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TMI Blog2015 (1) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... rtunity to the Appellant to furnish the details, the Appellant would have satisfied the same. The CIT(A) ought to have refrained from confirming the alleged addition. 5. The CIT(A) erred in confirming the levy of interest of the Act and same is arbitrary & excessive and same is liable to be cancelled or to be reduced substantially. 6. Without prejudice, the CIT(A) erred in confirming the addition is arbitrary, unreasonable and liable to be cancelled." 2. There was delay in filing the appeal and therefore an Affidavit was also filed for the condonation of delay of 19 days stating therein that Shri B.P. Anand Kumar, husband of the Assessee was put behind the bars on account of the mining scam and the staff was pre-occupied in attending the legal matters for getting Shri B.P. Anand Kumar out from the prison and due to this, delay was caused. After hearing both the parties, we noted that the Assessee was prevented by sufficient cause to file the appeal within time. We accordingly condone the delay and admit the appeal. 3. Subsequently the Assessee vide application dt. 23.5.2014 raised the following additional grounds : "1. On the facts and in the circumstances of the case, the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was issued to the Assessee. In response thereto, the Assessee filed his return of income on 19.12.2008 declaring total income at Rs. 10,56,520/- at which the original assessment u/s 143(3) was completed in the case of the Assessee on 6.2.2007 by the Assessing Officer, Circle-1, Bellary. During the impugned assessment year the Assessee received Rs. 90 lacs gift by way of cheques of Rs. 5 lacs each from Harish Wadhava of Dubai. Rs. 45 lacs was received on 10.5.2004 and was invested in RBI bonds on 24.4.2004 and another Rs. 45 lacs received on 10.5.2004 were withdrawn in the same month. The AO required the Assessee to state her relation with the said Harish Wadhava or any business connection with the said person. Vide letter dt. 6.11.2009 the Assessee confirmed that the said money was gift and the same was confirmed by the Donor vide his letter. The AO, as per para 5 and 6 of his order, took the view that the said gifts are not genuine by taking into account the circumstantial evidence and human probabilities with a finding that the Donor, an NRI having address at Delhi, is not a relative. Reliance was placed by the AO on the case of Sumati Dayal vs. CIT, 214 ITR 801 (SC), CIT vs. Kan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the third party in respect of whom documents were found are same and no handing over of the documents was required, whether recording of satisfaction is necessary. In the impugned case the question is whether any addition can be made in the assessment completed u/s 153C in respect of items which have already been considered in the original assessment and for which no incriminating material was found. The decision of the Hon'ble Supreme Court in the case of Manish Maheshwari vs. CIT, 289 ITR 341 (SC) also relate to recording of satisfaction but in the case of the Assessee no evidence about non-recording of satisfaction was placed before us. The decision in Ingram Micro (India) Exports Pvt. Ltd., (supra) also relates to the mandatory requirement of recording of satisfaction while in the case of the Assessee, no such material was brought to our knowledge that satisfaction was not recorded by the AO. Similar view has been taken by the Chennai bench of the Tribunal in the case of P. Sathyanarayanan vs. ACIT, 50 SOT 168. The decision of the Hon'ble Delhi High Court in the case of Anil Kumar Bhatia and SSP Aviation Ltd. will be dealt with by us while giving finding whether an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section 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. (2) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A." 12. In our opinion, the Assessing Officer assumed jurisdiction for framing the assessment u/s.153C of the Act where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person in whose case search is conducted u/s.132 of the Act. Therefore, for initiating action u/s.153C of the Act and framing assessment u/s.153A of the Act, the pre-requisite is that the satisfaction of the Assessing Officer that the money, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of search". 15. In view of the decision of Special Bench in the case of All Cargo Global Logistics Ltd(supra), no doubt the addition in the case of the assessee can be made by the Assessing Officer only on the basis of incriminating material found during the course of search but the AO got jurisdiction for initiating proceedings u/s.153c r.w. section 153A against the assessee in view of documents etc, belonging to the assessee are found in the case of the person in whose case search had taken place. Thus, this decision will help the assessee. 16. Similar view has been taken in the cases discussed as under: 17. We noted that Hon'ble Delhi High Court in the case of Chetandas Laxmandas, 254 CTR (Del) 392 has taken similar view. In para 11 of this judgement, the Hon'ble High Court held that "obviously an assessment has to be made under this section only on the basis of the seized material". Even we noted that the Hon'ble Delhi High Court in the case of Anil Kumar Bhatia, 352 ITR 493 (Del), under para 20, it has been observed as under: "even if assessment order had already been passed in respect of one or any of the six relevant assessment years either u/s143(1)(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. If some incriminating material is found in respect of such assessment years for which the assessment is not pending, then the total income. would be determined by considering the originally determined income plus income emanating from the incriminating material found during the course of search. In respect of assessment pending on the date of search which got abate in terms of second proviso to section 153A(1), the total income shall be computed afresh uninfluenced by the fact whether or not there is any incriminating material. This position of law which is pronounced, in our opinion, will apply in all these decisions. 19. We have already observed that no incriminating material has been found relating to the year in which the assessee has received gifts. Therefore, in our opinion, no addition on account of the gifts can be sustained. Accordingly, on this basis itself, we delete the addition on account of gifts. We accordingly allow the additional grounds. Since we have deleted the addition on the basis of the additional grounds taken by the Assessee, therefore, in our opinion, the grounds taken by the Assessee on merit does not require adjudication. 20. In the result, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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