TaxTMI 
TaxTMI 
2017 (6) TMI 547
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....n for condonation of delay along with affidavit. Therefore, the delay in filing appeal may be condoned. On the other hand, the Ld. D.R. did not oppose condonation petition filed by the assessee. 3. Having heard both the sides and considered material on record, we find that there is a marginal delay of 1 day in filing these two appeals. The assessee has explained the reasons for delay in filing the appeal. We observed that the reasons given by the assessee for not presenting the appeal on or before the due date is beyond his control. Therefore, we are of the considered view that there is a reasonable cause for not presenting the appeal within the due date specified under the Act, and hence the delay in filing the appeal has been condoned and admit the appeal for adjudication on issues. 4. The brief facts of the case are that the assessee is an individual deriving income from salary from Chalapati Chit Fund Private Limited, Chalapati Housing and Finance Private Limited, property income, income from business and income from other sources has filed his regular return of income u/s 139(1) of the Income Tax Act, 1961 (hereinafter called as 'the Act'). A search and seizure o....
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....he assessment years. From these grounds of appeal, the assessee has challenged the additions made by the A.O. towards deemed dividend u/s 2(22)(e) of the Act. The assessee also filed a petition for admission of additional grounds on 10.12.2016, raising a legal ground challenging additions made by the A.O. towards deemed dividend in the concluded assessment for the assessment years 2004-05 & 2005-06. For the sake of convenience, the additional grounds raised by the assessee for the assessment year 2004-05 are reproduced below: 1. The appellant filed his return of income for the A.Y.2004-2005 originally on 17-10-2005 admitting total income of Rs. 34,00,000. Consequent to search & seizure operations in the group cases of Chalapthi Group on 2407-2008 notice u/s 153A was issued to the appellant on 30-11-2009. In response, the appellant filed his return of income on 22-1-2010 admitting the same income of Rs. 34,00,000. 2. Assessment u/s 143(3) r.w.s.153A was completed vide order dt.28-122010, wherein the assessing officer made on addition of Rs. 21,75,000 towards deemed dividend. This addition was made based on the ledger a/c of the appellant in the books of Chalapathi ....
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....ed by the assessee. 8. Having heard both the sides and considered material on record, we find that facts which are necessary for adjudication of legal issue raised by the assessee by way of additional grounds of appeals are already on record and no new material or evidence is relied upon to challenge the legal issue. Therefore, we are of the view that additional ground raised by the assessee can be admitted for adjudication and accordingly, we admit additional ground raised by the assessee and proceed to dispose of the appeal. 9. The first issue that came up for our consideration by way of additional grounds of appeal is whether on the facts and in the circumstances of the case, the A.O. is right in making additions towards deemed dividend u/s 2(22)(e) of the Act, for the assessment years 2004-05 & 2005-06, where the assessment proceedings has been completed and no proceedings are pending as on the date of search. The Ld. A.R. for the assessee referring to the decision of ITAT, Visakhapatnam bench in the case of Sri Hari Prasad Bhararia Vs. DCIT, Central Circle-1, in ITA Nos.435 to 441/Vizag/2014 dated 9.9.2016, submitted that in the case of concluded assessments, the A.O. ha....
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....extracted below: 12. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The factual matrix of the case is that there was a search action u/s 132 of the Act. Consequent to the search, the assessee case was centralized and accordingly, notice u/s 153A of the Act was issued requiring assessee to file return for 6 assessment years immediately preceding the assessment year in which search is conducted. The assessee filed returns in response to notice u/s 153A of the Act. The A.O. completed the assessment u/s 143(3) r.w.s. 153A of the Act and made additions towards deemed dividend under the provisions of section 2(22)(e) of the Act. The A.O. was of the opinion that transactions between the assessee and his company is coming within the definition of deemed dividend under the provisions of section 2(22)(e) of the Act. It is the contention of the assessee that the assessment order passed by the A.O. u/s 143(3) r.w.s. 153A of the Act, for the assessment years 2005-06 to 2009-10 is null and void as the A.O. has made additions towards deemed dividend u/s 2(22)(e) of the Act without any incriminating materials....
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....t he has inflated 10% labour charges and which is common in this line of business. Consequent to search action u/s 132 of the Act, the assessee case has been centralized and accordingly fresh assessment proceedings have been initiated by issuing notice u/s 153A/153C of the Act for the six assessment years immediately preceding the assessment year in which search was conducted. The assessee has filed revised returns in response to notice u/s 153A of the Act and admitted the additional income disclosed during the course of search. The case has been selected for scrutiny. During the course of assessment proceedings, the assessee was asked to produce books of accounts and relevant bills & vouchers in support of expenditure claimed. In response, the assessee filed written submission and stated that the books of accounts are not available and hence cannot be furnished. Therefore, the A.O. issued a show cause notice and asked to explain why the net profit from the business shall not be estimated. In response to show cause notice, the assessee has filed a written reply and contended that the income for the assessment year 2004-05, 2005-06 and 2007-08 cannot be tinkered with, as th....
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....come of those completed assessments. Though the provisions of section 153A of the Act does not specify abated and completed assessments, the natural meaning assigned to it should be given to interpret the provisions in such a way that which shall not cause undue hardship to the tax payers. The provisions of section 153A of the Act explained the procedure of assessments, abated assessments and the manner in which the assessment should be framed, which was further supported by circular no.7 of 2003 issued by the CBDT. When the law has explained the position of abated assessments, then the same way the completed assessment should be treated so as to understand that those assessments are reached finality and which cannot be tinkered with unless there was a seized document. Therefore, we are of the considered opinion that where search is initiated, all pending assessments are merge into one and only one assessment for each assessment year shall be made separately on the basis of findings of search and other material existing or brought on record by the A.O. In respect of non abated or completed assessments, the assessment will be made on the basis of books of accounts or other relevant ....
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.... It appears that the learned Tribunal found on fact that after completion of assessment proceedings and after reaching finality thereon, the Assessing Officer tried to reagitate the assessments. According to us, the learned Tribunal has rightly held that the Assessing Officer has no jurisdiction to reagitate the assessments which were already completed and subsisting. We therefore do not find any element of law to be decided in this appeal. Hence, the appeal is dismissed. There will be no order as to costs." 25. The assessee has relied upon the coordinate bench decision of ITAT, Visakhapatnam in the case of A.T. Rayudu in ITA No.373 to 379/Vizag/2014. The coordinate bench, under similar circumstances held the issue in favour of the assessee. The relevant portion is reproduced hereunder: "22. In this regard, it is also pertinent to refer to the following observations made by the Special bench in the case of All Cargo Global logistics Ltd (supra):- "57 (f) In the case of Parashuram Pottery works co. Ltd Vs. ITO (106 JTR 57)(SC), it has been mentioned in the last paragraph of the judgment that the court has to bear in mind that the policy of law is....
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....e contentions of Ld Standing Counsel that the assessing officer would get unfettered powers in the case of unabated assessments, once they were reopened us 153A of the Act. In our view, in the case of unabated assessments, the total income should be determined by the assessing officer by combining the income already assessed/disclosed in the return of income and the undisclosed income, if any, found during the course of search proceeding. Even otherwise, it is settled proposition of law that the assessee is entitled to take support of the decision in his favour, when two contradictory views have been expressed by the High Courts. In the instant case the Hon'ble jurisdictional High Court comes to the support of the assessee in respect of the legal proposition in addition to the decision rendered by the Hon'ble Bombay High Court. Accordingly, we find merit in the contentions of the assessee on the legal issue." 26. Considering the facts and circumstances of the case and also respectfully following the coordinate bench decision in the case of All Cargo Logistics Pvt. Ltd. (supra), we are of the opinion that the A.O. has made reassessment u/s 153A/153C of the Act on the ba....