TaxTMI 
TaxTMI 
2023 (3) TMI 427
X X X X Extracts X X X X
X X X X Extracts X X X X
....in law as well as facts in ignoring the facts that being partner in a concern some investment is required. III) That on the facts and circumstances of the case, the Ld. CIT (A) is not justified in law as well as facts in ignoring the statement of the Shri Pritam Beria, wherein he has admitted that he was partner in Siddha Projects for 4 to 5 years. IV) That the Department craves leave to add, modify or alter any of the grounds and/or adduce additional evidence at the time of hearing of the case." 3. As the issues raised in these appeals are common and the facts are identical, therefore, as agreed by both the parties, they are heard together and disposed off by way of this common order for the sake of convenience and brevity. For adjudication purpose we will take up the facts in IT(SS)A No. 35/KOL/2022 for AY 2014-15 and our decision in this appeal shall apply mutatis mutandis on all the remaining appeals. 4. Brief facts of the case as culled out from the records are that search and seizure action u/s 132 of the Act was conducted on12.09.2017 at GPT Group which is engaged in the business of manufacturing of concrete sleeper for railways, hospital, manufacturi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e ld. AO in para 9 & 9.1 for AY 2014-15 reads as follows: "9. As per the above discussion, it is clear that Shri Pritam Beria had used its concern for fulfilling his obligation being a partners in Siddha Projects and the capital contribution required to be paid by him routed in the books of Siddha's Group through his group concern in form of Unsecured loan and booking. Further, it is fact that the concern which was used for providing unsecured loan & booking money in to Siddha Project has no worth. Therefore, it is clear that Shri Pritam Beria had used its group concern to accommodate his unaccounted money. Accordingly, after taking in to consideration of facts available on record, daywise entry of loan & booking money, peak of investment has been prepared and the peak amount as on end of financial year is taken as undisclosed investment of Shri Pritam Beria and the same is added to his total income. 9.1 As discussed in the above table, for the year under consideration, it is found that the peak of the investment in the books of Siddha Group's from the assessee through his group concern was of Rs. 7,30,00,000/-.In course of the assessment proceeding assessee was a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ses of CIT vs. Kabul Chawla [2016] 380 ITR 573 (Delhi), PCIT vs. Meeta Gutgutia [2017] 82 taxmann.com 287 (Delhi), PCIT vs. Kurele Paper Mills (P.) Ltd. [2016] 380 ITR 571 (Delhi) concluded the appellate proceedings deleting the additions made by ld. AO u/s 69 of the Act. 8. Aggrieved, the Revenue is now in appeal before this Tribunal. Ld. D/R vehemently argued referring to the finding of ld. AO and also relied on the judgment of Hon'ble Supreme Court of India in the case of PCIT vs. Param Dairy Ltd. SLP Appeal (C) No. 13775 of 2021 dated 20.09.2021. 9. On the other hand, ld. Counsel for the assessee reiterated the submissions filed before ld. CIT(A) and vehemently argued supporting the finding of ld. CIT(A), judgments and decisions referred therein and also summarized the contentions in the following manner: "1) For Assessment Year 2014-15 Return of income filed by assessee on 11.06.2014 for Assessment Year 2014-15. The last date for issue of notice u/s 143(2) was September 2015. No proceedings u/s 143(3) or 147 of the Income Tax Act was pending on the date of search being 12.09.2017. Therefore, since no proceedings were pending and the assessment was a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iddha Group from companies mentioned at page 3 to 5 of the Assessment Order. In spite of verifying the details and documents submitted by assessee, the AO could not bring any material on record to corroborate that the assessee in any manner participated in extending loan I booking money to Siddha Group. There has been no substantive evidence on record to corroborate the findings of AO. The findings of AO that assessee had advanced loan I booking money from his undisclosed sources is merely based on surmises and conjectures. It is well settled legal proposition that suspicion howsoever strong, cannot takes place of evidence. There is no material to back the allegation of the AO. The assessee cannot be expected to prove the negative. The onus is on the AO to substantiate that assessee had advanced loan I booking money from his undisclosed sources to make addition u/s 69 of the Act. 4) The transactions of loan / booking advance was made by the respective companies from their own sources of funds reflected in their Balance Sheet. The repayments made by Siddha Group companies also happened between them and assessee was not a party to these transactions. The assessee had filed l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ich is liable to be taxed u/s 69 of the Act. We also notice that in the assessment order itself ld. AO observed that the assessee has not shown any investment in the Siddha Projects in its books of accounts but still he is a partner. Similarly, ld. AO also could not dispute the fact that in various companies run by Siddha Group the assessee's name is not appearing in any of the companies investing in the Siddha Projects. The alleged addition made u/s 69 of the Act by ld. AO is purely based on the statement given at the time of search on 12.09.2017. We also notice that the incriminating material referred to by ld. AO do not contain any reference to the assessee nor any undisclosed income in the name of the assessee is said to be appearing in any of the seized material. 11. Further, we notice that ld. CIT(A) considering these facts specially the retraction statement of the assessee given in the affidavit sworn in within three days of the date of search, no reference to any incriminating material relating to the assessee found during the course of search and also considering the fact that all the alleged investments have come from various companies/LLP/Legal entities duly assessed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inventorised and seized. The seized documents mainly contained details of transactions of various companies controlled by and belonging to the Beria Family with various concerns of Siddha Group and the nature of transactions were mainly unsecured loan and Flat Booking Advance money paid, to various concerns of Siddha Group. All the transactions referred to in various seized documents under the identification marks PB-1 to PB-3 were duly disclosed in the Audited Financial Statements of the respective companies, Income Tax Returns were duly filed in respect of all those companies and all statutory obligations were duly discharged by the respective companies from time to time. In fact these companies from which first unsecured loans and thereafter booking advances were given have been separately scrutinized under the IT Act for the same period. Up until now the entire factual matrix is undisputed either by the appellant or the AO. In fact the AO, on page 2 of his order has recorded that the appellant had stated that all the bank accounts found and/or seized during the search had been duly declared in the regular books of account and requisite returns filed. The AO ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mpleted in the absence of any incriminating material having been found during the course of search. The appellant has given various arguments as well as placed his reliance upon various judicial pronouncements to support his stand. These have been reproduced above and need not be repeated here. In evaluating whether there is any merit in the arguments of the appellant, the first question that arises is whether all the assessments had been completed for this assessment year and whether the time for these assessments had already elapsed as on the date on which the search was conducted. I find that the return of income was filed by the appetent on 11.06.2014 for the instant AY 2014-15. Neither the appellant nor the AO have suggested that any proceeding u/s 143(3) had been going on or was pending as on the date of search. The search itself was conducted on 12.09.2017. Therefore as on the date of search, no proceedings had been pending and all the assessments had already been completed or deemed to have been completed. There was no question of any proceedings to get abated due to the search. With the above facts in mind, I see that various judicial pronounceme....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is well settled. The assessment made pursuant to the search has to be on the basis of incriminating materials gathered or unearthed during the course of the search. It is relevant to state that the words "incriminating material" has been deemed to mean and include the following: Incriminating material, which in the context of relevant provisions means - (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (ii) undisclosed income or property discovered in the course of search" 3. Reliance for this view can be upon the Hon'ble Calcutta High Court in the case of Veerprabhu Marketing Ltd, ITA No. 661/2008 dated 04/08/2016. In this case the question of law was framed as follows: "1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is justified in not holding that all assessments were made under section 143(1) of the I. T. Act, therefore, disallowance as per law were not earlier made. As per Section 153(c) of the I. T. Act assessment is to be made afresh and Income to be assessed or reassessed. The meaning of reassessment is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e concluded cases when the search and seizure did not disclose any incriminating material. In taking the aforesaid view, the learned Tribunal relied upon a judgement of Delhi High Court in the case of CIT[A] vs. Kabul Chawla in ITA No.707/2014 dated 28th August, 2014. The aggrieved Revenue has come up in appeal. Mr. Bagaria, learned Advocate appearing for the assessee, submitted that more or less an identical view was taken by this Bench in ITA 66112008 [CIT vs. Veerprabhu Marketing Ltd.] wherein the following views were expressed - "We are in agreement with the views expressed by the Karnataka High Court that incriminating material is a pre- requisite before power could have been exercised under section 153C read with section 153A. In the case before us, the assessing officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances." In that view of the matter, w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts and in the circumstances of the case, the Hon'ble ITAT is correct in law in holding that the scope of Section 153A is limited to assessing only search related income thereby denying Revenue the opportunity of taxing other escaped income, that comes to the riotice of the AO? (iii) Whether on the facts and in the circumstance of the case, the Hon'ble ITAT was right in limiting the scope of Section 153A only to undisclosed income when as per the section the AO has to assess the total income of the six assessment years? Hon'ble Bombay High Court rejected the revenue appeal, accepting the findings of the Special Bench as follows: "53. The question now is - what is the scope of assessment or reassessment of total income u/s 153A (1) (b) and the first proviso? We are of the view that for answering this question, guidance will have to be sought from section 132(1). If any books of account or other documents relevant to the assessment had not been produced in the course of original assessment and found in the course of search in our humble opinion such books of account or other documents have to be taken into account while making assessment or reassessm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The 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 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 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 abs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ement in the case of Meeta Gutgutiya (supra). 7. In the case of Pr. CIT vs. Ram Narain Jindal, 2017(11) TMI 1677, Hon'ble Delhi High Court had taken the same view. The special leave petition filed by the Revenue at Supreme Court was dismissed as reported under 2018 (8) TMI 295 (Special Leave Petition (Civil) Diary No(s). 23833/2018) dated 03/08/2018. 8. In the case of Hon'ble Delhi High Court in the case of RRJ Securities Ltd., 2015- TIOL-2539-HC-DEL-IT, held as under:- "In respect of such assessments which have abated, the AO would have the jurisdiction to proceed and make an assessment. However, in respect of concluded assessments, the AO would assume jurisdiction to reassess provided that the assets/documents received by the AO represent or indicate any undisclosed income or possibility of any income that may be remained undisclosed in the relevant assessment years. This Court in Commissioner of Income Tax (Central)-III v. Kabul Chawla: ITA 707/2014, decided on 28th August,2015 [2015-TIOL- 2006-HC-DEL-IT] has held that completed assessments could only be interfered with by the AO on the basis of any incriminating material unearthed during the course of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... incorrect. It is thereof clear that all the material seized during the search as identified by PB-1 to 3 does not constitute incriminating material found during search since the same had already been part of the regular books of account and the required returns in this regard had already been filed. Coming finally to the information that had been received by the appellant during assessment, from the assessing officer of the Siddha Group, it has once again been recorded that this information was present in the afore-mentioned seized material pertaining to the appellant. No incriminating material has been brought on record nor shown to exist, which could be said not to have been declared in the regular books of account of the appellant or of the concerns that advanced the moneys. Therefore it is clear that the additions made in the case of the appellant, whatever their merits, did not in any case emanate from any incriminating material found during search. In view of these facts, and respectfully relying upon the various authorities cited above I hold that this addition made by the AO cannot be confirmed and is deleted accordingly. Grounds 2, 3 an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f AO that these moneys were appellant's undisclosed money was purely on presumption and suspicion and assumptions without any material brought on record. The AO did not accept appellant's any of the contentions and concluded that appellant has used his concerns for fulfilling his obligation of being a partner in SIDDHA projects and the capital contribution required to be paid by him was routed in the books of SIDDHA group this his concerns in the form of Unsecured Loan and booking advance. The AO also concluded that the concerns who gave unsecured loans/booking advances has no worth. Finally AO treated the peak amount of investment in SIDDHA group during the year as undisclosed investment of the appellant being his capital contribution through his controlled and managed group concerns. The action of AO is not only bad in law but also beyond the Income Tax Act. It was explained that unsecured loans and flat booking advance was given from various companies. These companies have their separate PAN, they are separate set of books of accounts which are audited by auditors, they file their Income Tax returns separately, and their Annual returns are filed with the Regist....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 37 ITR 151 (SC) and decision in the case of Lalchand Bhagat Ambica Ram vs CIT reported in 37 ITR 288 (SC) where in it was held that there must be something more than mere suspicion in support of an assessment and mere suspicion cannot take the place for the purpose of passing an order of assessment. It is further reiterated that all the companies who have paid unsecured loans/ booking advances are separate entities with separate assessment thus the addition in the hands of appellant is absolutely baseless and bad in law. The allegation of AO that appellant was a partner in some projects of SIDDHA group and that there was no investment made by the appellant individually to these projects and therefore these loans/booking advances are appellant's undisclosed money is completely wrong particularly when there is no material on record to support the contentions of the AO. The AO conveniently ignored the fact that moneys were advanced as loans/booking advance by the companies from their respective sources disclosed in their books of accounts. This by no stretch of imagination can lead to conclusion that appellant has used his undisclosed funds through these companies to give money to S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....all he was a partner, in the impugned period. The only observation of the AO in this regard is that the appellant had, during search admitted to being a partner for 4 - 5 years- which at best is a general statement in the absence of any material brought on record by the AO, who is relying upon this statement to make a huge addition. These observations are of course material, and bring to the fore the unsustainability of these additions for want of any corroborative evidence. However, there are also other reasons that cast a shadow upon the reasoning and inference of the AO. The AO has made a categorical finding, that the appellant had not made any direct investments or advances to the any of the concerns of the Siddha group. Given this finding, there is absolutely no basis at all for the assumption of the AO that the impugned moneys advanced by various concerns into the Siddha Group had actually come from the appellant. The AO was in possession of all the seized material, from a search that had been conducted upon Siddha Group and the appellant as well as the appellant's family members. Even after this search no material connecting the money trail from the appellant either....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ced by independent entities to Siddha Group actually were the appellant's own undisclosed income and not of the concerns that had advanced them. For this, some form of tangible monetary connection would have to be established between the sources of these amounts shown by the advancing concerns and the appellant. The AO would also have to establish that the moneys advanced by those concerns had not been from their own incomes, but through undisclosed sources of these concerns. Also this undisclosed source would have to be shown to be the appellant himself. Nothing even remotely resembling the above procedure has been attempted by the AO. This proof would have to be done through a process of adducing lawful, concrete evidence and providing acceptable reasoning. The propositions furthered by an AO cannot be regarded as acceptable, based solely upon suspicions, conjectural constructs and surmises. In this case, the entire addition has been made based solely upon suspicions and conjectures, with scant interest in adducing any tangible evidence. In view of the above discussions, I cannot find merit in the actions of the AO and the same are not sustained." 12. From perusal of the above....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ear, no additions can be made unless until supported by incriminating material found during the course of search belonging/pertaining to the assessee. Plethora of judgments laying down this ratio has been referred by ld. CIT(A) and we, further find that recently this Tribunal in the case of Aditya Himatsingka vs. DCIT in I.T.(S.S.)A. No. 27/Kol/2022 order dated 09.09.2022 dealing with same issue and identical facts has held as follows: "9. We have heard rival contentions and perused the records placed before us as well as the case laws cited by Ld. Counsel for the assessee. First we take up Ground Nos. 1 to 3 challenging the legality of the assessment proceedings carried out subsequent to search u/s 132 of the Act. (i) It is an admitted fact that no incriminating documents or material were found in course of the search and no addition has been made in the assessment made pursuant thereto on such account. Only two additions have been made in the assessment under section 153A of the Act in respect of the said alleged bank account at the HSBC and the disallowance of Rs. 587 under Section 14A of the Act. It was submitted that the disallowance under section 14A of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....were pending at the time of search and got abated and/or any incriminating material or documents were found in the course of search. From the facts of the case it is clear that the assessment u/s 153A/143(3) was framed with reference to unverified and unsubstantiated information allegedly gathered by the Income Tax Department from some unnamed and unspecified authorities whose identity has never been disclosed to the appellant till date. No documents, details or papers even remotely connected with the alleged bank account were found from the appellant's premises or were in the possession of the appellant. In absence of any incriminating details found in the course of search and the fact that the assessment for A.Y. 2006-07 had not abated, no addition or disallowance was permissible in the assessments framed u/s 153A of the Act. 10. This is now well settled by the judgments of various High Courts and Co-ordinate Benches of the Tribunal. It can also be seen from pages 16 to 26 of the order of the CIT(A) set out from the written submissions filed by the Appellant before him. In addition to the above, we may also refer to the following orders : a) In the context of Se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ould not be made u/s. 153A of the I. T. Act? While disposing appeal the Hon'ble High Court held: We are in agreement with the views expressed by the Karnataka High Court that incriminating material is a pre-requisite before power could have been exercised under section 153C read with section 153A. In the case before us, the assessing officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances. We find no infirmity in the aforesaid act of the learned Tribunal. The appeal is, therefore, dismissed. No Special Leave Petition was filed in the Supreme Court by the Revenue against the aforesaid decision of the Hon'ble Calcutta High Court. c) In the case of Pr. CIT vs. Salasar Stock Broking Ltd ITAT No. 264 of 2016, the Hon'ble Calcutta High Court took the same view and held: "Subject matter of challenge is a judgment and order date....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... account copies of various companies supposed to be part of the chain of companies was not confronted to the assessee. The alleged statements that were recorded from directors of these companies which formed this alleged chain were also not brought on record. Only a general statement has been made. There is no evidence whatsoever that cash has been routed from the assessee company to any of these chain of companies. There is no evidence that any cash was deposited by the assessee company. Moreover, there is no material whatsoever brought on record to demonstrate that the alleged cash deposit made in the bank account of a third party was from the assessee company. No opportunity to cross examine any these parties was provided to the assessee. The bank statements based on which the cash trail was prepared are part of the disclosed documents and cannot be held as incriminating material. 10.2. Thus, none of these materials gathered by the Assessing Officer can be categorized as incriminating material found during the course of search or found during the course of any other operation under the Act. Thus, we hold that the additions in question are not based on any incri....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... decision referred and relied by the Ld. Counsel for the assessee. For Assessment Year 2008-09 assessee has raised two grounds of appeal. Ground No.1 challenges the addition on the ground that no incriminating material was found during the course of search and addition has been made merely on the basis of information called during the course of assessment proceedings. Through Ground No.2 the impugned addition of Rs.2,24,326/- is challenged with regard to disallowance of interest paid on loan holding that the loan funds were not utilized for the business purposes. 9. We find that the Co-ordinate Bench while adjudicating similar issue in the case of Sainath Coloniers V ACIT (2019) 35 ITJ 77 (Trib. Indore) following the judgment of Hon'ble High Court of Delhi in the case of CIT V/s Kabul Chawla (2016) 380 ITR 573 (Del) observed as follows: "We therefore in the given facts and circumstances of the case and respectfully following the judgments referred and relied by the Ld. Counsel for the assessee are of the considered view that no addition/disallowance was called for Assessment Year 2008-09 to 2010-11 as no incriminating material was found during the course of search....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as under: (i) Once a search takes place under Section 132 of the Act, notice under Section 153 A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. (ii) Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. (iii) The 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "15. Thus, when during the course of search of an assessee any books, document or money, bullion, jewellery etc. is found which relates to a person other than the person searched, then the Assessing Officer of the person searched shall hand over such books of account, documents, or valuables to the Assessing Officer of such other person and thereafter, the Assessing Officer of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, Section 153C is not invoked in the case of the assessee and the assessment is framed under Section 153A. We, respectfully following the above decisions of Hon'ble Jurisdictional High Court, hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person." Hon'ble Delhi High Court in the case of Subhag Khattar in Tax Appeal No.60 of 2017 has considered the following question of law: "Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the additions made under Section 153A read ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nal is right in law in holding that the addition should be based on the incriminating material found during the course of search under new procedure of assessment u/s 153A which is different from earlier procedure u/s 158BC r.w.s. 158BB of the Act and by reading into the section, the words 'the incriminating material found during the course of search' which are not there in section 153A? [C] Whether the Tribunal erred in relying on the ITAT order in Sanjay Aggarwal v. DCIT (2014) 47 Taxmann.Com 210 (Del) which has interpreted undisclosed income unearthed during the search to imply incriminating material, as against the finding of the Delhi High Court in Filatex India Ltd. v. CIT- IV (2015) 229 Taxman 555 wherein it is held that during the assessment u/s 153A additions need not be restricted or limited to incriminating material found during the course of search?" 35. Hon'ble Court concurred with the decision of Hon'ble Delhi High Court. We deem it appropriate to take note of relevant part of the decision, which reads as under: "16. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....red to be completed within a period of two years from the end of the financial year in which the search came to be carried out, namely, on or before 31st March, 2012. Here, insofar as the impugned addition is concerned, the notice in respect thereof came to be issued on 19.12.2011 seeking an explanation from the assessee. The assessee gave its response by reply dated 21.12.2011 calling upon the Assessing Officer to provide copies of statements recorded on oath of Shri Rohit P. Modi and Smt. Pareshaben K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K. Modi regarding the on-money received, copies of the assessment orders in case of said persons and also requested the Assessing Officer to permit him to cross-examine the said persons. The Assessing Officer issued summons to the said persons, however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to cross-examine the said persons, the Assessing Offi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India), Jodhpur (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court in the case of Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed." 11. It is also pertinent to note that, in the case of Kabul Chawla (sup....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eme of assessment as propounded in the various judgments of the Hon'ble High Courts referred above, an addition can only be made if some incriminating material regarding receipt of bogus share application money was found during the course of search. The Assessing Officer did not make reference to this effect. The ld. CIT(A) is on the same line. The ld. CIT(A) has discussed the issue on merits but did not address whether the issue can be examined in an assessment framed u/s 153A of the Act or not. The judgment of the Hon'ble Delhi High Court in the case of Kabul Chawla (supra) is very specific which has been discussed above. The time limit to issue notice u/s 143(2) of the Act has expired long back. Hence, it is an unabated assessment year and this assessment can be tinkered with only if incriminating material pertaining to this year has been found during the course of search. In view of the above discussion and respectfully following the judgments of various Hon'ble High Courts and Co-ordinate Benches, we allow the preliminary ground of the appeal and delete the additions made in the assessment order dt. 30/03/2015 passed u/s 153A r.w.s. 143(3) of the Act. 11. In view of t....