TaxTMI 
TaxTMI 
2018 (12) TMI 405
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....nt order. 2. That the impugned assessment order deserves to be cancelled/ annulled because no valid notice u/s 143(2) of the I.T. Act had been issued. 3. That the Ld. AO was not at all justified in passing the impugned assessment order u/s 143(3) of the I.T. Act on protective basis without first making an assessment on substantive basis in the hands of the beneficiaries with regard to deposits in the bank accounts. 4. That without prejudice to Ground No. 1 to 2 above, the Ld. AO was not justified in making the following additions towards the assessable income of the Appellant and the Ld. CIT(A) had erred on facts and under the law in confirming them: a) Rs.6,58,895/- on account of commission assessed as business income by assuming the same @ 3% against 0.1% charged by the Appellant. b) Rs.2,19,63,154/- being the addition on account of deposits in bank account of the Appellant emanating from the accounts of the beneficiaries on protective basis. 5. That the Id. AO had erred on facts and under the law in making the addition of bank credits separately in the hands of the Assessee ignoring the fact that the Appellant was not operati....
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....ice u/s 143(2) dated 21/01/2013 is invalid and unlawful. " 3. In order to admit above additional grounds of appeal for consideration, it has been pleaded on behalf of the assessee that these grounds were omitted in original grounds inadvertently before the ld. CIT(A) and since these grounds are purely legal in nature and challenge the validity of assessment order u/s. 143(3), and the facts relating to them are already available on record, the same can be raised at any stage of proceedings. In support of these additional grounds, the ld. counsel for the assessee relied on various decisions as under : (i). Singhad Technical Society, 397 ITR 344 (SC) (ii). Fast Booking (I) Pvt. Ltd., 378 ITR 693 (Del) (iii). Siler Line, 383 ITR 455 (Del) (iv). M/s. VMT Spinning Co. Ltd., 389 ITR 326) (v). Jolly Fantasy World Ltd., 373 ITR 530 (Guj) The ld. AR has also relied on several other decisions of ITAT, Delhi Benches in his written synopsis as under : (i). BNB Investment & Propeties Ltd. (ITA No. 504/Del/2015-dt. 27.06.2018 (ii). Reliance Estate Agency (ITA No. 1614 to 1619/Del/2011- dt. 30.07.2018) (iii). Pavitra Rea....
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....red by the decision of co-ordinate Bench in the case of BNB Investment & Properties Ltd., where it is held as under : "7. We have considered the rival submissions. Section 153C of the I.T. Act, 1961, as is applicable to assessment year under appeal reads as under : "153C.Assessment of income of any other person.- (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A : Provided that in case of such other person, the reference to the date of initiation of the search under section 13....
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....ith the provisions of section 153A. The first proviso to subsection (1) of section 153C further states that, in case of such other person, the reference to the date of initiation of search in the second proviso to section 153A(l) "shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person". In terms of section 153A(1)(b) of the Act. the Assessing Officer shall assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted. The second proviso to sub-section (1) of section 153A of the Act states that assessment or reassessment relating to any assessment year falling within the period of six assessment years referred to in the said sub-section pending on the date of initiation of the search under section 132, would abate. In CIT v. RRJ Securities Ltd. [2016] 380 ITR 612 (Delhi), the court held that in the context of proceedings under section 153C of the Act, the reference to the date of initiation of the search in the second proviso to section....
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....9;ble jurisdictional High Court in the case of CIT Vs RRJ Securities in ITA No. 164/2015 and ITA No. 175 to 177/2015. For ready reference, the relevant Para of the judgment is reproduced as under: "24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings, by virtue of Section 153C(1) of the Act, would have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee. In this case, it would be the date of the recording of satisfaction under Section 153C of the Act, i.e., 8th September,....
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....er of searched person and such other person in whose case proceedings undersection 153C are initiated, is the same officer, then the date of recording of satisfaction would be construed as the date of handing over of the seized records by the Assessing Officer of searched person to the Assessing Officer of such other person in whose case proceedings under section 153C are initiated. Since the Hon'ble High Court has already construed the relevant provisions, we do not concur with the arguments advanced by the ld. CIT DR on this count. Respectfully following the above judgment of the Hon'ble High Court in RRJ Securities (supra) the date of handing over of seized material/ record by the Assessing Officer of searched party to the Assessing Officer of the assessee would be 2nd November, 2009. Further, following the judgment, the six assessment years for which assessment/re-assessment could be made u/s 153C of the Act would also have to be construed as from the reference date of handing over of assets/documents to the Assessing Officer of the assessee. In the case in hand, it would be the date of recording satisfaction under section 153 of the Act i.e. 2nd November, 2009, and the....
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....years under section 153C of I.T. Act in the case of assessee would be A.Y. 2008-2009 to 2013-2014. The A.O, therefore, shall have to pass the assessment order under section 153C of the I.T. Act. However, A.O. has not issued any notice under section 153C of the I.T. Act before initiating the proceedings against the assessee which is also admitted by the A.O. in reply to the assessee under RTI Act. The Amendment in Section 153C of the I.T. Act by the Finance Act, 2017, w.e.f. 01.04.2017 to the effect that block period for the person in respect of whom the search was conducted as well as the "other person"would be the same six assessment year immediately preceding the year of search is prospective in nature. The issue have been dealt in detail by the Hon'ble jurisdictional Delhi High Court in the case of Pr. CIT vs. Sarwar Agency P. Ltd., (supra) and by ITAT, Delhi, B-Bench, in the case of Empire Casting Pvt. Ltd., New Delhi vs. ACIT, C.C.2, New Delhi and Pavitra Realcon Pvt. Ltd., New Delhi vs. ACIT, C.C.32, New Delhi (supra). The A.O, therefore, should have framed the assessment under section 153C of the I.T. Act in the case of the assessee and at the time of initiating the....