AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (4) TMI 1245
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....led on 30.10.2006 declaring an income of Rs. 9,13,190/-. Thereafter, a search under section 132 of the Act was carried out at residential premises of the assessee and his family members on 30.06.2010. Accordingly, a notice under section 153A was issued to the assessee in response to which the assessee filed return in prescribed form declaring same income as was declared earlier. The Assessing Officer asked for several informations and provided copies of the seized material to the assessee. 4. During the course of assessment proceedings, it is noticed that assessee purchased shares of M/s Pragati Nirman Pvt. Ltd. (PNPL). The assessee was asked to file the number of shares and source for purchase. The Assessing Officer noticed that assessee had purchased 1150 shares of PNPL from Shri Harmohinder Singh Chadha, HUF and 10 shares from L.S.Chadha & Sons, HUF, Chandigarh. The search & seizure operation were also carried out by the department at the business and residential premises of S/Shri Harmohinder Singh Chadha, Surinder Gulati and Baldev Raj Gulati and others. During the course of search, some incriminating documents were found and seized from residential premises of Sh Surinder Gu....
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....2014 was dismissed by the Tribunal vide order dated 28.12.2015 (PB-) having low tax effect. 8. The ld. Principal CIT (Central) Ludhiana after passing of the appellate order by ld. CIT(Appeals) on 07.11.2013, issued show cause notice under section 263 of the Act dated 08.01.2015 which is reproduced in the impugned order in which the ld. Pr. CIT noted that assessee has purchased 2860 shares of PNPL Chandigarh from various persons and Assessing Officer made addition considering the shares to be 1160 only. The ld. Pr. CIT also considered the same seized document as have been considered by the Assessing Officer in the assessment order and noted that instead of addition of Rs. 30,78,640/-, Assessing Officer should have made addition of Rs. 45,11,800/- in respect of all the shares. The assessment order was, therefore, found to be erroneous in so far as prejudicial to the interest of revenue. 9. The assessee in response to notice under section 263 filed reply before ld. Pr. CIT which is reproduced in the impugned order in which the assessee briefly explained that Assessing Officer has duly considered all the seized document and material on record vide order dated 25.03.2013 and made the ....
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.... The ld. CIT(Appeals) vide order dated 07.11.2013 deleted the entire addition. ITAT Chandigarh in the case of M/s R.P. Import & Export Pvt. Ltd. (supra) on identical facts quashed the proceedings under section 263 of the Act. Findings of the Tribunal in para 8 to 17 are reproduced as under : "8. We have considered rival submissions. Section 263 of the Income Tax Act reads as under : 263. (1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the [Assessing] Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. [Explanation.-For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed [on or before or after the 1st day of June, 1988] by the Assessing Officer s....
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....xtend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal". It would, therefore, show that if a matter in issue has been considered in appeal and decided by the appellate authorities, the same could not be subject matter of revision under section 263 of the Income Tax Act. It is no explained when original seized document has already been considered by the appellate authorities against the revenue, how the copy of the same is admissible in evidence in subsequent revision proceedings under section 263 of the Income Tax Act. 10. Hon'ble Madhya Pradesh High Court in the case of CIT Vs Shalimar Housing & Finance Ltd. 320 ITR 157 held as under : "A search was conducted in the assessee's group and a block assessment was passed with several additions against the assessee. The Commissioner (Appeals) allowed the appeal of the assessee in part. The assessee and the Department preferred appeals which were pending disposal before the Tribunal. Meanwhile, the Commissioner under section 263 of the Income-tax Act, 1961, revised the order of the Assessing Officer on the grounds that (i) from the project-wise analysis it was p....
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....tter in appeal before ld. CIT(Appeals) and addition has been deleted, would clearly show that the matter in issue remained in subject matter in appeal before ld. CIT(Appeals) prior to initiation of the proceedings under section 263 of the Act. Not only this, when the department has preferred appeal before Tribunal, Tribunal also dismissed the departmental appeal vide order dated 12.12.2014 (supra). The Tribunal in the finding has specifically observed that assessee is not party to the Agreement to Sell in question and none of the persons relating to the assessee company also connected with the said agreement in question. It was also noted that no evidence was found during the course of search to prove if any over and above consideration have been paid in respect of any property purchased by the assessee company. Even during the course of search, no adverse material was found against the assessee. It was also noted that since agreement in question is cancelled document and did not relate to the assessee directly or indirectly, therefore, Assessing Officer has merely inferred that assessee might have paid some more consideration over and above what is stated in the registered documen....
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....uring the course of search, the seized paper as was recovered, was a cancelled/crossed document. Therefore, there is no question of considering same against the assessee, that too when the same is not signed by the assessee company. Further more when the original seized document page 34-35 of Annexure A-9 was considered and discussed in detail and it is held by the appellate authorities that no addition could be made on the basis of the same cancelled document against the assessee, there is no question of considering the same against the assessee on the basis of copy of the same seized document. When the matter in issue has already been examined by the appellate authorities, prior to proceedings under section 263 of the Act, the ld. Principal CIT should not have resorted to the present proceedings under section 263. When the order of the Assessing Officer is merged with the orders of the appellate authorities, therefore, proceedings under section 263 of the Act on the same matter in issue could not be resorted to in view of the Explanation (c) of sub section (1) of Section 263 of the Act. We may also refer to the judgement of the Hon'ble Supreme Court in the case of Malabar Ind....
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.... under section 263 of the Act. 13. We may also note here that when additions on merit have been made on the identical issue in the cases of Shri Ashish Singla and others and ld. CIT(Appeals) deleted on merit, revenue preferred appeals titled as DCIT Vs Ashish Singla & Others in ITA 129/2014 for same assessment year 2006-07, the Tribunal vide order dated 15.02.2016 dismissed the departmental appeal holding no justification for making addition on identical issue. The findings of the Tribunal in this case in para 10-11 are reproduced as under : "10. We have heard rival submissions. It is not in dispute that seized papers were found and recovered during the course of search in the case of Shri Surinder Gulati. These documents were used against Shri Surinder Gulati in his assessment and all these seized papers have been mentioned in the assessment order of Shri Surinder Gulati dated 28.02.2013 for assessment year 2006-07. The statement of Shri Surinder Gulati at the time of search was recorded under section 132(4) of the Income Tax Act which is also reproduced in his assessment order as above. The seized paper alongwith small blue diary marked 'Raymond' were confronted to him in whic....
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....admitted that since tax effect was low in the case of Shri Surinder Gulati, therefore, no departmental appeal have been filed before the Tribunal. It, therefore, stands concluded that the addition made on the basis of the same seized material found from the residence of Shri Surinder Gulati was not reliable and would not lead to any addition even in the case of Shri Surinder Gulati from whose possession, seized papers were found and recovered. It is not explained during the course of arguments how the same seized papers containing no allegation against the assessee are admissible in evidence against the assessee. Where there is no incriminating evidence available against the assessee on record, the above addition for enhancing value of the asset could not be made on suspicion and surmises. The presumption under section 132(4A) is, therefore, not available when the seized paper is recovered from the third party and not from the assessee. We are fortified in our view by order of ITAT Ahmedabad Bench in the case of Akshay Pushpvandan Vs DCIT (supra). Once the seized papers were not found reliable in the case of Shri Surinder Gulati from whose possession same were recovered, there is n....