TaxTMI 
TaxTMI 
2018 (1) TMI 131
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....the Asst Years 2009-10 and 2012-13 dated 28.12.2016 ; Appeal No. 10867 /CC-3(3)/CIT(A)-21/Kol/16-17 dated 6.7.2017 in the case of Ajay Kumar Singhania against the order of assessment framed u/s 153A/143(3) of the Act for the Asst Year 2012-13 dated 29.12.2016 ; Appeal No. 10779 /CC-3(3)/CIT(A)-21/Kol/16-17 dated 6.7.2017 in the case of Smt Kasak Singhania against the order of assessment framed u/s 153A/143(3) of the Act for the Asst Year 2012-13 dated 20.12.2016 ; Appeal Nos. 10766 & 10785 /CC-3(3)/CIT(A)-21/Kol/16-17 dated 6.7.2017 for Asst Years 2009-10 and 2012-13 respectively in the case of Smt Nirmala Devi Singhania against the independent order of assessments framed under section 153A / 143(3) of the Act for the Asst Years 2009-10 and 2012-13 dated 23.12.2016 ; Appeal Nos. 10770 & 10781 /CC-3(3)/CIT(A)-21/Kol/16-17 dated 6.7.2017 for Asst Years 2009-10 and 2012-13 respectively in the case of Vijay Kumar Singhania against the independent order of assessments framed under section 153A / 143(3) of the Act for the Asst Years 2009-10 and 2012-13 dated 13.12.2016 and 28.12.2016 respectively; Appeal No. 10784 /CC-3(3)/CIT(A)-21/Kol/16-17 dated 6.7.2017 in the case of Smt....
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....ng term capital gains by converting their undisclosed income. In other words, the ld AO was of the opinion that the assessee had converted his unaccounted cash and brought the same in the form of long term capital gains which was shown as exempt income in connivance with the share brokers and the Calcutta Stock Exchange Ltd. In response to this, the assessee apart from addressing the issue on merits stated that the seized document relied upon by the ld AO viz CG /1 to 11 and CG/HD/1 was not seized from the premises of the assessee during the course of search on 23.12.2014. The same were found and seized in the business premises of Cygnus Equipment & Rentals Pvt Ltd and other companies in the course of search on 23.12.2014 pursuant to an independent search warrant issued on them as could be evident from the panchaname drawn in the name of the said companies. The assessee submitted that the only document which was seized from his premises was KKS /1 comprising of 8 pages in the form of loose sheets and there was nothing incriminating in the same as admittedly the same only contains details of amount spent in the sums of Rs. 93,500/- and Rs. 225/- towards purchase of TV and which is d....
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....hambha Road, New Delhi-110001 where documents having identification marks A-1, A-2(HD) were impounded." I have considered findings of the AO in the assessment order and the written submissions filed by the AR on this issue. From the assessment order it is clear that many papers, incriminating documents, CDs and incriminating computerized data were found and seized during the search operations and in survey/search operations conducted in Delhi and Noida many incriminating documents were found and seized/impounded. The AO has considered all such incriminating documents and only after that he has framed assessment order. Therefore, the argument of the assessee that no incriminating document was found or considered while framing the assessment orders is not correct. Accordingly, assessee's appeal on grounds no. 1 and 2 are dismissed." 7. Aggrieved, the assessee is in appeal before us on the following grounds: 1. For that the Ld. CIT(A) erred in confirming the order of the AO making the additions while completing the assessment u/s 153A when no incrementing documents belonging to the assessee were found in the course search, nor any such document have been relied on....
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....(c) where a person is in possession of any money, bullion, jewellery or other valuable article or thing and such assets represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Act (hereinafter referred to as the undisclosed income or property) ; then the officer, so authorized could conduct a search and proceed as per the requirements laid down in the said section. He argued that the aforesaid three primary conditions for invoking search proceedings cannot be given a go by while framing section 153A assessments and the instant case falls under section 132(1)(c ) of the Act. The provisions of section 153A of the Act use the expression 'assess or reassess total income' and hence the search assessment could be framed u/s 153A of the Act irrespective of any incriminating materials. He further argued that the documents seized in the business premises of the group companies of the assessee also could be very well used in the section 153A proceedings of the assessee, which has been rightly done by the ld AO in the instant case. 9. In response to this, the ld AR stated that as on the date of search, the assess....
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....mption. Then in such a scenario, the person on whom presumption is drawn, has got every right to state that the said documents does not belong to him / them. The ld AO if he is satisfied with such explanation, has got recourse to proceed on such other person (i.e the person to whom the said documents actually belong to) in terms of section 153C of the Act by recording satisfaction to that effect by way of transfer of those materials to the AO assessing the such other person. This is the mandate provided in section 153C of the Act. In the instant case, if at all, the seized documents referred to in CG/1 to 11 and CG/HD/1 is stated to be belonging to assessee herein, then the only legal recourse available to the department is to proceed on the assessee herein in terms of section 153C of the Act. In this regard, we would like to place reliance on the recent decision of the Hon'ble Delhi High Court in the case of CIT vs Pinaki Misra and Sangeeta Misra reported in (2017) 392 ITR 347 (Del) dated 3.3.2017, wherein it was held that, no addition could be made on the basis of evidence gathered from extraneous source and on the basis of statement or document received subsequent to search. Hen....
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....ome of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years:" 10.2. We find that the Co-ordinate Bench of this tribunal in the case of ACIT vs Kanchan Oil Industries Ltd in ITA No. 725/Kol/2011 dated 9.12.2015 reported in 2016- TIOL-167-ITAT-KOL had explained the aforesaid provisions as below:- "6.4 In our opinion, the scheme of assessment proceedings should be understood in the following manner pursuant to the search conducted u/s. 132 of the Act :- (a) Notice u/s. 153A of the Act would be issued on the person on whom the warrant of authorization u/s. 132 of the Act was issued for the six assessment years preceding the year of search and assessments thereon would be completed u/s. 153A of the Act for those six assessment years. (b) In respect of the year of search, notice u/s. 143(2) of the Act would be issued and assessment thereon would be completed u/s. 143(3) of the Act. (c) In respect of c....
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....receding the previous year relevant to the AY in which the search takes place. (ii) Assessments and reassessments pending on the date of the search shall abate. 14 The total income for such AYs will have to be computed by the LD AOs as a fresh exercise. (iii) The LD AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The LD 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 153A 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 LD 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 o....
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....as Lachman Das reported in (2012) 211 Taxman 61 (Del HC) ; Madugula Venu vs DIT reported in (2013) 215 Taxman 298 (Del HC) ; Canara Housing Development Co. vs DCIT reported in (2014) 49 taxmann.com 98 (Kar HC) ; Filatex India Ltd vs CIT reported in (2014) 229 Taxman 555 (Del HC) ; Jai Steel (India) vs ACIT reported in (2013) 219 Taxman 223 (Del HC) ; CIT vs Murli Agro Products Ltd reported in (2014) 49 taxmann.com 172 (Bom HC) ; CIT vs Continental Warehousing Corporation (Nhava Sheva) Ltd reported in (2015) 374 ITR 645 (Bom HC) and All Cargo Global Logistics Ltd vs DCIT reported in (2012) 137 ITD 287 (Mum ITAT) (SB). We also find that against the decision of the Hon'ble Delhi High Court in 380 ITR 573 (Del), the revenue preferred Special Leave Petition before the Hon'ble Supreme Court and the same was dismissed by the Hon'ble Apex Court which is reported in 380 ITR (St.) 4 (SC). Hence it could be safely concluded that the decision of Hon'ble Delhi HC in the case of Kabul Chawla supra would have to be considered on the impugned issue and in any case, the Hon'ble Supreme Court in the case of CIT vs Vegetable Products Ltd reported in 88 ITR 192 (SC) had held that if two reasonable ....
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....n the course of search from the premises of the assessee. Since the issue is addressed on preliminary ground of absence of incriminating materials, we refrain to give our findings on the merits of the additions for the Asst Year 2009-10 in the case of Krishna Kumar Singhania. Accordingly the preliminary ground raised by the assessee in this regard is allowed. Krishna Kumar Singhania, Ajay Kumar Singhania, Kasak Singhania, 11. The aforesaid decision rendered in the case of Krishna Kumar Singhania for Asst Year 2009-10 would apply for Asst Year 2012-13 also for that assessee and also for other assessees involved supra for various assessment years in view of identical facts and circumstances except with variance in figures. It is not in dispute that for both the Asst Years 2009-10 and 2012-13, the assessments were deemed to be completed as on the date of search for all the abovementioned assessees as admittedly the time limit for issuance of notice u/s 143(2) of the Act had expired in all the abovementioned cases. Thus they had become concluded assessments on the date of search. The basic facts of filing the original return of income by other assessees and the time limit available ....