TaxTMI 
TaxTMI 
2021 (7) TMI 447
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.... the assessee is a Private Limited Company engaged in the business of commodity trading and providing services in capacity of being a member of National Commodity & Derivative Exchange Ltd. (in short NCDEX) and National Board of Trade Indore (in short NBOT). Search was conducted u/s 132 of the Act on 02.05.2008 at the business premises of the company and also at the residence of its Directors. Consequent to search notice u/s 153A of the Act were issued for A.Ys. 2004-05 to 2008-09. In response assessee company filed the return. During the course of assessment proceedings assessee was asked to explain the transactions which various clients for which trading was done through NBOT. It was submitted by the assessee that apart from earning brokerage, assessee also involved in its individual capacity in commodity trading on NBOT. As regard the profit and loss earned by the client it was submitted that all the transactions are carried out through banking channels and the gain/loss had been shown by the respective clients in their tax return. 4. Ld. Assessing Officer was not satisfied with the documents filed and also as there was no positive response to the notice issued u/s 133(6) ....
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.... in 15 cases, notices issue u/s 133(6) could not be served and in the 14 cases replies were received, out of which 6 parties were stated that information cannot be furnished since the information are beyond the time limit. On the basis of this, it cannot be said that the onus of the assessee have been discharged. 3. The appellant craves leave to add to or deduct from or otherwise amend the above grounds of appeal. The Assessee has raised common grounds of appeal in CO No.05 to 08/Ind/2019: 1. "That on facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the AO's action in issuing the notice u/s 153A and completing the assessment even when no incriminating documents relevant to assessment year in question were found and seized from the possession of the assessee." 9. We will first take up legal ground raised by the assessee in CO. Nos.05 to 08/Ind/2019 10. Ld. Counsel for the assessee reiterated the submission made in the synopsis filed before this Tribunal on 13.08.2919 & 27.05.2021. It was submitted that since no incriminating material was found during the course of search additions should not have been made in view of th....
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....dispensed off. 14. We observe that Hon'ble Delhi High Court in the case of CIT vs. Kabil Chawla(supra) after considering the various judgments has dealt with this issue and legal position that emerges is reproduced below: 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 AYs immediately preceding the previous year relevant to the AY in which the search takes place. 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. 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 other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". Although Section 153 A does not say that additions sho....
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....aterial found during the course of search. Thus revenue's appeal for Assessment Years 2005-06, 2006-07 and 2009-10 stands dismissed. 16. In the light of the above decisions, we are of the considered view that ld. Assessing Officer erred in issuing notice u/s 153A of the Act for A.Ys.2005-06 & 2006-07 since there was no incriminating material was found during the course of search pertaining to these two assessment years and as both these years were non-abated assessments, no addition could be made. Thus, legal ground raised in the Cross Objections for A.Ys. 2005- 06 & 2006-07 are allowed and the assessments proceedings for both these years are quashed. 17. As regards assessment years 2007-08 & 2008-09 the assessee fails to get any relief in the Cross Objections filed before us, since the ratio laid down by the Hon'ble Delhi High Court in the case of Kabul Chawla (supra) & other decisions relied by the assessee are not applicable for these two assessment years. Thus, grounds raised in Cross Objections for A.Ys. 2005-06 & 2006-07 are allowed and for A.Ys. 2007-08 & 2008-09 are dismissed. 18. Now we take up the revenue's appeal for A.Y. 2005-06 to 2008-09 in IT(SS)A Nos. 2....
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....,645,640 23,203,700 2008-09 49,982,340 37,933,650 37,305,350 43,063,520 18,625,920 24. The above figures are not disputed at the end of both the parties. So far as the first contention of Ld. Counsel for the assessee is concerned that the alleged amount has been disclosed by the clients in their returns as few clients have confirmed the transaction entered into with the assessee and address of all the clients are made available for the Ld. Assessing Officer, we observe that in the impugned order at page 3 there is a list of 15 clients which dealt with the assessee during A.Ys. 2006-07 to 2008-09 who have not replied to the notice issued u/s 133(6) of the Act which thus could not help, the Ld. AO to find the exact position about the disclosure of profit and loss incurred by the clients. Similarly, in another list of 14 clients appearing at page 4 of the impugned order all the notices served were returned back which even included in few clients from Indore. Then again there is a list of 14 clients appearing at pages 5 & 6 of the impugned order out of which six have submitted that since the matter is a very old so they did not have the necessary documents and i....