TMI Blog2024 (1) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... ized in the course of search - no incriminating materials were seized leading to the additions in dispute. Decided in favour of assessee. - Shri G.S. Pannu, Hon ble Vice President And Shri Challa Nagendra Prasad, Judicial Member For the Revenue : Shri Zafarul Haque Tanweer, CIT DR For the Assessee : Shri UN Marwah, CA And Shri Praveen Goel, Adv. ORDER PER C.N. PRASAD, J.M. These two appeals are filed by the Revenue against different orders of Ld.CIT(Appeals)-30, New Delhi dated 05.06.2020 for the assessment years 2011-12 and 2013-14. Revenue raised the following common grounds of appeal except for the figures: Grounds of ITA No. 1564/Del/2020 for AY 2011-12: 1. Whether on the facts and in the circumstances of the case the Ld.CIT(A) has erred in law and on facts in not appreciating that the SLP filed before the Hon ble Supreme Court against the decision of Kabul Chawla has been withdrawn due to low tax effect but the Revenue has already filed SLP in the case of APAR Industries Pvt. Ltd. which includes the ratio as decided by the Hon ble High Court in the case of CIT(Central-3) Vs. Kabul Chawla. 2. Whether on the facts and in the circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to the contrary. 4. Whether on the facts and in the circumstances of the case the Ld.CIT(A) has erred in law and on facts in not appreciating that the case of M/s Pebble Investment and Finance Pvt. Ltd. Vs. ITO (2017-TIOL-238 SC-IT) is very much applicable in this case. 5. That the order of Ld.CIT(A) is perverse, erroneous and is not tenable on facts and in law. 6. That the grounds of appeal are with prejudice to each other. 7. That the appellant craves leave to add, amend, alter or forgo any grounds of appeal either before or at the time of hearing of the appeal. 2. The Ld. Counsel for the assessee, at the outset, submits that a search and seizure operation u/s 132 of the Act was conducted on 27.07.2016 and 23.08.2016 in the premises of the assessee and his family and associate group of cases at various residential and business premises. Assessment for these two assessment years was completed u/s 153A making additions towards unexplained investments in the form of loans and advances. The Ld. Counsel for the assessee submits that no incriminating material was found in the course of search warranting the additions. Ld. Counsel submits that as there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 16,69,85,000/ routed through M/s Shivsakti Commercial Pvt. Ltd. and M/s Dynamic Enclave Pvt. Ltd. was his unaccounted cash which assessee had paid to some entry operator in Kolkata to convert into white. The relevant portion of his statement are reproduced as under: ANS:- I admit that I have taken loans and advances from Shiv Shakti commercial private limited and dynamic enclave private limited in my company J H Jewels private limited. Actually this was my own accounted cash which I paid to some person in Kolkata whose name I do not remember. He had made a deal with me to convert my unaccounted cash into genuine white money. I paid a cash commission of 0.2% of the total loans as received from the company mentioned above. I have generated this cash through personal trading of jewellery out of my firm. I admit my mistake and offer Rs. 16,69,85,000/- for due taxation as per Income Tax Act 1961 in the year of receiving loans and advances from these companies. I do not remember any transaction details with maharaja tie up private limited as they are very old and I do not have proper records for that period hence I recollect and thus I am not in a position to explain it. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded on 29.09.2017, also figure of surrender is incorrect; (ii) That no incriminating material /evidence has been found during course of search or survey proceedings and since the assessment for this year having been completed, no addition in law can be made; (iii) That without prejudice, investment in companies has been made by J H Jewels Pvt. Ltd. and not the Appellant and since no investment made by Appellant addition not warranted; (iv) That on merits it was stated that the Report of Inspector pursuant to commission u/s 133(i)(d) is incorrect and not reliable for the reason that the registered offices had shifted to Delhi and the tax jurisdiction had also been transferred to ACIT Central Circle 30 New Delhi , who has passed the present order; (v) That all loans given by Maharaja Tie Up Pvt. Ltd. during the year are genuine and satisfy all conditions of Section 68 namely (a) Identity (b) Maharaja Tie Up Pvt. Ltd. assessed to Tax u/s 143(3), share capital and share premium accepted; the said company had reserves and investment in shares of various companies, which were sold and such funds were advanced to M/s J H Jewels Pvt. Ltd. which held 100% of the shares o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 afresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant A Y 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed proceedings, addition can be made only in respect to the incriminating material found during the course of search. Since, in the instant case, the assessment proceedings were already concluded under section 143(1) of the Act and did not abate, therefore, applying the ratio of above decisions to the case in hand, the AO can made addition in the returned income only in respect to the incriminating material unearthed during the search. If no incriminating material is unearthed during search then no addition can be made. No incriminating material was found during search/ survey relating to the addition of Rs. 16,48,00,000/- [which was reduced to Rs. 15,22,00,000/- u/s 154] for this year being completed assessment. 10.2 Applying the aforementioned propositions laid down in the case of Kabul Chawla (supra) to the facts of this case, it is held that the addition made of Rs. 16,48,00,000/- for the year under appeal i.e. AY 2011- 12 is bad in law as no incriminating material has been found or seized, which is relatable to this year, during the course of search/^survey proceedings. 6. As could be observed from the above, it is the finding of the Ld.CIT(A) that no incrimi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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