TaxTMI 
TaxTMI 
2016 (1) TMI 1291
X X X X Extracts X X X X
X X X X Extracts X X X X
.... raised two grounds and they read as under: "1. The Ld CIT (A) has erred in law and on the facts and in the circumstances of the case in upholding the addition of Rs. 5,00,000/- to the total income of the appellant. 2. The Ld CIT (A) was not justified in ignoring my ground of appeal in levying interest u/s 234A, 234B and 234C of the Act." 3. Briefly stated relevant facts in this regard are that there a search action u/s 132 of the Act was conducted in the Mali Group of cases on 28.6.2006. However, there was no seizure of any kind in the hands of the assessee. However, assessee was signatory to the declaration u/s 132(4) of the Act amounting to Rs. 75 lakhs. The said disclosure was divided among five brothers [ie (i) Shankarlal P Mali; (ii) Samarthmal P. Mali; (iii) Chunnilal P. Mali; (iv) Bhagaram P. Mali and (v) Prakash P. Mali] of the Mali Group. Rs. 5 laksh was allocated for the present assessee as per the statement acknowledged by the assessee on 29.6.2006 by putting his signatures. Question No.18 of the statement of Shri Shankarlal P. Mali recorded on 29.6.2008, supports the above. Relevant discussion is given in para 7 of the CIT (A)‟s order. Subsequently, assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Tribunal and the decision of the Tribunal in the case of M/s. Ideal Appliances Co. Pvt. Ltd vs. DCIT is one of the, wherein one of us (AM) is a party to the order. Considering the signif icance and for the sake of completeness of this order, relevant paras from the said Tri bu n al ‟s or de r i n th e c as e of M/ s . Ide al Ap pl iances Co. Pvt. Ltd (supra) are same are extracted as under:- 7. We have heard both the parties and perused the orders of the Revenue Authorities as well as the cited decision of the Tribunal in the case of Shri Govind Agarwal v. ACIT being ITA No: 3389/Mum/2011 dated 10.01.2014 (supra); All Cargo Global Logistics v. Addl.CIT (supra); SKS Ispat and Power Limited vs. DCIT CC 45 (ITA 8746/M/12 and ITA 8747/M/12) (supra) as well as the judgment of the Hon‟ble Bombay High Court in the cases of CIT v. All Cargo Global Logistic (374 ITR 645) (supra), copies of which are placed on record. On perusal of the said decisions, we find they are relevant for the proposition that "when no assessment has abated, the question of making any addition or making disallowance which are not based on only material found during the search is bad in law". In this....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssments does not arise, which would require more reiteration and it is only in the context of the abated assessment under second proviso which is required to be assessed. ....... ....... Para 26 of the Judgment: The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess' have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ich assessments shall be made for each of the six assessment years separately ; (b) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means - (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (ii) undisclosed income or property discovered in the course of search. 14. Thus, in case of the completed assessments either u/s 143(1) or 143(3), the above extracts are uniform in advocating against making additions in routine manner in the assessments made u/s 153A of the Act when there is no incriminating material gathered in the search action. Statutory notice u/s 153A of the Act can also be issued to reiterate the returned income or for making additions based on the incriminating material or unproduced books of account. Otherwise, additions made in routine matter as in the present appeal are not sustainable. Further, for the sake completeness of the order, we have perused the orders/judgments relied upon by Ld DR for the revenue and found they are distinguishable ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... AO made addition for assessee‟s failure to provide evidences / bills in support of the claim of expenditure on the construction. It the presumption of the AO that the plots since acquired only by July 2001, the assessee would not have spend Rs. 31,33,007/- by 31.3.2002. This is merely a presumption rather conclusion based on any evidences. Such additions are unsustainable in law in the assessments made u/s 153A r.w.s 143(3) of the Act. 17. Rajasthan High Court judgment in the case of Jai Steel (India) (supra), vide para 18, it is categorically mentioned that "the requirement of assessment or reassessment under the said section (153A) has to be read in the context of sections 132 or 132A of the Act, inasmuch as, in case nothing incriminating is found on account of search or requisition, then the question of reassessment of the concluded assessments does not arise, which would more reiteration.............". Thus, the judgment of Hon‟ble High court in the case of Jai Steel Ltd, supra and above decisions of the Tribunal are categorical in concluding that, in case of the concluded assessments like the present one, the additions are made only based on the incriminating mat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years 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 AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A 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 AO 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 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, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e case, in upholding the order of the AO making addition of Rs. 1 lakh by treating the gift received as income of the appellant ignoring all the details submitted to him relating to the „gift‟ including the order passed in regular assessment by the predecessor AO. 3. The Ld CIT (A) has erred in not granting rebate of Rs. 506 u/s 88 for the life insurance premium of Rs. 2,530/- paid on the life of the assessee." 8. In all these AYs, the additions made by the end the fate of these additions in the first appellate proceedings are tabulated as under:- 9. Ld Counsel for the assessee brought our attention to each of the Assessment Year and submitted that none of these additions were made based on the „seized material‟. Further, he submitted that the Shri Prakash P. Mali was not covered u/s 132 of the Act by drawing an assessee‟s specific. There was survey action u/s 133 of the Act. Further, he informed that in all these assessment years, AO made assessments u/s 143(3) r.w.s 153C of the Act without having seized any documents from the premises of the search person implicating the assessee on the issue of unaccounted income. Referring to the documents se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ied on following decisions viz., (i) CIT vs. Smt Shaila Agarwal, 346 ITR 130; (ii) All Cargo Global Logistics Ltd vs. DCIT [18 ITR 106] (Mum.) (SB); (iii) Spacewood Furnishers Pvt Ltd Ors vs. DGIT & Ors. [340 ITR 393 (Bom)] (iv) Shri Govind Agarwal v. ACIT being ITA No: 3389/Mum/2011 dated 10.01.2014; (v) SKS Ispat and Power Limited vs. DCIT l (vi) Sinhgad Technical Education Society vs. ACIT [2011] 140 TTJ 233 and others. 10. On the other hand, Ld DR relied on the order of the AO and the CIT (A). Further, on the legal propositions, Ld DR has nothing to controvert except relying on the decisions of the Revenue Authorities. He further mentioned that the event of survey action is unsustainable as the issue of notice u/s 153C is based on the conditions specified in the said provisions of section 153C and not on the outcome of the survey action. In this regard, Ld DR filed written submissions referring to the facts concerning the event of survey action on the assessee. 11. We have heard both the parties and perused the orders of the Revenue Authorities as well as the cited decision of the Tribunal in the case of Shri Govind Agarwal v. ACIT being ITA No: 3389/Mum/2011 dated 10.01.2014....