AI Drafter 
TaxTMI 
TaxTMI 
2017 (3) TMI 36
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....ome Tax (Appeals) [CIT(A)] is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of an amount of Rs. 1,09,029/- made by the AO invoking the provisions of Section 14A of the Act. 3. The appellant craves leave to add, amend or alter any/all of the grounds of appeal before or during the course of the hearing of the appeal." 4. In the appeal of the department in ITA No. 5615/Del/2013, the grounds raised read as under: "1. On the facts and in the circumstance of the case, the CIT(A) has erred in deleting the disallowance of Rs. 2,31,55,000/- made by the A.O. on account of unexplained expenditure on sub brokerage and the assessee could not substantiate the services rendered by sub brokers and funds mobilized by them for the assessee. 2. On the facts and in the circumstance of the case, the CIT(A) has erred in deleting the disallowance of Rs. 2,31,55,000/- made by the A.O. and ignoring the facts that the third party enquiries conducted by the A.O. proved that no actual services were rendered and assessee has not discharged its onus, as no details were filed ....
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....aring the ld. Counsel for the assessee reiterated the contents of the aforesaid application and requested to admit the additional grounds. The reliance was placed on the judgment of the Hon'ble Supreme Court in the case of NTPC Vs CIT (1998) 229 ITR 383. 7. In his rival submissions the ld. DR opposed the admission of the additional grounds. 8. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the additional grounds raised by the assessee are purely the legal grounds for which no investigation is required and facts are already available on the record. As regards to the admission of the additional grounds, the Hon'ble Supreme Court in the case of NTPC Vs CIT 229 ITR 383 (supra) has held as under: "Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. The Tribunal should not be prevented from considering questions of law arising in assessment proceedings, although not raised earlier. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner (Appeals) is too narrow ....
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....sed on any evidence but only on the basis of his subjective opinion which is in the form of suspicion. Even though this is a search assessment completed u/s 153A r.w.s 143(3), there are no incriminating documents seized during action u/s 132 relating to these sub-arrangers who have rendered services as already noted by CIT(A), The companies involved, though located in U.P. have offices in Delhi as per the invoices/ letter heads of these sub-arrangers which are part of the records. Further, the AO had not asked any specific detail which according to him could have satisfied that the other party rendered actual services. It is not the case of the AO that the subarrangers did not confirm having rendered the services. Whatever called for had been submitted by them, I consider that it was upto the AO to seek further specific requirement from the assessee to establish the genuineness of the services rendered. Instead the AO had directly proposed disallowance of the expenses on the ground that there are no evidences of providing actual services. He had not spelt out what else, in clear terms, was required to be submitted by the assessee. The Para No. 6 of CIT(A) dated 1/06/2010 reads as u....
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....4.4.3 It is noted that CIT(A)-I, had taken a view after appreciating the evidences before him on winch I cannot find fault. Being a search assessment the disallowances should have emanated from the documents seized during the search. However, there is no clarity on this aspect in the assessment order. ITAT has set aside the order mainly for giving opportunity of being heard to the AO who had expressed his desire to be heard by way of a specific request in ITNS-5I in this regard. The AO has accordingly been heard. No new fact has been pointed out or brought out on the issue, that was not considered in the 1st round. The AO has made written submissions based on the assessment order which was considered in details by CIT(A)-I. Therefore, I do not think that there is any case for interfering with the findings given by CIT(A)-I, which are based on logical reasoning and appreciation of the facts on record. The AO has not followed up his doubts / suspicions to their logical endings by following up with his leads if any. Instead the addition has been made only on the doubts/suspicions which has been deleted in the 1st round of appeal proceedings. Thus the disallowance of Rs, 2,3l,55,000/- ....
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....CIT(A) was not justified in allowing the relief to the assessee. 15. We have considered the submissions of both the parties and carefully gone through the material available on the record. On a similar issue the Hon'ble Jurisdictional High Court in the case of CIT (Central-III) Vs Kabul Chawla in ITA Nos. 707, 709 & 713/2014 order dated 28.08.2015 (supra) held as under: "37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The ....