TaxTMI 
TaxTMI 
2024 (7) TMI 1137
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....fact that the Ld. CIT(A) in the same order has held that the assessee had done circular transactions which were not genuine. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by AO on account of disallowance of financial expenses in proportion of purchase from bogus companies to total purchases of Rs. 25,25,934/-inspite of fact that the Ld. CIT(A) in the same order has uphold the disallowance of loss relating to circular paper transactions of Rs. 8,33,594/- made by the Assessing Officer. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 4,00,00,000/- made by AO on account of unexplained share premium and capital inspite of the fact the two investor companies M/s Bindhachal Yyapar Pvt. Ltd. and M/s Anandmoyee Trade Links Pvt. Ltd. were shell companies having no business activities. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 4,00,00,000/- made by AO on account of unexplained share premium and capital inspite of the fact the address of the investor companies provided by the....
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....re fabricated. As regards the disallowance of proportionate financial expenditure amounting to Rs. 25,25,934, it is important to refer to the relevant portion of the learned CIT(A)'s order:- "4.5 Though with introduction of section 158BI of the Act provision of cechapter XIVB are made inapplicable to proceedings u/s 153A/153C of the Act. The above principle propounded by Supreme Court in above discussion is embedded in section 153A & 153C which does not limit the authority of Assessing Officers to material found during search as held in the case CIT vs Gopal Lai Bhadruka, supra. Therefore, AO has rightly considered all the material available on record while framing assessment u/s 153A. 4.6 It is the 'assessment of total income' which is required to be made u/s 1534. The total income as defined u/s 2(45) would be the total income computed as per section 5 of the Act. The word 'assessment' cannot have a different meaning for different purposes under the same Act, unless restricted by specific provisions. The process of assessment for the purposes of the Act is wide enough to include every kind of enquiry/examination for discovery, quantification and ....
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....the purpose of business and is allowable under section 36(1)(iii) of the Act. There is no ground to interfere with the conclusions of the learned CIT(A). Hence, the ground raised by the Revenue is dismissed. 6. Now, the next question for our determination is, whether or not the amount of share application money of Rs. 4 crore, can be considered to be satisfied the requirement of provisions of section 68 of the Act. The learned A.R. has pleaded that the order of the learned CIT(A) need not be interfered with and has relied upon the following judgment:- i) ACIT v/s Krishna Gupta, ITA no.223/Nag./2013, order dated 22/05/2015; ii) S.A. Builders Ltd. v/s CIT(A) & Anr., [2007] 288 ITR 001 (SC); iii) CIT v/s Lovely Exports Pvt. Ltd.[2009] 319 ITR 005 (SC); iv) CIT v/s Veedhata Tower Pvt. Ltd., [2018] 403 ITR 415 (Bom.); v) CIT v/s Gangandeep Infrastructure Pvt. Ltd., [2017] 394 ITR 680 (Bom.); vi) CIT v/s Creative World Telefilms Ltd., [2011] 333 ITR 100 (Bom.); vii) PCIT v/s AMI Industries (India) Pvt. Ltd., [2020] 424 ITR 219 (Bom.); viii) ACIT v/s Swiftsol India Pvt. Ltd., [2018] 171 ITD 577 (Nag. Trib.); ....
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.... done under section 153A of the Act, 1961 and the assessing officer thereafter has the jurisdiction to pass assessment orders and to assess the total income taking into consideration other material, though no incriminating material is found during the search even in respect of completed/unabated assessments. 7. At the outset, it is required to be noted that as such various High Courts, namely, Delhi High Court, Gujarat High Court, Bombay High Court, Karnataka High Court, Orissa High Court, Calcutta High Court, Rajasthan High Court and the Kerala High Court have taken the view that no addition can be made in respect of completed/unabated assessments in absence of any incriminating material. The lead judgment is by the Delhi High Court in the case of Kabul Chawla (supra), which has been subsequently followed and approved by the other High Courts, referred to hereinabove. One another lead judgment on the issue is the decision of the Gujarat High Court in the case of Saumya Construction (supra), which has been followed by the Gujarat High Court in the subsequent decisions, referred to hereinabove. Only the Allahabad High Court in the case of Pr. CIT v. Mehndipur Balaji 2022 SC....
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....ofar as pending 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 assessment year on the basis of the findings of the search and any other material existing or brought on the record of the assessing officer. (vii) Completed assessments can be interfered with by the assessing officer 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. 8. For the reasons stated hereinbelow, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the Case of Saumya Construction (supra), taking the view that no addition can be made in respect of completed assessment in absence of any incriminating material. xxxxxxxxxxxxxxxxx 11. As per the provisions of section 153A, in case of....
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....lfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the assessing officer can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under section 153A of the Act is linked with the search and requisition under sections 132 and 132A of the Act. The object of section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisiti....
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....n 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the assessing officer 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. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs. (emphasis supplied) Therefore, no addition can be made by the assessing officer in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act." 8. In this case, the addition is not based on any incriminating evidences as evident from the assessment order. All the transactions were reflected in regular books of account. No incriminating evidences were unearthed. Neither there is any statement under section 132(4) of the Act nor any corroborative evidences which goes against the assessee. Accordingly, no addition is sustainable in the absence of any incriminating document. Further, we place reliance ....
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....ari [2023] 154 taxmann.com 359 (Bom.) appeal was to be dismissed. iv) Principal CIT v Swetaben Ghanshyambhai Patel [2023] 152 taxmann. com 404 (Guj.); S. M. Kamal Pasha v. Dy. CIT [2023] 153 taxmann. com 144/454 ITR 157 (Kar.); Principal CIT v. Rajesh Mohanbhai Patel [2023] 152 taxmann.com 353/294 Taxman 279 (Guj.); Principal CIT. Kaushik Devjibhai Patel [2023] 152 taxmann.com 462 (Guj.) The assessment of the assessee for relevant assessment year was com- pleted. Subsequently, a search was conducted at premises of the assessee. In pursuance of said search Assessing Officer passed assessment order under section 143(3) read with section 153A(1)(b) and made addition under section 68 on account of alleged bogus long-term capital gain. Held that since no incriminating material was found during course of search with regard to issue of addition made in assessment order, no addition could be made in respect of completed assessment and thus, impugned addition was to be deleted. v) ACIT v. Saluja Construction Co. Ltd. [2023] 155 taxmann.com 545/295 Taxman 529 (Delhi) The assessment of the assessee for relevant assessment year was completed under section 14....
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....at the assessee could comply with said notice, same was to be set aside. ix) Principal CIT v. Shyama Power India Ltd. [2023] 154 taxmann.com 403/294 Taxman 652 (Gauhati) The authorized officer conducted a search under section 132 upon the asses- see and seized copy of the ledger account of subcontractor expenditure. For the relevant assessment year 2011-12, the Assessing Officer completed the original assessment of the assessee under section 143(1) and time limit for issuance of notice under section 143(2) had expired on the date of search. The Assessing Officer examined the ledger account of subcontractor expenditure and found entry pertaining to an account of one M in the books of assessee for the assessment year 2011-12 showing credit of Rs. 15.46 crores and the assessee did not deduct tax at source in respect of the said amount issued a notice under section 153A to the assessee to show cause as to why the amount of Rs. 15.46 crores which was credited in the account of M should not be disallowed under section 40(a)(ia). The assessee in reply to the notice submitted that there were eight Naga subcontractors who had independently carried out the works and the bil....
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....abated and it cannot be disturbed as the copy of ledger account of subcontractor expenditure seized during the search does not constitute incriminating material. In view of the above, the order of the Tribunal deserves to be upheld. Chief CIT V. R.J. Corp. Ltd. [2023] 147 taxmann.com 61 (Delhi) The Assessing Officer made assessment of the assessee for assessment year 2010-11 under section 153A and made disallowance of advertisement expen- diture and also made disallowance under section 14A. The Tribunal having noticed that said assessment was not pending as on date of search and the Assessing Officer could not show that any of these disallowances were made on basis of incriminating material found during course of search held that disallowance, which was not based on incriminating material found during course of search, could not be made basis for assessment under section 153A and deleted addition. Held that the Tribunal was right in its view. x) Principal CIT v. LKG Builders (P.) Ltd. [2023] 154 taxmann.com 188 (Delhi) Once a search takes place under section 132, notice under section 153A(1) will have to be mandatorily issued to person s....