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TMI Blog2018 (5) TMI 1993X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT(A) has erred in law and facts in not following the ratio laid down by the jurisdictional High Court in case of CIT vs R.K. Arora vide appeal No. ITA 56 of 2011 wherein the Hon Tile High Court has held that in a proceedings u/s 153 A entire assessment is open before the A.O. (Annexure 'A) 3. That the order of the Ld. CIT(A) being erroneous in law and on facts which needs to be vacated and the order of the A.O. be restored. 4. That the appellant craves leave to add or amend any one or more of the ground of the appeal as stated above as and when need for doing so may arise. C.O No. 482/Dle/2015 1. That in facts and circumstances of the case, CIT(A) has rightly deleted the additions from the assessment order passed u/s 153A, in the absence of any incremental material brought on record during the course of search, assessment and remand report by the AO. The assessee case is fully covered by the order of CIT vs. Kabul Chawla 1TA No. 709/2014 dated 28.08.2015. 2. It is unlawful on the part of the AO to adjudicate the Appellate Authority to follow Non - Judicial Allahabad High Court in the case of CIT vs. R.K. Arora, ITA No. 56 of 2011 whereas the assessee office and Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ective buyers. The method of accounting followed is mercantile system. The cost of construction is carried to next year as work in progress and all direct expenses incurred on the property is charged to that particular property and indirect expenses incurred are allocated to various projects . Accounting method followed is AS9 for revenue recognition at the time of transfer of goods to the buyer for a consideration. 4. During the year under consideration, the assessee company has received unsecured loans of Rs. 61,70,730/- vide Cheques from S.K. Land Finance Co. and Rs. 5,00,000/- from Shri Praveen Sethi as well as Rs. 1,00,00,000/- from M/s. Oceanic Homes Pvt. Ltd. The assessee was asked to file the details of loans/ advances received during the year along with supporting evidences to prove the source of these loans. The Assessing Officer observed that despite giving sufficient time and opportunity the assessee only filed confirmations which does not prove either the source of loan, creditworthiness of the party or the genuineness of the transaction. The Assessing Officer further observed that mere filing of confirmation letter is not sufficient proof of the genuineness of the cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 on account of loans received from S. K. Land & Finance, Shri Prveen Sethi and Ms Oceanic Homes Pvt. Ltd the Assessing Officer was asked to clarify as to whether any incriminating material had been found and has categorically admitted that no incriminating materials with relation to the t r a n s a c t i o n s with these parties were found during the search. It is also clear that all the loans have been repaid before the search through account payee cheques. That being the case the additions made by the assessing officer on this count, without there being any "mating material found during search are hit by the by the judgement of the Special Bench in All Cargo Global Logistics 137 ITD 287 (Mum)(SB) and the judgement of Gurinder Singh Bawa vs. DCIT 28 taxmann.com 328 (Mumbai) ITAT and fit to be deleted. This view -as also been upheld by the Rajasthan High Court in the case of Jai Steels(India) vs ACIT 1103) 259 CTR (Raj)281 and been followed by the jurisdictional tribunal in a number of cases, sutli as Kusum tsnatia, Asha Kataria, Sanjay Agarwal, Manoj Narain Agarwal, MGF Automobiles Ltd. etc. The Assessing Officer has submitted that the assesse could not prove the creditworthiness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial 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 the absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assesss' in Section 153A 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 made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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