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2017 (11) TMI 980
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....el/2011:- "1. The order of the Ld, CIT (Appeals) is not correct in law and facts. 2. On the facts and in the circumstances of the case, the Ld CIT(A) has erred in law as well as in facts that the assessment made u/s 153A cannot be held to be valid and has to be annulled. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law as well as in facts in deleting the addition of Rs. 57,99,662/- made by the assessing officer on account of unexplained money received by the assessee from Shri Suresh Nanda." 3. Brief facts of the case are that assessee is an individual who has income from other sources being interest from bank. Search in seizure action under section 132 of the income tax act was carried out on Suresh Nanda group of cases on 28/2/2007 and pursuant to that notice under section 153A was issued to assessee on 09/09/2008. In response to this return of income of Rs. 1 05870/- was filed on 08/10/2009. 4. Assessment under section 143 (3) read with section 153A of the income tax act, 1961, was passed on 29/12/2009 wherein an addition of Rs. 5 799662/- was made to the total income of the assessee on account of some receive....
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.... the cheques are that for 5 months cheques of Rs. 60,000 each approximately were given from that account to the assessee. On 09/11/2000, Rs. 5 Lacs was given from that account and on 14/2/2001 sum of Rs. 50 Lacs was given from that particular account. Be identical issue arose in the hands of the daughter of the assessee miss Sonali punj wherein she received the sum from Mr. Suresh Nanda through the same bank account. The coordinate bench in ITA No. 3717/del/2011 for the same assessment year 2001- 2002 has held that assessment order clearly shows that there was no incriminating evidence found during the course of the search and therefore following the decision of the Hon'ble Delhi High Court in case of CIT versus Kabul Chawla deleted the above addition. In the present case also, it is apparent that no incriminating evidence was found during the course of search mentioned in the assessment order. These are the regular entries in the bank account of the assessee received from her husband; therefore, the addition has not been made on the basis of any incriminating material. 8. However, the issue involved in this appeal is that the assessee has not filed any appeal against order of t....
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....y if the Principal Commissioner or the Commissioner objects to any order passed by the Appellate Commissioner, he would direct the Assessing Officer to file appeal before the Appellate Tribunal. Essentially therefore, an appeal before the Tribunal against the order of Appellate Commissioner would lie against an order which is adverse to the appellant. May be, on one out of two grounds if the appeal of the assessee is allowed by the Appellate Commissioner in its entirety, he cannot be stated to be a person aggrieved by such order. His appeal under sub-section (1) of section 253 would not be maintainable. The assessee cannot file a standalone appeal challenging a finding of the Appellate Commissioner which may be against the assessee as long as the appellate order of the Commissioner is entirely in favour of the assessee and no part of the appeal of the assessee's claim is rejected. Under subsection (4) of section 253, it is open for a person either an Assessing Officer or, the assessee, upon receipt of a notice of the appeal filed before the Tribunal to file cross-objection against any part of the order of the Commissioner (Appeals) and such cross-objection would be dealt with b....
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....he learned Judges of the High Court having categorically found that there was an antecedent debt which was discharged by the suit-mortgage loan only to the extent of Rs. 59,000/- and odd and there being no appeal by the Bank against the finding that the balance of the Rs. 80,000/- had not gone in discharge of an antecedent debt, the respondent was precluded from putting forward a contention that the entire sum of Rs. 80,000/- covered by Exs. A and B went for the discharge of antecedent debts. We do not see any substance in this objection, because the respondent is entitled to canvass the correctness of findings against it in order to support the decree that has been passed against the appellant." 13. Likewise, in case of S.Nazeer Ahmed vs. State Bank of Mysore and ors reported in 2007 AIR SCW 766 it was held and observed as under: "7. The High Court, in our view, was clearly in error in holding that the appellant not having filed a memorandum of cross-objections in terms of Order XLI Rule 22 of the Code, could not challenge the finding of the trial court that the suit was not barred by Order II Rule 2 of the Code. The respondent in an appeal is entitled to support....
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....tation within which an appeal could be preferred. Section 253(4) of the Act lays down that either the assessing officer or the assessee, on receipt of notice that an appeal against the order of Commissioner (Appeals) has been preferred under subsection (1) or subsection (2) by the other party, may, notwithstanding that no appeal had been filed against such an order or any part thereof, within 30 days of the notice, file a memorandum of cross objections verified in the prescribed manner and such memorandum shall be disposed of by the Tribunal as if it were an appeal presented within the period of limitation prescribed under sub-section (3). Therefore, on a plain reading of the provision, it transpires that a party has been granted an option or a discretion to file cross objection. 19. In case a party having succeeded before Commissioner (Appeals) opts not to file cross objection even when an appeal has been preferred by the other party, from that it is not possible to infer that the said party has accepted the order or the part thereof which was against the respondent. The Tribunal has, in the present case, unfortunately drawn such an inference which is not supported by the....
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....ts and circumstances of the case, the Ld. CIT(A) has erred in upholding the order of the Assessing Officer wherein the AO treated a sum of Rs. 12963000/- out of total cash found of Rs. 17,96,300/- as unexplained disbelieving the availability of cash out of cash withdrawn from bank account of assessee and her husband. 13. During the course of search proceeding certain cash were founded the various premises in possession of the assessee. A sum of Rs. 7.46 Lacs was founded the defense colony residence of the assessee and Rs. 10.50 Lacs was founded local No. 44 4 with Oriental bank of commerce. During the course of assessment proceedings, the assessee was asked to explain the source of the above cash and assessee explained that she has withdrawn a sum of Rs. 14.65 Lacs from her bank account and her husband has withdrawn a sum of Rs. 60.45 Lacs, and therefore after meeting the day to day expenses there are sufficient balance available with the assessee which covers the above amount of cash found during the course of search. The Ld. assessing officer disbelieved the above explanation of the assessee and made an addition of Rs. 1 296300 on account of unexplained cash. The Ld. CIT appea....
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....cash flow statement wherein opening balance of Rs. 10 Lacs in the hands of the assessee and Rs. 4.29 Lacs in the hands of the assessee is husband is shown. Further, the withdrawal amount is also shown, therefore, the total withdrawal amount of the husband of the assessee and assessee amounts to Rs. 66 Lacs and out of this after deducting the household expenditure. The assessee has shown the available cash on hand of Rs. 67 lakhs. Therefore, if the combined effect of the total cash withdrawal of the assessee as well as her husband is given that the amount of cash found during the course of search is covered by the availability of the cash in their hands. However, the Ld. CIT (A) has held that both are living apart and therefore the credit cannot be given of the cash withdrawn by the husband of the assessee. We do not agree with that for the simple reason that nowhere it is established by the revenue that amount of cash withdrawn by the husband of the assessee is not available to assessee. Merely because the reason that the assessee and the husband of the assessee are legally separate cannot be the reason for not giving the credit of the cash found during the course of search. It is ....
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....nd of the assessee. The pattern of the amount received is Rs. 1 lakh for each of the month and a paltry sum of Rs. 30700/-was received on 03/08/2006. As assessee could not explain the source of the above funds in the hands of the appellant's husband the addition was made. The Ld. CIT appeal deleted the same and therefore revenue is in appeal before us. 22. The Ld. CIT DR vehemently relied upon the order of the Ld. Assessing officer. The Ld. authorized representative relied upon his written submission and the order of the Ld. CIT appeal. 23. We have carefully considered the rival contentions. Admittedly, the sum of Rs. 1 lakh each was received by the assessee from her husband from his Deutsche bank non-resident external account on monthly basis for 12 months and further sum of Rs. 3 0700 was received on 03/08/2006. Assessee explained that these money was paid by the husband of the assessee as maintenance in pursuance of an order of the court for her living expenditure. The assessee submitted that the husband of the assessee is a regular income tax assessee and the money has been received by the banking channel. It was also explained that the money is in the non-resident extern....
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....ound during the course of search and as per the explanation of the assessee jewellery more than one crore was lying with a jeweller in Mumbai. Further, there was no item wise reconciliation given by the assessee. On appeal before the Ld. CIT (A) the above addition was deleted and therefore revenue is in appeal before us. 25. The Ld. CIT DR vehemently relied upon the order of the Ld. Assessing officer. The Ld. authorized representative relied upon his written submission and the order of the Ld. CIT appeal. 26. We have carefully considered the rival contentions and also perused the orders of the lower authorities. Admittedly, the jewellery of Rs. 1.74 crores for found during the course of search and out of that jewellery of Rs. 1.20 crores was seized and the Ld. assessing officer has made addition on that account. The Ld. CIT appeal wide para No. 12 of his order has held as under:- "12. I have considered the facts of the case, the AO's order, the submission of the appellant, the AO's report and the position of law. As per the remand report the Annexure is filed with the submissions by the appellant does not constitute additional evidence. These Annexure's contained det....
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....r were using the jewellery interchangeably cannot be ignored. The appellant's husband Mr. Suresh Nanda has filed a confirmation before the assessing officer stating that his family had placed the jewellery in a common pool and used the same interchangeably. It is observed that the total weight of gold declared by the appellant had her daughter exceeds the weight of gold found with them on the date of search by 1577.446 gms. Similarly, the total diamond declared in the wealth tax return exceeds the total weight of diamonds found during the course of search. In terms of the value, the value of declared jewellery taking the rate of gold at Rs. 900 per gram in respect of the family comprising of appellant, Mr. Suresh Nanda and Miss Sonali Punj works out to Rs. 7.5572939/- against the total jewellery found of rupees 41224097/-. Hence, the value of jewellery declared is far in excess of the value of jewellery found during the course of search. Even individually the value of jewellery declared taking the rate of gold at Rs. 900 per gram is in excess of jewellery found during the course of search." 27. Therefore, from the above finding it is apparent that the value of the jewellery foun....
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....the addition of Rs. 1 296300/- on account of unexplained cash found during the course of search wide order dated 16/11/2012. The Ld. assessing officer held that assessee has concealed the particulars of the income. The above penalty was deleted by the Ld. CIT appeal wide order dated 25/06/2014 holding that appellant has no source of income except money given by Sri Suresh Nanda and from bank interest. Therefore, the addition was rightly made in the hands of the Suresh than the and no addition can be made in the hands of the assessee and therefore the penalty has been remanded for the fresh adjudication in the hands of the Suresh Nanda, therefore, the penalty does not survive. The revenue aggrieved before us contested that excess cash was found and therefore the penalty should have been levied and confirmed. 31. We have carefully considered the rival contention and as we have already deleted the addition made by the Ld. assessing officer and confirmed by the Ld. CIT appeal for the reasons given by us in ITA No. 3700 Del 2011 for assessment year 7 - 08, the penalty does not survive. Hence, the appeal of the revenue is dismissed. AY 2005-06 32. The Revenue has raised the foll....
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....e of undisclosed income was found during the course of search and therefore the assessment deserves to be annulled. 37. The Ld. CIT DR vehemently supported the order of the Ld. assessing officer and submitted that that the Ld. CIT appeal has wrongly held that the addition cannot be made in the hands of the assessee in absence of any incriminating material. She further submitted that despite there being no incriminating material such additions could have been made in the hands of the assessee. 38. The Ld. authorized representative supported the order of the Ld. CIT A, and submitted that no addition can be made in the hands of the assessee Pursuant to the search in absence of any incriminating material. 39. We have carefully considered the rival contention and perused the orders of the lower authority. In the present case, the Ld. assessing officer has passed an assessment order under section 143 (3) read with section 153A of the income tax act. According to the provisions of section 153 A of the income tax act. The assessing officer sell issue notice to such person requiring him to furnish within such period as may be specified in the notice, the return of income in respect....
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....e the assessing officer on the date of the search without any incriminating material pertaining to that year. 43. We have carefully considered the rival contentions and also perused the orders of the lower authority. We also noted the reasons stated by the Ld. assessing officer for making those additions. The assessment year involved in this appeal is assessment year 2005 - 06 return for which was filed on 01/08/2005 and till the date of search, no notice under section 143 (2) or under section 148 of the income tax act has been issued. The search took place on 28/02/2007. The notice under section 143 (2) could have been issued to the assessee up to 30/9/2006. Therefore as on the date of the search i.e. on 28/02/2007 assessment for assessment year 2005 - 06 was not pending before the assessing officer. Therefore, if any addition is required to be made in assessment year 2005 - 06 it is to be made on the basis of the incriminating material found during the course of search. We have carefully perused the assessment order also with respect to the various additions made by the Ld. assessing officer. On perusal of the same, we find that with respect to the addition of Rs. 1 50, 07557/....
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....this section only on the basis of the seized material." (v) In the 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 153A is relatable to abated pro ceedings (i.e., those pending on the date of search) and the word "reassess" to the completed assessment proceedings. (vi) In so far as the pending assessments are concerned, the jurisdic tion to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each assessment year on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer. (vii) Completed assessments can be interfered with by the Assessing Officer while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment." 44. Therefore it is ....
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....ion of Rs. 1 207 3115/- was made to the total income of the assessee as unexplained investment in jewellery. And, therefore, the identical amount was also added to the total wealth of the assessee for assessment year 2007 -08. The above addition was made in assessment year 2007 - 08 and therefore for the purpose of the current assessment year 2010 - 11 the amount was recalculated applying the current market rate of gold on the valuation date and further addition of Rs. 1 503 9484 was made for the appreciation in the value of the jewellery. 48. Assessee, aggrieved with the order of the Ld. WTO filed an appeal before the Ld. CIT (W) who wide order dated 13/08/2014 deleted the above addition, as in para No. 4 of his order. He is mentioned that the addition of jewellery in the hands of the appellant in the income tax proceedings were deleted and which is been confirmed by the coordinate bench. As the addition has been deleted the addition of the value of the said jewellery to the taxable wealth of the appellant also stands deleted. Revenue, aggrieved by the order of the Ld. CIT (W) has preferred an appeal before us. 49. The Revenue has raised the following grounds of appeal in WT....