee are against the separate orders, all dated 31.12.2019 of the CIT(Appeals)-11, Bengaluru for the assessment years 2008-09 to 2011-12. These appeals were heard together and disposed of by this common order for the sake of convenience.

2. The grounds of appeal are common in nature for all the years with only change in the figures. The grounds for the AY 2008-09 are as follows:-

“1. The learned Commissioner of Income-tax (Appeals) has erred in confirming the order passed by Assessing Officer. The order passed by learned assessing officer being bad in law and  void-ab-initio was required to be quashed in toto instead of being confirmed partially.

2. In any case, the learned Commissioner of Income-tax (Appeals) has erred in rejecting the contention of the appellant that the application of section 153C of the Act lacked jurisdiction. The order passed by the Assessing officer is bad in law especially in the absence of satisfaction to be recorded before the issue of notice u/s 153C of the Act and such order is liable to be quashed.

3. In any case and without prejudice, the learned Commissioner of Income-tax (Appeals) has erred in partially confirming the additions made by the Assessing officer. On proper appreciation of facts and the law applicable, the additions made/confirmed are wholly erroneous and are liable to be deleted.

4.1 The learned CIT(A) has erred in not adopting the peak theory with respect to addition made on the bank deposits and confirming 10% of the addition made on account of total bank deposits by the Assessing officer. On the facts and circumstances of the case and the law applicable, the addition sustained by the CIT(A) is adhoc, without any basis and is to be deleted in entirety.

4.2 The learned CIT(A) having confirmed 10% of total additions, also erred in holding that out of the sources explained for bank deposits, a sum of Rs 3,90,40,000/- being advance received from Ayyappa Minerals remained unexplained, not supported with documentary evidence and same is to be added to the income of the appellant. The addition made is already subsumed in the addition sustained and amounts to double addition to the extent of 10% of the advances and such addition is liable to be deleted.

5. The learned CIT(A) has erred in confirming the addition made by the Assessing officer on account of URD purchases to the extent of 10% . On proper appreciation of facts and the law applicable, the addition made being adhoc, purely on estimation basis is to be deleted in entirety. 

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