TaxTMI 
TaxTMI 
2024 (12) TMI 66
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....onsolidated order are summarized below in a tabular form as under: Name of assessee Asstt. year Dt. of assessment order Assessed income Dt. of impugned appellate order of learned CIT(A) Outcome of impugned appellate order of learned CIT(A) Standard Frozen Foods Exports Pvt. Ltd. 12-13 29/12/2019 5,62,470 31/01/2022 Dismissed -Do- 13-14 29/12/2019 32,94,360 31/01/2022 Partly allowed -Do- 16-17 30/12/2019 87,42,900 31/01/2022 Partly allowed -Do- 17-18 30/12/2019 34,94,030 31/01/2022 Partly allowed -Do- 18-19 31/12/2019 2,97,93,070 31/01/2022 Partly allowed Standard Agro Vet Pvt. Ltd. 12-13 28/12/2019 47,43,180 31/01/2022 Partly allowed -Do- 13-14 29/12/2019 1,22,06,030 31/01/2022 Partly allowed -Do- 14-15 29/12/2019 72,29,750 31/01/2022 Partly allowed -Do- 15-16 29/12/2019 96,13,740 31/12/2022 Partly allowed Kamal Kant Verma 15-16 30/12/2019 68,45,160 31/01/2022 Partly allowed -Do- 16-17 30/12/2019 1,00,02,230 31/01/2022 Partly allowed -Do- 17-18 30/12/2019 92....
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....on money received us. 68 of the Income Tax Act, 1961. 6. That the assessment completed by learned assessing officer is arbitrary, prejudicial and unlawful. 7. That the learned assessing officer has erred in not providing proper and adequate opportunity to the appellant." I.T.A. No.43/Lkw/2022 "1. That the notice issued and assessment completed under section 153A of the act is invalid and unlawful being without jurisdiction. 2. That the learned assessing officer has erred in invoking section 153A of the Income Tax Act, 1961. 3. That the learned assessing officer has erred in making addition arbitrarily without any relevance or nexus to the seized material. 4. That the assessment order passed by Ld. AO is without jurisdiction and bad in law as without valid and lawful approval u/s. 153D of the Income Tax Act, 1961. 5. That the Ld. CIT (A) has erred in confirming addition of Rs. 40,80,000/- on a account of unexplained share application money received us. 68 of the Income Tax Act, 1961. 6. That the learned CIT(A) has erred in confirming addition of Rs. 43,00,000/- on account of unsecured loan as unexplaine....
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....erial. 4. That the assessment order passed by Ld. AO is without jurisdiction and bad in law as without valid and lawful approval u/s. 153D of the Income Tax Act, 1961. 5. That the Ld. CIT (A) has erred in confirming addition of Rs. 21,64,000/- on a account of unexplained share application money received us. 68 of the Income Tax Act, 1961. 6. That the assessment completed by learned assessing officer is arbitrary, prejudicial and unlawful. 7. That the learned assessing officer has erred in not providing proper and adequate opportunity to the appellant." I.T.A. No.47/Lkw/2022 "1. That the notice issued and assessment completed under section 153A of the act is invalid and unlawful being without jurisdiction. 2. That the learned assessing officer has erred in invoking section 153A of the Income Tax Act, 1961. 3. That the learned assessing officer has erred in making addition arbitrarily without any relevance or nexus to the seized material. 4. That the assessment order passed by Ld. AO is without jurisdiction and bad in law as without valid and lawful approval u/s. 153D of the Income Tax Act, 1961. ....
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....nd adequate opportunity to the appellant." I.T.A. No.50/Lkw/2022 "1. That the notice issued and assessment completed under section 153A of the act is invalid and unlawful being without jurisdiction. 2. That the learned assessing officer has erred in invoking section 153A of the Income Tax Act, 1961. 3. That the learned assessing officer has erred in making addition arbitrarily without any relevance or nexus to the seized material. 4. That the assessment order passed by Ld. AO is without jurisdiction and bad in law as without valid and lawful approval u/s. 153D of the Income Tax Act, 1961. 5. That the Ld. CIT (A) has erred in confirming addition of Rs. 45,00,000/- on a account of unsecured loan us. 68 of the Income Tax Act, 1961. 6. That the assessment completed by learned assessing officer is arbitrary, prejudicial and unlawful. 7. That the learned assessing officer has erred in not providing proper and adequate opportunity to the appellant." I.T.A. No.51/Lkw/2022 "1. That the notice issued and assessment completed under section 153A of the act is invalid and unlawful being without jurisdictio....
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....icer is arbitrary, prejudicial and unlawful as no addition can be made merely on doubt or presumption without any bringing any positive evidences. 4. That the learned assessing officer has erred in not providing proper and adequate opportunity to the appellant." I.T.A. No.54/Lkw/2022 "1. That the notice issued and assessment completed under section 153A of the act is invalid and unlawful being without jurisdiction. 2. That the learned assessing officer has erred in invoking section 153A of the Income Tax Act, 1961. 3. That the learned assessing officer has erred in making addition arbitrarily without any relevance or nexus to the seized material. 4. That the assessment order passed by Ld. AO is without jurisdiction and bad in law as without valid and lawful approval u/s. 153D of the Income Tax Act, 1961. 5. That the Ld. CIT (A) has erred in confirming addition of Rs. 2,00,000/- on a account of unsecured loan us. 68 of the Income Tax Act, 1961. 6. That the Ld. CIT (A) has erred in confirming disallowance on account of interest on unsecured loan of Rs. 789/-. 7. That the assessment completed by learned a....
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....lawful being without jurisdiction. 2. That the learned assessing officer has erred in invoking section 153A of the Income Tax Act, 1961. 3. That the learned assessing officer has erred in making addition arbitrarily without any relevance or nexus to the seized material. 4. That the assessment order passed by Ld. AO is without jurisdiction and bad in law as without valid and lawful approval u/s. 153D of the Income Tax Act, 1961. 5. That the Ld. CIT (A) has erred in confirming addition of Rs. 8,90,000/- on a account of unsecured loan us. 68 of the Income Tax Act, 1961. 6. That the Ld. CIT (A) has erred in confirming disallowance on account of interest on unsecured loan of Rs. 1,71,382/-. 7. That the assessment completed by learned assessing officer is arbitrary, prejudicial and unlawful. 8. That the learned assessing officer has erred in not providing proper and adequate opportunity to the appellant." I.T.A. No.58/Lkw/2022 "1. That the notice issued and assessment completed under section 153A of the act is invalid and unlawful being without jurisdiction. 2. That the learned assessing officer has....
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.... Copy of decisions of Hon'ble Supreme Court on the issue of assessment completed under section 153A of the Act, in absence of incriminating material: -Saroj Sudhir Kothari dated 7th August, 2023 -M/s King Buildcon (P) Ltd. dated 10th July 2023 -M/s Jay Ambey Aromatics dated 24th November, 2023 -M/s Abhisar Buildwell (P) Ltd. dated 24th April, 2023 3. Copy of decisions of Hon'ble High Court where the courts have held that statement under section 132(4) of the Act does not constitute incriminating material found during the course of search: -Shiv Kumar Agarwal (Del. HC) dated 28th July, 2022 -Anand Kumar Jain (Del. HC) dated 12th February, 2021 -Best Infrastructure (India) (P) Ltd. dated 1st August, 2017 -Divya Exim (P) Ltd. dated 15th January, 2023 4. Copy of statement of Sachin Verma recorded under section 132(4) of the Act, dated 12/01/2018 5. Copy of tabular chart containing details of approval of case by Additional CIT (Central), Kanpur along with approval letters 6. Copy of decisions on the issue of statutory approval by Addl. CIT under section 153D of the Act: -Subodh Agarwal (All. HC) dated 12th December 2022 -M/s ....
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....Standard Agro Vet Pvt. Ltd. along with supporting documents 24. Copy of Form No. PAS-3 return of share allotment in the case of Standard Agro Vet Pvt. Ltd. (B.1) Moreover, written submissions in two parts were filed from the assessee's side which are reproduced below for the ease of reference: (B.1.1) Sub: Written Submissionin the case of : Standard Frozen Foods Export Pvt Lt - ITSSA 41-44/Lkw/2022 for AY 2012-13, AY 2013-14, AY 2016-17 & AY 2017-18 and ITA 45/Lkw/2022 for AY 2018-19 Standard Agro Vet Pvt Ltd- ITSSA 46-49/Lkw/2022 for AY 2012-13, AY 2013-14, AY 2014-15 and AY 2015-16 Kamal Kant Verma- ITSSA 50-52/Lkw/2022 for AY 2015-16, AY 2016-17 & AY 2017-18 and ITA 53/lKw/2022 for AY 2018-19 Sachin Verma- ITSSA 54-58/Lkw/2022 for AY 2012-13, AY 2014-15, AY 2015-16, AY 2016-17 & AY 2017-18 and ITA 59/Lkw/2022 for AY 2018-19 In connection to the above, the appellant humbly submits before your honour as under: 1. That the search and seizure operation u/s 132 was carried out on 10.01.2018 in the Rustom Foods Group of cases alongwith the appellant group of cases u/s 132 of the IT Act, 1961. The case was centralized u/s 127 dat....
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....IT in two days, 48 cases on 27.12.2019 and 62 cases on 28.12.2019. It is even humanly not possible to go through exhaustive assessment records and search & seizure material of 110 cases. (Pg 76-84 of PB Vol-1) * Approval No. 1490 requested by AO on 28.12.2019 and approved by Addl.CIT on the same day i.e. 28.12.2019 consisting of 16 cases (appellant cases from sl. no. 1 to 14) whereas approval no.1488 requested by ld.AO on 26.12.2019 approved by Addl.CIT on the next day i.e. 27.12.2019 consisting of 15 cases (appellant cases from sl. no. 6 to 15). (Pg 83 and 80 of PB Vol- 1) * Draft Assessment Order sent by AO for approval to Addl.CIT at the fag end of assessment proceeding on 26.12.2019 and 28.12.20219 getting barred on 31.12.2019 * Addl.CIT failed to discharge mandatory and statutory obligation to protect appellant/assessee from arbitrary or unjust exercise of discretion by AO and failure to provide fair search assessment being the very intention and purpose of section 153D statutory approval introduced by legislature in its wisdom to cast obligation upon JCIT in search assessment for the following reasons in the case of appellant: - Mistake com....
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....es and supporting documents filed, seized material and the conduct of assessment proceeding by the ld.AO as submitted above and failed to protect the taxpayer against arbitrary or unjust exercise of discretion by the AO for which provision u/s 153D has been introduced and also by common approval instead of each assessee assessment year wise on the same day and next day respectively to 110 cases which is also in violation of requirement u/s 153D of the IT Act, 1961 only for the sake of providing administrative approval at the fag end of assessment proceeding on 27.12.2019 and 28.12.2019 for completion of assessment proceeding getting time barred on 31.12.2019. Reliance is placed upon Jurisdictional Allahabad High Court in the case of PCIT vs. Subodh Agarwal, ITA 86 of 2022 dated 12.12.2022, recent decision in the case of KhodayEhshwarsa and Sons vs. DCIT, ITA 1079 & 1080/Bang/2024 dated 20.09.2024, I.T.A. No.1813/Del/2019 in the case of Sanjay Duggal and Others and Hon'ble Lucknow Tribunal in the case of Quality Structure Pvt Ltd. vs. DCIT, CC-2, Kanpur, ITSSA 679 & 680/Lkw/2019 dated 30.09.2024. ISSUE OF ASSESSMENT FRAMED U/S 153A IN ABSENCE OF INCRIMINATING MATER....
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....ddition can be made in absence of incriminating material found during search on the basis of statement recorded u/s 132(4) of the IT Act, 1961. Sl.No. 14 to 16:In these cases no incriminating material was found during search and the addition has been made on account of unsecured loan received during the year on the basis of statement recorded u/s 132(4) of the brother of the appellant during search and that no confirmation or statement to confront the same was done during search or assessment proceeding. Reliance is placed upon the decision of Delhi High Court in the case of PCIT vs. Shiv Kumar Agarwal, ITA No 231 of 2022 dated 28.07.2022, PCIT vs. Anand Kumar Jain (2021) 432 ITR 384 dated 12.02.2021, Best Infrastructure India (P.) Ltd [2017] 397 ITR 82 (Delhi) and recent decision in the case of Dviya Exim (P) Ltd v. DCIT, ITA 7442, 5952 & 5957 (Delhi) of 2018 dated 15.01.2024in which the Hon'ble Court held that no addition can be made in absence of incriminating material found during search on the basis of statement recorded u/s 132(4) of the IT Act, 1961. * In view of above, the appellant prays and request before your honour to quash the assessment order framed ....
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.... - also that the ld.AO consequent to search assessment completed has made several rectification of assessment orders, accepting the mistakes committed in completing the assessment hurriedly of which details where already available on record, meaning that the ld.AO has overlooked the documents already available on record.(copy of seven rectification orders u/s 154 on page 164-179 of PB Vol-1) The Addl.CIT while giving approval to the cases on the same day or next day where the approval were given to 110 cases, failed to apply mind to the facts of the case, the assessment proceeding conducted by the AO, the issue in appraisal, seized documents and replies alongith supporting documentary evidences filed the by appellant which is the very intent of section 153D entrusted upon the JCIT to protect the taxpayer against arbitrary or unjust exercise of discretion by the AO. 5. Now, the appellant humbly submits before your honour that before going to legal issue involved, it is important to understand the background of the assessment and its relevant timelines in which assessment proceeding has been conducted and completed by the ld.AO and approved by the ld.Addl.CIT. Tha....
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....ll as Central Agra under which Central Kanpur- DCIT, Central Circle-1, Kanpur (Search Group- SatvikPolychem Group of Cases, Rajendra Chabra Group of Cases, Shyam Leela Fashion Group of cases and Som Arora Group of Cases) were time barring on 31.12.2019 and with DCIT, Central Circle-2, Kanpur (Search Group- Rustom Food Group of Cases, Standard Frozen Group of Cases, Shatabdi Group of Cases and Vivek Agarwal Group of Cases) were time barring on 31.12.2019 and that under Central Agra - DCIT, Central Circle, Agra (Search Group- BNR Overseas Group of Cases) was time barring on 31.12.2019. Therefore, from the above, it is very humbly submitted that as many as nine search group of cases required statutory approval of Addl.CIT of whose search assessment were time barring on 31.12.2019 among which the appellant cases alongwith others upto 110 cases were approved on the same day or the next day at the fag end of assessment proceeding without application of mind for the sake of administrative approval for completion of assessment. 7. The appellant from the above humbly submits before your honour that the provision of section 153D has been specifically incorporated in the Sta....
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....ut which the approval is mechanical and the order passes in consequence to mechanical approval u/s 153D invalid and without jurisdiction. 10. The provision of section 153D is being reproduced for your honour perusal as under: "Prior approval necessary for assessment in cases of search or requisition. 153D.-No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of [sub-section (1) of] section 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner. Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the [Principal Commissioner or] Commissioner under sub-section (12) of section 144BA." 11. That the approval granted by the JCIT as required u/s 153D has been granted mechanically by the approving authority only for the sake of formality as being one of the mandatory requirement before co....
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....tection to the taxpayer against arbitrary or unjust exercise of discretion by the AO. The approval granted under section 153D of the Act should necessary reflect due application of mind and if the same is subjected to judicial scrutiny, it should stand for itself and should be self-defending. 15. It is apparent that the purpose behind the enactment of the above provision in the statute by the Parliament is two-folds. Firstly, the approval of the senior authority will ensure that the assessee is not prejudiced by the undue or irrelevant addition or assessment. Secondly, the approval by the senior authority will also ensure that proper enquiry or investigations are carried out by the assessing authority. Thus, the above provision provides for the mental application of a senior officer of the Department, which in turn, provides safeguard to both i.e., Revenue as well as the assessee. Therefore, this important provision laid down by the legislature cannot be treated as a mere empty formality. If the approval is granted by the superior authorities in a mechanical manner without application of mind then the very purpose of obtaining approval is defeated. The power to grant appro....
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....ch assessment year" falling within six assessment years (and for the relevant assessment year or years), referred to in clause (b) of sub-section (1) of section 153A. The proviso to section 153A further provides for assessment of the total income in respect of each assessment year falling within such six assessment years (and for the relevant assessment year or years). The careful and conjoint reading of section 153A(1) and section 153D leave no room for doubt that approval with respect to "each assessment year" is to be obtained by the Assessing Officer on the draft assessment order before passing the assessment order under section 153A. The relevant finding of the Hon'ble High Court is reproduced as under: 8. The submission is that the substantial question of law which arises for consideration before this Court is about the justification of the act of the Tribunal in ignoring the findings recorded by the Assessing Officer and setting-aside the assessment order on the sole ground of defect in the approval to the draft assessment order granted by the competent Approving Authority. Learned counsel for the Assessee, however, defended the order of the tribunal for th....
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.... 11. The Tribunal while quashing the assessment order had relied upon its earlier decision in Navin Jain and Others (supra) wherein a detailed discussion has been made with regard to the requirement of prior approval of superior authority on the draft assessment order under section 153D, before passing the assessment order by the Assessing Officer. It was noted that the word 'approval' though has not been defined in the Income-tax Act but the general meaning of the word 'approval' in Black's Law Dictionary, 6th Edition was to be seen. The decision of the Apex Court in Vijayadevi Naval Kishore Bharatiav. Land Acquisition Officer (2003) 5 SCC 83 wherein the distinction between Approving Authority and Appellate Authority was drawn, had been noted. The decision of the High Court of Gauhati in Dharampal Satyapal Ltd.v. Union of India [2019] 366 ELT 253 has been noted to record that grant of approval means due application of mind on the subject matter approved which satisfies all the legal and procedural requirements. There is an exhaustive discussion on the requirement of prior approval under section 153D of the Act and it was noted that the requirement of a....
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....tion 153A of the Act. 15. It was observed that this is an important concept mentioned in section 153A of the Act, which is peculiar to the scheme of the said section. Keeping in view of this basic fundamental features of section 153A, if section 153D is scrutinized, then, it would become manifest that an important phrase is employed in the text of section 153D, which is "each assessment year". The reading of the provisions in section 153A and 153D conjointly makes it clear that separate approval of draft assessment order for each year is to be obtained under section 153D of the Income-tax Act. In its erudite judgement with the discussion on the legislative intent of sections 153A to 153D and the meaning of the "approval" as defined in Black's Law Dictionary as also the decisions of the Apex Court in the case of Sahara India(Firm)v. CIT [2008] 169 Taxman 328/300 ITR 403 where the discussion on the requirement of prior approval of Chief Commissioner or Commissioner in terms of provision of section 142(2A) of the Act had been made, it was noted that the Apex Court has held therein that the requirement of previous approval of the Chief Commissioner or Commissioner in terms....
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....s pre-requisite to pass an order of assessment or re-assessment. Section 153D requires that the Assessing Officer shall obtain prior approval of the Joint Commissioner in respect of "each assessment year" referred to in clause (b) of sub-section (1) of section 153A which provides for assessment in case of search under section 132. Section 153A(1)(a) requires that the assessee on a notice issued to him by the Assessing Officer would be required to furnish the return of income in respect of "each assessment year" falling within six assessment years (and for the relevant assessment year or years), referred to in clause (b) of sub-section (1) of section 153A. The proviso to section 153A further provides for assessment of the total income in respect of each assessment year falling within such six assessment years (and for the relevant assessment year or years). 19. The careful and conjoint reading of section 153A(1) and section 153D leave no room for doubt that approval with respect to "each assessment year" is to be obtained by the Assessing Officer on the draft assessment order before passing the assessment order under section 153A. 20. In the instant case, the draft....
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....ach" assessment year for "each" assessee and on the same day. 19. The entire gamete of law, as contemplated u/s 153D of the Act, has been considered by Delhi Bench of the Tribunal in a bunch of 52 appeals in I.T.A. No.1813/Del/2019 in the case of Sanjay Duggal and Others wherein the Hon'ble Bench vide order dated 19/01/2021 has quashed the assessment orders by holding that the approval granted u/s 153D of the Act was in a mechanical manner and thus cannot be held to be an approval as required u/s 153D of the Act. The relevant findings of the Tribunal are contained in para 11 onwards, which for the sake of completeness are reproduced below: "11. We have considered the rival submissions and perused the written submissions filed by the parties and considered the material on record. It is an admitted fact that search and seizure action were carried-out in the cases of the assessees on 29.12.2015. Section 153A have been inserted into the Income Tax Act w.e.f. 01.06.2003. Prior to that there were provisions contained under section 158BC being the special procedure for assessment of search cases. Thus, the provisions of Section 153A to 153D are applicable in the case....
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....n Section 153A which shall have to be satisfied by the A.O. before proceeding to frame assessment in the cases of persons searched under section 132 of the I.T. Act, 1961. Further safeguard have been provided for framing the assessments under section 153A that prior approval shall be necessary for assessments in the cases of the search or requisitioned, under section 153D of the IT. Act. Section 153D of the I.T. Act is reproduced as under : "153D - No Order of assessment or re-assessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in Clause (b) of Sub-Section (1) of Section 153A or the assessment year referred to in Clause (b) of sub-section (ii) of Section 153B except with the prior approval of the Joint Commissioner. "Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the Commissioner under subsection (12) of section 144BA.". 11.1. It is an admitted fact that in all the above appeals assessments under section 153A have been fra....
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....uthority in what beneficial to accept/ appreciate tine material on record in regard to the compensation payable. Otherwise, it would tantamount to blurring the distinction between Approving Authority and Appellate Authority''. 11.5. The Hon'ble Gauhati High Court in the case of Dharampal Satyapal Ltd., vs., Union of India [2019] 366 ELT 253 (Gau.) Manu/GH/07070/2018 in para-28 has held as under: "When an Authority is required to give his approval, it is also to be understood that such Authority makes an application of mind as to whether the matter that is required to be approved satisfies all the requirements of Law or procedure to which it may be subjected. In other words, grant of approval and application of mind as to whether such approval is to be granted must co- exist and, therefore, where an Authority grants an approval it is also to be construed that there was due application of mind that the subject matter approved and satisfies all the legal and procedural requirements." 11.6. Therefore, in the cases of search, assessment orders whether framed under section 153A or 153C, the Joint Commissioner [Approving Authority] is required to see....
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....he sake of giving approval for completion of assessment by way of common approval for multiple assessee and assessment years instead of each assessment as mandatorily required by the law. 21. In view of above, the appellant humbly submits and request before your honour to quash the assessment order as the assessment has been framed in violation to mandatory and statutory requirement of approval to be given by the Addl.CIT, Central being Approving Authority u/s 153D of the IT Act, 1961 without application of mind to the facts of the case, replies and supporting documents filed, seized material and the conduct of assessment proceeding by the ld.AO as submitted above and failed to protect the taxpayer against arbitrary or unjust exercise of discretion by the AO for which provision u/s 153D has been introduced and also by common approval instead of each assessee assessment year wise on the same day and next day respectively to 110 cases which is also in violation of requirement u/s 153D of the IT Act, 1961 only for the sake of providing administrative approval at the fag end of assessment proceeding on 27.12.2019 and 28.12.2019 for completion of assessment proceeding getting t....
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....2 2015-16 Standard Agro-Vet Pvt. Ltd Yes No 9 ITSSA 55/LKW/2022 2014-15 Sachin Verma Yes No 10 ITSSA 57/LKW/2022 2016-17 Sachin Verma Yes No 11 ITSSA 54/LKW/2022 2012-13 Sachin Verma Yes No 12 ITSSA 56/LKW/2022 2015-16 Sachin Verma Yes No 13 ITSSA 58/LKW/2022 2017-18 Sachin Verma Yes No 14 ITSSA 50/LKW/2022 2015-16 Kamal Kant Verma Yes No 15 ITSSA 51/LKW/2022 2016-17 Kamal Kant Verma Yes No 16 ITSSA 52/LKW/2022 2017-18 Kamal Kant Verma Yes No 23. On the basis of above tabular chart Income Tax Appeal and the appellant wise categorisation of appellant with legal issue and its judicial precedence has been made as following: Sl. No 1 to 10 : In these cases no incriminating material was found during search and the addition has been made on account of share application received during the year. Reliance is placed upon the decision of Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax, Central-3 v. AbhisarBuildwell (P.) Ltd. [2023] 454 ITR 21....
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....lain reading of Section 153A of the Act, 1961, it is evident that once search or requisition is made, a mandate is cast upon the AO to issue notice under section 153 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. Section 153A of the Act reads as under: "153A. Assessment in case of search or requisition - (1) Notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, Section 151 and Section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132-A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the ....
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....in the period of six assessment years pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. As per subsection (2) of Section 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the 'total income' for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. The....
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....ion with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and subsection (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, 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) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; (iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the ....
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....) * Recent decision in the case of Dviya Exim (P) Ltd v. DCIT, ITA 7442, 5952 & 5957 (Delhi) of 2018 dated 15.01.2024 In the case of PCIT vs. Shiv Kumar Agarwal, ITA No 231 of 2022 dated 28.07.2022, the Hon'ble Delhi High Court has held that where pursuant to search conducted upon a company, AO invoked proceedings under section 153A against assessee and made addition treating exempt capital gain under section 10(38) shown by assessee on sale of shares of said company as unexplained credit under section 68, since assessment with respect to relevant assessment year already stood completed as on date when notice under section 153A was issued to assessee and above said addition was not based on any incriminating material found during course of search and AO had made additions solely relying on disclosures made by MD of a company on which search was conducted, impugned addition was unjustified. The decision of the Hon'ble Court is reproduced as under: 1. The present Income-tax Appeal arises out of the impugned order passed by the Income-tax Appellate Tribunal (hereinafter referred to as 'ITAT'), Delhi in Raj Gopal Agarwal v. Asstt. CIT [IT App....
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....was claimed by the assessee as an exempt income under section 10(38) of the Act. The Assessing Officer (AO) relying upon the letter dated 31st July, 2015 and statement by Sh. Madho Gopal Agarwal dated 3rd August, 2015 held that the amount of gain of Rs. 3,61,496/- is an accommodation entry, therefore, rejected the return filed by the assessee and treated the amount of Rs. 3,61,496/- as an unexplained credit received by the assessee under section 68 of the Act and added the same to the total income of the assessee. 3. The assessee filed an appeal against the aforesaid order of the AO dated 28th December, 2017 before CIT(A). The assessee raised a specific ground that the assessment with respect to the AY 2011-12 stood completed as on the date when notice under section 153A of the Act was issued to the assessee. The assessee submitted that no incriminating evidence or document was found during the search proceedings for the relevant assessment year. The assessee further contended that the statement of Sh. Madho Gopal Agarwal recorded under section 132(4) of the Act during the search proceedings does not constitute as incriminating material. The assessee further relied upon th....
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..... Anu Aggarwal was confronted with A-1, A-4 and A-11 he explained that these documents did not pertain to any undisclosed income and had, in fact been accounted for. Even these, therefore, could not be said to be incriminating material qua each of the preceding AYs." 5. The appellant has filed the present appeal aggrieved by the aforesaid order of the tribunal. 6. It is contended before us that the ITAT fell in error in holding that there was no corroborative material in support of the statement made by Sh. Madho Gopal Agarwal, in this regard, it was contended that in pursuance to the statement made by Sh. Madho Gopal Agarwal, various other members of the family disclosed LTCG and did not claim exemption under section 10(38) of the Act and paid taxes on the said amount. It was, thus, submitted that in view of the statement of Sh. Madho Gopal Agarwal and the corroborative conduct of the other family members, the ITAT fell in error and the reliance placed on the judgment of this Court in Best Infrastructure India (P.) Ltd. (supra) is erroneous. 7. The addition has been made by the AO with respect to the LTCG earned on sale of shares of M/s KGN Industries Li....
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....aw 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 153 A (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 AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post....
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....Y 2012-13, AY 2014-15, AY 2015-16, AY 2016-17 & AY 2017-18 and ITA 59/Lkw/2022 for AY 2018-19 [Page No. 39-51] Standard Frozen Foods Export Pvt Lt - ITSSA 41-44/Lkw/2022 for AY 2012-13, AY 2013-14, AY 2016-17 & AY 2017-18 and ITA 45/Lkw/2022 for AY 2018-19: The appellant humbly submits before your honour that in the above appeal, the issues on account of which addition has been made by the ld.AO is on account of share application in the AY 2012-13, AY 2013-14, AY 2016-17 & AY 2017-18 totaling to Rs. 76,65,000/- and unsecured loan of Rs. 43,00,000/- in AY 2016-17 and on the basis of LP-5 page 44 found with the third party of Rs. 80,76,000/- in the AY 2018-19 which has been confirmed by the Ld. CIT(A). Share Application- A.Y AY 2012-13, AY 2013-14, AY 2016-17 & AY 2017-18: In respect of addition in A.Y AY 2012-13, AY 2013-14, AY 2016-17 & AY 2017-18 on the issue of share application, the appellant humbly submit the appellant company was in its initial stage where the share capital was raised from number of persons/subscribers in small amount in cash and cheque who have been subsequently allotted shares. The appellant during the assessment proceedin....
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.... with the third party of Rs. 80,76,000/- in the AY 2018-19: 01. it is undisputed fact that alleged document/ paper was not found from the possession of appellant. In other words alleged paper was found from the possession of the third parties. 02. That this alleged paper is not part of the books of accounts. 03. That this alleged paper is not written by assessee and who has written/ maintained this paper does not known to appellant. 04. That appellant has no business transaction with Mr. Saleem Qureshi. It is fact that assessee has business relation with M/s Rushtam Foods Pvt. Ltd only. Merely in the last page of alleged documents, name of appellant company is mentioned does not alone make accountable for the documents written in the back of assessee. 05. Your honour may please very kindly be appreciate that during the course of search operation in the appellant group of cases, no evidence/ documents indicating alleged payment / receipts were found. 06. That every person is free to think, write anything at his own choice and only he is accountable for that thing. No other person can be made accountable for the act of another per....
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....m Qureshi for confrontation of facts but the said requests was not entertained 11. The legal effect of the statement recorded behind the back of the assessee and without furnishing the copy thereof to the assessee or without giving an opportunity of cross-examination, no addition could be made as it will be amount to violation of principles of natural justice. No addition can be made only the basis of presumptions. 12. Your honour may please very kindly be appreciate that no addition could be made merely on the basis of documents collected behind the back of assessee and statements of third parties recorded during search on another person unless the assessee is confronted with those statements/ documents, and without affording opportunity for cross examination. 13. It was held in the case of Paul Mathews & Sons v. CIT reported in 263 ITR 101 (Ker) apex court judgment reported in 91 ITR 18 (SC) and CIT v. S. Khader Khan Son reported in 300 ITR 157 (Mad) no addition is called for also involved of CBDT Instruction. Section 133A of the Act empower any authority to examine any person on oath, and such statement has on evidentiary value and any admission made d....
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....Delhi High Court has held as under:- "That the revenue has to prove the undisclosed income beyond doubt. Further it was held that the document should be a speaking one and it should contain narration in respect of various figures noted therein. Otherwise the same should be considered as dumb document on which reliance could not placed upon." 18. Your honour may please very kindly be appreciate that without collecting any evidence and bringing the same on record, no addition cannot be made on loose sheet / dumb documents found from the possession of third party, that too on the basis of estimation/ extrapolation. Reliance is placed on the followings decisions: i) Common Cause v/s Union Of India, 77 taxmann.com 245 (SC); ii) CIT v/s JayabenRatilalSarothiya, 222 taxman 64 (Guj.); iii) Uday C. Thmhankan v/s DCIT, 174 TTJ 151 (Mum.); and iv) Dr. M.K.E. Menon, 248 ITR 310 (Bom.). Standard Agro Vet Pvt Ltd- ITSSA 46-49/Lkw/2022 for AY 2012-13, AY 2013-14, AY 2014-15 and AY 2015-16 The appellant humbly submits before your honour that in the above appeal, the issue on account of which addition has been made by the ld.AO....
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.... invest in share application of the company to become shareholder of that company whereas as regard to the share application money above 2,00,000/- the PAN and Bank Statement has also been provided which are enclosed in the paperbook vol2 part 2 page 312-566. As regard to Unsecured Loan of Rs. 6,00,000/- in AY 2012-13, the appellant humbly submits that the this is not share application from S.K.Nigam but unsecured loan which has been repaid. The copy confirmed copy of account, ITR, acknowledgement from S.K. Nigam and bank reflecting reparyment is enclosed in the paperbook at page 343-347 of PB Vol2- Part2. Kamal Kant Verma- ITSSA 50-52/Lkw/2022 for AY 2015-16, AY 2016-17 & AY 2017-18 and ITA 53/lKw/2022 for AY 2018-19 The appellant humbly submits before your honour that in the above appeal, the issue on account of which addition has been made by the ld.AO is on account of unsecured loan in the AY 2015-16, AY 2016-17 & AY 2017-18totaling to Rs. 1,55,11,100/- and Rs. 3,45,00,000/- in AY 2018-19 on the basis of LP 5 Page 32which has been confirmed by the Ld. CIT(A). Unsecured loan in the AY 2015-16, AY 2016-17 & AY 2017-18 totaling to Rs. 1,55,11,10....
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....the Income Tax Act, 1961. In this regards appellant respectfully submitted that paper seems printout taken from of tally accounting software and is account ledger named Net Profit MBM Sales (GST Exempted) for the period 30.04.2017 to 31.12.2017 containing 10 entries on monthly basis. It is also important to address being doubtful as to whether the printout being taken as LP 5 Page 31 & 32 are from the tally computer of Standard Frozen Foods Export Pvt Ltd, Unnao which the department is claiming or mischievously kept or provided by someone to the department. 02. This paper contains details of cash sales on the very last day of the every month with narration Being Net Profit Received. 03. Except to only this tally printout, no other documents/ slip/evidence with regards income/ outgoing justifying actual sales was found. That in this alleged Loose paper neither detail of purchase nor detail of sale is mentioned. To earn actual profit, purchases and sales must existed and established because no one has to earn income without these transactions, closely associates to any business entities. In this paper neither name of item supplied nor in what weight, the it....
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....al Area, Unnao which does not belongs to appellant. This address is factory premises of Standard Frozen Foods Exports Pvt Ltd and thus this paper was not found from the possession of appellant. 07. That during the course of assessment proceeding, assessee has filed detailed submissions on the query raised along with supporting evidences and explanations but the ld. AO disregarded the same and has come to conclusion with predetermined and preconceived mind of making addition on the basis of investigation report, solely considering amount of surrender made in the statements recorded u/s 132(4) of Sachin Verma without bringing any evidence to disregards the explanations/ submissions and without establishing with corroborative evidences whether the alleged transactions having been actually carried out or not. 08. It Is fact that in statement recorded u/s 132(4) Sachin Verma has surrendered certain sum but the same was retracted giving detailed reasons by him. Your honour may appreciate that after getting the photocopy of the seized documents and their verification with reference to the books of account, since no discrepancy was noticed, no undisclosed income was offer....
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....nd observed that even if such entries are admissible under the said provisions to support an inference about correctness of the entries still such entries would not suffice without supportive independent evidence. They have no probative value in the absence of some corroborative primary evidence of the reality of such transaction shown in the noting in such loose sheets of paper. Even entries in the books of account need corroboration before acting against the third party on the basis of any entry in the books of account of a person. Any presumption of transaction on some vague, tenuous and dubious entries in a sheet of paper is not rational and hence legal unless there is corroboration by corresponding entry in regular accounts of both the parties to the transaction. 12. That all these things clearly suggests that this paper is nothing but a dumb paper having no reality and cannot be considered as evidence against appellant and no addition could be made on the basis of such dumb paper. It seems that this ledger was prepared by some frustrated person only with intent to deceive the appellant and thus no addition could be made on the basis of such dumb paper without collect....
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.... * The CBDT must issue immediate instruction to the effect that no raiding party should obtain any surrender whatsoever. * Where, a taxpayer desire to voluntarily make a disclosure, he should be advised to make so after the search. * All cases where surrender is obtained during the course of the search in violation of the instruction of the CBDT, the leader of the raiding party be subjected to vigilance enquiry. * All statements recorded during the search should be Video recorded. Subsequently, CBDT also issued another letter [F.NO.286/98/2013-IT (INV.II)], DATED 18-12-2014, emphasizing upon the need to focus on gathering evidences during Search/Survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence. The letter is being reproduced herein under:- "SECTION 132, READ WITH SECTION 133A OF THE INCOME-TAX ACT, 1961 - SEARCH & SEIZURE - ADMISSIONS OF UNDISCLOSED INCOME UNDERCOERCION/PRESSURE DURING SEARCH/SURVEY LETTER [F.NO.286/98/2013-IT (INV.II)], DATED 18-12-2014 Instances/complaints of undue influence/coercion have come to notice of the CBDT that some assessees were....
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....ission being not conclusive:- The settled principle of law suggests that a confession of an accused would need corroboration with evidences to convict the accused. It is a matter of acceptance that though an admission is an important piece of evidence but it is not conclusive and it is open to the assessee to show that it is incorrect. At this stage, it shall not be out of place to quote the verdict of Hon'ble Supreme Court of India in case of Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 wherein their Lordships while observing that admission is an extremely important piece of evidence, held that, it cannot be said to be conclusive and the maker can show that it was incorrect. The landmark verdict was followed by the Hon'ble Delhi High Court of Delhi in case of S. Arjun Singh v. CWT [1989] 175 ITR 91. Further reliance can also be placed on the judgement of the apex court in case of NagubaiArmul V. B Sharma Rao AIR 1956 SC 100 wherein it was held that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the assessee who made the admission to show that it is incorrect. I....
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....tatement of the appellant under undue coercion contrary to the fact. The appellant has filed details of the unsecured loan comprising of ledger account, PAN, ITR & Bank Statement have been filed and appearing in the paperbook vol 2 part 1 from page 2 to 43 fulfilling the requirement of section 68 three ingredients i.e. identity, genuineness and creditworthiness. In view of above, the appellant humbly request your honour to kindly delete the addition made on the basis of statement recorded without any incriminating material was found during search nor any corroborative evidence to support the allegation brought on record during the assessment proceeding by the ld.AO. ADDITION OF Rs. 4,00,000/- IN AY 2014-15 ON OF DIFFERENCE IN VALUE OF PROPERTY U/S 56(2)(vii) OF THE IT ACT, 1961: 1. That appellant re-producing the provisions of section 56(2)(vii)(b) for ready reference as under : - (b) any immovable property,- i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; ii) for a consideration which is less than the stamp duty value of the property by an am....
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....he terms "cost", "price" and "value". As a matter of fact, a price indicates a fact that has already occurred in practice, a completed affair after a property has been, or agreed to be sold. On the other hand, "value" indicates the estimation of a probable price of the property concerned. The value of a property cannot be stated in an abstract form and it varies from time to time and can only be stated with reference to so many factors, i.e. the locality, situation, general appearance in the area, availability of shopping and marketing facilities, condition of public ways and transportation, availability of utilities, and many other things. As far as "cost" is concerned, it indicates cost to the purchaser for the purchase of the property after the purchase has been completed or agreed to. The provisions of sec. 56 of the Act state the fair market value and value is estimation of a probable price of the property, i.e. the deeming fiction. 5. The value of a property cannot be stated in an abstract form and it varies from time to time and can only be stated with reference to so many factors, i.e., the locality, situation, general appearance in the area, availability of shoppi....
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....he Assessing Officer to prove that the assessee had, in fact, made investments over and above that recorded in the books in the year under consideration. 10. Your honour may please very kindly be appreciate that no addition could be made solely on presumption without affording reasonable opportunity to the appellant and without fallowing the provisions of section section56(2)(x)(B)as amended. There is no presumption under Law that the difference between the actual purchase price and the stamp duty value would be unaccounted investment by the purchaser. In view of the above, it is prayed that addition made by AO may please very kindly be deleted as:- i) No evidence either at the time of search or at the time of assessment was found that appellant has paid any extra amount other than actual price. ii) No opportunity has been allowed to appellant before making addition. iii) The AO has failed to fallow the provisions of section 56(2)(x)(B), as amended, as the provisions is curative in nature and must be adhered. ADDITION OF Rs. 2,60,00,000/- IN AY 2018-19 ON THE BASIS OF LP 5 PAGE 31: In respect of addition of Rs. 2,60,00,....
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....e course of search, except to this alleged paper, no other single document evidencing the activities actually to have been carried out was found. Your honour may appreciate that to earn income of Rs. 37 lacs to 60 lacs in a single day, there must be sale at least 2,46,00,000/- to 4,00,00,000/-in that day if the profit rate is assumed being 15%. The rate of MBM is approx.35000/- PMT meaning thereby at least goods to the extents of 700 Ton to 1140 Ton must have been supplied. The truck capacity is approx. 15 MT thus at least 50 to 76 trucks must be required. Further no stock was found undisclosed in the hand of assessee and all these things clearly supports that this paper was prepared by someone only with intent to mischief the appellant. Your honour may please very kindly be appreciate that department has carried out action u/s 132 covering business as well as residential premises and except to this alleged seized document, no other evidence with regards to fallowing transactions which is integral part of business ,were found: ix) No single evidence regarding sales of MBM to earn such huge profit in a day was found. x) No Single evidence regarding purchases of MBM....
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.... is duty of the AO to make further inquiries. 09. That the assessment has been framed without affording reasonable opportunity to the appellant, solely relying on investigation report and on statements recorded u/s 132(4) of the IT Act, 1961 without collecting any concrete evidence to justify the addition. 10. Your honour may appreciate that no addition can be made or sustained simply on the basis of statement recorded at the time of search, for which no corroborative material is found. In order to make a genuine and legally sustainable addition on the basis of surrender during search, there must be some incriminating material must have been found to correlate the undisclosed income with such statement which is absent in the case of appellant. 11. That if the contents are alleged documents is treated as genuine then cash to the extent of Rs. 3,45,00,000/- must have been found available at the time of search or undisclosed investment to that extents must have been found which is absent in the appellant case. The cash in the case of appellant was found tallied with the books of accounts and therefore no addition has been made on account of cash. The Hon'....
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....ddition on the basis of seized loose paper Page No- 12 &13 of LP-5 and relying on the statement of Shri Sachin Verma recorded u/s 132(4) of the Income Tax Act, 1961. In this regards appellant respectfully submits as under: a) That paper is printout taken from of tally accounting software and is account ledger of A T International. b) This paper does not contain the name of person/ company to whom it belongs. In other words name of the receiver is no where mentioned in this loose paper. c) This paper contains details of cash taken /given to/from A.T International during the periods 09.06.2017 to 02.01.2018. d) That Ld. AO allegation on the hand is that this printout was taken from tally systems and another hand it has been alleged that no one has to records such types of transactions in regular books. e) That in no where it has been found that appellant was maintaining two sets of books. f) Only a account ledger could be construed as books. g) That as per alleged printout, assessee has taken loan of Rs. 1,77,17,070/- and repaid Rs. 1,01,50,000/- leaving balance payable amounts to Rs. 7567070/-. If the transactions are re....
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....ce without supportive independent evidence. They have no probative value in the absence of some corroborative primary evidence of the reality of such transaction shown in the noting in such loose sheets of paper. Even entries in the books of account need corroboration before acting against the third party on the basis of any entry in the books of account of a person. Any presumption of transaction on some vague, tenuous and dubious entries in a sheet of paper is not rational and hence legal unless there is corroboration by corresponding entry in regular accounts of both the parties to the transaction. l) Similar view was taken in ITO v. Smt. Pratibha Goyal [2011] 14 taxmann.com 50/132 ITD 517 (Jp.): wherein reference was made to Mumbai Bench of the Tribunal in the case of Universal Impex v. ITO [IT Appeal No. 444 (Mum.) of 2007, dated 7-5-2009] held that addition made on the basis of statement of one of the partners and entries recorded in the diary cannot be upheld solely on the strength of the statement without any supporting material. The onus was on the AO to collect supporting material and since the AO has not discharged his onus, therefore, the addition was deleted. ....
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.... o) That Ld. AO has only relied on the statement recorded u/s 132(4) which was later on retracted by the appellant and thus the statement has no evidentiary value. The copy of retraction made by appellant was given before AO. p) Your honour may appreciate that no addition could be made solely on the basis of statement recorded u/s 132(4) unless the same is not supported by in corroborative evidences in the form of undisclosed investments. The addition has been made solely on presumption basis without affording proper opportunity to the appellant and thus suffers from legal infirmity. Reliance is placed to the decision of Hon'ble Gauhati High Court in the case Greenview Restaurant vs. Assistant Commissioner of Income-tax reported in (2003] 133 Taxman 432 (Gauhati) in which Hon'ble High Court has held as under: A plain reading of section 143(2) and (3) makes it manifestly clear that if the Assessing Officer while making the assessment of the tax liability considers it necessary to ensure that the assessee had not understated the income or had not computed excessive loss and had not underpaid the tax in any manner, he shall serve on the assessee a notice req....
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....ereof can be either comprehended or countenanced. As a corollary, any assessment under section 143(3) in violation of the peremptory guidelines in the parent provision would render it untenable in law. When the law prescribes a mode of doing a thing, it has to be done in that way alone and all other modes of execution are impliedly prohibited. [Para 13] On an overall consideration of the facts and circumstances of the case discussed above, it was clear that the mandatory requirement of affording opportunity to the appellant-firm to adduce evidence in support of the return and explain the disclosures made in the statement of its partner had not been complied with. The Tribunal in passing the impugned orders also did not address itself to that vital aspect of the matter. Thus, one could not sustain the impugned orders of the Tribunal restoring the amount of Rs. 4 lakhs as undisclosed income of the appellant- firm for the assessment years in question. Matter was to be remitted back to the Assessing Officer. [Para 17] 13. Evidentiary value of statement recorded u/s 132(4) of the Income Tax Act, 1961: The CBDT has issued Instruction to curb such erroneous prac....
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....quently, CBDT also issued another letter [F.NO.286/98/2013-IT (INV.II)], DATED 18-12-2014, emphasizing upon the need to focus on gathering evidences during Search/Survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence. The letter is being reproduced herein under:- "SECTION 132, READ WITH SECTION 133A OF THE INCOME-TAX ACT, 1961 - SEARCH & SEIZURE - ADMISSIONS OF UNDISCLOSED INCOME UNDERCOERCION/PRESSURE DURING SEARCH/SURVEY LETTER [F.NO.286/98/2013-IT (INV.II)], DATED 18-12-2014 Instances/complaints of undue influence/coercion have come to notice of the CBDT that some assessees were coerced to admit undisclosed income during Searches/Surveys conducted by the Department. It is also seen that many such admissions are retracted in the subsequent proceedings since the same are not backed by credible evidence. Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or launching of prosecution. Further, such actions show the Department as a whole and officers concerned in poor light. ....
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....erving that admission is an extremely important piece of evidence, held that, it cannot be said to be conclusive and the maker can show that it was incorrect. The landmark verdict was followed by the Hon'ble Delhi High Court of Delhi in case of S. Arjun Singh v. CWT [1989] 175 ITR 91. Further reliance can also be placed on the judgement of the apex court in case of NagubaiArmul V. B Sharma Rao AIR 1956 SC 100 wherein it was held that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the assessee who made the admission to show that it is incorrect. In yet another case of Sarwan Singh Rattan Singh v. State of Punjab AIR 1957 SC 637 , the Hon'ble Supreme Court of India held that an admission is not conclusive as to the truth of the matters stated therein. It is only a piece of evidence, the weight to be attached to which must depend on the circumstances in which it is made. It can be shown to be erroneous or untrue." 14. In view of above facts submitted, it is humbly prayed that the addition made on the basis of statement made by the appellant and LP 5 Pg 32 alleged to be found being doubtful as to whe....
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....) No. 4077 of 2023 dated 07.08.2023, PCIT vs. King Buildcom (P) Ltd, Civil Appeal No. 4326 of 2023 dated 10.07.2023, PCIT vs. Jay Ambey Aromatics, SLP (Civil) 24524 of 20223 dated 24.11.2023and PCIT vs. S.S. Con Build (P) Ltd., SLP (C) No. 7799 of 2023 dated 04.05.2023. In view of above, the appellant prays and request before your honour to quash the assessment order framed unlawfully and in violation to provision of law and settled judicial precedents or appropriate relief as deem fit in the interest of justice to the appellant." (B.1.2) Second Part of Written submissions Sub: Brief Submission on Legal Issues in the case of : Standard Frozen Foods Export Pvt Lt - ITSSA 41-44/Lkw/2022 for AY 2012-13, AY 2013-14, AY 2016-17 & AY 2017-18 and ITA 45/Lkw/2022 for AY 2018-19 Standard Agro Vet Pvt Ltd- ITSSA 46-49/Lkw/2022 for AY 2012-13, AY 2013-14, AY 2014-15 and AY 2015-16 Kamal Kant Verma- ITSSA 50-52/Lkw/2022 for AY 2015-16, AY 2016-17 & AY 2017-18 and ITA 53/lKw/2022 for AY 2018-19 Sachin Verma- ITSSA 54-58/Lkw/2022 for AY 2012-13, AY 2014-15, AY 2015-16, AY 2016-17 & AY 2017-18 and ITA 59/Lkw/2022 for AY 2018-19 In connec....
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....ommitted and accepted by AO :- Subsequent to search assessment, petitions were filed for rectification of orders, which were also rectified u/s 154. Meaning thereby that the ld.AO accepted the mistake committed in making addition in the search assessment order(No. of Cases rectified u/s 154 - 7 Search Assessment Orders.)- Page 164-179 of PB Vol-1 - Undue and unjust discretion by AO: Notice was issued on 23/12/2019 for compliance on 24/12/2019 as show-cause notice for the first time on the issue of certain cash payment of Rs. 80 Lacs appearing on LP 05 page 44 seized from Saleem Qureshi, Lucknow to which the appellant filed reply and denied to have any connection with these transaction as neither it was found from the possession of appellant nor contains name of the appellant and further requested for confrontation of the person with whom such paper was found to which the ld.AO has simply made addition without any basis. (Notice and reply on Page 204-219 of PB Vol-1) - No Cross Examination: At page 223 of the PB Vol-1, the appellant had requested the ld.AO regarding transaction with AT International of Rs. 1.77 Crore and requested for confrontation but the ld.AO si....
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....TERIAL: * That the search conducted u/s 132 of the Income Tax Act, 1961 on 10.01.2018 and the search assessment was completed u/s 153A for the AY 2012-13 to AY 2017-18. No notice or assessment proceeding was pending on the date of search i.e. 10.01.2018 which is also apparent from the assessment order itself. * No incriminating material found and seized during search, also apparent from the assessment order. Reliance is placed upon Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd. [2023] 454 ITR 212 (SC)and also in the following decisions subsequent to Abhisar Buildwell, the Apex Court affirmed its decision inthe following cases: - PCIT vs. Saroj Sudhir Kothari, SLP (C) No. 4077 of 2023 dated 07.08.2023 - PCIT vs. King Buildcom (P) Ltd, Civil Appeal No. 4326 of 2023 dated 10.07.2023 - PCIT vs. Jay Ambey Aromatics, SLP (Civil) 24524 of 20223 dated 24.11.2023 - PCIT vs. S.S. Con Build (P) Ltd., SLP (C) No. 7799 of 2023 dated 04.05.2023 * On the basis of tabular chart ( at page 1-2 of PB Vol-1) Income Tax Appeal and the appellant wise categorisation of appellant with legal issue and its judicia....
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....ramed unlawfully and in violation to provision of law and settled judicial precedents or appropriate relief as deem fit in the interest of justice to the appellant. PRAYER The appellant humbly submits in brief and pray before your honour that the assessment has been framed in violation to mandatory and statutory requirement of approval to be given by the Addl.CIT, Central being Approving Authority u/s 153D of the IT Act, 1961 without application of mind to the facts of the case, replies and supporting documents filed, seized material and the conduct of assessment proceeding by the ld.AO as submitted above and failed to protect the taxpayer against arbitrary or unjust exercise of discretion by the AO for which provision u/s 153D has been introduced and also by common approval instead of each assessee assessment year wise on the same day and next day respectively to 110 cases which is also in violation of requirement u/s 153D of the IT Act, 1961 only for the sake of providing administrative approval at the fag end of assessment proceeding on 27.12.2019 and 28.12.2019 for completion of assessment proceeding getting time barred on 31.12.2019. Reliance is placed upon Jurisdi....
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....order. He also supported his submissions with the help of case laws referred to in foregoing paragraph number (B.2) of this order. The learned D.R. for Revenue placed reliance on the impugned appellate orders passed by the learned CIT(A) and on the assessment orders passed by the Assessing Officer. (D) We have heard representatives of both sides. We have also perused the materials on record carefully. (D.1) The first limb of the contention raised by the learned Counsel for the assessee is on the legal ground that statutory approval given to the Assessing Officer for the assessment orders was not based on application of mind. It was the case of the learned Counsel for the assessee that approval was given by Addl. CIT in a mechanical manner within a short period of time during which it was humanly impossible for the Addl. CIT to go through exhaustive assessment records, search & seizure materials and to thereafter give approval after due application of mind. The learned Counsel for the assessee submitted that the Addl. CIT gave approval to 110 cases in two days which included; 48 cases on 27/12/2019 and 62 cases on 28/12/2019. These cases included approvals given for assessment....
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....of the Assessing Officer in submission of draft assessment orders to the Addl. CIT at the fag end of the limitation period; and if so, whether the submissions made by the assessee would still be good on merits, learned Counsel for the assessee submitted that the delay on the part of the Assessing Officer in submission of the draft assessment orders to the Addl. CIT was due to the fact that assessment proceedings were taken up in haste by the Assessing Officer after lapse of substantial duration of time available during the limitation period. He further submitted that the assessees made compliance with the notices of the Assessing Officer even though sufficient time was not given by the Assessing Officer. Therefore, he contended that the delay on the part of the Assessing Officer in submission of the draft assessment order to the Addl. CIT was entirely attributable to Revenue and to the Assessing Officer in particular; and further, that the assessees were in no way responsible for the delay. After hearing both sides, we are of the view that the issue in dispute is squarely covered by the order of the Hon'ble Allahabad High Court in the case of Pr. CIT vs. Subodh Agarwal, I.T.A. ....