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M/s MANAS DWELLERS (P) LTD. Versus DCIT, CENTRAL CIRCLE-4, NEW DELHI

2016 (9) TMI 747 - ITAT DELHI

Assessment order u/s 153A - Held that:- AO has completed the assessment and made the addition in dispute without any incriminating material found during the search and seizure operation and the addition in this case was purely based on the material already available on record. Hence, the addition in the case is deleted . See CIT Central-III vs Kabul Chawla (2015 (9) TMI 80 - DELHI HIGH COURT), we allow the CO of the assessee and quash the assessment order passed u/s 143(3)/153A. - Decided in fav .....

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es of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. A.O. in making disallowance of a sum of ₹ 8,51,OOO/- under provisions of the section 40A(3) of Income Tax Act, 1961. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in assuming jurisdiction to pass impugned assessment order under section 153A, more so in making impugned disallowance which ought not to have bee .....

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interest u/s 234B of the Income Tax Act, 1961. 5. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are prejudice to each other. 2. The brief facts of the case are that a search and seizure operation u/s. 132 of the I.T. Act, 1961 was carried out on 21.1.2011 in DS Group of cases. M/s Dharampal Satyapal Group is engaged in manufacturing and trading of chewing tobacco and premium pan masala besides ot .....

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, lands or immovable or movable property and real estate promotion. During the FY 2005-06, the assessee company has made purchases of land aggregating to ₹ 4,36,99,087/- from various persons. Out of the said payment, an amount of ₹ 42,55,000/- has been paid to various persons in cash. Since, the payments in cash have been made in excess of the limit prescribed u/s. 40A(3) of the Income Tax Act, the explanation of the assessee was sought and the in response to the same, assessee filed .....

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s. 153A of the I.T. Act, 1961. 3. Against the aforesaid assessment order dated 23.1.2013, assessee preferred an appeal before the Ld. CIT(A), who vide impugned order dated 24.12.2013 has dismissed the appeal of the asseseee. 4. Aggrieved with the order of the Ld. CIT(A), the Assessee is in appeal before the Tribunal. 5. At the threshold, Ld. Counsel of the assessee stated that the issues in dispute relating to upholding the validity of the order of assessment passed u/s. 153A on 23.1.2013, is sq .....

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d and undisclosed income or property discovered in the course of search and as such are bad in law being beyond the scope of jurisdiction u/s. 153A of the I.T. Act. In support of his contention, he filed a Paper Book containing pages 1 to 31 having the copy of assessment order in the case of M/s Nilay Infrastructure Pvt. Ltd. for the assessment year 2007-08 dated 29.1.2013; copy of the Ld. CIT(A) order in the case of M/s Nilay Infrastructure Pvt. Ltde. for the assessment year 2007-08 dated 28.6. .....

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the relevant records available with us, especially the orders of the revenue authorities and the cases 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 transactions. It was noticed that as on the date of search i.e. 21.1.2011, no assessment proceedings were pen .....

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inion, the action of the AO is based upon conjectures and surmises and hence, the additions made is not sustainable in the eyes of law, because this issue in dispute is now no more resintegra, in view of the decision dated 28.8.2015 of the Hon ble Delhi High Court in the case of Commissioner of Income Tax vs. Kabul Chawla (2016) 380 ITR 573 (Del.) 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 .....

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ll abate. The total income for such AYs will have to be computed by the AOs as 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 .....

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to be made under this Section only on the basis of seized material. v. In absence 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 .....

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