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2017 (7) TMI 354
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....e addition of Rs. 49,50.000/- made by Assessing Officer without considering the fact that assessee had filed evidence to prove even the source of making payment of Rs. 49,50,000/- by Balwant Rai Rehawar, by furnishing confirmations from four persons who had made payment to Balwant Rai on account of purchase of timber etc., from him but the learned AO as well as learned CIT(A) had ignored the same conveniently without making any enquiry and without considering the submission. 4. The Learned CIT(A) has erred in law and facts in upholding the addition of Rs. 49,50,000/- made by Assessing Officer without considering the assessee plea and rejecting the same that "confirmations of sale of timber to four parties are undated, signatures with no names, and cash consideration in lump sum even though the claim of repayment was in installment". The learned CIT(A) has very conveniently ignored the copies of account of Balwant Singh Rehawar filed in the books of account of these four parties for the period 1.4.2008 to 31.3.2009 without considering the same. 5. The Learned CIT (A) has erred in law and facts in upholding the addition of Rs. 49,50,000/- made by Assessing Officer w....
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.... return of income on 8.2.2013, declaring income of Rs. 4,50,750/-. Thereby, statutory notice u/s 143(2) and questionnaire in terms of section 142(1) of the Act were issued to the assessee and assessment framed making an addition of Rs. 49,50,000/- u/s 68 of the Act on account of unexplained cash receipts. 6. Before the Ld. CIT (Appeals), the assessee raised several grounds both legal, challenging the validity of the order passed u/s 153C of the Act, and also on the merits against the addition made. The Ld. CIT (Appeals) rejected all the grounds of appeal raised by the assessee. 7. Aggrieved by the same, the assessee has now come up in appeal before us raising the above grounds of appeal. 8. We shall first be taking up the additional grounds raised. In the additional grounds raised before us, the assessee has challenged the issuance of notice u/s 153C of the Act as also the addition made u/s 68 of the Act in the absence of any incriminating documents or material found during the course of search. Since the grounds raised are legal the same are being admitted for adjudication. 9. During the course of arguments before us, the Ld. counsel for the assessee contended that the....
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....red to be initiated in the case of the assessee and whose satisfaction is also placed on record. The Ld. DR relied upon the decision of the Delhi High Court in the case of SSP Aviation Ltd. Vs. DCIT (2012) 20 Taxmann.com 214 (Del) in this regard. 11. We have heard contentions of both the parties. The undisputed facts relating to the present issue are that search was conducted on 17.11.2010 in Dr.Naresh Mittal Group of cases. That certain documents relating to the assessee were found during the course of search mentioned as annexure A-7 and which undisputedly is a handwritten cash book pertaining to the assessee and relating to the period April, 2007 to January, 2008. The assessment in the present case has been framed u/s 153C of the Act r.w.s. 153A of the Act. It is also not disputed that the addition made in the impugned assessment year amounting to Rs. 49,50,000/- finds no mention in the seized document i.e. handwritten cash book and has been made solely on the basis of cash book actually maintained by the assessee. To put it briefly, it is not disputed that the addition made in the present case is not based on any incriminating documents or material pertaining to the assessee....
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....ssessments can only be interfered with by the Assessing Officer on the basis of any incriminating material unearthed during the course of search. The Hon'ble High Court went on to state that the principles relating to assessment u/s 153A would be equally applicable to proceedings initiated u/s 153C of the Act, since section 153C of the Act expressly provides that the assessment or re-assessment under the said section is to be proceeded in accordance with provisions of section 153A of the Act. The relevant findings of the Hon'ble High Court at paras 21 and 22 of the order are as follows: "21. As discussed hereinbefore, once the AO of the searched person is satisfied that the seized assets/documents belong to another person and the said assets/documents have been transferred to the AO of such other person, the proceedings for assessment/reassessment of income of the other person has to proceed in accordance with provisions of Section 153A of the Act. Section 153A requires that where a search has been initiated under Section 132 of the Act, the AO is required to issue notice requiring the noticee to furnish returns of income in respect of six assessment years relevant....
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....ment powers in respect of the six years previous to the relevant AY in which the search takes 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 'r....
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.... could not be resorted to; the AO had no jurisdiction to make the reassessment under Section 153C of the Act." 15. As per the aforesaid decision, it is clear that the principles enunciated for section 153A of the Act, in the case of completed assessments, to be based solely and on the basis of incriminating material found during the course of search, applies to assessment framed u/s 153C of the Act also. No divergent view of any High Court in this regard was pointed out by the Ld. DR to us. The Ld. DR, we find has merely relied upon the decision of the Hon'ble Delhi High Court in the case of SSP Aviation Ltd. (supra). This decision, we find has been dealt with by the Hon'ble Delhi High Court in the case of RRJ Securities (supra) and distinguished also. The Hon'ble Delhi High Court in the case of RRJ Securities (supra) stated that the decision in SSP Aviation Ltd. (supra) cannot be understood to mean that the assessee has jurisdiction to make assessment in every case where seized assets or documents were handed over to the Assessing Officer and in fact, the decision of the Hon'ble Delhi High Court in SSP Aviation Ltd. (supra) states that it is only where the seize....
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....ily require the AO to reopen the concluded assessments and reassess the income of the Assessee. 36. The decision in SSP Aviation (supra) cannot be understood to mean that the AO has the jurisdiction to make a reassement in every case, where seized assets or documents are handed over to the AO. The question whether the documents/assets seized could possibly reflect any undisclosed income has to be considered by the AO after examining the seized assets/documents handed over to him. It is only in cases where the seized documents/assets could possibly reflect any undisclosed income of the Assessee for the relevant assessment years, that further enquiry would be warranted in respect of those years. Whilst, it is not necessary for the AO to be satisfied that the assets/documents seized during search of another person reflect undisclosed income of an Assessee before commencing an enquiry under Section 153C of the Act, it would be impermissible for him to commence such enquiry if it is apparent that the documents/assets in question have no bearing on the income of the Assessee for the relevant assessment years. 37. As expressly indicated under Section 153C of the Act the ....
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....same, the assessee submitted that it pertained to the amount returned by late Shri Balwant Rai Rehawar, which had been originally given to him by late Smt.Luxmi Devi Mittal, mother of Dr.Naresh Mittal, in relation to a land deal which did not fructify. As evidence, the assessee filed affidavit of the son of late Shri Balwant Rai Rehawar Shri Sukhdev Raj, copy of "Behami Faisla" depicting the payment of Rs. 50 lacs by late Smt.Luxmi Devi Mittal to late Shri Balwant Rai Rehawar and final settlement thereof and death certificate of late Shri Balwant Rai Rehawar. The assessee also submitted that late Shri Balwant Rai Rehawar had repaid the amount out of sale of agricultural produce grown by him. The Assessing Officer rejected assessee's contention since he found all documents to be unregistered and only self serving. He, therefore, held that the assessee had failed to discharge its onus u/s 68 of the Act and made addition of the cash received of Rs. 49,50,000/- to the income of the assessee u/s 68 of the Act. 21. Aggrieved by the same, the assessee carried the matter in appeal before the Ld. CIT (Appeals), who in turn concurred with the findings of the Assessing Officer and upheld t....
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....e Assessing Officer chose not to examine them. The Ld. counsel for the assessee thus contended that by virtue of his above explanation, substantiated by various documents as stated above and by his act of producing witnesses before the Assessing Officer for examination, he had discharged his onus of proving identity, genuineness and creditworthiness of the transactions and, therefore, the addition made under section 68 of the Act was totally unwarranted and uncalled for. 24. The learned D.R., on the other hand, relied upon the order of the learned CIT (Appeals) and stated that none of the documents produced by the assessee were original and further that they were all unregistered. He, therefore, contended that the assessee had failed to discharge its onus as per the provisions of section 68 of the Act. 25. We have heard both the parties. We find merit in the contention of the Ld. counsel for the assessee. On going through various documents filed by the assessee before us and after having heard both the parties, we find that the assessee had indeed discharged its onus of satisfactorily explaining the nature and source of cash receipts. The assessee had contended that the amoun....
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....yer, the writer of the "Behami Faisla" and witness of the "Behami Faisla" to substantiate its arguments. Therefore, the documents produced by the assessee have not to be looked into in isolation but also alongwith the fact that the witnesses were also produced before the Assessing Officer for examination. The assessee, we find had produced all the possible evidences to substantiate its claim and duly discharged its onus cast upon it as per section 68 of the Act. If the Assessing Officer for any reason did not believe the contention of the assessee and considered the documents to be suspect, he could have gone forward and examined the witnesses produced before him to come to a conclusive finding that the explanation of the assessee was false.The Revenue has also contended that the Confirmation of Timber merchants was undated and were signed with no names. A perusal of the said confirmations placed at paper book page no.19-22 reveals that it was on the letter head of the merchants which mentioned their addresses and telephone numbers and we also find that the PAN Number of the merchants was mentioned in the confirmations filed. The non-mentioning of names of signatories merely raises....
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.... to the assessee to prove that the gift is genuine and if the assessee is unable to proffer a credible explanation, the Assessing Officer may legitimately raise an inference against the assessee. If, however, the assessee furnishes all relevant facts within his knowledge and offers a credible explanation, the onus reverts to the revenue to prove that these facts are not correct. The revenue cannot draw an inference based upon suspicion or doubt or perceptions of culpability or on the quantum of the amount, involved. Any ambiguity or any ifs and buts in the material collected by the Assessing Officer must necessarily be read in favour of the assessee, particularly when the question is one of taxation, under a deeming provision. Thus, neither suspicion/doubt, nor the quantum shall determine the exercise of jurisdiction by the Assessing Officer. The above exposition shall not be misconstrued to restrict the power of the revenue to raise an inference as to the efficacy of material produced by or before the Assessing Officer. . . . . A question may, however, legitimately arise that such a large amount could not be given as a gift on the marri....