PRADEEP KUMAR LADIWALA,JAIPUR vs. DCIT, CENTRAL CIRCLE-1, JAIPUR

On the facts and circumstances of the case, the Ld. Appellate authority grossly erred in treating the documents submitted by the assessee as sketchy. incomplete and irrelevant without properly appreciating them. Further, there were many evidences which were not considered by Ld. Appellate authority at all. It is thus hereby prayed to delete the additions so made.

On the facts and circumstances of the case, The Ld. Appellate authority grossly erred in approving the action of the Ld. A.O A.O of making the additions under section 68 as against the provisions of the act. The addition is thus bad in law and hereby prayed for being deleted.

On the facts and circumstances of the case, The Ld. Appellate authority grossly erred in approving the action of the Ld. A.O A.Ο of treating long term capital gains of the assessee as income liable to be taxed under section 68. The addition is illegal and thus prayed for being deleted.

On the facts and circumstances of the case, the Id. Appellate authority grossly erred in law and facts by not considering the legal ground raised by the assessee on account of alleged delay in raising such ground as well as other irrelevant reasons. The ground raised by assessee was that the juri ictional notice issued under Section 143(2) is void ab initio as it has been issued on wrong premise of survey which is factually incorrect. Hence, it is hereby prayed to quash the said notice and proceedings in pursuance thereof. 6. The appellant hereby craves the leave to add, delete, amend or substitute any or all grounds of this appeal at the time or before the actual hearing of the case.

In ITA No. 1069/JP/2024, the assessee has taken following grounds of appeal;

On the facts and circumstances of the case, the Ld. Appellate authority grossly erred in treating the documents submitted by the assessee as sketchy. incomplete and irrelevant without properly appreciating them. Further, there were many evidences which were not considered by Ld. Appellate authority at all. It is thus hereby prayed to delete the additions so made.

On the facts and circumstances of the case, The Ld. Appellate authority grossly erred in approving the action of the Ld. A.O A.O of making the additions under section 68 as against the provisions of the act. The addition is thus bad in law and hereby prayed for being deleted.

On the facts and circumstances of the case, The Ld. Appellate authority grossly erred in approving the action of the Ld. A.O A.Ο of treating long term capital gains of the assessee as income liable to be taxed under section 68. The addition is illegal and thus prayed for being deleted.

The appellant hereby craves the leave to add, delete, amend or substitute any or all grounds of this appeal at the time or before the actual hearing of the case. 4. At the outset of hearing, the bench noted that the assessee’s appeal for both years was filed with a delay of three days as reported by the registry. To this effect the assessee filed an application for condonation of delay stating that no message or email was received to be aware of the passing of the order. On being aware the assessee immediately filed the appeal. The application supported by an affidavit. Considering the facts which were not controverted by revenue we condone the delay in bringing the present appeals i.e. of 3 days.

Firstly, we take up the appeal of the assessee for Assessment Year 2017-18 in ITA No. 1069/JP/2024. 6. The brief facts of the case are that a search & seizure operation under section 132(1) of the Income-tax Act, 1961 (hereinafter "the Act") was carried out on 30-10-2017 at the various premises of Ladiwala and Kanoongo Group, Jaipur. Consequent to search action, notice u/s 153A of the Act was issued to the assessee on 29-10-2019 which was duly served. In response to notice issued u/s 153A, the assessee furnished his return of income on 07-11-2019 declaring total income of Rs. 2,72,040/- which was same as filed u/s 139 of the Act on 17-08-2017. 7. Ld. AO noted in the assessment proceeding that the assessee had claimed exempt income of Rs. 2,66,279/-, but not substantiated his claim. Assessee could not file any details regarding the script in which the assessee claimed to have transacted to find out as to whether the sale of shares effected by the assessee has suffered the payment of the security transaction tax (STT) or not especially when assessee failed to furnish details of sale and purchase of share along with the demate account in support of his claim. Thus, ld. AO noted that the assessee failed to establish claim of exempt income, and thereby treated the proceeds as unexplained credit entries in the books of the assessee. 8. Aggrieved by the order of the Assessing Officer, assessee preferred an appeal before ld. CIT(A) wherein the assessee submitted all the details which they could not placed before ld. Assessing Officer. Ld. CIT(A) did not consider that additional evidence and accordingly, the same was not admitted. The assessee vide additional ground raised before ld. CIT(A), contended that no incriminating material was found at assessee’s premises relating to the amount of addition made and therefore, no addition could be made. In this case, ld. CIT(A) did not admit that additional ground on the reason that the assessee had failed to place on record, any reason as to why the said ground could not be raised before ld. AO. As regards the merit of the dispute regarding addition made u/s 68 of the Act in respect of income claimed by the assessee as the assessee has not substantiated claim of exempt income. Thus, with those observations the appeal filed by the assessee was dismissed by the ld. CIT(A).

Aggrieved by the order of ld. CIT(A), assessee preferred the present appeal on the grounds as reiterated herein above. These appeals were listed for hearing on more than three occasions. On all the occasions. Bench noted emails on same ground with a prayer to adjourn the hearing of the case. The assessee has not filed any paper book or written submission after filling the present appeal. Looking to this aspect of the matter, Bench feels to decide the appeal based on material available on record. As regards ground No. 4 raised by the assessee, the bench notes that to decide that ground the office note as attached to the assessment order which was placed on record. The said office note reads as under : “The assessment proceedings for this assessment year were not pending on date of search i.e. 30-10-2017. Therefore, the assessment proceedings in this case will be considered completed (non-abated). IN respect of these proceedings, apart from other case laws, there is a judgment of the juri ictional High Court of this office, i.e. the Rajasthan High Court. In the case of Jai Steel (India), Jodhpur Vs. Assistant Commissioner of Income-tax [2013] 36 taxmann.com 523 (Rajasthan), High Court of Rajasthan, the facts of the case were the search u/s 132(1) of the Actwas conducted and notices u/s 153A of the Act were issued in those cases. It has been held in this case that:- "(a) the assessments or reassessments, which stands abated in terms of second proviso to section 153A, the Assessing Officer acts under his original juri iction, for which, assessments have to be made;

The bench also takes note of the fact that while considering the admission of the additional ground by ld. CIT(A), he noted that the assessee had not taken it before lower authority and therefore he considered that technical grounds lacked merits. Whereas ld. AO was fully aware and conscious about the contention and that is why he specifically recorded the office note recording his satisfaction that “No addition can be made as no incriminating documents were found”. Therefore, considering the decisions of Hon’ble Apex Court in the case of Principal Commissioner of Income-tax, Central-3 vs. Abhisar Buildwell (P.) Ltd. [2023] 149 taxmann.com 399 (SC) technical ground is covered.

When this aspect of the matter was brought to notice of ld. DR, she did not controvert the fact recorded in the office note but at the same time, she relied upon the orders of lower authorities.

We have heard the rival contentions and perused the material placed on record. The Apple of discord as raised vide ground no. 4 by the material or not where the assessment is not abated. As is evident from the office note, reproduced herein above, ld. AO was aware of the decision of Hon’ble High Court of Delhi in the case of CIT(Central)-III vs. Kabul Chawla [2015] 61 taxmann.com 412, reported in office note. That decision of Kabul Chawla (Supra) was confirmed by Hon’ble Apex Court in the case of Principal Commissioner of Income Tax, Central-3 Versus Abhisar Buildwell P. Ltd. [ 293 Taxman 141 (SC) ] wherein the highest court has held that; 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 Section 132 or requisition under Section 132A, the AO assumes the juri iction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; CA No. 6580/2021 Etc. Page 55 of 59 www.taxmann.com iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the juri iction to assess or reassess the ‘total income’ taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of CA No. 6580/2021 Etc. Page 56 of 59 www.taxmann.com the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs. Respectively, following the above finding of the highest court of country, we direct the ld. AO to delete the addition of Rs. 2,66,279/- made in the hands of the assessee.

Now we take up the appeal of the assessee in ITA No. 1071/JP/2024. As the facts of the case are that a search & seizure operation under section 132(1) of the Income-tax Act, 1961 (hereinafter "the Act") was carried out on 30-10-2017 at the various premises of Ladiwala and Kanoongo Group, Jaipur. Consequent to the search the assessment was completed wherein the ld. AO made the addition in the absence of the evidence called for not being submitted. The assessee submitted those evidence before the ld. CIT(A), who did not consider and this being the assessment being abated revenue can take up all the issues. The bench notes from the order of ld. CIT(A) that ld. CIT(A) did not admit additional evidence. But considering the principle of natural justice, we admit said additional evidence. As said additional evidence was not admitted and examined by both the lower authority, we consider it fit to remand the matter to the file of the ld. Assessing Officer, who will after granting the sufficient opportunity of being heard to the assessee, decide the issue. At the same time, ld. AO may also call any other documents related to the issue of completing assessment. Therefore, we remand back the issue raised in this appeal to the file of Assessing Officer. Since the assessee did not appear and represent the case properly before lower authorities and before us also we deem it fit to levy exemplary cost on the assessee i.e of Rs. 1,000/- in this case which is required to be deposited in the “Prime Minister Relief Fund” and the receipt of the same be presented before the ld. Assessing Officer.