TaxTMI 
TaxTMI 
2025 (8) TMI 1672
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....addition during the assessment u/s. 153 has to be confined to the incriminating material found during the course of search u/s. 132(1) of the Act, even though, there is no such stipulation in sec. 153A of the Act. 2. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that sec. 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 assessment years and to assess or re-assess the total income of those six assessment years, and that the scheme of assessment or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment years in the absence of any seized incriminating material. 3. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s. 158BB was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec. 153A and sec. 153BI specifically states that....
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....additions / disallowances. 3. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in holding that any addition during the assessment u/s. 153A has to be confined to the incriminating material found during the course of search u/s.132(1) of the Act, even though, there is no such stipulation in sec. 153A of the Act. 4. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that sec. 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 assessment years and to assess or re-assess the total income of those six assessment years, and that the scheme of assessment or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment years in the absence of any seized incriminating material. 5. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s.158BB was to be made on the basis of evidence f....
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....r. 3. On the facts and in the circumstances of the case, the CIT(A) erred in upholding addition of Rs. 15,00,000 (AY 2001 & 2002) and Rs. 15,50,000/- (AY 2002-03) based upon ad hoc disclosure made in Settlement Application which was subsequently rejected and such disclosure was made only to cover any discrepancies. 4. The respondent craves leave to add, alter, amend and/or withdraw any ground or grounds of cross objections either before or during the course of hearing of the same." IT(SS)A No.461/Ahd/2019 for AY 2001-02 : 5. We take IT(SS)A No.461/Ahd/2019 as the lead case. 5.1 The brief facts of the case are that the assessee is engaged in the business of real estate dealings and financing activities. During the AY 2001-02, assessee was running three proprietary concerns in his name which were (i) Abhyudaya Finance, (ii) Radhe Finance and (iii) Radhe Organiser. A search under Section 132 of the Act was carried out in case of assessee/Radhe Group on 4thAugust, 2006. The search was finally concluded by drawing final panchnama in the name of Assessee on 29th September, 2006. The Assessee had filed return of income for the year under consideration on 24th Ma....
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.... be subject to final decision. On 07.09.2017, the Hon'ble High Court disposed of main SCA of the Assessee. The Hon'ble High Court set aside the order passed by the Settlement Commission u/s 245HA dated 04.10.2007 to a limited extent. As per the above order of the Hon'ble High Court, proceedings before the Settlement Commission revived for Α.Υ. 2001-02, 2002-03, 2003-04, 2005- 06 and 2007-08 in ITSC, hence proceedings for A.Y. 2004-05 & 2006-07 were affected. Hence, assessment for AYs 2004-05 & 2006-07 have been completed by the Assessing Officer vide order dated 03.11.2017 u/s 153A (1)(b) rws. 143(3). Further, the Settlement Commission passed order dated 16.11.2017 vide which application dated 28.05.2007 filed by the assessee was declared invalid u/s 245D(2C), hence assessment proceedings for A.Y. 2001-02, 2002-03, 2003-04, 2005-06 & 2007-08 got revived before the Assessing Officer. Consequently, the Assessing Officer passed the present Assessment Order, after making addition of Rs. 15,00,000/- being income disclosed in settlement application, interest income on loan for Rs. 3,71,11,615/- and disallowance under Section 14A for Rs. 20,775/-. 6. Aggrieved....
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.... 30,92,63,462/- 4.1 In this regard, you are requested to furnish the detailed explanation with documentary evidence of the interest income on the above mentioned loans/advances given & shown as assets in your books of account, if any. 4.2 In case of non-submission or partial submission regarding point no. 4 & 4.1, kindly treat this notice as show-cause notice as to why the addition of interest income @ of 12% i.e. market rate should not be made on loans/advances given and added to your total income for A.Y. 2001-02 and interest expense claimed for borrowed fund should not be disallowed, if any." 8.2 In response to the said show-cause notice dtd: 19.11.2018, assessee has filed submission dtd: 24.11.2018 received in this office on 26.11.2018 at 05:30 PM where assessee submitted copy of ledger of parties to whom loans and advances were given. Assessee failed to provide reasonable explanation regarding interest earned on loans/advances given to others and also failed to substantiate the same with documentary evidence. Assessee only submitted those details which were already available on record as attachment to audit report submitted by assessee. Assessee d....
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....Revenue on this issue is dismissed. Issue No. 2 Disallowance u/s 14A 15. Keeping in view the low quantum involved, the Ld. AR submitted that he would not like to press the issue; therefore, the ground relating to the disallowance u/s 14A of the Revenue's appeal is allowed. In the result, the appeals of the Revenue are partly allowed. CO No. 192/Ahd/2019 - AY 2001-02 CO No. 194/Ahd/2019 - AY 2002-03 Issue No.1 Interest - Rs. 21,46,250/- 16. The relevant part of the order of the Ld. CIT(A) on this issue is as under:- "8 While, deciding appeal for the assessment year 2003-04, addition of Rs. 21,46,250/- have been confirmed considering accrued interest income, as written in the seized paper, pertain to this assessment year, hence AO should make additions of Rs. 21,46,250/- to the returned income, while giving appeal effect to this order. The AO should allow credit to the appellant from this addition to the extent of income offered before Settlement Commission & confirmed in previous paras, if it had not been allowed against any other items." 16.1 On this issue, we find that the Ld. CIT(A) has not issued any enhancement notice to the assessee perta....
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....eld that assessee did not offer the undisclosed income of Rs 15,00,000/- for tax as disclosed before ITSC and that the assessee has total disregard for the tax-authorities and is changing his stand every now and then regarding the quantum of income on which taxes were not paid. 17.1 Since the assessee has not offered the amount in the income-tax return and the same was accepted as additional income before the ITSC, Assessing Officer made addition of the amount of Rs. 15,00,000/- towards undisclosed income. 17.2 Before us, the assessee submitted that the amount was offered before the Hon'ble Settlement Commission to cover any omission, error and discrepancy. The Settlement Commission has rejected the application of the assessee and the matter has been revived by the Assessing Officer for assessment under Section 153A of the Act. Since the assessment has been conducted under section 153A, the rigors of provisions of Section 153A would be applicable. It was submitted that since there was no material evidence or seized material pertaining to the addition of Rs. 15,00,000/-, the action of the Assessing Officer making the addition simply by the virtue that the assessee has offered ....
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....onfession during the search and seizure and survey operation do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income-tax department. Similarly, while recording statement during the course of search and seizure operation, no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely". 17.7 The CBDT also instructed the field authority not to rely merely on the statement in the absence of credible evidence. In this case, the Assessing Officer has not brought any evidence, material, incriminating document to make addition of Rs. 15,00,000/-. Merely because the assessee has offered the same before the Hon'ble ITSC does not necessarily convert the same as undisclosed income in the proceedings u/s 153 of the Act. This issue has also been examined by the Co-ordinate Bench of Mumbai in the case of Anantnadh Constructions and Farms (P.) Ltd. Vs. DCIT (166 ITD 83). The Tribunal held that no addition can be made on the basis of income....