TaxTMI 
TaxTMI 
2020 (11) TMI 262
X X X X Extracts X X X X
X X X X Extracts X X X X
....hering to the direction of the Hon'ble ITAT dt.20.09.2013. 3. The learned C.I.T. (A) failed to appreciate that the Appellant has provided all the details of the creditors, and therefore, the addition made by the Assessing Officer ought to be deleted. 4. The learned C.I.T. (A) is wrong in law by allowing the addition made by the Assessing Officer as there had been no failure to disclose truly and fully the material facts necessary for completing the assessment. 5. The reassessment proceedings and reassessment order in appeal are illegal, as section 153 C prohibits proceedings under 147 where seized materials found and seized at third party premises is the basis for reopening the assessment. 6. Without prejudice, the disallowance is excessive, arbitrary, unreasonable and ought to be deleted. 7. The learned C.I.T. (A) erred in allowing the interest levied by the A.O. u/S.234B and 234C of the Act. 8. For these and other grounds that may be urged at the time of hearing of the appeal, the Appellant prays that the appeal may be mowed. 3. The Grounds raised by the assessee in ITA 589/Bang/2020 and additional grounds raised in thi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....u/ S.148 which falls under the exclusive jurisdiction of S.153C / S.153A of the Act in search proceeding. 3. The learned A.O. ought to have appreciated that the assessment could only be made under the provisions of S.153C or S.153A of the Act, thereby making the notice issued u/ S.148 of the Act is void ab initio and assessment made under section 143(3) r.w.s 147 is bad in law. 4. Since, the assessment year involved in both appeals is same, we first take note of the sequence of events appearing on page 1 of the paper book to understand as to why there are two appeals filed by the assessee for the same assessment year. As per the same, an order u/s 143 (3) r.w.s. 147 was passed by the AO on 29.12.2009 and when the assessee filed an appeal against the same before CIT (A), an order was passed by CIT (A) on 28.02.2011. Thereafter, the AO passed an order on 15.03.2011 to give effect to this order of CIT (A). Against this order of CIT (A), cross appeals were filed by the assessee and revenue before the tribunal on 26.04.2011 and these appeals were disposed of by the tribunal as per its order dated 20.09.2013, copy available on pages 44 to 52 of the paper book. In the meant....
X X X X Extracts X X X X
X X X X Extracts X X X X
....been proved and the entire sub contract payments had been disallowed. In the impugned order of CIT (A) dated 13.01.2020 in para 16, the CIT (A) has also noted that during second reassessment proceedings, entire expenditure claimed as paid to sub contractors amounting to Rs. 25,35,07,740/- was held to be bogus and therefore, this claim of the assessee that the assessee has proved genuineness of payments to sub contractors is factually incorrect. CIT (A) has noted in para 18 of the impugned order that the assessee has failed to produce any documentary evidence in support of the contentions and therefore, no interference is called for in the assessment order on this issue being addition of Rs. 487,88,586/- made by the AO. 6. Both sides were heard. We find that in the first round, this was the claim of the assessee before the tribunal that in the second reassessment proceedings, genuineness of all sub contractors except four was accepted by the AO and the tribunal remanded the matter to AO for fresh decision and in second round, both the AO and CIT (A) had repeated the addition of Rs. 487,88,586/- on the basis of this finding that this claim of the assessee that the assessee has pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d in course of search conducted in the case of a third party and therefore, the AO might have issued notice u/s 153A r. w. s. 153C but the AO had no jurisdiction to issue notice u/s 148 in the facts of the present case. She submitted that as per sub section (1) of section 153C, section 148 cannot be invoked where section 153C is applicable. She placed reliance on the tribunal order rendered in the case of ACIT vs. Shri Srinivas Rao Haskote in ITA No. 1154 & 1155/bang/2015 dated 21.02.2018, copy available on pages 103 to 111 of Paper Book - 2. She pointed out that in Para 6 of this tribunal order, the tribunal has reproduced paras 1 to 14 of another tribunal order rendered in the case of G. Koteswara Rao vs. DCIT (2015) 64 Taxmann.com 159 and in para 14 thereof, it is noted by the tribunal that in that case also, the AO reopened the assessment based on a search conducted in a third party case as in the present case. She pointed out that in that case in the same para, it is noted by the tribunal that the AO formed the opinion based on the statement recorded from the assessee, consequent to post search proceedings taken up by the DDIT (Inv) and held that the AO is not justified in reo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A: Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A 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 : Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., we first examine the assessment order dated 30.03.2013 passed by the AO for A. Y. 2005 -06, copy available on pages 53 to 88 of the paper book. In this, the AO has noted on page 1 that a search action was conducted in the case of Sri Dayanand Pai and Group on 12.04.2011 and during the course of investigation, it was found that in the assessee's books, a sum of Rs. 25,35,07,740/- has been debited as development expenses. Some other findings of investigation were also noted by the AO and based on such findings in course of post search investigation, the AO formed a belief that certain income has escaped assessment in the present case and the AO recorded the reasons and issued notice u/s 148 on 19.03.2012. The assessee has requested the AO to provide copy of the reasons recorded by the AO before issuing notice u/s 148. In para 8 of the assessment order, it is noted that the copy of reasons as requested by the assessee was given on 08.01.2013 and thereafter, the assessee has raised objection about validity of re-opening and a speaking order dated 08.02.2013 was passed after considering the objections raised by the assessee. The AR of the assessee has filed a paper book containing 126....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed was this that assumption of jurisdiction by the AO u/s 148 was challenged by alleging that the AO has not recorded reasons. The tribunal rejected this additional ground. In the cross appeal filed by the revenue, the issue raised by the revenue was about deletion of addition made by the AO of Rs. 37,03,90,625/- being the difference in the amount paid to M/s Gouri Ganesha and it was alleged by the AO that it is inflation of purchases. The explanation of the assessee was this that the assessee was following mercantile system of accounting and that party M/s Gouri Ganesha was following cash system of accounting and the difference was because of this reason. This addition was deleted by CIT (A) by accepting this contention of the assessee that that the assessee was following mercantile system of accounting and that party M/s Gouri Ganesha was following cash system of accounting and the difference was because of this reason. The revenue was in appeal before the tribunal against this relief allowed by CIT (A). The tribunal in this order restored this issue also to the AO with the direction to verify as to the exact method of accounting followed by the assessee as well as M/s Gouri Gan....