TaxTMI 
TaxTMI 
TaxTMI 
2016 (12) TMI 1572
X X X X Extracts X X X X
X X X X Extracts X X X X
....ad no authority under the provisions of section 153A/153C of the Act to disturb the assessment which had attained finality on the date of search. The ld counsel drew our attention to application dated 25.10.2016 wherein the assessee raised a ground under rule 27 of the Income Tax Appellate Tribunal Rules, 1963 (hereinafter called as " the Rules") . The Ld counsel of the assessee stated that the issue is purely of legal nature which will go to the root of the matter and has been raised before ld CIT(A) also but the same has been decided against the assessee. It was explained that same was not challenged by the assessee as relief has been granted on merit of the case by the CIT(A). The ld counsel drew our attention to the para 3 and 3.1 of the appellate order wherein the issue has been decided by the FAA against the assessee. 3. Referring to the above , the ld counsel for the assessee stated that the AO had no jurisdiction u/s 153A/153C of the Act to make any additions by disturbing the assessment order which had attained finality on the date of search without any incriminating material being found by the search team during the course of search. The ld counsel drew our attention to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e the new ground; and so on. But if leave is granted and if the other side has notice of the new ground which the appellant seeks to urge, there does not seem to be any reason why the Court of appeal should not permit the appellant to challenge the decision of the trial Court on a ground other than those taken in the grounds of appeal. The position with regard to the respondent is different: it is not open to him to urge before the Court of appeal and get a relief which would adversely affect the appellant. If the respondent wanted to challenge the decision of the trial Court, it was open to him to file a cross-appeal or cross-objections. But the very fact that he has not done so shows that he is quite content with the decision given by the trial Court. Therefore, under these circumstances, his only right is to support the decision of the trial Court. It is true that he may support the decision of the trial Court, not only on the grounds contained in the judgment of the trial Court, but on any other ground. In appreciating the question that arises before us, one must clearly bear in mind the fundamental difference in the positions of the appellant and the respondent. The appellant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions of the Act or its scheme. Hon'ble Allahabad High Court in the case of Kanpur Industrial Works vs. CIT, 59 ITR 407 (AL) has held that in case the assessee not liable to be assessed at all is also a ground for showing that there should be no further increase and assessee may resist the appeal on this ground also. In the present case before us, the CIT(A) has allowed the appeal of the assessee on merits and relief has been granted by deleting all the additions. The only ground dismissed by CIT(A) was with regard to assumption of jurisdiction by AO to make addition without based on searched materials as nothing was found during the search proceedings. In view of the above facts we admit this additional ground of the assessee under Rule-27 and will adjudicate the same. 7. The ground taken by the assessee under rule 27 of the Rules dated 25.10.2016 reads as under:- RESPONDENT'S GROUNDS UNDER RULE 27 OF THE APPELLATE TRIBUNAL RULES, 1963. "1. On the facts and circumstances of the case and in law, the ld.CIT(A) has erred in affirming the action of the AO in confirming the addition mAde u/s 143(3) r.w.s 153C of the Act in absence of any incriminating material found during the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch conducted on the Gaggar Group on 06.10.2010. Further, on going through the case laws relied upon by the appellant, it has come to the notice that in the case of CIT vs. Murli Agro Products Ltd (August 9th, 2014), (Bombay High Court) the order para No.12 and 13) the following was observed by the Hon'ble High Court "12. Once it is held that the assessment finalized on 29.12.2000 has attained finality, then the deduction allowed under section 80 HHC of the Income-tax Act as well as the loss computed under the assessment dated 29-12-2000 would attain finality. In such a case, the A.O. while passing the independent assessment order under Section 153A read with Section 143(3) of the IT. Act could not have disturbed the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under Section 153A of the Income-tax Act establish that the reliefs granted under the finalised assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. 13. In the present case, there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings which ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing to Rs. 64 lakhs was without jurisdiction as the assessment in the instant year had attained finality on the date of search. 10. The ld. DR on the other hand, heavily relied on the orders of authorities below and submitted that the material was gathered by the AO during the course of assessment proceedings under section 153C and therefore the AO had the material on the basis of which he rightly made additions in respect of five unsecured loans/creditors on the grounds of creditworthiness, genuineness of transactions and identity of the creditors not being proved. 11. We have carefully considered the rival contentions and perused the material placed before us including the orders of authorities below and the case laws relied upon by the parties. We find that on the date of search the assessment for the instant year had already attained finality as the return was filed on 30.9.2006 whereas the search was conducted on 6.10.2010. We also find from the perusal of provision of section 153C of the Act that the AO shall assess the income in respect of six assessment years prior to the year in which the search was conducted. It has also been provided in the section that the assessment ....