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TaxTMI 
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TaxTMI 
2023 (8) TMI 431
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....se and the decision rendered thereon shall apply with equal force for other assessment years also, in respect of identical issues, except with variance in figures. 3. The assessee has raised the following grounds of appeal for the assessment Year 2008-09 before us:- "1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) {CIT(A)} is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the appellant that the proceedings initiated under Section 153A and assessment framed under Section 153A/143(3) are in violation of the statutory conditions and the procedure prescribed under the law and as such the same is bad and liable to be quashed. 3. On the facts and circumstances of the case, the proceedings initiated under Section 153A and assessment framed thereafter under Section 153A are bad in the eye of law in the absence of any incriminating material being found during the course of the search. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in co....
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....raised by the assessee go to the root of the matter and it being a legal issue, the same are hereby admitted for adjudication. Even otherwise, we find that these aspects raised in additional grounds were indeed submitted before the Ld.CIT(A) in the form of written submissions, but, the same were not addressed by the ld.CIT(A). Hence, the assessee, as a matter of abundant caution, though raised the grounds vide grounds No.2 and 3 in the original grounds, had also raised the same by way of additional ground. 6. The assessee is a domestic company regularly maintaining its books of account which are subjected to statutory audit under the Companies Act, 1956. The assessee had filed the return of income together with computation of income, audited accounts, etc. The assessee was searched u/s 132 of the Act on 23.05.2013. The assessee owned an immovable industrial property situated at Plot No. B-6, Sector-4, Noida and had duly declared the cost of construction of building on the plot of Rs. 82,79,077/- in its books plus air-conditioning expenses in the building of Rs. 26,50,000/- totalling to Rs. 1,09,29,077/- upto 31.03.2010. During the course of search assessment proceedings, the ld. A....
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...., the ld. AO proceeded to treat the difference in value of cost of construction of Rs. 97,16,144/- as unexplained investment made by the assessee. 8. Before the ld. CIT(A), the assessee reiterated its submissions and further pointed out that the reference made to ld. DVO by the AO per se is grossly incorrect in view of the fact that the audited books of account submitted by the assessee were not sought to be rejected by the ld. AO. No deficiencies were pointed out in the said books of account by the ld. AO. The valuation report of the ld. DVO suffers from multiple defects and deficiencies. The said valuation report u/s 142A of the Act was furnished by the ld. DVO on 28.10.2016 which is beyond the maximum period allowed to the ld. DVO to furnish the same to the ld. AO in terms of section 142A(6) of the Act. The assessee also pointed out that this addition is not supported by any incriminating material found during the course of search and since the assessment for AY 2008-09 is a concluded assessment, this addition could not be made in the search assessment in the absence of incriminating material. The ld. CIT(A), however, proceeded to hold that the assessee was unable to substantia....
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....Supreme Court in the case of Sargam Cinema vs. CIT, reported in 328 ITR 513 and in the case of CIT vs. Nirmal Kumar Aggarwal, reported in 259 Taxman 320 (SC). (c) In the instant case, the reference to DVO was made on 14.03.2016 by the ld. AO u/s 142A of the Act. Hence, in terms of section 142A(6) of the Act, the ld. DVO is duty-bound to furnish his valuation report on or before 30.09.2016. Admittedly, the DVO's report was dated 28.10.2016 which has been relied upon by the ld. AO for framing the addition towards cost of construction in the hands of the assessee. This is in gross violation of provisions of section 142A(6) of the Act. Reliance was placed on the decision of the coordinate Bench of Hyderabad Tribunal int eh case of Shri Zulfi Revdjee vs. ACIT, ITA No. 2415/Hyd/2018 dated 05.09.2019. (d) The provisions of section 69B of the Act uses the word 'find.' The ld. AO is bound to find something by way of some material that the assessee had made investment in cost of construction over and above the value disclosed in the books of account. The ld. AO directly cannot apply the provisions of section 69B of the Act and make an addition. The assessee is not even supposed to submi....
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.... during the course of search if they wish to disturb the assessments already concluded earlier. This situation would not have been any different even if the earlier assessment has been completed u/s 143(1) of the Act. Admittedly, no incriminating material has been found during the course of searchqua this addition towards cost of construction. This fact is evident from the perusal of the orders of the lower authorities. The sole basis of the addition is only the valuation report furnished by the ld. DVO which has been obtained by the ld. AO during the course of search assessment proceedings. Then, the said report cannot constitute incriminating material found during the course of search. Hence, we have no hesitation to hold that no addition could be made by placing reliance on the said valuation report while framing the assessment u/s 153A of the Act in the hands of the assessee. This issue is now well settled by the recent decision of Hon'ble Supreme Court referred to supra in the contentions of the ld. AR. 14. We find that the provisions of section 142A(6) of the Act categorically state that the valuation report has to be furnished by the ld. DVO within six months from the end o....
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....pect of Creative Capital Services Pvt. Ltd., from whom loan of Rs. 78 lakhs was received during the year and Rs. 28 lakhs had been returned during the year. The ld. AO observed that the assessee, had filed the copy of ITR along with balance sheet and Profit & Loss Account of the said lender, but, did not file their bank statements. Hence, the source and nature of availability of money in the creditors' bank account could not be ascertained. The ld. AO further observed that the assessee company has not carried out any business activities during the year. The assessee company has not paid any interest on the loan received from Creative Capital Services Pvt. Ltd. Therefore, genuineness and credit worthiness of the transaction remains unverified. With these observations, he proceeded to treat the receipt of unsecured loan of Rs. 78 lakhs from Creative Capital Services Pvt. Ltd. as unexplained cash credit u/s 68 of the Act and added the same to the total income of the assessee for the AY 2008-09. Before the ld.CIT(A), the assessee prima facie submitted that the actual receipt of loan from Creative Capital Services Pvt. Ltd. during the year was only Rs. 50 lakhs and not Rs. 78 lakhs. Thi....
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....is duly assessed to income-tax and copy of ITRs were duly filed before the ld. AO together with the PAN. Hence, the identity is also proved. The transactions have been routed through regular banking channels details of which were already submitted hereinabove and, hence, the genuineness of the transaction is also proved. Merely because the bank statement of the lender company (which is the personal property of the lender company) is not furnished by the assessee, that would not automatically disprove the creditworthiness of the lender. Nothing prevented the ld. AO by either issuing notice u/s 133(6) of the Act to the lender company to ascertain the said details. Admittedly, no examination whatsoever was carried out by the ld. AO in the instant case after the receipt of documents from the assessee. Hence, the assessee cannot be fastened with a tax liability for non-furnishing of a particular document which is not even expected to be in possession of the assessee. When this was pointed out to the ld. DR before us, he merely relied on para 5.3 of the order of ld. CIT(A). The contention of the ld. CIT(A) in para 5.3 has already been addressed by us herein above. Hence, we hold that the....