TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 701
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch for the sake of completeness is reproduced below: "2. Because the learned CIT(A) has erred in law and on facts in upholding the assessment ignoring the settled position of law that provisions of section 153A, in case where proceedings are not pending could not be applied in absence of any incriminating material." 2. The ld. AR at the outset submitted that the assessments in these cases were completed u/s. 153A/153C of the Act in view of a search and seizure on the group on 27.11.2015. The ld. AR submitted that six assessment years were reopened and the Assessing Officer has not made any addition on the basis of any incriminating material and therefore the concluded assessments could not have been disturbed as has been held by various High Courts and confirmed by the Hon'ble Supreme Court. 3. The ld. AR of the assessees in this respect filed a chart showing therein the serial number of appeals along with related assessment years and date of filing of original return. The chart also indicated as to whether the assessment has been completed u/s. 143(1) or 143(3) of the Act and in the case of assessment u/s. 143(1) whether the time for issuing of notice u/s. 143(2) had expi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s been admitted by Hon'ble Supreme Court and in this respect heavily placed reliance on the written submissions filed in the case of M/s Sigma Castings Ltd. vs. DCIT (Supra) and also relied on the case laws relied on by the ld. CIT(A). 7. We have heard the rival submissions and have gone through the material placed on record. We find that a search took place on 27.11.2015 and the cases belonging to various assessees of the group were reopened u/s. 153A/153C of the Act and various additions were made. The additions made by the Assessing Officer does not relate to any incriminating material found during search and rather the Assessing Officer has made the additions on the basis of examination of books of account. For the sake of completeness the findings of Assessing Officer in IT(SS) No. 551/Lkw/2019 are reproduced below: "During the year under consideration, the assessee has raised unsecured loans of Rs. 30,00,000/- from M/s Neil industries Ltd.. The assessee was required to furnish the identity genuineness and creditworthiness of the lender. However the fact is that M/s Neil Industries Ltd. is engaged in providing accommodation entry in the form of unsecured loans/share cap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rightly exercised his powers to assess/reassess the case u/s 153A of the Act. The undersigned find no force in the submission of the appellant and therefore, this ground is dismissed. 9. The above findings of both authorities clearly demonstrate that Assessing Officer had not made the addition on the basis of any incriminating material and rather he has made the addition on the basis of entries in the books of account which is not in accordance with the settled law as in a number of cases it has been held by various High Courts that in case of concluded assessments the addition can be made only on the basis of incriminating material found during search. Even Hon'ble Supreme Court in the case of Kabul Chawla (Supra) and Meeta Gutgutia (Supra) has dismissed the SLP filed by the Department against the order of Hon'ble High Courts. The Lucknow Bench vide order dated 16.12.2020 in a consolidated order after considering the written submissions of Revenue has decided the issue in favour of the assessee by holding as under: "5. We have heard the rival parties and have gone through the material placed on record. We find that the first argument of Learned counsel for the assessee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bservations, noted by the Assessing Officer, clearly demonstrate that a diary identified as BK-2 was impounded during search & seizure operation on 28/04/2015 in the case of search on the companies belonging to Shri Shashwat Agarwal wherein the name of Shri Navin Jain and his family members were mentioned. The Assessing Officer nowhere noted that the names of the assessees was also mentioned in such diary. Moreover, from the findings of the Assessing Officer, we find that the companies of Shri Shashwat Agarwal were engaged in providing accommodation entries of bogus Long Term Capital Gain, unsecured loans etc. to various parties and there is no mention of bogus transactions of cloth. Moreover, the above findings clearly indicate that the accommodation entries of Long Term Capital Gain and unsecured loans were obtained by the individuals mentioned in the assessment order and there is no mention that the assessees had taken any entry of Long Term Capital Gain or unsecured loans from the companies of Shri Shashwat Agarwal. This fact is further corroborated from the fact that the Assessing Officer in the case of the assessees did not make any addition on account of Long Term Capital Ga....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2000-01 to 2003-04. For the assessment year 2004-05, as in the preceding years, the assessee had claimed deduction on account of franchisee commissions paid to various parties. The Assessing Officer held that the addresses of the franchisees were not revealed and that there were discrepancies in the details of the accounts of the franchisees filed by the assessee. Consequently, the franchisee commission payments claimed by the assessee were added back to her income. For the assessment year 2004-05, the Assessing Officer also made an addition on account of stock. The Assessing Officer estimated the undisclosed income, on account of franchisee fee, at a certain percentage for the assessment years 2001 -02 to 2006- 07. No addition was made for the assessment year 2006-07, although a disclosure was made. Before the Commissioner (Appeals), the assessee produced additional evidence under rule 46A of the Income-tax Rules,1962, which included copies of franchisee agreements. A rejoinder was filed by the assessee. On analysis of the additional evidence, the Commissioner (Appeals) held that the accounts of the assessee had been tax audited and that no adverse remarks had been made by the ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee in the case of Meeta Gutgutia therefore, the judgment of jurisdictional High Court will not help the Revenue. The contention of the Revenue that since the Department has not accepted the decision of Hon'ble Supreme Court in the case of Kabul Chawla and Meeta Gutgutia as SLP in the case of CIT vs. Continental Warehousing Corporation 235 Taxman 568 (SC) has been admitted is also of no help to Revenue. Therefore, in view of the above case laws, we hold that in case of completed assessments, the addition can be made only on the basis of incriminating material found during search. We have already held that no incriminating material was found from the premises of the assessee therefore, the additions cannot be made in the case of completed assessments which in this case is appeal for assessment year 2013-14 wherein in I.T.A. No.510 the assessment order was already passed u/s 143(3) on 22/03/2016 which is before the search date of 23/08/2016, copy of assessment order is placed at pages 51 to 54 of the paper book. Similarly in I.T.A. No. 515, the assessment was completed u/s 143(3) vide order dated 23/03/2016, the copy of which is placed at pages 54 to 57 of the paper book.....