TaxTMI 
TaxTMI 
2017 (11) TMI 70
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..... 1458/Mum/2012 for A.Y. 2007-08. The assessee has raised common grounds of appeal in ITA Nos. 5198, 5199, 5200, 5201/Mum/2013, except for the change in figures. The ground raised in A.Y. 2003-04 reads as under: "1. On the facts and circumstances of the case, the Learned Assessing Officer erred in assuming jurisdiction U/s. 153A of the Income Tax Act and consequently passing the Order U/s 143(3) read with Section 153A particularly when the proceedings U/s. 132 itself were illegal and bad in law. 2. On the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs. 5,85,600/- U/s. 68 without appreciating that the cash deposits in the bank were duly explained by the Cash Book filed during the assessment proceedings." In ground no.2 for A.Y. 2004-05, 2005-06 and 2006-07, the figure Rs. 5,85,600/- be read as Rs. 4,31,800/-, Rs. 12,52,200/- and Rs. 11,43,000/- respectively. 3. In ITA No. 1458/Mum/2012 for A.Y. 2007-08, the assessee has taken the following effective ground of appeal: "1. On the facts and circumstances of the case, the Learned Assessing Officer erred in issuing Notice U/s. 1....
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....04 6,99,800/- 2004-05 5,63,290/- 2005-06 13,89,650/- 2006-07 12,72,020/- 2007-08 60,37,690/- Thus, making the following additions in each assessment year Assessment Year Income Added (Rs.) Under Section 2003-04 5,85,600/- 68 2004-05 4,31,800/- 68 2005-06 12,52,200/- 68 2006-07 11,43,000/- 68 2007-08 2,73,850/- 68 56,00,000/- 69C So far as the addition made in each of the assessment year u/s. 68 is concerned, they have been made on the basis of cash deposit made by the assessee in the following bank accounts Assessment Year 2003-04 2004-05 2005-06 2006-07 2007-08 Banks Malad 6370 4,03,000 1,09,000 4,80,000 8,00,000 3,000 Syndicate 50612010044496 - 3,22,500 1,67,500 3,43,000 Corporation 15124 1,50,500 6,03,000 2,70,850 Corporation 15125 10,900 500 Corporation 15126 10,900 300 1,200 Corporation 15127 10,300 5,85,600 4,31,....
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....rala High Court in the case of CIT vs. M/s. St. Francis Clay Decor Tiles [385 ITR 624], in which it was held that u/s. 153A the phraseology 'incriminating' was any material which was unearthed during search operations or any statement made during the course of search by the assessee is a valuable piece of evidence in order to invoke section 153A of the Income-tax Act, 1961. He also drew our attention towards the panchnama as well as the statement of the assessee's husband recorded during the course of search, a copy of which is available as Annexure 'B' to the letter of the CIT-DR dated 14.12.2015. Reliance was also placed on the decision of Hon'ble Delhi High Court in the case of Filatex India Ltd vs CIT (2014) 229 Taxman 555 as well as Judgment of Hon'ble Karnataka High Court in the case of Canara Housing Development Company Ltd. vs. DCIT 274 CTR 122 for the proposition of law that during assessment u/s. 153A, additions need not be restricted or limited to incriminating material found during course of search. 7. We have heard the rival submissions and carefully considered the same along with the orders of the tax authorities below. We noted that the Assessing Officer in each o....
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....are perusal of section 153A would indicate as to how a nonobstante clause has been inserted and with a defined intent. Where search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after 31-5- 2003, that the Assessing Officer is in a position to and mandated to issue notice within the meaning of sub-section (1) of section 153A. That is because, Chapter XIII within which the powers of search and seizure and powers to requisition books of account are spelt out enable the revenue to take care of cases where it effects a search and seizure. That search and seizure is effected and after the same is effected, books of account, other documents, money, bullion, jewellery or other valuable article or thing is found as a result thereof that notwithstanding anything and within the meaning of the above provisions having been concluded, it is open for the revenue to make an assessment. It is also open to the revenue to make a reassessment in cases where it exercises the powers to requisition books of account etc. This is because it is of the view that the books of account are required to be summoned or taken into custody. It,....
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....tification pending against finalised assessment/reassessments would not abate. Therefore, the argument of the revenue, that on initiation of proceedings under section 153A, the assessments/reassessments finalised for the assessment years covered under section 153A stand abated cannot be accepted. Similarly on annulment of assessment made under section 153A (1) what stands revived is the pending assessment/reassessment proceedings which stood abated as per section 153A(1). Once it is held that the assessment has attained finality, then the Assessing Officer while passing the independent assessment order under section 153A read with section 143 (3) could not have disturbed the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under section 153A establish that the reliefs granted under the finalised assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. If there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings, the Assessing Officer while passing order under section 153A read with section 143(3) ca....
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....evant to the previous year in which such search is conducted or requisition is made. Thus, the crucial words 'search' and 'requisition' appear in the substantive provision and the provisos. That would throw light on the issue of applicability of the provision. It being enacted to a search or requisition that its construction would have to be accordingly. That is the conclusion reached by the Division Bench in Murli Agro (supra). These are the conclusions which can be reached and upon reading of the legal provisions in question.[Para 30] *Therefore, the Special Bench's understanding of the legal provision is not perverse nor does it suffer from any error of law apparent on the face of the record. [Para 31] * Further, revenue would submit that the above observations and conclusions of the Special Bench are specifically disapproved in CIT v. Anil Kumar Bhatia [2012] 24 taxmann.com 98/211 Taxman 453 (Delhi). However, this argument is not found to be accurate. Upon reading of the observations of the Delhi High Court as a whole and in entirety, it is not possible to agree with revenue that the High Court of Delhi reached a conclusion different than t....
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....d. (supra), in which it was held by the respective High Court held that the assessing authority shall determine the total income of the assessee takinginto consideration the materials which was the subject-matter of earlier return and the undisclosed income unearthed during search and also any other income which comes to his notice. But when we have jurisdictional High Court decision, that will be binding before us and, thus, we are bound to follow the decision of the Hon'ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. (supra). 9. Now coming to the addition made by the Assessing Officer, we noted, on the basis of the facts involved that the additions in A.Ys. 2003-04, 2004- 05, 2005-06, 2006-07 and 2007-08 made u/s. 68 relate to the cash deposited by the assessee in its bank accounts. But it is a fact that these bank accounts were not found during the course of the search. Even the learned DR did not produce any material showing that these banks accounts were found during the course of search. In these circumstances, we are bound to delete the addition made u/s. 68 in each of the assessment years. Thus, ground no.2 of the asses....