9911796707
TMI Blog2023 (3) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals)-1 , Guwahati [in short ld. CIT(A) ] dated 22.11.2019 arising out of the assessment orders framed u/s 153A/153D/143(3) of the Act dated 28.12.2018. 2. The Revenue is in appeal before this Tribunal raising the following grounds: Assessment Year : 2011-12 : 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing appeal of the assessee without appreciating the facts of the case. 2. The Ld. CIT (A) has erred in Law and in facts in deleting the additions of Rs. 2,04,00,000/- made u/s 68 when the assessee has failed to bring on record any evidence to prove the credit worthiness and genuineness of the transaction of the creditors M/s. Seema Holding Pvt Ltd and others and Inspector s enquiry report also suggests non-existence of creditor company M/s Seema Holdings Pvt Ltd others. 3. That the Ld. CIT (A) was not justified in deleting the addition stating that in absence of any incriminating seized documents the addition made by the AO in the impugned order is deleted. 4. The Appellant craves the leave to add/modify/alter any of the ground during the course of hearing /pendency of appeal. Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the help of Kolkata based jama-kharchi entry operators and companies in lieu of cash commission. The statement given by Mr. Madan Lal Mittal on 31.08.2016 was retracted within 4 days i.e. on 05.09.2016. An affidavit dated 01.09.2016 was filed retracting the statement given during the course of search stating that the statement given on 31.08.2016 was neither voluntary nor correct and the same is hereby retracted from so far as it pertains to the transaction relating to the share capital and share premium of the company. However, during the course of assessment proceedings ld. AO again referred to the retracted statement and asked the assessee to explain the share capital and share premium received by the assessee during the year. Though the details were filed by the assessee, however ld. AO was not satisfied and without referring to any incriminating material found during the course of search which could indicate or rather prove that the share capital and share premium received by the assessee are bogus or are in the nature of accommodation entry held the credit from M/s. Seema Holding Pvt. Ltd. and others totalling to Rs. 2.04 Cr as unexplained cash credit u/s 68 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2016 accepting that the assessee company takes accommodation entry in the form of bogus share capital and share premium. Immediately after the date of search this person i.e. Mr. Madan Lal Mittal by an affidavit dated 01.09.2016 files a retraction statement before the Revenue authorities on 05.09.2016 thereby stating that the said statement was neither voluntary nor correct and in the said retraction statement which has been captured by ld. CIT(A) in the impugned order from page 38 to 47 contains the reasons of retraction about the statement given for the alleged bogus share capital and share premium thereby stating that the share capital and share premium received by the assessee were genuine. Now, apart from this statement dated 31.08.2016 which was retracted on 05.09.2016, ld. AO while concluding the assessment proceedings and making the addition in the hands of the assessee has not referred to any incriminating material whatsoever pertaining to the alleged share capital and share premium found during the course of search. There was no document found by the search team which could indicate that the assessee has given cash in lieu of the accommodation entry nor any document of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts to Rs. 4,52,40,074 and Masonic Limited amounts to Rs. 20,80,685. Admittedly the said addition has been made without reference to any incriminating material or documents found as a result of the search. The said documents relating to the alleged bank account at HSBC Switzerland were in the possession of the Department prior to the search and the appellant was confronted with them in the course of search proceedings. (iii) AO has alleged that during the Search Seizure operations, assessee accepted the existence of a/c but stated it was in the name of M/s Masonic Ltd., in which his NRI son, Mr. Amitabh Himatsingka held 600 class-B non- voting equity shares. In the same statement, the Assessee had clarified and subsequently asserted, through filing of affidavits, that he was neither a director nor a shareholder in the said companies. (iv) As no incriminating material or documents whatsoever was found during the course of search under section 132 of the Act and since the time limit for issuing notice u/s 143(2) of the Act for A.Y. 2006-07 stood expired as on the date of search i.e., 22/09/2011, the said assessment falls under the category of completed assessment and addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. b) Similar view was taken by the Hon'ble Calcutta High Court in the case of Veerprabhu Marketing Ltd, ITA No. 661/2008 dated 04108/2016. In this case the question of law was framed as follows: 1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is justified in not holding that all assessments were made under section 143(1) of the I. T. Act; therefore, disallowance as per law were not earlier made. As per Section 153(c) of the I. T. Act assessment is to be made afresh and Income to be assessed or reassessed. The meaning of reassessment is that there is no need to resort to Section 147 of the I. T. Act and to consider the disallowance in the assessment to be made under section 153 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eizure did not disclose any incriminating material. In taking the aforesaid view, the learned Tribunal relied upon a judgement of Delhi High Court in the case of Kabul Chawla in ITA No. 78.7/2014 dated 28th August, 2014. The aggrieved Revenue has come up in appeal. Mr. Bagaria, learned Advocate appearing for the assessee, submitted that more or less an identical view was taken by this Bench in ITA 66112008, [CIT vs. Veerprabhu Marketing Ltd] wherein the following views were expressed We are in agreement with the views expressed by the Karnataka High Court that incriminating material is a pre-requisite before power could have been exercised under section153C read with section 153A. In the case before us, the assessing. officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances In that view of the matter, we are unable to admit the appeal. The appeal is, therefore, dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed u/s 153A1143(3) are not based of any incriminating documents/papers seized during the search operation. It would also not to be out of context to mention here that in this case, on the date of search, no assessment for this year was pending. Therefore, keeping in view the ratio decided by the jurisdictional bench of Kolkata tribunal in case referred above and the ratio decided by the Hon'ble Calcutta High Court in the case of Veer Prabhu Marketing Ltd. (Supra) in the light of CBDT's decision of not filing SLP in this 'case in the Supreme Court and keeping in view the Apex Court's decision to dismiss SLP on the similar issue in the case of Pr CIT vs Kurele Paper Mills Pvt. Ltd: SLP (C) No. 34554 of 2015 dt. 07.12.2015, I am of this view that in order to maintain judicial continuity on this issue and respectfully following the ratio decided by the Hon'ble Calcutta High Court in the case of Veer Prabhu Marketing Ltd (Supra), assessee's appeal on ground no 1 is allowed and as such I am not inclined to adjudicate appeal on ground no. 2 on merit. The tribunal is the final fact finding authority. A plausible adjudication on facts has been made. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009. Search was conducted on 29.1.2014. Impugned addition at Rs.2,24,326/- is purely based on information called during the course of search proceedings. In this situation the assessment for Assessment Year 2008-09 is to be treated as non-abated assessments for which additions could be made only on the basis of incriminating material found during the course of search. Therefore, in the given facts and circumstances of the case and respectfully following the decision of the co-ordinate bench referred above, we direct the Ld. A.O to delete the disallowance of Rs.2,24,326/- and accordingly allow Ground No.1 and consequentially Ground No. 2 of the assessee s appeal for 2008-09 raised in IT(SS)No.245/Ind/2017. f) In the case of Sreedeb Commodities Pvt. Ltd., 158, Lenin Sarani, Kolkata 700013 -vs- DCIT, Central Circle-2(1), Kolkata in I.T.(SS).A. Nos. 15/Kol/2022 for Assessment Year : 2007-08 Income Tax Appellate Tribunal A Bench, Kolkata by its order dated 26.07.2022 held as follows : 8. We have duly considered rival contentions and gone through the record carefully. Before adverting to the facts and alleged seized material considered by the ld.AO for making the addition in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. (vi) Insofar as pending assessments are concerned, the jurisdiction to make the 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. ITAT Delhi Bench in the case of DIT Vs. Smt. Shivali Mahajan and others, rendered in ITA No.5585/Del/2015 has considered this aspect in its decision. Thereafter, the Tribunal has specifically held that serial no.(iv) of the above proposition, the Hon'ble Delhi High Court has specifically held that assessment under section 153 A of the Act has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal was filed by the Assessee before the IT AT. The IT AT, inter alia, found substance in the contention of the Assessee that the assessment under Section 153(A) of the Act, in I.T(SS).A. No. 15/Kol/2022 Assessment Year: 2007-08 Sreedeb Commodities Pvt. Ltd. 7 the absence of any incriminating material found during the search on the premises of the Assessee was not sustainable in law. Reliance was placed on the decision of this Court in Commissioner of Income Tax v. Kabul Chawla, [2016] 380ITR 573. 7. A question was posed to the learned counsel for the Revenue whether in the present case anything incriminating has been found when the premises of the Assessee was searched. The answer was in the negative. The entire case against the Assessee was based on what was found during the search of the premises of the AEZ Group. It is thus apparent on the face of it, that the notice to the Assessee under Section 153A of the Act was misconceived since the so- called incriminating material was not found during the search of the Assessee's premises. The Revenue could have proceeded against the Assessee on the basis of the documents discovered under any other provision of law, but certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs.l 1,05,51,000/- 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 appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lhi Court as completion of assessments and this acceptance of return, according to the Hon ble Delhi High Court, could be tinkered with if some incriminating material was found at the premises of the assessee. Though, it is not necessary to recite and recapitulate this proposition in other judgments, suffice to say that in the following judgments, unanimous view is taken by Hon ble High Court as well as ITAT on this point. They concur with the Hon ble High Court. Just for reference, we note the citations as under:- Sl. No. Particulars 1. CIT vs. Kabul Chawla [2015] 61 taxmann.com 412 (Delhi) 2. PCIT vs.- Kurele Paper Mills (P) Ltd. [2017] 81 taxmann.com 82 (Delhi) 3. PCIT vs.- Rashmi Infrastructure Pvt. Ltd. ITAT 99 of 2019, GA No. 1211 of 2019 (Calcutta HC) 4. CIT vs.- Veerprabhu Marketing Ltd. [2016] 73 taxmann.com 149 (Calcutta) 5. PCIT vs.- Salasar Stock Broking Ltd. ITAT No. 264 of 2016, GA No. 1929 of 2016 (Calcutta HC) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liminary ground of the appeal and delete the additions made in the assessment order dt. 30/03/2015 passed u/s 153A r.w.s. 143(3) of the Act. 11. In view of the facts of this case and the settled legal position as discussed above, we hold that the addition of INR 4,52,40,074/- in respect of Gingest Marketing Limited and INR 20,80,685/- in respect of Masonic Limited and the dis-allowance of INR 587/- u/s 14A of the Act are wrong and are directed to be deleted. Since we have already quashed the assessment proceedings carried out u/s 153A r.w.s. 143(3) of the Act dt. 30/03/2015, as bad in law, and all the additions made therein stands deleted, renders the remaining grounds infructuous. In view of our finding as above, we do not deem it necessary to decide other grounds of appeal. 12. In the result, the appeal is partly allowed. 10. Similar view under identical facts and dealing with the same issue was again taken by this Tribunal in the case of ACIT vs. Pritam Beria in I.T.(S.S.)A. Nos. 35 36/KOL/2022 for Assessment Years 2014-15 2015-16 order dated 20.02.2023. 11. We, therefore, under the given facts and circumstances of the case and respectfully following the ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
