TaxTMI 
TaxTMI 
2024 (4) TMI 745
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....ittedly no incriminating material was found from the search premises of the appellant. The alleged incriminating material on the basis of which an addition was made in the impugned assessment order was found from the search premises of Lion Manpower. Admittedly the original return of income for AYs 2015-16 and 2016- 17 was filed on 30/09/2015 and 30/09/2016, respectively and which stood processed under section 143(1), and the time limit to issue notice under section 143(2) stood expired on 30/09/2016 and 30/09/2017 respectively. Accordingly, the aforesaid assessment stood concluded before the conduct of search under section 132 on 29.05.2018. 3. Pursuant to search, the assessment proceedings under section 153A of the Act, were initiated for both the AYs, which were completed vide order(s) dated 17/03/2021 after making addition(s) of Rs. 28,20,658/- and Rs. 9,25,074/- respectively under section 69C of the Act on the basis of a manual cash book, alleged to be containing cash expenses from unexplained sources found from the premises of Lion Manpower. 4. On further appeal, the Ld. CIT(A), however, allowed partial relief to the appellant and modified the order of the assessing officer....
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.... leave to add, alter and modify any ground of appeal before or during the appellate proceedings." 6. Heard and perused the record. We are of the considered view that all the issues are connected, therefore, they are taken up for discussion together. 7. Now with regard to the issue if assessment u/s 153A of the Act is not based on any incriminating material. It comes up that during the course of search operation conducted at the premises of Company at Vasant Kunj, New Delhi, a manual cash book of Company was found and seized. The premises, at Vasant Kunj, New Delhi from which such manual cash book was found is the premises of Company in which the assessee is a director. Copies of panchnamas of both the appellant and Company are enclosed at page 120-129 of paper Book II. The case of Ld. AR is that the Ld. AO did not refer any document found during the course of search upon the appellant. The seized material, i.e., cash book was annexed at Annexure A-12 and A-13, which was found from the aforementioned premises of Lion Manpower and formed part of its Panchnama. Therefore, during the course of search upon the appellant, no incriminating material was found. Thus Ld. AR contends, under....
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....Abhisar Buildwell Pvt. Ltd.(supra) also does not carve-out any such exception qua incriminating material found from the search premises of related parties. 10. Reliance in this regard, was further placed by Ld. AR, on decision of this Tribunal in Shri Krishna Kumar Singhania Vs DCIT; I.T.(SS).A Nos. 109 & 110/Kol/2017; dt. 06/12/2017 and Kalyanika Infra Mega Ventures (P.) Ltd. Vs DCIT; [2023] 157 taxmann.com 34 (Jabalpur - Trib.) (Third Member Decision) for the proposition of law that despite common search between the assessee and the group entity like the company and its director, there can be no deviation from the scope of assessment contained in section 153A or 153C of the Act. 11. Further reliance is placed on the decision Delhi High Court in the case of PCIT, (Central) - 3 Vs. Anand Kumar Jain (HUF) [ITA 23, 26-31/2021] dated 12.02.2021 for the proposition that even if a search was conducted upon the premises of the assessee, if the AO was relying upon the incriminating material found from the search of third party, then the same can not be used for assessment u/s 153A and AO should have resorted to section 153C of the Act. We consider it pertinent to reproduce the part of j....
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....om the premises of the assessee; ii) The scope of the aforesaid decision was restricted to the interpretation of erstwhile scheme of search assessment contained in section 158BB r.w.s 158BC of the Act which is different from the scheme of assessment u/s 153A for concluded years, which now stands settled by the decision of Hon'ble Supreme Court in the case of Abhisar Buildwell (Supra). 14. The ld. DR has, however, supported the orders of the ld. tax authorities below by submitting that there is no evidence to establish that the office premises of the company and the office of the director were separate. Referring to para 6.2 of the order of the ld.CIT(A), it was submitted that the ld.CIT(A) has rightly relied the judgement of the Hon'ble Supreme Court in the case of CIT vs. Ajit Kumar (2018) 93 taxmann.com 294(SC) as the adverse material found at the time of search and seizure proceedings at the premises of the company had material information available with regard to the transactions of the assessee also. It was submitted that the company does not have a separate existence and a mind of its own. With regard to certain transactions of Mr. Vasudevan which was submitted in the form....
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....pellant received an amount of Rs. 24,38,500/- from Mr Vasudevan and returned an amount of Rs. 15,13,426/- to Mr Vasudevan. Accordingly, the net amount of Rs. 9,25,074/- (24,38,500 - 15,13,426) (Difference of S. No. B & C in above cash book summary) was added by the Ld. AO alleging unexplained cash expense u/s 69C. 19. As a matter of fact, in appeal, the Ld. CIT(A), however, having perused the complete cash book for the period 07-10-2014 to 22-04-2015 allowed partial relief to the appellant and modified the order of the assessing officer by partially sustaining the additions in the following manner: AY Addition made by Ld. AO u/s 69C Addition sustained by modifying the same u/s 2(24)(iv) of the Act, as appearing in above cash book summary 2015-16 28,20,658 16,57,222 2016-17 9,25,074 8,54,575 20. Ld. CIT(A) has held that: i) Since the source of expenses is cash of the company traceable to the seized cash book itself in the form of; i) funds introduced by the appellant and ii) withdrawals from the bank account of the company, such expenditure cannot be treated as unexplained expenditure u/s 69C of the Act. ii) However, the said expenses were personal expenses of the app....