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2017 (12) TMI 359

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..... For The Respondent : Sh. B. Ramanjanegulu Sr. DR ORDER PER SUCHITRA KAMBLE, JM The appeal has been filed by the assessee against the order dated 20/1/2014 passed by CIT(A)-XXXII, New Delhi for the Assessment Year 2007- 08. 2. The grounds of appeal are as under:- 1. On the facts and circumstances of the case and in law, the addition of ₹ 46,19,000/- made by the Assessing Officer on account of alleged bogus purchase is beyond the jurisdiction of provisions of Section 153A of Income Tax Act, 1961 and Commissioner of Income Tax (Appeals) erred in not holding so. 2. On the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals) erred in confirming the addition of &# .....

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..... income of ₹ 84,26,540/- as against the returned income of ₹ 38,07,540/- wherein the Assessing Officer made an addition of ₹ 46,19,000/- on account of bogus purchases made through accommodation entries. 4. The assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee whereby confirming the addition of ₹ 46,19,000/- on account of bogus purchases. 5. The Ld. AR submitted that search and seizure operation u/s 132 of the Income-tax Act, 1961 is carried out in the case of the assessee on 26/4/2010 while completing the assessment u/s 153A/143(3). The Assessing Officer made the addition on account of bogus purchase. The Ld. AR submitted that the addition made by the Assessing Office .....

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..... In-fact the group is engaged in the business of manufacturing and started through flag ship concerned M/s Tegh International. In-fact, the assessment was long back concluded and the same was not disputed by the Revenue authorities. The ITAT in case of M/s Tegh International (supra) has allowed the appeal of the assessee therein and by applying the ratio of the Hon ble Delhi High Court decision in case of Kabul Chawla, the relevant findings are given in para 8 and 9 of the order dated 27.05.2016 which reads as under: 8. We have heard both the counsel and perused the relevant available with us, especially the orders of the revenue authorities and the cases referred by the Ld. Counsel of the Assessee in the shape of Paper Book. We find .....

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..... Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatory issued to the person searched requiring him to file returns for six Ays immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the total income of the aforementioned six years in separate assessment orders for each of the six years. I .....

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..... during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 38. The present appeals concern AYs, 2002-03, 2005-06 and 2006-07. 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. 9. Respectfully following the precedent of the Hon ble Jurisdictional High Court in the case of CIT vs. Kabul Chawla, as aforesaid, we allow the appeal of the Assessee, because AO has completed the assessment and made the addition in dispute .....

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