TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 1091
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....T(C)-IV, Mumbai vide order in F.NO. CIT(C)IV/263/2010-11 dated 11.03.2011 under section 263 of the Act for AY 2002-03. Another appeal is against the consequential order passed by AO under section 143(3) r.w.s 263 of the Act vide order dated 27.12.2011 by ACIT, CC-40, Mumbai for AY 2002-03. In ITA No. 3739/Mum/2011 for AY 2001-02 2. The first issue in this appeal of assessee is against the order of CIT(A) confirming the addition made by AO and also enhancing the assessment on account of gift received by assessee amounting to Rs. 11,23,000/- treating the same as non-genuine and unexplained. The assessee has challenged assumption of jurisdiction for framing the assessment under section 153A read with section 143(3) of the Act, as there is no incriminating material found during the course of search and assessment is not based on incriminating material although the original assessment remains unabated. 3. Briefly stated facts are that a search and seizure action under section 132 of the Act was carried out by the department on Saf Yeast Group on 30.11.2006. The present assessee has been member of Saf Yeast group, was covered under search and seizure action under section 132 of the Ac....
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....nsel for the assessee stated that even the assessee has filed return of income for AY 2001-02 on 23.05.2001 and along with return of income filed the income and expenditure account, capital account where he has disclosed the gifts of Rs. 11.23 lakhs and also bank balance maintained with State Bank of Bikaner and Jaipur Account No. 5222/- at Rs. 11.48 lakhs. The learned Counsel for the assessee drew our attention to pages 147 to 151, wherein the copy of return of income for the relevant assessment year and copies of income and expenditure account, capital account and balance sheets as on 31.03.2001 are enclosed. The learned Counsel for the assessee in view of the above, stated that the entire saving bank account of State Bank of Bikaner and Jaipur saving Bank Account No. 5222 and the gift received from Shri Gulab M. Adnani, Shri Jammumal V. Pohani, Shri Jashanlal D. Somani are already disclosed to the department and the assessment has been unabated and no proceedings whatsoever was pending before the AO for this assessment year. The learned Counsel for the assessee relied on the decision of Hon'ble Bombay High Court in the case of CIT vs. Continental Warehouse Corporation (2015) 374....
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.... gifts received in the capital account filed with the return of income from Shri Gulab M. Adnani. The assessee has enclose the copy of capital account along with the return, wherein the gift received from the above said party of Rs. 6,62,000/- has been disclosed. Further, the assessee also drew our attention to the capital account wherein he has declared the receipt of fixed deposit maturity amount of Rs. 2 lacs and amount receive don redemption of ULIP of Rs. 86,855/-. Further, we also find that there is no proceedings pending before the AO on account of regular assessment and there is no incriminating material available with the assessing officer for framing this assessment under section 153A read with section 143(3) of the Act. The assessment originally made is unabated and once, there is no incriminating material found during the course of search in relation to the income added as undisclosed income, the proposition argued by the learned Counsel for the assessee relying on the decision of Hon'ble Bombay High Court in the case of Continental Warehouse Corporation (supra) is clearly applicable in respect of undisclosed income added by the AO despite the fact that there is no incr....
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....al relating to search conducted on 30.11.2006. We find from the facts of the case that the assessee has filed regular return of income for AY 2004-05 on 27.08.2003 under section 139 of the Act and along with the return of income the assessee has disclosed the gifts received in the capital account filed with the return of income from Shri Gulab M. Adnani. The assessee has enclose the copy of capital account along with the return, wherein the gift received from the above said party of Rs. 6,31,000/- has been disclosed. Further, we also find that there is no proceeding pending before the AO on account of regular assessment and there is no incriminating material available with the assessing officer for framing this assessment under section 153A read with section 143(3) of the Act. The assessment originally made is unabated and once, there is no incriminating material found during the course of search in relation to the income added as undisclosed income, the proposition argued by the learned Counsel for the assessee relying on the decision of Hon'ble Bombay High Court in the case of Continental Warehouse Corporation (supra) is clearly applicable in respect of undisclosed income added b....
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.... of reconciliation statement based on the credits of Rs. 4.97 lakhs. The AO has made addition. The assessee before the CIT(A) explained that there is credit in his capital account under the narration of 'journal' of an amount of Rs. 4.97 lakhs as on 31.03.06. It was explained that this entry difference in the value recorded in the books of account, which was on explained by filing of reconciliation of Flat account in the books of accounts. It was explained that there was an accounting error occurred in AYs 1995-96, 1998-99, 2000-01 and 200405 while recording the value of Flat owned by the assessee resulting in short credit in the capital account and the assessee filed reconciliation statement. The CIT(A) confirmed the addition by stating that the assessee has failed to satisfactorily explain the credit entry of Rs. 4.97 lakhs by observing in Para 12.3 as under: - "12.3 On a careful examination of the remand report and the submissions made by the appellant, it is seen that the appellant has not discharged the onus of explaining the addition made in the capital account amounting to Rs. 4,97,000/-. Even after admitting the additional evidence during the appeal proceedings and after ....
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....nds:- "1. On the facts and circumstances of the case and in law the learned Commissioner of Income Tax erred in concluding that the order made under section 143(3)/153A of the Act by the Assessing Officer is erroneous and prejudicial to the interest of the revenue Provisions of the Act ought to have been properly construed and regard being had to facts of the case said order should not have been treated as erroneous and prejudicial to the interest of the revenue Reasons assigned by him are wrong and insufficient to justify that said order is erroneous and prejudicial to the interest of the revenue. 2. On the facts and circumstances of the case and in law the learned Commissioner of Income Tax erred in arriving at the conclusion that there is omission on the part of the assessee to disclose gift received by his minor children in as much as there is no provision in the Act or column in the return of income to disclose gift received by minor children. Provisions of the Act ought to have been properly construed and regard being had to facts of the case no such conclusion should have been arrived at. Reasons assigned by him are wrong and insufficient to justify such conclusion so ar....
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.... in the form of books of account or other documents related to the issue of deemed dividend under Section 2(22) of the Act. The amounts paid were in fact originally declared in the assessment returns of the assessee. The CIT, therefore, had opportunity to exercise his powers as it were on the basis of returns as filed originally and validly under Section 263 of the Act. 5. In the circumstances in the absence of any material disclosing that the issue of deemed dividend had been willfully derived or had been deemed or otherwise withheld from the assessment an addition under Section 153A was warranted - based on the proposition taught by this Court in judgment dated 28.08.2015 in ITA 707/2014 titled: CIT vs Kabul Chawla. Therefore, we concur with the ITAT's opinion in this regard. The search and seizure proceedings in such cases are undoubtedly meant to bring to tax amount that are to be determined on the basis of materials seized in the course of such searches; permitting anything over and above that would virtually amount to letting the Revenue have a third or fourth opinion as it were. Searches -to quote the view of Attorney-general (NSW) vs. Quin (1990) HCA 21 in another c....