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TMI Blog2017 (6) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee. - Decided in favour of assessee. - ITA No. 5202/Del/2013 - - - Dated:- 5-4-2017 - SHRI N.K. SAINI, ACCOUNTANT MEMBER, AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Assessee : Sh. Salil Aggarwal, Adv. Sh. Shailesh Gupta, CA For The Revenue : Ms Jyoti Kumar, CIT DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER: This appeal has been preferred by the assessee against the order of the CIT (A)-III; New Delhi dated 26.07.2013 and pertains to assessment year 2005-06. 2. Brief facts of the case are that on 20th of November 2007, a survey was conducted by the investigation wing of the Department on one Mr SK Gupta, Chartered Accountant, who admitted during survey that he was controlling more than 38 companies whose primary task was to provide accommodation entries. During the course of survey action certain documents/laptops were impounded in which records of providing accommodation entries to various entities including the assessee s group were maintained and it also included the name of assessee s counsel, one Mr. AS Aneja, who is alleged to have acted as a conduit in providing accommodation entries between Mr SK Gupta and the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the course of search proceedings and assessment for the impugned assessment year had attained finality on the date of search and thus, the addition so made by learned assessing officer, should have been deleted as such. 3. That the learned Commissioner of Income Tax (Appeals) has further erred in law and on facts in sustaining addition of ₹ 45, 00, 000/- as alleged accommodation entry and brought to tax under section 68 of the I.T. Act, 1961, the breakup of which is as under: (a) M/s Dhamaka Trading and Construction Ltd. ₹ 5, 00, 000/- (b) M/s Vasudeva Farms (P) Ltd. ₹ 10, 00, 000/- (c) M/s Belief Chits P. Ltd. ₹ 5, 00, 000/- (d) M/s SJ Securities P. Ltd. ₹ 5, 00, 000/- (e) M/s Champs Finvest P. Ltd. ₹ 15, 00, 000/- (f) M/s VA Food Ltd. ₹ 5, 00, 000/- 4.1 That further the learned Commissioner of Income Tax (Appeals) has ignored the basic fact that no amount was ever received from Sh. S.K. Gupta (the alleged accommodation entry operator), rather: ₹ 5, 00, 000/- were received from M/s Dhamaka Trading and Construction Ltd. on account of share application money, ₹ 10, 00, 000/- were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment Year had attained finality on the date of search. It was submitted by the Ld. authorised representative that the assessing officer had relied only on the statements recorded during the search proceedings and no incriminating material found during the course of the search had been linked to the addition. Ld. Authorised Representative relied on the decision of the Hon'ble Delhi High Court in the case of Kabul Chawla reported in 380 ITR 573 (Del) and submitted that since no incriminating evidence had been found, the impugned addition of ₹ 45,00,000 deserved to be deleted. 6. Ld. DR, on the other hand, supported the order of the Ld. CIT (A) and vehemently argued that the judgment of the Hon'ble Delhi High Court in the case of Kabul Chawla (supra) was not applicable on the facts and circumstances of the present case and he sought to place reliance on the judgment of the Hon'ble Delhi High Court in the case of Anil Kumar Bhatia reported in 352 ITR 493 (Del). 7. We have carefully considered the material placed before us and the issue involved. Section 153A of the Act provides that where a search is initiated u/s 132 of the Act, the AO shall assess or reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions, the legal position that emerges is under: I. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs 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 post-search material or information available with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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