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TMI Blog2016 (7) TMI 1042X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 for the AYs 2001-02 to 2005-06. 2. The revenue has raised the following grounds of appeal for Assessment Year 2001-02:- 1. The order of the Ld. CIT(Appeals) is not correct in law and facts. 2. Whether in the facts and circumstances of the case, the Id. CIT (A) erred in deleting the addition of ₹ 1,37,50,000/- made u/s 68 of the Income Tax Act by the AO in respect of share application money introduced during the year. 3. Whether in the facts and circumstances of the case, the Id. CIT (A) erred in deleting the addition of ₹ 41,50,000/- made u/s 68 of the Income Tax Act by the AO in respect of unsecured loans. 3. The revenue has raised the following grounds of appeal for Assessment Year 2002-03:- 1. The order of the Ld. CIT( Appeals) is not correct in law and facts. 2. Whether in the facts and circumstances of the case, the Id. CIT (A) erred in deleting the addition of ₹ 5,00,000/- made u/s 68 of the Income Tax Act by the AO in respect of share application money introduced during the year. 3. Whether in the facts and circumstances of the case, the Id. CIT (A) erred in deleting the disallowances of ₹ 1,96,93,116/- made u/s 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following grounds of Cross objection No. 281/Del/2011 for Assessment Year 2002-03:- 1. Because the departmental appeal is bad in law as well as on facts and is liable to be dismissed. 2. Whether the assessment framed under section 153A / 143(3) of the Income Tax Act, 1981 is legal, when consequent upon action taken by the department under section 132 of the Act on 21.03.2007 against the assessee was carried out and nothing incriminatory was found, and re-visiting the issues, which have been settled earlier is permissible. 3. Because the Ld. Lower authorities have failed to appreciate that the assessee had fully discharged the initial onus regarding cash credits being Share application money amounting to ₹ 5,00,000/- by placing irrefutable documentary evidence on record and in view of decision pronounced by the Apex Court as well as High Court, the Hon'ble High Court in the case of Dwarkadhish Investments Pvt Ltd 201Q-T!OL-617-HC-Del-IT. 4. Because the Ld. Lower authorities have ignored the facts and evidences supplied to them and made the disallowance of ₹ 1,96,93,116/- under section 80IB of the Act. 5. Whether on the facts and circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out and nothing incriminatory was found, and re-visiting the issues, which have been settled earlier, is permissible. 2. Because the order passed by the assessing officer was so vulnerable on both the facts as well as law that the Ld. CIT (A) had no option but to correct the same in the interest of justice and equity. 3. The appeal by department is bad in law because the issue for claiming exemption u/s 80IB which has already been settled earlier and which has got finality after the order of Hon'ble ITAT in appeal no. IT 1429 (Del) of 2006. The revisiting of the issue is not allowed in fiscal laws in the garb of reassessment u/s 153A of the act, 4. Because the Ld. Lower authorities have ignored the facts and irrefutable evidences supplied to them and treated the interest income of ₹ 6,38,558/- as income from other sources and not at part of the income derived from business and profession whereas the 5. Hon'ble ITAT itself had adjudicated that interest income is income from the business and allowable u/s 80IB in the assessment year 2002-03 in the case of assessee itself. 11. The assessee has raised the following grounds of Cross objection No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e similar for all the assessment years are that assessee is a company on which action u/s 132 of the Income Tax Act was carried out on 21.03.2007. It belongs to one of group companies of Surya Vinayak Group which is headed by two brother Mr. Sanjay Jain and Mr. Rajiv Jain residing at I-42, Ashok Vihar, Phase-I, New Delhi. The revenue alleges that this group had taken a large number of accommodation entries in various group companies through entry operators. Notice u/s 153C of the Act was issued on 24.11.2008 and in response to which assessee submitted that original return filed on 26.03.2003 may be treated as return filed in response to the notice. In the original return assessee declared income of ₹ 1234270/-. The ld AO noted that assessee has received share application money to the tune of ₹ 13750000/- and unsecured loan of ₹ 41.50 lakhs which was unexplained and therefore same were added u/s 68 of the Act vide order dated 30.12.2009. 16. Now first we take up the additional ground of the appeal of the assessee which was raised stating that orders passed by the ld Assessing Officer are barred by the limitation and additions have been made in absence of any inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact was not mentioned the last Punchnama was drawn on 15.05.2007. 18. In the rejoinder ld AR submitted that this fact has been considered by Hon ble High Court in para NO. 6 of the order of the Hon ble High Court. Therefore, now this cannot be agitated. He further stated that merely because the revenue is in process of filing of appeal before the higher authorities cannot be the reason for none following the decision of Hon ble High Court. 19. We have carefully considered the rival contentions. The issue in the appeal agreed by both the parties is that the issue is now covered by the decision of Hon ble Delhi High Court in ITA No. 27 to 39 and 47 48 of 2015 dated 30.11.2015, wherein Hon ble High Court on the same search and on the basis of same punchnama and authorisation has held as under:- 3. The background to the present appeals is that on the basis of authorizations dated 20th March 2007 under Section 132 (1) of the Act, a search was commenced on 21 st March 2007 in the office premises of the above Assessees as well as the other Assessees, including Rim Zim Valley Products Pvt. Ltd, Aakriti International, apart from the residences of Mr.Sanjay Jain and Mr. Rajeev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs pursuant to the said searches were passed on 24/31st December 2009. 6. The first question that arises for consideration was whether in terms of Section 153B, the assessments were completed within the time stipulated therein. The case of the Assessees, which has been accepted by the ITAT in the impugned order, was that the assessment ought to have been completed by 31st December 2008, but was completed on 31st December 2009, i.e., beyond the period of twenty one months from the end of the financial year in which the last authorisation for the search under Section 132(3) was issued. This is in terms of Clause (i) of the second proviso to Section 153B (1) of the Act. It is pointed out that the names of the Assessees were included in the panchnama drawn up on 15th May 2007 although no fresh search authorisations qua any of them were issued. The case of the Revenue has been that the search did not conclude on 23rd March 2007 but on 15th May 2007. This was on account of the restraint orders claimed to have been validly passed on 23rd March 2007 in peculiar circumstances where either the person searched was not present or the witnesses were not present or the keys of some of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings in terms of Section 153B qua the Respondent Assessees herein. 10. Even assuming that the restraint orders were validly passed, once the search stood concluded on 23rd March 2007 in respect of these Assessees, in the absence of a fresh authorisation for another search, the time period for conclusion of the assessment in terms of clause (i) of the second proviso to Section 153 B (1) of the Act does not get extended only because their names were included in the panchnama drawn up on 15th May 2007. It is possible that their names were included in the said panchnama drawn up on 15th May 2007 in order to avoid the consequence of expiry of the period of limitation which, as far as these Assessees are concerned, commenced on 23rd March 2007, when the search finally concluded . 11. Consequently, the impugned order of the ITAT, holding that the assessments in question were barred by limitation, and therefore liable to be quashed, does not call for any interference. 12. The second ground on which the ITAT has invalidated the assessments is that there was no incriminating material found in the course of the search against any of the Respondents/Assessees in these appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forementioned decisions, the legal position that emerges is as under : (i) Once a search takes place under section 132 of the Act, notice under section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six assessment years immediately preceding the previous year relevant to the assessment year in which the search takes place. (ii) Assessments and reassessments pending on the date of the search shall abate. The total income for such assessment years will have to be computed by the Assessing Officers as a fresh exercise. (iii) The Assessing Officer will exercise normal assessment powers in respect of the six years previous to the relevant assessment year in which the search takes place. The Assessing Officer 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 assessment years in which both the disclosed and the undisclosed income would be brought to tax . (iv) Although section 153A does not say that additions should be strictly made on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est Pvt. Ltd. and CIT Vs. Kabul Chawla (supra) the appeal of the revenue also do not survive and hence, dismissed. 28. In the result appeal of the revenue for AY 2001-02 in ITA No. 3153/Del/2011 is dismissed and CO of the assessee is partly allowed. 29. Similarly, the revenue has filed appeal for the AY 2002-03 to 2005-06 in ITA No. 3154 to 3157/Del/2011 and assessee has filed CO No. 261 to 264/Del/2011 and 281/Del/2011 having same facts. Therefore, in accordance with our decision in ITA No. 3153/Del/2011 and CO No. 261/Del/2011 for AY 2001-02 wherein we have held that order passed u/s 153C are barred by the limitation and the addition has been made without any incriminating material found during the course of search assessment orders and addition therein are not sustainable. Similarly, we also hold for the above appeals for AY 2002-03 to 2005-06 and Cross objections therein that the orders u/s 153C are not sustainable as those are barred by limitation. The additions in those assessments are not sustainable as they are not based on incriminating found during the course of search. In view of this cross objections of the assessee for all those years are partly allowed and appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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