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TMI Blog2016 (6) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... nd invalid as same should have been completed under section 153C of the Act. Since we have already held the entire proceedings under section 144 of the Act as illegal, we do not propose to adjudicate other grounds of the assessee. - Decided in favour of assessee - ITA No. 3305/Del/2014, ITA No. 2170/Del/2014, ITA No. 2656/Del/2014, ITA No. 2172/Del/2014 - - - Dated:- 27-4-2016 - SH. I.C. SUDHIR, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER For The Department : Sh. Rajiv Malhotra, CIT (DR) For The Assessee : Sh. Kapil Goyal, Adv. ORDER PER O.P. KANT, A.M.: These appeals consists of cross appeals of the assessee and revenue and are directed against two separate orders of the Commissioner of Incometax( Appeals)-II NEW Delhi in the case of M/s Satkar Roadlines Private Limited and Shivansh Advertising and Publication Private Limited respectively for assessment year 2009-10. The grounds of appeal of the assessee and Revenue and facts of both the cases being identical, all the 4 appeals are heard together and disposed of by this consolidated order. ITA No. 2170/Del/2014 for AY: 2009-10 2. Now we take up the appeal in ITA No. 2170/Del/2014, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 i.e. ₹ 4,96,863/- and cash deposit into bank i.e. ₹ 3,25,000/- respectively). (C)That the Ld. CIT Appeal has ignored the concept of real income and wrongly calculated/ confirmed the addition of ₹ 43,684/- without granting the credit of peak of financial transactions as per the cash book and bank book of the preceding years. The additions have been sustained with preset mind of the Ld. CIT( A) and her order is based on surmises, conjectures and suspicion, even when no adverse material is there. 6. That on the facts and circumstances of the case and the provisions of law, the Ld. C1T (A) has erred in concluding the alleged cash payment of ₹ 80,000/- to Phoenix Data Services Pvt. Ltd. as unexplained/unaccounted investments. 7. That on the facts and circumstances of the case, the various observations and findings of the Ld. CIT Appeals in the impugned appellant order is irrelevant and vitiated in the law. 8. That the Appellant craves the right to amend, append, delete any or all grounds of appeal. 3. The assessee also filed additional ground before the Tribunal, which are as under: Additional Ground of Appeal No. 2( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee fixing the date on 10/11/2010. According to the AO, no compliance of the notices were made and the assessment being barred by limitation on 31/12/2010, the Assessing Officer on the basis of the material available on record, assessed the income at ₹ 10,61,130/- under section 144 of the Act, increasing the income by 30% over the income for the assessment year 2008-09. 5. Aggrieved, the assessee challenged the assessment before the Ld. Commissioner of Income-tax(Appeals) on legal grounds and on the merit of the additions. The legal ground raised included as notice issued under section 143(2) was barred by limitation and the assessment order passed was in violation of the principle of natural Justice. The grounds on merit included ignoring concept of real income and not allowing the telescoping of the income by the Assessing Officer. The Ld. Commissioner of Income-tax (Appeals) after considering submission of the assessee confirmed the legal grounds, however, on merit of the addition allowed relief and out of the addition of ₹ 10,61,130/- sustained addition of ₹ 43,684/- computed on the basis of the peak credit appearing in bank book and cash book produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act being illegal, required to be quashed. In support of proposition, he also relied on the judgment dated 28/07/2015 of the Hon ble Delhi High Court in the case of Aakash Arogya Mandir Private limited in ITA No. 509, 510 and 513/2015, decision dated 06/01/2015 of the ITAT Delhi bench in the case of Sh. Bhupinderpal Singh Sarna in ITA No. 3037 and 3695/Del/2013 and decision dated 14/11/2014 of the ITAT in the case of Inlay Marketing Private Limited in ITA No. 4197to 4202/Del/2012. 9. On the other hand, the Ld. DR submitted that proviso below the section 153C of the Act, which has construed the reference to the date of initiation of search under section 132 of the Act in case of persons other than the person searched, as the date of receiving of books of accounts or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, was with reference to second proviso of subsection (1) of section 153A and which was for the purpose of deciding the abetment of proceedings pending as on that date. He submitted that as far as the assessment years involved for reassessment proceedings under section 153C as well as 153A, are governed by section 153A(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.3.2009 2009-10 1.4.2007 to 31.3.2008 2008-09 1.4.2006 to 31.3.2007 2007-08 1.4.2005 to 31.3.2006 2006-07 1.4.2004 to 31.3.2005 2005-06 32. In view of above, we are inclined to hold that the Assessing Officer has issued notice under Section 153C of the Act dated 5.7.2010 for 2003-04 and 2004-05 on 6.7.2010 which is clearly barred by limitation. Therefore, the issue of notice under Section 153C of the Act by the revenue cannot be sustained because it is legally not valid as the conditions laid down for valid assumption of jurisdiction u/s 153C of the Act have not been fulfilled and the same is barred by limitation for AY 2003-04 and 2004-05. In view of above discussion, we quash the notice issued under Section 153C of the Act and consequently, the assessment completed in pursuance to such notice are also quashed for AY 2003-04 and 2004-05 as the same are barred by limitation and also not initiated properly without having valid assumption of jurisdiction as required u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson under Section 153C. Though there is no statutory requirement for the AO of such other person to record any satisfaction/reason before issuing notice under Section 153C and proceeding further, considering the above aspects, it is advisable for maintaining institutional memory that the AO records receipt of the seized material and the satisfaction from the AO of the searched person and such recording/noting may be kept in the assessment folder of such ITA No. 337/2015 Page 4 of 4 other person. In case, the AO of the searched person exercises jurisdiction over the other person also, appropriate referencing should be made in the relevant assessment records of such other person. 5. It may be noted that in the present case satisfaction note was prepared by the AO on 25th February 2010. Consequently, the finding of the ITAT in the present case that the assessment made under Section 143(1) of the Act for the AY 2009-10 was not valid, calls for no interference. No substantial question of law arises in the facts and circumstances of the present case. 12. In the other decisions cited by the assessee similar findings have been given. Thus in view of the facts of the case, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the rejection of books of accounts of the assessee. (a) The order of the 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. 16. At the outset, the Ld. Authorized Representative of the assessee pointed out that the present appeal having tax effect below ₹ 10 Lacs, has been preferred by the Revenue in violation of CBDT circular No. 21/2005 dated 10/12/2015, hence not maintainable. 17. The Ld. CIT(DR) did not dispute the above submission on the preliminary objection raised by the Ld. AR, however placed reliance on the assessment order in support of the ground raised in the appeal. 18. We find that in the present appeal the tax effect involved on the deletions of additions challenged is below ₹ 10 Lacs and, therefore, in view of the CBDT circular this appeal should have been withdrawn by the Department, hence it is not maintainable. We also find that the assessment completed by the Assessing Officer has already been held by us as illegal in ITA No. 2170/Del/2014 the subsequent proceedings in such illegal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i.e. ₹ 3,33,877/-) for the year under consideration (after reducing the corresponding opening balance of cash in hand as on 01.04.2008 i.e. ₹ 1,70,539/- and cash deposit into bank i.e. ₹ 2,90,000/- respectively). (c) That the Ld. CIT Appeal has ignored the concept of real income and wrongly calculated/ confirmed the addition of ₹ 3,38,664/- without granting the credit of peak of financial transactions as per the cash book and bank book of the preceding years. The additions have been sustained wdth preset mind of the Ld. CIT( A) and her order is based on surmises, conjectures and suspicion, even when no adverse material is there. 6. That on the facts and circumstances of the case and the provisions of law, the Ld. C1T (A) has erred in concluding the alleged cash payment of ₹ 90,000/- to Phoenix Data Services Pvt. Ltd. as unexplained/unaccounted investments. 7. That on the facts and circumstances of the case, the various observations and findings of the Ld. C1T Appeals in the impugned appellant order is irrelevant and vitiated in the law. 8. That the Appellant craves the right to amend, append, delete any or all ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. 24. Since the issue raised in the additional ground is identical to the additional ground raised in the case of M/s Satkar Roadlines Private Limited in ITA No. 2170/Del/2014, the additional ground raised in the case in hand is also allowed in favour of the assessee and the reassessment is held to be illegal and invalid. 25. In the result, the appeal of the assessee is allowed. ITA No. 2656/Del/2014 for AY: 2009-10 26. Now, we take up the appeal of the Revenue in ITA No. 2656/Del/2014 raising following grounds: i. That the Commissioner of Income Tax (Appeals) erred in law and on facts of the case in deleting the addition of ₹ 79,61,336/- out of total addition of ₹ 83,00,000/- made by AO by increasing 30% of the income as taken last year without examining and adjudicating upon merits of the case. ii. That the Commissioner of Income Tax (Appeals) erred inlaw and on facts of the case in deleting the addition to total sum of ₹ 3,38,664/- by adopting the peak amounts of Cash Book Bank Book, after reducing the respective opening balances. iii. That the Commissioner of Income Tax (Appeals) erred in law and on facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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