TaxTMI 
TaxTMI 
2015 (7) TMI 240
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....erred both in law and on facts in confirming the proceedings initiated under section 153A of Income Tax Act, which is bad in law in the absence of any incriminating material belonging to the assessee being found during the course of search. 2 That on the facts and circumstances of the case, the Commissioner of Income Tax (Appeals) has erred both in law and on facts in confirming the validate of impugned assessment order dated 27.12.2011 u/s 153A of the Income Tax as framed by the Assessing officer in respect of closed assessment for which no incriminating material seized during the course of search and seizure action. 3 That on the facts and circumstances of the case, the Commissioner of Income Tax (Appeals) has erred both in law and on facts in confirming the action and procedure followed by the Assessing officer during the proceeding u/s 153A of the Income Tax Act, which is invalid in eyes of law being based on incorrect postulate that search assessment u/s 153A is denovo in nature whereas the same is to be based and confined to incriminating material unearthed during search operations. 4 That on the facts and circumstances of the case, the Commissioner of....
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....hat summons were issued u/s. 131(1) of the Act, and information was called u/s. 133(6) of the Act. In the assessment order the AO observes that the requirement of Section 68 of the Act is that the onus to prove the credit entry in the books of accounts is primarily on the assessee and not on the department. According to him, the assessee has not fully discharged its onus to prove the creditworthiness of the creditors companies. He further observed that merely establishing the identity of the creditor is not enough. In this regard, he placed reliance on various judicial pronouncements and held that the amount introduced by the assessee is under the garb of „share application money/ share capital/ share premium‟ and therefore treated it as income of the assessee from undisclosed sources within the meaning of section 68 of the Act and the additions of Rs. 20,00,000/- was made while completing the assessment u/s. 153A/145(3) of the Act vide his order dated 27.12.2011. 5. Against the aforesaid order of the Assessing Officer, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 26.11.2012 has partly allowed the appeal of the assessee and deleted ....
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.... 143(3) of the Act cannot be unsettled without incriminating materials found during the search. In the case in hand according to the ld AR the AO did not have a single piece of incriminating material collected during search to impose the addition, therefore according to him, addition thus made without incriminating material found during search and seizure was clearly illegal in the eyes of law and therefore is invalid and cited the Special Bench decision of the Tribunal in All Cargo and also brought to our notice the Coordinate Bench decision of this Tribunal in the assessee‟s own case wherein the CO of the assessee has been allowed. On the other hand, the ld DR contended that once search takes place in the assessee‟s premises then the AO has no alternative but to invoke section 153(A) and assess or reassess the assessee for six assessment years immediately preceding the assessment year relevant to the previous year in which search has been conducted. According to the ld DR since the assessment year in question falls in the ambit of six years, the AO has to assess/reassess the assessee even though the original assessment was concluded u/s 143(3) of the Act and placed hi....
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....ment has been found to be wrong due to some material unearthed during search or has come to the notice of the AO through any other means and (c) if any fresh evidence comes to the notice of Commissioner u/s 263 of the Act and he directs the AO to take the evidence into consideration, then the said evidence can be made use by the AO while computing the "Total Income" of the assessee for the six Assessment Years immediately preceding the assessment year relevant to the previous year in which search has been conducted. The parliament has given a mandate to the AO, unbridled by any fetters to compute the "Total Income" based on evidence on record which has escaped notice of the AO during original assessment or the evidence adduced during original assessment has been found to be bogus by virtue of material unearthed during search and the fresh evidence unearthed during the search proceedings; and any other evidence which is brought to the notice of the AO by CIT u/s 263 of the Act. However the AO while computing the "total income" has to do that based on evidence as stated above; without the same, the additions will have no legs to stand and it has to necessarily fall. Coming to the cas....
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....he face of the record." 12. And finally in para 49 after concurring with the view of the Hon‟ble Delhi High Court order in Anil Kumar Bhatia‟s case held as follows:- "We, therefore, dismiss the Revenue appeals and answer the substantial questions of law against the Revenue and in favor of the assessee." 13. In the present case, the Ld CIT(A), while allowing the assessee‟s appeal on merit‟s made a categorical finding in para 9.7 of the impugned order that no evidence could be unearthed adverse to the assessee for the instant year as under:- "9.7 I find from the evidence available on record that from its side, the appellant company has furnished all the necessary documentary evidence relating to share capital. Firstly, in the original proceedings under section 143(3) and later again in 153A proceedings. Also no incriminating document/evidence is available or new facts have emerged during the search proceedings doubting the creditworthiness or genuineness of transactions, specifically in view of the fact that in original 143(3) proceedings both these entities have duly responded to the notices issued by the Department and their identity....