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Smt. Parvati S. Chowdhary C/o. Mehta Lodha & Co., Archana Shrenik Chowdhary C/o. Mehta Lodha & Co., Shankarlal Lalchand Chowdhary C/o. Mehta Lodha & Co., Shrenikkumar S. Lalchand Chowdhary C/o. Mehta Lodha & Co., Smt. Pushpadevi Sampatraj Chowdhary C/o. Mehta Lodha & Co., Rajuldevi Ganpatraj Chowdhary C/o. Mehta Lodha Versus ACIT, Cent. Cir. 2 (4) Ahmedabad

2018 (2) TMI 506 - ITAT AHMEDABAD

Assessment u/s 153A - Additions on account of alleged investment in jewellery - Held that:- As considered very facts from that case and variation in the gold jewellery in his case was to the extent of 269.10 grams. Similarly, variation in silver articles was of 13.43 kg. This was excess jewellry found at the time of search than the one disclosed in the wealth-tax returns filed by the assessees viz. Ganapat L. Chowdhary. Similarly, in the case of Smt.Parvati S. Chowdhary variation was of only 41. .....

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2018 (2) TMI 423 - ITAT AHMEDABAD)(2018 (2) TMI 427 - ITAT AHMEDABAD). Following order of the Co-ordinate Bench, we allow all these appeals, and direct the AO to delete impugned additions. - Decided in favour of assessee. - IT (SS) A No. 25, 26, 30, 31,34 ,35 /AHD/2015 - Dated:- 5-2-2018 - Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member Assessee by : Shri Prakash D. Shah, CA Revenue by : Aparna Agrawal, CIT-DR ORDER Per Rajpal Yadav, Judicial Member Present appeals a .....

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peals of ten assessees by impugned common order. Out of those ten, four appeals of the assessees have already been decided by the Tribunal i.e. IT(SS)A.Nos.28, 29, 32 and 33/Ahd/2015 in the cases of Shripal Sampatraj Chowdhary, Yamini Shripal Chowdhary and Sampatraj Lalchand Chowdhary. 4. Brief facts of the case are that a search and seizure operation was carried out at the residential premises of all the assessees under section 132 of the Income Tax Act on 21.9.2011 and 22.9.2011. In order to g .....

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upporting evidences, date of acquisition of jewellery along with details of jewellery including weight, nature etc., confirmation from donors who have gifted to the assessees, source of purchase of jwellery. All these assessees have filed detailed replies which have been reproduced by the AO in the respective assessment orders. In short, the case of the assessee is that they have filed their returns of wealth-tax showing possession of jewellery. There is a minor variation in the details of jewel .....

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Lalchand Chowdhary. The ld.CIT(A) has observed facts with regard to the details of jewellery which are identical in other cases. 6. The ld.counsel for the assessee submitted that the Tribunal has considered identical issue in the case of Shripal Sampatraj Chowdhary whose appeal was also decided by the ld.CIT(A) with the impugned order. His name appeared at Sr.No.3 of the case title in the order of the ld.CIT(A). The ld.DR was unable to controvert the above facts. 7. Order of the ITAT in the cas .....

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very outset, we would like to state that the grievance is common in both these appeals and which relates to the order framed u/s. 153A of the Act when no incriminating material was found during the course of the search proceedings. 4. Briefly stated the facts of the case are that a search and seizure operation was conducted at the premises of the assessees on 22.09.2011. During the search proceedings, gold, jewellery and other valuable items were found from the residence & bank lockers of t .....

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ur Co- operative Bank- Anand nagar locker no. 11 434 31.10.2011 2858.75 21 77.30 130.30 - Tamilnad bank- Locker no. 39 09.11.2011 3295.50 2640.35 16.78 - Sub Total 9792.75 6806.95 259.42 81.26 Kalupur Co- operative Bank- Anand nagar locker no. 243 14.11.2011 728.30 565.30 2.76 - Total 10521.05 7372.25 262.18 81.26 a. Firstly, it is submitted that during the course of proceedings under section 132, the follower jewellary / ornaments and valuable of my family were found at our residence and bank l .....

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wdhary 1542.9 1293.6 21.4 24.3 Archana Chowdhary 2137.4 1685.2 13.13 4.5 Sampatraj L.Chowdhary-HUF 827.2 781.7 44.119 43.5 Total 10685.47 9337.008 205.459 120.6 c. It is submitted that I have purchase gold Jewellary of 25,30 gms consisting of 17.030 ct of diamonds on 10.03.2011, which was not covered in wealth tax return filed till date of search. The copy of invoice is enclosed and marked as Annexure -5. The payment is made out of internal accruals. d. After considering the Wealth-Tax Return, J .....

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43.5 Total 10710.75 9362.308 222 A 89 120.6 e. Reconciliation Particulars Gold Quantity- Gross-(Grams) Diamond Jewellary (Ct) Silver Quantity JKGsl Jewellary found during search proceedings 10521.05 262.18 81.26 Jewellary as per para d 10710.75 222.49 120.6 Excess {Short) found -189.70 39.69 -39.34 Value of Excess found 1389185 f. From the above you may observe that there was excess diamond of 32.69 ct in possession comparison with the wealth tax return filed by all the members of the family. T .....

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urces of acquisition of jewellery in question. The A.O. concluded by making addition of unaccounted gold in the hands of the assessees. 7. Assessee carried the matter before the ld. CIT(A) but without any success. 8. Before us, the ld. counsel for the assessee vehemently stated that the impugned assessment is bad in law inasmuch as no incriminating material was found during the course of the search and seizure operation. It is the say of the ld. counsel that whatever jewellery was found has alre .....

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dence which came to the notice of the search party were the Wealth Tax Returns filed by the assessee. In our considered opinion, the Wealth Tax Returns of the group, by any stretch of imagination, cannot be considered as incriminating material in the hands of the assessees. Except for this, there is nothing on record to suggest any incriminating material/document/evidence. 10. The Hon ble Bombay High Court in the case of Continental Warehousing Corporation 374 ITR 645 had decided a similar issue .....

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sessment were contrary to the facts unearthed during the course of 153A proceedings. If there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings, the AO while passing order u/s. 153A r.w.s. 143(3) cannot disturb the assessment order." 10.2. The Hon'ble High Court had an occasion to consider the following questions of law: "1. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is correct in na .....

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ether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in limiting the scope of Sec. 153A only to undisclosed income when as per the section the AO has to assess the total income of the six assessment years?"- and the Hon ble High Court of Bombay finally held as under:- We, therefore, dismiss the Revenue s appeal and answer the substantial question of law against the Revenue and in favour of assessee. 11. Now, the other issue which has to be decided is wheth .....

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43(1)(a) of the Act. The time period for issuing notice u/s 143(2) of the IT Act for selecting case for security expired on 31.12.2004. The first search was conducted on the premises of assessee on 22.9.2005 and the 2nd search was conducted on 25.8.2006 and in both the searches, no incriminating material, document, unaccounted assets and bogus of accounts were found and seized relating to land development expenses debited in profit and loss account for the year. The both searches on assessee did .....

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s no dispute with regard to the proposition that A.O has the jurisdiction u/s 153A of the Act to initiate assessment/ reassessment proceedings for all the six years to compute the total income of the assessee including the undisclosed income where action have been taken against the assessee u/s 132(1) of the IT Act. However, the question remains that when return has been processed u/s 143(1)(a) and the time period for issuing notice u/s 143(2) for selecting return for scrutiny has elapsed then w .....

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ment may not be pending even though there is no formal order u/s I43(1)(a). The moment return is filed and acknowledgement or intimation issued, the proceedings initiated by filing the return are closed, unless they are again triggered by issuing notice u/s 143(2) of the IT Act. In the case under consideration, the period for issuing the notice u/s 143(2) elapsed. The process has attained the finality which can only be assailed u/s 148 or 263 of the IT Act. Such proceedings can never be initiate .....

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But in a case where the proceedings have reached finality, assessment under section 153A read with section 143(3) and certain incriminating documents have been found indicating undisclosed income, the addition shall only be restricted to those documents or incriminating material, and clubbed only to the assessment framed originally, as the law does not permit the Assessing Officer to disturb issues already concluded. Where on the date of initiation of search under section 132 or requisition of .....

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aw 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 153 A(l) 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. The total income for such AYs will have to be c .....

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rought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post- search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v .....

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shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under section 153A only on the basis of some incriminating material unearthed 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 kno .....

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n assessment under Section 153 A of the Act? 6. It is not in dispute that in respect of the Respondent Assessee for the AYs in question the initial assessment proceedings took place under Section 143(3) of the Act. Thereafter they were sought to be reopened by issuing notice under Section 147 of the Act and re-assessment orders were passed under Section 147 read with Section 143(3) of the Act. During both the aforementioned proceedings the question whether the gold and silver utensils were the c .....

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