TaxTMI 
TaxTMI 
2016 (6) TMI 803
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....(1). The order of the CIT be cancelled as being without jurisdiction. (ii) That the CIT has wrongly relied upon Section 263(1) Explanation (a) (i) to assume jurisdiction which is inapplicable. 2. That the CIT was wrong to direct the examination of taxability of the deemed dividend in the proceedings u/s 153A wrongly widening the scope of Sec 153A as it was not a material found on the basis of search. The direction be quashed. 3. (i) That the CIT was wrong to treat the comments of the Hon'ble High Court which Assessment Year in the nature of obiter as binding precedent. The CIT was wrong to make it as a basis for passing the order u/s 263. (ii) That the CIT has wrongly relied on 20,000/- Sec 263 proceedings of Jakson Generato....
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.... The assessment u/s 143(3) r.w.s. 153A was completed on 9/12/2011 by assessing income at Rs. 6,09,677/-. 4. The Commissioner of Income Tax, Central - I, New Delhi observed that the assessee, Shri Mahesh Kumar Gupta is shareholder/director of M/s Jakson Generator (P) Ltd., holding substantial shareholding of more than 43.19% in the company and he is also partner in M/s. Jakson & Co. having sharing profit of 30% in the firm. Further, the CIT observed that M/s Jakson & Co. has taken loan of Rs. 1,72,15,824/- from M/s Jakson Generator Pvt..Ltd.- which ought to be fixed as deemed dividend u/s 2(22) (e) of the Income Tax Act, 1961 in the hand of Shri Mahesh Kumar Gupta-as this transfer of loan attracts the provision of 2(22) (e) of the Act as an....
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....n Generators Pvt. Ltd in the books of Jakson & Co. was not filed in the case of the assessee Sh. M. K. Gupta and it cannot form part of assessment record of the assessee. The assessee also stated that when he has not taken loan/advances, loan taken by M/s Jakson & Co. from M/s Jakson Generators Pvt. Ltd has been squared off. The invocation of provision of Section 263 of the Act is not properly justified when Assessment order was passed u/s 1143(3) r.w.s. 153A of the Act with the approval of Joint Commissioner of Income Tax. Thus the CIT's finding that it will attract Section 2(22)(e) of the Act is not correct. 7. The CIT held that he is satisfied that the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to ....
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....ace in Jaksons Group of cases and the Assessment Order was passed under Section 143 r.w.s. 153A of the Act. In case of Kabul Chawla (supra), Hon'ble Delhi High Court held in para 37 and para 38 as under: "37. On a conspectus of Section 153A(1) of the Act, read with the proviso thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under:- i. Once a search takes place under Section 132 of the Act, notice under Section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of t....
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....on 153A merges into one. Only one assessment shall be made separately for each AY 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 Section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. Conclusion 38. The present appeals concern AYs 2002-03, 2005-06 and 2006-07. On the date of the search the said assessments already stood completed. Since n....