TMI Blog2020 (8) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... e the date of search and that the assessment had not abated. As AR submitted that issue is identical. It is also been alleged by Ld. ar that no incriminating material was found during search relating to assessment year 2013-14, we therefore direct Ld.AO to verify the same and consider the claim of assessee. In the event it is found that time period for issuance of notice under section 143 (2) stood expired, and that no incriminating materials were found, no addition could be made under section 153C. Estimation of income - Tribunal partly allowed by limiting the estimation to 8% of gross receipts - HELD THAT:- As decided in own case [ 2020 (3) TMI 572 - ITAT BANGALORE] on careful consideration of facts and taking a reasonable approach, it would be met end of justice, if the profit rate were applied to 8% being equal to presumptive rate under section 44AD of gross receipts as against estimation @ 8.5% by Ld. CIT (A). The AG is, therefore, directed to recalculate the addition of business income by adopting 8% of gross receipts. This ground of appeal is therefore, partly allowed. Addition being 1/3rd of cash seized at the time of search - HELD THAT:- As decided in [ 2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that, assessee stays in residential premises with other family members, and is a common residence for 19 members of the same family. During the course of search, cash amounting to ₹ 14,80,000/- and 1970.39gm of gold jewellary were seized as unaccounted from assessee s residence. 4. After completion of search the case was centralised and Ld.AO issued notice under section 153C of the act on 05/10/2016 calling upon assessee to file return of income for assessment years under consideration. 5. Assessee raised objection on issuance of notice under section 153C of the act on the premise that provisions of section 153C are applicable only when there is a search in of premises and during the course of search certain papers/documents are found that belong to other person, and that AO of searched person is satisfied that such papers etc., belongs to a person, other than searched person. Ld.AO rejected the contentions of assessee s and passed assessment order by holding that jurisdiction under section 153C of the act has been resumed correctly. Ld.AO passed assessment order on 13/11/2016 in respect of all assessment years under consideration by estimating business income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up AY 2013-14 AY 2014-15 AY 2015-16 Validity of assessment u/s 153C: No incriminating material found belonging to appellant no satisfaction note recorded and furnished to the appellant 2A, 2B 2A, 2B N.A Hon'ble ITAT in the case of another assessee of the group ie. Shri Panati Vittalnath Reddy in ITA No. 1768 to 1770/Bang/2017 dated 26/02/2020 for AY 2013-14 to AY 2015-16 [placed at Pages 170 to 204 of Paper Book has upheld the validity of proceedings u/s I53C of the Act. Relevant discussion vide Para 11 at Page 182 of the paper book. Estimation of business income by the CIT(A) at 8.5% of gross receipts (Being reduced from 12 ,, originally estimated by the learned A.O) 3A, 3B, 3C 3A, 3C 2A, 2B For AY 2013-14, Hon ble ITAT held in the aforesaid case that the assessment has not abated since time levied for issue of notice u/s 143(2) expired before date of search vide Para Appellant had filed his return for AY 2013-.14 on 29/09/2013 [Page 48 of Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of validity of assessment under section 153C of the Act, alleging that no incriminating material has been found belonging to assessee and no satisfaction note has been recorded and furnished to assessee. 16. This issue has been decided by this Tribunal in case of Sh.P. Vittalnath Ready (supra) upholding the validity of proceedings under section 153C of the Act by observing as under: 10. We have heard the rival submissions and perused the relevant material on record. The section 153C of the Act reads as under:- 153C [(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, jewel/cry 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 notice and assess or reassess the income of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial on record. We find that the return of income was filed on 30.09.2013 and notice under section 143(2) could be issued up to 30.09.2014 for making scrutiny assessment in this case. However, the search was conducted on 09.10.2014 hence, on the date of search no proceeding were pending for assessment year 2013-14, hence, the assessment is not abated on the date of search. Therefore, no addition under section 153C could be made for the assessment year under consideration, where no incriminating material was found in search relating to that assessment year. Accordingly, addition in business income sustained on account of estimation @ 8.5% of gross receipts is therefore, deleted. Accordingly, Ground No. 3A, 3B and 3C of appeal is Allowed. 21. In present facts of the case Ld.AR submitted that issue is identical. It is also been alleged by Ld. ar that no incriminating material was found during search relating to assessment year 2013-14. 22. We therefore direct Ld.AO to verify the same and consider the claim of assessee. In the event it is found that time period for issuance of notice under section 143 (2) stood expired, and that no incriminating materials were f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 2015-16. 27. Ground 3 for assessment year 2015-16 pertains to addition of ₹ 4,93,000/-, being 1/3rd of cash seized at the time of search. 28. Ld.AR submitted that identical issue has been addressed by this Tribunal in case of Sh. P Vittalnath Reddy, (supra). He also submitted that in the present case assessee had withdrawn cash of ₹ 9,00,000/- on 20/09/2014 before the date of search for certain expenses and the balance was available with him as on the date of search. 29. Ld. senior DR submitted that the issue may be set aside to learnt AO for verification. 30. We have perused submissions advanced by both sides in light of records placed before us. 31. We note that in case of Sh. P Vittalnath Reddy, (supra) this Tribunal considered this issue by observing as under: 45. We have heard the rival submissions and perused the relevant material on record. We find that the assessee has withdrawn cash of ₹ 7 Lakh on O1.10.2014, hence, this cash might be available with the assessee on the date of search. As against this, the addition made by the AO is ₹ 4.93 lakhs only. We further note that the assessee has been showing substantial incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to be made it is to be equally divided among family members. Further, the assessee has only claimed jewellery of 261 grams as belonging to him, which has been reflected in balance sheet as on 31.03.2011 hence, no addition could be made in the hands of the assessee. Further, considering the CBDT Circular which provides jewellery holding by female member and male members and children in particular quantity as not be served meaning thereby as explained, we are of the considered opinion that no addition can be sustained on this account. Accordingly, 1/3rd addition made in the case of the assessee on account of jewellery at ₹ 16,42,900/- is deleted. This ground of appeal is therefore, allowed. 38. We direct Ld.AO to verify the facts for year under consideration and to consider the claim in light of observations of this Tribunal in case of Sh.P.Vittalnath Reddy, (supra). Accordingly, this ground raised by assessee for assessment year 2015-16 stands allowed for statistical purposes. In the result, appeal is filed by assessee for assessment year 2013-14, 2014-15 and 2015-16 stands partly allowed for statistical purposes. Order pronounced in the open court on 21st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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