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TMI Blog2015 (11) TMI 1516X X X X Extracts X X X X X X X X Extracts X X X X ..... s premises of the assessee on 9.12.2010. Subsequently, it was converted into search action u/s 132 both at the residence and business premises of the assessee on 28.12.2010. During the course of search action, various materials were found and seized. Accordingly, statement u/s 132(4) of the Act was recorded. Consequent to this, notices u/s 153A/153C of the Act were issued for the assessment years 2005-06 to 2011-12. The details of return of income filed u/s 139(1) and in response to notice u/s 153C of the Act for these assessment years i.e 2005-06 to 2011-12 are as follows: Assessment year Returns of income filed u/s 139 Returns of income u/s 153A/153C Additional income offered u/s 153A/153C Rs Date of filing Income returned Rs Dated of filing Income returned (Rs ) 2005-06 10.10.2005 79,807 28.06.2012 1,53,507 73,700 2006-07 20.10.2006 2,98,074 28.06.2012 5,08,072 2,09,998 2007-08 31.10.2007 8,51,570 28.06.2012 12,71,630 4,20,060 2008-09 29.9.2008 10,42,820 28.06.2012 10,98,532 55,712 2009-10 20.09.2009 7,32,510 28.06.2012 10,80,650 3,48,140 2010-11 25.09.2010 8,50,940 28.06.2012 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 15,510/- only for assessment year 2005-06, therefore, it is difficult to imagine how the said concern suffered a loss of Rs. 1. 75 crores in the said assessment year and the same was adjusted by the undisclosed income of the assessee. Further the CIT(A) observed that on perusal of ledger copy of M/s Lennex India, Chennai, the assessee has only one transaction with M/s Linnex India, Chennai on 10.10.2009 for a sum of Rs. 1,06,299/- with regard to cash sales for fabrics. There was no other transaction with M/s Lennex India, Chennai. Further while making such addition, the Assessing Officer also relied upon the statement given on oath by Shri N. Rajendran and there is no material to show that the assessee has stated to have utilized its undisclosed income for setting off of losses of the said concerns, M/s Fabric Style International and M/s Lennex India, Chennai. Therefore, the additions made by the Assessing Officer are not based on any concrete evidence, but based only on the statement given by Shri N. Rajendran during the course of search action u/s 132 of the Act. Accordingly, by placing reliance on the order of the ITAT, Chennai in the case of G. Munusamy in I.T.A.No. 751/Mds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urbed the concluded assessment which had attained finality unless the materials gathered in the course of search action to establish that there is under-assessment in these cases. According to the ld. Counsel, there is no material found indicting the assessee either suppressed its sales or inflated the expenditure during the course of search action. The additions were made only on the basis of statement recorded by the partner of the assessee-firm, therefore, there cannot be any addition on the statement alone unless it is supported by corroborated material found during the course of search operation. He relied on the following case law: a) CIT vs Murli Agro Products Ltd [2014] 49 taxmann.com 172(Bom) b) CIT vs Continental Warehousing Corporation (Nhava Sheva) Ltd , 374 ITR 645 (Bom.) c) Pr. CIT vs Kurele Paper Mills P. Ltd - I.T.A.No. 369/2015 dated 6.7.2015 by Delhi High Court d) CIT vs Kabul Chawla - I.T.A.No. 707/2014 dated 28.8.2015 by Delhi High Court e) B.R. Machine Tools P. Ltd vs ACIT - I.T.A.Nos.4174 to 4177/Mum/2013 dated 6.12.2013 f) Shri Gopal Agarwal vs ACIT - I.T.A.No.4823/Mum/2012 dated 28.5.2014 g) Shri Gopal Agarwal vs ACIT - I.T.A.Nos.7075 & 7076/Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the Assessing Officer has to make assessment u/s 153C in the case of the person other than the searched person on the basis of the material found during the course of search operation. In other words, the assessment proceedings on the basis of return filed u/s 139(1) is not pending on the date of search, therefore, the Assessing Officer has to confine himself only to the material found during the course of search operation. 13.1 In this case, it is to be noted that search was took place on 28.12.2010 and the assessee had already filed the returns of income for the assessment years 2005-06 to 2009-10 and the time limit for issue of notice u/s 143(2) was already expired by this time and thereby the assessments said to be reached finality by operation of law. Being so, no assessment or re-assessment was 'pending' at the time of search carried out on 28.12.2010 in respect of these assessment years or in the course of assessment proceedings initiated u/s 153C of the Act. When this crucial fact is taken into consideration, we have to look into the decision of Special Bench in the case of All Cargo Global Logistics Ltde vs DCIT, 137 ITD 287 (SB). In the said case, the Special Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement recorded u/s 132(4) during the search proceedings is not conclusive proof as held by the Rajasthan High Court in the case of Ashok Kumar Soni, 291 ITR 172. Further, the Supreme Court in the case of Pullangode Rubber Produce Co. vs State of Kerala, 91 ITR 18, observed that an admission is an extremely piece of evidence but it cannot be said that it is conclusive. It is open to the person who made the addition to show that it is incorrect. In the case of Saveetha Institute of Medical and technical Sciences vs ACIT[2011] 12 (Trib) 376(Chen) wherein addition towards capitation fee allegedly collected by the institute was made solely on the basis of statement of students and staff recorded under sec. 132(4) was made. Except for a note giving the breakup of number of students who were admitted under different quotas in various courses, there was no incriminating material as to the receipt of capitation fee. Referring to the Instruction F.No.286/2/2003-IT(Inv.II) dated 10.3.2003 addition deleted after observing that admission made u/s 132(4) was not a valid evidence. Therefore, it is well settled judicial proposition that merely on the basis of statement which is not supported ..... X X X X Extracts X X X X X X X X Extracts X X X X
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