TaxTMI 
TaxTMI 
2023 (8) TMI 1542
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....came to be issued on 05.10.2015. 3.1 The assessee filed its return of income under Section 153A of the Act on 15.12.2015 declaring total income at Rs.67,42,910/-. A notice under Section 143(2) of the Act, came to be issued on 16.12.2015, and thereafter notice under Section 142(1) of the Act alongwith a detailed questionnaire was issued to the assessee on 07.10.2016. 3.2 On verification of details of income from Long Term Capital Gain, it was noticed by the Revenue that the assessee had claimed Long Term Capital Gain of Rs.22,89,898/- for the sale of shares of M/s. Karma Industries Ltd. (formerly known as M/s. Scana Colour India Ltd.). 3.3 Vide order dated 27.12.2016, the Assessing Officer added Rs.22,89,898/- in the total income and thus, the total assessed income as per the Assessment Order was Rs.90,32,808/-. 3.4 Against the order of the Assessing Officer, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals)-12, Ahmedabad, in addition to Rs.22,89,898/- made by the Assessing Officer on account of bogus Long Term Capital Gain. Vide order dated 13.07.2022, appeal of the assessee was partly allowed and exemption claimed by the assessee under Se....
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....g the course of search and without appreciating the fact that the department is in possessing of the information regarding such accomodation entry in form of LTCG arranged by the assessee from the Kolkata based entry providing company viz. M/s. Karma Industries Ltd., which was accepted by Shri Ramesh Kumar Kaithan, one of the directors of the entry providing company i.e. M/s. Karma Industries Ltd. before the Investigation Wing? [5] Learned advocate for the appellant has taken us through the impugned decision of the learned Tribunal and has submitted that the learned Tribunal has gravely erred in not allowing the appeal of the Revenue and further submitted that the learned Tribunal has erred by holding that any addition/disallowance during the assessment under Section 153A of the Act has to be confined to the incriminating material found during the course of search under Section 132(1) of the Act. [6] It is further submitted by the learned advocate for the appellant that the learned Tribunal has erred in not appreciating that Section 153A requires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year falling within Six ....
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....h 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. Commissioner Of Income Tax v. Mehndipur Balaji, 2022 SCC OnLine All 444 : (2022) 447 ITR 517 has taken a contrary view. 7.1 In the case of Kabul Chawla (supra), the Delhi High Court, while considering the very issue and on interpretation of Section 153A of the Act, 1961, has summarised the legal position as under: Summary of the legal position 38. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153A(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 ....
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....ra) and after considering the entire scheme of block assessment under Section 153A of the Act, 1961, had held that in case of completed assessment/unabated assessment, in absence of any incriminating material, no additional can be made by the AO and the AO has no jurisdiction to re-open the completed assessment. In paragraphs 15 & 16, it is held as under: "15.On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the' assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed i....
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....f search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment, should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the as....
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....n the statute. But it has acquired a definite connotation through various judicial pronouncements. In Sir Chunilal V. Mehta & Sons Ltd. v. Century Spinning & Mfg. Co. Ltd., AIR (1962) SC 1314, this court laid down the following tests to determine whether a substantial question of law is involved. The tests are: (1) whether directly or indirectly it affects substantial rights of the parties, or (2) the question is of general public importance, or (3) whether it is an open question in the sense that issue is not settled by pronouncement of this Court or Privy Council or by the Federal Court, or (4) the issue is not free from difficulty, and (5) it calls for a discussion for alternative view. There is no scope for interference by the High Court with a finding recorded when such finding could be treated to be a finding of fact." 8. Again the Supreme Court in case of Vijay Kumar Talwar versus Commissioner of Income Tax in (2011) 330 ITR 1 considered the issue of substantial question in context of Section 260A of the IT Act and observed as under: "18. It is manifest from a bare reading of the Section that an appeal to the High Court from a decision of the Tribunal lies ....
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....erefore, depend on the facts and circumstance of each case whether a question of law is a substantial one and involved in the case, or not; the paramount overall consideration being the need for striking a judicious balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of any lis." 20. In Hero Vinoth (Minor) Vs. Seshammal (2006) 5 SCC 545, 556, this Court has observed that: "The general rule is that High Court will not interfere with the concurrent findings of the courts below. But it is not an absolute rule. Some of the well-recognised exceptions are where (i) the courts below have ignored material evidence or acted on no evidence; (ii) the courts have drawn wrong inferences from proved facts by applying the law erroneously; or (iii) the courts have wrongly cast the burden of proof. When we refer to "decision based on no evidence", it not only refers to cases where there is a total dearth of evidence, but also refers to any case, where the evidence, taken as a whole, is not reasonably capable of supporting the finding. 21. A finding of fact may give rise to a substantial ques....