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TMI Blog2018 (10) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... - Decided in favour of assessee - ITA No. 2544/Del/2015 - - - Dated:- 10-10-2018 - SHRI G.D. AGRAWAL, HON BLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant : Shri S.S. Rana, C.I.T. DR For The Respondent : Shri Salil Agarwal, Advocate And Shri Shailesh Gupta, CA ORDER PER SUDHANSHU SRIVASTAVA, J.M. This appeal is preferred by the department against the order dated 10.02.2015 passed by the Ld. CIT (Appeals)-23, New Delhi for assessment year 2006-07 wherein vide the impugned order, the Ld. CIT (A) has deleted the addition of ₹ 80 lakh made by the Assessing Officer on account of share application money and share premium u/s 68 of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 1.1 The assessee has also filed an application under Rule 27 of the Income Tax Appellate Tribunal Rules, 1963. 2.0 Brief facts of the case are that a search and seizure operation u/s 132 of the Act was carried out in the case of the assessee as well as the group companies on 4.8.2011. A notice u/s 153A 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 &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed as ground no. 1.7 before the Ld. CIT (A). The ld. AR prayed that the application under Rule 27 may be admitted. 4.0 In response, the Ld. C.I.T. DR opposed the assessee s prayer for admitting of application under Rule 27 of the Act. 5.0 Having heard both the parties on the issue of admitting the application moved by the assessee under Rule 27 of the Income Tax Appellate Tribunal Rules 1963, we are of the considered opinion that in an appeal before the ITAT, the respondent is entitled to support the order of the appellate authority even on a ground which has been decided against it even though it may not have filed any appeal against such an order. Accordingly, we deem it fit to admit the assessee s application made under Rule 27 of the Income Tax Appellate Tribunal Rules, 1963 wherein the assessee has taken the following ground:- 1. That the learned CIT (A) has erred in law and on facts in overlooking the basic fact that no document much less incriminating material was found during the course of search and the assessment as contemplated under section 153A is not a de novo assessment and as such, the additions so made by Assessing Officer which are beyond incriminati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon ble Delhi High Court in the case of Smt. Dayawanti vs. CIT (supra) had since been stayed by the Hon ble Apex Court and, therefore, the judgment of the Hon ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) would apply. The Ld. AR also submitted that the statement of Shri Tarun Goyal was not recorded during the course of search but before the date of search and, accordingly, it could not be considered as incriminating material found during the course of search. The Ld. AR also highlighted the fact that the issue of share capital had been duly considered in the original assessment order passed u/s 143(3) of the Act vide order dated 28.12.2007 wherein no addition had been made. It was submitted that this original assessment order was also passed after duly considering the fact that an earlier search had taken place on 6.3.2006 and the assessee s returned income had been accepted. 9.0 We have heard the rival submissions and perused the material available on record. A perusal of the assessment order shows that while making the impugned addition, there is no reference to any incriminating material which has been found during the course of search. It is also un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgment of the Hon ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) will have to be followed. In Para 37 of this judgement, the Hon ble Delhi High Court has summarized the legal position as under: 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 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 othe ..... 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