TMI Blog2018 (3) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... Per N . K . Saini, AM : These two appeals by the department are directed against the separate orders each dated 31.05.2016 of ld. CIT(A)-29, New Delhi. 2. Since, the issues involved in these appeals are common and the appeals were heard together so these are being disposed off by this consolidated order for the sake of convenience and brevity. 3. First we will deal with the appeal in ITA No. 4593/Del/2016 for the assessment year 2007-08. Following grounds have been raised in this appeal: 1 . On the facts and in the circumstances of the case, the Ld . CIT ( A ) has erred in law in deleting the additions made by the AO on account of undisclosed income by relying on the decision of Hon ble Delhi High Court in the case of Kabul Chawla Vs CIT ( Central )- 3 and holding that the satisfaction note recorded by the AO is not able to explain how much seized material is incriminating in nature and how such documents lead to disclose of any income of the appellant . 2 . That the order of the CIT ( A ) is perverse, erroneous and is not tenable on facts and in law . 3 . That the grounds of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt etc . discovered or any admission made by the appellant during the course of search proceeding in its case, based on which this addition has been made . ( iii ) The reason for reopening the assessment under section 148 of the Act for the AY 2007 - 08, as it is found that no additions have been made in the order under section 148 / 147 of the Act . ( iv ) Copy of Panchnama for search in the case of the appellant, showing any such incriminating material etc . , based on which the addition has been made ...... 7. In response, the AO vide letter dated 16.03.2016 stated as under: . Reply to query no . 1 : The information about the accommodation entries taken by M / s SP Singla Construction P . Ltd . was received from ACIT, Circle - 22 ( 1 ) , New Delhi vide letter dated ACIT / Circle - 22 ( 1 )/ 2014 - 15 / 162 dated 10 . 03 . 2015 which they received the said information from DCIT, Circle - 24 ( 1 ). Thus the findings of the investigation wing was conveyed to the AO vide above letter though the investigation report was not enclosed . Reply to query no . 2 : The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in this regard during the course of search . It may also be mentioned here that the assessment proceedings for the year under appeal had already been completed vide order dated 08 - 12 - 2008 passed u / s 143 ( 3 ) of the Act by the Ld Addition Commissioner of Income - tax Range - 7, New Delhi and subsequently vide order dated 03 . 12 . 2012 passed u / s 143 ( 3 )/ 147 of the Act by the Ld Deputy Commissioner of Income - tax, Circle 7 ( 1 ) , New Delhi . ( 3 ) In view of the said fact it is submitted that since there is no cause for the issue of notice u / s 153A of the Act, the notice issued is void ab initio and the consequent assessment made non - est and bad in law . ( 4 ) In this connection reliance is also placed on the following decisions, including those of the jurisdictional High Court, wherein the above position of law has been clearly affirmed : Commissioner of Income - tax vs Anil Kumar Bhatia [( 2013 ) 352 ITR 493 ( Delhi )] ; Commissioner of Income - tax vs Chetan Das Lachman Das [( 2012 ) 254 CTR 392 ( Del )] ; Sanjay Aggarwal vs Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings . 8 . 1 The appellant company is stated to have been engaged in the business of civil contractor . During assessment proceedings, appellant raised objection against the issuance of notice under section 153A, however the AO disposed off the same, as discussed elaborately in the assessment order stating that assessment proceedings are correctly initiated . 8 . 2 During the assessment proceedings under section 153A, it was observed by the AO that the appellant has received share capital / premium from various companies as follows : s No . Name Amount of Share Application Amount of Share of premium Total amount invested 1 . M / s Campari Fiscals Services ( P ) Ltd 5,00,000 45,00,000 50,00,000 2 . M / s Countrywise Credit and Securities Pvt . Ltd 5,00,000 45,00,000 50,00,000 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial found during the course of search . This fact is also emanating from the assessment order . Therefore the facts of this case are similar to that of various cases relied upon by the appellant, including the case of M / s Kabul Chawla 380 ITR 573 ( Delhi ). 8 . 7 However before preceding further, it is expedient to examine the issue related to the investigation report as mentioned in the assessment order . One of the basis of addition was the information received from the Investigation Wing with respect to the search carried out in case of one Mr . Tarun Goel, wherein it was alleged that through various bogus companies these share capital has been taken as Hawala entry by the appellant . As per the report of AO and the documents furnished, following sequence of events emerged :- ( a ) DC1T Circle - 24 ( 1 ) , New Delhi sent a letter dated 09 . 03 . 2015 to the DCIT Circle 22 ( 1 ) , New Delhi mentioning that an information has been received from Addl . DIT ( Investigation ) Unit - IV, Delhi wherein a list of companies has been provided who have taken accommodation entries from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd afresh, which has no bearing to the search proceedings or any incriminating material found during the course of search . Accordingly, the legality of the addition needs to be decided in view of the judgment by Hon'ble Delhi High Court as pronounced in various cases including the cases of Kabul Chawla ( supra ). 8 . 10 As evident, neither any proceedings were pending nor abated on the date of search nor additions are made on the basis of any incriminating material, information or unexplained investment, cash etc . , found during search, therefore the ratio laid down in the case law relied upon by the appellant, especially the judgment of jurisdictional High Court in the case of CIT vs . Kabul Chawla ( Supra ) is applicable in the case of appellant . Here it is pertinent to mention that in the case of Raj Kumar Arora ( 2014 ) 52 Taxmann . com 172 ( Allahabad ) , the Hon'ble Allahabad High Court had held that when an assessment has been initiated under section 153A of the Act, then the AO has jurisdiction and powers to take up the issues, which are not only related to or based on search proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival submission, the ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the additions u/s 153A r.w.s. 143(3) of the Act had been made by the AO even when no incriminating material was found during the course of search. A reference was made to paras 6.3 6.4 of the impugned order. Reliance was placed on the judgment of the Hon ble Jurisdictional High Court in the case of CIT Vs Kabul Chawla (2016) 380 ITR 573. 12. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the original assessment was framed by the AO vide order dated 08.12.2009 u/s 143(3) of the Act, thereafter, the case was reopened and the assessment was framed u/s 147/143(3) of the Act vide order dated 03.12.2012. After it, a search and seizure operation u/s 132 of the Act was carried out on 10.12.2012. During the course of search, no incriminating material was found and the AO made the addition on account of increase in share capital which was recorded in the books of accounts. The assessee had taken a plea before the ld. CIT(A) that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 the seized material ( v ) In the absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made . The word assess in section 153A is relatable to abated proceedings ( i . e . , those pending on the date of search ) and the word reassess to completed assessment proceedings, ( vi ) In so far as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one . Only one assessment shall be made separately for each assessment year on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer, ( vii ) Completed assessments can be interfered with by the Assessing Officer while making the assessment under section 153A only on the basis of some incriminating material une ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
