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The Prl. Commissioner of Income tax, (Central) , The Deputy Commissioner of Income Tax, Central Circle-1 Versus Smt. Sunita Bai

2017 (2) TMI 552 - KARNATAKA HIGH COURT

Additions on account of gifts - proceedings commenced under Section 153C - Held that:- Admittedly, the Revenue has not produced any evidence either before the Assessing Officer, or before this Court to show that any incriminating evidence was discovered against the assessee during the search on 25.03.2008. In the absence of any incriminating evidence, the Assessing Officer was not justified in invoking his power under Section 153C of the Act. The learned Tribunal has also noticed that this opini .....

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Sreenivas Harish Kumar, JJ. For the Petitioner : Sri Y. V. Raviraj, Advocate) And , SVK Bus Service, K.R.Road, Ranipet For the Respondent : Sri H.R. Kambiyavar & Sri S. Parthasarathi, Advocates JUDGMENT The Revenue is aggrieved by the order dated 09.12.2014, passed by the Income Tax Appellate Tribunal, Panaji Bench, Panaji, whereby the learned Tribunal has deleted the additions made to the income of the assessee on account of gifts, for proceedings that had commenced under Section 153C of th .....

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ing Establishment, a company set up in Dubai. She had not only explained the gift of ₹ 45,00,000/- made by way of cheques of ₹ 5,00,000/- each, but even the donor had admitted giving cheques to the assessee. Therefore, the assessment was closed by the Assessing Officer. Subsequently, on 25.03.2008, the premises belonging to Mr. B. P. Anandkumar Singh of Hospet were searched. Since certain incriminating evidence was discovered, but not with regard to the assessee, proceedings against .....

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said notice, the assessee appeared before the Assessing Officer. The assessee was asked to explain the receipt of ₹ 45,00,000/- by way of gift from Hasim Mod Trading Establishment, Dubai. Despite the explanation given by the assessee, the Assessing Officer was of the opinion that the gift is not a genuine one. Therefore, the amount of ₹ 45,00,000/- should be added to the assessee s total income within the meaning of Section 68 of the Act. Hence, the said amount was treated as undisc .....

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ts can be sustained. Hence, this appeal before this Court. 4. Mr. Y. V. Raviraj, the learned counsel for the Revenue, submits that the following substantial questions of law arise in the present case. 1. Whether the Tribunal was right under the facts and circumstances of the case and in law in holding that, the gifts received by the respondent are genuine in disregard of the fact that in this case no scrutiny assessment had been made earlier and thus the issue of gifts had not been examined in a .....

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of the seized materials? 4. Whether, on the facts and in law, the Tribunal erred in holding that, the total income in the assessments under Section 153A/153C should be determined in respect of assessment years for which original assessments were already completed on the date of search, by restricting additions only to those which flow from materials found during the course of search? According to him, the learned Tribunal is not justified in concluding that since a regular assessment had already .....

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present case. Secondly, the stand taken by the assessee before the learned Tribunal that since no incriminating evidence was discovered qua her, during the search made on 25.03.2008, therefore, no proceedings could be initiated under Section 153C of the Act, such stand was never taken by her either before the Assessing Officer, or before the learned CIT. Therefore, the assessee cannot and could not be permitted to raise the said stand, for the first time, before the learned Tribunal. Thirdly, t .....

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in setting aside either the assessment order, or the order passed by the learned CIT. 5. On the other hand, Mr. H.R.Kambiyavar, the learned counsel for the assessee, submits that admittedly, no incriminating evidence was discovered during the search of the premises belonging to Mr. B. P. Anandkumar Singh, which related to the assessee. Even prior to the search, the assessee had already filed her income tax returns. She had explained the receipt of ₹ 45,00,000/- by way of a gift from the Ha .....

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be raised by the assessee even at the appellate stage. Thirdly, this was the only issue that was taken up by the learned Tribunal. According to the learned counsel, the learned Tribunal was justified in holding that the power under Section 153C of the Act could not be invoked in the absence of any incriminating evidence against the assessee during the search under Section 132 of the Act. Moreover, even in the assessment order dated 21.12.2009, there is not an iota of evidence produced by the Re .....

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