2015 (12) TMI 551 - AT - Income Tax

Undisclosed investment, unexplained loans and unexplained share application money - assessments u/s. 153A/153C - CIT(A) deleted the addition admitting additional evidence - Held that - We do not see any additional evidence being admitted by the CIT(A) in disposing of this issue. Assessee only stated the dates and amounts involved and entire information was available with AO consequent to the search and seizure proceedings. Since the Revenue has raised the ground only on the issue of additional evidence and since we do not find any additional evidence being taken/ admitted by the CIT(A), there is no merit in the Revenue s ground. Accordingly, the same is rejected. Order of CIT(A) in deleting the additions cannot be upheld. It is true that ITAT Special Bench in the case of All Cargo Logistics Ltd., Vs. DCIT 2012 (7) TMI 222 - ITAT MUMBAI(SB) held that in cases where assessments are not abated, the assessment u/s. 153A will be made on the basis of incriminating material. However, this opinion that not upheld by the jurisdictional High Court in the case of Gopal Lal Badruka Vs. DCIT 2012 (6) TMI 657 - ANDHRA PRADESH HIGH COURT which was rendered on 15-12-2011 much before the order of the CIT(A). In fact, CIT(A) is bound to follow the jurisdictional High Court order. Not only the jurisdictional High Court, but also the Hon ble Allahabad High Court and Delhi High Courts (supra) have held that for completing the assessments u/s. 153A/153C, AO could take into consideration material other than what was available during the search and seizure operation. In view of this, we are of the opinion that the order of CIT(A) cannot be upheld. It is one of the contentions of AO that Assessee has not furnished any information in the course of assessment proceedings. Therefore, without going into the merits of the additions made, we are of the opinion that these issues should be re-examined by the AO by giving proper opportunity to Assessee. Decided in favour of revenue for statistical purposes.

Summary

Issues:
1. Appeal by Revenue and Cross-Objections by Assessee against orders of Commissioner of Income Tax (Appeals).
2. Dispute over deletion of addition made on account of undisclosed investment, unexplained loans, and unexplained share application money.
3. Admission of additional evidence by Assessee contrary to Rule 46A.
4. Interpretation of provisions under Section 153A regarding unabated assessments and incriminating material.
5. Treatment of unsecured loans and share application money received by Assessee.
6. Dispute over unexplained investment in the purchase of land.
7. Jurisdiction of Assessing Officer under Section 153A/153C to consider material beyond search and seizure operations.
8. Re-examination of issues related to share application money and unsecured loans by the Assessing Officer.

Analysis:
1. The case involved appeals by the Revenue and cross-objections by the Assessee against the orders of the Commissioner of Income Tax (Appeals) concerning various issues across different assessment years.
2. The primary dispute revolved around the deletion of additions related to undisclosed investment, unexplained loans, and share application money, with the Revenue contesting the decisions made by the Commissioner of Income Tax (Appeals).
3. The Revenue objected to the admission of additional evidence by the Assessee, alleging a violation of Rule 46A, although the Tribunal found no merit in this ground as the information was available to the Assessing Officer during search proceedings.
4. The interpretation of Section 153A regarding unabated assessments and the requirement for incriminating material for additions was a key point of contention, with the Tribunal considering relevant legal precedents and the jurisdictional High Court's rulings.
5. The Assessing Officer had made additions in the assessments concerning unsecured loans and share application money due to the Assessee's failure to provide necessary details, which were subsequently deleted by the Commissioner of Income Tax (Appeals).
6. Another issue related to unexplained investment in land purchase, where the Tribunal upheld the Commissioner's decision to delete the amount after considering the circumstances surrounding the agreement and payment made before the company's incorporation.
7. The jurisdiction of the Assessing Officer under Section 153A/153C to consider material beyond search and seizure operations was extensively discussed, citing relevant court judgments supporting a broader scope for assessments.
8. Ultimately, the Tribunal ordered a re-examination of issues related to share application money and unsecured loans by the Assessing Officer, emphasizing the need for proper opportunity to the Assessee and setting aside the previous orders for reconsideration.

This detailed analysis highlights the various legal issues, arguments presented, and the Tribunal's decision in the complex case involving income tax assessments and interpretations of relevant provisions and precedents.