TaxTMI 
TaxTMI 
2015 (3) TMI 442
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....see was found during the course of search. Except this reason raised in ground No.10 questioning the validity of assessment framed under sec. 153A read with sec. 143(3) of the Act, the assessee has not pressed the validity of the said assessment on the basis of other reasons questioned in ground Nos. 1 to 8 (except ground No.6). These ground are accordingly rejected as not pressed. 2. In the assessment year 2007-08, besides the above, validity of notice issued under sec. 153A of the Act has also been questioned as time barred in ground No.9, which has also not been pressed. The same is accordingly rejected as not pressed. 3. In the assessment year 2007-08 the validity of assessment framed under sec. 153A read with sec. 143(2) of the Income-tax Act, 1961 without issuance of valid notice under sec. 143(2) has also been questioned in ground No. 10 which has not been pressed. The same is accordingly rejected as not pressed. 4. The other common issue in all the assessment years raised in ground No. 9 except assessment year 2007-08 wherein this issue has been raised in ground No.11 is regarding validity of addition on account of income from some house property as the same has be....
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....rned CIT(Appeals) but the assessee could not succeed. The assessee had also raised the validity of assessment framed under sec. 153 read with sec. 143(3) of the Act besides others on the basis that there was no incriminating material found during the course of search and original assessment proceedings were completed on the date of search. The Learned CIT(Appeals) did not concur with this contention of the assessee and rejected the ground raised by the assessee in this regard before him. 7. In support of the issue regarding validity of the assessment in question, the learned AR reiterated the contentions of the assessee made in this regard before the Learned CIT(Appeals) that merely because a search has been carried out under sec. 132, a notice under sec. 153A for reassessment of income cannot be issued in absence of incriminating material found during the course of search and when no original assessment proceedings is pending on the date of search. The learned AR asserted that no incriminating material was found relating to the assessee during the course of search of his premises and the return of income originally filed under sec. 139 of the Act was processed under sec. 143(1)....
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....be made for each of the six assessment year separately : (b) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (ii) undisclosed income or property discovered in the course of search." 11. The issue raised before the Special Bench was as to whether scope of assessment u/s 153A encompasses additions not based on any incriminating material found during the course of search? 12. In the case of Kusum Gupta (supra) also the return was processed u/s 143(1) of the Act and time limit for issuance of notice u/s 143(2) had expired on the date of search and it was held that no assessment was pending in that case and thus there was no question of abatement of assessment. Therefore, the addition in the assessment u/s 153A would be made only on the basis of incriminating material found during the search. The Delhi Bench of the Tribunal in its recent decision on the issue in the case of Shri Kabul Chawla (supra) an....
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....sess the total income but by 'taking note of the undisclosed income if any, unearthed during the search'. The expression 'unearthed during the search' is quite significant to denote that in respect of completed or non-pending assessments, the Assessing Officer is albeit duty bound to assess or reassess the total income but there is a cap on the scope of additions in such assessment, being the items of income 'unearthed during the search'. In other words, the determination of 'total income' in respect of the assessment years for which the assessments are already completed on the date of search, shall not be influenced by the items of income other than those based on the material unearthed during the course of search. There is not and cannot be any quarrel over the proposition that the Assessing Officer has no option but to determine the total income of the assessee in respect of the relevant six assessment years. However, the scope of such determination of total income is different in respect of the years for which the assessments are pending vis-vis the years for which assessments are non-pending. In respect to the assessment years for which the orig....
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....in the order passed u/s 153A of the Act was without jurisdiction, being outside the scope of proceedings under that section?" The other question was, "whether on the facts and circumstances of the case, the Tribunal erred in law in upholding the action of the AO in denying set off, of book loss unabsorbed depreciation relatable to earlier assessment year in terms of clause (III) of Explanation 1 to section 115JB of the Act?" The relevant facts of that case noted in para no. 2 of the decision are that the AO in the proceedings u/s 153A of the Act, had made several additions, relying upon the incriminating material found in the course of search, which was conducted on 18.1.2006 and subsequent dates. In this paragraph of the decision it has been perused from the impugned order of the Tribunal that incriminating material including statement of Sanjay Agarwal, GM (Marketing) have resulted in additions, which have been upheld. The Hon'ble High Court has been pleased to note in this paragraph as "it is not the case of the appellant - assessee that initiation of proceedings u/s 153A was bad or unwarranted in law as no incriminating material was found during the search. The contention raise....
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....itions and the addition made u/s 115JB of the Act was not based upon any incriminating material. Thus, the question raised before the Hon'ble High Court was as to whether the Tribunal has erred in law in not upholding that recomputation of book profit, de-hors any material found during the course of search in the order based u/s 153A of the Act was without jurisdiction, being outside the scope of proceedings under that section. The Hon'ble High Court after discussing the issue in detail has been pleased to decide the question against the assessee and has upheld the addition made u/s 115JB of the Act. Thus, having distinguishable facts this cited the decision in the case of Filatax India Ltd. (supra) is not helpful to the revenue. 16. So far as, the decision of Hon'ble Karnataka High Court in the case of Canara Housing Development Company (supra) relied upon by the ld. CIT DR is concerned, the issue raised before the Hon'ble High Court was regarding validity of revisional order passed u/s 263 of the Act by the ld. CIT partly upheld by the Tribunal and during that course the Hon'ble High Court has also been pleased to discuss the decision in the cases of Anil Kumar Bhatia (supra) ....