TMI Blog2013 (10) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the CIT (A) were also available in seized material which was in the possession of the Assessing Officer - Thus, there was no fresh evidence filed before the CIT (A) which could be considered for violation of Rule 46A of Income-tax Rules – Decided against the Assessee. - ITA No.1694,2092/Del./2012 - - - Dated:- 4-1-2013 - R P Tolani and B C Meena, JJ. For the Appellants : Shri Rajiv Saxena, Abhishek Verma, Advs. Shri Mayank Goyal, CA For the Respondent : Mrs Sushma Singh, CIT-DR ORDER:- Per: B C Meena: The revenue has filed ITA No.1694/Del/2012 and the assessee has preferred Cross Objection No.247/Del/2012 against this appeal. The assessee has also filed ITA No.2092/Del/2012 on certain issues against the order of CIT (A) dated 31.01.2012. The grounds of appeal taken in these three matters are as under :- ITA No.1694/Del/2012 1. The order of Ld. CIT(A) is not correct in law and facts. 2. On the facts and in the circumstances of the case, the Ld CIT(A) has erred in deleting the addition of Rs.89,51,418/- (Rs.47,23,372/- in respect of M/s Omway Builders Pvt. Ltd., Rs.33,27,337/- in respect of M/s Unison Estate Pvt. Ltd., RS.8,72,659/- in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not examined or was in possession of the AO. b) Because analysis of interest free funds was out of the material already in possession of the AO and out of amount of books of accounts examined by him. c) Because there was no fresh evidence furnished but analysis of the funds was prepared from the entries of receipts already made in the books of the accounts examined by the AO and the material placed before him. d) Because AO made the disallowance without appraising the details and evidence in his possession and without raising any query in his mind after analysis was made by him. 3. The respondent craves leave for addition, modification, alteration, amendment of any of the cross objection. ITA No.2092/Del/2012 1. Whether on the facts and circumstances of the case, the Ld. CIT(A)-XXXI is correct in upholding the assessment framed outside the search material and after the change of opinion? 2. That on the facts and circumstance of the case, the Ld. CIT(A)-XXXI erred in confirming the addition of Rs.5,99,130/- being the amount of out of books commission paid by the assessee company u/ s 69C of the Income Tax Act, 1961. 3. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, we are unable to agree with the contention of the assessee that assessment u/s 153A has been made on the basis of outside the search material and after the change of opinion. Moreover, in this year, the assessment was made u/s 144 of the Income-tax Act, 1961 on 09.12.2009. The same was held invalid as there was a search operation at the premises of the assessee on 31.07.2008. In view of the provisions of section 153A, the pending assessments abate. The order passed u/s 144 was against the law. Considering all the relevant facts, we dismiss this ground of assessee s appeal. 6. Ground No.2 of assessee s appeal is against sustaining the addition of Rs.5,99,130/- being the commission paid u/s 69C of the Income-tax Act, 1961. The CIT (A) granted the part relief. Revenue has also taken ground no.2 in its appeal against deleting part addition. The revenue has also taken a ground against admitting additional evidence in contravention of Rule 46A of Income-tax Rules, 1962. The assessee has also taken ground no.1 in its cross objection for stating that no fresh evidences were filed before CIT (A) and all material was available to Assessing Officer in search material. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the. Income Tax Act. As per the AO, amount paid for commission during the year is less than the amount of bills of commission seized by the department at the time of search and therefore an addition of difference amount was made by the AO. In contention to that the AR has submitted detailed explanation party wise and also submitted the reconciliation for the difference amount. After considering the submissions made and documents submitted, I am of the considered opinion that an addition of Rs.5,75,879 is to be retained against Rs.14,48,538/- of Vardhaman Associates Pvt. Ltd and Rs.23,251/- against Rs.33,50,588/- of Unison Estates Pvt Ltd. In the case of M/s Unison Estates Pvt Ltd the amount of Rs.20,11,340/- is finally settled for 10,15,997/- as evident from the seized records itself and the payment of this amount has been shown in the books. However from the bill of Rs.323,251 of the same party, the payment in the books is shown at Rs.3,00,000 thus the difference of Rs.23251/- is liable to be confirmed. Further, an addition of Rs.28,050 of Shree Ganesh Estate has been found to be unwarranted as reflected in the books of account, thus deleted. In relation to commission of Rs.58,85, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the presumption when addition is to be made u/s 69C of the Incometax Act while making the assessment u/s 153A of the Incometax Act. No addition can be made under the scope of section 153A on presumption basis. The revenue has to bring certain corroborative evidence or supporting material by way of making investigation or enquiries. All the brokers were located in Delhi, however, the revenue has done nothing in this regard. Some of the brokers were even corporate assessees. Their records could have been easily verified. The seized material relied upon by the AO alone cannot be made a basis for driving adverse inference with regard to the undisclosed expenditure which can be added u/s 69 of the Income-tax Act. In our considered view, material relied upon by the AO for making the addition was merely a correspondence which alone cannot lead to the inference that assessee had incurred such expenditure. This cannot be made basis for addition made u/s 69 of the Income-tax Act while framing the assessment u/s 153A of the Income-tax Act, 1961. There is no evidence gathered by revenue from anywhere, which could establish a bit of the fact that assessee has paid anything more than whatever re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s possession which has not been examined. The details of interest free funds were available before the Assessing Officer. Assessing Officer has not analyzed the same. In our considered view, CIT (A) has not admitted any fresh evidence as no fresh evidence was furnished. The analysis of interest free funds made available by the assessee was nothing but only the analysis of books of account which were examined by the Assessing Officer himself. 9. We have heard both the sides on this issue. We have also decided the issue by deciding the revenue s appeal in ITA No.1693/Del/2012 for Assessment Year 2006-07 vide order dated 31.12.2012 where we have held as under :- 17.3 In ground no.5 of revenue s appeal, the issue is deletion of interest on loan to sister concerns. On this, we hold that the earlier assessment was completed u/s 143(3) of the Income-tax Act, 1961 and no such disallowance was made on this issue. The issue was considered at that time by Assessing Officer and asked for details. There is no new evidence or incriminating document found and seized during the search operation which can make the Assessing Officer to form a belief that income has escaped assessment on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, confirmation of accounts and audited accounts were filed. These details are available at pages 13l7 to 295 of the paper book. Similarly, documents relating to share application money of Rs.81,55,000/- received from three parties were also filed. Copy of PAN number, income-tax return, confirmation of accounts, audited accounts and bank statements of these parties are available at pages 297 to 332 of the paper book. These parties from whom the share application money was received were also examined at the time of making the assessment for the Assessment Year 2006-07 u/s 143(3) of the Income-tax Act, 1961. All these confirmations are available at pages 333 to 345 of the paper book. He also pleaded that all companies who have invested money in the assessee company are group companies whose assessment is also being made by the same Assessing Officer as all cases of the group are centralized. The assessment of these group companies have been made after examination of the books of accounts and no addition has been made. The ld. AR submitted that the Assessing Officer raised questionnaires which have been duly replied by the assessee. Subsequently, queries raised by the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 7.6 I have carefully considered the submissions, perused the order of assessment and, evidence on record. The dispute, as raised by the appellant, pertains to the additions made by the AO on account of section 68 of the Income Tax Act. After analyzing the submissions made by the AR of the appellant, I am of the considered opinion that AO has completed the assessment u/ s 144 on 09/12/2009 at Rs.54,51,00,877/ - which is after the date of the search initiated (i.e. 31.07.2008) on the appellant by the Income tax department. The order passed by the AO u/s 144 is thus a nullity in the light of provisions of section 153A of the Income Tax Act. This view has been endorsed in the case of Abhay Kumar Shroff vs. CIT (2007) 290 ITR 114, 123 Jharkhand. Further, the same addition affirmed and retained by the A.O. of CC-12 u/s 153A without going into the merits of the addition u/s 144 by ITO ward 16(4) I not sustainable. The assessment which is held as void cannot be made basis of subsequent assessment by the AO, CC-12, I am unable to understand why the A.O. of CC-12 preferred to borrow the addition u/s 144 for Rs.54,51,00,877/- when he was seized of the matter and completing a search a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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