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TMI Blog2020 (10) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... dditions/disallowances cannot be sustained within the pale of Section 153A - See SAUMYA CONSTRUCTION PVT. LTD. [ 2016 (7) TMI 911 - GUJARAT HIGH COURT] - Decided in favour of assessee. - I.T(SS).A. No. 238/Ahd/2018 And I.T(SS).A. No. 238/Ahd/2018 - - - Dated:- 9-10-2020 - Shri Rajpal Yadav, Vice President And Shri Pradip Kumar Kedia, Accountant Member For the Appellant : Shri Ketan H. Shah with Shri Aman K. Shah, A.Rs. For the Responden : Shri O. P. Sharma, CIT.DR Shri L. P. Jain, Sr. D.R. ORDER PER PRADIP KUMAR KEDIA - AM: The captioned appeals have been filed at the instance of the Revenue Assessee against the order of the Commissioner of Income Tax (Appeals)-11, Ahmedabad ( CIT(A) in short), dated 09.07.2018 arising in the assessment order dated 28.12.2016 passed by the Assessing Officer (AO) under s. 143(3) r.w.s. 153A(1)(b) of the Income Tax Act, 1961 (the Act) concerning AY 2014-15. IT(SS)A No. 238/Ahd/2018 (Assessee s appeal) 2. The grounds of appeal raised by assessee read hereunder: 1 The Ld. CIT (A) has erred in law and on facts in partly confirming the assessment order passed by the Assessing Officer u/ s. 143 (3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... morandum of appeal are being admitted for adjudication in terms of Rule 11 of Income Tax (Appellate Tribunal) Rules, 1963 owing to the fact that objections raised in the additional ground are legal in nature and challenges the jurisdiction of the AO for making additions/disallowances and for such objections the relevant facts are stated to be emanating from existing records in the light of decision of the Hon ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [ 1998] 229 ITR 383 (SC). 10. Briefly stated, the assessee in the instant case filed original return of income for AY 2009-10 under s.139 of the Act on 22.06.2010 declaring total income of ₹ 1,26,640/-. Thereafter, a search was conducted in group cases on 04.12.2014 where assessee was also covered in search action. Consequent upon search, a notice under s.153A of the Act was issued on the assessee. In response to the notice under s.153A of the Act, the assessee filed return of income declaring total income at ₹ 1,35,844/- on 30.11.2016. The assessment was thereafter completed under s.143(3) r.w.s. 153A of the Act. While framing the assessment under s.153A of the Act, the AO inter alia observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been closed. The appellant submitted bank account to prove that the transactions were shown in the regular bank account. The AO did not find the explanation satisfactory and made additions of total sales consideration of ₹ 4,11,06,995/-. 5.1 The appellant contended that he is in the business of trading in shares securities. He purchased shares of ₹ 3, 83,99,753/- and sold for ₹ 4,11, 06, 995/-. He has shown profit of ₹ 68,140/- on share trading in the profit loss account. He could not submit evidence from Archi Shares Stock Broker P Ltd, broker through which transaction took place, as it is closed- now-. The-appellant further contended that additions cannot be made because no incriminating evidence was found during the course of search. When no incriminating document is found during the course of search, additions in the assessment made u/ s.153A or 153C of the Act cannot be made. The appellant cited several case laws in support of this contention. The leading judgement on this issue is from jurisdictional Hon'ble High Court of Gujarat, Ahrnedabad in the case of CIT-4 v/ s Saumya Construction P Ltd 387 JTR 529 (Guj). 5.2 Facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the Tribunal. Likewise, the assessee has also moved an appeal before the Tribunal on the impugned action of the CIT(A) whereby partial disallowance was confirmed on aspects of merits. 13.1 When the matter was called for hearing, the learned DR for the Revenue relied upon the action of the AO in applying the provisions of Section 153A of the Act and submitted that the present scheme under s.153A of the Act fully enables the AO to make additions both on account of incriminating material as well as other material noted or found in the course of assessment. It was submitted that once a search is conducted, law enjoins issuance of notice under s.153A of the Act and complete the assessment under s.153A of the Act as per the scheme envisaged in the Act. It was submitted that no fault can be found in the action of AO as wrongly done by the CIT(A). 13.2 The learned AR, on the other hand, defended the action of the CIT(A) on legal point and submitted at the outset that the action of the AO is solely based on the transactions reported in ITS statement which was already available with the department much before search. The action of the AO in making additions has no rational connectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the designated authority. On being called by the Bench to support the allegation of non-application of mind, the learned AR for the assessee simply mooted that the approval was obtained on the same day of communication and as a corollary, it has to be presumed to be without application of mind. We dispose of the objections raised by way of additional ground straightway against the assessee as we see no merit in such line of argument. The quantification of time for application of mind is a difficult task. No presumption can flow adverse to the authorized person only on the ground that the task has been reportedly performed swiftly. The Supervising Officers are normally kept abreast of development in the assessment routinely and are often privy to factual aspects. No cogent evidence direct or circumstantial is before us to hold against the designated authority under s.153D of the Act. We thus see no substance in the plea raised on behalf of the assessee and thus dismiss the additional ground in summarily. 14. We have carefully perused the orders of the authorities below and examined the merits of legal contentions raised on behalf of the assessee while supporting the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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