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TMI Blog2019 (9) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... l Chawla that no addition could have been made in case of completed assessment in absence of any incriminating material found during the course of the search. In similar set of facts, the Hon ble High Court of Bombay in the case of Principal CIT Vs. Jignesh P. Shah [ 2015 (9) TMI 80 - DELHI HIGH COURT] held that no addition of deemed dividend could be made in assessment order passed under section 153A of the Act in absence any incriminating material. Addition on the ground that the document relied upon for making the addition was found from the premises of the third party and thus, the addition could have only been made u/s 153C - HELD THAT:- Separate search warrant has been issued in the case of the assessee as well in the case of Sh. Ashok Chowdhary and the Assessing Officer has used the material found in the course of search at the premise of Sh. Ashok Chowdhary, which is not permitted in view of the express provision of the law. The addition made by the Assessing Officer in violation of the procedure provided in the Act is bad in law and void-ab-initio and cannot be sustained. Accordingly, the addition of ₹ 3.3 crore, made protectively on the basis of the documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of some incriminating material found during search. 4. That the Ld. CIT(A) has erred in directing the Ld. AO to restrict the addition of ₹ 6,00,000/- made u/s 2(22) (e) of the Income Tax Act to the extent of accumulated profits. By doing so, Ld. CIT(A) has exceeded his jurisdiction/powers given u/o of the Income Tax Act, 1961. 5. That the Ld. CIT(A) as well as Ld. AO have not appreciated the fact that the advance was received by the assessee to purchase the properties on behalf of lender companies and therefore advance was in the nature of trade advance which does not cover u/s 2(22) (e) of the Income Tax Act. 6. That the Ld. CIT(A) has erred in confirming the addition of ₹ 3.30 crore made by the ld. AO in the hands of assessee on Protective Basis. 6.1 That the addition was sustained by the ld. CIT(A) merely on conjectures and surmises. 6.2 That the ld. CIT(A) has not appreciated the fact the seized document was found from the premises of third party and therefore addition on the basis of the said document can only be made u/s 153C of the Act. 7. That the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld addition of deemed dividend following his own order for assessment year 2013-14 and 2014-15. The addition of ₹ 3.3 crore made on protective basis by the Assessing Officer was held by the Ld. CIT(A) on substantive basis in the hands of the assessee. 3. Before us, Ld. Counsel of the assessee referred to ground No. 3 of the appeal and submitted that in view of the decision of the Hon ble Delhi High Court in the case of CIT Vs. Kabul Chawla (2016) 380 ITR 573 (Delhi), completed assessment cannot be interfered by the Ld. Assessing Officer under section 153A of the Act except on the basis of some incriminating material found during the course of search. The Ld. counsel of the assessee submitted that limitation period for issuing notice under section 143(2) of the Act under regular assessment proceeding had expired in financial year 2010-11 and in absence of any notice issued, the proceedings in the year under consideration stands completed before the date of the search. He submitted that addition under section 2(22)(e) of the Act has been made without any basis on incriminating material, which cannot be made in view of the decision of the Hon ble Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal the other ground challenging the addition under section 2(22)(e), i.e., ground no. 1 to ground no. 2.4 and ground No. 4 5 are rendered merely academic, and are not required to adjudicate upon. 5. In ground No. 6.2 of the appeal, the assessee has challenged addition of ₹ 3.30 crores on the ground that the document relied upon for making the addition was found from the premises of the third party and thus, the addition could have only been made under section 153C of the Act. 5.1 Brief facts qua the issue in dispute are that during the search proceeding at the premise of Sh. Ashok Chowdhary certain document was seized which contained a list of valuables including, jewellery items, cloths for bride and bridegroom, household articles ( freeze, TV, microwave, AC , washing machine etc), vehicles, total silver ( 3 quintile), total gold (8 KG) , Diamond (3 carats) etc. According to the Assessing Officer, daughter of the assessee has been married to the son of Sh. Ashok Chowdhary and these items were given by the assessee as dowry on marriage of his daughter. But, since this document was found from the premises of Sh. Ashok Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble Delhi High Court in the case of Sh. Vinod Kumar Gupta in ITA No. 1003/2017, wherein addition on the basis of statement of the third party during the course of such was held as validly made. 5.4 We have heard the rival submissions of the parties and also perused copy of Panchnama through which the document in dispute was seized. On perusal of the Punchnama, we find that the said search warrant was issued in the case of Shri Ashok Chaudhri and the Panchnama is not containing name of the assessee. Therefore, it is evident that the material relied upon for making addition was not found from the premises of the assessee. 5.5 We also find that during relevant period, i.e., FY: 2014-15, for using any material found from the premises of the third party during the course of the search in assessment proceeding of the assessee, the Assessing Officer of the third party was required to record satisfaction as the material belong to the assessee in terms of section 153C of the Act and then was required to proceed as per the provisions of section 153C of the Act. In the instant case, it is evident that addition in dispute has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thereafter, he was at liberty to take action under section 153C of the Act for bringing the material found from the premise of Sh. Ashok Chaudhri to tax in the hands of the assessee. 5.7 In the case of Shivani Mahajan(supra), identical question was raised before the Tribunal as under: 9. We have carefully considered the arguments of both the sides and perused the material placed before us. After considering the facts of the case and the rival submissions, we find that in these appeals, following two questions arise for our consideration: (i) Whether any material found in the search of any other person than the assessee in appeal can be considered in the assessment under 153A of the assessee. 5.8 The Tribunal after considering arguments of the parties held as under: 14. From a reading of the above decisions of Hon'ble Jurisdictional High Court, it is evident that completed assessment can be interfered with by the Assessing Officer on the basis of any incriminating material unearthed during the course of search. If in relation to any assessment year no incriminating m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the Assessing Officer of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, Section 153C is not invoked in the case of the assessee and the assessment is framed under Section 153A. We, respectfully following the above decisions of Hon'ble Jurisdictional High Court, hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person. 5.9 The facts of the case of Vinod Kumar Gupta (supra) are distinguishable with the facts of the instant case. In the case of Vinod Kumar Gupta (supra) material found from Sh. S.K. Gupta was used in assessment proceeding under section 153A of the Act in the case of Sh. Vinod Kumar Gupta. But in that case warrant in fact was issued in the name of Sh. SK Gupta, Gaurav Gupta, Sh. Vinod Kumar Gupta, Ms. Veena Gupta, Sh. Vikas Gupta, and Ms. Madhu Gupta. The Panchnama drawn was also signed by both the assessee (Sh. Vinod Kumar Gupta) and SK Gupta. The statements of both Sh. S.K. Gupta and Sh. Vinod Gup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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