TMI Blog2018 (1) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... R Per Bench: 1. All these appeals of the assessee are directed against the independent orders passed by the Learned Commissioner of Income Tax (Appeals) 21, Kolkata [ in short the ld CITA] in Appeal Nos. 10841 10866 /CC-3(3)/CIT(A)-21/Kol/16-17 dated 6.7.2017 for Asst Years 2009-10 and 2012-13 respectively in the case of Krishna Kumar Singhania against the independent order of assessments framed under section 153A / 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for the Asst Years 2009-10 and 2012-13 dated 28.12.2016 ; Appeal No. 10867 /CC-3(3)/CIT(A)-21/Kol/16-17 dated 6.7.2017 in the case of Ajay Kumar Singhania against the order of assessment framed u/s 153A/143(3) of the Act for the Asst Year 2012-13 dated 29.12.2016 ; Appeal No. 10779 /CC-3(3)/CIT(A)-21/Kol/16-17 dated 6.7.2017 in the case of Smt Kasak Singhania against the order of assessment framed u/s 153A/143(3) of the Act for the Asst Year 2012-13 dated 20.12.2016 ; Appeal Nos. 10766 10785 /CC-3(3)/CIT(A)-21/Kol/16-17 dated 6.7.2017 for Asst Years 2009-10 and 2012-13 respectively in the case of Smt Nirmala Devi Singhania against the independent order of assessments f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and hence the income assessed originally thereon either u/s 143(3) or u/s 143(1) or the returned income, as the case may be, could not be disturbed unless there is any incriminating material found in the course of search relatable to such assessment year. 5. The ld AO observed that the incriminating materials were indeed found in the course of search on 23.12.2014 vide seized document reference CG / 1 to 11 and CG/ HD /1 which reflected that the assessee had his group were indulged in purchasing bogus long term capital gains by converting their undisclosed income. In other words, the ld AO was of the opinion that the assessee had converted his unaccounted cash and brought the same in the form of long term capital gains which was shown as exempt income in connivance with the share brokers and the Calcutta Stock Exchange Ltd. In response to this, the assessee apart from addressing the issue on merits stated that the seized document relied upon by the ld AO viz CG /1 to 11 and CG/HD/1 was not seized from the premises of the assessee during the course of search on 23.12.2014. The same were found and seized in the business premises of Cygnus Equipment Rentals Pvt Ltd and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were also covered u/s 132 of the Income Tax Act, 1961 and valuation of the jewellery and other valuable items were done by registered valuer. In consequence of search, survey operations were also conducted in the office premises of (i) M/s Sunway Infrastructure Services Pvt. Ltd. at A-44/45, DLF IT Park, Tower C, Sector-62, Noida where documents having identification marks LP- 1, A-1 to A-17, A-18 (Main server), HD-1 HD-2 were impounded and (ii) M/s Cygnus Splendid Limited at 1009, 10th Floor, Arunachal Building, Barakhambha Road, New Delhi-110001 where documents having identification marks A-1, A-2(HD) were impounded. I have considered findings of the AO in the assessment order and the written submissions filed by the AR on this issue. From the assessment order it is clear that many papers, incriminating documents, CDs and incriminating computerized data were found and seized during the search operations and in survey/search operations conducted in Delhi and Noida many incriminating documents were found and seized/impounded. The AO has considered all such incriminating documents and only after that he has framed assessment order. Therefore, the argument of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conditions based on which a search action could be initiated u/s 132 of the Act on an assessee. They are :- Section 132(1) - If the concerned authority has in consequence of information in his possession, has reason to believe that - (a) where a person fails to produce the books of accounts and other documents in response to notice u/s 142(1) or summons issued u/s 131(1) of the Act ; or (b) where a person fails to comply with the requirements of summons issued u/s 131(1) of the Act ; or (c) where a person is in possession of any money, bullion, jewellery or other valuable article or thing and such assets represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Act (hereinafter referred to as the undisclosed income or property) ; then the officer, so authorized could conduct a search and proceed as per the requirements laid down in the said section. He argued that the aforesaid three primary conditions for invoking search proceedings cannot be given a go by while framing section 153A assessments and the instant case falls under section 132(1)(c ) of the Act. The provisions of section 153A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment is CG/1 to 11 and CG/HD/1 which were seized only from the office premises of Cygnus group of companies in which assessee is a director. In this regard, it would be pertinent to note that as per section 292C of the Act, there is a presumption that the documents, assets, books of accounts etc found at the time of search in the premises of a person is always presumed to be belonging to him / them unless proved otherwise. This goes to prove that the presumption derived is a rebuttable presumption. Then in such a scenario, the person on whom presumption is drawn, has got every right to state that the said documents does not belong to him / them. The ld AO if he is satisfied with such explanation, has got recourse to proceed on such other person (i.e the person to whom the said documents actually belong to) in terms of section 153C of the Act by recording satisfaction to that effect by way of transfer of those materials to the AO assessing the such other person. This is the mandate provided in section 153C of the Act. In the instant case, if at all, the seized documents referred to in CG/1 to 11 and CG/HD/1 is stated to be belonging to assessee herein, then the only legal rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; ( b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: 10.2. We find that the Co-ordinate Bench of this tribunal in the case of ACIT vs Kanchan Oil Industries Ltd in ITA No. 725/Kol/2011 dated 9.12.2015 reported in 2016- TIOL-167-ITAT-KOL had explained the aforesaid provisions as below:- 6.4 In our opinion, the scheme of assessment proceedings should be understood in the following manner pursuant to the search conduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Chawla reported in (2016) 380 ITR 573 (Del) held as under:- '37. On a conspectus of section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: ( i) Once a search takes place under section 132 of the Act, notice under section 153A(1) will have to be mandatorily 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. 14 The total income for such AYs will have to be computed by the LD AOs as a fresh exercise. ( iii) The LD AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The LD 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. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is therefore left open. 10.5. The ld DR also relied on the recent decision of the Hon ble Kerala High Court in the case of E.N.Gopakumar vs CIT reported in (2016) 75 taxmann.com 215 (Kerala) in support of his contentions. We find that the decision of Hon ble Delhi High Court in the case of CIT vs Kabul Chawla reported in (2016) 380 ITR 573 (Del) had duly considered the decisions of CIT vs Anil Kumar Bhatia reported in (2013) 352 ITR 493 (Del) ; CIT vs Chetan Das Lachman Das reported in (2012) 211 Taxman 61 (Del HC) ; Madugula Venu vs DIT reported in (2013) 215 Taxman 298 (Del HC) ; Canara Housing Development Co. vs DCIT reported in (2014) 49 taxmann.com 98 (Kar HC) ; Filatex India Ltd vs CIT reported in (2014) 229 Taxman 555 (Del HC) ; Jai Steel (India) vs ACIT reported in (2013) 219 Taxman 223 (Del HC) ; CIT vs Murli Agro Products Ltd reported in (2014) 49 taxmann.com 172 (Bom HC) ; CIT vs Continental Warehousing Corporation (Nhava Sheva) Ltd reported in (2015) 374 ITR 645 (Bom HC) and All Cargo Global Logistics Ltd vs DCIT reported in (2012) 137 ITD 287 (Mum ITAT) (SB). We also find that against the decision of the Hon ble Delhi High Court in 380 ITR 573 (Del), the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the aforesaid findings and respectfully following the judicial precedents relied upon hereinabove, we hold that the assessment already deemed to have been completed for the Asst Year 2009-10, which was unabated / concluded assessment, on the date of search, deserves to be undisturbed in the absence of any incriminating material found in the course of search and accordingly no fresh addition could be made thereon without the existence of any incriminating materials found in the course of search from the premises of the assessee. Since the issue is addressed on preliminary ground of absence of incriminating materials, we refrain to give our findings on the merits of the additions for the Asst Year 2009-10 in the case of Krishna Kumar Singhania. Accordingly the preliminary ground raised by the assessee in this regard is allowed. Krishna Kumar Singhania, Ajay Kumar Singhania, Kasak Singhania, 11. The aforesaid decision rendered in the case of Krishna Kumar Singhania for Asst Year 2009-10 would apply for Asst Year 2012-13 also for that assessee and also for other assessees involved supra for various assessment years in view of identical facts and circumstances except with varianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gus Development Expenses This was part of the claim in the original return of income. Krishna Kumar Singhania Asst Year 2012-13 Perqusites u/s 17(2)(iv) of the Act The remuneration was part of the original return of income. This was a fresh addition made towards insufficient drawings in the section 153A assessment which is not backed by any search material found in the course of search. II. Vijay Kumar Singhania Asst Year 2012-13 Perqusites u/s 17(2)(iv) of the Act The Director s remuneration was part of the original return of income. This was a fresh addition made towards insufficient drawings in the section 153A assessment which is not backed by any search material found in the course of search. III. Kasak Singhania Asst Year 2012-13 (a) Difference between contractual receipts reported in return and that shown in Form 26AS ₹ 16,200/- This is part of the records of the department and no search material was found at the time of search. This was a fresh addition made in section 153A assessment. (b) Disallowance u/s 14A of the Act ₹ 1,055/- This was a fresh addition made in the section 153A assessment which is not backed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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