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2015 (8) TMI 9 - ITAT DELHI

2015 (8) TMI 9 - ITAT DELHI - TMI - Addition u/s. 68 - CIT(A) deleted the addition - validity of proceedings initiated under section 153A - Held that:- The assessee has discharged the initial onus of establishing the bona-fides of the transactions and the AO was not justified in ignoring various evidences produced by the assessee and which were available before him on record of the department itself in reassessment proceedings of North Delhi Projects Pvt Ltd for the A.Y 2004-05 and in assessee’s .....

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collected during the search/enquiry conducted by him. Therefore, Ld. CIT(A), has rightly deleted the addition made under section 68 of the Act. - Decided against revenue.

Violation of Rule 46A of the Income Tax Rules, 1962 - Held that:- No new evidence was adduced before the Ld. CIT(A). He only took note of the already existing documents in the public domain. i.e. the remand report of the AO in a sister concern’s case of assessee wherein, the AO candidly accepts the identity, creditw .....

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any additional evidence which has been adduced before the ld. CIT(A) for the first time to invoke Rule 46A. Hence, the contention raised by the Department regarding violation of Rule 46A, has no merits, therefore, we reject the ground - Decided against revenue.

Taking note that the Hon'ble Bombay High Court [2015 (5) TMI 656 - BOMBAY HIGH COURT] has upheld the Special Bench decision of the Tribunal, in ALL Cargo (2012 (7) TMI 222 - ITAT MUMBAI(SB) ) we uphold the contention of the as .....

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ndent : Sh. A.K. Jain, CA ORDER PER A. T. VARKEY, JUDICIAL MEMBER The appeal filed by the Revenue and Cross Objection filed by the Assessee are directed against the order dated 11.2.2013 passed by the Ld. CIT(A)-III, New Delhi pertaining to the assessment year 2007-08. 2. The grounds raised in ITA No. 2288/Del/2013 (A.Y. 2007-08):- 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of ₹ 26,00,000/- made by the AO u/s. 68 of the Income Ta .....

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court to give two stage opportunity under rule 46A i.e. first before admission of additional evidence and second after admission of additional evidences. 3. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 4. The assessee craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 3. The grounds raised in Assessee's Cross Objection No. 245/Del/2014 (A.Y. 2007-08) are as under:- 1. That on the fac .....

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AO under Section 153A/143(3) of I.T. Act, is without jurisdiction. 3. That on the facts and circumstance of the case, the CIT(A) has erred both in law and on facts in confirming the proceedings initiated under section 153A of the I.T. Act, which is bad in law in the absence of any incriminating material belonging to the assessee being found during the course of search. 4. That on the facts and circumstances of the case, the CIT(A) has erred both in law and on facts in confirming the validate of .....

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t u/s. 153A is denovo in nature whereas the same is to be based and confined to incriminating material unearthed during search operations. 4. The facts in brief are that the original return in this case was filed on 26.3.2008 declaring net taxable income ₹ 7,670/-. The return was processed u/s. 143(1) of the Income Tax Act, 1961 (hereinafter the Act ) and later on scrutiny assessment was carried out vide order dated 31.03.2009 u/s 143(3) of the Act. Subsequently, a search and seizure opera .....

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filed u/s. 153A of the Act. In this case regular proceedings were initiated and notice u/s. 143(2) and 142(1) of the Act, along with the questionnaire was issued and duly served upon the assessee. 4.1 The aforesaid Unity Group is engaged in the real estate projects. The group is involved mainly in business of promotion and development of DDA approved commercial complexes. During the year, under consideration the company was executing one commercial project Function Mall‟ which is situated .....

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rify 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 .....

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the assessment u/s. 153A/145(3) of the Act vide his order dated 30.12.2011. 5. Against the aforesaid order of the Assessing Officer, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 11.2.2013 has partly allowed the appeal of the assessee and deleted the addition of ₹ 26,00,000/- made by the AO u/s. 68 of the Act. 6. Aggrieved by the order of the Ld. CIT(A), now the Revenue is in appeal and the assessee has preferred cross-objection before the Tribunal. First of a .....

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ind that AO has made the said addition because, the summons issued to M/s Caplin Commercial Pvt. Ltd. has not been responded or complied with by it. So the AO concluded that the identity, creditworthiness and genuineness of the transactions were not established and he made the addition. 10. The issue of identity, creditworthiness and genuineness of the said M/s Caplin Commercial Pvt. Ltd. was adjudicated at length by us vide order of the even date in ITANo.2290/Del/2013(AY2006-07), DCIT Vs. Agga .....

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nd therefore we concur with the Ld. CIT(A) and dismiss both the grounds of the Revenue following our finding in ITA No. 2290/Del/2013 (AY 2006-07) on both grounds raised before us. 11. In the result, the Appeal filed by the Revenue stands dismissed. CROSS OBEJCTION 245/DEL/2014 (AY 2007-08) 12. In the Cross Objection the assessee has raised five grounds, in which he has not pressed ground Nos.1, 2 and 3 and the same stands dismissed. 13. Coming to the Ground Nos.4 and 5 the ld AR for assessee Sh .....

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material whatsoever has been seized during search which could have been the basis of any addition to be made u/s 153A of the Act. According to the ld AR since no incriminating material were seized, the AO could not have made the impugned addition in reassessment order without any incriminating material seized during the search proceedings which took place on 20.08.2009. In the absence of any incriminating material from the search in the possession of the AO, according to the Ld. AR, he could not .....

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ection 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 .....

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d, the ld DR contended that once search takes place in the assessee's premises then the AO has no alternative but to invoke section 153(A) and assess or reassess the assessee for six assessment years immediately preceding the assessment year relevant to the previous year in which search has been conducted. According to the ld DR since the assessment year in question falls in the ambit of six years, the AO has to assess/reassess the assessee even though the original assessment was concluded u .....

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25.07.2014 of Hon'ble Karnataka High Court  Apoorva Extrusion Pvt. Ltd., ITA No. 3308/Del/2010 for the A.Y. 2002-03, dated 09.10.2014 (IT AT, Delhi)  Shivnath Rai Harnarain (India) Ltd. v.DCIT 117 ITD 74 dated 15/02/2008 (ITAT, Delhi)  SSP Aviation Ltd. Vs. DCIT, WPC No. 309/2011 dated 29103/2012 14. We have heard both the parties and have perused the records of the case, and have gone through the case laws cited before us. Before we adjudicate this issue we were won .....

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be the base of any additions whether during scrutiny assessment u/s 143(3), u/s 147/148 or u/s 153A of the Act. Section 153A, no doubt is an overriding provisions which takes 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 reasses .....

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h 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 assessment year relevant to the previous year in which search has been conducted. The parliament has given a mandate to the AO, unbridled .....

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ted above; without the same, the additions will have no legs to stand and it has to necessarily fall. Coming to the case laws cited by the Ld. DR, we would like to point out that in all these cases decided by the Hon'ble Jurisdictional High Court, on facts there was incriminating material and the view of the Special Bench of the Tribunal in All Cargo Logistics Ltd. in which the Special Bench held that the de-hors any incriminating material, no additions can be sustained has been upheld by th .....

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before the Hon'ble High Court of Bombay in that case (ALL Cargo) were the following:- (i) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is correct in narrowing down the scope of assessment under section 153A in respect of completed assessments by holding that only undisclosed income and undisclosed assets detected during search could be brought to tax? ii) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is correct in law in ho .....

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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? 16. 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 rec .....

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there was no incriminating material found in the instant case during search of the assessee. In Anil Kumar Bhatia‟s case also there was incriminating material on record to justify additions, but here in this case there was no incriminating material at all. 19. Therefore in the facts and circumstances of the case we find 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 .....

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