Assessment framed u/s 153A (of Income Tax Act, 1961) quashed by ITAT.

Facts in Brief:

1. Assessee is an individual who is stated to be deriving income from salary, other sources and capital gains. Assessee filed his original return of income for the assessment year 2003-04 on 30.09.2003 which was initially processed under section 143(1) (of Income Tax Act, 1961). Thereafter, an action under section 132 (of Income Tax Act, 1961) was carried out in the case of assessee.

2. During the course of search, evidence regarding acceptance of gift from several donors were found. Accordingly, notice under section 153A (of Income Tax Act, 1961) was issued on 21.07.2009 and served upon the assessee and in response to which assessee filed his return of income for AY 2003-04 on 30.11.2009 declaring total income of Rs.2,01,130/-.

3. The case was taken up for scrutiny and thereafter the assessment was framed under section 143(3) (of Income Tax Act, 1961) r.w.s. 153A(1)(b) (of Income Tax Act, 1961) and vide order dated 29.12.2010, the total income was determined at Rs.9,51,130/- inter alia by making addition of Rs.7,50,000/- on account of unproved transactions of gift.

4. Aggrieved by the order of Assessing Officer, the assessee carried the matter before the ld. CIT(A) who by his consolidated order dated 25.1.2012 in the case of the assessee as well as other members of the group (in Appeal No.CIT(A)-III/148 to 154, 156 to 162, 163 to 169, 131 to 135 & 176, 136 to 141 & 155, 142 to 147 & 177, 179, 180 & 181 & 178/CC-1(3)/11-12 decided the appeal.

On appeal ITAT held as under,

5. In view of the aforesaid facts, we are of the view that these assessments framed u/s.153A (of Income Tax Act, 1961) need to be quashed. Ordered accordingly. Since the legal issue has been decided in favour of the assessee, we are of the view that the other grounds raised on the merits of addition have been rendered academic and requires no adjudication.

6. Thus, the appeal of the assessee IT(SS)A No.153/Ahd/2012 for the assessment year 2003-04 is allowed.

As regards appeals for the assessment years 2004-05, 2005-06 & 2006-07 it is an agreed position that since all the relevant material facts are the same in these assessment years as well, whatever we decide for the assessment year 2003-04 will apply mutatis mutandis for these three assessment years also. Therefore, following the same view as taken in the case of the assessee Shri Vijaykumar D Agarwal for the A.Y. 2003-04, appeals filed by the assessee for assessment years 2004-05, 2005-06 & 2006-07 i.e. IT(SS)A Nos.154, 155 & 156/Ahd/2012 are also allowed. As regards the appeals filed by other assessees, since both the parties have admitted before us that the facts of the present case are identical to the case of Vijaykumar D Agarwal, we, therefore, for the reasons given hereinabove while deciding the appeals in the case of Vijaykumar D Agarwal and for similar reasons, hold that in all these cases the assessments framed under section 153A (of Income Tax Act, 1961) need to be set aside. Thus the grounds raised in all these appeals are also allowed.

7. In the result, all the appeals of the assessee are allowed.

Case Reference - Vijaykumar D.Agarwal, Ahmedabad vs Assessee.