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TMI Blog2016 (4) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O had objected to its admission on both on principle and on merits. 3. On the facts and in the circumstances of the case, the CIT(A) has erred, in violation of rule 46A of the Income Tax Rules 1962, by not following the decision of Hon'ble High Court in the case of Manish Buildwell Pvt. Ltd. 204 Taxman 106, wherein it was held by the Hon'ble jurisdictional High Court to give two stage opportunity under Rule 46A i.e. first before admission of additional evidence and second after admission of additional evidence. 4. The order of the Ld. CIT (A) is erroneous and is not tenable on facts and in law. 5. 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." The grounds taken in the cross objection by the assessee are as under:- "1. That the order passed under section 153A / 143(3) and the additions made are illegal, bad in law and without jurisdiction. 2. That no incriminating material was seized during the search that suggested in any manner any undisclosed investment in the property at Masjid Moth, hence the addition made is illegal bad in law. 3. That the AO passed the order on his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter observing the submissions of the assessee, deleted the addition as under :- "6. I have gone through the above submissions of the appellant and have perused the AO's order and considered the facts and evidences on record. 6.1 From the perusal of the assessment order it is seen that AO's objection is that the said property at Masjid Moth has not been shown in the balance sheet for the assessment years 2002-03 and 2003-04 and since no documents viz. purchase deed and sale deed for the said property were filed, the AO accordingly disallowed the capital loss claimed by the appellant in its return of income. 6.2 It is further seen from the balance sheet filed by the appellant during the appellate proceedings from Assessment Years 1994-95 to 2003-04 that the said property has duly been reflected in the appellant's books of accounts. The perusal of purchase deed and sales deed of the property in question shows that: (a) Vipps India Ltd acquired land from POA by obtaining perpetual Lease hold rights of land vide lease deed dated 06.02.1981. (b) By agreement dated 5.9.85 and supplementary agreement dated 07.12.1988 Vipps India Ltd entered into agreement with.1.K. Synthetics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property was not shown in the state of affairs/balance sheet filed by the assessee of earlier years. He further submitted that the ld. CIT (A) was not right in accepting the additional evidences like sale deed and purchase deed produced for the first time by the assessee before him and also not giving the opportunity to the AO under Rule 46A before and after the admission of the same. He, therefore, pleaded that the order of the CIT (A) be set aside and that of the AO be restored. 7. On the other hand, the ld. AR for the assessee relied on the order of the ld. CIT (A) and reiterated the submissions made before him. He submitted that the assessee sold equity share of M/s. Satnam Overseas Ltd., M/s. Union Overseas Bank, M/s. Oriental Bank of Commerce and M/s. Global Trust Bank and units of UTI and after claiming the indexation on the cost of acquisition of the equity shares/units showed long term capital gain on shares at Rs. 92,77,748 for the year. Against this income, the assessee adjusted the long term loss of Rs. 79,724/- carried forward from last year and thus, the assessee had declared long term capital gain of Rs. 91,98,024/- from the sale of shares and also declared long te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty only on 14.02.2003 was erroneous as the property in question was purchased by the assessee in the year 1993. 7.1 Ld. AR further submitted that the assessee purchased the property against agreement to sell dated 28.07.1993 and the said property was duly reflected in the balance sheet as on 31.03.1994 i.e. AY 1994-95 being the book value at Rs. 84,26,500/-. He also submitted that the same was regularly shown in the balance sheet for AYs 1994-95 to 20003-04 and the ld. CIT (A) rightly appreciated the same on the basis of the evidences filed before him. 7.2 As regards the objection of revenue under Rule 46A, ld. AR submitted that the AO was given the opportunity by the ld. CIT(A) to comment on the documents filed by the assessee and the AO objected to the documents filed as additional evidence. He submitted that the ld. CIT (A) rightly appreciated that the balance sheets for AYs 1994-95 to 2003-04 filed before the ld. CIT (A) were part of the AO's assessment record and as regards the new documents i.e. purchase deed and sale deed of the property which were filed during the appellate proceedings for the first time, again the ld. CIT (A) rightly held that the said property was sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax (Appeals) had erred and failed in their duty in adjudicating the matter correctly and by mechanically including the amount in the total income. It is pertinent to note that the assessee contended that it was entitled to the deduction in view of two orders of the Special Benches of the Tribunal and the assessee further stated that it, had raised these additional grounds on learning about the legal position subsequently. 10. The Tribunal declined to entertain these additional grounds. The Supreme Court did not answer the question on merits, but framed the following question and held as under:- "4. The Tribunal has framed as many as five questions while making a reference to us. Since the Tribunal has not examined the additional grounds raised by the assessee on merit, we do not propose to answer the questions relating to the merit of those contentions. We reframe the question which arises for our consideration in order to bring out the point which requires determination more clearly. It is as follows: "Where on the facts found by the authorities below a question of law arises (though not raised before the authorities) which bears on the tax liability of the assessee, whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ys immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other postsearch material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material ..... X X X X Extracts X X X X X X X X Extracts X X X X
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