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The Tax Publishers2018 TaxPub(DT) 6560 (Mum-Trib) Skylark Build v. Asstt. CIT INCOME TAX ACT, 1961 --Appeal [Tribunal]--Additional ground Admissibility--Proceedings under section 153C--Where statutory provisions as well as procedural provisions were not followed while issuing notice under section 153C same being legal as well as jurisdictional issue additional ground raised by assessee was to be admitted.--After search and seizure of 'searched person' assessee raised additional ground before Tribunal stating that assessment framed by AO and confirmed by CIT(A) was against statutory provisions and without complying with procedures prescribed under section 153C and as such assessment being bad in law and deserved to be quashed and contended that it was a legal issue. *Held:* Assessee had raised jurisdictional issue/legal issue with respect to issuance of notice under section 153C without complying with statutory provisions and procedures prescribed under section 153C.Additional ground/legal ground raised by assessee was admitted. Income Tax Act, 1961 Section 153C *Relied:National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC) : 1998 TaxPub(DT) 0342 (SC), DIT (IT) v. Ingram Micro (India) Exports (P) Ltd. (2015) 234 Taxman 464 (Bom) : 2015 TaxPub(DT) 4338 (Bom-HC) and CIT v. Singhad Technical Education Society Civil Appeal Nos. 11081 to 11083 of 2017 order dt. 29-8-2017 : 2017 TaxPub(DT) 3941 (SC). REFERRED :* Manish Maheshwari v. Asstt. CIT (2007) 208 CTR (SC) 97 : (2007) 289 ITR 341 (SC) : 2007 TaxPub(DT) 1020 (SC) and ITO v. Jasjit Singh, C.O. Nos. 138 to 142/Del/2014 decided on 23-9-2014. FAVOUR : In assessee's favour. A.Y. : 2007-08 to 2012-13 INCOME TAX ACT, 1961 --Search and seizure--Proceedings under section 153CCondition precedent--Satisfaction of AO--Condition precedent before issuing notice under section 153C satisfaction of AO of searched person was to be complied with though 'AO\ of 'searched person' and 'other person was one and same.--Search and seizure operation was carried out in the case of one 'S' who was partner in assessee-firm as per revenue, various incriminating documents found and seized. As per assessee, one document, neither incriminating nor belonging to assessee was found. On the basis of said document, AO issued notice under section 153C. It was to be noted that AO of 'searched person' and 'other person' was same. *Held:* Recording of requisite satisfaction in the case of a searched person a sine qua non for assuming jurisdiction for the issue of notice under section 153C even if AO of searched person and assessee were same. It is abundantly clear from the records in the case of the searched person that there was no requisite satisfaction granting AO jurisdiction for issuing notice to assessee under section 153C. Income Tax Act, 1961 Section 153C *Relied:ARN Infrastructure India Ltd. v. Asstt. CIT (2017) 394 ITR 569 (Del) : 2017 TaxPub(DT) 1216 (Del-HC), CIT v. Singhad Technical Education Society. Civil Appeal Nos. 11081 to 11083 of 2017 order dt. 29-8-2017 : 2017 TaxPub(DT) 3941 (SC), DIT(IT) v. Ingram Micro (India) Exports (P) Ltd. (2015) 234 Taxman 464 (Bom) : 2015 TaxPub(DT) 4338 (Bom-HC), Manish Maheshwari v. Asstt. CIT (2007) 289 ITR 341 (SC) : 2007 TaxPub(DT) 1020 (SC), ITO v. Jasjit Singh, C.O. Nos. 138 to 142/Del/2014 decided on 23-9-2014, CIT v. Singhad Technical Education Society. Civil Appeal Nos. 11081 to 11083 of 2017 order dt. 29-8-2017 : 2017 TaxPub(DT) 3941 (SC), Pepsi Foods (P.) Ltd. v. Asstt. CIT (2015) 231 Taxman 58 (Delhi) : 2014 TaxPub(DT) 3687 (Del-HC), CIT v. Arpit Land (P.) Ltd. (2017) 393 ITR 276 (Bom.) : 2017 TaxPub(DT) 0465 (Bom-HC), order dt. 7-2-2017, Vijaybhai N. Chandrani v. Asstt. CIT (2011) 333 ITR 436 (Guj.) : 2011 TaxPub(DT) 0202 (Guj-HC), CIT v. Vijaybhai N. Chandrani (2013) 357 ITR 713 (SC) : 2013 TaxPub(DT) 2196 (SC), CIT v. Sinhgad Technical Education Society (2015) 378 ITR 84 (Bom.) : 2015 TaxPub(DT) 1464 (Bom-HC), REFERRED :* Dy. CIT v. Satkar Roadlines (P.) Ltd. (2015) 155 ITD 501 (Del) : 2015 TaxPub(DT) 3559 (Del-Trib), Ideal Appliances Co. (P.) Ltd. v. DCIT [ITA Nos. 173 to 177 (Mum.) of 2015, dt. 31-12-2015] and CIT v. RRJ Securities Ltd. (2016) 380 ITR 612 (Del) : 2015 TaxPub(DT) 4278 (Del-HC). FAVOUR : In assessee's favour. A.Y. : 2007-08 to 2012-13 INCOME TAX ACT, 1961 --Business expenditure--AllowabilityAlleged bogus purchases----No addition for alleged hawala purchases could be made where neither sellers were examined nor statement/affidavit filed before sales tax department and assessment order of sales tax department was taken into consideration and holding was revealed regarding alleged hawala transaction of purchases thus addition made was to be deleted.--While passing assessment order, AO has held certain purchases to be bogus and through hawala transactions and also no incriminating document(s) was seized. In respect of additions made on account of those purchases, where confirmation could not be filed during the course of assessment proceedings, CIT(A) have deleted additions.Held: Approach of AO in neither making any enquiry in respect of parties nor providing any copy of statement/affidavit filed by these parties before Sales Tax Department, additions made on account alleged hawala purchases be treated as bad in law and against principles of natural justice. Copy of assessment order passed by Sales tax Authorities were also filed before CIT(A). It was also pointed out while arguing the matter on legal issue that during the course of search, no incriminating documents were found and hence, no additions could be made addition made on account of alleged hawala purchases was deserved to be deleted. Income Tax Act, 1961 Section 37(1) *Relied:*CIT v. Singhad Technical Education Society civil appeal Nos. 11081 to 11083 of 2017, order dt. 298-2017 : 207 TaxPub(DT) 3941 (SC). *REFERRED :* FAVOUR : In assessee's favour. A.Y. : 2007-08 to 2012-13 INCOME TAX ACT, 1961 --Capital gains--Transaction not regarded as transferApplicability of sections 45 and 112 --Conversion of firm into company--Where a firm was succeeded into company under Chapter IX of Companies Act and assets and liability of firm was taken over by company in whole and interest of partners was not reduced nor any separate amount was given to partners on account of goodwill or revaluation of assets provision of section 45 read with section 112 would not be applied.--Firm was converted into a company under Chapter-IX of Companies Act, 1956. Plea was raised by assessee that all conditions prescribed under section 47(xiii) have been fulfilled. So far as, vestng of properties of a partnership firm in a company under Part ix of Companies Act make it liable for capital gains tax under section 45 of Act was concerned, CIT(A) that condition of section 45(4) was not satisfied and also there was no distribution of or redduction in share of partners nor revaluation of assets was distributed amongst partners by company.Held: Provisions of sections 45 read with section 112 was not attracted as asset and liability of erstwhile firm vested in company as a whole and interest of partners was not reduced in any way nor any amount was paid separately to the firm or to partners on account of goodwill or on account of revaluation of assets. Income Tax Act, 1961 Section 47 Income Tax Act, 1961 Section 45 Income Tax Act, 1961 112 *Followed:*CIT v. Texspin Engg. & Mfg. (2003) 263 ITR 345 (Bom) : 2003 Tax Pub(DT0 1082 (bom-HC). *Relied:Sunil Sidharthbhai v. CIT (1985) 156 ITR 509 (SC) : 1985 TaxPub(DT) 1358 (SC), Vali Pattabhiram Rao v. Shri Ramanuja Ginning & Rice Factory (Purchase) Ltd. (1986) 60 CompCas 568 (AP) : 1986 TaxPub(CL) 0206 (AP), Vali Pattabhiram Rao v. Shri Ramanuja Ginning & Rice Factory (Purchase) Ltd. (1986) 60 CompCas 568 (AP) : 1986 TaxPub(CL) 0206 (AP), ITO v. Gulabdas Printers [IT Appeal No. 1931 (Ahd.) of 2007, dt. 5-2-2010] : 2010 TaxPub(DT) 1462 (Ahd-Trib) and Vishal Containers (P.) Ltd. v. ACIT [IT Appeal No. 409 (Ahd.) of 2009, dt. 7-10-2011] and Krishna Electrical Industries v. Dy. CIT (2004) 4 SOT 143 (Del-Trib) : 2004 TaxPub(DT) 0651 (Del-Trib). REFERRED :* FAVOUR : In assessee's favour. A.Y. : 2007-08 to 2012-13 INCOME TAX ACT, 1961 --Search and seizure--Assessment under section 153AComputation of undisclosed income--Retraction of statement--Addition for alleged WIP could not be made only on the basis of statement which was retracted later on and no other evidence was gathered by AO to add undisclosed income.--A search and seizure operation was carried out in the case of 'S' who was partner of assessee-firm and certain addition was made by AO on the basis of alleged statements which were retracted by 'S' and there was no further material either found or seized during course of search or brought on record by AO during assessment proceedings indicating that there was undisclosed income. *Held:* It was quite clear that there was a retraction of earlier statement. CIT(A) as well as this Tribunal did not find any other material except the statement and letter of assessee to corroborate addition. It is an established position of law that no addition can be made simply on the basis of statement and it had to be corroborated with material available on record. This issue had been emphasized by CBDT Instruction dated 10-3-2003 mentioned in the impugned order and subsequent clarification issued from time to time that addition in search and survey cases should be based on evidences gathered during such actions. Income Tax Act, 1961 Section 153A Income Tax Act, 1961 Section 132(1) Income Tax Act, 1961 Section 132(4) *Followed:Paul Mathews & Sons v. CIT (2003) 263 ITR 101 (Ker.) : 2003 TaxPub(DT) 1040 (Ker-HC), CIT v. S. Kadar Khan Sons (2008) 300 ITR 157 (Mad.) : 2008 TaxPub(DT) 0790 (Mad-HC), Dy. CIT v. Prem Sons (2010) 130 TTJ 159 (Mum.) : 2010 TaxPub(DT) 0300 (Mum-Trib) and CIT v. Dhingra Metal Works (2011) 196 Taxman 488 (Delhi) : 2010 TaxPub(DT) 2293 (Del-HC). REFERRED :* FAVOUR : In assesses favour. A.Y. : 2007-08 to 2012-13 INCOME TAX ACT, 1961 --Business expenditure--AllowabilityAlleged bogus purchases already added in firm's hands----Where alleged bogus purchases transactions and consequent addition was made in the hands of firm i.e., M/s 'SB' hence, no separate addition was required to be made in assessee's hands as it would amount to transaction of double addition.--Where addition was made in firm's hands while completing assessment under section 143(3) read with section 153C on account of alleged bogus purchases. Assessee claimed that addition in the hands of partnership firm were made on the basis of roving enquiry made by AO and consequent order passed under section 143(3) read with section 153C without finding any incriminating documents. CIT(A) deleted the addition. *Held:* Alleged bogus purchases transactions and consequent addition was made in the hands of firm, i.e., M/s. SB. Thus, no separate addition was required to be made on the same transactions in the hands of assessee as it will amount to double taxation on the same income. It was observed that no material was brought on record by AO that any cash had exchange hands in the transactions of alleged bogus purchase and misappropriated by partners. Before this Tribunal, no contrary material was brought on record by Revenue contradicting the finding of CIT(A). Income Tax Act, 1961 Section 37(1) Umacharan Shaw & Bros. v. CIT (1959) 37 ITR 271 (SC), CIT v. K. Mahim Udma (2000) 242 ITR 133 (Ker.) : 2000 TaxPub(DT) 0944 (Ker-HC), Dhakeshwari Cotton Mills Ltd. (1954) 26 ITR 775 (SC) : 1954 TaxPub(DT) 0123 (SC), CIT v. Anupam Kapoor (2008) 299 ITR 179 (P &H) : 2008 TaxPub(DT) 0500 (P&H-HC), CIT v. Metro Construction Co. (2013) 36 CCH 249 (Mum.) : 2014 TaxPub(DT) 0617 (Mum-Trib) and Smt. Sunita Dhadda v. Dy. CIT (2012) 148 TTJ 719 (JP-Trib) : 2012 TaxPub(DT) 2819 (JP-Trib). *REFERRED :* Umacharan Shaw & Bros. v. CIT (1959) 37 ITR 271 (SC), CIT v. K. Mahim Udma (2000) 242 ITR 133 (Ker.) : 2000 TaxPub(DT) 0944 (Ker-HC), Dhakeshwari Cotton Mills Ltd. (1954) 26 ITR 775 (SC) : 1954 TaxPub(DT) 0123 (SC), CIT v. Anupam Kapoor (2008) 299 ITR 179 (P &H) : 2008 TaxPub(DT) 0500 (P&H-HC), CIT v. Metro Construction Co. (2013) 36 CCH 249 (Mum.) : 2014 TaxPub(DT) 0617 (Mum-Trib) and Smt. Sunita Dhadda v. Dy. CIT (2012) 148 TTJ 719 (JP-Trib) : 2012 TaxPub(DT) 2819 (JP-Trib). FAVOUR : In assessee's favour. A.Y. : 2007-08 to 2012-13 INCOME TAX ACT, 1961 --Search and seizure--Assessment under section 153ANo incriminating material found during search----Where addition was made on the inferences that assessee was a member of AOP though AOP came into existence much before assessee, addition could not be sustained as no incriminating material was found during search.--AO assessed certain amount in the hands of assessee as income from other source and added on the ground that cash was generated out of bogus purchases booked by partnership firm M/s. SB and/or AOP firm M/s. OR, wherein according to AO, assessee was a member having 43% share. The stand of assessee before this Tribunal was that present assessee was not a member of AOP firm M/s. OR as alleged by AO. It was also pleaded that during the course of search at the residential premises, no incriminating documents were found in respect of assessee, except cash and jewellery. *Held:* In the absence of any incriminating material found during the search, no addition could be sustained. Income Tax Act, 1961 Section 153A *Followed:*CIT v. Singhad Technical Education Society. Civil Appeal Nos. 11081 to 11083 of 2017 order dt. 29-8-2017 : 2017 TaxPub(DT) 3941 (SC). *Relied:*Umacharan Shaw & Bros. v. CIT (1959) 37 ITR 271 (SC), CIT v. K. Mahim Udma (2000) 242 ITR 133 (Ker.) : 2000 TaxPub(DT) 0944 (Ker-HC), Dhakeshwari Cotton Mills Ltd. (1954) 26 ITR 775 (SC) : 1954 TaxPub(DT) 0123 (SC), CIT v. Anupam Kapoor (2008) 299 ITR 179 (Punj. & Har.) : 2008 TaxPub(DT) 0500 (P&H-HC), CIT v. Metro Construction Co. (2013) 36 CCH 249 (Mum.) : 2014 TaxPub(DT) 0617 (Mum-Trib), Smt. Sunita Dhadda v. Dy. CIT (2012) 148 TTJ 719 (JP) : 2012 TaxPub(DT) 2819 (Jp-Trib). SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2018 TaxPub(DT) 6560 (Mum-Trib)

Skylark Build v. Asstt. CIT

INCOME TAX ACT, 1961

--Appeal [Tribunal]--Additional ground Admissibility--Proceedings under section 153C--Where statutory provisions as well as procedural provisions were not followed while issuing notice under section 153C same being legal as well as jurisdictional issue additional ground raised by assessee was to be admitted.--After search and seizure of 'searched person' assessee raised additional ground before Tribunal stating that assessment framed by AO and confirmed by CIT(A) was against statutory provisions and without complying with procedures prescribed under section 153C and as such assessment being bad in law and deserved to be quashed and contended that it was a legal issue. Held: Assessee had raised jurisdictional issue/legal issue with respect to issuance of notice under section 153C without complying with statutory provisions and procedures prescribed under section 153C.Additional ground/legal ground raised by assessee was admitted.

Income Tax Act, 1961 Section 153C

Relied:National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC) : 1998 TaxPub(DT) 0342 (SC), DIT (IT) v. Ingram Micro (India) Exports (P) Ltd. (2015) 234 Taxman 464 (Bom) : 2015 TaxPub(DT) 4338 (Bom-HC) and CIT v. Singhad Technical Education Society Civil Appeal Nos. 11081 to 11083 of 2017 order dt. 29-8-2017 : 2017 TaxPub(DT) 3941 (SC).

REFERRED : Manish Maheshwari v. Asstt. CIT (2007) 208 CTR (SC) 97 : (2007) 289 ITR 341 (SC) : 2007 TaxPub(DT) 1020 (SC) and ITO v. Jasjit Singh, C.O. Nos. 138 to 142/Del/2014 decided on 23-9-2014.

FAVOUR : In assessee's favour.

A.Y. : 2007-08 to 2012-13

INCOME TAX ACT, 1961

--Search and seizure--Proceedings under section 153CCondition precedent--Satisfaction of AO--Condition precedent before issuing notice under section 153C satisfaction of AO of searched person was to be complied with though 'AO\ of 'searched person' and 'other person was one and same.--Search and seizure operation was carried out in the case of one 'S' who was partner in assessee-firm as per revenue, various incriminating documents found and seized. As per assessee, one document, neither incriminating nor belonging to assessee was found. On the basis of said document, AO issued notice under section 153C. It was to be noted that AO of 'searched person' and 'other person' was same. Held: Recording of requisite satisfaction in the case of a searched person a sine qua non for assuming jurisdiction for the issue of notice under section 153C even if AO of searched person and assessee were same. It is abundantly clear from the records in the case of the searched person that there was no requisite satisfaction granting AO jurisdiction for issuing notice to assessee under section 153C.

Income Tax Act, 1961 Section 153C

Relied:ARN Infrastructure India Ltd. v. Asstt. CIT (2017) 394 ITR 569 (Del) : 2017 TaxPub(DT) 1216 (Del-HC), CIT v. Singhad Technical Education Society. Civil Appeal Nos. 11081 to 11083 of 2017 order dt. 29-8-2017 : 2017 TaxPub(DT) 3941 (SC), DIT(IT) v. Ingram Micro (India) Exports (P) Ltd. (2015) 234 Taxman 464 (Bom) : 2015 TaxPub(DT) 4338 (Bom-HC), Manish Maheshwari v. Asstt. CIT (2007) 289 ITR 341 (SC) : 2007 TaxPub(DT) 1020 (SC), ITO v. Jasjit Singh, C.O. Nos. 138 to 142/Del/2014 decided on 23-9-2014, CIT v. Singhad Technical Education Society. Civil Appeal Nos. 11081 to 11083 of 2017 order dt. 29-8-2017 : 2017 TaxPub(DT) 3941 (SC), Pepsi Foods (P.) Ltd. v. Asstt. CIT (2015) 231 Taxman 58 (Delhi) : 2014 TaxPub(DT) 3687 (Del-HC), CIT v. Arpit Land (P.) Ltd. (2017) 393 ITR 276 (Bom.) : 2017 TaxPub(DT) 0465 (Bom-HC), order dt. 7-2-2017, Vijaybhai N. Chandrani v. Asstt. CIT (2011) 333 ITR 436 (Guj.) : 2011 TaxPub(DT) 0202 (Guj-HC), CIT v. Vijaybhai N. Chandrani (2013) 357 ITR 713 (SC) : 2013 TaxPub(DT) 2196 (SC), CIT v. Sinhgad Technical Education Society (2015) 378 ITR 84 (Bom.) : 2015 TaxPub(DT) 1464 (Bom-HC),

REFERRED : Dy. CIT v. Satkar Roadlines (P.) Ltd. (2015) 155 ITD 501 (Del) : 2015 TaxPub(DT) 3559 (Del-Trib), Ideal Appliances Co. (P.) Ltd. v. DCIT [ITA Nos. 173 to 177 (Mum.) of 2015, dt. 31-12-2015] and CIT v. RRJ Securities Ltd. (2016) 380 ITR 612 (Del) : 2015 TaxPub(DT) 4278 (Del-HC).

FAVOUR : In assessee's favour.

A.Y. : 2007-08 to 2012-13

INCOME TAX ACT, 1961

--Business expenditure--AllowabilityAlleged bogus purchases----No addition for alleged hawala purchases could be made where neither sellers were examined nor statement/affidavit filed before sales tax department and assessment order of sales tax department was taken into consideration and holding was revealed regarding alleged hawala transaction of purchases thus addition made was to be deleted.--While passing assessment order, AO has held certain purchases to be bogus and through hawala transactions and also no incriminating document(s) was seized. In respect of additions made on account of those purchases, where confirmation could not be filed during the course of assessment proceedings, CIT(A) have deleted additions.Held: Approach of AO in neither making any enquiry in respect of parties nor providing any copy of statement/affidavit filed by these parties before Sales Tax Department, additions made on account alleged hawala purchases be treated as bad in law and against principles of natural justice. Copy of assessment order passed by Sales tax Authorities were also filed before CIT(A). It was also pointed out while arguing the matter on legal issue that during the course of search, no incriminating documents were found and hence, no additions could be made addition made on account of alleged hawala purchases was deserved to be deleted.

Income Tax Act, 1961 Section 37(1)

Relied:CIT v. Singhad Technical Education Society civil appeal Nos. 11081 to 11083 of 2017, order dt. 298-2017 : 207 TaxPub(DT) 3941 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08 to 2012-13

INCOME TAX ACT, 1961

--Capital gains--Transaction not regarded as transferApplicability of sections 45 and 112 --Conversion of firm into company--Where a firm was succeeded into company under Chapter IX of Companies Act and assets and liability of firm was taken over by company in whole and interest of partners was not reduced nor any separate amount was given to partners on account of goodwill or revaluation of assets provision of section 45 read with section 112 would not be applied.--Firm was converted into a company under Chapter-IX of Companies Act, 1956. Plea was raised by assessee that all conditions prescribed under section 47(xiii) have been fulfilled. So far as, vestng of properties of a partnership firm in a company under Part ix of Companies Act make it liable for capital gains tax under section 45 of Act was concerned, CIT(A) that condition of section 45(4) was not satisfied and also there was no distribution of or redduction in share of partners nor revaluation of assets was distributed amongst partners by company.Held: Provisions of sections 45 read with section 112 was not attracted as asset and liability of erstwhile firm vested in company as a whole and interest of partners was not reduced in any way nor any amount was paid separately to the firm or to partners on account of goodwill or on account of revaluation of assets.

Income Tax Act, 1961 Section 47

Income Tax Act, 1961 Section 45

Income Tax Act, 1961 112

Followed:CIT v. Texspin Engg. & Mfg. (2003) 263 ITR 345 (Bom) : 2003 Tax Pub(DT0 1082 (bom-HC). Relied:Sunil Sidharthbhai v. CIT (1985) 156 ITR 509 (SC) : 1985 TaxPub(DT) 1358 (SC), Vali Pattabhiram Rao v. Shri Ramanuja Ginning & Rice Factory (Purchase) Ltd. (1986) 60 CompCas 568 (AP) : 1986 TaxPub(CL) 0206 (AP), Vali Pattabhiram Rao v. Shri Ramanuja Ginning & Rice Factory (Purchase) Ltd. (1986) 60 CompCas 568 (AP) : 1986 TaxPub(CL) 0206 (AP), ITO v. Gulabdas Printers [IT Appeal No. 1931 (Ahd.) of 2007, dt. 5-2-2010] : 2010 TaxPub(DT) 1462 (Ahd-Trib) and Vishal Containers (P.) Ltd. v. ACIT [IT Appeal No. 409 (Ahd.) of 2009, dt. 7-10-2011] and Krishna Electrical Industries v. Dy. CIT (2004) 4 SOT 143 (Del-Trib) : 2004 TaxPub(DT) 0651 (Del-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08 to 2012-13

INCOME TAX ACT, 1961

--Search and seizure--Assessment under section 153AComputation of undisclosed income--Retraction of statement--Addition for alleged WIP could not be made only on the basis of statement which was retracted later on and no other evidence was gathered by AO to add undisclosed income.--A search and seizure operation was carried out in the case of 'S' who was partner of assessee-firm and certain addition was made by AO on the basis of alleged statements which were retracted by 'S' and there was no further material either found or seized during course of search or brought on record by AO during assessment proceedings indicating that there was undisclosed income. Held: It was quite clear that there was a retraction of earlier statement. CIT(A) as well as this Tribunal did not find any other material except the statement and letter of assessee to corroborate addition. It is an established position of law that no addition can be made simply on the basis of statement and it had to be corroborated with material available on record. This issue had been emphasized by CBDT Instruction dated 10-3-2003 mentioned in the impugned order and subsequent clarification issued from time to time that addition in search and survey cases should be based on evidences gathered during such actions.

Income Tax Act, 1961 Section 153A

Income Tax Act, 1961 Section 132(1)

Income Tax Act, 1961 Section 132(4)

Followed:Paul Mathews & Sons v. CIT (2003) 263 ITR 101 (Ker.) : 2003 TaxPub(DT) 1040 (Ker-HC), CIT v. S. Kadar Khan Sons (2008) 300 ITR 157 (Mad.) : 2008 TaxPub(DT) 0790 (Mad-HC), Dy. CIT v. Prem Sons (2010) 130 TTJ 159 (Mum.) : 2010 TaxPub(DT) 0300 (Mum-Trib) and CIT v. Dhingra Metal Works (2011) 196 Taxman 488 (Delhi) : 2010 TaxPub(DT) 2293 (Del-HC).

REFERRED :

FAVOUR : In assesses favour.

A.Y. : 2007-08 to 2012-13

INCOME TAX ACT, 1961

--Business expenditure--AllowabilityAlleged bogus purchases already added in firm's hands----Where alleged bogus purchases transactions and consequent addition was made in the hands of firm i.e., M/s 'SB' hence, no separate addition was required to be made in assessee's hands as it would amount to transaction of double addition.--Where addition was made in firm's hands while completing assessment under section 143(3) read with section 153C on account of alleged bogus purchases. Assessee claimed that addition in the hands of partnership firm were made on the basis of roving enquiry made by AO and consequent order passed under section 143(3) read with section 153C without finding any incriminating documents. CIT(A) deleted the addition. Held: Alleged bogus purchases transactions and consequent addition was made in the hands of firm, i.e., M/s. SB. Thus, no separate addition was required to be made on the same transactions in the hands of assessee as it will amount to double taxation on the same income. It was observed that no material was brought on record by AO that any cash had exchange hands in the transactions of alleged bogus purchase and misappropriated by partners. Before this Tribunal, no contrary material was brought on record by Revenue contradicting the finding of CIT(A).

Income Tax Act, 1961 Section 37(1)

Umacharan Shaw & Bros. v. CIT (1959) 37 ITR 271 (SC), CIT v. K. Mahim Udma (2000) 242 ITR 133 (Ker.) : 2000 TaxPub(DT) 0944 (Ker-HC), Dhakeshwari Cotton Mills Ltd. (1954) 26 ITR 775 (SC) : 1954 TaxPub(DT) 0123 (SC), CIT v. Anupam Kapoor (2008) 299 ITR 179 (P &H) : 2008 TaxPub(DT) 0500 (P&H-HC), CIT v. Metro Construction Co. (2013) 36 CCH 249 (Mum.) : 2014 TaxPub(DT) 0617 (Mum-Trib) and Smt. Sunita Dhadda v. Dy. CIT (2012) 148 TTJ 719 (JP-Trib) : 2012 TaxPub(DT) 2819 (JP-Trib).

REFERRED : Umacharan Shaw & Bros. v. CIT (1959) 37 ITR 271 (SC), CIT v. K. Mahim Udma (2000) 242 ITR 133 (Ker.) : 2000 TaxPub(DT) 0944 (Ker-HC), Dhakeshwari Cotton Mills Ltd. (1954) 26 ITR 775 (SC) : 1954 TaxPub(DT) 0123 (SC), CIT v. Anupam Kapoor (2008) 299 ITR 179 (P &H) : 2008 TaxPub(DT) 0500 (P&H-HC), CIT v. Metro Construction Co. (2013) 36 CCH 249 (Mum.) : 2014 TaxPub(DT) 0617 (Mum-Trib) and Smt. Sunita Dhadda v. Dy. CIT (2012) 148 TTJ 719 (JP-Trib) : 2012 TaxPub(DT) 2819 (JP-Trib).

FAVOUR : In assessee's favour.

A.Y. : 2007-08 to 2012-13

INCOME TAX ACT, 1961

--Search and seizure--Assessment under section 153ANo incriminating material found during search----Where addition was made on the inferences that assessee was a member of AOP though AOP came into existence much before assessee, addition could not be sustained as no incriminating material was found during search.--AO assessed certain amount in the hands of assessee as income from other source and added on the ground that cash was generated out of bogus purchases booked by partnership firm M/s. SB and/or AOP firm M/s. OR, wherein according to AO, assessee was a member having 43% share. The stand of assessee before this Tribunal was that present assessee was not a member of AOP firm M/s. OR as alleged by AO. It was also pleaded that during the course of search at the residential premises, no incriminating documents were found in respect of assessee, except cash and jewellery. Held: In the absence of any incriminating material found during the search, no addition could be sustained.

Income Tax Act, 1961 Section 153A

Followed:CIT v. Singhad Technical Education Society. Civil Appeal Nos. 11081 to 11083 of 2017 order dt. 29-8-2017 : 2017 TaxPub(DT) 3941 (SC). Relied:Umacharan Shaw & Bros. v. CIT (1959) 37 ITR 271 (SC), CIT v. K. Mahim Udma (2000) 242 ITR 133 (Ker.) : 2000 TaxPub(DT) 0944 (Ker-HC), Dhakeshwari Cotton Mills Ltd. (1954) 26 ITR 775 (SC) : 1954 TaxPub(DT) 0123 (SC), CIT v. Anupam Kapoor (2008) 299 ITR 179 (Punj. & Har.) : 2008 TaxPub(DT) 0500 (P&H-HC), CIT v. Metro Construction Co. (2013) 36 CCH 249 (Mum.) : 2014 TaxPub(DT) 0617 (Mum-Trib), Smt. Sunita Dhadda v. Dy. CIT (2012) 148 TTJ 719 (JP) : 2012 TaxPub(DT) 2819 (Jp-Trib).