TaxTMI 
TaxTMI 
2020 (12) TMI 823
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.... the Income Tax Act, 1961 and certain documents were found and seized by the Department. The A.O. recorded reasons for reopening of the assessment under section 147/148 of the Income Tax Act, 1961 and notice under section 148 of the I.T. Act, 1961 was issued on 28.03.2013 to the assessee. In response thereto, the assessee submitted that the return of income filed originally may be treated as return filed in response to notice under section 148 of the Income Tax Act 1961. The A.O. noted in the reassessment order that proceedings under section 147 were initiated on the basis of sufficient evidence found during the course of search in the case of assessee. Therefore, by applying the provisions of Section 132(4A) and Section 292C of the Income Tax Act, 1961, the A.O. rejected the objection of the assessee against the initiation of the reassessment proceedings. The A.O. further noted that during the course of assessment proceedings it has been claimed by assessee that he had earned income from brokerage and interest only during the year under consideration and he has no other business activity. On 20.02.2014 notice under section 142(1) along with detailed questionnaire was issued to the....
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....n the basis of the seized material found during the course of same search computed the total income of assessee at Rs. 1,82,98,210/-. The said assessment order was challenged before the Ld. CIT(A) who vide Order dated 14.12.2010 [PB-81] quashed the assessment order on the ground that notice under section 143(2) was not served within the period of limitation, therefore, assessment was held to be void abinitio. Learned Counsel for the Assessee submitted that the A.O. thereafter recorded the reasons for reopening of the assessment for same A.Y. 2006-2007, copy of which is filed at Page-110 of the paper book, in which, the A.O. has mentioned that since earlier assessment order have been declared as void abinitio because of non-service of notice under section 143(2) of the Income Tax Act, 1961 and the Departmental appeal is pending before the Tribunal, therefore, in order to safeguard the interests of Revenue and bring to tax such income, therefore, income has escaped assessment. He has referred to PB-101 which is notice under section 148 of the Income Tax Act, 1961 Dated 28.03.2013. Learned Counsel for the Assessee, therefore, submitted that no new material was available to the A.O. fo....
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....d on same basis on which Assessing Officer initially desired to make additions but which failed on account of setting aside order of assessment, it would not preclude Assessing Officer from carrying out exercise of reopening of assessment." 7.1. He has submitted that the aforesaid decision of the Hon'ble Gujarat High Court have been confirmed by the Hon'ble Supreme Court by dismissing the SLP of the assessee Krishna Developers & Co., vs., DCIT-II reported in [2018] 254 Taxman 125 (SC) in which it was held as under : "Merely because reasons recorded by Assessing Officer proceeded on same basis on which it initially desired to make additions but which failed on account of setting aside order of assessment, it would not preclude Assessing Officer from carrying out exercise of reopening of assessment; SLP dismissed." 8. The Ld. D.R. also relied upon Judgment of the Hon'ble Supreme Court in the case of Pooran Mal vs., Director of Inspection (Inv.) [1974] 93 ITR 505 (SC) in which it was held that "even if search and seizure may be in contravention of Section 132 of the I.T. Act, still the material obtained thereby is liable to be used, subject to Law before the Income Tax ....
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..... Learned Counsel for the Assessee submitted that assessee is not in business of trading in gold. No statement of assessee was recorded at the time of search. No documents were confronted to the assessee at the time of search or in post-search enquiry and that A.O. has admitted this fact in the remand report at PB-255 Dated 06.02.2017 that statement of assessee was not recorded to confront the documents found during the course of search. He has submitted that somebody left Diary Annexure-A at the residence of assessee which do not pertain to assessee. He has submitted that copy of the Diary filed at PB-13 to 73 will clearly indicate that assessee is not doing any business activity. The assessee also filed reply before the authorities below to the same effect, copy of which is filed at Page-142 of the PB disowning the alleged Annexure-A Diary. He has submitted that in preceding A.Y. 2005-2006, the A.O. made similar addition based on the entries contained in Annexure-A seized Diary and the matter travelled to ITAT, Delhi A-Bench, Delhi in ITA.No.1182/Del./2011 for the A.Y. 2005-2006 in the case of same assessee and similar addition have been deleted by the Tribunal vide Order Dated 1....
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....es and carefully gone through the material available on the record. In the present case, the AO made the addition by invoking the provisions of Section 292C of the Act and considering the notings of page nos. 31, 32 & 33 of Annexure A found during the course of search in those documents, certain notings were there but name of the assessee was not mentioned, in some of the documents there were details of clothes like sari, suits and shirts etc. The claim of the assessee is that he was not engaged in the business of gold or jewellery. The assessee in the present case, from the very beginning stated that page nos. 31, 32 & 33 etc. of Annexure A did not relate to him. The AO did not make any inquiry from the parties whose names were appearing in the said documents but made the addition by invoking the provisions of Section 263 of the Act. 9. On a similar issue in the case of DCIT Vs Delco India Pvt. Ltd. and Others in ITA Nos. 2453, 2952 & 2926/Del/2013, the ITAT Delhi Bench vide order dated 16.06.2015 had held as under : "A perusal of section 292C shows that a statutory presumption can be drawn where any documents is found in possession of a person in the course of a....
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....elate the assessee's alleged undisclosed transactions with M/s Smridhi Sponge appear to have been addressed so as to demolish the consistent claim on record that it had no dealings with the said concern. In such a background the departmental stand that the level of information available with the assessee proved that the assessee had interactions with the said concern is adding insult to injury. The silence of inaction speaks much louder than the frenzy of the misdirected actions necessitating a pro-active department to address the fest spreading malaise lest the tools of search and seizure are reduced to a farce. The repeated inactions speak louder than the half-hearted actions taken. We are of the view that as far as the assessee is concerned the onus to address the seized documents qua which a statutory presumption has been drawn stands fully discharged. - Decided in favour of assessee. " 10. The aforesaid decision of the ITAT has been affirmed by the Hon'ble Jurisdictional High Court vide its order dated 10.02.2016 in the case of Pr. CIT Vs M/s Delco India Pvt. Ltd. reported at (2016) 2 TMI 607 (Del.) wherein it has been held as under: "17. Section....
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.... Under the circumstances, it is to be examined by the competent authorities as to whether the presumption under the section is attracted owing to the nature of the documents and the contents of such documents found during search/survey action. Such a presumption, thus, is not an absolute or conclusive presumption, but, it has to be taken in the light of any corroborative, correlating or circumstantial evidence found during the search or survey action. It has been held time and again by various courts of law that where, the Revenue Authorities are vested with any discretionary power, the same is to be exercised judicially. The assessee Shri Pandoo P. Naig, in this case, has, from the very beginning, denied his link or relation with the seized document or with any of the transaction made therein. As observed above, no corroborative, correlating or circumstantial evidence has been found either during the survey action or during post survey investigations which may make a connection or in any manner relate the assessee-Shri Pandoo P. Naig with the said document or the transactions mentioned therein. Hence the nature of document seized does not point any strong/reliable or stanalone pre....
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.... course of search and assessment proceedings." In the instant case, it is also an admitted fact that during the course of search no unaccounted stock or assets were found. It is also noticed that in the assessee's case search took place on 09.12.2005 and the seized material was with the AO who issued notice u/s 153 A of the Act on 05.09.2007 but he did not make any enquiry during that period i.e. between 09.12.2005 and 05.09.2007, to ascertain as to whom the payments, if any, were made and how the assessee was related to those payments. On the contrary, the assessee denied the ownership of the document from the very beginning. We, therefore, considering the totality of the facts and by keeping in view the ratio laid down by the Hon'ble Jurisdictional High Court in the aforesaid referred to decision of Pr. CIT Vs M/s Delco India Pvt. Ltd. (supra) are of the view that the addition made by the AO and sustained by the Id. CIT(A) was not justified. Accordingly, the same is deleted." 13.1. Since the assessee from the beginning have denied the contents of the seized Diary that he did not deal in trading of gold jewellery, therefore, onus was upon the A.O. to prove that assesse....
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....therefore, presumption would be that father of the boy must have incurred the expenditure. Otherwise, there is no liability of the grand father to incur any expenditure on the occasion of birthday of his grandson. Otherwise also, there is no evidence available on record to suggest that the assessee has incurred any expenditure on the birthday of his grand-son. No further enquiries have been made from the owner of the Banquet Hall or any other person whose name is appearing in the seized paper to verify as to who has incurred the expenditure for the party of the grand-son of the assessee. It, therefore, appears that addition is made merely on presumption and as such, there is no justification to make addition in the hands of the assessee. We, accordingly, set aside the Orders of the authorities below and delete the entire addition. In the result, Ground No.12 of the appeal of the assessee is allowed. 18. On Ground No.13, assessee challenged the addition of Rs. 2,89,500/- towards bank deposits. The A.O. found that during assessment year under appeal there are deposits in the bank account of assessee maintained with South India Bank Ltd., Chandni Chowk in a sum of Rs. 2,89,50....