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TMI Blog2021 (6) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... a Shah or his group. No such mentioning in any document found during search at the premises of the assessee is available on record which indicates any nexus with transaction carried out by the appellant in such shares of the Chandini Textiles Engineering Ltd. nor does it suggest accommodative entries ever. Therefore, it is a fact that no documents found during the course of search from the premises of the appellant which could be terms as incriminating in nature as prescribed under Section 153A of the Act as already taken care in SMT. SONAL UDAY VORA AND (VICE-VERSA) [ 2020 (12) TMI 350 - ITAT AHMEDABAD] The Revenue before us has failed to draw our attention to any material which is incriminating in nature found during such course of search at the premises of the assessee and therefore, respectfully relying upon the judgment passed by the Co-ordinate Bench and the issue involved in the common search proceeding in our considered opinion the assessment order passed under Section 153A is beyond the ambit, scope and purview of Section 153A. Keeping in view of the different pronouncement made by different judicial forums including the Jurisdictional High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act was also raised before us on this count that the assessee herein has filed her original return of income on 28.09.2011 and the time limit of issuance of notice under Section 143(2) in the facts and circumstances of the case had already expired. Therefore, in the absence of any incriminating material the complete assessment cannot be reassessed as of main argument advanced by the Ld. AR. In fact, the Ld. AR relied upon the order passed by this Ld. Tribunal dated 08.12.2020 in the matter of DCIT vs. Smt. Sonal Uday Vora in IT(SS)A No. 179/Ahd/2018 and C.O. No. 107/Ahd/2019 for A.Y. 2011-12 in support of his argument further supporting the order passed by the Ld. CIT(A) in favour of the assessee whereby and whereunder the impugned addition to the tune of ₹ 12,41,24,932/- as bogus exempt long-term capital gain on sale of shares of M/s. Chandani Textile Engineering Ltd. made by the Ld. AO has been deleted. 3. On the contrary, the Ld. DR submitted that the evidences found during search revealed that shares of Chandini Textiles Engineering Ltd. were managed to provide exempt long term capital gain. The e-data seized contained one DV sheet ; the data of sale and pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue as to whether in the absence of any incriminating material the completed assessment can be reiterated, we would like to consider the relevant statutory provision on this aspect. The provision of Section 153A deals with the issue in hand states as follows:- 153A. Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 3lst day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y attained finality or wherein the assessment orders have already been passed. When pending assessment abate in case of a search, the AO retains the original jurisdiction as well as the one conferred upon him under Section 153A of the Act for which assessments shall be made for each of six assessment years separately. In case of non-abated assessment i.e. the assessment which are not pending in terms of said second proviso, the assessment therein under Section 153A will be made on the basis of incriminating material found in the course of search and undisclosed income or property discovered in course of search. In the absence of any incriminating material the completed assessment cannot be reassessed to make addition. 8. In this regard, we have considered the judgment relied upon by the Ld. AR in support of his case passed by the Hon ble Delhi High Court in the case of CIT (Central)-III vs. Kabul Chawla reported in [2015] 61 taxmann.com 412 (Delhi) relevant portion whereof is as follows:- On a conspectus of section 153A(1), read with the provisos thereto, and in the light of the law explained in various decisions, the legal position that emerges is as under: Once a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (Para 37] The present appeals concern assessment years 2002-03, 2005-06 and 2006-07. On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed. (Para 38] The revenue's appeals are accordingly dismissed. [Para 40] 9. While discussing with the power to be exercised by the AO in the absence of any incriminating material found during the course of search the Hon ble Court in the said judgment further discussed the following:- 34. The argument of the Revenue that the AO was free to disturb income de hors the incriminating material while making assessment under Section 153A of the Act was specifically rejected by the Court on the ground that it was not borne out from the scheme of the said provision which was in the context of search and/or requisition. The Court also explained the purport of the words assess and rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued in the present case seeking to make the proposed addition of ₹ 11,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition. In the present case, it is an admitted position that no incriminating material was found during the course of search, however, it is on the basis of some material collected by the Assessing Officer much subsequent to the search, that the impugned additions came to be made. 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Neither addition under Section 153A is permissible on the basis of incriminating material found from the place of third person or after completion of search proceeding as also the case made out by the appellant before us. This particular aspect has also been taken care of by the Ld. CIT(A) as we found from the order impugned. He has further relied upon the judgment passed by the jurisdictional High Court in the case of PCIT vs. Sunrise Finlease Pvt. Ltd. reported in 89 taxmann.com 1 (Guj.) and the judgment passed by the Honb ble Tribunal, Calcutta Bench in the case of Krishna Kumar Singhania vs. DCIT, reported in 88 taxmann.com 259(2017)(Kol Trib.). 13. We have further considered the said judgment passed by the jurisdictional High Court in the case of PCIT vs. Sunrise Finlease Pvt. Ltd. reported in 89 taxmann.com 1. The relevant portion whereof is as follows:- Section 153A of the Income-tax Act, 1961 Search and seizure Assessment in case of (Condition precedent) Assessment year 2007-08 Whether where no incriminating evidence against assessee was found during course of search so as to attract provisions of section 153A proceedings, no additions could be made on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to that effect by way of transfer of those materials to the Assessing Officer assessing the such other person. This is the mandate provided in section 153C. In the present case, if at all, the seized documents referred to in is stated to be belonging to assessee herein, then the only legal recourse available to the department is to proceed on the assessee herein in terms of section 153C. In this regard, one would like to place reliance on the recent decision of the Delhi High Court in the case of CIT v. Pinaki Misra Sangeeta Misra [2017] 392 ITR 347, wherein it was held that, no addition could be made on the basis of evidence gathered from extraneous source and on the basis of statement or document received subsequent to search. Hence, the said materials cannot be used in section 153A against the assessee. This opinion is given without going into the merits and veracity of the said seized documents implicating the assessee herein. [Para 10] Hence now the only issue which is left to be addressed is the preliminary issue of whether the addition could be framed under section 153A in respect of a concluded proceeding without the existence of any incriminating materials found in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpleted for the assessment year 2009-10, which was unabated/concluded assessment, on the date of search, deserves to be undisturbed in the absence of any incriminating material found in the course of search and, accordingly, no fresh addition could be made thereon without the existence of any incriminating materials found in the course of search from the premises of the assessee. Since the issue is addressed on preliminary ground of absence of incriminating materials, one refrains to give findings on the merits of the additions for the assessment year 2009-10. Accordingly, the preliminary ground raised by the assessee in this regard is allowed. [Para 10.8] 15. The Ld. Tribunal thus has been pleased to observe that in the absence of any incriminating material found from the premises of the assessee during the course of search, addition made by the AO under Section 153A of the Act in unwarranted and the same deserve to be deleted. 16. After taking into consideration the entire facts we find that the addition has been made based upon the search carried out at the premises of Shirish C. Shah and documents found during such search. Thus, such documents as relied upon by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Subsection (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under subsection (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment failing within the six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A of the Act. Similarly, sub- section (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of the Act is annulled in appeal or any other proceeding. 16. Section 153A bears the heading Assessment in case of search or requisition . It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Here insofar as the impugned addition is concerned, the notice in respect thereof came to be issued on 19.12.2011 seeking an explanation from the assessee. The assessee gave its response by reply dated 21.12.2011 calling upon the Assessing Officer to provide copies of statements recorded on oath of Shri Rohit P. Modi and Smt. Pareshaben K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K, Modi regarding the on-money received, copies of the assessment orders in case of said persons and also requested the Assessing Officer to permit him to cross-examine the said persons. The Assessing Officer issued summons to the said persons, however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to crossexamine the said persons, the Assessing Officer made the addition in question. 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an High Court in the case of Jai Steel (India), Jodhpur v. Assistant Commissioner of Income Tax (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court in the case of Commissioner of income-tax-1 v.Jayaben Ratiiai Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed. It is observed that in case before Hon'ble Gujarat High court, facts of the case were as under: During the course of assessment proceedings, it was noticed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability point itself reject such appeal preferred by the Revenue relying upon the judgments discussed above find no merit in usurping the jurisdiction confirmed by the provision of Section 153A of the Act by the Ld. AO to reassess the year under considerations in the absence of any incriminating materials found during the search proceeding from the premises of the appellant in the unabated assessment proceeding. In the absence of any merit found in the appeal preferred by the Revenue we reject the same by upholding the order passed by the Ld. CIT(A). Since the matter has been decided on the maintainability point itself in favour of the assessee issues on merit become academic, and need not to be addressed. The Revenue s appeal is, thus, dismissed. 20. The C.O. preferred by the assessee challenging the decision of the Ld. AO in relying upon the judgment passed by the Hon ble Mumbai High Court in the case of Shamim M. Bharwani [2016] 69 taxmann.com 65 has no consequences at all, since the appeal preferred by the Revenue stands dismissed. The C.O. is accordingly dismissed. 9. In this regard, we would like to rely upon a particular discussion made by the Ld. CIT(A) is as foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erself has been covered under search seizure action but not a single evidence about the share transaction with Shri Shirish Shah has been found. The company involved in these transactions is still actively traded on the stock exchanges and it has not been barred by SEBI. 12. At the time of hearing of the instant appeal the Ld. AR drew out attention at Page 222 of the Paper Book filed before us which speaks of the statement on oath made by the said Shri Shirish Chandrakant Shah where in reply to the question No. 12 he has deposed that he is basically a share trader and deals with lot of shares every day. Chandani is one of such shares being dealt with by him. Furthermore, it is a transaction in the stock market which is variable. He further reiterated and/or reaffirm that the said transactions in the shares of Chandini Textiles Engineering Ltd. has nothing to do with capital gain as such. We find no cogent document forthcoming from the Revenue controverting such statement made by Shri Shirish Chandrakant Shah. Therefore, nowhere in the material as referred by the Ld. AO in the assessment proceeding practically proves that there was any relation between the said Shri Shirish ..... X X X X Extracts X X X X X X X X Extracts X X X X
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