TaxTMI 
TaxTMI 
2019 (11) TMI 365
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....e was also searched on 20/2/2008. Therefore, the learned assessing officer issued notice u/s 153A of the income tax act on 11/8/2009. The assessee filed return on 22/9/2009 declaring an income of INR 5 142771/-. The assessment u/s 143 (3) of the act read with section 153A of the act was passed on 29/12/2009 wherein several additions were made and the income of the assessee was assessed at INR 1 4536692/-. The assessee preferred an appeal before the learned CIT - A. The learned CIT - A passed an order dated 17/3/2011 against which the cross appeals were filed before the coordinate bench. The coordinate bench per order dated 28/6/2012 set aside the appeal back to the file of the learned CIT - A holding that admission of the additional evidence in rule 46A has not been complied with and the learned CIT - A has not decided about the genuineness of the memorandum of understanding which is refuted by the learned assessing officer. Consequently, the learned CIT - A passed an order dated 19/8/2014 partly allowing the appeal of the assessee. Therefore, the assessee has challenged the above order in ITA number 5696/del/2014 and the learned AO has challenged that order in ITA number 5982/d....
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....in case of CIT vs Kabul Chawla (supra) has held as under :- 37. On a conspectus of section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under : (i) Once a search takes place under section 132 of the Act, notice under section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six assessment years immediately preceding the previous year relevant to the assessment year in which the search takes place. (ii) Assessments and reassessments pending on the date of the search shall abate. The total income for such assessment years will have to be computed by the Assessing Officers as a fresh exercise. (iii) The Assessing Officer will exercise normal assessment powers in respect of the six years previous to the relevant assessment year in which the search takes place. The Assessing Officer 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 respe....
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....h section 143 (3) of the income tax act on 29/12/2009 all 3 additions are made without any reference to any incriminating material found during the course of search. The first addition of INR 2,500,000 on account of loan from Mr. Prem Sheth, there is no reference of any material found during the course of search. With respect to the amount of loan received from Messer ATS Infrastructure Ltd as deemed dividend was also not made on account of any incriminating material found during the course of search. The memorandum of understanding referred by the learned assessing officer was also not found during the course of search. The third edition of the short-term capital gain of INR 3 525645/- on sale of shares was also made on account of search on Messer's DN Kansal securities private limited. However, during the course of search on assessee, there is no incriminating material found with respect to the above transaction. Even otherwise, the assessee has shown the above sum as short-term capital gain whereas the learned assessing officer has taxed this as income from other sources. This is evident from the computation made by the learned assessing officer on the last page of the ass....
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....of the assessee. Accordingly, Ground no 2 is also allowed. 9. Accordingly, ground number 1 and 2 of the appeal of the assessee are allowed. 10. With respect to the appeal of the learned assessing officer, wherein the deletion of 2 additions with respect to addition u/s 68 of the income tax act of INR 2,500,000 and addition of deemed dividend of INR 6,500,000 in the hands of the assessee by the learned CIT - A are under challenge, while deciding the ground number 1 of the appeal of the assessee we have already held that with respect to the above two additions there is no incriminating material found during the course of search. Therefore, these two additions could not have been made in the hands of the assessee. Accordingly, ground numbers 1 - 5 of the appeal of the learned assessing officer are dismissed. 11. In the result ITA number 5696/del/2014 filed by the assessee for assessment year 2005 - 06 is allowed and ITA number 5982/del/2014 for the same Assessment Year filed by the learned assessing officer is dismissed. 12. ITA number 3128/del/2016 for assessment year 2005 - 06 is filed by the assessee against the order of the learned CIT - A -IV, Kanpur dated 17/3/2016 w....
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.... Now we come to the appeal of the learned assessing officer for assessment year 2006 - 07 in ITA number 2216/del/2014 against the order of the learned CIT (Appeals) dated 13/1/2014 challenging the deletion of the addition of INR 7,000,000 as deemed dividend and INR 2 804022/- u/s 41 (1) of the income tax act not treating it as a trading liability. The claim the assessee filed his return of income on 29/9/2009 declaring income of INR 1 994253/- in response to notice u/s 153A of the act issued on 11/8/2009. Assessment u/s 143 (3) of the act read with section 153A of the act was passed on 29/12/2009 determining total income of the assessee at INR 1 1824060/-. Assessee preferred appeal against that order before the Commissioner of income tax- A. He passed an order dated 17/3/2011 partly allowing the appeal of the assessee. He deleted the addition of Rs. 2804022/- u/s 41 of the income tax act. He also deleted the addition of INR 7 0 lakhs as deemed dividend holding that transaction between the assessee and the company were business transactions. Assessee preferred an appeal before the coordinate bench. The coordinate bench passed the Consolidated order for assessment year 2004 - 05, 200....