TaxTMI 
TaxTMI 
2021 (4) TMI 62
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....rned CIT (A) erred in holding that seized document formed a basis for issuing notice u/s 153C and hence 153C notice was validly issued while he himself admits In para 8 of his order that seized document dt.7-6-2011 belongs to Yennarkay R Chiranjeevirathinam, husband of appellant but not to the appellant and hence in the absence of any seized material linking the appellant, issue or notice u/s 153C and addition of Rs. 48,48,821 made towards difference in interest Income not admitted by appellant is incorrect and learned CIT(A) erred In confirming this addition. 2. Without prejudice to the above as held by the CIT (A), entire loan having been wiped out by appellant in AY 11- 12 Itself , interest on loan of Rs. 50 lakhs availed by app....
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....ment year 2012-13 declaring total income of Rs. 5,38,464/-. A search u/s.132 of the Act, was carried out on 16.10.2014 in Standard Fire Works group in consequence thereof, notice u/s.153C read with section 153(A) was issued to the assessee on 17.01.2016, for which she had filed return of income on 30.11.2016 declaring total income as admitted in the return of income filed u/s.139(1) of the Act. The case was taken up for scrutiny and during the course of assessment proceedings, the Assessing Officer noticed that as per seized documents in annexure NRKRC/loose sheets/S/SNo.1(p.79 to 83), it was noticed that the assessee has unaccounted repayment of loan to Indus Ind Bank, therefore, after considering relevant submissions of the assessee and a....
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....ourse of search. Therefore, unless there is nexus between incriminating material and escaped income, no addition can be made in the assessment framed u/s.153C read with section 153(A), where assessment has been unabated as on the date of search. 5. The learned CIT(A), after considering relevant submissions of the assessee and also taking note of incriminating material found during the course of search observed that entire loan of Rs. 50,00,000/- was wiped out on 17.03.2011 and the loan account became zero as on 31.03.2011. This fact is evident from copy of the said bank account filed by the assesse. Thus, loan account closed in the financial year 2010-11 relevant to assessment year 2011-12 cannot be added for the assessment year 2012-13 ....
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.... u/s.143(2) of the Act was expired on 30.09.2013. The search has been conducted on 16.10.2014, therefore, when the search took place assessment for the impugned assessment was unabated. Therefore, in absence of any incriminating material found as a result of search, no additions can be made in the concluded assessment. In this regard, he relied on the decision of the Hon'ble Supreme Court in the case of PCIT Vs. Meeta Gutgutia (2018) 257 Taxman 441 (SC) and also the decision of the ITAT., Chennai in the case of DCIT Vs. Shri R.P.Dharmalingam in ITA No.1103/Chny/2018. 8. The learned DR, on the other hand, submitted that there is no merit in the arguments of the learned AR for the assessee that addition made towards interest income is ....
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.... unabated or concluded on the date of search, no addition could be made in absence of incriminating material found as a result of search. In this legal background, if you examine the claim of the assessee that additions made towards interest received is not supported by any incriminating material found during the course of search, we find that arguments taken by the assessee are devoid of merit, because the Assessing Officer has made additions towards interest income on the basis of document found during the course of search marked as annexure NRKRC/loose sheets/S/SNo.1(p.79 to 83), which contains documents related to unaccounted repayment of loan to Indus Ind bank. The said loan taken from Indus Ind Bank was not disclosed to the income-tax....
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....said document has to be examined. The assessee has filed details of interest received of Rs. 48,48,820/- out of which a sum of Rs. 36,20,263/- pertains to loan taken from SBI and said loan was disclosed in the regular return of income filed by the assessee. Therefore, interest to the extent of Rs. 36,20,263/- is not having any reference to incriminating material found during the course of search. Hence, no addition could be made to interest received towards loan given out of SBI loan. But, insofar as interest received towards Indus Ind Bank loan amounting to Rs. 13,28,557/-, there is a direct nexus between incriminating material found during the course of search vide document in annexure NRKRC/loose sheets/S/SNo.1(p.79 to 83) and interest i....