TaxTMI 
TaxTMI 
2021 (1) TMI 1006
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....its group concern and residential/factory premises of partners, directors and proprietors of the group on 7th August, 2013. The AO issued notice u/s 153A of the Act on 5th February, 2015 which was duly served on the assessee. In response to the same the assessee vide letter dated 14th February 2015 requested the AO to treat the original return filed on 27th September, 2011 declaring total income of Nil in response to notice u/s 153A of the Act. 3. During the course of assessment proceedings, the AO noted that assessee has received share application money to the tune of Rs. 1 crore from Shri Ajay Chamanlal Kanwal and Rs. 1.50 crore from Shri Abhay Ajay Agarwal. In order to verify the transaction the AO issued notice u/s 133(6) of the Act on 29th February, 2016 to the above persons fixing the date of compliance for 10th March, 2016. Since no reply was received from the above persons, the AO held that the identity, creditworthiness and genuineness of the persons giving share application money to the tune of Rs. 2.5 crores remained to be established, The assessee failed to discharge the primary onus of proving the identity and capacity of the persons making the investment and the ge....
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....g the search. 3. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming the addition despite the fact that addition made by AO are legally unsustainable in the absence of any incriminating material being found in search relating to the assessment year under consideration. 4. The respondent craves leave to add amend on alter any of the grounds of cross objection." 8. Ld. Counsel for the assessee at the outset referring to the copy of the Panchanama dated 8.8.2013 submitted that no incriminating documents were found from the premises of the assessee. Therefore, in view of the decision of the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla vide ITA No. 707, 709 and 713/2014 order dated 28th August, 2015 no addition could have been made to the income already assessed in absence of any incriminating material found during the course of search.. Relying on the following decisions he submitted that following the decision in the case of CIT vs. Kabul Chawla (supra) the Hon'ble Delhi High Court also held that no addition can be made in the absence of any incriminating material in case of completed ass....
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....n not be made merely on surmises ,suspicion and conjectures. He accordingly submitted that the Ld. CIT(A) has rightly deleted the addition. 11. Ld. DR on the other hand strongly opposed the grounds raised by the assessee in the cross objection. She submitted that as per Rule 22 of ITAT Rules 1963 a Memorandum of cross objection filed under sub section 4 of section 253 shall be registered and numbered as an appeal and of the rules, so far as may be, shall apply to such appeal. Referring to provisions of section 253(4) of the Act and Rule 22 of ITAT Rule 1963 Ld. DR submitted that the cross objection can be filed only against any part of the order of appellate authority and the concerned party should be aggrieved. However, in the present case the grounds as raised in the cross objection were never taken before the Ld. CIT(A) nor did Ld. CIT(A) adjudicated these grounds. Therefore, once the assessee has foregone its right to appeal it cannot be raised in cross objection before the Tribunal. Referring to the decision of the Tribunal in the case of Neetee Clothing Pvt. Ltd. (2010) 129 TTJ 342 Ld. DR referred to para 10 to 18 of the order of the Tribunal and submitted that after consi....
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....ival arguments made by both sides, perused the orders of the AO and Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. Before adjudicating the issue on merit as per the grounds of appeal filed by the revenue we would like to decide first the maintainability of the cross objection as well as the grounds raised therein. A perusal of the assessment order as well as the order of Ld. CIT(A) shows that the addition was based on the basis of verification of balance sheet and not based on any incriminating material found during the course of search. Although the Ld. CIT(A) has decided the issue in favour of the assessee and has deleted the addition, the validity of the assessment u/s 153A to the proposition that no addition can be made in absence of any incriminating material found during the course of search in case of a completed assessment was not adjudicated by him as the same was never argued before him. However, this ground being a legal one we are of the considered opinion that the assessee can not be precluded from raising a legal ground for the first time before the appellate authorities. We find the Delhi ....