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TMI Blog2015 (1) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that no incriminating material has been found relating to the year in which the assessee has received gifts. Therefore, in our opinion, no addition on account of the gifts can be sustained. Accordingly, on this basis itself, we delete the addition on account of gifts. We accordingly allow the additional grounds. Since we have deleted the addition on the basis of the additional grounds taken by the Assessee, therefore, in our opinion, the grounds taken by the Assessee on merit does not require adjudication. - Decided in favour of assessee. - ITA No. 113/PNJ/2014 - - - Dated:- 9-12-2014 - P. K. Bansal, AM And D. T. Garasia, JM,JJ. For the Petitioner : P Dinesh, Adv. For the Respondent : Ratnakar, DR ORDER Per: P. K. Bansal 1. This appeal has been filed by the Assessee against the order of CIT(A)-VI, Bangalore dt. 20.8.2013 for A.Y 2005-06 by taking the following effective grounds of appeal : 1. The learned CIT(A) grossly erred in passing the order in the manner which he did. 2. The learned CIT(A) erred in confirming the addition made by AO towards gift received by the Appellant from Sri Harish Wadva by relying on the ratio of the Hon'ble Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the additional grounds taken by the Assessee are legal grounds and relates to the validity of the addition and no further material is required to be investigated. Therefore, these grounds be admitted. Reliance was placed in this regard on the following decisions : 1. National Thermal Power Co. Ltd. vs. CIT 229 ITR 383 (SC) 2. Jute Corporation of India Ltd. 187 ITR 688 (SC) 3. Ahmedabad Electricity Co. vs. CIT 199 ITR 351 (Bom) 4. CIT vs. Jay Engineering Works Ltd. 233 ITR 433 (Del) 5. CIT vs. Indian Overseas Bank 239 ITR 335 (Mad) 6. CIT vs. Commonwealth Trust (India) Ltd. 221 ITR 474 (Ker) 7. CIT vs. Mayur Foundation 274 ITR 562 (Guj) 5. The ld. DR on the other hand agitated the admission of the additional grounds. After hearing the rival submissions, we noted that the additional grounds raised by the Assessee are legal grounds and legal grounds can be raised by the Assessee for the first time before this Tribunal in view of the decision of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT, 229 ITR 383 (SC). We, therefore, admit the additional grounds. Since the additional grounds raised by the Assessee are legal grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the following decisions : 1. CIT vs. Gopi Apartment 107 DTR (All) 217 2. Manish Maheshwari vs. CIT 289 ITR 341 (SC) 3. CIT vs. Calcutta Knitwears 267 CTR(SC) 105 4. CIT vs. Anil Kumar Bhatia ITA No.1626/2010 and others dt. 7.8.2012 5. CIT vs. Radhey Shyam Bansal Ors 337 ITR 217 (Del) 6. P. Sathyanarayanan vs. ACIT 50 SOT (Chennai) (URO) 168 7. Delhi High Court judgement in the case of SSP Aviation Ltd. vs. DCIT - WPC Bo. 309/2011 dt. 29.3.2012 8. Order of the ITAT, Delhi - Pacl India Ltd. vs. DIT, ITA No. 2637/Del/2010 dt. 20.6.2013 9. ITAT Mumbai - Ingram Micro (India) Exports P. Ltd. vs. DDIT - ITA Nos. 8133/2010 and others dt. 21.12.2012 It was further submitted that even on merit the impugned addition was uncalled for as the Donor was identified and he had confirmed the gifts. The gifts have been received through banking channel. Evidence for the same had also been furnished. Our attention was drawn towards pg. 8, 9 to 16 of the paper book. The AO after satisfying the genuineness of the gifts accepted during the course of the original assessment that the gifts were genuine. 8. The ld. DR relied on the order of the assessing authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leted, let us look into the provisions of the section 153A under Chapter 14 under the title 'Assessment in case of search or requisition'. The provisions of section 153A, 153B 153C were inserted by the Finance Act, 2003 w.e.f 1.6.2003. Originally section 153A of the Act did not have any sub-section. However, sub-section (2) to Section 153A was inserted by the Finance Act, 2008 w.e.f from 1.6.2003. Section 153A provides for an assessment in case of a person in whose case search is initiated u/s.132 of the Act or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003. Section 153B provides for time limit for completion of assessment under section 153A and Section 153C of the Act. Section 153C provides for assessment of income of person or other than person in respect of whom warrant or authorisation is issued u/s.132 of the Act. 11. Section 153A and Section 153C are extracted below: 153A. Assessment in case of search or requisition.- (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any other person.- (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A : Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. (2) Where books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench was constituted in the case of All Cargo Global Logistics Ltd vs. DCIT, (2012) 137 ITD 287 (SB)(Mum) on the following question: Whether, on the facts and in law, the scope of assessment u/s 153A encompasses additions, not based on any incriminating material found during the course of search? Before the Special Bench, Ld Sr. Counsel relied on the decision of LMG International Ltd (supra) as is apparent from para 16 of that order. We noted that in the said judgment in para 52 of its order, the Tribunal has held that section 153A comes into operation if a search or requisition is initiated after 31.5.2003. On the satisfaction of this condition, the AO is under obligation to issue notice to the persons requiring him to furnish the return of income of six years immediately preceding the year of search. This finding implied that the proceedings u/s.153A is not to be restricted to the years for which incriminating material is found during the search. Ultimately, in respect of question referred to the Special Bench, the Special Bench in para 58 of its order held as under: 8. Thus, question No.1 before us is answered as under : a) In assessments that are abated , the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those proceedings and reassess the total income, taking note of the undisclosed income, if any, unearthed during the search. 18. The above observations of Hon.ble High Court, which are though obiter dicta, make it point clear that where an assessment order has already been passed for a year of years within the relevant six assessment years, then the AO is duly bound to reopen those proceedings and reassess the total income but by .taking note of the undisclosed income if any, unearthed during the search. The expression .unearthed during the search. is quite significant to denote that in respect of completed or non-pending assessment, the AO is albeit duty bound to assess or reassess the total income but if there is scope for additions in such assessment, on the basis of income unearthed during the search., he can make the addition. In other words, the determination of .total income. in respect of the assessment years for which the assessments are already completed on the date of search, shall not be influenced by the items of income other than those based on the material unearthed during the course of search. However, the scope of such determination of total income is differen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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