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2017 (2) TMI 581 - KARNATAKA HIGH COURT

2017 (2) TMI 581 - KARNATAKA HIGH COURT - TMI - 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 l .....

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Act. To the limited issue of the ambit and scope of Section 153A of the Act, the learned Tribunal has correctly expressed its opinion. - Decided against revenue - Income Tax Appeal No. 100059/2015 - Dated:- 13-1-2017 - Raghvendra S. Chauhan And Sreenivas Harish Kumar, JJ. For the Petitioner : Sri Y. V. Raviraj, Advocate 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 Appella .....

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05-06. During the assessment, notice was issued to her under Section 143(2) of the Act with regard to the fact that she had shown in her income tax returns a gift of ₹ 90,00,000/- from Mr. Harish Wadava of Dubai. Not only she had explained the gift of ₹ 90,00,000/-, made by way of cheques of ₹ 5,00,000/- each, but even the donor, Mr. Harish Wadava, had admitted giving cheques to the assessee. Therefore, the assessment was closed by the Assessing Officer. Subsequently, on 25.03. .....

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.04.2009, a notice under Section 143(2) was also issued to the assessee. On 10.08.2009, a notice under Section 142(1) accompanied with a questionnaire was also issued to the assessee. In response to the said notice, the assessee appeared before the Assessing Officer. The assessee was asked to explain the receipt of ₹ 90,00,000/- by way of gift from Harish Wadava of Dubai. Despite the explanation given by the assessee, the Assessing Officer was of the opinion that the gift is not a genuine .....

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ssee challenged the order dated 20.08.2013 before the learned Tribunal. By order dated 09.12.2014, the learned Tribunal allowed the appeal, and held that no addition on account of the gifts 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 on the facts and circumstances of the case and in law restricting the scope of .....

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ial found during the course of search? According to him, the learned Tribunal is not justified in concluding that since a regular assessment had already been completed under Section 143(1) of the Act, the proceedings under Section 153A of the Act could not be initiated. According to the learned counsel, in case of a search conducted under Section 132 of the Act, and in case incriminating evidence is discovered qua any person, other than the person whose premises is searched, then under Section 1 .....

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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, that once the assessment is reopened under Section 153C of the Act, the department has all the powers as it would have in the original assessment. Therefore, the Assessing Officer was justified, firstly, in calling for an explanation from the assessee; secondly, in holding that the transaction of gifting of ₹ 90,00,000/- was suspiciou .....

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n prior to the search, the assessee had already filed her income tax returns. She had explained the receipt of ₹ 90,00,000/- by way of a gift from the Harish Wadava of Dubai. Even the donor had accepted the fact that the cheques were issued to the assessee and the initial assessment was completed. Secondly, therefore, the issue before the learned Tribunal, which is a legal issue, was whether the Assessing Officer has the power under Section 153C of the Act, to reassess the income, even if .....

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rch 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 Revenue that any incriminating evidence was discovered at the time of the search against Mr. B. P. Anand Kumar. Therefore, the very basis of invoking the power under Section 153C did not even exist. Hence, the learned counsel has justified the order passed by the learned Tribunal. 6. Heard the learned counsel for the parties and perused the impugned order. 7 .....

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