2025 (6) TMI 293

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.... of the Act as per the CBDT Circular No.19/2019 dated 14 August 2019. 4. The learned CIT(A) has erred in not holding that the assessment order is bad in law considering the fact that approval obtained u/s. 153D of the Act is without application of mind. 5. The learned CIT(A) has erred in confirming the addition of Rs. 50,97,643/- arising due to alleged accommodation loan without appreciating that no incriminating evidence has been found during the course of search in respect of alleged accommodation loan. 6. The learned CIT(A) has erred in not appreciating the fact that the AO has not provided sufficient opportunity to the appellant to make the submission. Accordingly, the assessment order passed by making the addition is in violation of principle of natural justice. 7. The learned CIT(A) has erred in rejecting the documents filed by the appellant as additional evidence treating the same as make-believe documents and holding the same as not sufficient to discharge the onus u/s. 68 of the Act. 8. The learned CIT(A) has erred in confirming an addition of Rs. 50,97,643/- being alleged negative cash balance arising due to alleged accommodati....

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....f search. The case of the revenue is that the on-money received by various entities accepted by Mr. Anil Morarka is in itself incriminating and the accommodation entry in the form of loans recorded in the books of account is nothing but outcome of on-money received by the group. 10. We have carefully considered this contention of the revenue but do not find any force inasmuch as no addition has been made in respect of alleged on-money received by the assessee. In our understanding of the facts, the entire addition is based upon surmises and conjectures. The alleged unsecured loan is duly recorded in the books of accounts maintained by the assessee which has not been rejected by the AO. Therefore, in our considered opinion, the entries found to be recorded in the regular books of accounts cannot form incriminating material. 11. Since the impugned assessment year falls under the category of unabated assessment year, therefore, the ratio laid down by Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. [454 ITR 212], squarely applies. The relevant findings of the Hon'ble Supreme Court read as under:- "9.1. That prior to insertion of Section 153A in the statu....

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.... 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 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 153A does not say that additions....

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....r 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 income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby; it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year, falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or requisition und....