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TMI Blog2013 (11) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, then no addition can be made in 153A proceedings. 2(a). The order of the Ld.CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." GROUND NO-1 1. The relevant facts are that a search operation u/s 132 of the Act was carried out at the premises of assessee on 7/2/2007 and after affording opportunity to the assessee, the assessment has been framed u/s 153A read with Section 143(3) of the Act for the six preceding years as provided u/s 153 A, starting from assessment year 2001-02 to 2006-07. During the assessment year2002-03 under consideration in response to the notice issued u/s 153 A of the Act, the assessee filed return of income declaring the total income of Rs.4,59,750/- i.e. income which was assessed u/s 143 (3) of the Act. During the assessment proceedings the AO noted that in the year a credit of Rs.20,00,000/- in the name of Shri Aman Gupta minor son of the assessee was there. Since the minor son was not having any source of income, the amount was stated to be advanced to the assessee after receipt of Rs.20,00,000/- from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding he did not find it relevant to comment on the finding of the on merits AO as to whether the gift under consideration was genuine or not. He has accordingly deleted the addition made by the AO at Rs.20,00,00/- u/s 68 of the Act in the assessment framed u/s 153 A read with Section 143(3) of the Act. Against this action of the Ld. CIT(A) the revenue is in the appeal. 3. In support of the ground, the Ld. DR placed reliance on the assessment order with this contention that the special Provisions u/s 158 B B and in the provisions laid down u/s 153 A of the Act, there is no requirement of finding of incriminating document during the course of search for framing assessment under this provision as was there u/s 158 B B of the Act. He submitted that in the case CIT Vs. Anil Kumar Bhatia , (2012)211 Taxman 453 (Delhi), the Hon'ble Delhi High Court has not interpreted the Provisions of Section 153 A of the Act. Thus, this decision is not applicable on the issue raised in the present case on the validity of addition made in Section 153 A proceedings in absence of any material recovered or statement/recorded during the course of search. He submitted that provisions laid down u/s 153 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed u/s 143 (1) (a) of the Act. 6. Having gone through the orders of the authorities below we find that the Ld. CIT(A) has decided the issue raised in the ground in favour of the assessee following his earlier order on identical issue in the case of assessee for assessment year 2004-05. In that year also the only issue raised was as to whether while making addition in the assessment framed u/s 153 A, the AO has to restrict himself only to materials found during the course of search. It was held that where order has already been passed u/s 143(3) and if no material is found suggesting escapement of income during search then no addition can be made in Section 153 A assessment. In other words in such cases addition can only be made with reference to material found during the course of search. The Ld. CIT(A) has placed reliance on the decision of the Tribunal in the case of Shri Anil Kumar Bhatia Vs. ACIT and ors, 1 ITR (Trib) 484(Delhi) holding that the power to frame assessment u/s 153 A of the Act shall be to the extent of income escaping assessment came to the knowledge of the Assessing Officer during the course of search. It was held that the assessment u/s 153 A of the Act shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... triggered, it is mandatory for the Assessing Officer to issue notices u/s 153A calling upon the assessee to file returns for the prescribed six assessment years preceding the year in which the search took place. The contention of the Ld. A.R remained that under this premises that some document was found in the course of the search of the assessee's premises, the Hon'ble High Court was pleased to justify the assessment made u/s 153 A of the Act. In other words, in absence of finding of any material during the course of search where assessment has already been framed u/s 143 (3) of the Act or return filed u/s 139 has already been processed u/s 143 (1) (a), addition can not be made in the assessment framed u/s 153 A of the Act, remained the contention of the Ld. A.R. Further contention of Ld. A.R remained that in the assessment year 2001-02 no material was seized from the premises of assessee during the course of search and assessment was already framed u/s 143 (3) of the Act before the search, in that assessment u/s 143(3) the AO had made addition of Rs. 60,00,000/- u/s 68 of the Act due to non-genuineness of the gifts. The Ld. CIT(A) upheld the same. The Tribunal had deleted the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny of those six assessment years, either u/s 143 (1) (a) or Section 143(3) prior to initiation of search/requisition, still Assessing Officer is empowered to reopen those proceedings u/s 153A without any fetters and reassess total income taking note of undisclosed income, if any, unearthed during search. The appeal was however, allowed in favour of the Revenue because the Hon'ble High Court did not concur with the finding of the Tribunal on fact that no material was found during the search, whereas the document embodying the transaction with 'M' was recovered from the assessee in search but the same was ignored by the Tribunal on the plea that the document was not signed by 'M'. the Hon'ble High Court was pleased to hold that mere fact that the undertaking was not signed by 'M' did not absolve the assessee from the duty of satisfactorily explaining the possession of the documents. The amount was stated therein to have been advanced in cash. Thus an inference can be drawn from these decisions of the Tribunal and the Hon'ble High Court that there is no scope of debate on the ratio that taking note of undisclosed income, if any, unearthed during the search and even if assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment u/s 153 A can be made on the basis of incriminating material which in the context of relevant provisions means books of account and other documents found in the course of search but not produced in the course of original assessment and undisclosed income or property is found during the course of search. The question raised before the Special Bench was as to whether, the scope of assessment u/s 153A encompasses additions, not based on any incriminating material found during the course of search? (question No. 1). Vide para No. 58, reproduced below, it has been answered as : "58. Thus, question No. 1 before us is answered as under :- (a) In assessments that are abated, the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessments shall be made for each of the six assessment years separately : (b) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means- (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of bogus gifts in the assessment framed u/s was deleted by the Ld. CIT(A) which was approved by the Tribunal. Before that same addition u/s 68 of the Act due to same non-genuine gift was also made in the original assessment framed u/s 143(3) which was deleted by the Tribunal and the order of the Tribunal was approved by the Hon'ble High Court of Delhi. Thus the said decision of the Hon'ble High Court for this Asst. year is not helpful to the assessee on the issue. 10. On perusal of the assessment order for the year under consideration and others in question in the appeals before us, we find substance in the contention of Ld. AR that no incriminating material found or statement recorded during the course of search was there to suggest even prima facie that some undisclosed income was there to attract the invocation of the provisions laid down u/s 153A of the Act for the addition as per the decision of Special Bench of the Tribunal on the issue in the case of Alcargo Global Logistics Ltd Vs DCIT (Supra). As discussed above the ratio laid down is that when no assessment has been abated , addition in the assessment u/s 153A can be made only on the basis of incriminating material r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yond seized materials are liable to be deleted in totality." 13. In the appeals for the A.Ys 2003-04, 2004-05, 2005-06 and 2006-07 preferred by the assessee, the additions made in these A. Ys in the assessment framed u/s 153 A have also been questioned on their merits. In the A.Y 2003-04 addition has been made u/s on account of non-genuineness of gift received at Rs.5,00,000/- each from Mr. Rahul Jain and Smt. Babita Jain by the minor son of the assessee. In A. Y 2004-05 addition 68 has again been made on account of non-genuineness of the gifts received of Rs.69,00,000/- from Shri Goverdhan Dass and addition at Rs. 7,00,000/- has been made on account of ad-hoc disallowance of expenses. In A. Y 2005-06 addition has been made at Rs. 17,64,000/- on account of education expenses of assessee's son. In A.Y 2006-07 in the appeal preferred by the revenue the action of Ld. CIT (A) has been questioned in directing the A.O. to treat the income of sale of shares as one from long term capital gain; to treat the chargeability of income of Rs.29,09,500/- at lower tax rate and in deleting the addition Rs. 3.39 crores made on account of unaccounted investment in the property. In the appeal preferr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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