TMI Blog2019 (11) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010 as mentioned hereinabove, such additions and such assessment orders cannot be accepted as the same are devoid of any incriminating material/documents found at the time of search. Addition on account of commission paid - HELD THAT:- A perusal of the audited report in Form No. 3CD, which is placed at page 31 of the paper book shows that under the details Books of account maintained , it is mentioned Cash Book, ledger, stock register, bank book , etc. Books are maintained on tally accounting software. It seems that this tally accounting software was seized during the search and the same has been treated as incriminating material. In our considered opinion, regular books of account of the assessee, by any stretch of imagination, cannot be treated as incriminating material forming basis of framing assessment u/s 153A r.w.s 143(3) Unexplained expenditure u/s 69C - Unexplained salary expenditure - HELD THAT:- We find that no independent material or evidence had been brought on record by the Assessing Officer to establish that the notings/jottings recorded on the loose sheet of paper represented unaccounted transaction. Initial onus is upon the assessee as the said docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, assessment proceedings were commenced. Assessment order was framed u/s 143(3) r.w.s 153A of the Act after making several additions, which are as under: a) Addition on account of treating the purchase of milk in cash under the head Milk Purchases Tanki ; b) Disallowance made u/s 37 of the Act towards payment of commission; c) Disallowance on account of alleged unexplained balances of sundry creditors alleging the same to be suppressed profit element; and d) Addition on account of recharacterizing agricultural income as income from other sources. 6. In respect of all these additions, wherever part relief is given by the ld. CIT(A), the Revenue is in appeal before us. 7. The representatives of both the sides were heard at length, the case records carefully perused and with the assistance of the ld. Counsel, we have considered the documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules. 8. The first challenge relates to the validity of the assessment order framed u/s 143(3) r.w.s 153A of the Act. 9. Before us, the ld. counsel for the assessee vehemently stated that the assessment orders passed by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3989/Del/2019 2009-10 29.09.2009 - 30.09.2010 31.05.2011 NO 3990/Del/2019 2010-11 06.10.2010 24.01.2011 30.09.2011 - NO 3 991/Del/2019 2011-12 23.09.2011 27.01.2012 30.09.2012 - NO 3992/Del/2019 2012-13 22.09.2012 17.05.2013 30.09.2013 - NO 13. As mentioned elsewhere, search took place on 28.02.2014 and last authorisation was executed on 22.04.2014. The return of income for A.Ys 2008-09 to 2012-13 were already filed before the date of search. Assessments for A.Ys 2008-09 and 2009-10 were framed u/s 143(3) of the Act vide orders dated 28.07.2010 and 31.05.2011 respectively. 14. A perusal of the assessment order for A.Y 2008-09 reveals that the first and main addition is on account of milk purchase tanki. The Assessing Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this tally accounting software was seized during the search and the same has been treated as incriminating material. In our considered opinion, regular books of account of the assessee, by any stretch of imagination, cannot be treated as incriminating material forming basis of framing assessment u/s 153A r.w.s 143(3) of the Act. 20. Having said all that, let us now examine the ratio of the decision laid down by the Hon'ble Delhi High Court in the case of Kabul Chawla [supra] which reads 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 153 A (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. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement of account as mentioned elsewhere. Therefore, in the light of the ratio laid down by the Hon'ble Delhi High Court [supra], completed assessments can be interfered only on the basis of some incriminating material unearthed during the course of search. 22. In so far as the Assessment Years 2010-11 to 2012-13 are concerned, where no assessment was framed u/s 143(3) of the Act, it can be safely concluded that the period of limitation for issuing notice u/s 143(2) of the Act expired much before the date of search. 23. The Hon'ble Delhi High Court in the case of Chintels India Limited 397 ITR 416 has held that once an assessee does not receive a notice u/s 143(2) of the Act within the stipulated period, such an assessee can take it that the return filed by him has become final and no scrutiny proceedings are to be stated in respect of that return. This is also abundantly clear from the Circular No. 549 dated 31.10.1989. 24. The Hon'ble High Court was seized with the following substantial question of law: Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the assessments for Assessment Year 2008-09 were pending, on the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stand terminated. 21. In the present case, the facts speak for themselves. The Assessee filed its return on 21st October, 2008. The return was processed under Section 143(1) of the Act on 27th March, 2010. It has held by this Court in Indu Lata Rangwala v. Deputy Commissioner of Income Tax (supra) that the mere processing of a return under Section 143(1) of the Act and the sending of an intimation to the Assessee will not make it an 'assessment'. At the same time, the consequences of the Department not issuing a notice under Section 143(2) of the Act within the time stipulated as far as the filing of the return in normal course is concerned was not examined either in Commissioner of Income Tax v. Kabul Chawla (supra) or Indu Lata Rangwala v. Deputy Commissioner of Income Tax (supra). As notice by the Punjab Haryana High Court in Vipan Khanna v. Commissioner of Income Tax (supra), the CBDT circular makes it abundantly clear that once an Assessee does not receive a notice under Section 143(2) of the Act within the period stipulated then such an Assessee can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re making an addition on account of unexplained expenditure, the Assessing Officer has to bring on record material to show that on evidence found as a result of search, there is an undisclosed expenditure represented by debits appearing in the books of account. It is the say of the ld. counsel for the assessee that from the document, it is not possible to know the author of the same. 33. The ld. DR, on the other hand, challenged this contention of the ld. counsel for the assessee by stating that u/s 292C of the Act, the onus is upon the assessee as the said provision clearly raises a presumption as to the assets, books of account, etc found in the possession or control of any person belong to the said person. 34. We have given thoughtful consideration to the rival contentions and have carefully perused the impugned document vis a vis the assessment order. In our considered opinion, what is postulated in section 69C of the Act is that first of all, the assessee must have incurred that expenditure and thereafter, if the explanation offered by the assessee about the source of such expenditure is not found satisfactory by the Assessing Officer, the amount may be added to his inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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