TaxTMI 
TaxTMI 
TaxTMI 
2021 (9) TMI 902
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.... the appeals, the questions of law proposed in one of the appeals being ITA 81/2020 are reproduced hereinbelow:- "A. Whether, on the facts and the circumstances of the case and in law, the Ld. ITAT has erred in confirming the order of the Ld CIT(A) in directing the AO to delete the addition made u/s 68 on account of unexplained credits and u/s 69C on account of unexplained expenses? B. Whether on the facts and circumstances of the case and in law, the Ld ITAT has erred in dismissing the appeal of the Revenue and deleting the additions made by the AO u/s 68 and 69 of the Income Tax Act relying only upon the decision of Hon'ble Delhi High Court in the case of CIT vs Kabul Chawla (2016) 380 ITR 573, without adverting to the merit of the case? C. Whether on the facts and in circumstances of the case and in law, the Ld. ITAT has erred in deleting the additions made by the AO in the assessment framed u/s 153A of the Act without appreciating the fact that the decision of Hon'ble High Court of Delhi in the case CIT vs Kabul Chawla (supra), was not accepted by the Department and SLP filed in the Hon'ble Supreme Court was dismissed due to low tax effect and not on merit? ....
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....f Section 153A of the Act and has failed to appreciate that the mandatory provision of Section 153A of the Act requires the AO to assess the total income of six assessment years under Section 153A of the Act and this cannot be done if the scope of Section 153A is limited to only undisclosed income. He submits that the mandate under Section 153A of the Act is to issue the notice for six assessment years and assess the total income irrespective of incriminating material discovered during the search. 5. Learned counsel for the appellant/Revenue contends that in the present cases incriminating documents/materials had been found during the course of the searches and consequently by virtue of Section 153A of the Act, the Assessing Officer had to assess the total income of six years under Section 153A of the Act. Learned counsel further submits that the assessments were not completed under Section 143(3) in the present cases, consequently, prior to the date of search i.e. 18th June, 2013, the assessment of the respondents had not attained finality. COURT'S REASONING SCOPE OF SECTION 260A OF THE ACT. 6. Section 260A of the Act provides for an appeal to the High Court against a decision ....
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....hat no incriminating materials had been seized in the searches. One of the orders passed by the CIT (A) in an appeal bearing Appeal No. 457/15-16/2434 is reproduced hereinbelow:- "(a) During the period relating to A.Y. 2010-11, the appellant has received fresh share application money/premium receipts amounting to Rs. 3,00,00,000/- from the investor company, M/s Swastik Exports & Imports (P) Ltd. (b) In the return of income filed on 12.05.2015, by the appellant, in response to notice u/s 153A of the Act, dated 22.4.2015, no undisclosed income was included on account of any accommodation entry or on account of payment of any commission. (c) During the assessment proceedings, the appellant has furnished all the relevant details relating to the investor company, M/s Swastik Exports & Imports (P) Ltd in the form of its ITR, Bank Statements, Audited Balance Sheet, Confirmations of Investments, Copies of Share Certificates, MOA, AOA, relevant ROC records etc. Thus, the appellant has duly discharged its onus u/s 68 of the Act, by substantiating the identity, creditworthiness of the investor company and genuineness of the transactions of the receipts of share application money/premium....
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....lant, M/s Swastik Exports & Imports (P) Ltd. This is the statutory combined register (share register) (as per Companies Act, 1956) and the transactions reflected in the register, pertain to the share issue & transfer in relation to the investor company of the appellant, during the F.Y. 2007-08 to F.Y. 2009-10. These transactions are duly reported to ROC by filing various statutory forms and are also reflected in the financial statements of the investor company. (i) The fact of issue of shares at a premium of Rs. 90/- per share by the appellant to the investor company, is fully incorporated and disclosed in the Audited Financial Statements and the relevant ROC Returns of the appellant. (j) The assessment was not abated at the time of initiation of search action u/s 132 of the Act and as a result of search, no incriminating document/material was found, which shows that the appellant has taken any accommodation entry. (k) In respect of alleged commission, no evidence or document was found in the search action u/s 132 of the Act, which shows payment of such alleged commission. From the above discussion, it is clear that in the search action u/s 132 of the Act, no incriminating ....
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....he 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". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) ....