9911796707
TMI Blog2020 (6) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... ent years 2010-2011 to 2014-2015 being similar, are taken into consideration first, therefore, the identical grounds taken in appeal for A.Y.2010-2011 and the facts mentioned therein are taken for deciding all the appeals. The ground taken in IT(SS)A No.101/CTK/2018 are as under :- 1. For that, the impugned order of Assessment passed U/S.153A read with section 143(3) of the Act is without jurisdiction and without the authority of law, as such, the same being not sustainable in the eye of law, is liable to be quashed in the interest of justice. 2. For that, when documents seized during the course of search operation were duly explained by the Assessee and accepted by the learned A.O, hence he should not have disturbed the Assessment Under Section,143(l)(a) of the Act. The impugned additions made in the order of Assessment for Assessment year 2010-11 being not sustainable in the eye of law is liable to be deleted in the interest of justice. 3. For that, In course of search, no such incriminating materials could be unearthed by the Search Team, the documents seized by the Search Wing were explained by the Assessee during the course post search inquiry as well as during the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducted on 10.08.2016 in case of the assessee along with other group cases which was intimated to the assessee. Thereafter the AO issued notice u/s.153A of the Act on 27.01.2017, in response to which the assessee filed her return of income on 17.03.2017 declaring the income as already declared in the original return of income. Thereafter the case of the assessee was taken up for scrutiny assessment and statutory notices were issued to the assessee, in response to which the AR of the assessee was appeared on 25.07.2017 and submitted the copy of return of income, bank statements, cash flow statements and other information as per the questionnaire raised by the Assessing Officer(hereinafter referred to as 'AO'). Subsequent notices were also issued to the assessee which were served on the assessee. During the course of search and seizure proceedings at the residential premises of the assessee, it was unearthed that the assessee was having two bank accounts i.e. one in Andhra Bank and other in State Bank of India. During the course of assessment proceedings, the AO noticed that there was a total credit in both the bank accounts amounting to Rs. 9,06,811/-. The assessee was asked to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arthed. During the assessment proceedings, the Assessing Officer found that the total credits in these two bank account are of Rs. 9,06,811/-. He excluded the income declared by the appellant in the return of income and asked the appellant to explain the remaining credits. The explanation of the appellant was that he had cash-in-hand of Rs. 8,54,567/- and it was sufficient to explain the remaining credits. However, according to the Assessing Officer, income declared in the previous assessment order was not sufficient and the appellant did not furnish evidence in respect of the entries in the cash flow statement to merit favourable decision from him. 4.2 During the appeal proceedings, the appellant has filed income tax returns for A.Y.2008-09 and 2009-10, in which total income of Rs. 1,38,920/- and of Rs. 1,74,560/- have been disclosed. The appellant has also filed cash flow statement for financial year ending 31.03.2008 showing opening balance, of cash-in-hand Rs. 3,01,950/- and closing balance of Rs. 4,68,100/-. Similarly, appellant has filed cash flow statement for financial year ending 31.03.2009, showing opening balance of cash-in-hand of Rs. 4,68,000/- and closing balance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that during the course of search and seizure operation there was no any incriminating material found during the course of search. The AO has made addition not on the basis of any incriminating material but the addition has been made by the AO on the basis of bank accounts of the assessee maintained in the Andhra Bank and State Bank of India, which were disclosed in the return of income at appropriate column, therefore, it cannot be said that these accounts were to be in the nature of any incriminating material. It was also submitted by the ld.AR of the assessee that in the appropriate column the return of income did not accept the other name of bank, otherwise the assessee would have disclosed the other bank account maintained in State Bank of India. Ld. AR strongly relied on the decision of Hon'ble Delhi High Court in the case of Kabul Chawla, [2016] 380ITR 573 (Delhi) and submitted that when there is no any incriminating material, the assessment already completed cannot be interfered with. Further ld. AR to support his contentions, has also relied on the following decisions :- i) ACIT Vs. Shri Rasik Gopaldas Patel IT(SS)A Nos.617/Ahd/2011 & CO No.8/Ahd/2012, order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited into the bank account, therefore, the AO has rightly added unexplained opening cash-in-hand to the total income of the assessee, which could not be substantiated. He also pointed out that in the return of income the assessee had not disclosed cash in hand in the previous assessment year as well as in the current assessment year and it was also pointed out that the interest income has not been shown in the return of income. In support of his contentions, ld. DR relied on the following decisions :- i) CIT Vs. ST. Francis Clay Decor Tiles [2016] 70 taxmann.com 234 (Kerala); 20. On a plain reading of Section 153A, it is clear that once search is initiated under Section 132 or a requisition is made under Section 132A after the 31st day of May 2003, the Assessing Officer is empowered to issue notice to such person requiring him to furnish return of income in respect of each assessment year following within six assessment years referred to in clause (b). It further treats the returns so filed as if such return were a return required to be furnished under Section 139. So that on a reading of Section 153A(1) it is categoric and clear that once a notice is issued and the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of evidence in order to invoke section 153A - Held, yes - Whether once search is initiated under section 132 or a requisition is made under section 132A, Assessing Officer is empowered to issue notice to person searched requiring him to furnish return of income in respect of each of following six assessment years as referred to in clause (b) of section 153A(1) - Held, yes -Whether once aforesaid notice is issued, assessee has to furnish all details with respect to each assessment year since same is treated as a return filed under section 139 - Held, yes - Whether even if no documents are unearthed, nor any statement was made by assessee during course of search under section 132 or any material is received for aforespecified period of six years, assessee is bound to file a return - Held, yes - Whether abatement of assessment or reassessment pending on date of initiation of search within period of six assessment years specified under section 153A will also not absolve assessee from his liability to submit returns as provided under section 153A(1)(a) - Held, yes [Paras 5 & 6] [In favour of revenue] iii) Rajat Tradecom India (P) Ltd. Vs. DCIT, [2009] 120 ITD 48 (Indore): 9. Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the name of "A" after 31.5.2003 but his premises is not searched for the purpose of executing the warrant of authorization and the warrant of authorization is kept unexecuted, the question arises whether the Assessing Officer still should proceed under section 153A of the Act for the purpose of framing the assessment or reassessment of the six assessment years immediately preceding the assessment years relevant to the previous year in which such search is initiated or requisition is made without executing the search warrant. The answer would be xNo' because it would be a futile exercise. It may be added here that jurisdiction can be assumed by the Assessing Officer to initiate assessment proceedings to issue notices once search is initiated under section 132/requisition made under section 132A. He gets actual jurisdiction only on issue of notice, which could be issued under section 153A (unlike section 158BC(a) in block assessment) with no necessity for inference of escapement of income or underassessment as under section 147. Should it mean that a mere search will enable reassessment proceedings by-passing or ignoring the requirements of section 147. The only part of procedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were valid. However in the proceedings for reassessment under section 148 of the Act, materia/ or evidence relatable to the documents, for which the requisition had been sent under section 132A could not be taken into consideration. " 10. Considering the above provisions as noted above in the light of the provisions of section 153A of the Act, it would be clear that once the warrant of authorization or requisition is issued and search is conducted, Panchnama is drawn, the completed assessments for ail the relevant years would get reopened irrespective of whether any incriminating material is found or not in relation to a particular assessment year. However the warrant of authorization shall have to be executed by the authorized Officer in order to justify invoking of the jurisdiction by the Assessing Officer under section 153A of the Act. Finally, the ld. DR submitted that the case laws relied on by the ld. AR of the assessee are not applicable in the present case. 11. After hearing both the sides and perusing the entire material available on record and the orders of authorities below, we observe that in the assessment order the AO has mentioned that there was two bank account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. The assessee has also not shown the closing cash in hand at appropriate column. In the copy of return of income the assessee has shown income from house property and remuneration from partnership firm and income from household business. We observe from the cash-flow statements the assessee has received savings bank interest of Rs. 1090/- containing interest received from Andhra Bank of Rs. 147/- and interest from State Bank of India at Rs. 943/-, which is evident from the paper book page No.32. These incomes have not been disclosed by the assessee in his return of income. These are the real income which have been received by the assessee in the impugned assessment year which should have been disclosed in the return of income. It is clear from the cash-flow statements that the assessee has made certain payments out of his income and opening cash available with her. It is also clear that the interest income is also part of the income. The AO has doubted the availability of opening cash i.e. payments are also in doubt to the extent of Rs. 6,62,000/-. The contention of the assessee is that the additions can only be made on the basis of incriminating material found during the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment." Ld. AR inviting our attention to sub-para (vii) of Para 37 of the said decision of the Hon'ble High Court, submitted that in the case of the assessee there is no incriminating material found during the course of search, therefore, as per the decision of the Hon'ble High Court in the above case, the interference by the AO u/s.153A of the Act with the assessment already completed u/s.143(3) of the Act is unjustifiable. However, on careful perusal of the para 36(vii) of the above observations of the Hon'ble High Court, we found that the Hon'ble High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is Rs. 40,000/- & Rs. 50,000/-, respectively. We observe that the husband of the assessee is also filing return of income and has also shown in the financial statements as withdrawings. On perusal of the assessment order, we find that the AO has considered the income for the assessment year 2009-2010 and has arrived at opening balance of Rs. 6,62,000/-. Further on perusal of the CIT(A)'s order, the assessee has filed return of income for the assessment year 2008-2009 also. This return of income has been accepted by the department but the CIT(A) has not given the effect of net cash accruals for the assessment year 2008-2009 for considering the return of income for the A.Y.2008-2009 and cash accruals during the assessment year 2008-2009, the assessee has not produced any balance sheet in the impugned assessment year as well as preceding assessment years. The assessee is directed to produce correct net cash accruals for the assessment year 2008-2009 only to which the assessee will get benefit from the additions made by the AO for doubting the opening cash shown by her. Further we noted from page No.16 of the paper book, the assessee has not shown the details of bank accounts which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g facts and circumstances of the case, without considering any submission and without considering general principles of accounting in preparation of the capital account and cash flow statement and bank credits. 5. For that, the learned Commissioner of Income Tax Appeal should not have confirmed the additions made by assessing officer amounting to Rs. 3,00,000 (Three lakhs) received through bank towards sale of shares at par (face value which is equal to cost of acquisition), treating it income of the Assessee, without considering the written submission of the assessee and evidence thereof in this regard i.e., register of shareholders and confirmation letter and director's register duly certified by managing director of the company. 6. For these and other reasons to be adduced at the time of hearing that the assessee prays to accept the appeal and delete the entire addition in interest of natural justice and fair play. 15. Ground Nos.1 to 3 are relating to legal issue, which we have decided the same in the appeal of the assessee for A.Y.2010-2011 against the assessee. Therefore, the legal grounds raised by the assessee in the present appeal is dismissed. 16. In respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, the impugned order of Assessment passed U/S.153A read with section 143(3) of the Act is without jurisdiction and without the authority of law, as such, the same being not sustainable in the eye of law, is liable to be quashed in the interest of justice. 2. For that, when documents seized during the course of search operation were duly explained by the Assessee and accepted by the learned A.O, hence he should not have disturbed the Assessment Under Section,143(l)(a) of the Act. The impugned additions made in the order of Assessment for Assessment year 2012-13 being not sustainable in the eye of law is liable to be deleted in the interest of justice. 3. For that, In course of search, no such incriminating materials could be unearthed by the Search Team, the documents seized by the Search Wing were explained by the Assessee during the course post search inquiry as well as during the course of Assessment also. And when there were no such incriminating material found during the course of search and the seized documents, were well explained by the Assessee which were also accepted by the Search Team as well as by the A.O., then he should have accepted the return filed by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed during the course of search operation were duly explained by the Assessee and accepted by the learned A.O, hence he should not have disturbed the Assessment Under Section,143(l)(a) of the Act. The impugned additions made in the order of Assessment for Assessment year 2013-14 being not sustainable in the eye of law is liable to be deleted in the interest of justice. 3. For that, In course of search, no such incriminating materials could be unearthed by the Search Team, the documents seized by the Search Wing were explained by the Assessee during the course post search inquiry as well as during the course of Assessment also. And when there were no such incriminating material found during the course of search and the seized documents, were well explained by the Assessee which were also accepted by the Search Team as well as by the A.O., then he should have accepted the return filed by the Assessee and should have also accepted the Assessment passed U/s.l43(l)(a) of the Act and should not have disturbed the completed Assessment. Hence the impugned additions made in the order of Assessment for Assessment year 2013-14 being not sustainable in the eye of law is liable to be deleted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r claim before the AO. Accordingly, this matter is sent back to the file of AO to decide the same afresh after providing reasonable opportunity of hearing to the assessee. The assessee is also directed to substantiate her claim with sufficient evidence in respect of difference of accounts. This ground of appeal of the assessee is allowed for statistical purposes. 26. Further in respect of ground No.5, we find that during the course of assessment proceedings the assessee could not furnish supporting documents to substantiate her claim. Before us, ld. AR submitted that the rent received by the assessee as advance was already shown as an income for subsequent years. Therefore, in the interest of justice, we send this issue to the file of AO for deciding the issue afresh after affording reasonable opportunity of hearing to the assessee. The assessee is also directed to cooperate with the AO for early disposal of the case. This ground of appeal of the assessee is allowed for statistical purposes. 27. With regard to ground No.6, ld. AR submitted that the registration charges amounting to Rs. 28,385/- was borne by the assessee out of drawings shown in the cash-flow statement, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2,33,188. without considering the income of capital gain shown in subsequent years as the complete sale was completed in the assessment year 2015-16. For these and other reasons to be adduced at the time of hearing that the assessee prays to accept the appeal and delete the entire addition in interest of natural justice and fair play. 30. Ground Nos.1 to 3 are relating to legal issue, which we have decided the same in the appeal of the assessee for A.Y.2010-2011 against the assessee. Therefore, the legal grounds raised by the assessee in the present appeal is dismissed. 31. In respect of ground No.4, we, on perusal of the order of the CIT(A), find that the CIT(A) has already given the relief to the assessee by allowing the appeal of the assessee, therefore, there is no room for the assessee for further grievance before the Tribunal. Accordingly, this ground of appeal of the assessee has become infructuous. 32. Thus, appeal of the assessee for A.Y.2014-2015 in IT(SS)A No.105/CTK/2018 is dismissed. 33. Now, we shall take up the appeal of the assessee in IT(SS)A No.106/CTK/2018 for A.Y.2016-2017, wherein the assessee has raised the following grounds :- 1. For that, the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of remaining gold jewellery of 917.29 grams valued at Rs. 25,26,438/- and accordingly, the AO added the same into the total income of the assessee. In appeal, the CIT(A) observed that the assessee has explained the investments in gold ornaments and jewellery of 1650 grams amounting to Rs. 45,44,500/- and accepted the same, however, the CIT(A) confirmed the remaining gold ornaments and jewellery being 767.29 grams amounting to Rs. 21,13,302/- holding the same as unexplained. Against the order of CIT(A), the assessee is in further appeal before the Income Tax Tribunal. 36. Ld. AR before us filed a written submissions which read as under:- WRITTEN NOTES OF SUBMISSION ON BEHALF OF THE APPELLANT : FACTS: - For that, a Search and Seizure operation U/s.132 of the Income Tax Act, 1961 was conducted in the residential premises of the Assessee on 12.02.2016. Consequence to search, Assessment proceeding for Assessment year 2016-17 was initiated. During course of search, in the residential premises and from the locker No.75/4 and 145/2 at Indian Overseas Bank, Rayagada, the following gold and jewellery were found and seized. SI No. Particulars of premises searched Gold jewellery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n paragraph No.4.6 at page No.4 of his order is completely illegal, wrong and contrary to the facts on record. Therefore, the addition of gold and jewellery of 767.29 grams valued at Rs. 21,13,302.00 being not sustainable in the eye of law, needs to be deleted in the interest of justice. For that, the Appellant wants to draw kind attention of this Hon'ble Tribunal to Annexure-3 at page No. 16 and 17 of the Paper Book that is the written submission filed before C.I.T.(A). Further, the Assessee also drew attention to Annexure-5 to Annexure-8 i.e. from Page No.36 to 96 of the Paper Book, these documents formed part of seized materials and were well available before the Investigation Wing, the A.O as well as before the learned C.I.T.(A), therefore the findings given by him that, "for the remaining gold jewellery, the Appellant has to furnish not only the bills but also evidences of source of investment, which has not been done by the Appellant" is completely wrong and contrary to the facts on record, hence the consequential addition confirmed by him basing on these findings being not sustainable in the eye of law is liable to be quashed in the interest of justice. For that, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 grams 2. Learned A.O. allowed during Assessment 1500.000 grams 3. Learned C.I.T(A) allowed in appeal 150.000 grams Total 1650.000 grams Now dispute is for 767.290 grams Sl.No Weight Date of Purchase Reference to Paper Book 1. 43.91 grams 04.03.2012 Page No.37 & 38 (NTR-05-67) 2. 23.75 grams 31.05.2013 Page No.39(NTR-05-59) 3. 93.19 grams 05.04.2014 Page No.40 (NTR-05-65) 4. 5.95 grams 11.02.2015 Page No.41 (NTR-05-62) 5. 19.16 grams 14.03.2015 Page No.42 (NTR-05-63) 6. 27.84 grams 16.03.2015 Page No.43 (NTR-05-64) 7. 68.78 grams 14.08.2015 Page No.44 (NTR-05-66) 8. 85.29 grams (F.Y.2008-09 after availing bank loan Page No.51 to 54 367.87 grams 9. 15.00 grams 23.12.2015 Page No.48 (bill enclosed) 10. 18.00 grams 25.12.2015 Page No.48 (bill enclosed) 11. 18.00 grams 28.12.2015 Page No.48 (bill enclosed) 12. 14.00 grams 31.12.2015 Page No.48 (bill enclosed) 13. 18.00 grams 02.01.2016 Page No.49 (bill enclosed) 14. 17.00 grams 04.01.2016 Page No.49 (bill enclosed) 15. 18.00 grams 11.01.2016 Page No.49 (bill enc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewellery purchased by him of 200.00 grams during the year in his return of income and produced day-wise cash flow and cash flow statement which was accepted by the learned A.O., he is not authorized under the law to disallow and to add the same in the hand of the Assessee/Appellant. The learned C.I.T(A) also should not have ignored the explanations and evidences produced before him and before the learned A.O. as well as the seized materials while confirming addition of 767.290 grams valued at Rs. 21,13,302.00. The impugned addition, thus runs contrary to the facts available on record, as such, the same is not sustainable in the eye of law, hence needs to be deleted in the interest of justice. That, in the family of the Assessee, the Assessee has been staying with her husband, father-in-law, mother-in-law, daughter and son. As per the CBDT circular, the eligibility of gold and jewellery owned by them are of 1550.00 grams. The sister-in-law of the Assessee has kept 100.00 grams of jewellery in her bank locker as she had no locker account. Further, from the documents seized as NTR-05, it can be found that, the Assessee in couple of years had purchased 282.58 grams and 85.29 grams of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered 1500 grams of gold jewllery and bullion to be acquired out of explained sources and made addition of remaining 917.29 grams valuing at Rs. 25,26,438/- treating the same as acquired out of the unaccounted source of income and added the same to the total income of the assessee. In first appellate proceedings, the CIT(A) considering the submissions of the assessee has accepted that the source of 1650 grams gold and jewellery has been explained and confirmed the remaining gold and jewllery found and seized during the course of search. On perusal of the assessment order, it is found that the AO himself in first para at page No.5 of the assessment order has mentioned that the assessee has explained the sources with regard to acquisition of gold jewellery weighing around 682 grams. The ld. AR before vehemently submitted that even though the A.O. has accepted the fact that 682.000 grams of gold jewelry over and above that 1550.000 grams were explained but while completing the Assessment has allowed only 1500.000 grams and confirmed the addition of 917.29 grams, therefore, impugned addition made by him, needs to be deleted. Ld. AR also drew our attention to the statement of detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d/2009, the Ahmedabad Tribunal vide order dated 05.11.2015, has held that it is ample clear that gold jewellery found to the extent of limit mentioned in the circular is treated as explained and this can be clearly applied on the assessee's case, wherein no specific deduction of gold jewellery possessed by family members and grand children was given by the Assessing Officer from the total gold jewellery found at the time of search and seizure operation and differential gold jewellery of 1924.22 gr. is the gold jewellery possessed by the female members and minor children of the assessee's joint family and this quantity of 1924.22 gr. is well within the total limit of jewellery at 2100 grms. as per the CBDT instruction no.1916 dated 11.05.1994. 43. As per the above quoted judicial pronouncements and the facts and circumstances of the case, the assessee deserves to get benefit of the aforesaid CBDT Instruction No.1916, dated 11.05.1994, according to which 1650 grams is not to be treated as undisclosed investment. The CIT(A) has also held that the assessee is entitled to have 1550 grams of gold as per the following family members :- N. Roja 500 gms. N. Trinath Rao (Husband ..... X X X X Extracts X X X X X X X X Extracts X X X X
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