TMI Blog2017 (8) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... the given said of facts, we are of the view that this gift received from Shri Gayandhand Jain for an amount of ₹ 10,00,000 disclosed in the return of income as evidence by the capital account and which has not been abated, the amount of gift cannot be added. Accordingly, we reverse the orders of the Commissioner of Income-tax (Appeals) as well as that of the Assessing Officer and delete the addition in all these eleven appeals of the assessee. Penalty deleted. - Decided in favour of assessee. - I. T. A. Nos. 3577, 3581, 3583, 3575, 3584, 3580, 3582, 3735, 3736, 3737, 3576/Mum/2011 and 7384, 7387, 7390, 7389, 7383, 7382, 7385/Mum/2013 - - - Dated:- 24-5-2017 - Mahavir Singh (Judicial Member) And N. K. Pradhan (Accountant Member) For the Appellant : Jignesh R. Shah and Haresh Kenia For the Respondent : H. N. Singh, Commissioner of Income-Tax-Departmental Representative ORDER 1. These eighteen appeals by the assessees are arising out of the different orders of the Commissioner of Income-tax (Appeals)-39, Mumbai, in appeal No. CIT(A)-39/IT-189, 193, 197, 198, 201, 202, 203, 204, 205, 215, 222/2008-09 of even date March 23, 2011. The assessments were framed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3576/Mum/2011 do 3. For this all the eleven assessees have raised identical worded grounds and hence, we will take up the ground raised in I. T. A. No. 3577/Mum/2011 for the assessment year 2003-04, which is lead case, reads as under : 1. Re : Addition under section 68 with regard to the gift received. 1.1 On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) (hereinafter referred to as the learned CIT (Appeals)) erred in affirming the action of the Assessing Officer by treating the gifts received as 'Income from other sources' in spite of the fact that no incriminating evidence being found during the course of search proceedings. 1.2 On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals erred in discarding the various documentary evidence and explanations given during the course of assessment proceedings and the appeal proceedings to prove the genuineness of the gift received. 4. Brief facts are that in these eleven cases, the assessees filed returns of income on even date August 11, 2003 for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the Revenue by the decision of the hon'ble Bombay High Court in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd. (supra), wherein considering the judgment of the Special Bench of the Mumbai Tribunal in the case of All Cargo Global Logistics v. Deputy CIT [2012] 18 ITR (Trib) 106 (Mumbai) [SB] ; [2012] 137 ITD 287 (SB) (Mum) considered this issue that, whether there is scope of assessment under section 153A of the Act in respect of completed assessment which is limited only to undisclosed income and undisclosed assets found during the course of search or not ? The hon'ble High Court held that on a plain reading of section 153 of the Act it becomes clear that on initiation of the proceedings under section 153A of the Act, it is only the assessment/reassessment proceedings that are pending on the date of conducting search under section. 132 of the Act stand abated and not the assessments/reassessments already final for those assessment years covered under section 153A of the Act. The hon'ble High Court also discussed the Central Board of Direct Taxes Circular No. 8 of 2003 dated September 18, 2003 reported in 263 ITR (St.) 61 at page 107 wherein the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment or reassessment on the date of initiation of search shall abate. This means that an assessment or reassessment pending on the date of initiation of search shall cease to exist and no further action shall be taken thereon. The assessment shall now be made under section 153A. The case of the learned counsel for the assessee is that necessary corollary to this provision is that completed assessment shall not abate. These assessments become final except in so far and to the extent as undisclosed income is found in the course of search. On the other hand, it has been argued by the learned standing counsel that abatement of pending assessment is only for the purpose of avoiding two assessments for the same year, one being regular assessment and the other being assessment under section 153A. In other words these two assessments coalesce into one assessment. The second proviso does not contain any word or words to the effect that no reassessment shall be made in respect of a completed assessment. The language is clear in this behalf and therefore the literal interpretation should be followed. Such interpretation does not produce manifestly absurd or unjust results as section 153A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) summons or notice has been issued to produce books of account or other documents but such books of account or documents have not been produced, (b) summons or notice has been or might be issued, he will not produce the books of account or other documents mentioned therein, or (c) he is in possession of any money or bullion, etc., which represents wholly or partly the income or property which has not been and which would not be disclosed for the purpose of assessment, called as undisclosed income or property. We find that the provision in section 132 (1) does not use the word 'incriminating document'. Clauses (a) and (b) of section 132(1) employ the words 'books of account or other documents'. For harmonious interpretation of this provision with the provision contained in section 153A, all the three conditions on satisfaction of which a warrant of search can be issued will have to be taken into account. Having held so, an assessment or reassessment under section 153A arises only when a search has been initiated and conducted. Therefore, such an assessment has a vital link with the initiation and conduct of the search. We have mentioned that a search can be au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar position will obtain in a case where undisclosed income or undisclosed property has been found as a consequence of search. In other words, harmonious interpretation will produce the following results : (a) In so far as pending assessments are concerned, the juris diction to make original assessment and assessment under section 153A merge into one and only one assessment for each assessment year shall be made separately on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer, (b) in respect of non-abated assessments, the assessment will be made on the basis of books of account or other documents not produced in the course of original assessment but found in the course of search, and undisclosed income or undisclosed property discovered in the course of search.' 7. We have examined the details and noticed that the notice under section143(2) of the Act became time barred on August 31, 2004 at the time when the search took place much later on August 3, 2006. Therefore, it follows that as on the date of search, there was an assessment completed or processing of return of income of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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