TMI Blog2023 (3) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... C. A.; For the Respondent : Shri T. Kipgen, [CIT] D. R.; Date of Pronouncement 24.02.2023 ORDER PER YOGESH KUMAR U. S. , JM These two cross appeals are filed by the Assessee and the Revenue for assessment year 2011-12 against the common order of the ld. Commissioner of Income Tax (Appeals)-23, New Delhi, dated 31.07.2019 respectively. I. T. A. No. 7994/DEL/2019 (by the Assessee) Assessment Year : 2016-17 2. The assessee has raised the following substantive grounds of appeal :- 1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the proceedings initiated under Section 153A and order passed by the learned Assessing Officer (AO) under Section 153A/143(3) is without jurisdiction. 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in. law in rejecting the contention of the assessee that the order passed by the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red both on facts and in law in confirming the above additions by indulging in surmises without bringing on any direct evidence against the assessee, only on the basis of presumption and assumption. I. T. A. No. 8080/DEL/2019 (by the Revenue) Assessment Year : 2016-17 3. The Revenue has raised the following substantive grounds of appeal :- 1. That the order of the Ld. CIT (Appeals) is not correct in law and on facts. 2. The Ld. CIT (Appeals) has erred in deleting the addition of bogus purchase of Rs.4,71,56,854/- on account of unverified parties which were remained unverifiable at remand stage also. 3. The Ld. CIT (Appeals) erred in ignoring the facts mentioned in Assessment Order as well as in remand report that purchases of Rs.4,83,31,994/- remained unverified. 4. The Ld. CIT (Appeals) erred in not upholding the entire addition on account of unverified bogus purchases and applying estimation of profit out of bogus purchases. I.T.A. No.7994/DEL/2019 (A.Y 2016-17) I.T.A. No. 8080/DEL/2019 (A.Y 2016-17) I.T.A. No.7994/DEL/2019 4. Brief facts of the case are that, the assessee filed original return declaring total inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessee were found and seized. It is admitted fact that there is no pending assessment for the Assessment Year 2016-17. The Ld. A.O. made addition based on the documents submitted during the curse of assessment proceedings in following manners: ADDITION ON ACCOUNT OF UNEXPLAIEND CREDIT: 6. During the assessment proceedings, it was found that the assessee has made addition of Rs 1,00,000/- in his capital account .The assessee vide point No.5 of the questionnaire dated 21,12.2018 was asked to show cause as From perusal of Balance sheet for the year under consideration, you have made addition ofRs 1,00,000/- in your proprietors capital account You are hereby asked to show cause why the amount of Rs. 1,00,000/- should not be added back to your income as unexplained credit for the year under consideration. , 6.1 Vide reply dated 24/12/2018 , the AR of assessee replied that the assessee has made additions of Rs 1 lac in the capital account by transferring from savings account.'The reply of the assessee was considered and found not to be acceptable. 6.2. Again the assessee was provided final opportunity to furnish the details vide final show cause and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturned book/no reply received is provided in tabular form as below:- In view of above, You are hereby asked to show cause why purchases amounting Rs. .04,04,257 /- made from above parties should not be considered bogus and add back to your income for the year under consideration. 7.1 Vide reply dated 24/12/2018, the AR of assessee replied that in relation to the issue raised in para no.6,the assessee has already placed on record in consideration and the remaining details are under compilation and the same will be submitted at the earliest. The reply of the assessee was considered and found to be evasive and vague. Again the assessee was provided final opportunity to furnish the details vide final show cause and was asked vide point no, 5 of the notice u/s 142(1) dated 26.12,18 as Notice under 142(1) of the IT act,1961 dated 26.12.2018 was issued to you and you were asked to show cause that why the purchases amounting Rs. 107,04,04,257 /- made from the parties should not be considered bogus and add back to your income for the year under consideration, notices under section 133(6) of the IT act,1961 were issued to the purchase parties for the year under co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is making its all efforts to get the above compliance completed as early as possible as the assessee is in constant touch with such parties. The latest updated address details of the few parties with which the assessee is having continuous business transaction and are within the reach of the assessee are also enclosed the latest details of address for the parties for which the notices got returned. It is also submitted hat in certain cases the parties have closed their offices as permanent shut down of business and also in certain cases the assessee had the business transaction in the particular financial year and not again thereby it is very difficult to locate the said parties. Therefore, the assessee is placing on record the updated address of the parties which is enclosed for your perusal. It is further submitted that many parties have already complied with the notice issued to them by directly sending confirmation to the office of your good self and for the certain parties the assessee has already obtained the confirmation from them and the same is benign placed on record for your kind perusal and for the remaining the assessee will get the confirmations either directl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undisclosed income would be brought to tax . iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously ..... X X X X Extracts X X X X X X X X Extracts X X X X
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