TMI Blog2018 (10) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A) failed to appreciate that the Hon ble Allahabad High Court has held in the case of Commissioner of Income Tax, Central Kanpur V. Raj Kumar Arora [2014] 52 taxmann. Com 172 (Allahabad), after considering the judgement given by the Hon ble Delhi High Court in the case of CIT v. Anil Kumar Bhatia [2012] 211 Taxman 453/24 taxmann. Com 98, that the AO has power to reassess returns of assessee not only for undisclosed income, which was found during search operation but also with regard to material that was available at time of original assessment. 3. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the addition of ₹ 50,00,000/-, on account of unexplained unsecured loan u/s 68, and addition of ₹ 77,71,138/- on account of interest earned on unsecured loans, made vide the original assessment order dated 30.12.2011. 4. That the order of the CIT(A) is perverse, erroneous and is not tenable on facts and in law. 5. That the grounds of appeal are without prejudice to each other. 6. That the appellant craves leave to add, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Schedule - 4 of Raffle for A.Y. 2009 - 2010 (showing Advances of ₹ 6.65 Cr. to assessee.) and B/s. of Raffle for A.Y. 2010 - 2011. (showing Investment in Share Appln. Money of ₹ 7.40 Cr.) After analyzing the documents submitted by the assessee and giving it ample opportunity to prove the identity, genuineness and creditworthiness of the above share capital a show cause notice dated 20.3.2015 was served vide which the assessee was asked to show cause why the said amount may not be added to its total income being unexplained credits u/s 68 of the I. T. Act, 1961. In this regard, the assessee filed reply dated 26.03.2015. The reply of the assesee has been duly considered and it has been found that investment in M/s Landcraft Developers Pvt. Ltd. has been routed through a sham enterprise, M/s Raffle Mercantile Pvt. Ltd. which is registered out of Kolkalta. On enquiry its credentials are found to be dubious as the money or the funds which were utilized by M/s Raffle Merchantile Pvt. Ltd to invest in Landcraft Developers were arranged from bogus/fictitious entry providing companies which are based out of Kolkata. Thus, the Assessing Officer passed Assessment Order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot referred any incriminating material found in the search. During the course of appellate proceedings before the ld. CIT (A), the ld. CIT(A) specifically asked the Assessing Officer for clarifying the status of assessment on the date of search for the impugned assessment year. The Assessing Officer vide his reply dated 16.10.2015 mentioned after perusal of record, it is observed that as on the date of search, assessment in this case was not pending, hence, it was unabated . The case law relied by the assessee, as noted above is fully applicable. The ld. CIT (A) has made a reasoned order. The findings reached by the ld. CIT (A) are as under : I have carefully considered the submissions made by AO and the appellant. As reported, no notice under section 143(2) is available on record, though it has been mentioned in the assessment order and order sheet. It is a settled law now that there is no need to issue a separate notice under section 143(2) for proceedings related to 153A of the Act. Accordingly, looking to the provisions of section 153A of the Act and also respectfully following the judgment in the case of Ashok Chadda vs. Income Tax Officer, as cited above, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h any unaccounted income, cash, jewellery or any other asset has been found/seized. No trace of any generation of unaccounted income has also been pointed out. Therefore, AO was specifically asked whether the addition made in assessment order is arising out of any incriminating material found/seized during the search, as nothing has been mentioned in the assessment order. 10.6 Vide letter dated 16.10.2015 it was submitted that with regard to point 2 of your letter, it is submitted that an addition of ₹ 2.05 crores was made on the grounds that the assessee simply filed copy of confirmation and bank statement of M/s Raffle Mercantile P. Ltd. and Purshottam Vinimay P, Ltd. but failed to prove the genuineness and creditworthiness of the transaction. Although the number of opportunities were provided to the assessee to explain the transactions. On examination of the bank statement submitted by the assessee, it was observed that funds were transferred M/s Landcraft Developers P. Ltd. after the receipts of funds from another entity within a few days of deposit During the course of assessment proceedings, it was observed by the AO that M/s Raffle Mercantile P. Ltd. was register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neration of' undisclosed income of the appellant, the decision ,of Hon'ble Delhi High Court relied upon by the appellant in the case of Kabul Chawla vs. CIT dated 28.08.2015 is applicable in this case. 10.12 Accordingly, respectfully following the decision of the jurisdictional high court where it has been held that in an unabated assessment under section 153A of the Act, the addition can be made only on the basis of incriminating material found and seized during the course of search, whereas the addition made in the present case is without having any incriminating material/seized document is not sustainable. 10.13 Therefore, the addition cannot be sustained in view of the legal provisions as defined by the Hon'ble Jurisdictions! High Court in the above -eferreci case law. 10.14 Since, the issue has been decided on the legal grounds regarding jurisdiction of AO to make such additions under section 153A of the Act and the addition has not been sustained, the ground relating to the merit of this case has not been considered. 6. In view of the above findings, we dismiss the appeal of the Revenue. 7. In the result, the appeal of the Revenue is dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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