TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 883
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....rom house property and income from other sources besides agricultural income of Rs. 18,66,273/- after claiming exemption u/s 10(38) to the tune of Rs. 8,94,76,600/-. A search and seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') was conducted in the case of M/s. AMR India Limited and Others on 02.05.2018. As part of the search operations, the case of the assessee was covered u/s 132 of the Act. Subsequently, the case of the assessee was notified to Central Circle - 2(1), Hyderabad vide order of the Pr. Commissioner of Income Tax - 1, Hyderabad in F.No. 5/Pr.CIT-1,Hyd/Juris/2018-19, dtd. 18.07.2018." "1.0 The assessee is an individual. During the year under consideration, the assessee declared his income under Income Declaration Scheme Rules, 2016 for the Assessment Year 2012-13 on 30.09.2016 declaring total income of Rs. 12,31,808/- from salary, income from house property and income from other sources besides agricultural income of Rs.4,22,260/- after claiming exemption u/s 10(38) to the tune of Rs. 5,95,17,606/-. A search and seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter referred ....
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....ce of any incriminating evidence/material and/or asset found during the course of search." 4. Brief facts of the case are that a search and seizure operation was carried out in the premises of M/s. AMR India Limited & Others on 02.05.2018. In that search, the assessee was also covered. A notice u/s 153A of the Act was issued on 25.06.2019 and in response thereto, the assessee had filed the return of income on 24.07.2019 admitting the total income of Rs. 41,810/-, agricultural income of Rs. 14,05,376/- and exempt income of Rs. 5,96,11,906/- towards long term capital gains. Thereafter, notice was issued u/s 143(2) of the Act on 26.09.2019. In response thereto, assessee filed a letter offering his explanation and the same was reproduced by the Assessing Officer at Paragraph 1.4 of his order, which is to the following effect : "1.4 In response to the notice u/s. 153 A, the assessee has filed a letter in this office on 25.06.2019 stating as under: "With reference to the notice, cited above, this is to humbly submit that a Search operation u/s. 132 of Income Tax Act, 1961 ('hereinafter referred to as "the Act") was conducted in my case on 02.05.2018 and, as such....
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....the above, it is clear that the Assessing Officer has in his possession certain information / documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment in this case r the Assessment Year 2012-13. Hence, the objection raised by the assessee is not acceptable. The Assessing Officer has rightly issued notice u/s. 153 A of the Act for the Assessment Year 2012-13 and accordingly completed the assessment." 4.3. Assessing Officer after examining the above said legal issue had examined the merits of the case from Paragraph 2 onwards and thereafter, had made additions in the hands of the assessee for an amount of Rs.5,96,11,906/-. The basis of the addition in the hands of the assessee made by the Assessing Officer was captured in Para 1.5 and 1.6 which is as under : "1.5 The explanation submitted by the assessee is considered. Search operations u/s. 132 / Survey actions u/s 133A of the Act have been conducted by the Directorate of Investigation, Kolkata on various share brokers during which the share brokers accepted their role in the entire scheme of providing accommodation entry of bogus LTCG/STCL. The share brokers have stated ....
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.... in the relevant assessment year or in aggregate in the relevant assessment years. 6. Ld. CIT(A) thereafter examined the issue of the assessee on merits and relying upon the decisions of various High Courts had confirmed the addition made by the Assessing Officer. For the above said purposes, the ld. CIT(A) had relied upon the decisions of Hon'ble High Courts in the case of CIT Vs. NR Portfolio Pvt. Ltd. (Delhi High Court), PCIT Vs. Swati Bajaj (Kolkata High Court) etc. 7. Feeling aggrieved by the order of ld. CIT(A), assessee is in appeal before us. 8. Before us, the ld.AR for the assessee has submitted that no addition can be made in the hands of assessee, in the absence of any incriminating material and for the above said purposes, he relied upon the decision of Hon'ble Supreme Court in the case of PCIT Vs. Abhisar Buildwell Pvt. Ltd. (Civil Appeal No. 6580 of 2021 dt. 24.04.2023) and had also relied upon the decision of the Tribunal in the case of Smt. Prerana Agarwal Vs. DCIT in ITA No. 458/Hyd/2021 and others decided on 08.06.2023. 8.1. The ld.AR further submitted that the case of the assessee is covered by the decision of Hon'ble Su....
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....ium of shares. It was further submitted that once the assessee had filed the return of income in response to section 153A notice, the assessee had not admitted any amount during the course of alleged statement, thus the assessee has thereby denied admission of any liability. The assessee had submitted that the statement taken by the Revenue from the assessee during the course of search proceedings cannot be relied upon for the purpose of making the addition. In this regard, the assessee relied upon the Instruction F.No. 286/2/2003-IT (INV.II) dt. 10.03.2003 to say that the addition should not be merely based on the confession made by the assessee. 8.3. The ld.AR further drawn our attention to the decision of the Hon'ble Delhi High Court in the case of PCIT Vs. Best Infrastructure (India) Pvt. Ltd and also in the case of Andhra Motars of Andhra Pradesh High Court wherein both the courts have held that the statement recorded u/s 132(4) of the Act does not have any evidentiary value for the purposes of making the addition unless the recorded statement is corroborated by the clinching and cogent evidence. It was submitted that the statement recorded by Investigation Wing is not a....
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....er or by the ld.CIT(A) in their orders. The whole addition was made in the hands of the assessee on the basis of the search conducted by the Director of Investigation, Kolkata, in the premises of the Kolkata based share brokers wherein they have admitted that they were allegedly providing accommodation entries to various persons. However, the fact remains that no incriminating material was found during the course of search in the premises of the assessee. 10.1. In Paragraph 1.4 of the assessment order, assessee has categorically mentioned that no incriminating material constituting the tangible assets were found in the premises of the assessee. In our view, in the absence of any incriminating material, no addition can be made in the hands of the assessee. For the above said purposes, we may fruitfully reply upon the decision of Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. (supra). The co-ordinate Bench of the Tribunal has an occasion to examine the applicability of the decision in the case of Abhisar Buildwell Pvt. Ltd. (supra) in the case of Preranaa Agarwal ITA 458/Hyd/2021 wherein the co-ordinate Bench of the Tribunal in Para 8.2 to 9.1 had held as under....
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....ch and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. 9.1. This decision applies to the facts of the case on all fours and respectfully following the same, we hold that since no incriminating material found in the case of assessee for the assessment year 2013-14, the concluded assessment cannot be disturbed and the addition made by the learned Assessing Officer and sustained by the learned CIT(A) cannot be upheld. We accordingly allow the appea....
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....ssment year or in aggregate in the relevant assessment years; (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1. - For the purposes of this sub-section, the expression "relevant assessment year" shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. Explanation 2. - For the purposes of the fourth proviso, "asset" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account.'. 13. The reading of 4th proviso to Section 153A of the Act, make it abundantly clear that the revenue officials shall not issue notice beyond a period of six years unless (1) Assessing Officer is in possession of books of accounts and (2) there a....
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....IT Vs. Harjeev Aggarwal reported in (2016) 70 taxmann.com 95 (Delhi), wherein at Paragraph 21, it was held as under : "21. A plain reading of Section 132 (4) of the Act indicates that the authorized officer is empowered to examine on oath any person who is found in possession or control of any books of accounts, documents, money, bullion, jewellery or any other valuable article or thing. The explanation to Section 132 (4), which was inserted by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989, further clarifies that a person may be examined not only in respect of the books of accounts or other documents found as a result of search but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Act. However, as stated earlier, a statement on oath can only be recorded of a person who is found in possession of books of accounts, documents, assets, etc. Plainly, the intention of the Parliament is to permit such examination only where the books of accounts, documents and assets possessed by a person are relevant for the purposes of the investigation being undertaken. Now, if the provisions of Section 132(4) of t....