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TMI Blog2025 (3) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... shed by the husband of the assessee-appellant at the relevant time or within the prescribed period of limitation. We find merit in the contention raised on behalf of the appellant above- said 3 entries pertain to transfer of amounts to the assessee by the proprietorship concern being run by her husband and since the ledger did not indicate any financial implication, said entries could not be said to be unexplained cash credit, attracting the provisions of Section 68 of the Act. Having record to the material placed on record by the assessee-appellant, before the AO as well as CIT(A) and before this Appellate Tribunal, we are of the considered opinion that the impugned assessment framed by the AO and the impugned order passed by CIT(A) deserves to be set aside accordingly, same hereby set aside. Whether statement of the assessee was the only material available against the assessee? - In this regard, suffice it to state that the Assessing Officer nowhere mentioned in the assessment order about any statement made by the assessee u/s 132 of the Act. As mentioned here that subsequently, during pendency of the appeal, on behalf of the appellant an application came to be presented with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain documents as find mentioned in para 4 of the impugned order. 7. Ultimately, the addition was made u/s 68 of the Act on account of the unexplained credits. Arguments & Discussion 8. One of the contentions raised by Ld. AR for the appellant is that since search was carried out only in the case of her husband of the assessee and no search and seizure proceedings u/s 132 of the Act were carried out in the case of the assessee, , the Assessing Officer could not proceed with assessment proceedings u/s 153A of the Act. At the same time, it has been submitted that, at the most, the Assessing Officer could proceed with assessment proceedings u/s 153 C, particularly when no incriminating material was found or seized from the residential premises of the appellant. 9. In support of written submission on this point, Learned AR has extracted some paragraphs of certain decisions. Para 1.2 of the written submission , when reproduced, reads as under:- "1.2 Supporting Case Laws: 1.2.1 In the case of Tirupati Construction Company Vs ITO DB CWP No. 17651/2022, it has been held: "The Rajasthan High Court quashed the reassessment orders issued under Section 148A(d), underscoring the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt appeals, simultaneous searches were carried out at the premises of the other person namely, Shri Deepak Samtani). However, the Tribunal has specifically held that the material recovered from the premises of other persons cannot be used in the hands of the searched person (here the assessee) and for that purpose assessment could be made only under s. 153C or 147. It held as under: "15. Thus, when during the course of search of an assessee any books, document or money, bullion, jewellery etc. is found which relates to a person other than the person searched, then the AO of the person searched shall hand over such books of account, documents, or valuables to the AO of such other person and thereafter, the AO of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, s. 153C is not invoked in the case of the assessee and the assessment is framed under s. 153A. We, respectfully following the above decisions of Hon'ble jurisdictional High Court, hold that during the course of assessment under s. 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether assessment having been made under section 153A and not under section 153C, this being a fatal error in 6/29/24, 7:08 PM 2/14 assessment order which was not curable, order of authorities below was to be set aside Held, yes [Para 26) [In favour of assessee)" 1.2.7 In the case of DCIT vs. BSR Builders Engineers & Contractors in ITA Nos. 732, 733, 734/CHNY/2023, it has been held: "7. After going through the judicial precedents and particularly the decision of Hon'ble Delhi High Court in the case of Anand Kumar Jain, supra, we are of the view that as per the mandate provided by the provisions of section 153C of the Act, the statement made by assessee cannot be a base for making assessment u/s. 153A of the Act on the basis of alleged incriminating material (being the statement recorded u/s.132(4) of the Act) on the basis of which assessment was framed u/s.153A of the Act rather assessment should have been framed u/s 153C of the Act by recording a separate satisfaction. Hence, we find no infirmity in the order of CIT(A) and we affirm the order of CIT(A) on this legal issue." As per provisions of Section 153C of the Act, notice required to be issued to the other person woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d CIT(A) and the impugned assessment. 12. As regards, the ledger seized during search action at the residence i.e. 29, Shindhu Nagar, Bhilwara, and business premises of her husband, Ld. AR for the appellant has submitted that the ledger pertained to M/s Mohan Broker Agency, relating to assessment year 2017-18 i.e. proprietorship concern of her husband, to which she had no concern at all. 13. As per assessment order, the Assessing Officer found from certain documents that the assessee had received a sum of Rs. 50,000/- on 08.05.2014 Rs. 1,90,000/- on 09.05.2014 and Rs. 4,65,000/- on 02.06.2014, from the said proprietorship concern; and that she had also received back a sum of Rs. 2,90,000/-(during FY 2012-13) out of certain amount said to have already been given by her. In her return, the assessee was found to have not disclosed to have received back the said amount of Rs. 8,20,000/-. That is how, the Assessing Officer held that the said amount of Rs. 5,30,000/- i.e. (Rs. 8,20,000/--2,90,000/-) was not explained by the assessee, and the same attracted provisions of Section 68 of the Act. 14. In this regard, Ld. AR has placed reliance on following paragraphs extracted from certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the four appeals are dismissed as academic." 3.3.1 There are umpteen number of cases including the case of CIT vs. Kabul Chawla (2015) 281 CTR (Del) 45/ (2016) 380 ITR 573 (Del), wherein the Hon'ble Delhi High Court after detailed analysis, has summarized legal position, and the relevant extracts therefrom are extracted herein below: "(v) In absence of any incriminating material, the completed assessment can be reiterated, and the abated assessment or reassessment can be made. The word 'assess' in s. 153A is relatable to abated proceedings (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 s. 153A merges into one. Only one assessment shall be made separately for each assessment year 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 s. 153A only on the basis of some incriminating material unearthed during the course of search or req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made without following the provisions of S.s 147, 148 and 151 of the Act and determine the total income of the assessee." 3.3.3. The law on this aspect is no more Res Integra in as much as very recently the Hon'ble Apex Court in the case of PCIT vs. Abhisar Builders (2023) 332 CTR (SC) 385 has held as under: "13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under S. 132 or requisition under S. 1324, the AO assumes the jurisdiction for block assessment under S. 1534: (ii) all pending assessments/reassessments shall stand abated; (iii) in case any incriminating material is found/unearthed, even, in case (of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income takin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's A/R simply brushed aside the issue by saying that this is only related to M/s Mohan Broker Agency (a concern of her husband, Shri Deepak Samtani), but ignored this issue that she is in receipt of substantial amount of Rs. 8,20,000/ which includes her earlier loan given to this concern of Rs. 2,90,000/- during F.Y. 2012-13. There is no disclosure of these transactions in the return of the assessee filed for A.Y. 2015-16 and the unexplained credits of the balance sum of Rs. 5,30,000/- (Rs. 8,20,000 Rs. 2,90,000) is treated as unexplained cash credit u/s 68 and liable to be added to the income of the assessee for A.Y. 2015-16. Further, the undersigned records his satisfaction that the assessee has concealed her income particulars within the purview of provisions of Sec. 271AAB(1A) for A. Y. 2015-16. Notice u/s 271AAB (1A) r.w.s. 274 is being issued. As regard the Exhibit AS-2, Page No. 1 to 14 and AS-6, Page No. 6 which are respectively chain document of subsequent purchase made by the assessee during F.Y. 2015-16 and LIC premium payment receipts has got no direct financial implication in the year under consideration. Hence, the reply of the A/R in this regard is accepted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee-appellant had furnished Income Tax Return in the concerned assessment year, no such step was taken by the Assessing Officer for scrutiny or reassessment. In other words, previously the income disclosed by the husband of the assessee-appellant was not doubted, including the said transactions, which have subsequently been picked up after search and seizure action. There is no explanation from the Department as to why no scrutiny was made regarding the said assessments while processing the ITR furnished by the husband of the assessee-appellant at the relevant time or within the prescribed period of limitation. 24. In the given facts and circumstances, we find merit in the contention raised on behalf of the appellant above- said 3 entries pertain to transfer of amounts to the assessee by the proprietorship concern being run by her husband and since the ledger did not indicate any financial implication, said entries could not be said to be unexplained cash credit, attracting the provisions of Section 68 of the Act. 25. Having record to the material placed on record by the assessee-appellant, before the Assessing Officer as well as Learned CIT(A) and before this Appellate Tribunal, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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