TaxTMI 
TaxTMI 
2021 (1) TMI 90
X X X X Extracts X X X X
X X X X Extracts X X X X
....6 enhancing the assessment to the extent of Rs. 15,000/- and Rs. 47,053/- in a proceeding u/s.153A/153C of the Act consequent to the search conducted on a party other than the appellant-assessee and in which no material relevant to the enhancement made by the Commissioner was seized, is without jurisdiction, barred by limitation, against the provisions of law and contrary to the facts and circumstances of the case. 2. The Commissioner of Income Tax (Appeals) should have found that when an assessment is sought to be made u/s.153C of the Act', no addition can be made except on the basis of material seized during the search on some other assessee. 3. The Commissioner of Income Tax (Appeals) should have found that the jurisdiction to make an assessment u/s.153C r.w.s.153A can be assumed by the Assessing Officer only on the basis of any books of account or documents seized as stipulated by sub-clause (b) of section 153C(1) as also sub- clause (a) of the said section and in the absence of any material seized during the search, no satisfaction could have been recorded by the Assessing Officer conferring Jurisdiction u/s.153C of the Act' and consequently, the impugned assessment made....
X X X X Extracts X X X X
X X X X Extracts X X X X
....time of Remand hearing before the Assessing Officer. 7. The Commissioner of Income Tax (Appeals) erred in making the enhancement by taking recourse to a new source, He should have found that under the provisions of section 251(1)(b) of the 'Act', the Commissioner of Income Tax (Appeals) can enhance an assessment made by the Assessing Officer but not assess a new source of income as held in Commissioner of Income Tax vs. Sherafudin 399 ITR 524 and Full Bench of Delhi High Court in Commissioner of Income Tax vs. Sardari Lal and Co 251 ITR 864 (Delhi )(FB). In the present case, the Commissioner has: for the purpose of enhancement, relied not on any material which was before the Assessing Officer while making the assessment under appeal before him nor on any material seized during the search attracting the provisions of section 153C, but on the basis of an entry in the bank statement produced before the Assessing Officer for the purpose of verification and in respect of which some observation was made by the Assessing Officer passing the assessment in the course of submitting his Remand Report to the Commissioner and hence, the action of the Commissioner of Income Tax (Appeals) enha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o search, notice u/s.153C dated 07.11.2014 was issued to assessee to furnish return of income. In response to notice, the assessee vide letter dated 09.03.2015 informed Assessing Officer that original return filed for the assessment year on 30.10.2007 declaring Nil income may be treated as return filed for in response to notice issued u/s.153C of the Act. The case was taken up for scrutiny and assessment has been completed u/s.153C read with section 144 of the Act on 30.03.2015 determining total income of Rs. 8,90,00,000/-, after making addition towards unexplained credits found in bank account on peak credit basis. The relevant findings of the Assessing Officer are as under:- "5. From the audited accounts. it is seen that there is no profit and loss account indicating that no activities have been undertaken by the company during the year. The share capital is Rs. .1,00,00,000/- and there are no loan funds etc. However from part of the Statement of bank account filed along with audit report it is seen that there are many credits and debit in the bank account, which indicates that business activities have been undertaken by the assessee company. Peak credit in the bank account dur....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... addition of Rs. 15,000/- as unexplained credits. Similarly, learned CIT(A) made addition of Rs. 47,053/- towards interest on fixed deposits with the banks on the ground that no explanation has been given by assessee on interest income and hence, enhanced the income and made additions. Aggrieved by the learned CIT(A)'s order, assessee is appeal before us. 9. The learned AR for assessee submitted that the learned CIT(A) has erred in enhancing assessment to the extent of Rs. 15,000/- and Rs. 47,053/- without any reference to the incriminating materials found as a result of search in the assessments framed u/s.153A / 153C of the Act. The learned AR further submitted that the learned CIT(A) failed to appreciate that enhancements made by him to Rs. 15,000/- and Rs. 47,053/- is not on the basis of any material seized during the course of search and without any satisfaction recorded by the Assessing Officer having jurisdiction over the party subjected to search and consequently, assumption of jurisdiction u/s.153C for enhancing the assessment is misconceived, without any authority of law and beyond the powers of learned CIT(A) . In this regard, he has relied upon the decision of Hon'ble ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the date of search. But, fact remains that in the present case facts with regard to abatement and unabatement of assessments was not forthcoming from the records as well as additions made towards enhancement of assessment and cash credit and interest income was on the basis of bank account which was the basis for making additions for Rs. 8,90,00,000/- on peak credit and hence, arguments of the assessee that enhancement made by the learned CIT(A) is not on the basis of any incriminating material found during the course of search is unfounded. Therefore, we reject the ground taken by the assessee. 12. As regards three credits found on 28.08.2006, 28.09.2006 and 09.10.2006 amounting to Rs. 15,000/-, we find that addition to cash deposits was on the basis of same bank account, where the Assessing Officer during the remand proceedings has recorded categorical finding that although assessee claimed that source for cash deposits is out of cash received from M/s.Saravana Global Holdings Ltd., but account statement of assessee does not vouch the same, whereas the assessee claims that source for three cash deposits was from M/s. Saravana Global Holdings Ltd., for which account statement of....