TaxTMI 
TaxTMI 
2021 (5) TMI 399
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....he additions in assessment order Passed u/s.143(3) r.w.s 153A of the Income Tax Act, 1961, which is not an abated assessment, without any incriminating documents were found during the course of search. " 3. Since the grounds raised by the respondent assessee under rule 27 of the ITAT Rules is purely a legal issue arising out facts already on record and specific finding of Ld. CIT(A), therefore same is admitted and are being taken for adjudication first. The facts in brief are that, M/s Madhvilata Granite (India) Ltd was having its registered office at Plot No. 11-12, Ambika Mills Compound, Senapati Bapat Marg, Mahalaxmi, Mumbai (Maharashtra)-400013, which was incorporated under the Companies Act, 1956 on 19.08.1991. During the relevant period, it has shown interest income earned on FDRs. It was constructing a Hotel at Noida and the said hotel project was yet to complete. On 22.11.2011, the Investigation Wing of the Income Tax Department conducted Search & Seizure operations u/s 132 of the Income Tax Act, 1961 on different concerns and persons of Gurinder Jit Singh Group. In the said search operations, the case of M/s Aakriti Hotels Pvt. Ltd., 30, Community Centre, Saket, New Del....
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....reunder:- "Second argument is that in the case of closed assessment, no addition can be made without /seized document and relied on various judicial pronouncements. I have perused the assessment order. The appellant has filed following submission before the Assessing Officer on seized documents:- Page Documents Seized Explanation Annx-A9 Page 44-46 Extract of Signed Balance Sheet of Madhvilata Granite (India) Limited for the financial year ended as on 31.03.2010 The same is copy of audited balance sheet as on 31.03.2010 submitted with your honour. Annx-A9-Page 50-52 Correspondence vis e-mail between Madhvilata Granite (India) Limited Branch office and corporate office, discussion for finalization of balance sheet General Correspondence only for finalization balance sheet. Annx A9-Page 60-63 Cancelled cheques in possession of Accountant of Madhvilata Granite (India) Limited Cheque at page no. 60 , 61 and 63 issued to parties and cancelled due to expiry date. Further, wrt cheque at page 62 relates to refund of share application money received but not issued and shown in cu liability of balance sheet of assessee company of AY. 2012-13 An....
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....nt proceedings that even on current address, any purchase company has not replied. Therefore, such sweeping mark of the assessing officer does not prove that in some cases, the reply was not received except in specific case of M/s. S. S. Securities. In case of finding of the investigation wing of Pune, the assessing officer has not mentioned in the assessment order, the address on which enquiry was conducted & the contents of the enquiry report. Further, I have perused the order sheet of assessment proceedings, the assessing officer has not given an opportunity to explain the findings of the investigation wing that the share holder companies were not found at even old address. Even investigation wing, Pune's report was apparently not confronted to the appellant and is not part of the order. Under these circumstances, in my view no adverse inference can be drawn against the appellant of such enquiries. Once these purchase companies have complied with requirement of notice u/s 133(6), the assessing officer was not required to ask the appellant to produce directors of the purchase companies unless some defects were pointed out in the details filed by the appellant or....
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....ative grounds. 7. Fourth ground of appeal for A.Y. 2010-11 is against invoking two provisions inserted in section 68 of I.T. Act by the Assessing Officer, when these provisions were inserted w.e.f. 01.04.2013. I have perused the assessment order. The Ld. Assessing Officer has quoted these two provisos in section 68 of I.T. Act. During the appellate proceedings, Ld. AR argued that these provisions are inserted w.e.f. 1.4.2013 i.e. A.Y. 2013-14. I have perused the provision to section 68. First proviso to section 68 for onus on a company other public company has been widened w.e.f 1.4.2013 and, therefore, this proviso is not applicable to the impugned assessment year being earlier assessment years. " 6. Being aggrieved by the decision of Ld CIT (A), the revenue filed appeal before this ITAT. The assessee also filed the aforesaid ground (supra) to support the decision of Ld CIT (A) under rule 27 of the ITAT Rules, and as stated above, since the said ground relate to jurisdiction of the Assessing Officer to assess the income u/s 153A/153C; hence the same is being taken first before hearing the department appeal. 7. We have heard both the parties at leng....
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....place can be reopened but in case of any other person, who is not searched but his assets are seized from the searched person, the period for which the assessments could be reopened would be much beyond the period of six years. This is so because the date of handing over of assets/documents of a person, other than the searched person, to the AO would be subsequent to the date of the search. This, in our view, would be contrary to the scheme of Section 153C (1) of the Act, which construes the date of receipt of assets and documents by the AO of the Assessee (other than one searched) as the date of the search on the Assessee. The rationale appears to be that whereas in the case of a searched person the AO of the searched person assumes possession of seized assets/documents on search of the Assessee; the seized assets/documents belonging to a person other than a searched person come into possession of the AO of that person only after the AO of the searched person is satisfied that the assets/documents do not belong to the searched person. Thus, the date on which the AO of the person other than the one searched assumes the possession of the seized assets would be the relevant date for ....
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....e assessments for these two assessment years did not abate as per second proviso to Section 153A. In case of unabated assessments, legally speaking, no addition could be made, which is not based on any incriminating material found and seized during the course of search in the case of a concluded assessment as per series of judgments of Jurisdictional High Court, lead case being of CIT Vs. Kabul Chawla, reported in 380 ITR 573 (Delhi). 11. Further, to substantiate the fact that date of search as per proviso to section 153C (1) in this case is 22.09.2013, it has been brought on record by the assessee after taking inspection of the assessment records and also as per order sheet noting obtained from the Assessing Officer, first noting is from 20/09/2013 for assuming jurisdiction U/s 153C of the Act. Nowhere the date of recording of satisfaction has been provided nor has it been brought on record that satisfaction was recorded prior to the year 2012 and notice u/s 153C was issued in September 2013. Thus, the date of issuance of notice has to be reckoned as date of initiation in this case. Extract of the order sheet notings for A Y 2010-11 & 2011-12 (scan copy) as placed on record bef....
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....re he has found or held that the impugned addition is based on any incriminating material found during search. This judgement has been heavily relied upon by the Ld. CIT DR also who has read the relevant portion of the judgment before us. 15. In our opinion, Ld CIT (A) has wrongly interpreted the decision of Hon'ble Delhi High Court in case of Shri, Anil Bhatia (supra). In this case in para 23 the Hon'ble Court itself have clarified this aspect in the following manner:- "23. We are not concerned with a case where no incriminating material was found during the search conducted under Section 132 of the Act. We, therefore, express no opinion as to whether Section 153A can be invoked even in such a situation. That question is therefore left open." Thus, from the above finding it is clear that the their Lordships in the above decision has not adjudicated the issue when no incriminating document found during the course of search. 16. Further, Ld. CIT (A) mentioned that in the seized material is in the form of audited balance sheet of the assessee found and the addition is related to share capital which is part of balance sheet. Hence addition relates to seized ....
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....Tribunal and the Tribunal permitted the assessee to raise this additional ground and while dealing with the same on merits, accepted the contention of the assessee. 17) First objection of the learned Solicitor General was that it was improper on the part of the ITAT to allow this ground to be raised, when the assessee had not objected to the jurisdiction under Section 153C of the Act before the AO. Therefore, in the first instance, it needs to be determined as to whether ITAT was right in permitting the assessee to raise this ground for the first time before it, as an additional ground. 18) The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is ....
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.... under consideration, that was found during the course of search, in the case of the assessee. Mr. Maratha is also unable to point out any incriminating material related to the assessee which could justify the action of the Revenue. Merely because a satisfaction note has been recorded, cannot lead us to reach to this conclusion, especially when the Revenue has not laid any foundation to support their contention. In the factual background as explained above, the assumption of jurisdiction under section 153C cannot be sustained in view of the decision of this Court in the case of Kabul Chawla (supra)" 19. Thus, considering the facts and circumstances of the case and the aforesaid binding judicial pronouncements, we hold that the additions made in the order passed U/s 143(3) r.w.s. 153C, for the captioned assessment years which are unabated assessments, cannot be made, because same are beyond the scope of assessments u/s 153C/ 153A as the same are without any incriminating documents found during search. Hence on legal grounds the impugned additions are deleted. 20. In the result Revenue's appeals are dismissed. Order pronounced in the open court on 11/05/2021. =========....