NITIN A. SHAH,MUMBAI vs. ITO, 19(2)(4), MUMBAI

It is observed that there has been a delay of 587 days for filing this present appeal and the learned Authorised Representative (ld. AR for short) for the assessee during the appellate proceeding has submitted that an Affidavit for condoning the delay with the reasons has been filed by the assessee and that after considering the decision of the Hon'ble Supreme Court in the matter of Re Cognizance For Extension of Limitation (in

The assessee has challenged the appeal on various grounds where the ld. CIT(A) had confirmed the impugned addition and also on the grounds of jurisdiction of the Assessing Officer (A.O. for short) invoking the provisions of section 153C of the Act.

The brief facts are that the assessee is an individual engaged in trading of shares and securities. The assessee had filed his return of income dated 27.01.2011, declaring total income at Rs.7,28,554/-. Pursuant to a search action u/s. 132 of the Act conducted in the case of Shri Bhanwar Lal Jain Group dated 04.10.2013 and a survey conducted in assessee’s premises, the A.O. passed the assessment order u/s. 143(3) r.w.s. 153C of the Act on the assessee determining the total income at Rs.64,09,045/- relying on the incriminating documents found during the search action conducted at Shri Bhanwar Lal Jain Group where the assessee was said to be one of the beneficiary of accommodation entry on account of bogus loans from M/s. Millenium Star which was a benami concern managed and controlled by Shri Bhanwar Lal Jain Group and his son Shri Rajesh B. Jain.

The ld. CIT(A) then confirmed the addition made by the A.O. on the ground that the assessee has failed to substantiate the loan received from M/s. Millenium Star and also the addition on the interest amount received in cash for the reason that the assessee has failed to produce documentary evidences or details pertaining to the same.

The assessee is in appeal before us, challenging the order of the ld. CIT(A) in confirming the addition made by the A.O.

The ld. AR for the assessee contended that the assessee has challenged the initiation of proceeding u/s. 153C of the Act based on the survey action which according to the ld. AR ought not to have been made. The ld. AR harped on the legal ground that the assessment order should not have been passed u/s. 153C of the Act.

The learned Departmental Representative (ld. DR for short) for the Revenue, on the other hand, controverted the said fact and stated that there are discrepancies in the order passed by the first appellate authority. The ld. DR contended that the assessee has not raised the ground of jurisdiction u/s. 153C of the Act. The ld. AR for the assessee on the other hand had brought our notice that the assessee had filed revised grounds challenging the jurisdiction u/s. 153C of the Act whereas the ld. CIT(A) adjudicated the issue involving reopening u/s. 147 of the Act which according to the ld. AR may be due to inference from the earlier assessment order. Further, the ld. AR brought our attention to page no. 31 of the appeal set where the grounds challenging the jurisdiction u/s. 153C

We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has raised the grounds of jurisdiction invoked by the A.O. u/s. 153C of the Act before us. It is observed that this issue was not adjudicated by the ld. CIT(A) as per the order of the first appellate authority. Though the ld. AR has stated that this ground was raised before the ld. CIT(A), we do not find any observation on this in the order of the ld. CIT(A). The ld. DR had also submitted a copy of the satisfaction note recorded u/s. 153C in the case of Shri Bhanwar Lal Jain Group and the assessee. The ld. DR vehemently controverted the submission of the ld. AR. We find merit in the submission of the ld. DR, wherein this ground raised by the assessee has to be adjudicated by the first appellate authority. We have also considered the submission of the ld. DR in pointing out the factual error crept in the order of the ld. CIT(A) which (A.Y. 2010-11) Nitin A. Shah vs. ITO requires de nova adjudication on the above mentioned issues. We remand all these issues back to the file of the ld. CIT(A) who is directed to decide the issues raised by the assessee in the grounds of appeal

In the result, this appeal filed by the assessee is allowed for statistical purpose.