AI Drafter 
TaxTMI 
TaxTMI 
2020 (6) TMI 156
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....ppeals i.e. the appeals filed for the assessment years 2010-2011 to 2014-2015 being similar, are taken into consideration first, therefore, the identical grounds taken in appeal for A.Y.2010-2011 and the facts mentioned therein are taken for deciding all the appeals. The ground taken in IT(SS)A No.101/CTK/2018 are as under :- 1. For that, the impugned order of Assessment passed U/S.153A read with section 143(3) of the Act is without jurisdiction and without the authority of law, as such, the same being not sustainable in the eye of law, is liable to be quashed in the interest of justice. 2. For that, when documents seized during the course of search operation were duly explained by the Assessee and accepted by the learned A.O, hence he should not have disturbed the Assessment Under Section,143(l)(a) of the Act. The impugned additions made in the order of Assessment for Assessment year 2010-11 being not sustainable in the eye of law is liable to be deleted in the interest of justice. 3. For that, In course of search, no such incriminating materials could be unearthed by the Search Team, the documents seized by the Search Wing were explained by the Assessee....
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....f the assessee on 12.02.2016 at New Colony, Sai Mandir Road, Rayagada. Post-search was also conducted on 10.08.2016 in case of the assessee along with other group cases which was intimated to the assessee. Thereafter the AO issued notice u/s.153A of the Act on 27.01.2017, in response to which the assessee filed her return of income on 17.03.2017 declaring the income as already declared in the original return of income. Thereafter the case of the assessee was taken up for scrutiny assessment and statutory notices were issued to the assessee, in response to which the AR of the assessee was appeared on 25.07.2017 and submitted the copy of return of income, bank statements, cash flow statements and other information as per the questionnaire raised by the Assessing Officer(hereinafter referred to as 'AO'). Subsequent notices were also issued to the assessee which were served on the assessee. During the course of search and seizure proceedings at the residential premises of the assessee, it was unearthed that the assessee was having two bank accounts i.e. one in Andhra Bank and other in State Bank of India. During the course of assessment proceedings, the AO noticed that there was ....
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....operation at the residential premises of the appellant bank accounts in Andhra Bank and State Bank of India, were unearthed. During the assessment proceedings, the Assessing Officer found that the total credits in these two bank account are of Rs. 9,06,811/-. He excluded the income declared by the appellant in the return of income and asked the appellant to explain the remaining credits. The explanation of the appellant was that he had cash-in-hand of Rs. 8,54,567/- and it was sufficient to explain the remaining credits. However, according to the Assessing Officer, income declared in the previous assessment order was not sufficient and the appellant did not furnish evidence in respect of the entries in the cash flow statement to merit favourable decision from him. 4.2 During the appeal proceedings, the appellant has filed income tax returns for A.Y.2008-09 and 2009-10, in which total income of Rs. 1,38,920/- and of Rs. 1,74,560/- have been disclosed. The appellant has also filed cash flow statement for financial year ending 31.03.2008 showing opening balance, of cash-in-hand Rs. 3,01,950/- and closing balance of Rs. 4,68,100/-. Similarly, appellant has filed cash flow stat....
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....e the Income Tax Appellate Tribunal. 9. Ld. AR before us, reiterated the submissions made before the CIT(A) and filed paper book containing pages 1 to 53. Ld. AR further submitted that during the course of search and seizure operation there was no any incriminating material found during the course of search. The AO has made addition not on the basis of any incriminating material but the addition has been made by the AO on the basis of bank accounts of the assessee maintained in the Andhra Bank and State Bank of India, which were disclosed in the return of income at appropriate column, therefore, it cannot be said that these accounts were to be in the nature of any incriminating material. It was also submitted by the ld.AR of the assessee that in the appropriate column the return of income did not accept the other name of bank, otherwise the assessee would have disclosed the other bank account maintained in State Bank of India. Ld. AR strongly relied on the decision of Hon'ble Delhi High Court in the case of Kabul Chawla, [2016] 380ITR 573 (Delhi) and submitted that when there is no any incriminating material, the assessment already completed cannot be interfered with. Further....
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....the basis of documents found during the course of search and seizure operation which are evident from the above submissions recorded in the question-answers as noted above, it is clear that the assessee had two bank accounts which has been noted by the authorities below. The assessee could not substantiate the cash deposited into the bank account, therefore, the AO has rightly added unexplained opening cash-in-hand to the total income of the assessee, which could not be substantiated. He also pointed out that in the return of income the assessee had not disclosed cash in hand in the previous assessment year as well as in the current assessment year and it was also pointed out that the interest income has not been shown in the return of income. In support of his contentions, ld. DR relied on the following decisions :- i) CIT Vs. ST. Francis Clay Decor Tiles [2016] 70 taxmann.com 234 (Kerala); 20. On a plain reading of Section 153A, it is clear that once search is initiated under Section 132 or a requisition is made under Section 132A after the 31st day of May 2003, the Assessing Officer is empowered to issue notice to such person requiring him to furnish return of ....
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....axmann.com 173 (Kerala) : I. Section 153A, read with sections 132 and 132A, of the Income-tax Act, 1961 -Search and seizure - Assessment in case of (Submission of returns for six years) -Assessment years 2002-03 to 2008-09 - Whether any material unearthed during search operations or any statement made during course of search by assessee is a valuable piece of evidence in order to invoke section 153A - Held, yes - Whether once search is initiated under section 132 or a requisition is made under section 132A, Assessing Officer is empowered to issue notice to person searched requiring him to furnish return of income in respect of each of following six assessment years as referred to in clause (b) of section 153A(1) - Held, yes -Whether once aforesaid notice is issued, assessee has to furnish all details with respect to each assessment year since same is treated as a return filed under section 139 - Held, yes - Whether even if no documents are unearthed, nor any statement was made by assessee during course of search under section 132 or any material is received for aforespecified period of six years, assessee is bound to file a return - Held, yes - Whether abatement of assessm....
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...., detect and to take possession of the unaccounted/ undisclosed income or property. The mere issue of warrant of authorization without there being search of the premises mentioned in the warrant of authorization would be meaningless and would not serve the purpose of section 132 of the Act. It may be illustrated by taking an example that if warrant of authorization under section 132 is issued in the name of "A" after 31.5.2003 but his premises is not searched for the purpose of executing the warrant of authorization and the warrant of authorization is kept unexecuted, the question arises whether the Assessing Officer still should proceed under section 153A of the Act for the purpose of framing the assessment or reassessment of the six assessment years immediately preceding the assessment years relevant to the previous year in which such search is initiated or requisition is made without executing the search warrant. The answer would be xNo' because it would be a futile exercise. It may be added here that jurisdiction can be assumed by the Assessing Officer to initiate assessment proceedings to issue notices once search is initiated under section 132/requisition made under section 1....
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....equisition on March 27, 2002 under section 132A of the Act requisitioning the books of accounts and other documents seized by the Central Excise Department The record of the proceeding dated April 18, 2002 showed that the requisition was not fulfily executed as all the books of account and other documents had not been delivered to the requisitioning authority. The proceedings initiated under section 148 were valid. However in the proceedings for reassessment under section 148 of the Act, materia/ or evidence relatable to the documents, for which the requisition had been sent under section 132A could not be taken into consideration. " 10. Considering the above provisions as noted above in the light of the provisions of section 153A of the Act, it would be clear that once the warrant of authorization or requisition is issued and search is conducted, Panchnama is drawn, the completed assessments for ail the relevant years would get reopened irrespective of whether any incriminating material is found or not in relation to a particular assessment year. However the warrant of authorization shall have to be executed by the authorized Officer in order to justify invoking of the ju....
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.... SBI SB A/c. 14,988.36 1,309,430.00 1,309,430.00 Further we noted that the AO has made addition on the opening cash balance as shown of Rs. 8,54,567/- considering to the previous year's income. We also observe from the cash-flow statement that the assessee has made payments under the different heads but he could not substantiate the opening cash of Rs. 6,62,000/- with evidence. We also gone through the copies of income tax returns i.e. ITR-IV filed by the assessee. The assessee has also not shown the closing cash in hand at appropriate column. In the copy of return of income the assessee has shown income from house property and remuneration from partnership firm and income from household business. We observe from the cash-flow statements the assessee has received savings bank interest of Rs. 1090/- containing interest received from Andhra Bank of Rs. 147/- and interest from State Bank of India at Rs. 943/-, which is evident from the paper book page No.32. These incomes have not been disclosed by the assessee in his return of income. These are the re....
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....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 seized material." (v) In 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 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. (vi) Insofar 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 AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. (vii) Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which wer....
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....mentioned that the assessee has taken that the assessee is filing return for the last 20 years but she has submitted only for the last two years cash-flow statement for the assessment year 2008-2009 & 2009-2010. In the order of the CIT(A), it is clear that the assessee has filed income tax return for two years i.e. 2008-2009 & 2009-2010, in which the assessee has shown income of Rs. 1,38,920/- and Rs. 1,74,560/-, respectively, which has not been denied by the CIT(A) and before the CIT(A), the assessee has also filed cash-flow statements for the last two years and the CIT(A) has also observed that there is low drawings for the last two previous years which is Rs. 40,000/- & Rs. 50,000/-, respectively. We observe that the husband of the assessee is also filing return of income and has also shown in the financial statements as withdrawings. On perusal of the assessment order, we find that the AO has considered the income for the assessment year 2009-2010 and has arrived at opening balance of Rs. 6,62,000/-. Further on perusal of the CIT(A)'s order, the assessee has filed return of income for the assessment year 2008-2009 also. This return of income has been accepted by the department ....
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....ccepted the Assessment passed U/s.l43(l)(a) of the Act and should not have disturbed the completed Assessment. Hence the impugned additions made in the order of Assessment for Assessment year 2011-12 being not sustainable in the eye of law is liable to be deleted in the interest of justice. 4. For that, when during the course of Search Assessment proceeding, the Assessee produced day-wise cash flow statement, capital account, ledger account along with cash book and copies of bank statement and when the learned A.O. could not dispute the transactions reflected in these documents, he should not have added Rs. 5,22,571.00, treating the same as unexplained difference without considering facts and circumstances of the case, without considering any submission and without considering general principles of accounting in preparation of the capital account and cash flow statement and bank credits. 5. For that, the learned Commissioner of Income Tax Appeal should not have confirmed the additions made by assessing officer amounting to Rs. 3,00,000 (Three lakhs) received through bank towards sale of shares at par (face value which is equal to cost of acquisition), treating it ....
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....ng transfer of shares of Hotel Sai International Private Limited, which was also not produced before the authorities below. In the interest of justice, this issue is also sent back to the file of AO for proper adjudication of the case after affording reasonable opportunity of hearing to the assessee. The assessee is also directed to cooperate with the AO for early disposal of the case. This ground of appeal of the assessee is allowed for statistical purposes. 18. Thus, appeal of the assessee for A.Y.2011-2012 in IT(SS)A No.102/CTK/2018 is partly allowed for statistical purposes. 19. In appeal of the assessee in IT(SS)A No.103/CTK/2018 for A.Y.2012-2013, the assessee has raised the following grounds :- 1. For that, the impugned order of Assessment passed U/S.153A read with section 143(3) of the Act is without jurisdiction and without the authority of law, as such, the same being not sustainable in the eye of law, is liable to be quashed in the interest of justice. 2. For that, when documents seized during the course of search operation were duly explained by the Assessee and accepted by the learned A.O, hence he should not have disturbed the Assessment Under ....
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....nable opportunity of hearing to the assessee. The assessee is also directed to cooperate with the CIT(A) for early disposal of the case. This ground of appeal of the assessee is allowed for statistical purposes. 22. Thus, appeal of the assessee for A.Y.2012-2013 in IT(SS)A No.103/CTK/2018 is partly allowed for statistical purposes. 23. In appeal of the assessee in IT(SS)A No.104/CTK/2018 for A.Y.2013-2014, the assessee has raised the following grounds :- 1. For that, the impugned order of Assessment passed U/S.153A read with section 143(3) of the Act is without jurisdiction and without the authority of law, as such, the same being not sustainable in the eye of law, is liable to be quashed in the interest of justice. 2. For that, when documents seized during the course of search operation were duly explained by the Assessee and accepted by the learned A.O, hence he should not have disturbed the Assessment Under Section,143(l)(a) of the Act. The impugned additions made in the order of Assessment for Assessment year 2013-14 being not sustainable in the eye of law is liable to be deleted in the interest of justice. 3. For that, In course of search, no s....
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....e assessee for A.Y.2010-2011 against the assessee. Therefore, the legal grounds raised by the assessee in the present appeal is dismissed. 25. In respect of ground No.4, we find that the AO in the assessment order has observed that the assessee was unable to explain the entire deposits into the bank account resulting into difference of Rs. 14,43,250/- has been added to the total income of the assessee. The assessee has produced date-wise cash flow statement and related ledger accounts to substantiate the credit which has not been denied by the authorities below. If all the entries of bank statement are entered into the bank accounts then why the assessee could not explain the difference of Rs. 14,43,250/-, therefore, in the interest of justice one more opportunity should be given to the assessee to substantiate her claim before the AO. Accordingly, this matter is sent back to the file of AO to decide the same afresh after providing reasonable opportunity of hearing to the assessee. The assessee is also directed to substantiate her claim with sufficient evidence in respect of difference of accounts. This ground of appeal of the assessee is allowed for statistical purposes. ....
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....d by the Assessee during the course post search inquiry as well as during the course of Assessment also. And when there were no such incriminating material found during the course of search and the seized documents, were well explained by the Assessee which were also accepted by the Search Team as well as by the A.O., then he should have accepted the return filed by the Assessee and should have also accepted the Assessment passed U/s.l43(1)(a) of the Act and should not have disturbed the completed Assessment. Hence the impugned additions made in the order of Assessment for Assessment year 2014-15 being not sustainable in the eye of law is liable to be deleted in the interest of justice. 4. For that the Commissioner of income tax appeal should not have confirmed the additions made by Learned Assessing Officer towards capital gains amounting to Rs. 2,33,188. without considering the income of capital gain shown in subsequent years as the complete sale was completed in the assessment year 2015-16. For these and other reasons to be adduced at the time of hearing that the assessee prays to accept the appeal and delete the entire addition in interest of natural ....
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....ced at the time of hearing that the assessee prays to accept the appeal and delete the entire addition in interest of natural justice and fair play. 33. Ground Nos.1 & 2 are relating to legal issue, which we have decided the same in the appeal of the assessee for A.Y.2010-2011 against the assessee. Therefore, the legal grounds raised by the assessee in the present appeal in ground Nos.1 & 2 are dismissed. 34. Ground Nos.3 & 4 are relating to addition made on account of undisclosed investment in gold jewellery. 35. Facts relating to the above grounds are that the Assessing Officer made addition of Rs. 25,26,438/- on account of undisclosed investment in gold jewellery as mentioned in para 9 of the assessment order. During the course of search, gold and jewellery of 2417.290 grams valued at Rs. 66,57,802/- was found. The AO accepted the source of jewellery of 1500 grams, however, the AO did not accept the source of remaining gold jewellery of 917.29 grams valued at Rs. 25,26,438/- and accordingly, the AO added the same into the total income of the assessee. In appeal, the CIT(A) observed that the assessee has explained the investments in gold ornaments and jewellery of 165....
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....ained investment. For that, being aggrieved with the impugned addition, Assessee preferred appeal before the learned C.I.T(A)-2, Bhubaneswar. During course of hearing of appeal, the Appellant drew attention of the learned C.I.T(A) to the seized materials as well as the cash flow statement for last years and of this year. The learned C.I.T(A) allowed only 150.000 grams over and above 1500.000 grams allowed by the learned A.O. and confirmed the investment in remaining gold ornaments and jewelleries being 767.29 grams valued at Rs. 21,13,302.00, treating as unexplained investment. Being aggrieved with the order passed by the forums below, this present appeal is preferred for kind interference of this Hon'ble Tribunal. SUBMISSIONS.- For that, the learned C.I.T(A) has committed gross error in fact as well as of law in not allowing the addition of 917.29 grams of gold and jewellery valued at Rs. 25,26,438.00 made by the learned A.O. The findings given by the learned C.I.T.(A) in paragraph No.4.6 at page No.4 of his order is completely illegal, wrong and contrary to the facts on record. Therefore, the addition of gold and jewellery of 767.29 grams valued at ....
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....sessee drew attention of the learned A.O. to the CBDT circular and submitted that, in view of this circular and judicial pronouncements 1550.000 grams of gold and jewellery of Assessee and of her family members should be treated as explained. It was also explained that, 100.000 grams of gold and jewellery belongs to sister-in-law who resides in Rayagada. Even though the learned A.O. has accepted the fact that, 682.000 grams of gold jewelry over and above that 1550.000 grams were explained but while completing the Assessment has allowed only 1500.000 grams and confirmed the addition of 917.29 grams. The impugned findings of the learned A.O. and consequential addition made by him runs contrary to his own finding of fact, as such, the impugned addition made by him, needs to be deleted in the interest of justice. 8. For that, the Assessee/Appellant submits herewith a detail chart of gold and jewelleries owned and purchased by her for better appreciation of facts; 1. Total gold and jewelry found from residence and locker 2417.290 grams 2. Learned A.O. allowed during Assessment 1500.000 grams 3. Learned C.I.T(A) allowed in appeal 150.000 grams  ....
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....st of justice. 10. That, the Forums below have committed gross error of law as well as in fact in making addition of gold and jewelleries purchased by the husband of the Assessee/Appellant in her hand. The Assessee submits herewith a detail chart of gold and jewelleries purchased by her husband for reference and record. Sl.No. Weight Date of purchase Reference to paper book 1. 15.00 grams 23.12.2015 Page No.46 (bill enclosed) 2. 18.00 grams 25.12.2015 Page No.46 (bill enclosed) 3. 18.00 grams 28.12.2015 Page No.46 (bill enclosed) 4. 14.00 grams 31.12.2015 Page No.46 (bill enclosed) 5. 18.00 grams 02.01.2016 Page No.47 (bill enclosed) 6. 17.00 grams 04.01.2016 Page No.47 (bill enclosed) 7. 18.00 grams 11.01.2016 Page No.47 (bill enclosed) 8. 15.00 grams 12.01.2016 Page No.47 (bill enclosed) 9. 14.00 grams 14.01.2016 Page No.45 (bill enclosed) 10. 18.00 grams 16.01.2016 Page No.45 (bill enclosed) 11. 17.00 grams 18.01.2016 Page No.45 (bill enclosed) 12. 18.00 grams 19.01.2016 Page No.45 (bill enclosed) Total 200.00 ....
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....ed the acquisition of gold in the previous years including the current year before the Assessing Officer as well as before the CIT(A). However, both the authorities have not taken into consideration the submissions and the evidences as filed by the assessee. Therefore, the total addition made on account of undisclosed investment in gold jewellery may kindly be deleted. 37. On the other hand, ld. DR relied on the order of authorities below. Further, he submitted that the Circular issued by the CBDT No. No. 1916, dated 11-5-1994 is only for the non-seizure of jewellery by the searched team but sources have to be explained by the assessee at the time of assessment. The authorities below have rightly decided the issue in detailed manner after considering the documents found and submitted by the assessee. Therefore, the order of authorities below should be restored. 38. After considering the submissions of both the parties and perusing the entire material available on record, we find that the AO made addition on account of unexplained investment in gold and jewellery of 2417.290 grams as found and seized during the course of search in the residential premises and the Locker No.....
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....arried lady and 100 gms per male member of the family will not be questioned about its source and acquisition. 40. Further, in case of CIT v. Ghanshyam Das Johri [2014] 41 taxmann.com 295(Allahabad) the Hon'ble High Court held that if one goes with CBDT Instruction No. 1916, dated 11-5-1994 and ratio laid down in case of Smt. Pati Devi v. ITO [1999] 240 ITR 727 (Kar.) then a married lady of reputed family is expected to own 500 gm. Ornaments. Therefore, jewellery found in possession to that extent could not be treated as undisclosed investment. 41. Reliance can also be placed on the decision Delhi Bench of the Tribunal in the case of Mrs. Divya Devi Vs. ACIT in ITA No.6397/Del/2012, order dated 16-05-2014, wherein it is observed that it is true that the CBDT Instruction No. 1916, dt. 11th may, 1996 lays down guidelines for seizure of jewellery and ornaments. In the course of search, the same takes into account the quantity of jewellery which would generally be held by family members of an assessee belonging to an ordinary Hindu household. In the circumstances, unless the Revenue shows anything to the contrary, it can safely be presumed that the source to the extent of the ....