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2024 (12) TMI 634

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..... was barred. Established legal position cannot be ignored but to be followed in strict manner and if proceedings which are knowingly, that it is barred by law, initiated by competent authority, hardly be allowed to be confirmed. Addition on the basis that the assessee is not involved in the business of wool - CIT(A) deleted addition - HELD THAT:- CIT(A) clearly held that on verification of the documentary evidences submitted by the appellant, the AO has acknowledged the purchase and sale of shares and mutual funds being duely recorded in the audited financial statements and said trading activity had also been reported by the tax auditor in from 3CD and the Ld. CIT(A), depending on above fact situation, found that it has been duely substantiated by the appellant that the investment in mutual funds referred by the AO in the assessment order has been recorded in its books of accounts. So far question regarding ground no. 4 is concerned, the Ld. CIT(A) passed detailed findings that the true facts of the case of the appellant have been duely verified by the AO himself in the remand report and not further doubt has been raised by him with report of the genuineness of the business activity .....

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..... s, being M/s Bhoomika Enterprises, M/s Shree Chamunda Enterprises, Innovative Tradevision Pvt. Ltd. Aditi Import Export Pvt. Ltd, M/s K.G. Enterprises M/s Manglam Enterprises 6. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in not appreciating that the business of the company is immaterial in the transaction of accommodation entry and verification of genuineness of transaction is more important which was not done by the Ld. CIT(A). 7. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in ignoring the fact that the Assessing Officer vide para 8.4 of the Assessment Order has described the modus operandi of Bajaj Group of companies where in it was specifically mentioned that modus operandi of the assessee is purchase of share at exorbitantly high premium and this fact was not considered by the Ld. CIT(A). 8. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in not appreciating the fact that during the course of search action in the cases of the Bajaj group, connected surveys were conducted at the given office addresses of the shell companies cited at point 5 supra, and it was found that no business activi .....

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..... acts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in ignoring the contention of the assessee that the assessment order passed by the AO is invalid and bad in law as the same was passed in violation of the circular No. 19/2019 issued by CBDT which mandates that no order shall be passed without there being valid Document Identification Number (DIN) 8. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in ignoring the contention of the assessee that the notice issued under section 153A of the Act and consequent reassessment order passed under section 153A of the Act are bad in law as the same has been issued and passed on the non-existent entity. 2. The facts of the case may be summarized as that the assessee was a partnership firm which was incorporated in the year 2007. The main purpose of the firm was to serve the purpose of special purpose vehicle (SPV) for management of needs and transaction of the individual and entities of RNB group. It was involved into investment and trading in equity shares, mutual funds and other financial instruments etc. 3. The Ld. Assessing Officer ( AO ) completed .....

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..... nt person is null and void. He further submitted that assessee filed letter dated 18.03.2016 to ITO, Ward- 45(1) and intimated him about the dissolution of the assessee firm and a search on assessee was conducted on 20.04.2017 and during the search no incriminating document/material was found, which is clearly established from the Panchnama, placed in P.B. page No. 45-46 and 47-48.As per submissions of the Ld. AR, the Ld. AO ignored the material facts regarding intimation of dissolution of the assessee firm and proceeded against non-existent person without finding any incriminating material, which is quite unwarranted by law on the part of the Ld. AO and unsustainable. 7. Foremost question to decide the matter in hand that whether the AY in consideration i.e. 2008-09 is beyond the period of ten years from the end of the assessment year relevant to the year in which search was conducted and proceeding initiating u/s 153A of the Act and consequent assessment order is passed without jurisdiction and barred by limitation? And also that the notice issued u/s 153A of the Act and assessment order is barred by law, as mentioned above, and subsequent amendment brought by Finance Act, 2017 e .....

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..... (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years: Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1. For the purposes of thi .....

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..... ) TMI 268, The Pr. Commissioner of Income Tax...vs Ojjus Medicare Pvt. Ltd., others of which relevant para no. 119 is reproduced below: 119. We thus record our conclusions as follows: A. Prior to the insertion of Sections 153A, 153B and 153C, an assessment in respect of search cases was regulated by Chapter XIVB of the Act, comprising of Sections 158B to 158BI and which embodied the concept of a block assessment. A block assessment in search cases undertaken in terms of the provisions placed in Chapter XIVB was ordained to be undertaken simultaneously and parallelly to a regular assessment. Contrary to the scheme underlying Chapter XIVB, Sections 153A, 153B 25 ITAT and 153C contemplate a merger of regular assessments with those that may be triggered by a search. On a search being undertaken in terms of Section 153A, the jurisdictional AO is enabled to initiate an assessment or reassessment, as the case may be, in respect of the six AYs' immediately preceding the AY relevant to the year of search as also in respect of the relevant assessment year , an expression which stands defined by Explanation 1 to Section 153A. Of equal significance is the introduction of the concept of aba .....

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..... ce point spoken of in Section 153A(1), while defining the point from which the period of the relevant assessment year is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the non- searched person. The shift of the relevant date in the case of a non-searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. E. The reckoning of the six AYs' would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs' would consequently be those which immediately precede the AY relevant to the yea .....

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..... be of the opinion that the ultimate computation of escaped income is likely to exceed INR 50 lakhs. The aforesaid satisfaction would have to be based on an assessment of the material gathered and the potentiality of the same being indicative of the escaped assessment exceeding INR 50 lakhs. The formation of opinion in this respect would have to be based not on mere ipse dixit but reflective of a fair assessment of the quantum of income likely to have escaped assessment as distinct from mere speculation and conjecture. I. We further hold that since the precondition of INR 50 lakhs or more constitutes a sine qua non for initiating action for the extended ten year block, the aforesaid satisfaction and the reasons in support thereof would have to borne out from the Satisfaction Note itself. We are also of the opinion that the precondition of INR 50 lakhs is not liable to be viewed as being the qualifying criteria for each relevant assessment year that may be thrown open and that the said condition would stand satisfied if the escaped income cumulatively or in the aggregate meets the minimum benchmark of INR 50 lakhs. J. The contention of finality and closure addressed with respect to .....

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..... a power to enforce would not lead to the creation of a vested right. As was pertinently observed, the liability to the State exists and operates de hors a consideration of time and in the absence of the statute itself imposing a time limit. The only limitations which are introduced while enacting Sections 153A and 153C was of the period within which the search had been conducted. 11. On the basis of above factual position and judicial pronouncement, the learned AR also submitted that there was no any pending assessment in the case of assessee at the time of framing the assessment order u/s 153A of the Act, so it is a case of completed assessment/unabated assessment. The Ld. AR submitted in this regard that the Hon ble Jurisdiction High Court in the case of Commissioner of Income Tax(Central)-III vs. Kabul Chawala 2015(9) TMI-80 dated 28.08.2015 has laid down that completed assessments can be interfered with the AO while making the assessment order under Section 153A on the basis of some incriminating material unearthed during the course of search and further the above ratio laid down as above confirmed by the Hon ble Supreme Court in the case of PCIT v/s Abhisar buildwell Pvt. Ltd .....

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..... ound no. 4 is concerned, the Ld. CIT(A) passed detailed findings that the true facts of the case of the appellant have been duely verified by the AO himself in the remand report and not further doubt has been raised by him with report of the genuineness of the business activity / operation of appellant in the year under consideration. 14. Regarding the ground nos.- 3,5,6,7 8, the Ld. DR submitted that the Ld. AO has described in relevant para of the assessment order, the modus operandi of Bajaj Group of Companies is to purchase of share at exorbitantly high premium and the Ld. CIT(A) ignored this material fact that the business of the company is immaterial in the transaction of accommodation entry and verification of genuineness of transactions is more important. 15. In our humble opinion, discussion and factual position, there is no any substance in the submission that the Ld. CIT(A) did not decide the appeal on its merits but it clearly exhibited that the First Appellate Authority passed elaborated order after discussing all the points which were necessary to adjudicate. Above all, as we discussed above, the Ld. AO was lacking jurisdiction in proceed further and action of the Ld. .....

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