TMI Blog2015 (7) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... bjection filed by the Assessee are directed against the order dated 26.11.2012 passed by the Ld. CIT(A)-III, New Delhi pertaining to the assessment year 2006-07. 2. The grounds raised in Revenue‟s Appeal in ITA No. 241/Del/2013 (A.Y. 2006-07):- 1. On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the addition of ₹ 20,00,000/- made by the AO u/s 68 of the Income Tax Act,1961.(herein after the Act). 2 The order of the Ld CIT(A) is not tenable on facts and in law. 3. The grounds raised in Assessee‟s Cross Objection No. 285/Del/2014 (A.Y. 2006-07) are as under:- 1. That on the facts and circumstances of the case, the Commissioner of Income Tax (appeals) has erred both in law and on facts in confirming the proceedings initiated under section 153A of Income Tax Act, which is bad in law in the absence of any incriminating material belonging to the assessee being found during the course of search. 2 That on the facts and circumstances of the case, the Commissioner of Income Tax (Appeals) has erred both in law and on facts in confirming the validate of impugned assessment order dated 27.12.2011 u/s 153A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this is the first year of its operation. During the year the company has started a new project and has purchased land for it at Jodhpur. During the year the company has received only interest income. AO has noticed that the assessee company has received share capital / share application money from different entities. He observed that some of the applicants are individuals as well as group companies related to the Unity Group itself and are assessed in the same Circle. The AO himself acknowledges in para 5 of the assessment order that the sources of fund of these persons / companies have been verified in their respective cases. And then he proceeds to verify the fresh share capital / share application money received by the assessee and for that summons were issued u/s. 131(1) of the Act, and information was called u/s. 133(6) of the Act. In the assessment order the AO observes that the requirement of Section 68 of the Act is that the onus to prove the credit entry in the books of accounts is primarily on the assessee and not on the department. According to him, the assessee has not fully discharged its onus to prove the creditworthiness of the creditors companies. He further observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. AY 2006-07 was itself a scrutiny assessment u/s 143(3) of the Act, and investigation was done by the AO at that time and after satisfying himself of the identity, creditworthiness and genuineness of the share transactions made a conscious decision not to make any additions during the original scrutiny assessment; and now the AO has imposed the impugned addition by invoking section 153A and based his addition on materials already on record and that too without any serious attempt to enquire or investigate about the veracity of the documents placed before him by the assessee, which according to Ld. AR is clearly illegal in the eyes of law. According to the ld AR, the original assessment which has been done under scrutiny u/s 143(3) of the Act cannot be unsettled without incriminating materials found during the search. In the case in hand according to the ld AR the AO did not have a single piece of incriminating material collected during search to impose the addition, therefore according to him, addition thus made without incriminating material found during search and seizure was clearly illegal in the eyes of law and therefore is invalid and cited the Special Bench decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es away the fetters found u/s 147/148 of the Act, which AO has to face while reopening assessment in case of escapement of income, etc. However the moot question is whether the AO can make additions based on no evidence, the answer has to be in the negative. But then the question is what is the scope of assessment and reassessment envisaged u/s 153A of the Act and what evidence can be taken by the AO during the 153A proceedings. The AO while exercising his jurisdiction u/s 153A, can assess/ reassess based on (a) evidences unearthed during the search, (b) evidences already on record during the original assessment u/s 143(1) or 143(1)(a) or 143(3) but not taken notice by the AO for whatever reason or if the view of the AO during original assessment has been found to be wrong due to some material unearthed during search or has come to the notice of the AO through any other means and (c) if any fresh evidence comes to the notice of Commissioner u/s 263 of the Act and he directs the AO to take the evidence into consideration, then the said evidence can be made use by the AO while computing the Total Income of the assessee for the six Assessment Years immediately preceding the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, the Hon ble ITAT was right in limiting the scope of Section 153A only to undisclosed income when as per the section the AO has to assess the total income of the six assessment years? iv) Whether on the facts and in the circumstances of the case, the Hon ble Tribunal erred in holding that the assessee was entitled to deduction u/s. 80IA(4) which was contrary to the Circular of the CBDT No. 10/2005 as also contrary to the fact that JNPT Port had withdrawn its certification of the company? 11. The Hon‟ble High Court of Bombay in para 31 held as follows:- We, therefore, hold that the Special Bench s understanding of the legal provision is not perverse nor does it suffer from any error of law apparent on the face of the record. 12. And finally in para 49 after concurring with the view of the Hon‟ble Delhi High Court order in Anil Kumar Bhatia‟s case held as follows:- We, therefore, dismiss the Revenue appeals and answer the substantial questions of law against the Revenue and in favor of the assessee. 13. In the present case, the Ld CIT(A), while allowing the assessee‟s appeal on merit‟s made a categorical finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the original assessment done u/s 143(3), which was re-assessed invoking 153A after search u/s 132 of the Act is valid, however the additions made has no basis and is not based on any evidence to support the same collected during the search conducted against it and so the same has been rightly deleted by the ld CIT(A). 18. We take note of the 'A' Bench decision of ITAT, Delhi, in the assessee‟s group company M/s Aggarwal Plaza Pvt. Ltd Vs. DCIT, in ITA No. 1605/Del/2013, for the AY 2005-06, vide order dated 18/07/2014 considered identical grounds in the case of Sanjay Aggarwal Vs. DCIT in ITA No. 3184/Del/2013, for the A.Y. 2003-04 under Section 153A proceedings wherein the Bench vide para 14 held as follows: 14. Since the Special Bench has decided this issue in this manner, it is not possible for us to deviate from the same. There has to be some consistency in the view taken by the Tribunal. Once a Special Bench has decided a particular issue in a particular manner, then, that becomes binding on all the division benches across the country unless there is a contrary judgment of the Hon'ble Supreme Court or that of some High Court. As the ld. DR fail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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