TMI Blog2018 (5) TMI 2123X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence under Rule 46A. 2. That the CIT(A) erred in law and on facts of the case in deleting the addition of ₹ 3,50,00,000/- on account of cash credit made by the AO. 3. That the CIT(A) erred in law and on facts of the case in deleting the addition of ₹ 1,75,00,000/- on account of commission @ 0.5%. 4. That the CIT(A) erred in law and on facts of the case in deleting the addition of ₹ 14,00,000/- on account of unsecured loans. 5. (a) The order of the CIT(A) is erroneous and not tenable in law and on facts. ( b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of hearing of the appeal. Cross Objection 257/Del/2014 The Ld.CIT(A) erred both in law and on facts in not quashing the entire addition of ₹ 3,65,75,000/- on the basis of legal ground that the additions in question have no relation whatsoever to the material or evidence found in the course of search and there were no pending assessment proceedings on the date of search abating under second proviso to S.153A(1). 2. Brief facts of the case are as under: Assessee for the year und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , assessee, has challenged legality of assessment order passed under section 153A of the Act. Since this issue raised in Cross Objection goes to root of addition, we are proceeding to adjudicate the Cross Objection raised by assessee first. At the outset Ld.AR relied upon decision of Coordinate Bench of the Tribunal in the case of ACIT vs. MKR Construction Pvt.Ltd., in ITA No. 5444/Del/2013 along with CO No. 128/Del/2014 for Assessment Year 2004-05. It was submitted that M/s MKR Construction Pvt. Ltd. was also one of the group concerns of Mahesh Mehta on whom search was conducted. 4.2 . On perusal of order of this Tribunal in ACIT vs. MKR Construction Pvt.Ltd., it is observed that similar addition was made without there being any material or information gathered during the course of search. Ld. AR placed reliance upon the copy of the punchnama placed at page 14-18 along with the copy of the statement of Sh. Mahesh Mehta under section 132 (4) of the Act placed at page 19-24 of paper book. From, punchnama it has been pointed out that nothing relating to share application money was found during search in case of present assessee and that answers to various questions rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er on, in actual transaction date of payment have undergone variation and it was orally agreed that out of this total consideration of ₹ 25,00,01,100/- expenses for transfer with HSIIDC (approx. 1.5 crore ) would be deducted from the consideration. Till date I have received ₹ 18,50,01,100/-. Substantial part of ₹ 6.93 crore were received in June 2009 itself. Now, shares are to be transferred in the name of nominee of Mr.Kunjan Arora i.e. Deepti Arora W/o Kunjan Arora and Ramesh Arora father of Kunjan Arora. Santos Garg has already transferred shares in favour of nominee of Kunjan Arora in F.Y. 2008-09, Remaining formalities are likely to be completed in the coming month and balance payment could be received by me after FTL. Q.10. In what way, this amount ofRs.18,50,01,100/- is received in your books of accounts ? Ans. As per my direction and direction of my wife, the entire amount was received in the companies M/s M.A. Projects (P) Ltd. and M/s M.K.R. Construction (P) Ltd. 4.3 . Further in response to question no.15 raised by authorities, Sh.Mahesh Mehta offered for taxation additional unaccounted income in other concerns relevant for assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials are in case of Sh.Mahesh Mehta, M/s. Mahesh Wood Products Pvt. Ltd. Further, the statement recorded under section 133 (4) of Sh.Mahesh Mehta do not refer to any seized material relating to share application money received by assessee for the year under consideration. 5.3 . In a subsequent decision by Hon ble Delhi High Court in the case of CIT vs Kabul Chawla reported in 380 ITR 570, Hon ble Court observed and held as under: 35. In Commissioner of Income Tax v. Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 58 Taxmann.Com 78 (Bom) the question addressed by the Bombay High Court was whether the scope of assessment under Section 153A encompasses additions, not based on any incriminating material found during the course of search? It was held that no addition could be made in respect of the assessments that had become final in the event no incriminating material was found during search. The Bombay High Court relied on the earlier decision in CIT v. M/s. Murli Agro Products Ltd. (supra) and discussed the scope and ambit of the proceedings for assessment and reassessment of total income under Section 153A (1) of the Act and the provisos thereto. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b. In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means - (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (ii) undisclosed income or property discovered in the course of search. Summary of the legal position 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 exercise normal assessment powers in respect of the six years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in in the assessment order passed u/s 153A. Accordingly, same is directed to be deleted. So far as the reliance placed by Ld.CIT, DR on the judgment of Anil Kumar Bhatia, we find that the Hon ble High Court itself had clarified that there is no incriminating material was found during the course of search and, therefore, no express opinion as to whether the addition can be made u/s 153A was made by their Lordships. The relevant observation in para 23 of the judgment is reproduced here under.- We are not concerned with a case where no incriminating material was found during the search conducted u/ s 132 of the Act. We, therefore, express no opinion as to whether Section 153A can be invoked even in such a situation. That question is therefore left open. Hence, the reliance placed by the Learned CIT DR on this judgment is wholly misplaced. 12. Accordingly, we allow the grounds raised in the Cross Objection by deleting the entire addition made by the Assessing Officer on the ground that it is beyond the scope of assessment made uj s 153A. Since we have quashed the addition on the legal ground therefore, the grounds raised by the revenue has been rendered infructuou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
