AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 464
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....appeal filed by the revenue in ITA No.331/RPR/2014 for the assessment year 2006-07 as the lead matter and, the order passed as regards the common issues therein involved and permeating over the other years before us, shall, apply mutatis mutandis to those years i.e AY 2007-08 to AY 2012-13. Before us the revenue has assailed the impugned order on the following grounds of appeal: "1. On the facts and in the circumstances of the case the CIT(A) erred in deleting the additions of Rs.36,32,610/- made on acount of gross profit on unrecorded sales. 2. The CIT(A) has overlooked the fact hat the entire purchases and sales were not recorded resulting in disccrepancy in stock, which is a good evidence of unrecorded sales. 3. On the facts and in the circumstances of the case the CIT(A) erred in deleting the additions of Rs.34,79,761/- made on account of initial unaccounted investment. 4. On the facts and in the circumstances of the case the CIT(A) erred in deleting the additions of Rs.1,66,70,000/- made on account of share application/capital received an unexplained cash credits u/s.68 of the Income Tax Act, 1961. 5. On the facts and in the circums....
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....ises of the assessee during the course of search and seizure proceedings. Also, certain books of accounts, loose papers, documents etc. were impounded in the course of survey action. 4. Consequent to the search proceedings, notices u/s.153A of the Act dated 02.09.2013 were issued to the assessee calling upon it to file its returns of income for A.Y.2006-07 to A.Y. 201112. In compliance, the assessee company filed its returns of income for the AY2006-07 to AY2011-12, as under: A.Y. Date of filing of return u/s.139(1) Returned income (in Rs.) Date of filing of return by the assessee against notice u/s.153A Declared in return u/s.153A income Additional income offered by the assessee in (Rs.) 2006-07 30.11.06 Nil (Rs.936124 as per 115JB) 15.10.2013 NIL NIL 2007-08 31.10.07 9,26,820/- 15.10.2013 9,26,820/- NIL 2008-09 30.09.08 15,63,190/- 15.10.2013 15,63,190/- NIL 2009-10 30.09.09 1,93,28,480/- 15.10.2013 1,93,28,480/- NIL 2010-11 10.01.10 74,94,110/- 15.10.2013 74,94,110/- NIL 2011-12 31.12.11 94,36,170 15.10.2013 1,39,36,170/- 45,00,000/- Also, the asses....
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.... Name and Address PAN Amount Mode of receipt Anika Tie Up Pvt. Ltd. 52/1, College Street, 1st Floor, Kolkata AACCA5232B 2000000/- Cheque Easter Credit Capital 27, Weston Street, 5th Floor, Kolkata AAACE4526A 500000/- Cheque Kusum Vanijya Private Limited 137/12, NarikelDanga Main Road, Kolkata AADCK1895P 1500000/- Cheque Krishna Dealers Private Limited 137/12, NarikelDangaMain Road, Kolkata AADCK1893M 1500000/- Cheque Jewellers Mahavir Ashok Pvt. Ltd. 126/128, Trimurti Estate, Zaveri Bazar, 2nd floor, Mumbai AAACJ1938K 10500000/- Cheque Consolidated year-wise receipt of share capital money by the assessee company, as culled out by the AO in the body of his assessment order reads as under: A.Y. Share capital money received Remarks 2006-07 1,66,70,000/- Received from Kolkata based paper companies 2008-09 1,60,00,000/- Rs.1,05,00,000/- received from in-house company, Jewellers Mahavir AshokPvt. Ltd., rest from Kolkata based paper companies The A.O called upon the assessee to substantiate the authenticity of the aforesaid receipt of share application money for the years in question i....
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....ed, no addition as regards the share application money received from them could be validly made in its hands. In support of its aforesaid contention the assessee had placed reliance on the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Lovely Exports (P) Ltd., 216 CTR 195 (SC) and that of the Hon'ble High Court of Chhattisgarh in the case of M/s. Venkateshwar Ispat Pvt. Ltd., IT Appeal No.24/2006 dated 01.05.2009. Observing, that the assessee had duly discharged the onus that was cast upon it as regards proving the identity, creditworthiness and genuineness of the transaction of having received share application money from its group company, viz. M/s. Jewellers Mahavir Ashok Pvt. Ltd., Mumbai, the A.O accepted its claim to the said extent. However, the AO not finding favor with the explanation of the assessee that it had received genuine share application money from the Kolkata/Mumbai based companies, thus, rejected the same. Reasons given by the A.O for drawing adverse inferences as regards the share application money that was claimed by the assessee to have been received from Kolkata/Mumbai based companies was summed up by him as under: "(i) The entire inve....
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....ccountant) and Shri Chandrakant Rajput occupied the cubicle from where the aforesaid torn pieces of paper were retrieved. It is the claim of the A.O that the aforesaid persons could not be contacted because the directors of the assessee company had refused to divulge their residential addresses on one pretext or the other. It was observed by the A.O that the contents of the aforesaid torn paperswas in fact the actual data of sales that were carried out by the assessee company till February, 2012. Reasons for inferring that the torn pieces of documents contained correct sales of the assessee company till February, 2012, had been culled out by the A.O in his assessment order, as under: "1. These pieces of papers have been reviewed by a responsible person who had placed notings on them in his own hand writing. 2. Shri Kamlesh Burad agreed that items mentioned in the pieces of papers are sold from his shop at Sadar Bazar. 3. The unaccounted stock was found at the time of search which has also been duly admitted by the assessee in its returns of income filed under section 153A of the Act. As per the admission of the assessee in returns of income filed under se....
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.... 17thmarch 2012= Rs.47,40,16,959/- The amount of Rs.47,40,16,959/- is considered as the unaccounted turnover of the assessee for the FY 2011-12 till 17th March 2012. This is besides the regular turnover of Rs.24,85,99,411." Also, the A.O called upon the assessee to explain as to why on similar lines its sales for the six years preceding the year of search i.e. A.Y.2006-07 to AY.2011-12 may not be estimated in the following manner: "Total turnover (actual) found during the course of search: Rs.72,26,11,370/- Total turnover depicted in the books of accounts: Rs.24,85,99,411/- Ratio of Total turnover to the accounted turnover: 2.90 Times The ratio of 2.90 times is being applied on the declared turnover of the concern Mahavir Chand Ashok Kumar Jewellers, a division of Mahavir Ashok Enterprises private limited to arrive at the correct figures of income of the concern: Sr. No. Financial Year Accounted Sales (In Rs.) Unaccounted sales (in Rs.) Total sales 1 2005-06 21603390 41046441 62649831 2 2006-07 249772167 474567117 724339284 3 2007-08 253814302 482247174 736061476 4 2008-09 27....
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....was being relied upon by the department for inferring undisclosed sales etc. It was further the claim of the assessee that if there was no evidence of seizure of alleged torn papers from its premises, then,there was no justifiable basis for drawing of adverse inferences in its hands. Alternatively, it was submitted by the assessee that as the alleged torn papers referred to "Product Sales Summery" of Rs.67.98 crore (approximately) for the period April, 2011 to February, 2012 (as claimed by the department), then, there was no justification on the part of the department to extrapolate the said turnover and compute the income by so doing for the period relevant to the preceding six years, i.e, AY 2006-07 to AY 2011-12. 8. Confronted with the objection of the assessee as regards the adverse inferences which were sought to be drawn by referring to the torn pieces of computer-generated printout, the A.O vide his letter dated 05.02.2014 called upon the assessee to remain present during the course of opening of the envelope containing the aforesaid torn papers on 26.02.2014. On 26.02.2014, the DDIT (Inv.)-II and an Income-Tax Inspector in the presence of the director of the assessee com....
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....two witnesses and the rest of the persons present as detailed in the panchnama. The following other persons were present during this exercise, who have also signed this panchanma in token of their presence and correctness of the content of this panchnama. 1. Shri KasturchandBurad, s/o late Shri Khetmal Ji Burad, aged 76 yrs, r/o Sadar Bazaar, R.aipur (CC) 2. Shri Gaurav Burad, s/o Shri Praveen Burad, aged 26 yrs, r/o Sadar Bazaar, Raipur (CG) 3. Shri Ram Tiwari, DDIT (Inv.)-II, Raipur (CG) 4. Shri Dheeraj Arya, ITI, 0/0 the DCIT (Central), Raipur (CU) Sd/- Sd/- Sd/- Sd/- Sd/- (RituparnNamdeo) (KasturchandBurad) ( Gaurav Burad) ( Ram Tiwari) ( Dheeraj Arya) DCIT (Central) Raipur DDIT (Inv.)-II, Raipur Sd/- Sd/- Witness : (Anil Jain) (Gajendra Sahu)" At this stage, we may herein observe that though it is the claim of the department that the closing of the envelope formed part of the statement of Shri Kamlesh Burad (supra) that was recorded on 25.03.2012, however, the same as observed by us hereinabove had th....
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....nature of the authorized officer who had allegedly seized and sealed it. It was, thus, the claim of the assessee that the aforesaid torn papers had no evidentiary value. 12. Alternatively, it was claimed by the assessee that as on the date on which search proceedings were conducted i.e. on 21.03.2012, the respective assessments in its case for assessment years 2006-07 to 2010-11 had not abated, therefore, in absence of any incriminating materials found in the course of the search proceedings for the said respective years no addition could have been validly made u/s.153A of the Act. Elaborative contentions a/w. supporting judicial pronouncements were pressed into service by the assessee to drive home his contentions that where as on the date on which search proceedings are conducted on an assessee, the assessments in its case are not pending, and thus, are unabated, then, in the absence of any incriminating material found during the course of such proceedings no addition in the case of unabated assessment could validly be made u/s.153A of the Act. 13. The A.O not finding favour with the aforesaid objections that were filed by the assessee before him,therein, relying on the afo....
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....14. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). As regards the addition of Rs.1,66,70,000/- (A.Y2006-07) and Rs.55,00,000/- (A.Y2008-09) that was made by the A.O by treating the share application money received by the assessee from certain companies as an unexplained cash credit u/s. 68 of the Act, it was observed by the CIT(A) that the receipt of amounts by the assessee company towards share application/share capital was duly accepted by the A.O while framing the original assessment its case under Sec. 143(3) for A.Y.2006-07. Observing, that the A.O had neither came forth with any allegation that the assessee was a beneficiary of certain accommodation entry providers nor had placed on record any evidence which would rebut the documents that were submitted by it to substantiate the creditworthiness of the share applicants to make the respective investment towards share application/share capital of the assessee company, the CIT(A) was of the view that the A.O had failed to disprove the claim of the assessee of having received genuine share capital/share premium from the share applicants. Also, it was observed by the CIT(Appeals) that the audited fin....
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....(Appeals) that though the department had tried its level best to put hundreds of torn papers together and reconstruct the original sheets, however, even after carrying out such exercise for six hours none of the sheets could be reconstructed and read in entirety. It was further observed by the CIT(Appeals) that the torn pieces of papers were thereafter put back in the envelope and the same was finally sealed, and photocopy of the torn papers were never made available to the assessee company. Considering the aforesaid facts, the CIT(Appeals) after exhaustive deliberations on the issue in hand, was of the view that no credence could be given to such torn papers which could not be reconstructed in its entirety by the department even after exhausting six hours and were not readable. The CIT(Appeals) was of the view that now when the contents of the torn papers could not be read therefore, it was beyond comprehension that the A.O by referring to the same could have inferred that the assessee had indulged in carrying out unaccounted sales in all the years under consideration. It was observed by the CIT(Appeals) that the A.O except for harping upon the torn pieces of documents, had howeve....
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....not find favor with the CIT(Appeals). Observing, that as pursuant to a search initiated u/s.132 of the Act, the assessment of the assessee for six years stands reopened, the CIT(Appeals) was of the view that the A.O had full power to assess the income which has escaped assessment, whether or not the same was found as a result of search or otherwise. Accordingly, the CIT(Appeals) was of the view that addition made by the A.O for the aforementioned years i.e. A.Y.2006-07 to A.Y.2011-12 were well within the powers which were assigned to him u/s.153A of the Act. On the basis of her aforesaid observations the CIT(Appeals) partly allowed the assessee's appeal. 17. The Revenue being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 18. Also, the assessee company by way of cross-objections had, inter alia, assailed the very validity of the jurisdiction that was assumed by the A.O for making additions u/s.153A of the Act in A.Y.2006-07 to A.Y.2010-11, on the ground that no such addition could have validly been made in the absence of any incriminating evidence found in the course of the search proceedings in a case where as on the date of search t....
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....le High Court of Bombay in the cases of CIT vs. Murli Agro Product (ITA No. 36/2009) (Bom) and Commissioner of Income-tax Vs. Continental Warehousing Corporation (2015) 374 ITR 645 (Bom), had observed, that where as on the date of the initiation of search and seizure proceedings under section 132 of the Act, no assessment proceedings for the year under consideration were pending, then, in the absence of any incriminating evidence found during the course of search and seizure proceedings no addition/disallowance could have been made in respect of the unabated assessment of the assessee for the said year. The relevant observations of the Tribunal are culled out as under: "9. We have deliberated at length on the issue under consideration, and find that our indulgence in the present appeal has been sought for adjudicating as to whether in the case of the assessee where the assessment proceedings had not abated at the time when the search and seizure proceedings were conducted, any addition could validly be made in the absence of any incriminating material found during the course of the search and seizure proceedings. Admittedly, in the case before us no incriminating material ....
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....y him. 11. The appeal of the assessee is allowed in terms of our aforesaid observations." On the basis of our aforesaid observations, we concur with the claim of the Ld. AR that now when as on the date of the initiation of search and seizure proceedings under section 132 of the Act as no assessment or reassessment proceedings for the years under consideration were pending in its case for AY 2006-07 to AY 2010-11, therefore, in the absence of any incriminating evidence found during the course of search and seizure proceedings for the said years, no addition/disallowance could have been made in respect of the unabated assessment of the assessee for the said respective years. We, thus, in terms of our aforesaid observations vacate the additions made by the A.O while framing the respective assessments vide his order passed u/s.153A r.w.s. 143(3), dated 21.03.2014 for the A.Y.2006-07 to A.Y.2010-11. The Cross-Objection No. 2 is allowed in terms of our aforesaid observations. 23. Although, we have pursuant to the aforesaid settled position of law vacated the addition made by the A.O for want of valid assumption of jurisdiction on his part, however, for the sake of complete....
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....assessee on the basis of any concrete material had most arbitrarily dubbed the same as unexplained cash credits u/s.68 of the Act. In fact, the CIT(Appeals) after perusing the bank statements a/w. the audited financial statements and confirmations of the investor companies, had observed, that the same duly established the factum of making of the respective investments by the share applicants. Accordingly, the CIT(Appeals) on the basis of exhaustive deliberations in her order had vacated the respective additions of Rs. 1,66,70,000/- for A.Y.2006-07 and Rs.55,00,000/- for A.Y.2008-09 that were made by A.O. For the sake of clarity the relevant observations of the CIT(Appeals) are culled out as under: "13. I have carefully gone through the assessment order and submissions of the appellant. The discharge or otherwise of the onus u/s 68 has been independently evaluated and examined. It is also seen that the appellant was assessed in the past and the case of assessment year 2006-07 was under scrutiny assessment u/s 143(3) and in the said assessment proceedings, the addition to the share application / share capital was duly accepted as genuine. The present action of the A.O is not....
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....t the sums paid to the appellant was in fact received from the appellant and investors merely routed the undisclosed income of the appellant through money laundering process in the form of share application money. In the backdrop of these facts and documentary evidences, in my considered opinion, the identity and creditworthiness of the subscribers has been established and cannot be doubted. It is not justified on the part of the A.O to simply reject the documentary evidenceson record and take an adverse view and clothing the case of the appellant with the judicial pronouncements which have been rendered on absolutely different facts and circumstances. 13.4 The appellant has relied upon various judicial pronouncements and correlated the facts in those decisions with the facts in the case of the appellant. I am convinced that the decisions relied upon by the appellant are certainly applicable in the case of the appellant as the facts are not only similar but identical. The appellant has also relied upon the decision of the Hon'ble Supreme Court and jurisdictional High Court which cannot be ignored. It is further observed that no further enquiry or investigation has been....
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....formation received, if any, from the investigation wing of the Income Tax Department to show that the monies represented the appellant's undisclosed income. 13.6 The Hon'ble Supreme Court in CIT vs. Lovely Export, 216 ITR 198 SC and the Delhi High Court in Divine Leasing and Finance Limited, (2008) 299 ITR 268 have held that in the instances of money received towards share capital, only the identity of the share holders needs to be proved and once that is established and it is also shown that the money did in fact come from them, it is not for the assessee to prove as to how the share applicants came to be in possession of the money. In the light of the above discussion, I am inclined to agree with the arguments and evidences provided by the appellant to substantiate that the transaction regarding Share Application Money received by it were genuine transactions and the same were not accommodation entries. I also do not find any evidence collected by the A.O which could prove otherwise. Accordingly, the AO was not justified in treating the amount of share application money received by the appellant as its undisclosed income. 13.7 The case of the appellant f....
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....ring into their books of account their unaccounted monies through the medium of share subscription, and the assessee. The ratio is inapplicable to a case, again such as the present one, where the involvement of the assessee in such modus operandi is clearly indicated by valid material made available to the Assessing Officer as a result of investigations carried out by the revenue authorities into the activities of such "entry providers". The existence with the Assessing Officer of material showing that the share subscriptions were collected as part of a pre- meditated plan - a smokescreen - conceived and executed with the connivance or involvement of the assessee excludes the applicability of the ratio. In our understanding, the ratio is attracted to a case where it is a simple question of whether the assessee has discharged the burden placed upon him under sec.68 to prove and establish the identity and creditworthiness of the share applicant and the genuineness of the transaction. In such a case, the Assessing Officer cannot sit back with folded hands till the assessee exhausts all the evidence or material in his possession and then come forward to merely reject the same, without ....
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.... A.L. Lalpuria Construction (P.) Ltd. [2013] 32 taxmann.com 384 (Rajasthan); (u) Luminant Investments (P.) Ltd. v. Deputy Commissioner of Income-tax, Central Circle 40, Mumbai [2014] 42 taxmann.com 14 (Mumbai - Trib); 13.10 Overall, I am convinced that the appellant has been able to establish the identity and creditworthiness of the subscribers as also the genuineness of the transactions. In my considered opinion, the ratio of the aforesaid judgements of the Hon'ble Supreme Court in Lovely Exports and that of jurisdictional High Court are certainly binding in nature on all the revenue authorities and courts etc. and further, the judgement of the jurisdictional High Court as well as that of the Hon'ble Supreme Court in Lovely Exports has been rendered on identical facts. Hence, it is impermissible to deviate from the ratio laid down therein and against the law of judicial precedents. In view of the above and respectfully following the ratio of the binding judgements, the addition of share application/capital money as unexplained cash credits under section 68 is uncalled for and hence, deleted. The appellant gets relief of Rs.1,66,70,000/- and Rs.55....
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....w and on the facts of the case in vacating the two fold additions made by the A.O, viz. (i) addition on account of gross profit on unrecorded sales : Rs.36,32,610/-; and (ii) addition on account of initial unrecorded investment for making unrecorded sales : Rs. 34,79,761/-. 29. As observed by us hereinabove, the controversy in hand finds it roots in the adverse inferences that were drawn by the A.O in the hands of the assessee company for the A.Y2006-07 to A.Y2012-13 by relying on the torn pieces of papers which areallegedly stated to be a printout of a document titled as "Product Sales Summary" that were retrieved in the course of search and seizure proceeding conducted on the assessee from a dustbin lying in his shop located at Sadar Bazar, Raipur. As observed by us hereinabove, the A.O had claimed that the aforesaid torn pieces of paper referred to total sales of Rs.67,98,08,604.90/- (rounded to Rs.67,98,08,605/-) for various months of F.Y.2011-12 i.e till February, 2012. It was therein stated that the aforesaid torn pieces of papers were placed in an envelope, which was stapled and signatures of the witnesses were obtained on the same. Also, the aforesaid envelope was stated....
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....awing adverse inferences at the back of the assessee; (iii) that as the aforesaid envelope containing torn pieces of paper did not form part of the seized documents that were inventorized in the course of the search proceedings, therefore, the same did not carry any evidentiary value; (iv) the fact that the copy of the envelope made available by the department to the assessee revealed that the same was stapled more than once, therefore, the fact that the same had been opened at the back of the assessee could not be ruled out; (v) that contrary to the claim of the department in the statement of Shri Kamlesh Burad (supra) it was nowhere stated by him that the torn papers which were retrieved in the course of the search proceedings were kept in an envelope; and (vi). that as the torn pieces of paper were kept in an envelope which was neither sealed by wax nor contained any signature of the authorized official, therefore, the same on the said count too lost its evidentiary value. 31. Apart from that, it was observed by the CIT(A) that the very fact that as no unrecorded asset or unexplained investment had surfaced in the course of the search proceedings, which otherwise on a correla....
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.... part of the statement or was otherwise referred in the said statement. I find that based on the said torn papers, the A.O. had raised query no.5 part B of questionnaire dated 07.10.2013 which has been discussed at para 8.4 to para 8.8 of the assessment order. Thereafter, the A.O has worked out the quantum of unrecorded sales for the period from 01.04.2007 to 17.03.2012 i.e. date of search and also the gross profit and initial investment. 9.2 I have carefully perused the panchnama dated 26.02.2014. It is seen that, even according to the A.O, the torn papers were hundreds in number and it was extremely difficult to put the torn papers together to reconstruct the original sheets. This exercise continued for six hours, but none of the sheets could be reconstructed and read in entirety. Finally, the envelope was sealed. Photocopy of the torn papers also could not be furnished to the appellant. The issue that needs consideration is whether or not any credence can be given to such a material which could not be reconstructed in entirety even after exercise of six hours and was not readable. The AO raised a query on 17.10.2013 describing that these pieces of papers have been revie....
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....(1959) 37 ITR 288, the Supreme Court disapproved the practice of making additions in the assessment on mere suspicion and surmises or by taking note of the "notorious practice" prevailing in trade circles. 9.5 The significance "tangible evidence" h s been emphasized in various judicial pronouncements. I am convinced that there was no meaningful and tangible material before the A.O nor has the A.O brought any such evidence on record to corroborate his suspicion. The case of the appellant finds support from the decision in Income Tax Officer vs. W.D. Estate P. Ltd. (1993) 46 TTJ (Born) 143: 45 ITD 473. Similar ratio was laid down by the Hon'ble High Court of Delhi in Commissioner of Income Tax Vs. Discovery Estates Pvt. Ltd. vide order dated 18th February, 2013 (2013) 356 ITR 159 (Delhi). 9.6 Further, I find that no unrecorded asset or investment was found during the course of search with which undisclosed income of such magnitude worked out by the AO could be correlated i.e., deployment of undisclosed income. This factor was given due cognizance in Bansal Strips (P) Ltd. &Ors. vs. Assistant Commissioner of Income Tax (2006) 100 TTJ (Del) 665: (2006) 99 ITD 177 ....
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....rial found at the time of search that the assessee was indulged in making sales out of books of account throughout the year. In the absence of such material found at the time of search the sale cannot be estimated on the basis of torn bills found for a month at the time of search. At the most the unaccounted sales can be taken as Rs.18,49,000/- and applying 2 percent profit rate on which the calculation of profit comes to Rs.36,980/-. The order of CIT(A) was accordingly modified" 9.9 If general/casual/routine observations of the AO are to be considered as material evidence for the purpose of framing an assessment, the AO shall have blanket and arbitrary powers to dispose of the scrutiny assessments according to his whims and fancies which is not the spirit of the circulars issued by the Board from time to time on scrutiny assessment. An assessment cannot be made arbitrarily and in order that an assessment can be sustained, it must have nexus to the material on record. (CIT v. Mahesh Chand [1983] 199 ITR 247, 249 (All.). It is the settled position that, though the AO has very wide powers and is not fettered by technical rules of evidence and pleadings, there is one over-rid....
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....No evidence has been brought on record by the A.O to prove that the appellant did indulge into unaccounted sales to warrant such estimation of profit. Looking to the facts and circumstances of the case as also decisions cited above, the additions made on the basis of torn papers on account of unaccounted gross profit for A.Y. 2006-07 to 2012-13 and addition on account of unexplained initial investment in A.Y. 2006-07 cannot be sustained. Hence, the additions are deleted. The appellant gets relief as tabulated below: A.Y. Profit on suppressed sale Initial investment for suppressed sale 2006-07 36,32,610/- 34,79,761/- 2007-08 4,19,99,190/- --- 2008-09 4,26,78,875/- --- 2009-10 4,70,35,129/- --- 2010-11 6,60,87,326/- --- 2011-12 4,05,05,332/- --- 2012-13 2,78,98,401/- --- 32. After having given a thoughtful consideration to the issue in hand before us, we, in terms of our aforesaid observations, concur with the view taken by the CIT(A) that no adverse inferences could have validly been drawn by the A.O on the basis of hundreds of torn pieces of papers which were allegedly stated to have been retrieved in the co....
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....nt we find no substance in the same. On a perusal of Para 2.1 of the order of the CIT(Appeals), it transpires that he had in the course of the proceedings forwarded the written submissions of the assessee to the AO for his comments. Initially the AO had requested for one months time for necessary compliance. However, as can be gathered from the order of the CIT(Appeals), the AO had despite lapse of the aforesaid period of one moth failed to effect the necessary compliance. Further, the AO had vide his letter bearing No. F.No. DCIT (Central)/RPR/Tech/Misc/2013-14, dated 23/05/2014 sought exemption from personal appearance in the course of the proceedings before the first appellate authority. Considering the aforesaid facts, wherein it is clear beyond doubt that though the CIT(Appeals) had afforded sufficient opportunity to the AO to put forth his case, it was the latter who despite having been allowed a substantial time of one month, as requested by him, had not only failed to file his comments/rejoinder to the written submissions of the assessee, but had thereafter sought an exemption from personal appearance in the course of the proceedings before the CIT(Appeals). It was, thus, u....
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....ame did not see the light of the day. On the basis of the aforesaid facts as are emerging from the "Office Note (not for the assessee)" that has been filed by the department in its appeal before us as an enclosure to the assessment order, we find substance in the claim of the Ld. AR that the assessment in the present case is not based on an independent application of mind by the A.O, but is clearly as per the dictates of the Investigation Wing, Raipur. Although, as per the mandate of Section 153D of the Act, no order of assessment or reassessment shall be passed by the A.O below the rank of a Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of Sec. 153A or the assessment year referred to in clause (b) of sub-section (1) of Section 153B, except with the prior approval of the Joint Commissioner, however, we are unable to comprehend that as per the mandate of which statutory provision; or in fact authority, the assessment had been framed by the AO subject to approval/acceptance from the Investigation Wing of the department. As is discernible from the aforesaid "Office Note (not for the assessee)", the AO had categorically admitted of h....