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M/s Tegh International Versus Asstt. Commissioner of Income Tax

2016 (6) TMI 450 - ITAT DELHI

Scope of jurisdiction u/s. 153A - incriminating material found during the course of search - Held that:- Additions made by the AO are beyond the scope of section 153A of the Income Tax Act, 1961, because no incriminating material or evidence had been found during the course of search so as to doubt the purchases. It was noticed that as on the date of search i.e. 26.4.2010, no assessment proceedings were pending for the year under consideration and the AO was not justified in disturbing the concl .....

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s made on the assessed bogus purchases is not sustainable in the eyes of law, because this issue in dispute is now no more res-integra in view of decision of CIT vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT ] - Decided in favour of assessee - I.T.A. No. 1462 & 1463/DEL/2014 - Dated:- 27-5-2016 - Shri H. S. Sidhu, Judicial Member And Shri O. P. Kant, Accountant Member For the Assessee : Sh. Amit Goel, CA & Sambhav Goel, CA For the Department : Sh. Amit Jain, Sr. DR ORDER Per H. S. Sid .....

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ts and circumstances of the case and in law, the addition of ₹ 1,66,62,715/- made by the AO on account of alleged bogus purchase is beyond the jurisdiction of provisions of section 153A of the Income Tax Act, 1961 and CIT(A) erred in not holding so. 2. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition of ₹ 1,66,62,715/- made by the AO on account of alleged bogus purchases. The assessee craves leave to add one or more ground of appeal, .....

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ng so. 2. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition of ₹ 1,89,64,850/- made by the AO on account of alleged bogus purchases. The assessee craves leave to add one or more ground of appeal, or to alter / modify the existing ground before or at the time of hearing of appeal. The aforesaid ground are without prejudice to each other. ITA No. 1462/DEL/2014 - ASSESSMENT YEAR (2006-07) 4. The brief facts of the case are that the assessee fir .....

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as conducted by the Investigation Wing of the Department in M/s Tegh group of cases on 26.04.2010 and simultaneously the assessee's business premises at 49, Udyog Vihar, phase-IV, Gurgaon, Haryana, was also covered u/s 132(1) of the IT Act, 1961. The case of the assessee was centralized u/s 127 of the IT Act, 1961 vide order F.No.CIT- IXlITO(HQ)/127/2010-11/809 dated 13.08.2010 and the jurisdiction over the assessee's case was assigned to the Assessing Officer, Central Circle-10 New Delh .....

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details, information and documents which were examined by the Assessing Officer and the case was discussed. Thereupon, the assessment was completed in terms of an order u/s 153A of the Act read with section 143(3) of the Act dated 22.03.2013 at a total income of RS.7,96,50,433/- as against the returned income of ₹ 6,29,87,718/- wherein the Assessing Officer made an addition of ₹ 1,66,62,715/- on account of bogus purchases made through accommodation entries. 5. Against the aforesaid .....

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ion dated 28.8.2015 of the Hon ble Delhi High Court passed in the case CIT(Central)-III vs. Kabul Chawla in ITA No. 707, 709, 713/Del/2014 wherein the Hon ble High Court has held that if the additions are made, but not based on any incriminating material found during search operation, then these additions are not sustainable in the eyes of law. He further stated that the additions have no relation with any incriminating material found and undisclosed income or property discovered in the course o .....

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No. 274/2016 & Ors. Order dated 6.5.2016. - Neeta Saha vs. ITO (ITAT, Delhi) - CIT vs. JMD Computers & Communications Pvt. Ltd. (Delhi High Court) (2009) 20 DTR (Del) 317 - CIT vs. Bholanath Polyfab Pvt. Ltd. (Gujrat High Court) (2013) 355 ITR 290 (Guj) - CIT vs. Nikunj Exmp Enterprises Pvt. Ltd. (Bombay High Court.) 2013 (1) TMI 88 - Punjab Metal Store vs. ITO (ITAT, Delhi) - ITA No. 1612/Del/2015 (AY 2006-07) dated 2.12.2015. - Radhey Sham & Co. vs. ITO (ITAT Delhi) ITA No. 1429/De .....

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ases referred by the Ld. Counsel of the Assessee in the shape of Paper Book. We find that the additions made by the AO are beyond the scope of section 153A of the Income Tax Act, 1961, because no incriminating material or evidence had been found during the course of search so as to doubt the purchases. It was noticed that as on the date of search i.e. 26.4.2010, no assessment proceedings were pending for the year under consideration and the AO was not justified in disturbing the concluded assess .....

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he assessed bogus purchases is not sustainable in the eyes of law, because this issue in dispute is now no more res-integra, in view of the decision dated 28.8.2015 of the Hon ble Delhi High Court in the case of CIT vs. Kabul Chawla passed in ITA No. 707, 709 and 713/2014 wherein the Hon ble High Court of Delhi has held has under:- 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned ITA Nos. 707, 709 and 7 .....

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s a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undisclosed income would be brought to tax . iv. Althou .....

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sence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment s .....

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