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TMI Blog2017 (12) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... this Appeal against the impugned Order of the Ld. CIT(A)-I, New Delhi relevant to assessment years 2005-06. 2. The grounds raised by the Assessee read as under:- 1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the disallowance of deduction of ₹ 21,611/- claimed u/s. 35D of the Income Tax Act, 1961. 2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the disallowance of claim of indexation on the sale of property for ₹ 2,32,062/-. 3. The appellant craves leave for addition, modification, alteration, amendment of any of the grounds of appeal. 2.1 Assessee has also raised the issue on the admission of additional grounds of Appeal vide its Application in which the assessee has stated that in view of the settled decision in the case of NTPC 229 ITR 383 (SC), (legal ground can be raised for first time in collateral and second round also). He further stated that the following additional grounds are purely legal and do not require fresh investigation of facts and therefore, the same may be admitted. That Ld. CIT(A) as well as AO erred in law as well as on facts in sustaining or making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid additional grounds raised by the assessee, in view of the aforesaid case laws and proceed to decide the additional grounds first. 6. The brief facts of the case are that assessee filed original return of income declaring an income of ₹ 790/- on 29.10.2005. The same was processed u/s. 143(1) of the Income Tax Act, 1961 (hereinafter referred as the Act) at the returned income. In this case a search and seizure operation was conducted u/s. 132 of the Act on 21.3.2007 in Surya Vinayak Group of cases. The assessee company is one of the Group companies of M/s Surya Vinayak Industries Ltd. The Group is headed by Sh. Sanjay Jain and his brother Sh. Rajiv Jain, resident of I-42, Ashok Vihar, Phase-I, New Delhi. The main allegation against this group was that they had taken a large number of accommodation entries in various group companies by paying cash to the various entry operators. After recording the satisfaction note, a notice u/s. 153A of the Act was issued on 25.9.2009 to the assessee requiring it to file the return of income in the prescribed form. In response thereto, the assessee company vide letter dated 07.10.2009 submitted that the previous return declaring incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed by the AO, is bad in law and is liable to be quashed. 9.1 On the other hand, Ld. DR relied upon the order of the authorities below and stated that the provision of section 153A has rightly been applied in the case of the assessee on the material available with them. He relied upon the following judgments of the Hon ble High Courts and hence, requested that the appeal of the Assessee may be dismissed. - Pr. CIT v Instronics Ltd.(2017) 82 taxmann.com 357 (Delhi) - Ganpati Fincap Services (P) Ltd. v CIT (2017) 82 taxmann.com 408 (Delhi). - CIT v Super Malls (P) Ltd.(2016) 76 taxmann.com (Delhi) - PCIT v Nau Nidhi Overseas Pvt. Ltd.(ITA no. 58/2017)(Delhi) - SSP Aviation Ltd v DCIT (20 taxmann.com 214) (Delhi) - KamleshbhaiDharamshibhai Patel v CIT (2013) 31 taxmann.com 50 (Gujrat) - Rajesh Sunderdas Vaswani v ACIT(2016) 76 taxmann.com 311 (Gujarat) - CIT v Classic Enterprises 35 taxmann.com 244 (Allahabad) 10. We have heard both the counsel and perused the relevant records available with us, especially the orders of the revenue authorities and the cases referred by the Ld. Counsel of the Assessee as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned ITA Nos. 707, 709 and 713 of 2014 of decisions, the legal position that emerges is as 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized documents forming basis of satisfaction note must not merely 'pertain' to other person but must belong to 'other person' - Held, yes - Whether in order to justify assumption of jurisdiction under section 153C, documents seized must be incriminating and must relate to each of assessment years whose assessments are sought to be reopened - Held, yes - During course of assessment proceedings in case of a company, a number of documents were found and seized which contained trial balance and balance sheet of assessee company for period 1-4-2010 to 13-9-2010 - Though seized documents might pertain to assessee, same was not proved to belong to assessee - Further, said documents did not relate to relevant assessment years and secondly, they could not be said to be incriminating - Whether since, both essential requirements for assumption of jurisdiction under section 153C were not met, issuance of notice was unjustified - Held, yes [In favour of assessee]. 11. Respectfully following the precedents as aforesaid, as aforesaid, we quash the assessment made u/s. 153A/143(3) of the I.T. Act, 1961 and decide the legal issue in favour of the Assessee and according ..... X X X X Extracts X X X X X X X X Extracts X X X X
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