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TMI Blog2016 (9) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... al grounds. - I.T.A. No.537/M/2014, I.T.A. No.538/M/2014, I.T.A. No.567/M/2014, I.T.A. No.568/M/2014 - - - Dated:- 12-8-2016 - SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Shri Dharmesh Shah, Mr. Bipin Shah and Ashwin Kashinath For The Revenue : Shri Bhupendra Kumar Singh, DR ORDER PER BENCH: There are four appeals under consideration involving the cross appeals for the assessment years 2006-07 and 2007-08. Since, the issues raised in these appeals are inter-connected, therefore, for the sake of convenience, they are clubbed, heard combinedly and disposed of in this consolidated order. Appeal wise adjudication is given in the following paragraphs of this order. I. Cross appeals for the AY 2006-07 ITA No.537/M/2014 (Assessee s appeal) 2. This appeal filed by the assessee on 22.01.2014 is against the order of the CIT (A)-37, Mumbai dated 22.11.2013. In this appeal, assessee raised the following concise grounds and additional grounds which read as under:- 1. The Ld CIT (A) has erred in law and in facts in not appreciating that the AO has passed the order without complying with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case relevant to the AY 2006-07 and brought our attention to the above grounds raised by the assessee and mentioned that the date of search action u/s 132 of the Act was 24.1.2006 and the date of receipt of the documents by the AO of the other person is 13.12.2006. Without going to the various other arguments, Ld Counsel for the assessee demonstrated that the assessment in the present case for the AY 2006-07 should have been completed u/s 153C of the Act after complying with the statutory requirement relating to the recording of satisfaction, issue of notice u/s 153C of the Act etc, whereas, the AO completed the assessment for the AY 2006-07 u/s 143(3) of the Act and not u/s 153C of the Act on 24.7.2008. The same constitutes an invalid assessment and the same is required to be quashed in view of the express provisions of the Act vide first proviso to section 153C read with clause (b) of section 153A(1) of the Act. In this regard, Ld Counsel for the assessee submitted that the date of receipt of the documents from the AO of the searched person is 13.12.2006 which falls in the assessment year 2007-2008. Thus, as per the assessee the six years referred to in clause (b) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the previous year in which such search is conducted or requisition is made : 6. From the above, it is expressly mentioned the reference to the date of search in cases of other person where warrant of authorization was not issued, the date of receipt of the documents by the AO of the other person constitutes the date of search for the purpose of computing the six assessment years for assessing / reassessing u/s 153C of the Act. In the present case, the date of receipt of the documents is 13.12.2006, which relates to the AY 2007-2008. In view of the provisions of clause (b) of section 153A(1) of the Act, the six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted . Therefore, the assessment year in which the documents are received by the AO of the other person‟ is NOT required to be made u/s 153C of the Act. This view is repeatedly supported by the orders of the Tribunal viz the decision of the Delhi Bench of the Tribunal in the case of Jasjit Singh vs. ACIT (supra) and another decision of the ITAT, Delhi in the case of R.L. Allied Industries Vs. (supra). For the sake of completeness of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h action u/s 132 of the Act in the case of Shri Narendra Shah on 24.1.2006. During the assessment proceedings, certain background facts involving the assessee were examined and found that the assessee was accommodating certain accommodation entries involving share business activities. It was on record that the said transactions were accommodated by the assessee for earning commission income. It is the claim of the assessee that the rate of commission earned by the assessee is @ 2% in case of long term capital gains and the turnover in this regard works out to ₹ 1,10,81,116/- and the rate of commission for accommodation entries involving subsequent transaction is @ 0.5% and the transactional value in this regard is around ₹ 2.22 Crs. Assessee claimed expenses applying the flat rate of 20% of the gross commission for undertaking such accommodation entries. In the assessment, the above beneficial rates of commission claimed by the assessee were rejected by the AO as done in the earlier assessment years. AO uniformly adopted the flat rate of 5% of the entire accommodation entries business. Aggrieved with the same assessee filed an appeal before the first appellate authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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