TaxTMI 
TaxTMI 
2020 (8) TMI 851
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....le High Court only and in further holding, by implication, that the said ground not have been adjudicated by him. 1.2 BECAUSE the "CIT(A)" on a due consideration of material and information on record, particularly that a) search and seizure action referred to by the Assessing Officer was in pursuance of joint warrant of authorization and there was no warrant of authorization as such in the individual name of the "appellant"; b) owing to warrant of authorization being in the "joint names", the presumption was that "satisfaction""/ ""reason to believe"' as envisaged in clauses (a), (b) and (c) of sub-section (1) of section 132 was also in the joint names; c) on a conjoint reading of section 153A and 132(1), it was pre-requisite at the part of the Assessing Officer to ensure and to show that there existed requisite "" satisfaction""/ "' reason to believe" in the case of the " appellant" herself, individually and severally speaking, so as to treat her to be the " person in whose case search had been initiated" and liable for proceedings under section 153 A; and d) otherwise also, the assessment records nowhere showed that satisfaction existed in the individual name of....
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....ent for the year is pending/abated. No Section under which the addition was made. a) Share purchase. u/ s 56 (viia) b) Household withdrawals. Not mentioned(Sec. 69C) c) Loss from house property. Not mentioned (Sec. 24) d) Sundry creditor Not Mentioned (Sec. 68) e) TDS mismatch Not mentioned (Sec. 194A) Whether the additions were based any seized material. No Assessment Year 2012-13: Date of search. 25.06.2014 Date of issue of notice u/ s 153 A. 31.07.2014 Whether assessment for the year is pending/abated. No Section under which the addition was made. a) Household withdrawals. Not mentioned(Sec. 69C) b) Loss from house property. Not mentioned (Sec. 24) Whether the additions were based any seized material. No Assessment Year 2013-14: Date of search. 25.06.2014 Date of issue of notice u/ s 153 A. 31.07.2014 Whether assessment for the year is pending/abated. No Section under which the addition was made. a) Household withdrawals. Not mentioned(Sec. 69C) b) Loss from house property. Not mentioned (Sec. 24) c) Unsecured Loans Not mentioned (Sec. 68) Whether the additions were based any seized material. No 4. The limited ....
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....on of Section 153A in relation to AYs 2000- 01 to 2003-04, the central plank of the Revenues submission is the decision of this Court in Dayawanti Gupta (supra). Before beginning to examine the said decision, it is necessary to revisit the legal landscape in light of the elaborate arguments advanced by the Revenue. 56. Section 153A of the Act is titled " Assessment in case of search or requisition". It is connected to Section 132 which deals with 'search and seizure'. Both these provisions, therefore, have to be read together. Section 153A is indeed an extremely potent power which enables the Revenue to re- open at least six years of assessments earlier to the year of search. It is not to be exercised l ightly. It is only if during the course of search under Section 132 incriminating material justifying the re-opening of the assessments for six previous years is found that the invocation of Section 153A qua each of the AYs would be justified. 57. The question whether unearthing of incriminating material relating to any one of the AYs could justify the re-opening of the assessment for all the earlier AYs was considered both in CIT v. Anil Kumar Bhatia (supra) and CIT v....
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....d during the search under Section 132 of the Act, the Revenue sought to justify initiation of proceedings under Section 153A of the Act and make an addition under Section 68 of the Act on bogus share capital gain. The order of the CIT(A), affirmed by the ITAT, deleting the addition, was not interfered with." 55. In Kabul Chawla (supra), the Court referred to the decision of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (2013) 36 Taxman 523 Raj). The said part of the decision in Kabul Chawla (supra) in paras 33 and 34 reads as under: "33. The decision of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (supra) involved a case where certain books of accounts and other documents that had not been produced in the course of original assessment were found in the course of search. It was held where undisclosed income or undisclosed property has been found as a consequence of the search, the same would also be taken into consideration while computing the total income under Section 153A of the Act. The Court then explained as under: "22. In the firm opinion of this Court from a plain reading of the provision along with the purpose and purport of the said....
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....the course of search in respect of an issue, then no additions in respect of any issue can be made to the assessment under Section 153A and 153C of the Act. The legal position was thereafter summarized in Kabul Chawla (supra) as under: "37. On a conspectus of Section I53A(1) of the Act, read with the provisos thereto, and. in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person- searched requiring him to file returns for six A Ys immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the ' total income' of the aforementioned six years in separate assessment orders for each of the six years. In....
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....rt referred to the decision in Kabul Chawla (supra), of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (supra) and one earlier decision of the Gujarat High Court itself. It explained in para 15 and 16 as under: "15. On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132 A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess, the same. Since the assessment under section 153 A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which found during the course of or pursuant to the search or requisition. However instead of the earlier regime of block assess....
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....ent should connected With something round during the search or requisition viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub- section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition' or disallowance can be made only on the basis of material collected during the search or requisition, in ease no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra), the earlier assessment would have to be reiterated, in case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147....
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....at there had to he incriminating material qua each of the AYs in lich additions were sought to he made pursuant to search and seizure operation. Km Calcutta High Court in CIT-2 v. Salasar Stock Broking Ltd. (supra), too, followed the decision of this Court in Kabul Chawla (supra). In CIT v. Gurinder Singh Bawa (supra), the Bombay High Court held that: "6..once an assessment has attained finality for a particular year, i.e., it is not pending then the same cannot be subject to tax in proceedings under section 153A of the Act. This of course would not apply if incriminating materials are gathered in the course of search or during proceedings under section 153A of the Act which are contrary to and/ or not disclosed during the regular assessment proceedings." 63. Even this Court has in CIT v Mahesh Kumar Gupta (supra) and The Pr. Commissioner of Income Tax-9 v. Ram Avtar Verma (supra) followed the decision in Kabul Chawla (supra). The decision of this Court in Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd. (supra) which was referred to in Kabul Chawla (supra) has been affirmed by the Supreme Court by the dismissal of the Revenue' s SLP on 7 th December, 2015. xxx....
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.... by the AO on account of salary of drivers, expenditure on festivals, petrol- diesel expenses etc. The AO has made this addition on estimate basis without bringing any cogent material on record. Fundamentally, we are of the firm opinion that the addition on account of low withdrawals cannot be made in the hands of the assessee as the revenue has not brought anything on record regarding incurring of such expenses. We note that no evidence was brought on record by the Revenue which may prove that the assessee has incurred expenses on the household drawing much more than what has been shown by her family members. The household drawing has merely been estimated by the AO without pointing out any specific expenditure being incurred by the assessee. We have gone through the provisions of section 69C of the Income Tax Act and we note that there must be evidence on record which may prove that the assessee had incurred expenses much more than what has been shown by the family members. It is for the revenue to prove that the expenses have indeed been incurred and then the onus shifts to the assessee to prove that the assessee has enough sources to incur such expenses or to prove that such ....
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....he addition was made. a) Household withdrawals. Not mentioned(Sec. 69C) b) Loss from house property. Not mentioned (Sec. 24) c) Exempt Income Not mentioned d) Sundry creditors Not mentioned Whether the additions were based any seized material. No 15. Out of the above additions, the ld. CIT (A) has deleted the addition on account of loss from house property and exempt income. The ld. CIT (A) has confirmed addition of Rs. 4,35, 480/- made on account of low household withdrawals and also confirmed addition of Rs. 80,000/- on account of sundry creditors. 16. Regarding the addition on account of low household withdrawals, we hereby hold that the ratio laid down in the case of Indulata Gupta in ITA No.135/LKW/2018 for the assessment year 2014-15 shall apply. 17. Regarding the sundry creditors (infact loans) namely, SC Gupta for Rs. 20,000/-, Pushpa Gupra for Rs. 20,000/-, Shashi Gupta for Rs. 20,000/-, we find that the assessee has not submitted any detail before the AO and ld. CIT (A). Hence, we decline to interfere with the order of the ld. CIT (A) on this issue. In the result, the appeal of the assesse for this year is partly allowed. Assessment Year 2....
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....sed any seized material. No 23. Out of the above additions, the ld. CIT (A) has deleted the addition on account of loss from house property and has confirmed addition of Rs. 3,69, 292/- made on account of low household withdrawals. 24. Regarding the addition on account of low household withdrawals, we hereby hold that the ratio laid down in the case of Indulata Gupta in ITA No.135/LKW/2018 for the assessment year 2014-15 shall apply. 25. The ld. CIT (A) has confirmed the addition of Rs. 11,90,400/- out of loan of Rs. 27,22,857/- received from one entity namely, Fair Plan Agency (FPA) as the creditworthiness of the lender remained unsubstantiated. 26. With regard to the loan from FPA, we find that the lender has got an amount of Rs. 12.24 crores as share capital which can be fairly assumed to be sufficient to lend an amount of Rs. 11,90,400/- to the assessee. The assessee has submitted all the relevant documents to prove the identity, genuineness and creditworthiness of the lending party. The revenue has not brought anything on record to prove that the share capital of the FPA is suspicious or not genuine. Hence, the ld. CIT (A)'s decision to hold that the creditability of the....