TMI Blog2021 (1) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... essing officer under section 153A without reference to any incriminating material found search is not sustainable. Hence we set aside the orders of authorities below and direct that the additions made are not sustainable due to the jurisdictional defect. Since we have already held that addition of loan itself is not sustainable the addition of commission is also directed to be deleted as the same is also without reference to any material foundering search. These additions are not sustainable due to jurisdictional defect in as much as they are without reference to any incriminating material found upon search - Decided in favour of assessee. - ITA no.5165/Mum./2018 ITA no.5166/Mum./2018 ITA no.5167/Mum./2018 - - - Dated:- 1-1-2021 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER Assessee by : Shri Shashi Tulsiyan Revenue by : Dr. Deepkant Prasad ORDER PER SHAMIM YAHYA, A.M. These are appeals by the assessee, against the common order dated 31st July 2018, passed by the learned CIT(A) for the concerned assessment years as above. 2. The grounds of appeal are common except for the amounts. For the sake of reference we are refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laring total income of ₹ 3,90,830. There was a search and seizure action carried out against the RSBL group under section 132 of the Act on 11th June 2013, and the assessee was also covered. The notice under section 153A of the Act was issued. The assessment under section 143(3) r/w section 154A of the Act was completed in the case of all the years on 28th March 2016, on an income of ₹ 29,50,830 (A.Y. 2008 09), ₹ 45,76,360 (A.Y. 2009 10) and ₹ 30,16,628 (A.Y. 2011 12). In the assessment, addition was made under section 68 for loans taken from the following parties: Sr. no. Assessment Year Name of the Lender Amount 1. 2008 09 Simran Gems ₹ 25,00,000 2. 2009 10 Krishna Diam ₹ 20,00,000 3. 2009 10 Simran Gems ₹ 20,00,000 4. 2011 12 Khushi Gems Pvt. Ltd. ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09 ₹ 25,00,000 2. 2009 10 Simran Gems ₹ 20,00,000 3. 2009 10 Krishna Diam ₹ 20,00,000 4. 2011 12 Khushi Gems Pvt. Ltd. ₹ 21,38,178 A.Y. 2011 12 ₹ 21,38,178 Hence, addition of ₹ 25,00,000 is made to the total income of the assessee u/s 68 of the Income Tax Act, 1961. Penalty proceedings is initiated u/s 271(1)(c) of the Income Tax Act for furnishing inaccurate particulars of income. The assessee has to pay commission to arrange for such accommodation entries. Rate of commission is taken @ 2.4% which the assessee paid for arranging accommodation entries. Hence, the amount of commission paid comes to ₹ 60,000 which is added back to the total income of the assessee. Penalty proceedings initiated u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income. 30. From the various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he addition is without reference to any material foundering search. He submitted that all these assessments are unabated in as much as earlier assessment was completed under section 143(1) and there was no further time remaining to complete the assessment under section 143(3). In this regard he referred to several decisions from Hon ble Bombay High Court which were also referred before the CIT(A). Learned counsel of the assessee reiterated that the addition has been made solely on the basis of statements obtained upon survey from various parties which have also been retracted. That assessee has provided all the necessary documentary evidences. That the parties whose statement have been relied upon duly retracted. That no opportunity was given to the assessee to cross-examine the parties on the statement of which the addition has been made. 9. Per contra, learned departmental representative relied upon the orders of the authorities below. He submitted that the addition has been made on the basis of various statements upon survey and search obtained from various parties. He elaborately relied upon the orders of the learned CIT(A). Learned departmental representative referred to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts of the assessee. Hence he submitted that addition on the basis of regular books of accounts without reference to any search material is not sustainable under section 153A on the touchstone of various decisions referred above. 12. Upon careful consideration we find that addition in the present case has been made under section 153A on the basis of statements of various parties obtained under survey and search. The addition of unsecured loan has been made on the basis of entries in the regular books of accounts duly reflected in the assessee s financial accounts. There is no reference to material found in search with reference to the addition made. It is also undisputed that these assessments are unabated. The law for assessment under section 153A in case of unabated assessment has been duly laid down by the Hon ble Bombay High Court in the case of continental warehousing as under: On a plain reading of section 153A, it becomes clear that on initiation of the proceedings under section 153A, it is only the assessment/reassessment proceedings that are pending on the date of conducting search under section 132 or making requisition under I section 132/4 stand abated and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not pending, to which the above said ratio will apply. Assessments which are not pending are not only those which have been completed under section 143(3) but also those for which the time for issuing notice under section 143(2) have already elapsed. In other words the reference is to those assessments in whose case assessment under section 143(3) cannot now be done. It is not at all the case of the revenue that in the appeals which have been claimed as unabated here there was time for assessment under section 143(3). In this view of the matter, in our considered opinion, the submission of the learned counsel of the assessee succeeds that addition in the case of unabated assessment without reference to incriminating seized material for assessment u/s.153A is not sustainable on the touchstone of above said Hon'ble Jurisdictional High Court decision. 14. It may not be out of place here to mention that it is specifically provided in section 153A that assessment or reassessment if any relating to any relevant assessment year or years referred to in this subsection pending on the date of initiation of search under section 132 or making of requisition under section 132 a as th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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