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2015 (10) TMI 2305 - ITAT MUMBAI

2015 (10) TMI 2305 - ITAT MUMBAI - TMI - Assessment u/s.153A - Assessing Officer treating the gifts received from Non-resident individuals as unexplained, within the meaning of section 68 - Held that:- No justification for the Assessing Officer to make the impugned addition in an assessment finalized under section 153A of the Act in the absence of any incriminating material having been found during the course of search, qua the impugned gifts from the Non-Resident individuals. We may categorical .....

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de in respect of an unabated assessment which had become final in the absence of any incriminating material having been found in the course of search, qua the impugned gift. Thus, we set aside the order of CIT(A) and direct the Assessing Officer to delete the addition as the same is purported to be beyond the scope and ambit of an assessment envisaged under section 153A of the Act. - Decided in favour of assessee. - ITA Nos. 8027 & 5139/Mum/2010 & 2013 - Dated:- 30-9-2015 - G. S. Pannu, AM And A .....

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order passed by the Assessing Officer dated 23/12/2009 under section 143(3) r.w.s. 153A of the income Tax Act, 1961 (in short 'the Act'). In this appeal, assessee has raised the following Grounds of appeal:- "(1) On the facts and in the circumstances of the case, the Ld.CIT(A) erred in confirming the addition of ₹ 1,29,53,823/- in the assessment u/s.153A of the I.T. Act as no relevant or incriminating material or evidence was found or seized during the course of search reflec .....

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t facts are that the appellant is an individual, who alongwith his family members was subject to a search action by the Department under section 132 of the Act on 12/9/2007. Pursuant to search, a notice under section 153A of the Act was issued on 24/7/2008 calling for a return of income. In response, the assessee filed a return of income on 24/8/2009 declaring a total income of ₹ 10,89,125/- as against an income of ₹ 5,77,443/- declared in the return of income originally filed under .....

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assessee from two Non-Resident Indians, namely, Shri Ashok Pamani -Rs.77,03,823/- and Shri Raj Sitadas Motwani - ₹ 52,50,000/-, which have been treated as unexplained cash credits in the hands of the assessee. The said addition stands affirmed by CIT(A) also and accordingly, the assessee is in further appeal before us. 4. Before the CIT(A) as well as before us, assessee has assailed the addition on points of law as well as on facts. The first and foremost plea raised by the assessee is con .....

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e same is being taken up at the thresh-hold. 5. In this context, Ld. Representative for the assessee explained that during the course of search at the residence of the assessee no incriminating documents, jewellery, cash or unaccounted bank account etc. was found and, therefore, there was no seizure except some loose papers which were appropriately explained in the course of assessment proceedings and no addition has been made in respect of such loose papers. It was pointed out that in the conte .....

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d be made in the impugned assessment unless some incriminating material was found during the course of search regarding the ingenuineness of the gifts in question. In this context the Ld. Representative for the assessee has relied upon various decisions namely:- 1. All Cargo Global Logistics Ltd. vs. DCIT, 137 ITD 287 (Mum)(SB) 2. In the case of Shri Gurinder Singh Bawa, ITA No.2075/M/2010 & ITA No.2669/M/2010 dated 16/11/2012 - 28 Taxmann.com 328 3. CIT (Central) vs. Murli Agro Products Ltd .....

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e. 6. On the other hand, Ld. Departmental Representative appearing for the Revenue has defended the action of lower authorities by pointing out that the provisions of section 153A of the Act empower the AO to assess or re-assess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted. As per the Ld. Departmental Representative the AO was duty bound to assess or reassess 'total income' of such assessmen .....

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ions. Section 153A of the Act postulates the assessment in cases of search or requisition under section 132 or under section 132A of the Act respectively. The said section envisages that the Assessing Officer shall assess or reassess the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted. The second proviso to section 153A(1) of the Act also prescribes that assessment or re-assessment, if any, relating to an .....

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on the findings of the search as well as any other material existing or brought on record by the Assessing Officer. Notably, there would assessments in the period of the six assessment years identified in section 153A(1) of the Act, which would have become final (i.e. not pending on the date of search); such assessments do not abate in terms of the second proviso to sec.153A(1) of the Act, The scope and ambit of such an assessment is the controversy before us. In this context, it would be perti .....

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'ble High Court, no addition could be made in respect of the assessment that had become final in the event no incriminating material was found during the course of search. The Hon'ble High Court also noticed its earlier judgment in the case of Murali Agro-products Ltd. (supra) and has elaborately culled out the scope and ambit of the assessment and reassessment of total income under section 153A(1) of the Act read with the proviso thereof. The Hon'ble Bombay High Court in Continental .....

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plained, within the meaning of section 68 of the Act. 7.1 In the present case, we have perused the orders of the lower authorities and find that there is nothing on record to suggest that any material was found during the course of search which would show that the impugned gifts received from the two Non-Resident individuals were in-genuine or were contrary to the stated position. Notably, the assessee has asserted before the lower authorities that gifts of ₹ 77,03,823/- from Shri Ashok Pa .....

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aper Book, wherein is placed a copy of an Article published in the magazine containing a write-up about the financial and business interest of the two donors, which prima-facie show the creditworthiness of the donees. Be that as it may, we are not presently dealing with the merits of the efficacy of the ingredients of section 68 of the Act, but we are only trying to ascertain as to whether any incriminating material was unearthed during the course of search which would show that the gifts were i .....

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