2022 (9) TMI 1357

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....on account of under valuation of closing stock for A.Y. 2009-10. b) Addition of Rs. 18,87,840/- on account of unexplained investment in the shares of Kapis Traders Pvt. Ltd. c) Addition of Rs. 8,80,000/- on account of undisclosed capital gain on sale of property on estimation basis. d) Addition of Rs.2,52,07,230/- on account of unsecured loans. 3) The Ld. CIT(A) has erred in law in admitting the additional evidence in the absence of the fulfillment of the conditions mentioned in Rule 46A. 4) The Ld. CIT(A) has erred in law in by deleting the addition made on account of unsecured loan in spite of the failure of the assessee to establish the genuineness of the unsecured loan during the assessment as well as remand proceedings. 5) (a) The order of the CIT(Appeals) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal" 3. The ld. CIT-DR submitted that the ld.CIT(A) has erred in relying on the ratio of the judgement of the Hon'ble jurisdictional High Court of Delhi in the case of Kabu....

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....e of CIT v. Kabul Chawla in ITA No. 707, 709 and 713/2014, pronounced on 28.08.2015 wherein it has been held that no addition can be made in the absence of any incriminating material found during the course of search. Relevant findings of the CIT(A) at Page 88 Para 9.4.2. Now the facts of the appellant are to be examined in the light of this legal position. It is clear from the assessment orders as well as submissions of the appellant that search and seizure action 132(1) of the Act was undertaken by the Department in the case of appellant as on 08.07.2015 and on that date, assessment of A. Y. 2010-11 was completed assessments as the time period to issue notices u/s 143(2) for aforesaid years had already expired. The assessments/ reassessments were not abated in this assessment year upon issue of notice u/s 153A. Thus this assessment was completed assessment in all respects. As mentioned above, no incriminating material was found in the case of the appellant during the search proceedings or available with the AO from any other source, for making assessment in this year on these issues. Therefore, the AO was not justified in making above disallowances in absence of....

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....e 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) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment Conclusion 38. The present appeals concern AYs, 2002-03, 2005- 06 and 2006-07.On the date of the search the said assessments already stood completed. Since no incri....

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....OODS LTD., 2022 (1) TMI 650 - ITAT DELHI Dated.- January 11, 2022 wherein Hon'ble Tribunal has held as under: 8. We have carefully considered the rival submissions and the legal ground raised. It is a matter of record that the assessment concerning Assessment Years 2009-10 and 2010-11 stood concluded and were not pending at the time of search. Hence, the CIT(A) has rightly applied the position of law governing the field that while making the assessment under Section 153A of the Act, the Revenue is not entitled to interfere with already concluded (and not abated) assessment passed either under Section 143(1) or under Section 143(3) of the Act and not pending at the time of search, in the absence of any incriminating documents unearth, as a result of search. This legal position is affirmed and answered in favour of the assessee by large number of judicial precedents of different jurisdiction. A reference is made to the decisions rendered in CIT vs. Kabul Chawla (2016) 380 ITR 573 (Del.); Pr. CIT vs. Meeta Gutgutia, (2017) 395 ITR 526 (Del); Pr. CIT vs. Somia Construction Pvt. Ltd. (2016) 387 ITR 529 (Guj.) and so on. The SLP of the Revenue against the decision of the Hon&#39....

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....ioned by appellant in its submissions. Hon'ble Court has taken a view in such cases that although section 153A 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 Assessing Officer 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. As per Hon'ble Court, such assessment has to be made under the section only on the basis of the seized material. It is further opined by Hon'ble Court that completed assessments can be interfered with by the Assessing Officer while making the assessment in the section 153A only on the basis of some incriminating material found during the course of search or requisition of documents or undisclosed income or property discovered in the course of search, which were not produced or not already disclosed or made known in the course of original assessment. In the subsequent decisions also, Hon'ble Court has substantiated the aforesaid view. In the case Pr. CIT vs Ram Avtar Verma 395 ITR 252, Hon'ble Court has ....