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TMI Blog2020 (10) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... Panda, Accountant Member And Shri Sudhanshu Srivastava, Judicial Member For the Assessee : Shri Kapil Goel, Advocate For the Revenue : Shri S.K. Chatterjee, Sr. DR ORDER PER R.K. PANDA, AM: The above two appeals filed by the assessee are directed against the separate orders dated 28th January, 2019 of the CIT(A)-4, Kanpur, relating to assessment years 2009-10 2010-11, respectively. Since common issues are involved in both these appeals, therefore, these were heard together and are being disposed of by this consolidated order. 2. Facts of the case, in brief, are that the assessee is a company engaged in the business of real estate, developers and promoters, etc. The company was incorporated on 4th March, 2008. The return for assessment year 2009-10 was filed on 30th September, 2009 declaring the total income at ₹ 37,130/-. A search and seizure operation was conducted in the Mahalaxmi Buildwell group of cases on 31st October, 2014. During the course of search, certain information/documents belonging to the assessee were also found. In response to notice u/s 153A which was issued on 25th May, 2015, the assessee filed its return of income on 20th A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar as unsecured loan received from Banwari Lal and Shri Puran Mal Verma are concerned, he noted that the assessee failed to furnish any documents. Similarly, in the case of Lions Auto Components and Sartaj Infra Developer, the AO observed that the assessee furnished only unsigned confirmation. The AO further noted from the copy of acknowledgement of return of M/s Lion Auto Components and Sartaj Infra Developers that they have shown income of ₹ 10,230/- and ₹ 91,800/-, respectively for A.Y. 2009-10. Therefore, the credit worthiness of these parties remained unproved. Since the assessee failed to produce the parties from whom loan has been taken for his verification, the AO made addition of ₹ 16,77,983/-. Since the assessee, in the original return declared income of ₹ 37,130/-, but, in the return filed in response to notice u/s 153A no income has been declared and the reason for not showing income of ₹ 37,130/- was not filed, the AO made addition of ₹ 37,130/- to the total income of the assessee. Accordingly, he determined the total income of the assessee at ₹ 17,15,110/- against nil income shown by the assessee. 6. Similarly, for A.Y. 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he additional evidences. However, he decided both the grounds against the assessee for both the years. So far as the argument of the assessee that in absence of any incriminating material found during the course of search the assessment proceedings should be treated as invalid is concerned, the ld. CIT(A), following the decision of the Hon ble Kerala High Court in the case of E.N. Gopakumar vs. CIT, reported in 75 taxmann.com 215, the decisions of the Hon ble Allahabad High Court in the case of CIT vs. Raj Kumar Arora, 367 ITR 517 and CIT vs. Kesarwani Zarda Bhandar Sahson Alld., ITA No.270 of 2014 and various other decisions decided the issue against the assessee. According to the CIT(A), as per the decision of Hon ble Delhi High Court in the case of CIT vs. Anil Kumar Bhatia, 352 ITR 493, the jurisdiction of AO u/s 153A is to assess the total income for the year and not restricted to seized material. Post search reassessment in respect of all six years can be made even if original returns are already processed u/s 143(1)(a) and the AO has power u/s 153A to make assessment for all six years and compute total income of the assessee including the undisclosed income notwithstanding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of letter dated 28/12/2016 where approval is not given to final order and approval itself seems to be incomplete which makes the entire proceedings as void ab initio. 1.3 That on the facts and in the circumstances of the case and in law, Id CITA erred in sustaining the order passed by Ld AO u/s 153A/143(3) as none of the assessee submission is appreciated while adjudicating the appeal; 2. That on the facts and in the circumstances of the case and in law, Id CIT-A erred in sustaining the order passed by Ld AO u/s 153A/143(3) without appreciating that on basis of prodigious evidences on records burden u/s 68 lying on assessee has been fully discharged and met so addition made by Ld AO (₹ 30,00.000 and confirmed by CIT-A in impugned order deserves to be deleted 2.1 That on the facts and in the circumstances of the case and in law, Id CITA erred in sustaining the order passed by Ld AO u/s 153A/143(3) without appreciating that there is no basis of any of the addition of ₹ 30,00,000 as there is no remote trait of any accommodation entry , no meaningful enquiry is done at any stage by Ld AO/Ld CIT-A to dislodge the case of assessee, no adversarial statement or smoke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act; 1.1 That on the facts and in the circumstances of the case and in law, Id CITA erred in sustaining the order passed by Ld AO u/s 153A/143(3) without appreciating that for making valid assessment of unabated year u/s 153A as on date of search that is 31.10.2014 (here for AY 2009-2010 return was filed on 30.09.2009 which u/s 143(2) was barred on 30.09.2010 and on date of search that is 31.10.2014 said proceedings were barred u/s 143(2)) without corresponding valid incriminating material being brought on records for addition in question assumption of jurisdiction u/s 153A is plainly incorrect and unlawful; 1.2 That on the facts and in the circumstances of the case and in law, Id CITA erred in sustaining the order passed by Ld AO u/s 153A/143(3) without appreciating that assessment is not done on basis of valid approval u/s 153D as evident from bare reading of letter dated 28/12/2016 where approval is not given to final order and approval itself seems to be incomplete which makes the entire proceedings as void ab initio. 1.3 That on the facts and in the circumstances of the case and in law, Id CITA erred in sustaining the order passed by Ld AO u/s 153A/143(3) as none ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O u/s 147/143(3) without appreciating that lender who are giving loan to assessee herein, their existence is never called in question as the lenders are nowhere found untraceable; 3. That on the facts and in the circumstances of the case and in law, Id CIT-A erred in not restoring the returned income declared by assessee in its return of income . That the appellant craves leave to add add/alter any/all. grounds of appeal before or at the time of hearing of the appeal. 12. The ld. counsel for the assessee made three fold argument that is (a) validity of reassessment proceedings in absence of any incriminating material, (b) approval given by the JCIT under section 153D is not in accordance with law; and (c) the addition on merit. So far as the validity of the assessment u/s 153A/143(3) in absence of any incriminating material is concerned the ld. counsel drew the attention of the Bench to the decision of the Hon ble Delhi High Court in the case of PCIT vs. M/s SMC Power Generation Ltd., vide ITA 406/2019, order dated 23rd July 2019 and submitted that the Hon ble High Court after considering the decision of the Hon ble Supreme Court in the case of CIT vs Singhad Technical Ed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by filing the requisite documents. The AO has not issued any notice under section 131 to the concerned parties or called for information from them under section 133(6) and merely on the basis of low income of the creditors, has made the addition which has been sustained by the CIT(A). He submitted that once the assessee has discharged the initial onus by filing the primary details, the burden shifts to the AO which he has failed. Therefore, the addition so made by the AO and sustained by the CIT(A) should be deleted. 16. The ld. DR on the other hand heavily relied on the order of the AO. He submitted that the decision of Hon ble Kerala High Court in the case of E.N. Gopakumar (supra) is squarely applicable to the present case and, therefore, the assessment order cannot be held to be null and void. So far as the approval given under section 153D is concerned, the ld. DR submitted that the same is perfectly in order and the decision of the Delhi Bench of the Tribunal in the case of Rishabh Buildwell cannot be applied to the facts of the present case. He submitted that in that case in the approval given under section 153D the JCIT has mentioned that a technical approval is accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the entities from whom it had received share premium. The Hon ble High Court, following the decision of the Hon ble Supreme Court in the case of CIT vs. Singhad Technical Education Society, 397 ITR 344, held that the requirement that the incriminating material to have the correlation to the particular addition sought to be made is a logic that will hold good not only for Section 153C of the Act, but, in relation to Section 153A of the Act as well. The relevant observation of the Hon ble High Court at para 9 and 10 of the order reads as under:- 9. The fact remains that the Revenue itself is not disputing that in respect of the share capital no incriminating documents were found in the search proceedings. The Court s attention has been drawn to the decision of the Supreme Court in CIT v. Singhad Technical Education Society (2017) 397 ITR 344 (SC) where in the context of Section 153C of the Act it was held that the incriminating material which was seized had to pertain to the AY in question. It is further held that documents seized had to establish a co-relation documents wise with the assessment years for which the addition was sought to be made. 10. The requirement that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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