TMI Blog2018 (11) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... RCLE-1. [2018 (8) TMI 597 - ITAT DELHI] - Decided in favour of assessee. - ITA.No.3559/Del./2015 - - - Dated:- 6-11-2018 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Assessee : Shri Kapil Goel, Advocate For The Revenue : Shri S.S. Rana, CIT-D.R. ORDER PER BHAVNESH SAINI, J.M. This appeal by Assessee has been directed against the Order of the Ld. CIT(A), Ghaziabad, Dated 31.03.2015, for the A.Y. 2011-2012. 2. Brief facts of the case are that a search under section 132 was conducted in the case of Shri Pankaj Sharma and Shri Ajay Sharma. It was informed that cash was going to be withdrawn from A/c No.xxx2277 of M/s. A.K Traders with HDFC Bank, Ambedkar Road, Ghaziabad, source of which is not explained in the hands of Shri Ajay Sharma, the proprietor of M/s. A.K. Traders. When the team visited the Bank premises it was found that an amount of ₹ 2.78 crores was already got transferred to A/c No.xxx16097 with Punjab National Bank, Navyug Market, Ghaziabad standing in the name of M/s. Tushar Building Material Supplier, Gautam Budh Nagar. Bank authorities were requested to put balance of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been received by transfer are 10 in number mentioned at page-2 of the assessment order which includes two proprietary concerns of the assessee. During search proceedings at the residence of Shri Pankaj Sharma at Sahibabad, Ghaziabad, Shri Pankaj Sharma was examined on oath and he admitted that he was engaged in providing accommodation entries and was earning ₹ 15,000/- per month from this work. He had asked his brother-in-law Shri Ajay Sharma to form a concern in the name of M/s. A.K. Traders and have its account opened in HDFC Bank for facilitating the work of accommodation entries. He also approached the assessee and used his two proprietary concerns namely M/s. Tushar Building Material Supplier and M/s. Sigma Sales Corporation where from he started to provide accommodation entries. The amounts were got transferred to the bank accounts of concerns from where the accommodation entry was to be provided and the amounts were paid back either by withdrawing from the same account or by transfer to bank accounts of other concerns and thereafter withdrawals from those accounts. Shri Pankaj Sharma admitted that bogus bills of steel/building material have been issued in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve claimed a percentage of 0.01% as commission i.e. ₹ 10,000/-per crore. The A.O, therefore, noted that on the basis of search and seizure operation and enquiries it is established that assessee is engaged in the business of providing accommodation entries. Notice under section 153C was issued for the A.Y..2005-06 to 2010-11 on 18.09.2012 notice under section 142(1) was issued for assessment year 2011-12 under appeal on 18.09.2012 for filing of return of income. The assessee has filed return of income for the year under appeal on 17.01.2013 and shown income of ₹ 1,53,450/- from business and income from salary. The A.O. on the basis of these material computed commission income of assessee at 3% of the total amount/ gross deposits. The gross deposits were found in a sum of ₹ 17.14 crores and by applying 3%, A.O. made addition of ₹ 51,43,833/-. The A.O. also considered the unexplained deposit in the bank account of assessee of ₹ 17.14 crores which was added on protective basis. The assessment was completed on an income of ₹ 17.67 crores vide Order dated 31.03.2013 under section 143(3) of the I.T. Act, 1961. 3. The assessee challenged the initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That impugned assessment framed under section143(3) on basis of notice under section143(2) dated 21/01/2013 is invalid and void ab initio being made on basis of non-est return filed under section153A/153C on 17/01/2013 as no return was there under section139/142filed on 17/01/2013 to validly issue notice under section143(2 ] 5. Learned Counsel for the Assessee submitted that no search under section 132 was conducted on assessee. Search was conducted under section 132 on 11.10.2010 at A.K. Traders on HDFC Bank, Ghaziabad. Proceedings under section 153C were initiated against the assessee for A.Ys. 2005-06 to AY 2010-2011 and action under section 142(1) have been taken for A.Y. under appeal i.e., 2011-2012 and assessment have been framed under section 143(3) of the I.T. Act. These facts affirmed by the authorities below in the impugned orders. He has filed copy of the satisfaction note recorded by the A.O. under section 153C on 18.09.2012 in the case of the assessee, copy of which is filed at page 10 of the PB. He has also filed copy of the order sheet of the A.O. at page-3 of the paper book to show that no notice under section 153C have been issued in the case of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw and requires to be quashed. 6. On the other hand, Ld. D.R. relied upon the Orders of the authorities below and submitted that since the appellate order under appeal 2011-2012 is not related to the search assessment and no notice under section 153C have been issued, therefore, assessment under section 143(3) have been rightly framed. 7. We have considered the rival submissions, perused the material on record and findings of the authorities below. An identical issue have been considered by ITAT, Delhi, F- Bench, Delhi in the case of M/s. BNB Investment Properties Ltd., Gurgaon, Haryana vs. The DCIT, Central Circle-1, Faridabad in ITA.Nos.504 503/Del./2015, Dated 27.06.2018, in which the identical additional ground was considered in the light of Judgment of Hon ble Delhi High Court and others and additional ground of appeal have been allowed deleting the entire additions on merit. The findings of the Order of the Tribunal dated 27.06.2018 from paras 2 to 10 are reproduced as under : ITA.No.504/Del./2015 M/s. BNB Investments Properties Ltd., A.Y. 2012-2013 : 2. Briefly, the facts of the case are that in this case, a search and seizure operation was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, no new facts are required to be investigated or place on records for adjudicating these grounds which are already available on records. 4. That under above mentioned facts and circumstances and as per the following authorities, these additional grounds deserves to be admitted:- NATIONAL THERMAL POWER COMPANY LTD. 229 ITR 383 (SC) GEDORE TOOLS PVT. LTD., 238 ITR 268 (DEL. ) 5. That without prejudice, the issues covered in these additional grounds are covered in G.N. 1 and G. N. 2, as taken initially in Form - 36 also, however, these have been taken specifically only as a matter of abundant precaution and to meet out the situation in case the Hon ble Court is of the opinion that the same are not covered in Ground Nos. 1 2 as initially taken. 3.1. Learned Counsel for the Assessee submitted that additional grounds are legal in nature and no new facts shall have to be considered. He, therefore, submitted that additional grounds may be admitted. He has relied upon the decision of the Hon ble Supreme Court in the case of National Thermal Power Co. Ltd., (1998) 229 ITR 383 (SC) and Gedore Tools Pvt. Ltd., 238 ITR 268 (Del.). 4. On the other ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued for assessment year under appeal i.e., 2012-2013. He has referred to PB-160 which is a reply filed under RTI Act dated 01.11.2016 by DCIT, CC-1, Gurgaon, in which, A.O. has reported that no notice under section 153C was issued for A.Y. 2012-2013 as it was a search year. Hence, notice under section 143(2)/142(1) were issued. Learned Counsel for the Assessee submitted that the A.O. accordingly did not pass any assessment order under section 153C of the I.T. Act and passed the assessment order under section 153B(1)(b) of the I.T. Act being a search year. He has submitted that First Proviso to Section 153C is applicable in the case of the assessee because no search was conducted in the case of the assessee. The Amendment in Section 153C came w.e.f. 01.04.2017 which is prospective in nature. Assessment in A.Y. 2012-2013 under appeal should have been completed under section 153C being 5th year in the Block of 06th year. The First Proviso to Section 153C(1) provides that in case of Section 153C, the date of receiving of books of account by the jurisdictional A.O. shall have to be construe as date of initiation of search. Since the books of account/impounded documents have been rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be reckoned from the date of search as mentioned in the amended Section 153C(1) or from the date of handing over of the documents as mentioned in the First Proviso of Section 153C which remained un-amended. He has, therefore, submitted that assessment have been rightly framed under section 153A(1)(b) of the I.T. Act, 1961. 7. We have considered the rival submissions. Section 153C of the I.T. Act, 1961, as is applicable to assessment year under appeal reads as under : 153C.Assessment of income of any other person.- (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue held as under : Sub-section (1) of section 153C of the Income-tax Act, 1961 provides that the assessment or reassessment of the income of the other person would be in accordance with the provisions of section 153A. The first proviso to subsection (1) of section 153C further states that, in case of such other person, the reference to the date of initiation of search in the second proviso to section 153A(l) shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person . In terms of section 153A(1)(b) of the Act. the Assessing Officer shall assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted. The second proviso to sub-section (1) of section 153A of the Act states that assessment or reassessment relating to any assessment year falling within the period of six assessment years referred to in the said sub-section pending on the date of initiation of the search under section 132, would abate. In CIT v. RRJ Securities Ltd. [2016] 380 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), held in paras 5 and 5.1 as under : 5. We have heard the rival submission on this issue and also perused the judgment dated 30th October, 2015 of the Hon'ble jurisdictional High Court in the case of CIT Vs RRJ Securities in ITA No. 164/2015 and ITA No. 175 to 177/2015. For ready reference, the relevant Para of the judgment is reproduced as under: 24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings, by virtue of Section 153C(1) of the Act, would have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was recorded on 2nd November, 2009, is not disputed by both the parties. In the judgment cited above, the Hon'ble High Court has held that when the Assessing Officer of searched person and such other person in whose case proceedings under section 153C are initiated, is the same officer, then the date of recording of satisfaction would be construed as the date of handing over of the seized records by the Assessing Officer of searched person to the Assessing Officer of such other person in whose case proceedings under section 153C are initiated. Since the Hon'ble High Court has already construed the relevant provisions, we do not concur with the arguments advanced by the ld. CIT DR on this count. Respectfully following the above judgment of the Hon'ble High Court in RRJ Securities (supra) the date of handing over of seized material/ record by the Assessing Officer of searched party to the Assessing Officer of the assessee would be 2nd November, 2009. Further, following the judgment, the six assessment years for which assessment/re-assessment could be made under section153C of the Act would also have to be construed as from the reference date of handing over of assets/do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3C of the I.T. Act, would also have to be construed with reference to the date of handing-over of the assets or documents to the A.O. of the assessee. Therefore, the 06 assessment years under section 153C of I.T. Act in the case of assessee would be A.Y. 2008-2009 to 2013-2014. The A.O, therefore, shall have to pass the assessment order under section 153C of the I.T. Act. However, A.O. has not issued any notice under section 153C of the I.T. Act before initiating the proceedings against the assessee which is also admitted by the A.O. in reply to the assessee under RTI Act. The Amendment in Section 153C of the I.T. Act by the Finance Act, 2017, w.e.f. 01.04.2017 to the effect that block period for the person in respect of whom the search was conducted as well as the other person would be the same six assessment year immediately preceding the year of search is prospective in nature. The issue have been dealt in detail by the Hon ble jurisdictional Delhi High Court in the case of Pr. CIT vs. Sarwar Agency P. Ltd., (supra) and by ITAT, Delhi, B-Bench, in the case of Empire Casting Pvt. Ltd., New Delhi vs. ACIT, C.C.2, New Delhi and Pavitra Realcon Pvt. Ltd., New Delhi vs. ACIT, C.C.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Act for A.Ys. 2005-2006 to 2010-2011. Assessment Year under appeal 2011-2012 was considered to be the year of the search. However, the 1st proviso to Section 153C of the I.T. Act provides that six assessment years for which assessments or re-assessments could be made under section 153C of the I.T. Act, would also have to be construed with reference to the date of handing- over of the assets or documents to the A.O. of the assessee. Since, satisfaction note have been recorded on 18.09.2012, therefore, the six assessment years under section 153C of I.T. Act in the case of assessee would be A.Ys. 2007-2008 to 2012- 2013. The A.O, therefore, shall have to pass the assessment order under section 153C of the I.T. Act. However, A.O. has not issued any notice under section 153C of the I.T. Act before initiating the proceedings against the assessee which is also admitted by the authorities below in the impugned Orders. The Amendment in Section 153C of the I.T. Act by the Finance Act, 2017, w.e.f. 01.04.2017 to the effect that block period for the person in respect of whom the search was conducted as well as the other person would be the same six assessment years immediately preceding th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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