TMI Blog2014 (7) TMI 1315X X X X Extracts X X X X X X X X Extracts X X X X ..... struction no.1916 dated 11.5.1994 and decision of Hon ble Gujarat High Court we direct the assessing officer to work out the unexplained investment, if any, after giving credit for gold jewellery as per clause (iii) of board s instruction no.1916 dated 11.5.1994. Accordingly, assessee s appeal is considered to be allowed for statistical purposes. Assessment u/s 153A - Addition of unexplained cash credit - AO has only disputed the source of investment which is already reflected in the books of accounts and return filed prior to the date of search - HELD THAT:- an amount which has already been recorded in the books of accounts and disclosed in the return of income cannot be made subject matter of assessment u/s 153A of the Act, in absence of abatement of assessment proceeding. We therefore hold that the addition made of ₹ 7,30,000/- is not justified. So far as merits of the issue is concerned, undisputedly the assessee from the very beginning has explained that the amount was received as gift from his father. This fact was confirmed during the assessment proceeding through affidavit of his mother and father s brother. The assessing officer has simply disbelieved the affida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of no enquiry. Further, CIT has not brought any material on record to show that advances were not in regular course of business. Therefore, on merits also the CIT was not justified in exercising jurisdiction u/s 263 of the Act as the assessing officer has conducted enquiry and passed the order after application of mind. In the aforesaid view of the matter, we hold that the impugned order passed u/s 263 of the Act is invalid and therefore, we quash the same. - ITA Nos. 30 & 410/Vizag/2012, ITA Nos. 412 to 416/Vizag/2013 - - - Dated:- 21-7-2014 - SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER For the Appellant : Shri G.V.N. Hari, Advocate For the Respondent : Shri K.V.N. Charya, CIT(DR) ORDER Per Bench:- These seven appeals are by the assessee. While ITA No.30/Vizag/2012 and 410/Vizag/2012 are against separate orders of CIT(A) pertaining to assessment years 2009-10 and 2004-05, ITA Nos.412 to 416/Vizag/2013 are against the order passed u/s 263 of the Act by the CIT pertaining to assessment years 2003-04 to 2007-08. ITA 30/Vizag/2012: 2. The sole issue in the present appeal is in respect of addition of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such addition, the assessee preferred appeal before the CIT(A). Before the first appellate authority, it was submitted by the assessee that the assessing officer was not justified in treating the entire gold jewellery to be unexplained. The assessee relying upon the CBDT circular no.419 dated 31.5.1985 and instruction no. 1916 dated 11.5.1994 stated that as per the circular the gold jewellery found at the time of search is reasonable amount to be expected in case of married woman and others. The CIT(A) after considering the submissions of the assessee partially accepted the contention of the assessee by holding that the assessing officer was not justified to ignore the existence of gold jewellery in possession of the family members considering the economic status enjoyed by the assessee in the society. He further held that considering the income derived from agricultural land and business income by the assessee over the years it will not be uncommon to hold gold and silver jewellery which is customary in nature. Considering the above aspects, the CIT(A) held that out of the total gold jewellery found during the course of search weighing 3049 gms. credit which could be given to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellants family members - Ch.V. Ranga Raju (Appellant) - Smt. Ch.V. Subba Lakshmi (wife) - Ch. Gayatri Devi (Daughter) - Ch. Sushimita (daughter) - Ch. Tyaga Raju (son) - Smt. Ch.V. Subbamma (mother) 100 grams 500 grams 250 grams 250 grams 100 grams 500 grams ------------ 1700.00 ------------- 1349.00 Gold coins purchases recorded in appellant s books of account 380.00 ------------- 969.00 Gold coins purchases recorded in appellant s wife books 400.00 ------------- Excess gold in case of appellants status and ancestral nature not considered 569.00 ------------- The value of excess gold at present Rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys in filing the present appeal. The assessee has filed a delay condonation petition being supported by affidavit praying for condonation of delay. In the delay condonation petition it is stated that due to an inadvertent mistake on the part of the counsel, the appeal could not be filed. The Ld. D.R. however objected for condonation of delay. 11. We have considered the submissions of the parties and perused the materials on record. On going through the contents of the delay condonation petition and the averments made in the affidavit, we are satisfied that there is a reasonable cause for not filing the appeal in time. Accordingly, we condone the delay in filing of appeal and admit it for hearing on merits. The only issue in the present appeal is in respect of addition of ₹ 7,30,000/- as unexplained cash credit. 12. Briefly the facts are, a search and seizure operation was conducted in case of the assessee on 19.2.2009. As a consequence of the search and seizure operation, a notice u/s 153A of the Act was issued to the assessee calling for return of income for the impugned assessment year. In response to the notice, the assessee filed its return of income on 14.9.2009 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiated. So far as merits of the addition is concerned, the CIT(A) held that the affidavits submitted by the assessee are only self-serving documents and cannot be relied upon. It was held by the CIT(A) that apart from the affidavit the assessee could not produce any other evidence to substantiate the receipt of gift and accordingly upheld the addition made by the assessing officer. 14. The Ld. A.R. reiterating the stand taken before the revenue authorities submitted that as the assessment for the assessment year 2004-05 stood concluded at the time of search and seizure operation and since there is no assessment proceeding pending, the assessing officer was precluded from making any additions without reference to seized materials. In support of such contention, the Ld. A.R. relied upon the decision of the ITAT Vizag Bench in case of Sri Lalitha Constructions and another vs. ACIT in ITA Nos.162 to 164/Vizag/2013 dated 13.12.2013. Contesting the merits of the addition, the Ld. A.R. submitted that when assessee s mother and father s brother have confirmed the gift given by his father through affidavit, the departmental authorities cannot discard the same without verifying the averme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd as there was no assessment pending in this case, accordingly there cannot be any re-assessment on the issue of estimation of income, as there is no incriminating material found during the search. In the case of ASP Software Solutions Pvt. Ltd. 84 DTR (Hyd)(Trib.) 35 the coordinate bench at Hyderabad Tribunal has examined the issuance of notice u/s 153A of the Act or 153C of the Act and considered as under: Coming to the other contentions about the jurisdiction for initiation of proceedings under S.153C, these issues have become academic in nature. However, as seen from the additional grounds raised, and paper book filed, the Assessing Officer has issued a notice under S.153A when the assessee is not a searched party. Revenue did not bring out anything on record to submit that the notice under S.153C has been issued. As seen from the notice itself, this notice was issued/typed as a notice under S.153C. This was corrected by way of ink to be that of 153A. The learned Departmental Representative was specifically asked to enquire and place on record, whether the notice was issued under S. 153A or under S.153C. However, no information was placed on record. As seen from the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, the same cannot be sustained. Accordingly, we direct the assessing officer to delete the same. 18. In the result, assessee s appeal is allowed. ITA 412 to 416/Vizag/2013: 19. These appeals of the assessee are against a common order dated 28.3.2013 of the CIT(Central) Hyderabad u/s 263 of the Act revising the assessment orders passed u/s 143(3) r.w.s. 153A of the Act pertaining to the assessment year 2003-04 to 2007-08. 20. Briefly the facts are, pursuant to the search and seizure operation conducted in case of the assessee, assessment proceeding was initiated u/s 153A of the Act which were ultimately completed by the assessing officer vide order dated 29.12.2010 passed u/s 143(3) r.w.s. 153A of the Act. The CIT in exercise of power conferred u/s 263 of the Act called for the assessment records for the aforesaid assessment years and after examining the same was of the view that the assessment order passed are erroneous and prejudicial to the interest of revenue for the following reasons:- i) In assessment year 2003-04 to 2006-07 the assessing officer has not examined the allowability of interest as per the provisions of section 36(i) to (iii) as he has not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Chennai SB wherein it was observed that it is not necessary for the Commissioner of Income-tax in revision to make further enquiries before cancelling the Assessment Order of the A.O. The Commissioner of Income-tax can regard the order as erroneous on the ground that in the circumstances of the case, the A.O. should have made further enquiries before accepting the statements made by the assessee in his return. It is incumbent on the A.O. to investigate the facts stated in the return when circumstances would make such an enquiry prudent. The word erroneous in Sec. 263 of Income-tax Act, 1961 includes cases where there has been failure to make necessary enquiries. Considering the above, the order passed by Assessing Officer u/s 143(3) r.w.s. 153A on 29.12.2010 is prejudicial to the interest of Revenue. In view thereof, the orders passed by the A.O. u/s 143(3) r.w.s. 153A for the A.Y. 2003-04 to 2007-08 are set aside with a direction to redo the assessment after conducting necessary enquiries and verification on the above issues and redo the assessments thereafter as per the provisions of the I.T. Act 1961. Needless to say an opportunity should be given to the assessee before red ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessing officer during the assessment proceeding merely because the CIT entertains a different view jurisdiction u/s 263 of the Act cannot be assumed. In this regard, he relied on the decision of DIT Vs. Jyoti Foundation 357 ITR 388 (Del) and Lavanya Enterprises Vs. CIT ITA No.118/Vizag/2010 dated 3.8.2011. Finally the Ld. A.R. submitted that the order passed by the CIT cannot be sustained primarily because of the fact that he has passed a common order for all assessment years. 22. The Ld. D.R. on the other hand supporting the order of the CIT submitted that since the issues on which the CIT has revised the assessment orders were not at all considered by the assessing officer, the exercise of power u/s 263 of the Act is justified. 23. We have considered the submissions of the parties and perused the materials on record as well as impugned orders of the CIT. We have also gone through the decisions placed before us by the parties. As can be seen the issues on which the CIT has invoked jurisdiction u/s 263 of the Act are all reflected in the books of accounts of the assessee and disclosed in the return of income filed in regular course much prior to the search and seizur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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