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Commissioner of Income Tax-20 Versus Shri. Deepak Kumar Agarwal, Nikki Agarwal, Govind Agarwal, Manidevi Agarwal,

2017 (9) TMI 850 - BOMBAY HIGH COURT

Assessment u/s 153A/153C - proof of incriminating material in support of the additions made under Section 68 and under Section 14A - Held that:- Additions made by the Assessing Officer were in the absence of any incriminating material. Therefore, they are not sustainable and they came to be deleted. - We do not think that any view other than the one taken by the Division Bench of this Court in the case of The Commissioner of Income Tax, Central­-IV vs. M/s. SKS Ispat & Power Limited [2017 (7 .....

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, 470 OF 2017, 472 OF 2017, 477 OF 2017, 483 OF 2017, 566 OF 2017, 914 OF 2017, 1169 OF 2014, 1178 OF 2014,1194 OF 2017, 1169 OF 2014,1197 OF 2017,11 - Dated:- 11-9-2017 - S. C. DHARMADHIKARI & PRAKASH D. NAIK, JJ. Mr. Abhay Ahuja for the Appellant in ITXA/1709/2014, ITXA/1780/2014 and ITXA/131/2015. Mr. Naresh Jain i/b. Agrud Partners for the Respondent in all the Appeals. Mr. Arvind Pinto for the Appellant in ITXA/1178/2014, ITXA/1169/2014, ITXA(L)/468/2017, ITXA(L)/472/2017 & ITXA(L)/ .....

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ases, by the earlier order of the Tribunal. 4. A reference is also made to the same in as much as a Special Bench of the Tribunal was constituted so as to deal with similar grounds as were raised in the present Appeals. 5. In fact, the Tribunal has done nothing except reproducing relevant paragraphs of the order of the Special Bench and its earlier view based on that Special Bench order. 6. In Income Tax Appeal No. 1709 of 2014, the assessee is an individual deriving income from other sources. T .....

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several additions to the total income and passed an order under Section 143(3) read with Section 153A on 31st December, 2009, on a total income of ₹ 40,07,379/­. Being aggrieved by this order, the assessee preferred an Appeal before the Commissioner of Income Tax (Appeals). 7. The Commissioner of Income Tax (Appeals) directed the Assessing Officer to re­compute the disallowances made under Section 14A of the IT Act as per the decision of this Court in the case of M/s. Daga Capital .....

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10th April, 2014, held that the additions were made beyond the scope of Section 153A/153C of the IT Act as no incriminating material in support of the additions made under Section 68 and under Section 14A were brought on record by the Revenue. That is how the Tribunal allowed the assessee's Appeal and dismissed that of the Revenue. 10. Mr. Ahuja, appearing in support of this Appeal would submit that the following two questions are the substantial questions of law: 6.1 Whether on the facts an .....

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he facts and in the circumstances of thecase and in law, the Hon'ble ITAT was justified in deleting the addition made u/s.68 of the IT Act of unexplained gift received, which could not be proved to be genuine by the assessee, by not going into the merits of the case, but by holding that only income related to incriminating documents found during the search u/s. 132 of the IT Act can be considered in assessment u/s. 153A of the IT Act and it is beyond the scope of section 153A of the IT Act, .....

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s, Mr. Ahuja has tendered a chart of the questions proposed by the Revenue for the assessment years 2005-­2006 and which he states were proposed based on the lead matter, namely, Income Tax Appeal No. 1178 of 2014 for the assessment year 2002-­2003. The other question based on the Special Bench decision is common to Income Tax Appeal No.1709 of 2014 for the assessment year 2004-­2005 and the Income Tax Appeal No. 1780 of 2014 for the assessment year 2005­-2006. 14. We have alread .....

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ions of law and the Division Bench judgment in Continental Warehousing Corporation and All Cargo Global Logistics (supra) is rendered in ignorance of a judgment of the Hon'ble Supreme Court reported in [2007] 291 ITR 500 (SC) (Assistant Commissioner of Income­Tax vs. Rajesh Jhaveri Stock Brokers Private Limited). 16. It is also contended by Mr. Ahuja that on 12th July, 2017, Income Tax Appeal No. 1874 of 2014 and Income Tax Appeal No. 58 of 2015 (The Commissioner of Income Tax, Central&s .....

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t, to a judgment of the Calcutta High Court in the case of Bhola Shankar Cold Storage Pvt. Ltd. vs. Joint Commissioner of Income­Tax which is reported in [2004] 270 ITR 487 (Calcutta). 18. On the other hand, the argument of the respondent throughout is that the Special Bench decision of the Tribunal has now been upheld by this Court in Continental Warehousing Corporation and All Cargo Global Logistics (supra). The question proposed, namely, the first question is not a substantial question of .....

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of the Gujarat High Court. That Division Bench judgment allowed the Writ Petition/Special Civil Application of the assessee. 22. The respondent ­ assessee, a private limited company, filed its return of income for the assessment year 2001-­2002 on October 30, 2001, declaring total loss of ₹ 2,70,85,105/­. That return was proposed under Section 143(1) of the IT Act accepting the loss returned by the respondent. A notice was issued under Section 148 of the IT Act on the ground t .....

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se objections on 4th February, 2005 holding that the initiation of reassessment proceedings was valid and it had jurisdiction to undertake such an exercise. The notice under Section 148 of the IT Act dated 12th May, 2004 was challenged by the respondent ­ assessee. 23. That Writ Petition was allowed and hence, the Revenue was in Appeal. 24. Mr. Ahuja's argument overlooks this factual aspect and when he relies upon the observations of the Hon'ble Supreme Court, and particularly in par .....

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n away. The Hon'ble Supreme Court referred to the period between April 1, 1989 and March 31, 1998, and the second proviso to Sub­section (1) Clause (a) of Section 143 and its substitution with effect from 1st April, 1998. The sending of intimation between 1st April, 1998 and 31st May, 1999 under Section 143(1)(a) was mandatory. That requirement continued until the second proviso was substituted by the Finance Act, 1997, which was operative till 1st June, 1999. 25. The Hon'ble Supreme .....

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thorized and permitted to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. Before us, such is not the position, and even if this judgment of the High Court had been brought to the notice of the Division Bench deciding the Continental Warehousing Corporation and All Cargo Global Logistics (supra), there would not have been any difference. 26. The argument before the Income Tax Appellate Tribunal in this case was th .....

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family members of Mr. B. R. Agarwal, the arguments have been noted. 28. The Special Bench order in the case of All Cargo Global Logistics Ltd. (supra) has been referred in the impugned order at the internal page 8 (running page 70 of the paper book). 29. The relevant paragraphs of the same have been reproduced. 30. The Tribunal concluded that the arguments relating to the validity of the notice under Section 153A and though that provision could have been invoked in the given facts and circumstan .....

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tion and All Cargo Global Logistics (supra) can be taken. 32. Once we are of the firm view that the question no.1 proposed by the Revenue is already answered by this Court in a series of judgments, and particularly referred above, then we do not think that we should allow Mr. Ahuja to argue that these judgments are rendered in ignorance of the binding judgment of the Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers Private Limited (supra). After having noted the context and .....

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l (HUF) vs. DCIT (ITA No.8917/M/2010) decided on 16th May, 2013 for the assessment year 2005­-2006. 34. There as well, reliance was placed on All Cargo Global Logistic Ltd. (supra) and equally, the conclusion that has been reached that once there is no incriminating material in support of the addition and brought on record by the Revenue, then, the earlier view of this Court binds the Revenue even on this addition. Thus, even this question cannot be termed as substantial question of law in t .....

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