TaxTMI 
TaxTMI 
2013 (10) TMI 754
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....Vemireddy Prabhakar Reddy. The AO had completed the assessment based on the information gathered by him. 3. It was the submission of the AR before the CIT(A) that during the search operation, the Department did not seize any incriminating documents, therefore, the AO should not have initiated the proceedings u/s 153C of the IT Act. 4. The CIT(A) held that there was search & seizure operation in the case of Sri Vemireddy Prabhakar Reddy, Nellore who happened to be a partner of the assessee-firm. Therefore, the CIT(A) held that the reopening of the assessment is in order. Hence, this ground of appeal was dismissed by the CIT(A). 5. The next ground of appeal is in respect of addition made by the AO at Rs. 30 lakhs towards unexplained expenditure. 6. On verification of the bills/vouchers produced by the assessee towards expenditure like coolies, mess expenses, spares, tyres and retrading etc., the AO found that most of the vouchers were self made and unverifiable as to the identity of the payee and quantum of work done, etc. When this was questioned by the AO to the assessee, it was stated that all the expenses were genuine and correctly debited. The assessee's explanation ....
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....income remains sustained. ITA NO. 614/HYD/2011 - for AY 2004-05 - by the revenue 10. In this appeal also the facts are similar as in earlier years. The AR of the assessee before the CIT(A) submitted that the AO had not justified to make disallowances of Rs. 10,00,000/- towards unexplained expenditure Rs. 15,80,739/- on account of financial charges and depreciation and Rs. 2,43,000/- towards disallowance of salaries pointing out the above disallowances, it was argued by the AR that the AO had not seized material in his possession to make the above disallowances. It was further argued that the AO had issued notice u/s 153C of the Act and had reopened the assessment but the AO had no seized material to make any reference to make any additions. Therefore, it was pleaded by the AR of the assessee that all the additions made by the AO were without proper basis in view of the decision of the Hon'ble Gujarat High Court in the case of Vijaybhai N. Chandrani Vs ACIT, 231 CTR 474 (Guj.). 11. After considering the submissions of the assessee the CIT(A) held that all the additions made by the AO towards unexplained expenditure at Rs. 10,00,000/- disallowances made towards financial cha....
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....AY 2004-05 to 2009-10, vide order dated 06/07/2012. The question before the Special Bench was as under:- "Whether, on the facts and in law, the scope of assessment u/s 153A encompasses additions, not based on any incriminating material found during the course of search?" 15. The Special Bench answered the said question as under: "a) In assessments that are abated, the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessments shall be made for each of the six assessment years separately; b) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means - i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and ii) undisclosed income or property discovered in the course of search". 16. However, we find that there is a Jurisdictional High Court judgment in the case of Mr Gopal Lal Bhadruka Vs DCIT, Hyderabad, dated May 11, 2012, 2012-TIOL-357-HC-AP-IT wherein it was held that for the purpose of computing income u/s ....
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....r evidence from the assessee to establish that the deposits made were genuine. In these circumstances, to meet the ends of justice, one more opportunity may be given to the assessee to provide necessary evidence in support of its claim. Hence, the issue is remitted to the file of the AO to give one more opportunity to the assessee to file the necessary evidence in support of his claim and thereafter decide the issue in accordance with law. Thus, this ground of appeal is allowed for statistical purposes. 24. In the result, appeal of the assessee is allowed for statistical purposes. ITA no. 615/Hyd/2011 - by the revenue 25. The revenue has raised the following grounds of appeal in this appeal:- "1. The CIT(A) has erred in law and on fact while allowing the appeal of the assessee. 2. The CIT(A) has failed to appreciate the fact that the firm did not explain the sources for the overdrawn amount of Rs. 96,75,000/- in cash by the partner as the firm has closed its business operation in the relevant assessment year as it has no such fund in the capital accounts of the partners." 26. The AO made the addition of Rs. 96,75,000/- being withdrawals from firm, on the ground th....