TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 1042
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....68 of the Income Tax Act by the AO in respect of unsecured loans. 3. The revenue has raised the following grounds of appeal for Assessment Year 2002-03:- "1. The order of the Ld. CIT( Appeals) is not correct in law and facts. 2. Whether in the facts and circumstances of the case, the Id. CIT (A) erred in deleting the addition of Rs. 5,00,000/- made u/s 68 of the Income Tax Act by the AO in respect of share application money introduced during the year. 3. Whether in the facts and circumstances of the case, the Id. CIT (A) erred in deleting the disallowances of Rs. 1,96,93,116/- made u/s 80IB of the Income Tax Act by the AO. 4. Whether in the facts and circumstances of the case, the Id. CIT (A) erred in directing to re-compute the trading profit after considering and verifying claim of administrative expenses." 4. The revenue has raised the following grounds of appeal for Assessment Year 2003-04:- "1. The order of the Ld. CIT (Appeals) is not correct in law and facts. 2. Whether in the facts and circumstances of the case, the Id. CIT (A) erred in deleting allowances of Rs. 7,25,10,022/- made u/s 80IB of the Income Tax Act by the AO. 3. Whether in the facts and circumstances....
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....ts being Share application money amounting to Rs. 5,00,000/- by placing irrefutable documentary evidence on record and in view of decision pronounced by the Apex Court as well as High Court, the Hon'ble High Court in the case of Dwarkadhish Investments Pvt Ltd 201Q-T!OL-617-HC-Del-IT. 4. Because the Ld. Lower authorities have ignored the facts and evidences supplied to them and made the disallowance of Rs. 1,96,93,116/- under section 80IB of the Act. 5. Whether on the facts and circumstances of the case, the Ld. AO who was given the complete working of income from trading operations segregating the income from manufacturing operations that was totally ignored by him and arbitrarily all the administrative expenses belonging to trading operations were ignored and no disallowance of trading cost was given to the assessee. Therefore, the direction of Ld. CIT (A) to do so, how becomes erroneous. 6. Whether on the facts and circumstances of the case, the Hon'ble CIT(A) is correct in upholding the addition of Rs. 34,794/- on account of interest on bank deposits which were made for the purpose of getting cash credit facilities and made as a deposit with sales tax department as i....
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....futable evidences supplied to them and treated the interest income of Rs. 6,38,558/- as income from other sources and not at part of the income derived from business and profession whereas the 5. Hon'ble ITAT itself had adjudicated that interest income is income from the business and allowable u/s 80IB in the assessment year 2002-03 in the case of assessee itself." 11. The assessee has raised the following grounds of Cross objection No. 264/Del/2011 for Assessment Year 2005-06:- 1. Whether the assessment framed under section 153A / 143(3) of the Income Tax Act. 1961 is legal, when consequent upon action taken by the department under section 132 of the Act on 21.03.2007 against the assessee was carried out and nothing incriminatory was found, and re-visiting the issues, which have been settled earlier, is permissible. 2. Because the order passed by the assessing officer was so vulnerable on both the facts as well as law that, the Ld. CIT (A) had no option but to correct the same in the interest of justice and equity. 3. Because the Ld. AO has failed to appreciate that the assessee has explained the purpose of incurring business promotional expenses amounting to Rs. 52,587/-....
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....ey to the tune of Rs. 13750000/- and unsecured loan of Rs. 41.50 lakhs which was unexplained and therefore same were added u/s 68 of the Act vide order dated 30.12.2009. 16. Now first we take up the additional ground of the appeal of the assessee which was raised stating that orders passed by the ld Assessing Officer are barred by the limitation and additions have been made in absence of any incriminating material found during the course of search, the assessee took us to the relevant orders and submitted that additions have been made without any reference to any incriminating material and further as the search got concluded on 23.03.2007 the assessments should have been passed by 31.12.2008 which were passed on 30.12.2009. He therefore referred to the decision of the coordinate bench in case of JH Finvest Pvt. Ltd. for the similar assessment years in same search dated 30.05.2014 wherein at para No. 9.1 onwards the facts of the search were discussed and subsequently, in para No. 10 of that order the coordinate bench held that the date of conclusion of the search is 23.03.2007 being the date of authorization executed as per provisions of section 153B of the Act then AO was re....
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....eld as under:- "3. The background to the present appeals is that on the basis of authorizations dated 20th March 2007 under Section 132 (1) of the Act, a search was commenced on 21 st March 2007 in the office premises of the above Assessees as well as the other Assessees, including Rim Zim Valley Products Pvt. Ltd, Aakriti International, apart from the residences of Mr.Sanjay Jain and Mr. Rajeev Jain, Directors of J.H. Finvest Pvt. Ltd. The search apparently continued on 22nd and 23rd March 2007 as well. It appears that during the said search, the jewellery items of Mrs. Neena Jain, wife of Mr.Sanjay Jain were seized on 21st March 2007 and some part of the jewellery was released to her after preparing a valuation report dated 21st March 2007. The learned counsel for the Assessees has placed before the Court a compilation of documents containing, inter alia, the panchnamas drawn up in the course of the search. He states that these documents were part of the record of the case before the ITAT. 4. A perusal of the said documents shows that as far as the panchnama prepared on 23rd March 2007 was concerned, it was in respect of the authorizations issued for search of the above Assesse....
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.... authorisations qua any of them were issued. The case of the Revenue has been that the search did not conclude on 23rd March 2007 but on 15th May 2007. This was on account of the restraint orders claimed to have been validly passed on 23rd March 2007 in peculiar circumstances where either the person searched was not present or the witnesses were not present or the keys of some of the cupboards were not available. 7. The ITAT has in the impugned order, after discussing the earlier decisions of the ITAT and the High Courts, noted that mere passing of a restraint order would not extend the time limit available for completion of the assessment pursuant to the search. It has been noted that Section 132(3) of the Act for passing a restraint order can be only resorted to if there is any practical difficulty in seizing the item which is liable to be seized. If all actions of the search were completed and nothing was left to be done by the search party, then the action of the authorized officer under Section 132(3) would be illegal and consequently any panchnama prepared on the extended date of search, after lifting the restraint, would be of no consequence, for the purposes of computation....
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....order of the ITAT, holding that the assessments in question were barred by limitation, and therefore liable to be quashed, does not call for any interference. 12. The second ground on which the ITAT has invalidated the assessments is that there was no incriminating material found in the course of the search against any of the Respondents/Assessees in these appeals. In this context, reference only need be made to a recent decision of this Court in CIT v. Kabul Chawla (2015) 234 Taxman 300, which holds that in the absence of any incriminating material found in the course of search the framing of assessment under Section 153A or 153 C of the Act, as the case may be, would not be valid. 13. It may be mentioned here that in the case of J.H.Finvest Pvt. Ltd., the Revenue has not even urged a question regarding the absence of any incriminating material having been found against the said Assessee invalidating the assessment. 14. No substantial question of law arises from the impugned order of the ITAT in these cases. The appeals are accordingly dismissed. 20. Therefore, respectfully following the decision of Hon'ble jurisdictional High Court wherein it has been held that the search fin....
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....s in separate assessment orders for each of the six years. In other words, there will be only one assessment order in respect of each of the six assessment years "in which both the disclosed and the undisclosed income would be brought to tax". (iv) Although section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously, an assessment has to be made under this section only on the basis of the seized material." (v) In the absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word "assess" in section 153A is relatable to abated proceedings (i.e., those pending on the date of search) and the word "reassess" to the completed assessment proceedings. (vi) In so far as the pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 1....