9911796707
TMI Blog2018 (10) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... 3A of the Act was issued on 22.12.2013 and the assessee filed the return of income on 11.2.2014 declaring an income of Rs. 4,05,332/-. During the course of assessment proceedings, the Assessing Officer noted that the assessee company had, during financial year 2005-06, issued 20000 shares to M/s Geefcee Finance Limited having a face value of Rs. 100/- per share at a premium of Rs. 300/- per share totaling to Rs. 80 lakh. The Assessing Officer also noted that M/s Geefcee Finance Limited was engaged in the activity of providing entries. The Assessing Officer sought information from M/s Geefcee Finance Limited u/s 133(6) of the Act. Summons u/s 131 of the Act were also issued to M/s Geefcee Finance Limited to furnish the required information. However, no response was received from M/s Geefcee Finance Limited. The assessee was also asked to establish the genuineness of share capital and after considering the submissions of the assessee, the Assessing Officer made an addition of Rs. 80 lakh u/s 68 of the Act. 2.1 Aggrieved, the assessee approached the Ld. First Appellate Authority and challenged the addition on merits. The assessee also challenged the addition on the legal ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as such, the additions so made by Assessing Officer which are beyond incriminating/seized materials are liable to be deleted in totality." 6.0 The Ld. AR vehemently argued that it is apparent from the assessment order itself that the impugned addition was not made on the basis of any incriminating material found and seized during the course of search and therefore, in view of the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla reported in 380 ITR 573 (Delhi), addition was not sustainable. 7.0 In response, the Ld. CIT DR submitted that the department was relying on the statement of one Shri Tarun Goyal, which has been referred to by the Assessing Officer in Para 4.1 of the assessment order, and this statement itself was the incriminating material based on which the addition had been made. The Ld. CIT DR also placed reliance on the judgment of the Hon'ble Kerala High Court in the case of E.N. Gopukumar vs. CIT reported in (2016) 75 taxmann.com 215 (Kerala) wherein the Hon'ble Kerala High Court had held that additions could be made even when no incriminating material was found against the assessee in search u/s 132 of the Act. The Ld. CIT DR submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al which has been found during the course of search. It is also undisputed that the search took place on 4.8.2011 whereas the statement of Shri Tarun Goyal was recorded on 14.12.2010. Thus, the statement of Shri Tarun Goyal was recorded before the date of the search and the same cannot be considered to be a statement recorded during the course of search and, therefore, we do not agree with the contention of the Ld. CIT DR that the statement of Shri Tarun Goyal can be considered incriminating material in this regard. It is also undisputed that the assessee group, including the assessee company, was earlier subject to search and seizure operation on 6.3.2006 and the assessment was completed in the case of the assessee on 28.12.2007 u/s 143(3) of the Act wherein the returned income of Rs. 4,05,332/- was accepted. No undisclosed income was declared or assessed in respect of the assessee company including any share capital. Although the assessee had raised the ground of the addition being wrong in view of no incriminating material having been found during the course of search in ground no. 1.7 of its appeal before the Ld. CIT (A), the Ld. CIT (A) did not accept the contention of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent 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 the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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