TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1672
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....onfined 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 the provisions of Chapter-XIV-B, under which sec. 158BB falls, w....
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....ed 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 found as a result of search or requisition of books of accounts, there is no such stipulation in sec. 153A and sec. 153BI specifically sta....
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....c 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 May, 2007 in response to notice under Section 153A of the Act, dated 4th May, 2007. The Assessee had filed Settlement Application before Hon'ble Settlement Commission on 28thMay, 2007 for AY 2001-02 ....
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.... 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 by the order of the Assessing Officer, the assessee filed appeal before the ld. CIT (A) who has given partial relief to the assessee. 7. Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal....
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...., 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 did not submit any details as to when such advances or loans were given or when it was received back. Assessee failed to justify why interest income was not charged and if not so, why the same is not brought into books of account. It may kindly be noted that assessee mentioned words like "cash", "Hawala", "Lewana Chhe" etc. in seized materia....
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....0/- 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 pertaining to this year. There was nothing in the order of the ld. CIT(A) with regard to affording an opportunity to the assessee while modifying the addition made by the Assessing Officer. The relevant provisions of the Act are as under:- Powers of the [* * *] [ Commissioner (Appeals)]. 251. (1) In disposing of an appeal, the [* * *] [Commissioner (Appeals)] shall have the following powers- (a) in an appeal against an order of assessment, he may confirm, reduce, enha....
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....re 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 same before the Hon'ble ITSC cannot be sustained. 17.3 On the other hand, Ld. DR argued that assessee is the best judge of his affairs and the factum of his offering the amount of Rs. 15,00,000/- as additional income before the Settlement Commission proves without any doubt that the assessee has earned Rs. 15,00,000/- as undisclosed income. It was argued that the ratio of statement recorded u/s 132(4) would be applicable as the statement given before the ITSC becomes statutory and binding in nature. 17.4 Rebutting the a....