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TMI Blog2018 (5) TMI 1818X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 19.05.2014 of ld. CIT(A)-XXXI, New Delhi. 2. Since, the issues involved are common in these appeals which were heard together, so, these are being disposed off by this consolidated order for the sake of convenience and brevity. 3. The Registry has pointed out that the appeals filed by the assessee are barred by limitation by 63 days. The assessee moved application for condonation of delay for the assessment year 2005- 06 stating therein as under: Hon'ble Sir(s), 1 The assessee has been filed an appeal against the order of learned Commissioner of Income Tax (Appeals) XXXI, New Delhi dated 19.05.2014 in ITA No 5424/D/2014. According to the statutory provisions contained in section 253 of the Act, the appeal has to be filed within sixty days of service of order of learned Commissioner of Income Tax (Appeals)-31, New Delhi. 2. In the instant case, the aforesaid order was served on the appellant on 06.06.2014 and, as such the captioned appeal was due to be filed by 05.08.2014 whereas the appeal has been filed on 07.10.2014 leading to a delay of 63 days. The delay so occurred in filing the instant appeal is inadvertent and bonafide. 2.1 It is submitted that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous loss and irreparable injury to the party against whom the lis terminates, either by default or inaction and defeating valuable right of such a party to have the decision on merit. While considering the matter, courts have to strike a balance between resultant effect of the order it is going to pass upon the parties either way. [Emphasis Supplied] ii) (1998) 7 SCC 123 N. Balakrishan v. M. Krishnamurthy It must be remembered that in very case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of dilatory strategy, the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time, then the court should lean against acceptance of the explanation. While condoning the delay, the court should not forget the opposite party altogether. It must be borne in mind that he is a loser and he too would have incurred quite large litigation expenses [Emphasis Supplied] iii) 167 ITR 471 (SC) Collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. c) The Ld. CIT(A) has erred in refusing the acceptance of additional evidence under Rule 46A submitted during the course of hearing thereby denying the legitimate right of the assessee to adduce evidences during the appea.1 process. d) That the Ld. CIT(A) has erred the submission of the assessee duly acknowledged by him that the assessee has submitted the required documents i.e. ITR, Balance Sheet, Confirmations, PAN, Bank Statement of the subscribers at the time of hearing duly acknowledged by the AO in his Assessment order, duly noted by him thereby rejection of the acceptance of these documents is illegal. 2. The assessee craves leave for the addition, modification, alteration of any of the above grounds of appeal. 9. The grounds raised by the department in its appeal read as under: 1. The order of Ld. CIT(A) is not correct in law and facts. 2. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of ₹ 29,86,532/- made by the Assessing Officer on account of disallowance of pre-operative expenses. 3. The appellant craves leave to add, amend any/all the ground of appeal before or during the course of hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f granted by the ld. CIT(A) while the assessee is in appeal against the sustenance of addition and had challenged the validity of the assessment framed u/s 153A r.w.s. 143(3) of the Act in the absence of any incriminating material found during the course of search. 15. The ld. Counsel for the assessee submitted that the additions/disallowances made were not based on any incriminating material found as a result of search on the assessee company on 07.01.2010. It was further submitted that it is a case of non-abated assessment as the original returns of income were filed much earlier than the search operation as per following details: Assessment Year Return filed on 2005-06 31.10.2005 2006-07 4.12.2006 2007-08 14.10.2007 2008-09 30.09.2009 16. It was further submitted that since no notice u/s 143(2) of the Act was issued for the assessment years 2005-06 and 2008-09 and the assessments were framed u/s 143(3) of the Act for the assessment years 2006-07 and 2007-08. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,000 8.62,50,000 4,69,50,000 4,50,000 Disallowance on account of 29,86,532 --------- --------- --------- Addition made on account of unsecured loans --------- 53,50,000 2,37,77,225 4,50,00,000 Disallowance on account of excessive claim of deprecation --------- 37,07,507 8,92,250 --------- Disallowance by invoking of section 35D of the Act on account of preliminary expenses. --------- 2,96,175 --------- --------- Disallowance of expenses --------- --------- 2,26,188 5,63,008 Addition made on account of undisclosed income as per seized statement of affairs --------- --------- --------- 3,07,71,221 vi) CIT(A) Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pr. CIT Vs Sunrise Finlease (P) Ltd. 252 Taxman 407 (Guj.) CIT Vs Kabul Chawla 380 ITR 573 (Del.) Pr. CIT Vs Lata Jain 384 ITR 543 (Del.) CIT Anil Kumar Bhatia 352 ITR 493 (Del.) CIT Vs Kurele Paper Mills P. Ltd. 380 ITR 571 (Del.) CIT Vs MGF Automobiles Ltd. 241 Taxman 440 (Del.) Pr. CIT Vs Ram Avtar Verma (2017) 395 ITR 252 CIT Vs Harjeev Aggarwal 290 CTR 263 (Del.) Suncity Projects (P) Ltd. Vs DCIT 46 CCH 320 (Del.) CIT Vs All Cargo Gobal Logistics Ltd. in ITA No. 1969 of 2013 CIT Vs Continental Warehousing Corporation (Nhava Sheva) Ltd. 374 ITR 645 CIT Vs Gurinder Singh Bawa 386 ITR 483 Pr. CIT Vs Saumya Construction (P) Ltd. 387 ITR 529 (Guj.) Jai Steel India Vs ACIT 259 CTR 281 (Raj.) CIT Vs IBC Knowledge Park (P) Ltd. 385 ITR 346 (Kar.) Pr. CIT Vs Dipak Jashvantlal Panchal (2017) 397 ITR 153 (Guj.) 18. In his rival submissions, the ld. Sr. DR strongly supported the orders of the authorities below and furnished a written submission which read as under: 1. Search in the case of assessee group was conducted on 07.01.10 during the course of search at the assessee's premises blank signed share t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application through an IPO etc. c) Therefore it may be presumed that the persons investing in the share capital of the assessee company must be known to the promoters very well. d) It was however noted in post search inquiries that the persons paying the share application money had no business relations nor any transactions with the assessee company. Such persons were also not personally related to the promoters by way of family relations etc. e) It was also seen that these nondescript companies and persons who had allegedly invested in share capital of the assessee company have subsequently transferred all their shares to the assessee company's directors and their family members at face value or even less. f) Search at the assessee's premises led to the seizure of blank, share transfer forms duly signed by the allottees and affidavits of some of the companies/persons who were shown as investors in the share capital of the assessee company e.g. pages 9,10,12,15,16, 33, 34, 55, 56, 61 and 62 of annexure AA-1 are blank sign share transfer forms of some of the share allottee companies such as M/s NEPC Industries Ltd, M/s Telstar Editing Pvt. Ltd, and M/s Softgate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) CIT Vs Focus Exports (P.) Ltd. 51 Taxmann.com 46 (Del.) PCIT Vs Bikram Singh in ITA No. 55/2017 (Del.) Rick Lunsford Trade Investment Ltd. Vs CIT (2016) 385 ITR 399 (Cal.) Rick Lunsford Trade Investment Ltd. Vs CIT [2016-TIOL- 207-SC-IT] CIT Vs N Tarika Properties Investment (P.) Ltd. (2013) 40 Taxmann.com 525 (Del.) N Tarika Properties Investment (P.) Ltd. Vs CIT (2014) 51 Taxmann.com 387 (SC) Konark Structural Engineering (P.) Ltd. Vs DCIT (2018) 90 Taxmann.com 56 (Bom.) 20. We have considered the submissions of both the parties and perused the material available on the record. In the present case, it is an admitted fact that the assessee filed the returns of income for the assessment years 2005-06 to 2008-09 on 31.10.2005, 04.12.2006, 14.10.2007 and 30.09.2008 respectively. The assessments were framed u/s 143(3) of the Act for the assessment ears 2006-07 2007-08 vide orders dated 30.12.2008 and 30.12.2009 respectively while the intimations were issued for the assessment years 2005-06 and 2008-09 u/s 143(1) of the Act. Since, no notice u/s 143(2) of the Act was issued to the assessee for the assessment years 2005-06 and 2008-09 withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 143(1) of the Act for the assessment years 2005-06 and 2008-09, however, the time to issue the notice u/s 143(2) of the Act had already expired before the search took place on 07.01.2010, therefore, the assessments for these years were not abated. In the instant case, the assessments were completed u/s 143(3) of the Act for the assessment years 2006-07 and 2007-08 much prior to the date of search on 07.01.2010. As such these assessments attained the finality and were not abated. The AO made the additions on account of share application money/share capital/ share premium and unsecured loans received by the assessee u/s 68 of the Act on the basis of the material which was already available on the record and considered in the regular assessments much prior to the search u/s 132 of the Act. The other additions were made by the AO on account of disallowances out of the expenses etc. which were relating to depreciation, preliminary expenses and other expenses etc. but those additions/disallowances were not on the basis of any incriminating material found during the course of search. In the present case, the only documents found were alleged blank signed share transfer form of the nonde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturns for six assessment years immediately preceding the previous year relevant to the assessment year in which the search takes place. (ii) Assessments and reassessments pending on the date of the search shall abate. The total income for such assessment years will have to be computed by the Assessing Officers as a fresh exercise, (iii) The Assessing Officer will exercise normal assessment powers in respect of the six years previous to the relevant assessment year in which the search takes place. The Assessing Officer has the power to assess and reassess the total income of the 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 assessment years in which both the disclosed and the undisclosed income would be brought to tax. (iv) Although section 153A 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 Assessing Officer 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sibilities of altering the income of the assessee based on any incriminating documents. Admittedly both the assessment years in these appeals are completed assessments in case of the assessee. The reliance placed upon by the learned authorized representative on the decision of the Hon'ble Delhi High Court in the case of C/T v. Kabul Chawla [2016] 380 ITR 573 (Delhi) where original assessment have been made under section 143(1) of the Act is apt and squarely covers issue in favour of the assessee. The Hon'ble High Court in paragraph No. 37 of that decision has held that no addition can be made in the hands of the assessee in the absence of any incriminating material unearthed during the course of search or requisition of documents. On reading of the order of the Assessing Officer we could not find that there is any incriminating material referred to by the Assessing Officer which is found during the course of search for making these additions. Therefore, respectfully following the decision of the Hon'ble Delhi High Court in the case of CIT v. Kabul Chawla (supra) we confirm the order of the learned Commissioner of Income-tax (Appeals) and dismiss the appeal of the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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