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TMI Blog2021 (6) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and issues involved therein are common in nature, these are heard analogously and are being disposed of by a common order for the sake of convenience. IT(SS)A No. 130/Ahd/2018 (A.Y. 2011-12):- 2. At the time of hearing of the instant appeal the Ld. Senior Counsel appearing for the assessee submitted before us that the issues involved in this particular case have already been decided in favour of the assessee in the appeal preferred by the Revenue in IT(SS)A No. 179/Ahd/2019 in the case of DCIT vs. Smt. Sonal Uday Vora and in C.O. No. 107/Ahd/2019 in the case of Smt. Sonal Uday Vora vs. DCIT for the A.Y. 2011-12. The Ld. DR though relied upon the order passed by the Ld. AO the contention made by the Ld. Senior Counsel as mentioned hereinabove has not been able to controvert. The maintainability of such reassessment proceeding under Section 143 r.w.s. 153A of the Act was also raised before us on this count that the assessee herein has filed her original return of income on 28.09.2011 and the time limit of issuance of notice under Section 143(2) in the facts and circumstances of the case had already expired. Therefore, in the absence of any incriminating material the complete as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income on 09.01.2015. 6. The assessee had claimed exempt long-term capital gain under Section 10(38) of the Act to the tune of Rs. 12,41,24,932/-. 7. Revenue's case is this that such funds were routed to the beneficiaries in the guise of share capital, share premiums and unsecured loans. Such alleged managed exempt capital gain purchased in lieu of cash had been treated as income from unaccounted source and added to the total income of the assessee by the Ld. Assessing Officer. The same was, in turn, deleted by the Ld. CIT(A). Hence, the instant appeal before us. 8. In this aspect we have considered the judgment passed by the Ld. Tribunal in IT(SS)A No. 179/Ahd/2018 & C.O. No. 107/Ahd/2019 as has been relied upon by the Ld. AR. While dealing with issue the Ld. Tribunal has been pleased to observe as follows:- "7. In order to decide the issue as to whether in the absence of any incriminating material the completed assessment can be reiterated, we would like to consider the relevant statutory provision on this aspect. The provision of Section 153A deals with the issue in hand states as follows:- ""153A. Notwithstanding anything contained in section 139, section 147, sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment by the [Principal Commissioner or] Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation.-For the removal of doubts, it is hereby declared that, - (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year."" Thus, it appears that the relevant provision reveals that pending assessment on the date of search in respect of preceding six assessment years abate as per the second proviso. But the same does not include those assessments which have already attained finality or wherein the assessment orders have already been passed. When pending assessment abate in case of a search, the AO retains the original jurisdiction as well as the one conferred upon him under Section 153A of the Act for which assessments shall be made for each of six assessment years separately. In case of non-abated assessment i.e. the assessment which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the abated assessment or reassessment can be made. The word 'assess' in section 153A is relatable to abated proceedings (i.e., those pending on the date of search) and the word 'reassess' to complete assessment proceedings. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each assessment year on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer. Completed assessments can be interfered with by the Assessing Officer while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. (Para 37] The present appeals concern assessment years 2002-03, 2005-06 and 2006-07. On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- "(i) The Decision of Hon'ble Gujarat High Court in case of CIT Vs. Saumya Construction Pvt. Ltd (Tax appeal No. 24 of 2016) dated 14th March 2016, the facts and findings of which are restated as under: "18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs. 11,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed." Thus, it is held that if in relation to any assessment year, no incriminating material is found no addition or disallowance can be made in respect to that assessment year in exercise of powers under Section 153A of the Act and the earlier assessment shall have to be reiterated. 12. We have further considered the particular fact of non-finding of incriminating material at the premises of the assessee during search proceeding as submitted by the Ld. AR. The provision of Section 153A cannot be made applicable if the incriminating material is not found at the time of search proceeding. Neither addition under Section 153A is permissible on the basis of incriminating material found from the place of third person or after completion of search proceeding as also the case made out by the appellant before us. This particular aspect has also been taken care of by the Ld. CIT(A) as we found from the order impugned. He has further relied upon the judgment passed by the jurisdictional High Court in the case of PCIT vs. Sunrise Finlease Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor. In this regard, it would be pertinent to note that as per section 292C, there is a presumption that the documents, assets, books of account etc. found at the time of search in the premises of a person is always presumed to be belonging to him/them unless proved otherwise. This goes to prove that the presumption derived is a rebuttable presumption. Then in such a scenario, the person on whom presumption is drawn, has got every right to state that the said documents does not belong to him/them. The Assessing Officer if he is satisfied with such explanation, has got recourse to proceed on such other person (i.e., the person to whom the said documents actually belong to) in terms of section 153C by recording satisfaction to that effect by way of transfer of those materials to the Assessing Officer assessing the such other person. This is the mandate provided in section 153C. In the present case, if at all, the seized documents referred to in is stated to be belonging to assessee herein, then the only legal recourse available to the department is to proceed on the assessee herein in terms of section 153C. In this regard, one would like to place reliance on the recent decision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of unabated assessments, the Legislature had conferred powers on the Assessing Officer to just follow the assessments already concluded unless there is an incriminating material found in the search to disturb the said concluded assessment. This would be the correct understanding of the provisions of section 153A, as otherwise, the necessity of bifurcation of abated and unabated assessments in section 153A would become redundant and would lose its relevance. Hence, the arguments advanced by the revenue in this regard deserves to be dismissed, [Para 10.7] In view of the aforesaid findings and respectfully following the judicial precedents relied upon hereinabove, the assessment already deemed to have been completed for the assessment year 2009-10, which was unabated/concluded assessment, on the date of search, deserves to be undisturbed in the absence of any incriminating material found in the course of search and, accordingly, no fresh addition could be made thereon without the existence of any incriminating materials found in the course of search from the premises of the assessee. Since the issue is addressed on preliminary ground of absence of incriminating materials, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment whereby, it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assessee the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. The second proviso makes the intention of the legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or requisition under section 132A, as the case may be, shall abate. Subsection (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under subsection (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment faili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. 17. In the facts of the present case, a search came to be conducted on 07.10.2009 and the notice was issued to the assessee under section 153A of the Act for assessment year 2006-07 on 04.08.2010. In response to the notice, the assessee filed return of income on 18.11.2010. In terms of section 153B, the assessment was required to be completed within a period of two years from the end of the financial year in which the search came to be carried out, namely, on or before 31st March, 2012. Here insofar as the impugned addition is concerned, the notice in respect thereof came to be issued on 19.12.2011 seeking an explanation from the assessee. The assessee gave its response by reply dated 21.12.2011 calling upon the Assessing Officer to provide copies of statements recorded on oath of Shri Rohit P. Modi and Smt. Pareshaben K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said contention does not merit acceptance, inasmuch as, the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, an assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. It in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India), Jodhpur v. Assistant Commissioner of Income Tax (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court in the case of Commissioner of income-tax-1 v.Jayaben Ratiiai Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in deleting addition made by the Ld. AR under Section 153A of the Act. 18. Thus, it appears that all along and all through the Ld. CIT(A) considered the relevant judgments applicable to the instant case as discussed hereinabove and rejected the decision made by the Ld. AO in treating the exempt long term capital gain as undisclosed income not sustainable under Section 153A of the Act and finally deleted the addition made by the AO based upon no incriminating documents found during the course of search at appellant's premises without any ambiguity so as to warrant interference. 19. We, therefore, upon being satisfied on the maintainability point itself reject such appeal preferred by the Revenue relying upon the judgments discussed above find no merit in usurping the jurisdiction confirmed by the provision of Section 153A of the Act by the Ld. AO to reassess the year under considerations in the absence of any incriminating materials found during the search proceeding from the premises of the appellant in the unabated assessment proceeding. In the absence of any merit found in the appeal preferred by the Revenue we reject the same by upholding the order passed by the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led principle that additions cannot be made on the basis of dumb document. Further copy of statement of Shri Damodar Attal, employee of Shri Shirish Shah, which has been relied upon was not provided to the appellant, which is against the principles of natural justice. Moreover, Shri Shirish Shah himself has denied in the statement recorded by the AO that the provided bogus capital gain to the appellant. The date of transactions mentioned in the document, relied upon for making the additions, do not match with the date gathered from the SEBI by the AO and the same is admitted by the AO in the Assessment order. The appellant herself has been covered under search & seizure action but not a single evidence about the share transaction with Shri Shirish Shah has been found. The company involved in these transactions is still actively traded on the stock exchanges and it has not been barred by SEBI." 12. At the time of hearing of the instant appeal the Ld. AR drew out attention at Page 222 of the Paper Book filed before us which speaks of the statement on oath made by the said Shri Shirish Chandrakant Shah where in reply to the question No. 12 he has deposed that he is basically a shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2016 and the judgment passed by the Hon'ble Delhi High Court in the matter of CIT (Central)-III vs. Kabul Chawla reported in [2015] 61 taxmann.com 412 (Delhi) as already discussed by the Co-ordinate Bench in IT(SS)A No. 179/Ahd/2018, we find no merit in disallowing the claim of exempt long-term capital gain on the count of undisclosed income. The same is not sustainable in the eye of law in the absence of any incriminating documents found during the search which has properly considered by the Ld. CIT(A). The impugned order, is thus, according to us just and proper and without any ambiguity so as to warrant interference. Hence, the appeal preferred by the Revenue is dismissed. C.O. No. 105/Ahd/2019 (A.Y. 2011-12):- 13. Since the order has been passed in favour of the assessee the C.O. preferred by the assessee has become infructuous. The C.O. is accordingly dismissed. IT(SS)A No. 135/Ahd/2018(A.Y. 2011-12):- 14. The identical issue involved in the case has already been dealt with by us in IT(SS)A No.130/Ahd/2018 for A.Y. 2011-12 and in the absence of any changed circumstances the same shall apply mutatis mutandis. Hence, the appeal preferred by the Revenue is dismissed. 15. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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