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2018 (5) TMI 495 - AT - Income TaxInitiation of proceedings u/s. 153A - Held that - Since the assessment for assessment year 2007-08 had attained finality and no incriminating material was found during search, assessment u/s.153A r.w.s. 144 is without jurisdiction. Accordingly, the impugned order is set aside and ground No. 1 raised in appeal by assessee is allowed. Addition of advance received for selling of shares - Held that - No share transfer had taken place till the date of filing the confirmation although advance was received around 7 years back. Neither money was refunded nor shares were transferred. Moreover, confirmation filed does not include details like PAN or the other details like Bank Statement to show the creditworthiness of Mr. Deepesh Kotecha. In the circumstances, Xerox copy of confirmation is not found credible. For the appellant s failure to furnish satisfactory evidences regarding the transaction claimed by the appellant the cash credit remains unexplained and addition made by AO to that extent is upheld. Addition of cash seized during assessment proceedings from locker - Held that - Appellant does not maintain any cash book and there is no corroborative evidence to explain the source of cash found in the locker. It has been noted that appellant was investing in FDRs and keeping deposits in the group concerns. Only possible source of cash could be from hiring of machines. For want of cash book, it is not possible to ascertain as to what was cash left with the appellant after meeting out business and personal expenditure. Therefore no interference with the finding of AO is called for. Addition upheld.
Issues Involved:
1. Validity of assessment proceedings under section 153A read with section 144 in the absence of incriminating material. 2. Change of jurisdiction under section 127. 3. Specific additions confirmed by the Commissioner of Income Tax (Appeals) for various assessment years. 4. Charging of interest under sections 234A, 234B, 234C, and 234D and initiation of penalty proceedings under section 271(1)(b). Issue-wise Detailed Analysis: 1. Validity of Assessment Proceedings under Section 153A read with Section 144 in the Absence of Incriminating Material: - Assessment Year 2007-08: The Tribunal found that since the assessment for this year had attained finality and no incriminating material was found during the search, the assessment under section 153A read with section 144 was without jurisdiction. The Tribunal cited the Bombay High Court's judgments in CIT vs. Continental Warehousing Corporation and CIT vs. Gurinder Singh Bawa, which held that no additions can be made if no incriminating material is found during the search and no assessments are pending. Therefore, the appeal for this year was allowed on this legal issue alone. - Assessment Year 2008-09: Similar to the findings for 2007-08, the Tribunal allowed the appeal for 2008-09 on the ground that in the absence of any incriminating material and no pending assessments, the assessment under section 153A read with section 144 was without jurisdiction. - Assessment Year 2010-11: The Tribunal observed that there was still time for issuance of notice under section 143(2) on the date of the search. Hence, it could not be said that no assessment was pending. Therefore, the plea of the assessee that the assessment was without jurisdiction in the absence of incriminating material was dismissed. - Assessment Year 2012-13: Since the search was conducted in the period relevant to this assessment year, the entire proceedings were open before the Assessing Officer. The Tribunal dismissed the assessee's plea that no addition could be made in the absence of incriminating material. 2. Change of Jurisdiction under Section 127: - Assessment Year 2010-11 and 2012-13: The Tribunal upheld the Commissioner of Income Tax (Appeals)'s decision to dismiss the objections raised by the assessee against the change of jurisdiction. It was noted that the assessee did not file any objection before the competent authority and continued to participate in the assessment proceedings. The Tribunal also noted that the order passed under section 127 is not appealable. Therefore, the grounds related to the change of jurisdiction were dismissed for both assessment years. 3. Specific Additions Confirmed by the Commissioner of Income Tax (Appeals): - Assessment Year 2007-08: The Tribunal did not address specific additions since the appeal was allowed on the jurisdictional issue. - Assessment Year 2008-09: Similar to 2007-08, the Tribunal did not address specific additions due to the appeal being allowed on the jurisdictional issue. - Assessment Year 2010-11: The Tribunal dismissed the assessee's plea regarding an addition of ?47,12,511/- being an advance received from selling shares, as the assessee failed to furnish satisfactory evidence regarding the transaction. - Assessment Year 2012-13: The Tribunal upheld the addition of ?1,65,900/- as unexplained cash found in the assessee's locker, noting the lack of corroborative evidence to justify the source of the cash. 4. Charging of Interest under Sections 234A, 234B, 234C, and 234D and Initiation of Penalty Proceedings under Section 271(1)(b): - Assessment Years 2007-08, 2008-09, 2010-11, and 2012-13: The Tribunal noted that charging of interest under sections 234A, 234B, 234C, and 234D is consequential and mandatory. Hence, objections raised by the assessee were dismissed. Regarding the initiation of penalty proceedings under section 271(1)(b), the Tribunal considered these issues premature and dismissed them. Overall Result: - Assessment Year 2007-08: Appeal allowed. - Assessment Year 2008-09: Appeal allowed. - Assessment Year 2010-11: Appeal dismissed. - Assessment Year 2012-13: Appeal dismissed. Order Pronounced on April 26, 2018.
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