TaxTMI 
TaxTMI 
2016 (8) TMI 53
X X X X Extracts X X X X
X X X X Extracts X X X X
....That the learned CIT(A) erred in law and on facts of the case in deleting the addition of Rs. 33,03,880/- made on account of unexplained purchase u/s 69C of the I.T. Act. 2. That the learned CIT(A) erred in law and on facts of the case in accepting the transaction made in cash by the assessee company regarding sale and purchase. 3. That the learned CIT(A) erred in law and on facts of the case in deleting the addition of Rs. 3,81,596/- made on account of expenses and depreciation. 4. That the learned CIT(A) erred in law and on facts of the case in holding that the statement of various persons without being confronted to the assessee company have weak evidentiary value. 5. (a) The order of the CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. 3. The cross objections raised by the assessee in C.O. Nos. 80/Del/2012 to 85/Del/2012 in the respective assessment years involved, are almost identical and therefore grounds raised in cross objection C.O. No. 80/Del/2012 are only reproduced as unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2003-04 as follows: i. The Ld. CIT(A) has erred in law and on the facts and circumstances of the case by allowing the appeal of the assessee whereas the assessee has failed to file Statement of facts before the Ld. CIT (A) being mandatory for filing appeal before the first appellate authority. The appeal of the assessee was defective and should have been rejected by the Ld. CIT(A). ii. The Ld. CIT(A) has erred in law and on facts and circumstances by allowing the appeal of the assessee whereas the assessee has failed to file its appeal within the prescribed statutory limit u/s 249(2) of the Income Tax Act, 1961. In the case the assessee had received order on 31/12/2010 and thereby was required to file appeal on or before 30/01/2011 and it has filed appeal on 31/01/2011 which was beyond the prescribed period. iii. The appellant craves to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 5. The facts in brief of the case in respect of assessment year 2003-04, are that a search action under section 132 of the Income-tax Act, 1961 (in short 'the Act') was carried out on 28/10/2008 in the ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce the same might not be admitted. 6.2 We have heard the rival submissions on the issue of admissibility of the additional grounds. We find that the issue raised in additional grounds are purely legal in nature and no further examination of fact is required. It is settled law that legal ground can be raised at any stage of appellate proceedings in view of the finding of the Hon'ble Supreme Court in the case of National Thermal Power Corporation Ltd. Vs. Commissioner of Income Tax, reported in 229 ITR 383, therefore, we admit the same. 7. In additional ground No. 1, the Revenue has raised the issue that the assessee has failed to file a statement of facts before the learned Commissioner of Income Tax (Appeals), which being mandatory for filing appeal before the learned Commissioner of Income Tax(Appeals) and, therefore, the appeal of the assessee was defective and should have been rejected by the learned Commissioner of Income Tax(Appeals). Addressing the grounds, the learned Commissioner of Income Tax (Departmental Representative) further submitted that order of the learned Commissioner of Income Tax(Appeals) was bad in law as the appeal of the assessee was defective. 7.1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....econd additional ground relates to filing of appeal before the learned Commissioner of Income Tax(Appeals) with the delay of one-day and the learned Commissioner of Income Tax(Appeals) passed the order without condoning the delay. 8.1 In respect of the ground, the learned Authorized Representative of the assessee submitted that due date of filing of the appeal before the learned Commissioner of Income-tax (Appeals) was on 30/01/2011 and 29th and 30th, January being Saturday and Sunday, the appeal was filed on 31/01/2011 and, therefore, there was no delay in filing the appeal before the learned Commissioner of Income-tax (Appeals). The learned Commissioner of Income Tax(Departmental Representative) also could not controvert the fact of 29th and 30th, January being holiday, and therefore the appeal was filed on the next working day. 8.2 We have heard the rival submissions and perused the material on record on the issue in dispute. In view of the fact that there was no delay in filing the appeal before the learned Commissioner of Income-tax (Appeals), we dismiss the ground. 9. Before deciding the other grounds of the appeal, the learned Authorized Representative of the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e making the assessment under section 153A of the Act. 10.3 We have heard the rival submissions and perused the material on record including the paper book of the assessee. The issue in dispute in the cross objection in ground No. 3 raised by the assessee is that no incriminating material was found in the course of search belonging to the assessee and, therefore, no addition could have been made in the completed assessments in the proceedings under section 153C r.w.s. 153A of the Act. Thus, the issue before us is whether any incriminating material was found in the courses of search belonging to the assessee and for this purpose, we would like to reproduce the satisfaction note which is available at page No. 4 of the assessee's paper book: "Satisfaction Note for issuing Notice u/s 153C of the I.T. Act, 1961 of M/s. Sunkan Travels Pvt. Ltd., Aq-1-82, 2nd Floor, Hastsal Road, Uttam Nagar, New Delhi, PAN : AAICS9275Q for A.Y. 2003-04 to 2008-09. 08.09.2010 In the case of Sh. B.K. Dhingra, Smt. Poonam Dhingra, M/s. Madhusudan Buildcon Pvt. Ltd., search & seizure took place u/s 132 on 30.10.2008. The undersigned is the jurisdictional Assessing Officer of these cases.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t proof of sale/purchase of the goods except the bank transactions. During the course of assessment proceedings the assessee was asked to give break up of cash or cheque purchases. In response thereto a reply has been filed and placed on record in which assessee has declared its entire purchase as cash/cheque purchases of Rs. 33,03,880/-. Assessee company has also stated that it did not maintain any bank account during the year and the assessee deals with tax free goods only there is no necessity for it to file sales tax return. The post search enquiries conducted by the Investigation Wing from the address of the assessee has indicated that atleast 4 no. of concerns connected with the Thapar Group were declared as operating from the address, 1/82, 2nd Floor, Hastsal Road, Uttam Nagar, New Delhi and the number may be much higher also. The concerns declared operating from this address 3and their directors/partners were:- Shri Rajeev Khurana. Director of M/s Indu Surveyors Loss Assessor was recorded. Excerpts from the same are reproduced below: "Q.16. How much investment you have made through your company in the Thapar Group of Companies during last six years? Ans. I....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... shown in the balance sheet the closing stock of last year stands at Rs. 4,04,85,052/-. This year the figure is Rs. 4,04,72,632/- which us almost the same. Therefore, purchases & sales are only out of current year "transactions" which are held unverifiable and bogus. It is highly improbable that with a huge stock inventory of goods which change in fashion and taste the assessee has to make sales from fresh purchases only. The preponderance of probability suggests that the stocks are not genuine but since these are declared prior to 1.4.02. no action is being taken for now. 9. Keeping in view the facts of the case and reply of the assessee, it is crystal clear that all cash purchases are unverifiable and hence a sum of Rs. 33,03,880/- is disallowed. (The opening stock is of the period before the block period of section 153C). Penalty proceedings u/s 271(c) are being initiated for furnishing inaccurate particulars of income. Since, all the cash purchases of Rs. 33,03,880/- are bogus and are brought to tax as unaccounted expenditure u/s 69C of the IT Act, no further addition is made u/s 40A(3) of the IT Act since the entire amount of cash purchases is brought to tax.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessment has to be made under this Section only on the basis of seized material." v. In 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 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment." 10.7 In the instant case also, no in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 153A of the Act. The concluded assessments cannot be interfered with under Section 153A of the Act unless the incriminating material belonging to the Assessee has been seized. 38. As indicated above, in the present case, the documents seized had no relevance or bearing on the income of the Assessee for the relevant assessment years and could not possibly reflect any undisclosed income. This being the undisputed position, no investigation was necessary. Thus, the provisions of section 153C, which are to enable an investigation in respect of the seized asset, could not be resorted to; the Assessing Officer had no jurisdiction to make the re-assessment under Section 153C of the Act. 39. In view of the above, the third question framed, whether the proceedings under Section 153C of the Act could be initiated against the Assessee, is answered in favour of the Assessee and against the Revenue." 10.9 The facts and circumstances of the above case are identical to the case in hand as in both the cases no incriminating material belonging to the assessee was seized and in both the cases additions were made for unexplained purchases under section 69C of the Act on the bas....