TaxTMI 
TaxTMI 
2018 (3) TMI 47
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....e 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 Rs. 8,08,76,320/-. Subsequently, the assessment was reopened by issuing the....
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.... 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 letter dated 19.03.2015 submitted its reply. Therefore, vide this office letter 25.03.2015 the assessee was informed about the same. 3. ....
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.... 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 of the appellant on 24/25.02.2010. The same was finalized vide order under section 147/143(3) of the Act on 03.12.2012 on the returned income and no additions made. A search under section 132 of the Act was carried out on 10.12.2012, in the case of the a....
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.... 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 by the appellant, including the case of M/s Kabul Chawla 380 ITR 573 (Delhi). 8.7 However before preceding further, it is expedient to examine the issue related to the investigation report as mentioned in the assessment order. One of the basis of addition was the information received from the Investigation Wing with respect to the search....
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....een 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 unexplained investment, cash etc., found during search, therefore the ratio laid down in the case law relied upon by the appellant, especially the judgment of jurisdictional High Court in the case of CIT vs. Kabul Chawla (Supra) is applicable in the case of appellant. Here it is pertinent to mention that in the case of Raj Kumar Arora (2014) 52 Taxmann.com 172 (Allahabad), the Hon'ble ....
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....rt 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 vide order dated 08.12.2009 u/s 143(3) of the Act, thereafter, the case was reopened and the assessment was framed u/s 147/143(3) of the Act vide order dated 03.12.2012. After it, a search and seizure operation u/s 132 of the Act was carried out on 10.12.2012. During the course of search, no incriminating material was found and the AO made the addition on account of increase in share capital which wa....