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TMI Blog2015 (11) TMI 1878X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-03 and there being no assessment related proceedings pending for the said assessment year, the assessment made earlier could not be treated to have abated; the Assessing Officer was not validly vested with the jurisdiction to issue notice under section 153A and make second assessment in pursuance thereof. 2. BECAUSE view which is contrary to the pleading as above, as has been taken by "CIT(A)" is wholly erroneous and illegal too. 3. It was submitted by Learned A. R. of the assessee that these grounds are not pressed. Accordingly, these grounds are rejected as not pressed. 4. Ground No. 3 & 4 are inter-connected, which read as under: 3. BECAUSE on a due consideration of the facts and circumstances of the case, particularly that - (a) the appellant had duly filed the "return", by stating that the "return" filed earlier be treated to be the "return" filed in compliance with the notice under section 153A; (b) the "return" filed in the said manner, even if, the same was belated, constituted "return filed" in compliance with the notice under section 153A; (c) the "return" so filed by the appellant, had duly been taken cognizance of by the Assessing Officer; (d) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) is in the context of assessment u/s 153A and in this judgment, it was held that the requirement of issue and service of notice u/s 143(2) is not applicable in the assessment made in compliance to notice u/s 153A. We also find that in the case of Rajeev Sharma (Supra), the decision of Hon'ble Allahabad High Court is in favour of the assessee but the same is in the context of section 147 of the Act. We have already considered both these judgments in a case and have decided the issue against the assessee by following the judgment of Hon'ble Delhi High Court and the judgment of Hon'ble Allahabad High Court in the case of Rajeev Sharma (Supra) was not followed because this judgment is in the context of section 148 assessment and not assessment u/s 153A. No other judgment has been brought to our notice by Learned A. R. of the assessee which is in the favour of the assessee and is in the context of assessment u/s 153A of the Act. Therefore, in the present case also, we follow the judgment of Hon'ble Delhi High Court and decide the issue against the assessee. Accordingly, ground No. 3 & 4 of the assessee are also rejected. 8. Ground No. 5 is as under: 5. BECAUSE in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) has erred in law and on facts in upholding the addition of sums aggregating Rs. 20,00,000/- as had been borrowed from various persons as per particulars given below: Sl.No. Name of the lenders Amount Date of (Rs.) borrowing 1. Smat Rubber P. Ltd. 5,00,000 19/07/2000 2. Raj Kumar Agarwal 2,00,000 19/07/2000 3. Chandra Sekhar Agarwal 2,00,000 19/07/2000 4. Anil Kumar Khandelwal 1,50,000 19/07/2000 5. Khandelwal Trading Co. 2,50,000 19/07/2000 6. Saloni Garg 7,00,000 20/07/2000 Total 20,00,000 7. Because CIT(A) has erred in making observations to the effect that the onus of proving the identity, creditworthiness and genuineness of the borrowings (as made from the above mentioned persons) that had lied upon the appellant remained undischarged, in view of the principles laid down in various case laws (as have been specifically referred to in Para 5.4 of the impugned appellate order). 8. BECAUSE the case laws, particularly in the case of Shreelekha Banerjee was in favour of the appellant and the affirmation of the addition, based on such case laws, is wholly vitiated. 9. BECAUSE looking to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the amount of Rs. 2.40 Lacs brought to tax by him as notional interest on loan given by the assessee of Rs. 20 Lacs. We are aware that it is held by learned CIT (A) that this notional interest of Rs. 2.40 Lacs cannot be brought to tax but this is immaterial because if the assessee actually received interest on this loan given by the assessee at any point of time, the same can be taxed only after reducing deduction allowed by the A.O. himself on account of interest paid by the assessee on this very loan. Having allowed deduction on account of interest on this very loan of Rs. 20 Lacs, the A.O. cannot say that the loan is unexplained and add the same u/s 68 because the A.O. cannot blow hot and cold together. We, therefore, delete this addition. 14. Ground No. 11 is as under: "11. BECAUSE the "CIT(A)" has erred in law and on facts in sustaining the addition of Rs. 15,000/- in the hands of the appellant, on account of alleged ''low withdrawals" for meeting household expenses." 15. It was submitted by Learned A. R. of the assessee that the Assessing Officer has held in the assessment order that for a family of 7 members, house hold withdrawal shown by the assessee and his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant had duly filed the "return", by stating that the "return" filed earlier be treated to be the "return" filed in compliance with the notice under section 153A; (b) the "return" filed in the said manner, even if, the same was belated, constituted "return filed" in compliance with the notice under section 153A; (c) the "return" so filed by the appellant, had duly been taken cognizance of by the Assessing Officer; (d) after the "return" had been filed in the aforesaid manner, the appellant was not served with any questionnaire nor any notice under section 143(2); the "CIT(A)" should have held that ACIT had lost jurisdiction to make assessment in pursuance of notice under section 153A and accordingly the assessment order dated 31/12/2008 was void abinitio. 4. BECAUSE various case laws as have been referred to and relied upon by the "C1T(A)" in negating the appellant's contention as has been reiterated in Ground No.2 heareinfore are distinguishable on facts, having no application in the instant case. 5. BECAUSE in any case, no incriminating material having been found during the course of search & seizure action under section 132(1) that took place on 17th Octo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment. Respectfully following this judgment of Hon'ble Allahabad High Court, we hold that there is no merit in ground No. 5 and the same is rejected." 22. Accordingly grounds Nos. 1 to 5 are rejected. 23. Ground Nos. 6 to 9 are inter-connected, which read as under: 6. BECAUSE the authorities below have erred in law and on facts in making/sustaining addition of Rs. 26,22,482/- made up of (a) Value of Indian Millennium Deposit (IMD) of 50,000 US$ (as worked out by the A.O. on 19.06.2001 which is the date of endorsement on "IMD" and delivered by State Bank of India. 24,50,918 (b) Undisclosed expenditure as worked out at the rate of 7% of above. 2,45,091 26,96,009 to the income of the appellant, on the ground that identity of the donor as also the circumstances in which gift have been made, remained unproved. 7. BECAUSE the gift of "IMD" had been executed by the donor, through State Bank of India, a nominated agency under the scheme formulated by the Government of India and the issues raised by the Authorities below, were wholly extraneous to the said scheme. 8. BECAUSE the appellant enjoyed immunity from all such enquiries as have been ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were transferred in favour of the assessee by Sri K.C. Kapadia. 4. As a result of transfers of such bonds in favour of the assessee, the assessee received the maturity amount from the SBI and credited in her account. Letter of the Chief Manager, SBI, NRI Branch, Mumbai, dt. 28th Feb., 2006 confirms the transfers by way of gift to the assessee by Sri K.C. Kapadia. 5. Undisputedly, in purchasing the four bonds the investments were made on 1st Oct., 1998 and not in the year under consideration and in the year under consideration, namely, in the asst. yr. 2004- 05 only the maturity amounts of the bond were received. 6. Thus, so far as the year under consideration is concerned, the source and nature of deposit are fully established and the query with regard to the investment made in purchasing the bonds could be made only in the financial year 1998-99 relevant to the asst. yr. 1999-2000 and not in the year under consideration. 7. After the amendment in Section 5(iiie) of the GT Act by the Finance (No.2) Act of 1991, gift could be made to the person other than relatives also. The omission of the word 'relative' in the section shows that the amendment was made to prom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year involved before Hon'ble Allahabad High Court was 2004-05. Under these facts, it was held by Hon'ble Allahabad High Court that there is no reason to doubt the genuineness of gift by Shri K. C. Kapadia to the assessee and therefore, the assessee was able to establish the nature and source of the money because the same were the maturity proceeds of four bonds purchased by Shri K. C. Kapadia on 1st October 1998 and therefore, no addition can be made in assessment year 2004-05. In the present case also, India Millennium Bond of US$ 50,000 were gifted by Jayesh Arvind Bhai Patel of Dubai to the assessee as gift letter dated 18/06/2001. This IMD Bond Certificate was issued by SBI on 05/01/2001 in US$. This date falls in previous year 2000-2001 relevant to assessment year 2001-02 and therefore, as per this judgment of Hon'ble Allahabad High Court cited by Learned A. R. of the assessee, no addition can be made in the present assessment year being assessment year 2002-03. Hence, respectfully following this judgment of Hon'ble Allahabad High Court, this addition regarding India Millennium Bond is deleted and as a result, the second addition of Rs. 17,564/- being alleged u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ground Nos. 1 to 5 are as under: "1. BECAUSE on the facts and circumstances of the case, particularly that - (e) the appellant could not have been treated to be the person subjected to search under section 132(1); and (f) in any case, the appellant stood assessed for the assessment year 2002-03 and there being no assessment related proceedings pending for the said assessment year, the assessment made earlier could not be treated to have abated; the Assessing Officer was not validly vested with the jurisdiction to issue notice under section 153A and make second assessment in pursuance thereof. 2. BECAUSE view which is contrary to the pleading as above, as has been taken by "CIT(A)" is wholly erroneous and illegal too. 3. BECAUSE on a due consideration of the facts and circumstances of the case, particularly that - (e) the appellant had duly filed the "return", by stating that the "return" filed earlier be treated to be the "return" filed in compliance with the notice under section 153A; (f) the "return" filed in the said manner, even if, the same was belated, constituted "return filed" in compliance with the notice under section 153A; (g) the "return" so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Smt. Shaila Agarwal. In the case of Smt. Shaila Agarwal, this issue was decided against the assessee and therefore, on similar line, in the present case also, this issue is decided against the assessee. For the purpose of ready reference, relevant Para from the tribunal order in the case of Smt. Shaila Agarwal is reproduced below "14. We have considered the rival submissions. We find that it was held by Hon'ble Allahabad High Court in the case of Raj Kumar Arora (supra) that the reasons given by the Tribunal that no material was found during search, cannot be sustained since it is held by Hon'ble Allahabad High Court that the Assessing Officer has the power to reassess the returns of the assessee not only for the undisclosed income which was found during search but also with regard to the material that was available at the time of original assessment. Respectfully following this judgment of Hon'ble Allahabad High Court, we hold that there is no merit in ground No. 5 and the same is rejected." 34. Accordingly grounds Nos. 1 to 5 are rejected. 35. Grounds No. 6 to 9 are inter-connected, which read as under: "6. BECAUSE the authorities below, on the basis of loose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y cheque and of Rs. 6.25 lac has been made in cash. The Assessing Officer held that addition is to be made for the cash payment of Rs. 6.25 lac and regarding cheque payment of Rs. 17.25 lac, it was held by Assessing Officer that the payment of Rs. 10 lac by cheque is verifiable from the bank account of M/s Vrindavan Tower P. Ltd. but the balance payment of Rs. 7.25 lac claimed to be made by the assessee by cheque is not verifiable. The Assessing Officer made addition of total amount of Rs. 13.50 lac being Rs. 6.25 lac on account of cash payment and Rs. 7.25 lac on account of unverifiable cheque. 38. When the assessee carried the matter in appeal before CIT(A), the CIT(A) has deleted the addition of Rs. 7.25 lac paid by way of cheque but confirmed the addition of Rs. 6.25 lac on account of cash payment. Now the assessee is in further appeal before us for the addition of Rs. 6.25 lac upheld by CIT(A). 39. We find that it is noted by CIT(A) in Para 7.3 of his order that this was the submission before the Assessing Officer that cash payment to Shri Ashok Dayal was made out of cash available with family members. Before CIT(A), the assessee has submitted copy of cash book of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed D. R. of the Revenue supported the order of learned CIT(A). 43. We have considered the rival submissions. We find that the assessee has shown house hold withdrawal of Rs. 4.90 lacs. The same was estimated by Assessing Officer at Rs. 6.00 lac but CIT(A) has although agreed with the estimate of the A.O. about household expenses of Rs. 6.00 Lacs, but he confirmed the addition of only Rs. 15,000/- by saying that the family has many earning and tax paying members. But neither the Assessing Officer nor the CIT(A) has given any basis for holding that the house hold withdrawal shown by the assessee is not sufficient. Hence, we delete this addition of Rs. 20,000/-. This ground is allowed. 44. Now we take up the appeal of the Revenue for assessment year 2005-06 in I.T.A. No.535/Lkw/2013. 45. Ground No. 1 is as under: "45. That the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 4,64,310/- on account of receipts from guest house without looking into the merits as well as detailed discussion in the assessment order and categorical finding made by the AO therein." 46. Learned D. R. of the Revenue supported the order of Assessing Officer whereas Learned A. R. o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made by cheque by Smt. Laxmi Agarwal (vide cheque dated 14/07/2005). The CIT(A) held that the Assessing Officer may verify the same and after verification, delete the addition of Rs. 7.25 lacs. The objection of Learned D. R. of the Revenue was that it amounts to set aside, which is not within the power of CIT(A). We find force in the submissions of Learned D. R. of the Revenue that CIT(A) should not have given such direction to Assessing Officer for making verification and deleting the addition and instead of this, he should have obtained remand report and should have decided the issue. But considering this fact that already more than 2½ years have passed after the date of order of CIT(A) being 05/03/2013, no useful purpose will be served by obtaining remand report from the Assessing Officer by Tribunal or restoring the matter back to CIT(A) for fresh decision after obtaining remand report from the Assessing Officer and therefore, under these facts, we hold that the Assessing Officer should verify this contention of the assessee that this payment has apparently been made by cheque by Smt. Laxmi Agarwal vide cheque dated 14/07/2005 and if this contention is found correct th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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