TaxTMI 
TaxTMI 
2022 (12) TMI 346
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.... 2016-17 24.11.2021 3. ITA No. 322/JP/2021 Smt. Ratan Kanwar Ratnawat 2012-13 25.10.2021 4. ITA No. 323/JP/2021 Smt. Ratan Kanwar Ratnawat 2013-14 25.10.2021 2. Since the issues involved in the Revenue's appeals for all the years are almost identical except the difference in figure of additions disputed, are common, all these appeals were heard together with the agreement of both the parties and are being disposed off by this consolidated order. 3. At the outset, the ld. DR has submitted that the matter pertaining to pertaining to Shri Mahendra Singh Ratnawat in ITA No. 30/JP/2022 for A. Y. 2015-16 may be taken as a lead case for discussion as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are exactly identical except the difference in the amount in other assessee and assessment year. The ld. AR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. 30/JPR/2022 is taken as a lead case. Based on the above arguments we have also seen that for three app....
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....ng circumstances as laid down by the honorable Supreme Court in the cases of Sumati Dayal 214 ITR 801 SC and Durga Prasad More 82 ITR 540 SC. 5. The Appellant craves leave or reserves right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal" 5. The skeletal facts essential for deciding the appeal are that the assessee derives his income from salary, business and other sources. The assessee filed his original return of income u/s 139(1) of the Act, on 30.09.2015 for the assessment year 2015-16 declaring a total income of Rs. 1,67,70,610/-. The assessee belongs to Kiran Fine Jewellers Group, on whose premises a search and seizure u/s 132 on/or survey action u/s 133A of the Act was carried out on 02.08.2017. Pursuant to this, AO issued a notice u/s 153A of the Act to the assessee in compliance of which assessee filed his return of income of Rs. 1,67,70,610/-. Finally, AO Completed the assessment u/s 143(3) r.w.s. 153A of the Act vide order dated 26.12.2019 at a total income of Rs. 23,89,84,760/- by making the following addition/ disallowance: (i) addition of Rs. 22,16,60,000/- u/s 68 treating the ....
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....espectfully following the binding decision of the Hon'ble Jurisdictional High Court, decision of various other High Courts and the decision of Hon'ble Supreme Court as discussed supra, it is observed that the aforesaid addition made by the AO u/s 143(3) r.w.s. 153A for the year under consideration is legally not tenable, not being based on any incriminating document/ evidence found in the course of the search and hence is not liable to be sustained. Accordingly, the Ground of Appeal No. 1 is treated as allowed. 6. Since the appellant succeeds on legal ground, therefore the Grounds of Appeal No. 2 raised by the appellant on merits of the case is not required to be adjudicated upon. Accordingly, this ground of appeal is treated as disposed off. 7. Ground No. 3 relates an addition of Rs. 5,54,150/- on account of alleged commission paid u/s 69C of the Act. 7.1 The submissions of the appellant as per the statement of facts enclosed with Form No. 35 and reiterated during the appellate proceedings are summarized as under: The ground No. (3) of appeal relates to objecting the action of Ld. AO in making the addition of Rs. 554150/- u/s 69C of the I T ....
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....e additions made by the AO in the assessment order is without authority of law. The ld. CIT(A) has not decided the matter on merit. 1.1 It is submitted that as per provisions of section 153A, the AO has to issue notices u/s 153A(1) of the Act for six assessment years immediately preceding the assessment year relevant to the previous year in which search was Conducted. Further as per provisions of section 153A(1)(b), the AO has to assess or reassess the total income of such years. Therefore, in pursuance to these notices issued u/s 153A(1), the AO has to assess or reassess the total income for the relevant assessment years. Further, there is no mention in the section that these assessments should be based on incriminating material found during the course of search. 2.1 Further, even otherwise, if a return of income was filed u/s 139 of the Act, which was processed u/s 143(1)(a) of the Act and no assessment order was passed u/s 143(3)/144, the AO can made addition to the total income of the assessee in pursuance to notice issued u/s 153A even in the absence of incriminating material as the said processing/intimation u/s 143(1)(a) is not an assessment order as held b....
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....s competent to issue notice under said provision and require assessee firm to furnish returns as provided thereunder Held, yes - Whether neither under section 132 nor under section 153A, phraseology 'incriminating' is used by Parliament, therefore, any material which was unearthed during search operations or any statement made during course of search by assessee is a valuable piece of evidence in order to invoke section 153A - Held, yes [Para 21][Matter remanded/In favour of revenue] (ii) The head note in the case of E.N. Gopakumar Vs CIT [2016] 75 taxmann.com 215 (Kerala) is as under: "Section 153A, read with section 132, of the Income-tax Act, 1961 - Search & seizure - Assessment in case of (Scope of) - Whether for issuance of a notice under section 153A(1)(a), it is not necessary that search on which it was founded should have necessarily yielded any incriminating material against assessee or person to whom such notice is issued - Held, yes - Whether, therefore, assessment proceedings generated by issuance of a notice under section 153A (1)(a) can be concluded against interest of assessee including making additions even without any incriminating materia....
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....nearthed, nor any statement was made by assessee during course of search under section 132 or any material is received for afore specified period of six years, assessee is bound to file a return - Held, yes - Whether abatement of assessment or reassessment pending on date of initiation of search within period of six assessment years specified under section 153A will also not absolve assessee from his liability to submit returns as provided under section 153A(1)(a) - Held, yes [Paras 5 & 6] [In favour of revenue] (v) The head note in the case of Canara Housing Development Co. Vs DCIT [2014] 49 taxmann.com 98 (Karnataka) is as under: "Section 153A, read with section 263, of the Income-tax Act, 1961 - Search and seizure - Assessment in case of search or requisition (Conditions precedent) Assessment year 2008-09 - Whether once proceedings under section 153A is initiated, pursuant to search, order of assessment in respect of six years stands reopened and, therefore, in absence of any valid assessment order in existence, revisional proceedings under section 263 cannot be initiated in such a case - Held, yes [Paras 10 and 111 [In favour of assessee] Section 153A....
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....rs 2005-06 to 2009-10 - High Court by impugned order held that where during search proceeding one of directors of assessee-company surrendered a certain sum as undisclosed income only for assessment year in question and not for each of six assessment years preceding year of search, said submission could not be said to be incriminating material qua each of preceding assessment years and, consequently, assumption of jurisdiction under section 153A and consequent additions made by Assessing Officer on said basis were not justified - Whether SLP against said impugned order was to be allowed - Held, yes [Para 1] [In favour of revenue] " (IX) The head note in the case of DR. A. V. Sreekumar Vs CIT [2018] 90 taxmann.com 355 (Kerala) is as under: "Section 153A, read with sections 132 and 143 of the Income-tax Act, 1961 Search and seizure - Assessment in case of (Scope of) - Assessment years 19992000 and 2000-2001 - Search was conducted at premises of assessee on basis of two documents received before search by Department through a Tax Evasion Petition allegedly filed by one of brokers involved in transaction pursuant to which notices under sections 153A and 143 were issue....
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....ent years 2005-06 to 2011-12 - Assessee-company was engaged in production of 'Gutka' - Assessing Officer, mainly relying upon Notification No. 30/2008-Central Excise (NT), dated 1-7-2008 came to conclusion that assessee was engaged in unaccounted production and sale of 'Gutka' - He thus made addition to assessee's income - Tribunal opined that Assessing Officer while making assessment under section 153A could make addition only on basis of some incriminating material unearthed during course of search or requisition of documents - Tribunal further concluded that since no incriminating documents during course of search were found, impugned addition made by Assessing Officer was not sustainable - High Court upheld Tribunal's order - Whether, on facts, SLP filed against order of High Court was to be granted - Held, yes [Para 2] [In favour of revenue]" (XII) It is therefore humbly submitted that the issue has not been conclusively decided by the Hon'ble Apex Court in the case of Meeta Gugutia (Supra) as relied upon by the ld. AR, otherwise, these SLPs should not have been admitted by the Hon'ble Apex Court. (XIII) In the case of Sunny Ja....
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....t the risk of repetition, it has to be noticed that the block assessment prescribed under Chapter XIV-B also confers power on the AO to make assessment on the best of judgment." XV In Orma Marble Palace P. Ltd. V. CIT [2019] 110 taxmann.com 436 (SC), SLP filed by the assessee has been dismissed. 5 Without prejudice to the above, it is submitted that a search action was conducted in the case of directors of Gemini Commerce Pvt Ltd and statement of director Sh Arpit Khandelwal was recorded u/s 132(4) of the Act. In the said statement Sh. Arpit Khandelwal has admitted that he was even not aware about the full name of the company and all transactions were done on the directions of Sh. Harsh Agrawal. It is to be noted that in the case of Kabul Chawla or any other case following the same ratio decidendi, it has never been held that incriminating material should be found from the premises of the assessee itself These judgements only talk about the ' incriminating material' which was not available at the time of original assessment. The statement of the director of the party from with transactions have been done is definitely an incriminating material, if such sta....
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.... In the case of Bannalal Jat Constructions, the Hon'ble Supreme Court has also dismissed the SLP of the assessee. 2. With the above background, it is submitted that purchases were made in this case from Gemini Commerce Pvt Ltd. The name of Gemini is mentioned in the list of shell companies received from the Serious Fraud Investigation Office (SFIO). During the course of search operation, simultaneous search operation was also conducted in the case of Sh. Arpit Khandelwal who was Director in Gemini Commerce Pvt. Ltd. His statement u/s 132(4) was recorded on 05.08.2017 and therein he admitted that it is a paper company. Sh Khandelwal stated that he was just a dummy director and Sh Harsh Agrawal made him the dummy director. He even could not tell the full name of the company. The statement of Sh Khandelwal is placed at page no. 1-11 of the DPB. Further, statement of Sh Harsh Agrawal was also recorded u/s 131 on 05.08.2017 simultaneously with search operation in the assessee group. Sh Harsh Agrawal who was controlling many shell companies, Gemini Commerce Pvt Ltd being one of such companies. The statement of Sh Harsh Agrawal is placed at page no. 12-19 of the DPB. S....
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.... by the AO, it is first relevant to understand as to the meaning of the expression "incriminating material" or evidence. There can be several forms of incriminating material or evidence. In order to constitute an incriminating material or evidence, it is necessary lbr the AO to establish that the information, document or material, whether tangible or intangible, is of such nature which incriminates or militates against the person from whom it is found. Some common forms of incriminating material, inter alia, are for instance, where the search action u/s. 132 of the Act reveals information (oral or documented) that the assets found from the possession of the assessee in- form of land. building, jewellery, deposits or other valuable assets etc, do not corroborate with his returned income (which includes earlier Ars return also) and/or there is a material difference in the actual valuation of such assets and the value declared in the hooks of accounts. Further, incriminating evidence may also constitute of information, tangible or intangible which suggests or leads to an inference that the assessee is conducting transactions outside the regular hooks of account which are not disclosed....
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....9; is in itself an incriminating material. The Hon'ble Supreme Court in the case of CIT v S. Ajit Kumar, 93 taxmann.com 294 has held that: The power of survey has been provided under section133A.Therefore, any material or evidence found/collected in a survey which has been simultaneously made at the premises of a connected person can be utilized while making the block assessment in respect of an assessee under section 158BB, read with section 158B; the same would fall under the words "and such other materials or information as are available with the Assessing Officer and relatable to such evidence" occurring in section 158BB. In the present case, the Assessing Officer was justified in taking the adverse material collected or found during the survey or any other method while making the block assessment. [Para 15] It is to be noted that in the provisions related to block assessment, there was specific requirement to assess undisclosed income on the basis of the evidence found during the course of search or relatable material. In that scenario also, the Hon'ble Supreme Court held that findings of simultaneous survey operation can be used in the search as....
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....Ltd. (2020) 117 taxmann.com 118 (SC) * Sunny Jacob Jewellers And Wedding Centre vs. Deputy Commissioner of Income-Tax (2014) 48 taxmann.com 347 (Kerala) * Orma Marble Palace P. Ltd. v. Commissioner of Income-Tax-1 (2019) 110 taxmann.com 436 (SC) MGF Automobiles ltd. v ACIT ITA No. 4212 & 4213/DEL/2011 dated 28.06.2013 (Del-ITAT) Decision relied upon in the submission dated 23.08.2022 * CIT vs. Ravi Mathur, 2017 (1) WLC (Raj) 387 * PCIT v Roshan lal Sancheti 306 CTR 140 (Raj) * Bannalal Jat Constructions (P.) Ltd. vs. ACIT 106 taxmann.com 128 (Sc) * B. Kishore Kumar v. DCIT 52 taxmann.com 449 ( Madras)] * B. Kishore Kumar vs. DCIT 62 taxmann.com 2015 (SC) * Mani Square Ltd. v ACIT 118 taxmann.com 452 * CIT vs. s. Ajit Kumar 93 taxmann.com 294. 9. The ld. DR in addition to the above submission during the course of hearing submitted that during the year under consideration the assessee has accepted unsecured loan to the extent of Rs. 22,16,60,000/- . In the search carried out in the Kiran Fine Jewellers group the assessee is also covered. The information related to Gemini Commerce Private Limited, l....
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....ion of the ld. AO contradict to the finding recorded in the assessment order. There is a judgment of the Kerala High Court against the assessee. In the decision of the Kabul Chawala or in the Jai Stell decision relied upon there is not reference as to what constitute the incriminating material. The enquiry conducted by the AO in the assessment proceeding thus be an incriminating material which is based on the SFIO report, statement of assessee and director and the physical enquiry based on the financial statement be considered on merits of the case. The ld. DR further relying on the judgment of Rajasthan High Court in the case of Banalal Jat Construction P. Ltd. and Roshan Lal Sancheti submitted that the statement of Shri Arpit Khandelwal is not retracted and his version is required to be considered. Based on these arguments he supported the order of the ld. AO and prayed that the order of the ld. CIT(A) be set a side and order of the AO be upheld. 10. Per contra, the ld. AR appearing on behalf of the assessee has reiterated its arguments as advanced before CIT(A) and supported the findings recorded in the order of the ld. CIT(A). The ld. AR in addition also submitted his writte....
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....initiation of proceedings were on account of some seized incriminating material unearthed/found during the course of search. Thus the facts of this case are distinguishable from the assessee's case. 9. PCIT vs. Best Infrastructure (India) Pvt. Ltd. - 2018)( SC) In this case Hon'ble Delhi High Court in the year 2017 given a finding that without any incriminating material no addition can be made in case of unabated assessment. Further, the issue involved in this case was different and the Hon'ble Supreme Court has only granted SLP against the said order because there was some different issue in this case. 10. Dr. A.V. Sreekumar vs.CIT- (2018)(Kerala HC) In this case incriminating material was found and seized during the course of search and accordingly the facts of the case are distinguishable from the assessee's case. 11. PCIT vs. Gahoi Foods P. Ltd. - (2020)(Supreme Court) In this case the Hon'ble M.P. High Court has held that in the absence of incriminating document no addition can be made in the unabated or completed assessment. The Hon'ble Supreme Court has only granted SLP. 12. Orma Marble Palace P. ....
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.... * M/s Bitthal Das Parwal HUF * Mangilal Agarwal vs. ACIT 163 Taxman 399 (Raj) * CIT vs. Jai Kumar Bakliwal 45 taxmann.com 203 ( Raj. HC) * ITO vs. Smt. Ratan Kanwar ITA No. 334/JP/2014 dated 16.06.2017 11. In addition to the above written submission the ld. AR of the assessee submitted that in the case of Smt. Ratan Kanwar the transaction is already reflected in the regular books of account and the assessment proceeding were not pending when the search was conducted. Thus, the addition can only be made with respective incriminating material which is not there and the AO disturbed the completed assessment without placing on record any incriminating material found at the time of search no addition cannot be made on the completed assessment. The provision of law and Indian Constitution does not confer power on the assessing officer to review his own order which are completed. The purpose of the search as held in various cases laws that the addition can only be made on the completed assessment with respect to the incriminating material and the ld. AO and DR while argument in this appeal failed to establish that the whether any incriminating document....
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.... of cash, bullion, jewellery or documents in any other form which can come to the conclusion that the statement made was supported by some documentary evidence." The SLP in this case is also dismissed by the Supreme Court and thus the finding of the jurisdictional High Court becomes final so far as the fact that merely the addition based on the statement will not survive and therefore, the order of the ld. CIT(A) is reasoned order be sustained. At last the ld. AR of the assessee for his arguments on incriminating material relied upon the remand report submitted through JCIT dated 12-11.2021 where in the ld. AO specifically accepted that in this case there is no incriminating material found during the course of search. The same is extracted here in below: "To, The Commissioner of Income Tax (Appeal)-4, Jaipur. Submitted through: The Jt. CIT, Central Range, Jaipur Sub:- Calling Remand Report in the case of Shri Mahendra Singh Ratnawat (PAN: AFBPR0768Q) for AY 2015-regarding- Respected Mandam, Kindly refer to your office letter no. 227 dated 09.11.2021 calling for remand report in the case of Shri Mahendra Singh R....
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....of the assessee was allowed and the addition was deleted. We have also noted that there is no incriminating material unearth in the search proceeding to substantiate the addition as made in the assessment order even in the appellate proceeding this fact is confirmed by the ld. AO in his remand report. Not only that even though the assessee filed the confirmation, bank statement, ITR, Balance Sheet of these companies and AO failed to point out any error on these evidences filed by the assessee and the addition was made on the total amount taken on various dates and was also repaid on various dates. He has in his order merely without any corroborative evidence concluded that this company is shell company engaged in providing bogus accommodation entries in the shape of unsecured loans and the assessee has made shame transactions with this shell company under grab of unsecured loan to introduced the unaccounted income which is held unexplained cash credit u/s. 68 of the Act. The ld.AO has even not appreciated the fact that the assessee has entered into so many transaction and the total of the same cannot be added as income of the assessee even on ignoring all the arguments. This shows ....
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....ciated that has been placed on record and no cross verification were conducted merely relying the statement of Shri Arpit Khandelwal. The ld. AO has not appreciated the arguments of the ld. AR of the assessee that loan from M/s. Gemini Commerce Private Limited has been accepted as genuine in the cash of Harsh Share Portfolio Private Limited as principle of res judicata is not applicable under the income tax proceedings. The cross examination request of the assessee to verify the version of Shri Arpit Khandewal was not granted. Thus, based on the SFIO investigation the ld. AO categorized these various transaction of loan with M/s. Gemini Commerce P Ltd. as sham transaction and added the whole amount taken by the assessee in the year under consideration u/s. 68 of the Act. But on perusal of provision it is evident that assessing officer can very well make addition u/s 68 but for that two circumstances/condition must be satisfied i.e.: * assessee does not offer any explanation about nature and source of such credit or * explanation offered by assessee is not upto the satisfaction of AO. In other words, whenever assessee tenders explanation, before rejecting the sa....
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....ed out on 02.08.2017 and on that the assessment for AY 2015-16 in the case of the assessee was not pending and even the time limit for issue notice u/s. 143(2) was also passed. Thus, based on these set of facts the assessing officer would reassess the total income of the assessee as per the provisions of section 153A in respect of assessment year 2015-16. As the assessee objected to the proposed addition on the ground that during the search no incriminating material indicating any undisclosed income for the year under consideration was found, which is also apparently clear from the assessment order itself and from the order of the ld. CIT(A) when he called for the remand report before deciding the appeal of the assessee. Thus, the revenue cannot take a plea that they have not received fair change to represent their verdict before CIT(A). The ld. AO in the remand report categorically confirmed that in this case there is no incriminating material found in the course of search. Based on this fact non disputed fact the ld. AR of the assessee contended that since there is no incriminating material found during the course of search and seizure action, the ld. AO is not empowered to make ....
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....ade as no incriminating material was found with respect to the unsecured loan by alleging the same as non-genuine and taken from the shell company. We have gone through the grounds of appeal raised by the revenue and it appears that the revenue has not challenged the findings of the ld. CIT(A) on the very legal ground decided by ld. CIT(A) against the revenue. Thus, it is clear that this legal aspect of the decision is not challenged by the revenue before us. Thus, it is undisputed that when there is no incriminating material was found no addition could be made in the order passed u/s. 153A of the r.w.s. 143(3) of the Act. 15. The provisions of section 132 read with section 153A of the Act stipulate two types of situations - one where the assessment of any assessment year falling within six assessment years is pending on the date of initiation of search under section 132 or making of requisition under section 132A of the Act. Therefore, the assessment under section 153A in respect of those assessment years which stand abated due to the reason of pending on the date of initiation of search or requisition shall be the original/first assessment. In the second category where the ass....
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....g 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 incriminating material was unearthed during the search, no additions could have been made to the income already assessed." 16. Thus, the Hon'ble High Court has held that in the absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made....
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.... was subsequently unearthed during the search which was not already available to the AO. Consequently, the additions sought to be made by the AO on account of security deposits were rightly deleted by the CIT (A)." 17. Thus, the essential corollary of these decisions is that no addition can be made in the proceedings under section 153A in respect of the assessments which were completed prior to the date of search except based on some incriminating material unearthed during the search which was not already available to the AO. It is pertinent to note that the SLP filed by the revenue against the decision of Hon'ble Delhi High Court in case of Principal CIT vs. Meeta Gutgutia was dismissed vide order dated 2nd July, 2018. There are series of decisions on this issue including the decision of Hon'ble Jurisdictional High Court in case of M/s. Jal Steel India vs. ACIT (supra) wherein the Hon'ble High Court has held in para 23 to 30 as under : "23. The reliance placed by the counsel for the appellant on the case of Anil Kumar Bhatia (supra) also does not help the case of the assessee. The relevant extract of the said judgment reads as under: "19. Under the....
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....ng been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. 21. Now there can be cases where at the time when the search is initiated or requisition is made, the assessment or reassessment proceedings relating to any assessment year falling within the period of the six assessment years mentioned above, may be pending. In such a case, the second proviso to sub-section (1) of Section 153A says that such proceedings "shall abate". The reason is not far to seek. Under Section 153A, there is no room for multiple assessment orders in respect of any of the six assessment years under consideration. That is because the Assessing Officer has to determine not merely the undisclosed income of the assessee, but also the 'total income' of the assessee in whose case a search or requisition has been initiated. Obviously there cannot be several orders for the same assessment year determining the total income of the assessee. In order to ensure this state of affairs namely, that in respect of the six....
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....if any, unearthed during the search and the income that escaped assessments are required to be clubbed together with the total income determined in the original assessment and assessed as the total income. The observations made in the judgment contrasting the provisions of determination of undisclosed income under Chapter XIVB with determination of total income under Sections 153A to 153C of the Act have to be read in the context of second proviso only, which deals with the pending assessment/reassessment proceedings. The further observations made in the context of de novo assessment proceedings also have to be read in context that irrespective of the fact whether any incriminating material is found during the course of search, the notice and consequential assessment under Section 153A have to be undertaken. 25. The argument of the learned counsel that the AO is also free to disturb income, expenditure or deduction de hors the incriminating. material, while making assessment under Section 153A of the Act is also not borne out from the scheme of the said provision which as noticed above is essentially in context of search and/or requisition. The provisions of Sections 153A ....
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....n the search may be a ground for notice and assessment under Section 153A of the Act but that would not efface or terminate all the consequence, which has arisen out of the regular assessment or reassessment resulting into the demand or proceedings of penalty." (Emphasis supplied) The said judgment which essentially deals with second proviso to Section 153A of the Act also supports the conclusion, which we have reached hereinbefore. 28. It has been observed by the Hon'ble Supreme Court in K.P. Varghese v. ITO [1981] 131 ITR 597/7 Taxman 13 that "it is well recognized rule of construction that a statutory provision must be so construed, if possible that absurdity and mischief may be avoided." 29. The argument of the counsel for the appellant if taken to its logical end would mean that even in cases where the appeal arising out of the completed assessment has been decided by the CIT(A), ITAT and the High Court, on a notice issued under Section 153A of the Act, the AO would have power to undo what has been concluded up to the High Court. Any interpretation which leads to such conclusion has to be repelled and/or avoided as held by the Hon'ble Supreme....
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....Court as discussed supra, it is observed that the aforesaid addition made by the AO u/s 143(3) r.w.s. 153A for the year under consideration is legally not tenable, not being based on any incriminating document/ evidence found in the course of the search and hence is not liable to be sustained. Accordingly, the Ground of Appeal No. 1 is treated as allowed. 19. As it is evidently clear that not only in the assessment order there is no mention, reference or finding that the additions have been made by the AO on the basis of any incriminating material found during the course of search and seizure in the case of the assessee but in the remand proceeding the ld. CIT(A) has specifically raised the issue in remand proceeding AO categorically confirmed that "In this case no incriminating documents were found during the course of search proceedings. Seized digital record has also been operated/examined and nothing adverse has been found." 20. Whereas the ld. DR argued that as per provision of section 153A AO has to issue notice u/s. 153A for all the six years immediately preceding the assessment year relevant to the previous year in which search was Conducted. Further as per provisions....
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....(SFIO) and submitted that during the course of search operation was conducted in the case of Sh. Arpit Khandelwal who was Director of Gemini Commerce Pvt. Ltd. His statement U/s 132(4) was recorded on 05.08.2017 and therein he admitted that it is a paper company and he was just a dummy director and Sh. Harsh Agarwal made him as dummy director. The ld. DR submits that does not even know full name of the company and Arpit Khandenwal submits that Harsh Agrawal only was controlling many shell companies, Gemini Commerce Pvt. Ltd. being one of such companies. The statement of Arpit Khandenwal is submitted by the ld. DR in the paper book from page no. 1 to 11 from page 10 in question 11 was raised that whether you are director and partner of the company, the answer given that he does not remember the name of the company. Further in question no. 13 in paper book at page no. 11 & 12 has been taken into record as crucial document. Simultaneously the statement of Harsh Agrawal has been recorded from page 17 to 24 at page 19 of paper book in question Nos. 5,6,8 and 10 were brought to our notice by the ld. DR from the above question and answer coming to the conclusion that this company are shel....
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....Gemini Commerce Pvt. Ltd. is a shell company and providing only accommodation entries to various persons in the case to guise unsecured loans. The statement of Arpit Khandenwal if found correct then no question was asked to Arpit Khandenwal in his statement regarding providing entry to various persons in cash of loans and he never even admitted that Gemini Commerce Pvt. Ltd. is shell company. We are of the opinion that on the basis of the statement of Arpit Khandelwal and Harsh Agrawal the AO has no jurisdiction to make the additions and that in the proceedings u/s 153A of the Act when the assessment was not pending. The Assessing Officer failed to note that merely on the statement without any corroborative evidence to a conclusion that the AO to make the addition which is not sustainable in law. 21. We observed that when the Assessing Officer and ld. CIT(A) has accepted that the assessments were completed and books of account were verified, returns were filed, the entire record are persuaded by the AO and the ld. CIT(A) when there is no incriminating material found then the statements recorded during the assessment proceedings has no evidentiary value when it is not supported w....