TMI Blog2016 (5) TMI 1307X X X X Extracts X X X X X X X X Extracts X X X X ..... tement of the Assessee Company from which payment has been made to the said party; and Copy of Ledger Account of M/s. Soma Enterprise Ltd. (Customer) in the books of Assessee Company along with copies of invoices raised by Assessee on said party. For rendering of services to this customer assessee has availed services from M/s. Manav Impex. It appears from the above-mentioned documents that the Assessee Company has made payment to M/s. Manav Impex towards charges for excavation of under-ground tunnel by shaft. The said subcontract work is a part of the main project work undertaken by the Company for M/s Soma Enterprise Limited in relation to the Koyan Dam Project. Further, it was also shown from the copy of bank statement and copy of ledger account that the payments made to M/s Manav Impex was through normal banking channels. We set aside the issue of addition on account of purchase to the file of AO for deciding afresh by considering above documents discussed by us. Disallowance on account of personal usage of car - AO has disallowed suo motu estimated 10% on account of personal use of car by the Director. The assessee is a corporate entity, therefore, in view of the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , disallowance on account of loss on sale of assets, addition on account of share application money u/s.68 of the Act of and addition on account of cash credit (loans) u/s.68 of the Act etc. 3. Before the CIT(A) assessee raised issue of validity of the assessment order passed by the Assessing Officer uls.153A r.w.s. 143(3) of the Act and Ground No.2 pertains to the, issue of violation of principles of natural justice. In the written submissions filed during the appellate proceedings, it was submitted that, to assess income u/s.153A of the Act, A.O retains the original jurisdiction as well as jurisdiction conferred on him uls.153A of the Act to assess income in respect of such six years provided these assessments are abated and in respect of other cases i.e. cases where the assessments are not abated, A.O can make assessment u/s.153A of the Act on the basis of material found during the course of search but not produced in the course of assessment proceedings or in cases any undisclosed income/property is discovered during the search. It was further submitted that, in the case of the assessee, no assessment was abated for A.Y.2004-05 since the period to issue the notice u/s.143(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer has been given the power to assess or reassess the 'total income' of the six assessment years in question in separate assessment orders. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. 20. A question may arise as to how this is sought to be achieved where an assessment order had already been passed in respect of all or any of those six assessment years, either under Section 143(1)(a) or Section 143(3) of the Act. If such an order is already in existence, having obviously been passed prior to the initiation of the search/requisition, the Assessing Officer is empowered to reopen those proceedings and reassess the total income, taking note of the undisclosed income, if any, unearthed during the search. For this purpose, the fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub section (1) of Section 153A opens. The time-limit within which the notice under Section 148 can be issued, as pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The position thus emerging is that where assessment or reassessment proceedings are pending completion when the search is initiated or requisition is made, they will abate making way for the Assessing Officer to determine the total income of the assessee in which the undisclosed income would also be included, but in cases where the assessment or reassessment proceedings have already been completed and assessment orders have been passed determining the assessee's total income and such orders are subsisting at the time when the search or the requisition is made, there is no question of any abatement since no proceedings are pending. In this latter situation, the Assessing Officer will reopen the assessments or reassessments already made (without having the need to follow the strict provisions or complying with the strict conditions of Sections 147, 148 and 151 and determine the total income of the assessee. Such determination in the orders passed under Section 153A would be similar to the orders passed in any reassessment, where the total income determined in the original assessment order and the income that escaped assessment are clubbed together and assessed as the total inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder passed u/s. 153A r.w.s. 143(3) of the Act which are illegal and bad in law. 2. The order passed by the learned CIT(A) is in violation of principles of natural justice and is passed without giving a proper opportunity of hearing to the appellant. 3. The learned CIT(A) has erred in law and in facts in passing the order which is illegal and bad in law. The order passed by the learned CIT(A) purportedly on 04.01.2013 after the conclusion of hearing on 11.12.2012, which has been served on 09.03.2013 is illegal. 4. The learned CIT(A) has erred in law and in facts in not holding that the assessment order was passed in violation of principles of natural justice and was passed without giving proper opportunity of hearing to the appellant. In ground No.5, 6 7 the assessee had challenged validity of additions made with respect to share capital, unsecured loans etc. Grounds raised in ITA No.2199/Mum/2013(AY : 2005-2006) :- Grounds of appeal against the order dated 04.01.2013 passed by the learned Commissioner of Income-tax(Appeals)- 38, Mumbai Following grounds of appeal are without prejudice to each other: 1. The learned CIT(A) has erred in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. Grounds raised in ITA No.2202/Mum/2013(AY : 2006-2007) :- Grounds of appeal against the order dated 04.01.2013 passed by the learned Commissioner of Income-tax(Appeals) 38, Mumbai Following grounds of appeal are without prejudice to each other: 1. The learned CIT(A) has erred in law and in facts in confirming the additions made by the Assessing Officer in the assessment order passed u/s. 153A r.w.s. 143(3) of the Act which are illegal and bad in law. 2. The order passed by the learned CIT(A) is in violation of principles of natural justice and is passed without giving a proper opportunity of hearing to the appellant. 3. The learned CIT(A) has erred in law and in facts in passing the order which is illegal and bad in law. The order passed by the learned CIT(A) purportedly on 04.01.2013 after the conclusion of hearing on 11.12.2012, which has been served on 09.03.2013 is illegal. 4. The learned CIT(A) has erred in law and in facts in not holding that the assessment order was in violation of principles of natural justice and was passed without giving proper opportunity of hearing to the appellant. 5. The learned CIT(A) has erred in law and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2004-05, as per ld. AR return was filed on 31-10-2004. With the return of Income the assessee had enclosed its Audited Balance Sheet and Profit Loss Account along with Audit Reports, Computation of Total Income and other details. The return had been processed u/s.143(1) but no scrutiny assessment notice u/s. 143(2) was issued. For AY 2004-05, notice u/s. 143(2) of the Act was to be issued before expiry of 12 months from the end of the month in which the return is furnished. Accordingly, in this case AO should have issued notice by 31-10-2005, but no such notice was issued. Thereby the assessment was treated to be completed since on the date of search i.e. on 31-10-2009, limit for issuing notice u/s.143(2) was already expired much before date of search. 8. In respect of assessment year 2005-06, return was filed on 29-102005 which has been processed u/s. 143(1) but no scrutiny notice u/s. 143(2) was issued on or before 31-10-2006 i.e. time limit for issuing notice was expired. Further, in this case no notice u/s. 148 was issued for reopening of the assessment. As per ld. AR the assessment had been processed u/s.143(1) and no notice u/s. 143(2) or 148 was issued. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant case before us have been discussed. Reliance was also placed on the following decisions :- i) ITAT Mumbai Bench in the case of Shri Gurinder Singh Bawa vs. DCIT - 28 taxmann.com 328 ii) ITAT Mumbai Bench in the case of Anil P. Khimani vs. DCIT - No. 2855 to 2860/Mum/2008 dated 23-02-2010 iii) ITAT Jodhpur Bench in the case of Vishal Dembla vs. DCIT - 157 TTJ 189 iv) High Court of Bombay on the case of CIT v. Murli Agro Products Ltd. [2014] 49 Taxmann.com 172 v) ITAT Mumbai Bench in case of ACIT v. Jayendra P. Jhaveri [2014] 65 SOT 118 vi) Jodhpur ITAT in the case of Ayushi Builders Developers vs. DCIT [2014] 166 TTJ 25 vii) ITAT Pune Bench in case of ACIT vs. SRJ Peety Steels P. Ltd. [2011] 137 TTJ 627 viii) Mumbai Tribunal in the case of Nikki Agarwal vs. ACIT dated 22-01-2014 being ITA No. 879/M/2011 [20 14-TIOL-75-ITAT-MUM] ix) Mumbai Tribunal in the case of Parag M. Sanghvi vs. ACIT in ITA No. 8027/Mum/2010 dated 30-09-2015 x) Mumbai Tribunal in the case of Zeenat P. Sanghvi vs. DCIT in ITA No. 8026/Mum/2010 dated 19-12-2014 xi) Jaipur Tribunal in the case of Jadau Jewellers Manufacturers (P) Ltd. vs. ACIT in ITA No. 686/JP/2014-[2016] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding in respect of bank account entries of each of the share applicant. According to the finding of the AO, share applicant companies at the time of making payment to the assessee have received cheques from various companies. The AO has examined the bank account of those other companies and found that they have received cheque from some other companies and on examination of forth level companies they have found that cash was deposited in their account. The AO also recorded that in few cases those companies are having account with Progressive Co. Op. Bank wherein Mumbai address was mentioned but the Inspector did not find any such company at such address. It was further contended by ld. AR that during the course of assessment proceeding, assessee has submitted following documents to prove identity of the parties, Genuineness of transaction and creditworthiness of such parties vide its submission letter dated 09-11-2011 Copy PAN of Share applicant companies Copy of MOA/AOA of Share applicant Companies Copies of Ledger Confirmation from all the companies Copy of Bank passbook of share applicant from which share application money was paid Copies of Balance Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fourth level is actually assessee's own money. As per ld. AR the AO had merely relied on the information received from Investigation wing without confronting to the assessee on the information so received. 10. Our attention was also invited to para 9 of AO s order wherein he observed that during the course of search and post search enquiries, it has been established that the assessee has received huge share application money with heavy premium from various companies. However, as per ld. AR during the search no incriminating material was found regarding share application money received from the various shareholders. The same can be verified from the statement recorded u/s. 132(4) of the Act dated 31-10-2009 and 20-11-2009]. By inviting our attention to the statement recorded u/s.132(4), ld. AR submitted that during the course of search, the search arty had not questioned the director of the Company on the issue of bogus share applicant or bogus loan which shows that at the time of search the search party was not having this information in possession on the basis of which additions were made by AO. 11. With regard to merit of the addition, reliance was also placed by ld. AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of DCIT v. Rohini Builders - 256 ITR 360, decision of Hon ble Rajasthan High Court in the case of Aravali Trading Co., 220 CTR 622, decision of Hon. High Court of Gauhati in the case of Nemi Chand Kothari vs. CIT [2004] 264 ITR 254. 12. In support of the proposition reliance was placed on the decision of Hon. Delhi High court in the case of CIT - Divine Lasing Finance Ltd. 299 ITR 268 (Delhi High Court], wherein it is held as under: The tribunal has further found that the AO has not brought any positive material or evidence which would indicate that the shareholders were benamidars or fictitious persons or that any part of the share capital represented company's own income from undisclosed sources. As regards receipt of share capital on issue of rights shares to five companies, these companies were duly incorporated under the Sikkimese Companies Act and were assessed under the Sikkimese Taxation Manual-Their share subscriptions were also received through banking channels and found to be valid by the jurisdictional, AO-Therefore, no addition could be made under section 68. Under these circumstances the department is free to proceed to reopen individual assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 87 ITR 349 wherein it is held as under: The onus to prove that the apparent is not the real is on the party who claims it to be so. As it was the department which claimed that the amount of fixed deposit receipt belonged to the respondent firm even though the receipt had been issued in the name of B, the burden laid on the department to prove that the respondent was the owner of the amount despite the fact that the receipt was in the name of B. So far as the source was concerned, there was no material on the record to show that the amount came from the coffers of the respondent-firm or that it was tendered in B Calcutta branch of the Central Bank, on behalf of the respondent. As regards the destination of the amount, there was nothing to show that it went to the coffers of the respondent. On the contrary, there was positive evidence that the amount was received by B. It would thus follow that both as regards the source as well as the destination of the amount, the material on the record gave no support to the claim of the department. 15. In support of the proposition that addition cannot be made u/s. 68 of the Act merely on the basis of information received from Investigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrangement the assessee company had with these persons. 17. Accordingly we are of the tneui that the CIT(A) was justified deleting the addition made by the AO. 18. In the result, the appeal of the revenue stands dismissed. (iii) Latest decision of Hon. Mumbai Tribunal in the case of Krishna Sheet Processors Pvt. Ltd dated 30-06-2015 being ITA No. 546/Mum/2013 and ITA No.7465/Mum/2012, it is held as under: ITA No. 546/Mum/2013 6.2. We have carefully perused the bank statement brought before us which are placed in the paper book. We do not find any strength in the allegation made by the AO. Allegations are baseless and without any supportive evidence. On the contrary, these two companies have paid share application money from their bank accounts through account payee cheque, therefore the transaction cannot be treated as bogus. Since the AO has not made any further enquiry, merely because of the false allegation, a genuine transaction cannot become non genuine transaction. ITA No.7465/Mum12012 11.1. Further the allegation that these companies have taken money from their sister concerns who have deposited cash before lending money to these c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of proof and explained the source of share capital and advances received by established the identity) creditworthiness and genuineness of transaction by banking instruments with documentary evidences - assessee company substantiated the details with the documentary evidences as extracted from the website of Ministry of Corporate Affairs) Government of India before the Assessing Officer. These facts have not been rebutted on behalf of the Revenue. (v) Decision of Hon. Delhi Tribunal m the case of ITO vs. Shakti Securities Pvt. Ltd. in ITA No. 3475/Del/2009 dated 10-09- 2015 [2015-TIOL-1634-ITAT-DEL] it is held as under: A) ++ CIT(A) held that the AO did not bring on record any material or evidence proves that the various payments received were in the nature of accommodation entry. Simply the explanation was called for in response to which the assessee submitted various documents in support of the transactions. All the transactions have been carried out through account payee cheque and confirmations, share application forms, written acknowledgement of these parties have been filed. The AO rejected the said explanation merely on the ground that the summons issued by him was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of CIT vs. Navodaya Castles Pvt. Ltd. in [2014-TIOL-1775-HC-DEL-IT] Whether mere deposit of cash in the bank accounts prior to issue of cheque/pay orders would only raise suspicion, once the assessee had been able to show that the shareholder companies were duly incorporated and their identity genuineness stands established - Whether it is for the AO to conduct further investigation, before any addition can be made u/s 68 in the guise that the money belonged to the assessee and was their unaccounted money, which had been channelized.: - held in favour of the assessee (viii) Decision of Hon. Delhi High Court in the case of CIT vs. Shiv Dhooti Pearls And Investment Ltd. [20 16-TIOL-10-HC-DEL-IT] Whether the assessee is liable to disclose only the sources from where it has received the credit/loans - YES: HC Whether such liability of the assessee can be burdened to an extent, to show the sources of his creditor or to prove the creditworthiness of the sources of the sub-creditors - NO: HC (ix)Decision of Hon. Delhi ITAT in the case of ITO vs. Shantam Fashion Fabrics Pvt. Ltd. [2015-TIOL-2045-ITAT-DEL] Whether in case the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82 CCH 133 Delhi and Major Metal Ltd. (2012) 251 CTR 385. 18. With respect to the loan received from GIPTECH of ₹ 90 lakhs, addition was made u/s.68. During the course of assessment the AO observed that in response to the show cause, notice issued by AO to explain credit of this amount, Assessee company has submitted Loan Confirmation from GIPTECH on the company's letter head wherein it has been confirmed that loan was given by them and it was through banking channel. While deciding this issue, the CIT(A) has relied on issue adjudicated in the case of Mrs. Vina Viren Ahuja for AY 2004-05 as there was identical issue wherein by placing reliance on following case laws held that in this case the appellant has thwarted any further enquiry into the matter by not submitting the requisite details and not discharge its onus of submitting the basis information: i) Decision of Hon. Supreme court in the case of CIT vs. P.R. Ganapathy Ors. in Civil Appeal No. 5528 of 2007 ii) Decision of Supreme Court in the case of CIT vs. P. Mohankala reported in (2007) 291 ITR 278 Accordingly CIT(A) confirmed the addition made by AO in respect of loan taken from GIPTECH of ₹ 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment is treated to be completed since on the date of search i.e. 31-10-2009, limit for issuing notice u/s.143(2) was already expired. In respect of assessment year 2005-06 assessee has filed its return of income on 29-10-2005, which was also processed u/s.143(1). For taking into scrutiny notice u/s.143(2) was required to be issued before 31-10-2006 i.e. time limit for issuing notice during the relevant assessment year under consideration. However, no notice u/s.143(2) was issued. Even no notice u/s.148 was issued for reopening of the assessment. Thus, the assessment for both the assessment years i.e. A.Y.2004-05 2005-06, had become final and was not pending, therefore, there was no question of abatement. We had carefully gone through the order of AO as well as CIT(A). We had also gone through the statement recorded u/s.132(4) and did not find any mention of incriminating material with regard to bogus share capital or unsecured loans having been received by assessee in these years. Whatever share capital and unsecured loans were received by the assessee, was duly recorded in the regular books of account and shown in the audited accounts filed along with the return of income for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o issue notice within the meaning of sub-section (1) of section 153A. That is because, Chapter XIII within which the powers of search and seizure and powers to requisition books of account are spelt out enable the revenue to take care of cases where it effects a search and seizure. That search and seizure is effected and after the same is effected, books of account, other documents, money, bullion, jewellery or other valuable article or thing is found as a result thereof that notwithstanding anything and within the meaning of the above provisions having been concluded, it is open for the revenue to make an assessment. It is also open to the revenue to make a reassessment in cases where it exercises the powers to requisition books of account etc. This is because it is of the view that the books of account are required to be summoned or taken into custody. It, therefore, issues a summons in that regard. It may also requisition the books of account or other documents for that might be useful and or any assets representing withholding or part income or property which has not been or would not have been disclosed for the purpose of the Indian Income-tax Act, 1922 or the Income-tax Act o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 153A (1) what stands revived is the pending assessment/reassessment proceedings which stood abated as per section 153A(1). ■ Once it is held that the assessment has attained finality, then the Assessing Officer while passing the independent assessment order under section 153A read with section 143 (3) could not have disturbed the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under section 153A establish that the reliefs granted under the finalised assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. If there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings, the Assessing Officer while passing order under section 153A read with section 143(3) cannot disturb the assessment order ■ The stand of revenue that these observations are made in passing or that they are not binding on instant Court is not agreeable because the essential controversy before the Bench was somewhat different. Revenue urged that was only in relation to the legality and validity of the order of the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That is the conclusion reached by the Division Bench in Murli Agro (supra). These are the conclusions which can be reached and upon reading of the legal provisions in question. ■ Therefore, the Special Bench's understanding of the legal provision is not perverse nor does it suffer from any error of law apparent on the face of the record. ■ Further, revenue would submit that the above observations and conclusions of the Special Bench are specifically disapproved in CIT v. Anil Kumar Bhatia [2012] 24 taxmann.com 98/211 Taxman 453 (Delhi). However, this argument is not found to be accurate. Upon reading of the observations of the Delhi High Court as a whole and in entirety, it is not possible to agree with revenue that the High Court of Delhi reached a conclusion different than the view taken by the Division Bench. 23. ITAT Delhi Bench in the case of Jakson Enterprises, ITA No.383/Del/2013, order dated 27-5-2015, held as under :- 9. Having gone through the orders of the authorities below, we find that the Learned CIT(Appeals) has rejected the contentions of the assessee on the issue of validity of assessment framed under sec. 153A read with sec. 143(3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder :- 8. We are unable to accept the contention advanced on behalf of the Revenue for the reason that if both the pending and completed assessment were to be taken on same pedestal, then there was no need to enshrine second proviso to sec. 153A( 1) providing that the pending assessments within the period of six assessment years shall abate. The Hon'ble Delhi High Court in the case of Anil Kumar Bhatia (supra) dealt with a situation in which some incriminating material was found in respect of a non-pending assessment. It was in that background that the Hon'ble High Court held that sec. 153A applies if incriminating material is found even if assessments are completed. The question as to whether any addition can be made in respect of completed assessments when no incriminating material was found, was apparently left open. However, we find that there are sufficient indirect hints given by the Hon ble Delhi High Court in the case of Anil Kumar Bhatia (supra) about not making of any addition in respect of an assessment year for which the assessment is already completed unless some incriminating material is found during the course of search. This can be seen from the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome in the proceedings u/s 153A shall be computed by considering the originally determined income. If some incriminating material is found in respect of 11 such assessment years for which the assessment is not pending, then the 'total income' would be determined by considering the originally determined income plus income emanating from the incriminating material found during the course of search. In the other scenario of the assessments pending on the date of search which would abate in terms of second proviso to sec. 153A( 1), the total income shall be computed afresh uninfluenced by the fact whether or not there is any incriminating material. In fact, this is the position which follows when we read the judgment of the Hon'ble Delhi High Court in Anil Kumar Bhatia (supra) in juxtaposition to the special bench order in the case of All Cargo Global Logistics Ltd. (supra). The other judgment relied by the Ld. DR in the case of Madugulu Venu (supra) also talks about the need for making fresh assessment in respect of the assessment years for which the assessments are not pending on the date of search but does not set out the scope of such assessment, which is the issue be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee with this finding that u/s 153A of the Act, the additions need not to be restricted or limited to the incriminating material, which was found during the course of search. Thus, it is clear from the facts of this case before the Hon ble High Court that several additions relying upon the incriminating material found in the course of search were made by the AO in the assessment proceedings u/s 153A of the Act and addition u/s 115JB was made by the AO in absence of incriminating material concerning this addition. This addition was questioned by the assessee on the basis that there was no incriminating material found concerning the addition made in the assessment u/s 153A of the Act, which has been rejected by the Hon ble High Court with the above finding. It was held by the Hon ble High Court that there cannot be multiple assessments, once sec. 153A of the Act is applicable. Section 153A(1) postulates one assessment; putting the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted or requisition was made. 14. In para no. 3 of the judgment the Hon ble Delhi High Court while discussin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t dependent on any undisclosed income being unearth during the such search. The Hon ble Rajasthan High Court in the case of Jai Steel (supra) has been pleased to hold that if any books of accounts or other documents relevant to the assessment had not been produced in the course of original assessment and found in the course of search, such books of accounts or other documents have to be taken into consideration while assessing or re-assessing the total income under the provisions of sec. 153A of the Act. Even any undisclosed income or undisclosed property has been found after the conclusions of the search, same would also be taken into consideration. The requirement of assessment or re-assessment under the said section has to be read in the context of sections 132 or 132A of the Act, in much as, in case nothing incriminating is found on account of such search or requisition, then the question of re-assessment of the concluded assessment does not arise, which would require more reiteration and it is only in the context of the abated assessment under second proviso which is required to be assessed. 17. In the case of SSP Aviation Ltd. vs. DCIT (supra) where the validity of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad with sec. 143(3) of the Income-tax Act, 1961 for the assessment year under consideration is not valid and the same is accordingly held as null and void. The related ground nos. 2 to 6 on the issue is thus allowed. 20. In view of the above findings, whereby the assessment itself has been held null and void, the other issues raised in other ground nos. 7 and 8 questioning the validity of the disallowance of deduction u/s 80IB on scrap sales (ground no.7) and disallowance made u/s 14A (ground no.8) have become infructuous and academic only. These grounds thus do not require any adjudication. The same are being disposed off as such. 24. Similar view has been taken by ITAT Jodhpur in the case of Vishal Dembla, 40 taxmann.com 134, wherein it was held that where the assessee has already submitted his return prior to search which has attained finality and no incriminating document was found during the search, gifts already disclosed by the assessee in the return of income which has attained finality, could not be disturbed u/s.153A. 25. The Hon ble jurisdictional High Court in the case of Murli Agro Products Ltd., 49 taxmann.com 172, held as under :- Held : The ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alised assessments/reassessments do not abate, the appeal, revision or rectification pending against finalised assessments/reassessments would not abate. Therefore, the argument of the revenue, that on initiation of proceedings under section 153A, the assessments/reassessments finalised for the assessments years covered under section 153A stand abated cannot be accepted. Similarly on annulment of assessment made under section 153A(1) what stands revived is the pending assessment/reassessment proceedings which stood abated as per section 153A(1). [Para 10] In the instant case, the Assessing Officer while passing the independent assessment order under section 153A read with section 143(3) could not have disturbed the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under section 153A establish that the reliefs granted under the finalised assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. In the present case there was nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings which would show that re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulled by higher authorities on the ground of legality of notice under section 143(2), re-opening under section 147 on that very ground would mean nothing else but abuse of process of law. Hence, the contention of the revenue that as the return was processed under section 143(1), it was a mere intimation and the Assessing Officer had reason to believe that income had escaped assessment and it was open to the Assessing Officer to re-assess the income under section 153A, even without any incriminating material found during the search action, is not tenable. The next argument of the revenue has been that since in the case in hand, no books of account were found during the search action that itself is the incriminating material against the assessee, has no force of law. Though the revenue may not be satisfied with the explanation of the assessee that the books of account were lost in flood, still the assessment or addition cannot be made on this ground. Such an inference of concealment of income cannot be made just on mere assumptions, presumptions or suspicion. The next limb of argument of the revenue, while relying upon the authority of Supreme Court has been that the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umbai Tribunal in the case of Nikki Agarwal vs. ACIT dated 22-01-2014 being ITA No. 879jMj2011 [20 14-TIOL- 75-ITAT-MUM] ix) Mumbai Tribunal in the case of Parag M. Sanghvi vs. ACIT in ITA No. 8027/Mum/2010 dated 30-09-2015 x) Mumbai Tribunal in the case of Zeenat P. Sanghvi vs. DCIT in ITA No. 8026/Mum/2010 dated 19-12-2014 xi) Jaipur Tribunal in the case of Jadau Jewellers Manufacturers (P) Ltd. vs. ACIT in ITA No. 686/JP/2014-[2016] 175 TTJ 344 29. The ITAT Delhi Bench in the case of M/s Suncity Projects Pvt. Ltd., 2016-TIOL-643-ITAT-Del, held as under:- 13. We have carefully considered the arguments of both the sides and have perused the material placed before us. In the case of Kabul Chawla (supra), Hon'ble Jurisdictional High Court has considered all earlier decisions of Hon'ble Delhi High Court and has also considered the decisions of other High Courts and Tribunals and summarized the legal position in paragraph 37 and at the conclusion of the case in paragraph 38, which are reproduced below:- Summary of the legal position. 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the course of search which were not produced or not already disclosed or made known in the course of original assessment. Conclusion 38. The present appeals concern AYs 2002-03, 2005-06 and 200607. On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed. 14. In clause (iv) above, their Lordships held Obviously an assessment has to be made under this Section only on the basis of seized material . In clause (v), the same is reiterated by holding In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made . In clause (vii), it is stated Completed assessments can be interfered with by the AO while making the assessment under Section 153A only on the basis of some incriminating material unearthed during the course of search . Hon ble Delhi High Court in the case of RRJ Securities Ltd., 2015-TIOL-2539-HC-DEL-IT, held as under :- In respect of such assessments which have abated, the AO would have the jurisdiction to proceed and make a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voices were not made available in the course of search. These expenses mainly covers payment made to various suppliers. One of the supplier during the year under consideration was Manav Impex from whom assessee has shown purchase of ₹ 64,74,581/-. In the search interrogation, Mr. Viren Ahuja, director of the company had responded in his statement recorded u/s.132(4) during the search that in respect of these payments no documents were available and the said expense payments are not in order and declared undisclosed income for such purchases. However, after the conclusion of search proceedings on 20-11-2009, he has admittedly retracted his aforesaid statement by way of affidavit executed before Notary Public on 24-11-2009. What was stated in the aforesaid retraction statement is reiterated a s under :- 7. I state that the aforesaid alleged voluntary disclosure is nothing but the outcome of aforesaid disturbed mental and physical state, which was totally baseless, undisclosed and without support of any factual evidence. As a matter of fact, I state that: During the course of proceedings) the authorised officer recorded disclosure of additional income of ₹ 38.80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment Year 2006-07. For the year under consideration, AO has made addition of ₹ 64,74,581/- in respect of payment made to M/s. Manav Impex. In relation to the aforesaid addition, it was explained to the AO that the Assessee Company has made payment to M/s. Manav Impex towards subcontract charges on account of work carried out for the project services relating to Koyna Dam Project undertaken by the Company for its customer M/s. Soma Enterprise. From the said Koyna Dam Project services, the Assessee Company has earned revenue of amounting to ₹ 7.40 crores which was duly offered to tax for the year under consideration. 34. We had also perused the copy of Invoice raised by M/s. Manav Impex on the Assessee Company for rendering the services dated 20-122005; Copy of Ledger Account of the said party in the books of assessee; copy of Ledger Account of the said party in the books of Assessee Company in which it is reflected the invoices booked and the bank payment made against the said invoices; Copy of bank statement of the Assessee Company from which payment has been made to the said party; and Copy of Ledger Account of M/s. Soma Enterprise Ltd. (Customer) in the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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