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2015 (8) TMI 774 - DELHI HIGH COURT

2015 (8) TMI 774 - DELHI HIGH COURT - TMI - Scope of assessment under Section 153A - Tribunal sustained the finding of the CIT(A) that the addition made in respect of the share application money was beyond the scope of Section 153A - Held that:- We find considerable merit in the contention advanced on behalf of the Assessee. Concededly, the issue whether the additions made by the AO were beyond the scope of Section 153A had been decided by the CIT(A) in favour of the Assessee and the decision on .....

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d by the concerned Income Tax Authority. In the circumstances, there could be no dispute that the CIT(A)ís order in so far as it relates to the issue regarding the assessment being beyond the scope of Section 153A of the Act had attained finality, and thus, could not have been disturbed by the Tribunal. - Decided against revenue. - ITA 771/2014, ITA 185/2015 - Dated:- 13-8-2015 - Dr. S. Muralidhar and Mr. Vibhu Bakhru, JJ. For the Petitioner : Suruchi Aggarwal, Senior Standing Counsel with Ms. L .....

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on account of unexplained credit under Section 68 of the Act, on merits. The Revenue has filed the present appeal ( ITA 771/2014) being aggrieved by the decision of the Tribunal insofar as it has upheld the CIT(A) s view that the aforesaid addition made by the Assessing Officer (hereafter AO ) was beyond the scope of assessment under Section 153A of the Act. The Assessee states that it has filed the present appeal (ITA 185/2015) only for the reason that the Revenue has preferred an appeal agains .....

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Yet, the Counsel for the Revenue sought to assail the said finding in the appeal preferred by the Assessee. The Tribunal permitted the Counsel for the Revenue to agitate the issue but finally decided the same against the Revenue. It is contended by the Assessee that it was not permissible for the Tribunal to permit the Revenue to challenge the decision of the CIT(A) in an Appeal preferred by the Assessee. 3. The aforesaid controversy arises in the backdrop of the following facts: 3.1 The Assess .....

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ssessee for the Assessment Year 2008-09 at ₹ 20,28,84,027/-. The AO made an addition of ₹ 20,25,00,000/- under Section 68 of the Act as the AO was of the view that the share application money received by the Assessee Company was unexplained. 3.2 The Assessee preferred an appeal against the Assessment Order before the CIT(A), being Appeal No. 320/2013-14, inter alia challenging the addition on merits as well as on the ground that the addition was beyond the scope of Section 153A of th .....

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ating material found during the search. However, the CIT(A) upheld the conclusion of the AO that the share application money reflected in the books of the Assessee was unexplained. 3.4 The Revenue accepted the aforesaid order passed by the CIT(A) and did not prefer any appeal before the Tribunal. The Assessee, on the other hand, impugned the order of CIT(A), inter alia, on the following ground :- That the learned CIT (Appeals) has grossly erred in law and on facts in sustaining the addition made .....

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made were outside the scope of Section 153A of the Act. The Tribunal entertained the aforesaid plea and permitted the representative of the Revenue to raise contentions in that regard, but finally the conclusions of the CIT(A) were sustained. 3.6. The Revenue has now preferred an appeal impugning the decision of the ITAT insofar as the Tribunal sustained the finding of the CIT(A) that the addition made in respect of the share application money was beyond the scope of Section 153A of the Act. 4. .....

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for the respondent to travel outside the scope of the subject matter of the Appeal. 5. He submitted that the scope of the subject matter of the Appeal was limited to the finding of the CIT(A) with regard to the merits of the addition made; the issue whether the same was beyond the scope of Section 153A of the Act was not the subject matter before the Tribunal and, thus, the Tribunal could not have entertained any plea in that regard. 6. The learned counsel for the Assessee also referred to the .....

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gh Court, inter alia, on the ground that the matter could not be reopened by the Tribunal. In this context, the Supreme Court held that, We have already noticed that the order passed by the Tribunal to reopen the matter for further hearing as regards ground No. 7 has attained its finality. In the circumstances, the High Court could not have interfered with the final order passed by the Incometax Appellate Tribunal. 7. We find considerable merit in the contention advanced on behalf of the Assesse .....

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the AO to prefer an appeal to the Tribunal. It is not disputed that no such directions to file an appeal against the CIT(A) s order dated 21st January, 2014 were issued by the concerned Income Tax Authority. 9. In the circumstances, there could be no dispute that the CIT(A) s order in so far as it relates to the issue regarding the assessment being beyond the scope of Section 153A of the Act had attained finality, and thus, could not have been disturbed by the Tribunal. 10. It is also relevant .....

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sarily so because every point dealt with by the lower appellate court, the Appellate Assistant Commissioner, need not be the subject of attack before the Appellate Tribunal. The interests of the revenue are sufficiently protected by the extensive powers given to the first appellate authority, the Appellate Assistant Commissioner. At that stage, the only appellant would be the assessee, not the department although it is entitled to be represented by an officer of the department in support of the .....

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to the Appellate Tribunal, the liberty is given to both the sides to go up in appeal to the Appellate Tribunal and when the Appellate Tribunal comes to deal with the matter, the law regards it sufficient to leave it to the parties going up as appellants before the Tribunal to limit their attack on the order of the first appellate authority and to seek the intervention of the Tribunal only to the extent necessary to correct the errors in the order of the Appellate Assistant Commissioner accordin .....

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by statute, both its existence as well as its extent has to be gathered from the relevant statutory provision. The fundamental idea is that an appellant seeks a relief from an appellate court, and not determinate to himself. Even under the general provisions of the law of procedure, the worst determinate which an appellate court may visit on an appellant is to dismiss the appeal with a direction in an appropriate case to pay costs to the opposite side. An order adverse to the interests of the a .....

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e principle that a party who has not appealed cannot be permitted to raise a ground, which will work adversely to the appellant. 12. Indisputably, the Revenue could also not take recourse to Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963. By virtue of the said Rule, a respondent before the Tribunal can support the decision appealed against not only on the grounds decided in favour of the respondent but also on grounds decided against it. However, Rule 27 of the said Rules would not e .....

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