TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 5
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....sessments were framed by ACIT, CC-XXIII, Kolkata u/s. 153A read with section 143(3) of Act for Assessment Years 2008-09 & 2009-10 vide his separate orders all dated 31.12.2010. 2. I.T(SS)A Nos. 17 to 19/Kol/2012 by revenue and Cross Objection Nos. 18 to 20/K/2012 by assessee are arising out of common order of CIT(A), Central-III, Kolkata in Appeal Nos. 103, 104 & 105/CC-XXIII/CIT(A)C-III/10-11 dated 16.12.2011. Assessments were framed by ACIT, CC-XXIII, Kolkata u/s. 153A read with section 143(3) of the Act for Assessment Years 2004-05 to 2006-07 vide his separate orders all dated 31.12.2010. 3. At the outset, Ld. counsel for the assessee stated that there is a legal issue raised in the Cross Objections of the assessees, hence the same should be heard first. 4. The first legal issue raised by assessee in their Cross Objections is as regards to validity of assessment framed u/s. 153A of the Act despite the fact that there is no incriminating material pertaining to share application money or loans for the relevant Assessment Years. For this, assessees have raised common grounds in all these Cross Objections. Hence, we will decide all Cross Objections by this common order. For the s....
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....emises at 52, Weston Street, Kolkata-700012, the names of number of companies mostly having their registered offices at the said premises have been found. Please furnish details of these companies along with their nature of business. Ans.- I don't remember the names of all the companies right now. However, some of the companies running from my office are:- I. M/s Alfa Tie-Up Pvt. Ltd. II. M/s. Rang Vardhan Febtrade Pvt. Ltd. III. M/s. Cygnus Publishers Ltd. IV. M/s. Payaagpur Vyapaar Pvt. Ltd. V. M/s. Anuvrat Transport System Ltd. VI. M/s. Manush Distributors Ltd. VII. M/s Teji Mandi Securities Pvt. Ltd.' VIII. I will furnish the detailed list of the above on 12/5/2009. 9. Are you director in any of the companies maintained in Ans. No.-8? Ans.-No. However, I am a director in M/s. More highrise Pvt. Ltd., 52, Weston Street, Kolkata-700012. In the other companies the directors are my brother Sri Raj Kumar More and my employees, Sri Ravi Agarwal etc. 10. Please explain the nature of business conducted by the above mentioned companies. Ans.-All the above mentioned companies are engaged in the business of share trading, loans and advances and investment. 11....
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....f cash. Ans.- I procure cheques in lieu of cash from various "Entry operators". In the case of the concerns of the Surana group, were procured from Sr. Debesh Upadhyay and Sr Vinod Jaiswal, having their offices at Waterloo Street and Girish Park, respectively. However, I will check the records and submit details of the same on 12/5/2009. 15. What is your remuneration for laundering the unaccounted money of Sri Shanti Kumar Surana by routing it through accommodation entries in the books of your companies. As enumerated above by you? Ans.- I earn on an average 0.6% of the cash received as gross commission income for carrying out the aforementioned activities. After accounting for expenses, my net commission income is approximately 0.35% of the cash received from Sr. Shanti Kumar Surana 16. In cases where cash received from Sr Shanti Kumar Surana is routed back to his companies through unsecured loans from your companies, how is the interest thereon received and subsequently accounted for? Ans.- The interest on unsecured loans is in the range of 6% to 12% and is received in cheque, net of TDS. This amount of interest income is offered to tax by the relevant companies and TDS....
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....Ltd., and Manush Distributors Ltd., are my companies, I also confirm that amounts of Rs. 3,97,98,082/- and Rs. 4,83,76,460/- were received in cash from Sri. Surana and routed back to the books of Bikaji Mercantiles Pvt. Ltd., in the form of unsecured loans. I further confirm that during the year amounts of Rs. 4,07,98,082/- and Rs. 4,53,76,460/- were received in cheque and the sae amounts were returned back either in cash or through cheque in the form of share capital in M/s Bikaji Mercantiles Pvt. Ltd., I will submit the details after verifying our records on 12/5/2009." 6. During the course of assessment proceedings, the AO provided copies of all statement of Shri Sambhu Kr More to the assessee and another statement of assessee was recorded u/s 131 of the Act on 15.09.2010, by virtue of which he denied having made any disclosure of Rs. 8 cr. during the course of post search proceeding and also denied having taken any entries in lieu of cash from the various companies as admitted by Shri More. The relevant details of entries noted by the AO in assessment, which reads as under: DETAILS OF UNSECURED LOAN TO SHANTI KUMAR SURANA AND GROUP COMPANY Name of the borrower Name o....
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....nush Distributors Ltd. 2005-06 3,40,00,000 4,60,00,000 15,63,288 Shanti Kr. Surana Anuvrat Transport Systems Ltd. 2005-06 2,00,00,000 2,00,00,000 2,95,726 Amar Impex Pvt. Ltd. Anuvrat Transport Systems Ltd. 2005-06 1,20,00,000 1,20,00,000 91,726 S.A. Suppliers Pvt. Ltd. Manush Distributors Ltd. 2005-06 0 50,00,000 1,79,178 S.A. Suppliers Pvt. Ltd. Anuvart Transport Systems Ltd. 2005-06 0 50,00,000 1,80,822 Sub Total 10,33,00,000 14,33,00,000 33,82,323 Shanti Kr. Surana Payagpour Vyapaar Pvt. Ltd. 2006-07 1,35,00,000 1,35,00,000 1,70,137 Amar Impex Pvt. Ltd. Anuvrat Transport Systems Ltd. 2006-07 67,00,000 67,00,000 43,529 Devanshi Consultants Pvt. Ltd. Payagpour Vyapaar Pvt. Ltd 2007-08 25,00,000 25,00,000 9,041 Devanshi Consultants Pvt. Ltd. Anuvrat Transport Systems Ltd. 2007-08 71,00,000 71,00,000 19,396 Sub Total ....
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....p; Sub Total 5,29,65,000 Grand Total 8,29,45,000 7. The AO added all these share application money and loans as unexplained cash credit U/s.68 of the Act, consequential disallowance of interest on loans and disallowance of expenses of exempted income by invoking the provisions of section 14A of the Act, in identically worded assessments. The AO noted in the assessment order that a statement of Sh. Raj Kuamr More, who is brother of Sh Shambhu Kumar More is one of the directors in the companies which were found to be indulged in providing accommodation entries to Sh Shanti Kumar Surana and other group companies, was also recorded during the course of search on 9.5.2009. Another statement of Sh. Raj Kumar More was recorded u/s 131(1) of the Act on 21/10/2010 during the course of assessment proceedings....
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....12/2004 and 23/12/2004 respectively. Cash of Rs. 3,50,000/- and Rs. 50,000/- deposited in the account (No.-992328) of M/s. MJ Enterprise on 23/12/2004 and 24/12/2004 respectively. Both of them utilized this amount to advance Rs. 9,20,000/- by transfer to the account (No.-968357) of M/s. Nitya Commodities Ltd., on 24/12/2004. This concern then utilized this amount to advance Rs. 9,00,000/- by transfer to the account (No.-475870) of M/s. Cygnus Publishers Ltd. (a company controlled by Sh. More) on 24/12/2004. It utilized this amount to advance Rs. 24,00,000/.- by transfer to the account (No.-153894) of M/s Manush Distributors Ltd. (another company controlled by Sh. More). This company utilized this amount to advance Rs. 245,00,000/- by transfer to the account (No.-891096) of M/s. Surana Mercantile Pvt. Ltd., i.e., the assessee and the ultimate beneficiary of the whole chain of transaction. b. Cash of Rs. 5,00,000/- deposited in the account (No.-1033167) of Sh. Vikas Kumar Agarwal on 27/12/2004. Cash of Rs. 4,00,000/- deposited in the account (No.- 994133) of M/s. MA Trading Company on 27/12/2004. Both of them utilized this amount to advance Rs. 19,00,000/- by transfer to the accoun....
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....on of Rs. 90,593/- and Rs. 1,22,874/- in the names of Bose Developers and Sub Developers. Sri Surana was asked to furnish page wise explanation of these loose sheets. In his reply, he stated that these are rough notings or account information. But no basis of such notings was furnished. 5. Sri Surana was provided with the copies of all the statements of Sri More recorded u/s. 132(4) before D.D.I.T.(Inv) and u/s 131(1) by the undersigned and he was given an opportunity to cross examine Sri More. On the stipulated day of 16/12/2010, both Sri More and Sri Surana appeared before the undersigned but Sri Surana refused to cross examine Sri More. This clearly indicates the guilty mindedness of Sri Surana." In view of the above facts and circumstances of the case, the AO for all these assessment years 2003-04 to 2007-08 held that the assessee and his group concerns have accepted accommodation entries in their respective books of account towards unsecured loans as well as share capital/share premium in lieu of unaccounted cash routed through various concerns of Shri Shambhu Kr More, as admitted by Shri Sambhu Kr More. Aggrieved assessee preferred appeal before CIT(A). 8. The CIT(A) d....
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....minating documents or evidence were found during the course of the search in the premises of the appellant which even remotely suggest that the appellant has resorted to introduce its unaccounted cash through accommodation entries. The premises of Sri Sambhu Kumar More were also searched but no incriminating evidence or document to this effect was found. Even surveys conducted U/s. 133A in the business premises of the companies, who are loan creditors and share subscribers to the appellant and other Group Companies, drew a blank as far as any incriminating evidence or document is concerned. Neither during the post search enquiries or enquiries during the assessment proceedings any document or evidence were unearthed even remotely relating to accommodation entries. 6.10 The relevant portion of the statement of Sri More has been reproduced in the assessment order. It is apparent that the search and survey operation in respect of Sri More and the companies were undertaken with the objective of establishing some link between these companies and the assessee of the Surana Group. The manner in which the statement was taken also indicates the same. No questions were asked to Sri More as....
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....personally handle the cash and all the cash transactions have been handled by one Mr K.K. Bhartia. Once again no effort has been made to examine Sri K. Bhartia who was another vital link in the alleged accommodation entry transaction. 6.12 These factors clearly indicate that the investigations in these cases were made in a very half hazard manner with a closed mind. The statement of a third party i.e. Sri More has been accepted as gospel truth in spite of his candid admission of not having any evidence to support his statement. The statement of a third party does not have any evidentiary value unless supported and corroborated by evidence furnished by him or any independent material and evidences gathered from other sources. In this background it is pertinent to analyse the factors which in view of the Assessing Office corroborates the statement of Sri More. (a) It has been stated by the AO that by disclosing the additional income of Rs. 8 Crore during the post search proceedings Sri Surana indirectly admitted of having entered into transactions with the aforementioned companies through Sri Sambhu Kumar More. It is seen from records that the statement of Sri Shanti Kumar Surana....
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....made a part of this order. It is seen that cash was deposited in relation to the accounts of Sri Vikash Kr. Agarwal, M/s M.J. Enterprise and M/s M.A. Trading Co. In the statement Sri More has categorically stated that in respect of Surana Group cheques in lieu of cash were procured from Sri Debesh Upadhyay and Sri Vinod Jiswal. Apparently these accounts do not belong to these persons. Therefore, no nexus could be established between the statement of Sri More and the account holders having cash deposits. Again no effort was made to reach these persons and examine them with respect to the source of cash deposited in these accounts except issuing notices U/s 13(6) for which no reply was received. Further, as per the AO the total amount of cash deposit in these accounts amounted to Rs. 22,20,000/- whereas M/.s Surana Mercantile Ltd. Received a loan of Rs. 50,00,000/- through these transactions. What about the rest of the on amount received? It is also interesting to note that the AO has furnished the same argument in case of all the assessees of this Group n which total unsecured loan of approximately Rs. 43 crore and share capital of approximately Rs. 8 crore have been added U/s 68 in....
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....ircumstances of the case I am convinced that the criterion laid down by the Hon'ble Gujarat High Court in relation to the case of DCIT Vs. Rohini Builders (256 ITR 360) and Hon'ble Gujarat High Court in the case of Nemichand Kothari Vs. CIT (264 ITR 254) were satisfied in the appellant's case. (b) No incriminating papers or documents were found in the search operation in case of the appellant indicating that loans were obtained through accommodation entries. (c) Later on when search was conducted in the case of Sambhu Kr. More and survey operations were conducted in the case of various companies, with whom the appellant had transactions, no paper or document was found implicating the appellant. Further, neither during the post search investigation nor during the assessment or remand stage any incriminating document / evidence could be unearthed linking the transactions to any accommodation entries. (d) Only on the statement of Sri Smbhu Kr. More which is admittedly bereft of any evidence the AO has proceeded to brush aside all documentary evidences adduced by the assessee in support of the loans. I have already given my findings that the so called corroborative evidence adduc....
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....el, the Income tax Department conducted a survey u/s. 133A of the Act on the business premises of Shri Sambhu Kr More on 09.05.2009 and the same was converted into search and seizure operation u/s. 132 of the Act on the very same day. The department on the basis of Shri Sambhu Kr More came to conclusion that he has provided accommodation entries to Shri Shanti Kr Surana, the assessee, and his group companies in lieu of unaccounted cash. Apart from the statement of Shri Sambhu Kr More the revenue could not unearth any evidence which proves that the assessee has received unsecured loans, share capital/premium through accommodation entries provided by Shri Sambhu Kr More. There was no incriminating material found during the course of search either on the Surana group of companies on 19.03.2009 or during search and seizure operation on Sambhu Kr More on 09.05.2009. According to Ld. counsel, as the revenue has issued notices u/s. 153A of the Act in respect to assessee and his group concerns after search and assessee has filed return in response to the same depicting the same income as originally returned and assessed by the department, in the absence of any incriminating material found ....
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.... And the matter was adjourned for 28.04.2015 and again on 28.04.2015 revenue asked for adjournment and the matter was adjourned finally for 29.04.2015. On 29.04.2015 again Ld. CIT, DR was directed to produce the search material and the relevant order sheet entry reads as under: "29.04.2015: When these matters were called up, the Ld. CIT, DR Shri Vijay Kumar stated that he has brought appraisal report prepared by ADIT in these group cases and he can argue the same. The Ld. CIT, DR was asked whether he has brought the seized materials or not. He denied that the same could not be traced. The Ld. CIT, DR insisted on hearing without seized materials for the reason that everything is recorded in the appraisal report. On this, Bench insisted for seized materials. However, in the interest of justice and to give a fair chance to Revenue, this last adjournment is being given to produce the seized materials, as directed vide order sheet entry dated 23.04.2015. In terms of the above, this matter is refixed as part heard on 07.05.2015 as last opportunity to the Revenue. In case, the Revenue fails to produce seized materials on the next date of hearing, adverse inference will be drawn. Both t....
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....ted 19.09.2014, referred to as Bisakha Sales Pvt. Ltd., Kolkata." In term of the above factual position and opportunities given on number of times to the revenue, revenue could not produce the incriminating material found during the course of search in relation to share capital/premium and loans added by AO while framing assessment u/s. 153A of the Act. 11. We have heard rival contentions and gone through facts and circumstances of the case. We find that the assessee had borrowed funds and these borrowings are duly confirmed by the lenders by producing Loan confirmations. We find that the transactions of receipt of loan and re-payments thereof are all by account payee cheques. The assessee before us explained the source of the cash credits appearing in his books and has submitted confirmations in support of the same. Nowhere in the order of assessment made by the AO there is any reference to any paper/document seized by the search party in the curse of search u/s 132 in the case of the assessee as well as in the case of Shri Shambu Kumar More. Further, survey operations were conducted u/s 133A in the case of companies who had advanced loans to assessee. No incriminating paper/do....
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....ns after taking these from the assessee in cash and transferring again to the assessee through various layers of banking transactions involving a number of concerns. The facts have been discussed in the assessment orders itself. As regards your query as to whether there was any material evidence to prove the chain of transactions leading to the destination of the said cash, I would like to state that, during the course of search, the Investigation Wing had made certain enquiries from the concerned Bank from which it was gathered that certain payments to the assessee had originated from cash deposits in various accounts. The facts related to this aspect were also discussed in the assessment order itself." We find from the above remand report of the AO that he has observed that the assessee has filed the documents, which include (a) Balance Sheet of companies from who loans were received by the assessee, (b) confirmations in respect of the unsecured loans received from the lending companies, (c) Bank statements of the appellant reflecting the credit of loans received by cheque, (d) Balance Sheet of the loan creditors for various years. In the Remand Report, the AO has observed th....
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....der assessments. But now it is to be seen from the correspondence between the CIT-in-charge of the assessment and CIT, DR that revenue could not produce the incriminating material found during the course of search despite number of opportunities provided to revenue as is evident from the order sheet entries reproduced above. In such circumstances whether in the absence of any incriminating material found during the course of search the assessments framed u/s. 153A of the Act relating to the assessment years under appeal and where original assessments have not been abated because no proceedings are pending in those assessments, the assessments framed are valid or not. For this, now we have to go through the second proviso to section 153A(1) of the Act, which reads as under: "Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this (sub section) pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate." 13. In view of the second provision of section 153 of the Act, it is clear that assessment or....
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....se, one lakh of rupees,- The same proportion as the said period bears to the period of one year and, in respect of any chargeable accounting period beginning after the 31st day of March, 1947, such sum as may be fixed by the annual Finance Act. [Business Profits Tax Act (21 of 1947), S.2 (1)] Removal or destruction, (as) of a nuisance; failure; premature end, suspension or diminution, (as) of an action or of a legacy. The action of abating; being abated. {O.XXII, R.1, CPC (5 of 1908)]; decrease [S.12 (3) (b) (i), Specific Relief Act (47 of 1963)]. Of An Action Or Suit: In civil law an abatement of a suit is a complete termination of it. Abatement of a matter or cause is caused by the same becoming defective on account of the death of the parties materially interested. (Ency. of the Laws of England) A suspension or termination of proceedings for want of proper parties or due to some technical defect. The abatement of the main action abates proceedings ancillary or collateral to it. In Criminal Law: Abatement of proceedings connotes their termination without any decision on merits and without the assent of the prosecutor. (Ency. of the Laws of England) In Revenue....
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.... Tax has clarified the position in para 65.5 as follows:- "The Assessing Officer shall assess or reassess the total income of each of these six assessment years. Assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or requisition under section 132A, as the case may be, shall abate. It is clarified that the appeal, revision or rectification proceedings pending on the date of initiation of search under section 132 or requisition shall not abate. Save as otherwise provided in the proposed section 153A, section 153B and section 153C, all other provisions of this Act shall apply to the assessment or reassessment made under section 153A. It is also clarified that assessment or reassessment made under section 153A shall be subject to interest, penalty and prosecution, if applicable. In the assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year." 18. In State of Rajasthan & Ors. v. Khandaka Jain Jewellers, (2007) 14 SCC 339 the Supreme Court ....
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....ssment is limited only to undisclosed income and undisclosed assets found during the course of search or not. Hon'ble High Court held that on a plain reading of section 153 of the Act it becomes clear that on initiation of the proceedings u/s. 153A of the Act, it is only the assessment/reassessment proceedings that are pending on the date of conducting search u/s. 132 of the Act stand abated and not the assessments/reassessments already finalised for those assessment years covered u/s. 153A of the Act. Hon'ble High Court also discussed the CBDT Circular No. 8 of 2003 dated 18.09.2003 reported in 263 ITR (st.) 61 at page 107 wherein CBDT has clarified that on initiation of proceedings u/s. 153A of the Act the proceedings pending in appeal, revision or rectification proceedings against finalised assessment shall not abate. It is only because the finalised assessments do not abate the appeal, revision or rectification pending against finalised assessments would not abate. Therefore, Hon'ble High Court rejected the arguments of the revenue that on initiation of proceedings u/s. 153A of the Act, the reassessment finalised for assessment years covered u/s. 153A of the Act sta....
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....eassessment contained in the IT Act, where search is conducted under Section 132 or requisition is made under Section 132A on or after 31/5/2003 in the case of any person, the Assessing Officer shall issue notice to such person requiring him to furnish return of income within the time stipulated therein, in respect of six assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made and thereafter assess or reassess the total income for those assessment years. The second proviso to Section 153A provides for abatement of assessment/reassessment proceedings which are pending on the date of search/requisition. Section 153A (2) provides that when the assessment made under Section 153(A)(1)is annulled, the assessment or reassessment that stood abated shall stand revived. 10) Thus on a plain reading of Section 153A of the Income-tax Act, it becomes clear that on initiation of the proceedings under Section 153A, it is only the reassessment proceedings that are pending on the date of conducting search under Section 132 or making requisition under Section 132A of the Act stand abated and not the assessments....
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....turbed the assessment order finalised on 29.12.2000 relating to Section 80 HHC deduction and consequently the C.I.T. could not have invoked jurisdiction under Section 263 of the Act." 29. We are not in agreement with Mr. Pinto that these observations are made in passing or that they are not binding on us because the essential controversy before the Bench was somewhat different. He urges that was only in relation to the legality and validity of the order of the Commissioner under section 263 of the IT Act. Had that been the case, the Division Bench was not required to trace out the history of section 153A of the IT Act and the power that is conferred thereunder. When the Revenue argued before the Division Bench that the power under section 153A can be invoked and exercised even in cases where the second proviso to sub-section (1) is not applicable that the Division Bench was required to express a specific opinion. The provision deals with those cases where assessment or reassessment, if any, relating to the assessment years falling within the period of six assessment years referred to in sub-section (1) of section 153A were pending. If they were pending on the date of the initiati....
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....d after 31.5.2003. In such a case the AO is obliged to issue notice u/s 153A in respect of 6 preceding years, preceding the year in which search etc. has been initiated. Thereafter he has to assess or reassess the total income of these six years. It is obligatory on the part of the AO to assess or reassess total income of the six years as provided in section 153A(1)(b) and reiterated in the 1st proviso to this section. The second proviso states that the assessment or reassessment pending on the date of initiation of the search or requisition shall abate. We find that there is no divergence of views in so far as the provision contained in section 153A till the 1st proviso. The divergence starts from the second proviso which states that pending assessment or reassessment on the date of initiation of search shall abate. This means that an assessment or reassessment pending on the date of initiation of search shall cease to exist and no further action shall be taken thereon. The assessment shall now be made u/s 153A. The case of Ld. Counsel for the assessee is that necessary corollary to this provision is that completed assessment shall not abate. These assessments become final except ....
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....ovision also makes it clear that the abatement of pending proceedings is not of such permanent nature that they cease to exist for all times to come. The interpretation of the Ld. Counsel, though not specifically stated, would be that on annulment of the assessment made u/s 153(1), the AO gets the jurisdiction to assess the total income which was vested in him earlier independent of the search and which came to an end due to initiation of the search. 50. The provision contained in section 132 (1) empowers the officer to issue a warrant of search of the premises of a person where any one or more of conditions mentioned therein is or are satisfied, i.e. - a) summons or notice has been issued to produce books of account or other documents but such books of account or documents have not been produced, b) summons or notice has been or might be issued, he will not produce the books of account or other documents mentioned therein, or c) he is in possession of any money or bullion etc. which represents wholly or partly the income or property which has not been and which would not be disclosed for the purpose of assessment, called as undisclosed income or property. We find that the provis....
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.... question now is - what is the scope of assessment or reassessment of total income u/s 153A (1) (b) and the first proviso? We are of the view that for answering this question, guidance will have to be sought from section 132(1). If any books of account or other documents relevant to the assessment had not been produced in the course of original assessment and found in the course of search in our humble opinion such books of account or other documents have to be taken into account while making assessment or reassessment of total income under the aforesaid provision. Similar position will obtain in a case where undisclosed income or undisclosed property has been found as a consequence of search. In other words, harmonious interpretation will produce the following results:- a) In so far as pending assessments are concerned, the jurisdiction to make original assessment and assessment u/s 153A merge into one and only one assessment for each assessment year shall be made separately on the basis of the findings of the search and any other material existing or brought on the record of the AO, (b) in respect of non-abated assessments, the assessment will be made on the basis of books of....
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....the income returned in respect of the assessment years under consideration which included an amount of Rs. 1,50,000/- given by the assessee as a loan to Smt. Mohini Sharma on 10th December, 2003. This information was made available but the loan was not reflected in the return of income filed by the assessee for the assessment year 2003-04. The Assessing Officer, therefore, concluded that this loan was given out of unaccounted income of the assessee. Accordingly, the same was added in the income of the assessee for the assessment year 2003-04 and an order was made to that effect. Against this addition, the appeal was preferred before the Commissioner of Income Tax contending, inter alia, that the seized paper on the basis of which the addition was made did not contain the signature of the assessee; that no loan was given to Mohini Sharma. There was no admission of the statement of Mohini Sharma to that effect and there was only a proposal. The Commissioner of Income Tax confirmed this addition in the Assessing Officer's order. In respect of assessment years 2004-05 and 2005-06 there were appeals before the Commissioner of Income Tax (Appeals) questioning the additions made in th....
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....ceedings under section 153A of the Act calling upon the assessee to file return of income under section 153A(1)(a) came to be initiated by a notice dated 13th January, 2012. Return of income was filed pursuant to receipt of such notice and for six years as required by the provision. When this return was under consideration on 14th March, 2013, the Commissioner of Income Tax initiated proceedings under section 263 of the Act on the ground that the order dated 31st December, 2010 in relation to the return of income for assessment year 2008-09 and holding that the same is erroneous and prejudicial to the interest of the Revenue came to be passed. The assessee filed his objection but the Commissioner maintained his action under section 263. That is how the aggrieved assessee carried the matter in appeal to the Tribunal and before the Tribunal it was contended that once section 263 of the Act has been invoked during the pendency of proceedings under section 153A of the Act, then, that was impermissible. That was impermissible for the assessments including for the assessment year 2008-09 stand reopened. Once they are reopened, then, there is no order of assessment in force and in regard ....
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....in such six assessment years. If any assessment proceedings are pending within the period of six assessment years referred to in the aforesaid sub-section on the date of initiation of the search under Section 132, the said proceeding shall abate. If such proceedings are already concluded by the assessing officer by initiation of proceedings under Section 153A, the legal effect is the assessment gets reopened. The block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under Section 153A, however, the Assessing Officer has been given the power to assess or reassess the "total income" of the six assessment years in question in separate assessment orders. The Assessing Officer is empowered to reopen those proceedings and reassess the total income, taking note of the undisclosed income, if any, unearthed during the search. He has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters. This means that there can be only one assessment order in respect of each of the six assessment years, in....
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....any income that the assessing authority has not taken note of while passing the earlier order, the said material can be furnished to the assessing authority and the assessing authority shall take note of the said income also in determining the total income of the assessee when the earlier proceedings are reopened and that income also shall become the subject matter of said proceedings. In that view of the matter the reasoning given by the Tribunal is not justified. The Commissioner did not have jurisdiction to initiate any proceedings under Section 263 of the Act." 37. We do not see as to how while allowing the appeal of the assessee and setting aside the order of the Commissioner under section 263 could the judgment be said to be laying down a proposition and as canvassed by Mr. Pinto. True it is that the assessment which has to be made in pursuance of the notice is in relation to the six years. An order will have to be made in that regard. While making the order the income or the return of income filed for all these assessment years is to be taken into account. A reference will have to be made to the income disclosed therein. However, the scope of enquiry, though not confined a....