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2017 (1) TMI 623 - ITAT DELHI

2017 (1) TMI 623 - ITAT DELHI - TMI - Validity of assessment u/s 153A - addition to income - Held that:- The additions made by the AO are beyond the scope of section 153C 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 noted that in the entire assessment order, the AO has not referred to any seized material or other material for the year under consideration having being found during the .....

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avour of assessee - I.T.A. No.5196/DEL/2013, C.O. NO. 63/DEL/2014 - Dated:- 9-1-2017 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Revenue : Sh. S.S. Rana, CIT(DR) For The Assessee : S h . Gautam Jain, Adv. ORDER PER H.S. SIDHU : JM The Revenue has filed the Appeal and Assessee has filed the Cross Objection against the Order dated 28.6.2013 of the Ld. CIT(A)-XXXI, New Delhi relevant to assessment year 2006-07. 2. The grounds raised in the Revenue s App .....

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Ld. CIT(A) has erred in law in deleting the disallowance of ₹ 7,46,762/- made by AO u/s. 36(1)(iii) of I.T. Act, 1961. 5. On the facts and in circumstances of the case the ld. CIT(A) has erred in law in deleting the disallowance of ₹ 2,41,50,000/- made by AO on account of Share Capital. 6. The appellant craves leave to add, amend any / all the grounds of appeal before or during the course of hearing of the appeal. 3. The grounds raised in the Assessee s Cross Objection read as under: .....

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t were seized as a result of search on Gee Ispat Group of cases the assumption of jurisdiction u/s. 153C of the Act was illegal, invalid and unsustainable. It is, therefore, prayed that, it be held that, assumption of jurisdiction to initiate proceedings u/s. 153C of the Act and frame assessment u/s. 153C/143(3) of the Act was not in accordance with law and thus, be held to invalid. 4. The brief facts of the case are that the case of the assessee company was centralized consequent upon an action .....

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come of ₹ 2,50,07,600/- after making certain disallowances vide his order dated 22.12.2011 passed u/s. 153C/143(3) of the I.T. Act, 1961. 5. Against the aforesaid assessment order dated 22.12.2011, assessee preferred an appeal before the Ld. CIT(A), who vide impugned order dated 28.6.2013 has allowed the appeal of the asseseee. 6. Aggrieved with the order of the Ld. CIT(A), Revenue is in appeal and assessee is in Cross Objection before the tribunal. 7. At the threshold, Ld. Counsel of the .....

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on dated 28.8.2015 of the Hon ble Delhi High Court passed in the case Commissioner of Income Tax vs. Kabul Chawla reported (2016) 380 ITR 573 (Del.) 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 in the present case the AO has made the addition in dispute in a proceeding under section 153C, without there being any incri .....

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f Jasjit Singh vs. ACIT in ITA No. 1436/Del/2012 AY 2009-10 dated 5.11.2010 affirmed by the Hon ble Delhi High Court in ITA No. 337/2015 dated 11.8.2015 CIT vs. Jasjit Singh. ii) Decision of Hon ble Delhi High Court in the case of CIT vs. Kabul Chawla reported in 234 Taxman 300 (Del.) (380 ITR 573). iii) Delhi High Court decision in the case of CIT vs. RRJ Securities Ltd. reported in 62 taxmann.com 391 (Del.) (380 ITR 612) In view of the above, he requested that the assessment order passed by th .....

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5 (Delhi) - CIT vs. Anil Kumar Bhatia (24 taxmann.com 98) 10. We have heard both the counsel and perused the relevant records available with us, especially the orders of the revenue authorities and the cases referred by the Ld. Counsel of the Assessee and the Ld. DR. We find that the additions made by the AO are beyond the scope of section 153C 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 .....

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ce, the additions made 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 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 the light of the law explained in the aforementioned ITA Nos. 707, 709 a .....

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Os 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 the disclosed and the undisclosed income would be brought to tax . iv. Al .....

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n 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 and the assessment under Section 153A merges into one. Only one assessme .....

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