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TMI Blog2017 (3) TMI 1462X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and therefore otherwise the issue would become an academic one. Considering this development, we do not deem it necessary to upset the order of CIT(A) in A.Y. 2004-05. On this issue, otherwise also additions are not based on seized material and they are not sustainable. - Decided in favour of assessee. - IT(SS)A.No.328,329,331 to 333/Ahd/2011, ITA No.1037/Ahd/2011 - - - Dated:- 15-2-2017 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH ACCOUNTANT MEMBER For The Assessee : Shri Aseem Thakkar, AR For The Revenue : Shri Sanjay Agarwal, CIT,DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: In this bunch of six appeals, five appeals are directed at the instance of assessee against separate orders of even date i.e 25/01/2011 passed by ld.CIT(A) I, Ahmedabad on the respective appeals of the assessee for A.Y. 1999-2000 2000-2001 and 2002-03 to 2004-2005 . 2. Revenue is in cross appeal in A.Y. 2004-05. Common issues are involved in all these appeals therefore we heard them together and deemed it appropriate to disposed of them through this common order. 3. First we take the appeal of the revenue in A.Y. 2004-05. The solitary substantial grievance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Pvt. Ltd. the additions are not sustainable in the eyes of Law, because during the course of search no incriminating material was found which can authorized Assessing Officer to make additions in these assessment years. He placed on record copy of Hon ble High Court s decision rendered in Tax appeal no. 21 of 2016. 7. Brief facts of the case are that a search and seizure operation was conducted at the residential premises of the assessee along with Dharamdev Builders Group of cases on 09/02/2005. In order to give logical end to the proceedings a notice under section 153A of the I.T. Act was issued on 28/10/2006. In response to the notice, assessee has filed her return of income on 13/07/2006 disclosing total income at ₹ 63,650/- Similarly, income of ₹ 66,960/- was disclosed by the assessee in A.Y. 2000-01, ₹ 83,680/- in A.Y. 2002-03, ₹ 2,30,050/- in A.Y. 2003-2004 and 2,31,000/- in A.y.2004-05. The return for A.Y. 2004-05 was filed on 14/08/2006. The Ld. Assessing Officer has passed assessment orders on 29/12/2006. He determined taxable income of the assessee at Rs,3,42,650/- as against return of income of ₹ 63,650/- in A.Y. 1999-2000. In A.Y. 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gifts in capital account Rs.3,00,00/- 2. Cash deposit in bank account A/c.No.277 with Mahila Co-Op Bank Rs.1,32,500/- Total Rs.4,32,500/- Assessment Year 2004-05 1. Sale of Jewellery ₹ 24,867/- 2. Cash deposit in bank account A/c. No.277 with Mahila VikasCo-Op Bank Rs.25,15,816/- Total Rs.25,40,683/- 8. The Ld. Counsel, for the assessee took us through the assessment orders in each assessment years and contended that these additions are made by re-appreciating the profit and loss accounts, balance sheet and capital accounts. The additions are not based on any seized material. He further contended that in these assessment year, assessment orders were not pending, they were already finalized and nothing has been abated . Hon ble Gujarat High Court has considered this aspect and held that additions are to be confirmed on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t assessee failed to fulfill the conditions enumerated in section 68 of the Income Tax Act, 1961. Therefore we did not granted adjournment to the Ld. CIT,DR. 15. Admittedly these are search assessment years wherein assessment orders have been framed under section 153A of the Income Tax Act after the search operation on the assessee. Before embarking upon an inquiry about the facts which lead the AO to make additions in different assessment years, we deemed it appropriate to keep in mind the authoritative pronouncement of the Hon ble Jurisdictional High Court expounding scope of section 153 A, the relevant discussion in the judgment of Somaya construction Pvt. Ltd. read as under 15. On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India), Jod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of ₹ 11,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition. In the present case, it is an admitted position that no incriminating material was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Unexplained credits in Capital A/c and cash Credits: 4.1 on perusal of the copies of Profit Loss Account, Balance Sheet and Capital A/c, filed along with the return of income, it is noticed that during the year the assessee has shown the following gifts and deposits: Gifts: 1. Sonal Bhatt - Rs.100000/- 2. K.L. Thakkar - Rs.30000/- 3. Nilesh Joshi - Rs.100000/- Deposits: 1. HeerabenIshwarlalThakkar - Rs.49000/- - Grand Total - Rs.2,79,000/- 4.2 In this regard, the assessee, during the course of hearing on 20.11.2006, was requested to justify the genuineness of gifts and deposits and furnish the necessary details on thenext date of hearingi.e on 23.11.2996. on 23.11.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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