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TMI Blog2025 (2) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and circumstances, which indicated that the assessee company is engaged in transactions in the nature of accommodation entries and hence such documents constituted "incriminating material" for the purpose of the issue of notice u/s 153C in the context of assessee. 2. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) erred in law while holding that there was no incriminating material for the issuance of notice u/s IS3C, without appreciating that while recording the satisfaction for issue of notice u/s 153C, the test for "incriminating material has to be only in the nature of prima facie belief based on some material having live nexus and not in the nature of absolute evidence established after detailed investigation of facts or law. 3. Whether on facts and circumstances of the case and in law. the Ld. CIT(A) erred in law while holding that assessment framed u/s 153C of the ACT was bad in law and without jurisdiction because no incriminating document was found and seized ignoring the fact that the assessee company has transferred its assets through transfer of share at nominal value is a colourable transaction. 4. Whether on facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts return of income declaring a total loss of Rs. 42,52,242/-. The assessment u/s 153C of the Act r.w.s 143(3) of the Act was passed on 28.08.2017 inter alia making the following additions:- Total income as per return of income/system Rs.(-)42,52,242 Add: Addition/Disallowance on account : (1) Cash Credit u/s 68 of the Act (As discussed in Para 7) 13,00,00,000/- (2) Disallowance of interest (As discussed in para 7.1) 51,65,890/- (3) Addition of difference of receipts (As discussed in para 8) 3,21,608/- Rs.13,12,35,256/- Or say Rs.13,12,35,260/- 4.1. Against this order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) by a common order for AY 2009-10 to AY 2014-15 quashed the assessment order on the ground that the additions made by the AO were not sustainable as the same were not based on incriminating material. The relevant finding of the ld. CIT(A) in para no.5.8 is reproduced as under:- 5.8 Thus, from the plain reading of language of section 153C of the Act and various judicial pronouncement cited here-in above, it is abundantly clear that in order to reopen the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this issue. Nor was any notice on this issue was raised by AO during the assessment proceedings. Be that as it may, the property in question existed before 18.06.2011 and therefore this reference has nothing to do with Assessment Year 2014-15 under appeal. For some reason known only to the AO there is no mention of the reference to DVO Meerut in the assessment Order. Further without waiting for a report from DVO Meerut, the AO malafidely made a second reference on 23.12.2016 to DVO Delhi. The assessment was completed without obtaining a report from any of the DVO. 2.3. It is respectfully submitted that in computing the limitation period under clause (iii) of the explanation below section 153 B(3), the period commencing from the date of reference to DVO to the date of receipt of DVO's Report is to be excluded. Since no DVO's report was received, the period of exclusion cannot be computed and therefore, there can be no exclusion in view of the decision of Hon'ble Supreme Court of India in the case of Commissioner of Income Tax V B.C. Srinivasa Setty 1981 AIR 972. 2.4 Further a conjoint perusal of the provisions of section 142 A(6) and clause (iii) of explanation belo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime limit i.e. 31.12.2016 was extended by the period taken by the Valuation Officer for the submission of the Valuation report. The assessment order in this case was passed on 28.08.2017. As per the provisions of clause (iii) of the Explanation below section 153B(3) of the Act (as it stood at the material time) for computing the limitation period, the period commencing from the date of reference to DVO to the date of receipt of DVO's report was to be excluded. As submitted by the Ld. AR that no valuation report in pursuance to the impugned reference on 23.12.2016 was received by the AO in this case and therefore the extension of time limit as claimed by the AO, was not entitled to him. Further, in this regard as per the provision below to the Explanation of this section, the time limit for passing the assessment order in the case of the assessee was further extendable if where immediately after the exclusion of the aforesaid period as provided in clause (iii) in the Explanation below to section 153B of the Act, the period of limitation referred to in clause (a) or clause (b) of section 153(B)(1) of the Act available to the Assessing Officer for making an order of assessment or reas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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