TaxTMI 
TaxTMI 
2017 (1) TMI 1784
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....assessment u/s 153C were pending which related to an earlier search operation. As per the second proviso to section 153A of the Act, " Assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this subsection pending on the fate of initiation of the search under section 132.....shall abate." On 4.2.2010 i.e. on the date of search and seizure operation in assessee's premises, assessment under section 153C for AYs 2003-04 to 2009-10 were pending. The AO carried on the assessment proceedings and separate orders u/s 153C relating to earlier proceedings and u/s 153A in respect of search operation dated 4.2.2010 were passed. Therefore all these assessments are not validly passed as per the provisions of the IT Act. The appeals at sr. No. 1 and 2 relate to the assessments u/s 153C and those at sr. No. 3 relate to assessments u/s 153A. All these assessments are defective." 3. Referring to the above, learned D.R. submitted that all the assessments in this case should have been annulled by the learned CIT(Appeals) and matter remitted to the AO for fresh assessments, that the Department is in the p....
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.... him under the orders or directions issued by the Board or by the ^29a[Principal Chief Commissioner or] Chief Commissioner or ^29a[Principal Director General or] Director General or ^29a[Principal Commissioner or] Commissioner authorised by the Board in this behalf under section 120; (b) "record" ^30[shall include and shall be deemed always to have included] all records relating to any proceeding under this Act available at the time of examination by the ^29a[Principal Commissioner or] Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal ^31[filed on or before or after the 1st day of June, 1988], the powers of the ^31a[Principal Commissioner or] Commissioner under this sub-section shall extend ^31[and shall be deemed always to have extended] to such matters as had not been considered and decided in such appeal.] ^32[(2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed.] (3) Notwithstanding anything contained in sub-section (2), an order in revisio....
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....nding that such matter was not raised before the ^36[* * *] ^37[Commissioner (Appeals)] by the appellant. A reading of the above makes it clear that the Act does not empower the Commissioner of Income Tax to annul the assessment and send the matter back to the AO for reconsideration. 6. In view of the above discussion it appears from the above averments of the learned D.R. that the assessments in this case deserve to be quashed abinitio. However, since there is no such ground raised either by the Revenue or by the assessee, we do not deem it appropriate to engage into this adjudication to hold the assessments to be invalid. 7. Further more learned DR's plea that learned CIT(Appeals) should have annulled the assessment and sent the matter back to the AO for reconsideration also has no merits. Hence there is no cogent reason for seeking adjournment. 8. Revenue's appeal. The grounds of appeal read as under : 1. Whether in law and on facts & circumstances of the case, the CIT(A) has erred in concluding that the addition of Rs. 1,21,08,113/- made by A.O. did not make out a case for including the income on substantive basis in the hands of the assessee and directi....
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....note. He has also not made out any case for including these items in the income of the appellant except that the same were offered by Shri Anand Kumar Agrawal in his return and whom he treated as benamidar of the appellant on the basis of various inferences. Perusal of the initial statement reveals that the red suitcase was owned by Shri Anand Kumar Agrawal. Smt. Sita Devi Agrawal also admitted the ownership, thus, in so far as the appellant is concerned, there is no incriminating material relating to the cash and jewellery. Hence, these facts suggest that these assets do not belong to the appellant. Similarly, there is no evidence brought on record by the AO, to show that the family contribution made by Shri Anand Kumar Agrawal was in fact the money of Shri B.L. Agrawal, which was ploughed back through Shri Anand Kumar Agrawal. Under these circumstances, the only logical conclusion, specifically with respect to movable assets, is that the possessor is the owner and the liability thereupon to explain the same rests with him unless otherwise proved by credible evidence. The provisions of sec.292C of the Act in fact aim at achieving this objective. In the instant case, the A.O. has n....
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....fers from serious error. Hence learned D.R. pleaded that the order of the learned CIT(Appeals) may kindly be cancelled and the case be set aside to the AO. 13. Per contra learned counsel of the assessee submitted that; Shri Anand Kumar Agrawal had offered income in the return filed under section 153A of I.T. Act, 1961. The aforesaid income has been assed by the A.O. on protective basis at the hands of Shri Anand Agrawal and has been assessed on substantive basis at the hands of assessee. It has been held by A.O. that Shri Anand Agrawal is benamidar of Shri B.L. Agrwal. That in the course of action u/s 132(1) of I.T. Act, 1961 at the premises of Shri Anand Agrawal a red bag containing certain ornaments, cash and documens was found with Smt. Sita Devi Agrawal. In the course of search statement of Smt. Sita Devi Agrawal was recorded during proceedings u/s 132(4) of I.T. Act, 1961. In statement u/s 132(4) she deposed in answer to question No.2 that the aforesaid bag belonged to her and contents of the same are owned by her. The inventory drawn in respect to ornaments and cash found during the course of search clearly indicate that ornaments and cash are belonging t....
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.... of search. On above facts there is no room to consider that documents, cash and ornaments belong to assessee in view of aforesaid statutory provisions. That perusal of satisfaction note refers to only papers belonging to assessee. It nowhere says that cash and ornaments found at the premises of Shri Anand Agrawal are belonging to assessee. The addition for cash and ornaments is unjustified and unsustainable. That the protective assessment made by A.O. in the case of Shri Anand Agrawal was challenged in appeal filed by him before Hon'ble CIT(A), Raipur.In the appellate proceedings the Hon'ble CIT(A) has held that income as offered in the returns of income u/s 153A of I.T. Act 1961 is liable to be assessed on substantive basis and not on protective basis as concluded by AO. The aforesaid order in the appellate proceedings of Shri Anand Agrawal has achieved finality as it is not under challenge by revenue authorities in appeal before ITA T. The substantive assessment as directed by CIT(A) having achieved finality the very same income cannot be assessed at the hands of assessee. It is elementary principle of law that same income cannot be assessed twice. Reli....
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....C reveals that it is recorded as A.O. of assessee. It is not the satisfaction of the A.O. of person searched. Reliance on i) ITAT order in ITA No. 4228/Del/2011 in the case of M/s Shield Home Pvt. Ltd. vide order dated 24-02-2016. ii) Hon'ble Madhya Pradesh High Court order in ITA No. 44/2011 in the case of M/s Mechmen vide order dated 10-07-2015. iii) ITA No. 254 of 2014 Judgement (per Hon'ble the Chief Jusice Shri Kalyan Jyoti Sengupta). iv) CBDT Circular No. 24/2015 dated 31-12-2015. That it is settled position of law that onus lies on Revenue Authoritis to show that Shri Anand Agrawal is benami of assessee. No evidence on record are found in the course of search to show that Shri Anand Agrawal is benamidar of assessee. In fact Department has made search on Shri Anand Agrawal as independent group and this itself dispel the doubt of A.O. that Shri Anand Agrawal is benamidar of Shri B.L. Agrawal. Reliance on: i) 1977 AIR (SC) Krishnaqnand Agnihotri vs. State of M.P. That it is settled position of law that apparent is real. Asses found from Shri Anand Agrawal in search accepted by him to be belonging to him. He....
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....e assessee is based upon a red suitcase found in the bed room of Smt. Sitadevi Agrawal (mothe-in-law of the assessee) which was found during the search at the house of Shri Anand Agrawal, brother-in-law of the assessee. The said suitcase was containing some documents and cash and jewellery.l The amount reflected in the documents as well as cash and jewellery were accepted by Shri Anand Kumar Agrawal as belonging to him. He has owned up the entire amounts, reflected the same in the return of income and the same has been added in his hands. In such circumstances there does not remain any basis of making any addition in the hands of the assessee. 16. Section 292C of the I.T. Act provides as under : "292C. ^99[(1)] Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under section 132 ^1[or survey under section 133A], it may, in any proceeding under this Act, be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) th....
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....und in any of the search to show that Shri Anand Agrawl is a benamidar of the assessee. The case laws referred by the learned counsel of the assessee above duly support the case of the assessee. In particular we may refer to the following case laws in this regard : i) DSP Chennai vs. K. Inbasagaran (2006) 1 Supreme Court Cases 420 (Head notes only): " Prevention of Corruption Act, 1988 - Ss. 13(2) r/w 13(1)(c) - Acquisition of assets disproportionate to known source of income - joint possession - Effect of other party claiming ownership/contribution - Accused public servant and his wife living together - Prosecution discharged its initial burden by proving recovery of unaccounted for money and other assets from premises jointly in possession of accused and his wife - Accused on his part satisfactorily establishing that the monies and assets recovered belonged to his wife which she amassed from the business run by her separately - In absence of any evidence that the assets belonged to the accused, held, he cannot be held liable under PC Act for such assets." ii) Krishnanand v. State of M.P. AIR 977 Supreme Court 796. The burden of showing that a p....
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....ers of the respondent-firm or that it was tendered on behalf of the respondent. As regards the destination of the amount there is nothing to show that it went to the coffers of the respondent. On the contrary there is positive evidence that the amount was received by B on 22nd Jan,m 1946. It would thus follow that both as regards the source as well as the destination of the amount, the material on the record gives no support to the claim of the Department. The AAC also took into account the fact that the office of the Central Bank, is in the same building in which there are the business premises of the respondent-firm. This was, a wholly extraneous and irrelevant circumstances for determining the ownership of Rs. 5,00,000 which had been deposited in fixed deposit in the name of B. There should, be some direct nexus between the conclusion of fact arrived at by the authority concerned and the primary facts upon which that conclusion is based." 19. The above case laws fully support the case of the assessee. The law expounded herein above is that when the Revenue is alleging that the apparent is not real then onus lies upon the Revenue to prove the same. In the present case Revenue ....