TaxTMI 
TaxTMI 
2018 (3) TMI 47
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....at the satisfaction note recorded by the AO is not able to explain how much seized material is incriminating in nature and how such documents lead to disclose of any income of the appellant. 2. That the order of the CIT(A) is perverse, erroneous and is not tenable on facts and in law. 3. That the grounds of appeal are without prejudice to each other. 4. That the appellant carves leave to add, amend, later or forgo any grounds of appeal either before or at the time of hearing of the appeal." 4. From the above grounds, it is gathered that only grievance of the department relates to the deletion of addition made by the AO on account of undisclosed income in the absence of any incriminating material found during the course of search by relying the decision of Hon'ble Delhi High Court in the case of Kabul Chawla Vs CIT. 5. Facts of the case in brief are that the assessee filed the original return of income on 30.10.2007 declaring an income of Rs. 8,08,76,320/- which was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act). Later on, the assessment was completed u/s 143(3) of the Act on 08.12.2009 at the returned income of....
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....ings of the investigation wing was conveyed to the AO vide above letter though the investigation report was not enclosed. Reply to query no.2: The addition was not made only on the basis of report received from ACIT, Circle 22(1). Though no documents was found/seized nor there was any admission by the assessee during the course of search but addition was made as the assessee failed to establish the identity and creditworthiness and genuineness of the share capital/premium. Reply to query no.3: The reason for reopening the assessment under section 148 of the IT Act for the AY 2007-08 and assessment order are enclosed. Reply to query no.4: As no addition was made on the basis of any incriminating document found during the search, hence reply to this query may kindly be treated as NIL. 2. In addition to the above, it is submitted that with respect of addition made under section 68 of the IT Act in this case, the assessee vide order sheet entry dated 16.03.2015 was asked as to why the amount of share capital/premium should not be added under section 68 of the IT Act to the income of the assessee. In response to the said notice, the assessee vide lett....
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....Delhi [order dated 18.01.2016 in ITA No. 5184/Del/2014 passed by the Hon'ble ITAT Delhi Bench', New Delhi; • M/s Siriago Pharma (P) Ltd. vs. DCIT, Central Circle-3, Jaipur [order dated 13.01.2016 in ITA No. 1010/JPI/2013 passed by the Honble ITAT Jaipur Bench, Jaipur; • Dy. Commissioner of Income Tax, Central Circle 23 us. Sh. Himanshu B. Kanakia [order dated 18.01.2016 in ITA No. 3187/Mum/2014 passed by the Honble ITAT "H" Bench, Mumbai • Commissioner of Income-Tax (Central) -III vs. Kabul Chawla [(2016) 380 ITR 573 (Delhi)]..........." 9. The ld. CIT(A) after considering the submissions of the assessee deleted the addition made by the AO and the relevant findings have been given in paras 8 & 9 as under: "8. Facts emerging in this case are that the appellant submitted original return of income declaring total income of Rs.8,08,76,320/- on 30.10.2007. The same was selected for scrutiny and assessment completed under section 143(3) of the Act on 08.02.2009, at the returned income and no additions made. The assessment was reopened by issuance of notice under section 148 of the Act, as there was a survey conducted in the premises ....
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...., who is alleged to be an entry operator and the appellant was shown as actual beneficiary of those accommodation entries. It was replied by the appellant that the assessment was completed earlier under section 143(3) of the Act and due to the passage of time appellant is not able to locate further details pertaining to the said transactions and certain records are not traceable or lost. 8.5 The reply was not found satisfactory and looking to the information received and in the absence of any proper justification/details it was concluded that the appellant has not discharged its onus to prove the identity, creditworthiness and genuineness of the transaction and hence additions have been made as unexplained cash credit, by invoking the provisions of section 68 of the Act. 8.6 As mentioned earlier, on the date of search, no proceedings were pending in this case. Further it is clearly brought out by the AO in her report that addition was not made on the basis of any incriminating document/material found during the course of search. This fact is also emanating from the assessment order. Therefore the facts of this case are similar to that of various cases relied upon ....
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....pital received during the year has been duly accepted. Here it is pertinent to mention that appellant have stated in his submission as reproduced earlier that Hon'ble ITAT, Chandigarh in the case of M/s AP Refinery P. Ltd. (Supra) has deleted the addition on the identical grounds, where addition was made pursuant to the search carried out on Sh. Tarun Goel and money had been received from the same companies alleged to be a bogus entry transaction. It is also observed that the AO has categorically mentioned that addition was not made on the basis of investigation report. Thus, it is a case of re-examination of the share capital received by the appellant during the year, independently and afresh, which has no bearing to the search proceedings or any incriminating material found during the course of search. Accordingly, the legality of the addition needs to be decided in view of the judgment by Hon'ble Delhi High Court as pronounced in various cases including the cases of Kabul Chawla (supra). 8.10 As evident, neither any proceedings were pending nor abated on the date of search nor additions are made on the basis of any incriminating material, information or unexplai....
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....by the AO in the assessment order dated 31.03.2015 and the remand report dated 16.03.2016 and submitted that the AO has power to reassess the income of the assessee not only for undisclosed income found during the course of search operation but also with regard to the material that was available at the time of original assessment. The reliance was placed on the judgment of the Allahabad High Court in the case of CIT(Central), Kanpur Vs Raj Kumar Arora (2014) 52 Taxmann.com 172. 11. In his rival submission, the ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the additions u/s 153A r.w.s. 143(3) of the Act had been made by the AO even when no incriminating material was found during the course of search. A reference was made to paras 6.3 & 6.4 of the impugned order. Reliance was placed on the judgment of the Hon'ble Jurisdictional High Court in the case of CIT Vs Kabul Chawla (2016) 380 ITR 573. 12. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the original assessment was framed by the AO v....
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.... assessment order in respect of each of the six assessment years 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 Assessing Officer 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 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 proceedings (i.e., those pending on the date of search) and the word "reassess " to completed assessment proceedings, (vi) In so far as pending assessments are concerned, the jurisdiction 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 f....