TaxTMI 
TaxTMI 
2017 (9) TMI 967
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....ord in the case of Sh. Anil Bhatia by the jurisdictional High Court. 2. On the facts and in the circumstances of the case, the Ld. CIT (A) has in law and on facts in arriving at the conclusion that the words 'total income' as used in Section 153A would only mean undisclosed income discovered from seized / incriminating material. 3. On the facts and in the circumstances of the case, the Ld. CIT (A) has in law and on facts in adopting a restrictive and pedantic interpretation of the scope of assessment u/s 153A r.w.s. 153C of the Act. 4. On the facts and in the circumstances of the case, the Ld. CIT (A) has in law and on facts in arriving at the conclusion that the words 'total income' as used in section 153A would only mean income unearthed during search when the decision of the Hon'ble High Court of Karnataka in the case of Canara Housing Development Company Vs. DCIT dated 09-08-2014 has held that total income includes income unearthed during search and any other income. 5. The order of the CIT (A) is erroneous and is not tenable on facts and in law. 6. The appellant craves leave to add, alter or amend any/ all of the grounds of appeal b....
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....ssessment order, written submission and oral arguments of Ld. AR. I have perused the assessment made u/s 153C read with section 153A for all assessment year. There is no addition on the basis of any evidence or incriminating material found during the search. I have perused the entire assessment order and the nature of seized documents relied upon. Nowhere in the assessment order, the contents of the seized documents are discussed and there is no linkage between the additions made for all assessment years with the seized documents relied upon in the satisfaction notes. In view of the above facts, I intend to agree with the arguments of Ld. AR that the documents relied upon in the satisfaction notes u/s 153C are not incriminating in nature for assessment of income. Now the issue is whether in absence of any incriminating seized documents for any assessment year, addition can be made u/s 153C read with section 153A in respect of closed assessment. In respect of all assessment years either the assessments were completed u/s 143(3) or time to issue notice u/s 143(2) have expired. Therefore, these assessments are closed assessment. Ld. AR relied upon the decisi....
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.... incriminating documents even for one assessment year covered u/s 153C. Accordingly, addition made by the assessing officer for all assessment years are hereby deleted. These grounds of appeals are allowed for all Assessment Years." 2.1 Aggrieved, the Revenue is in appeal, raising the grounds as reproduced above. 3. In the grounds raised, the Revenue is aggrieved with the conclusion that the words total income as used in section 153A of the Act for only mean undisclosed income discovered from seized/incriminating material. 4. The Ld. CIT(DR) placed reliance on following decisions: "1. SSP Aviation Ltd Vs DCIT, Delhi High Court, 2016, 20 taxmann.com 214 In view of provisions of section 153C, satisfaction that is required to be reached by Assessing Officer having jurisdiction over searched person is that valuable article or books of account or documents seized during search belong to a person other than searched person and, it is not necessary that documents so seized must reflect any undisclosed income. 2. Rajesh Sunderdas Vaswani Vs ACIT, Gujarat High Court, 2016, [2016] 76 taxmann.com 311 (Gujarat) Where Assessing Officer of search pers....
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....ion was carried out on 7th October, 2009 and an assessment came to be framed under Section 143(3) read with Section 153A(1)(b) in determining the total income of the Assessee of Rs. 14.5 crores against declared income of Rs. 3.44 crores. The ITAT deleted the additions on the ground that it was not based on any incriminating material found during the course of the search in respect of AYs under consideration i.e., AY 2006-07. The Gujarat High Court referred to the decision in Kabul Chawla (supra), of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (supra) and one earlier decision of the Gujarat High Court itself. It explained in para 15 and 16 as under: "15. On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to....
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....guage or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153. the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment In case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition, in other words, the assessment should connected With something round during the search or requisition viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of subsection (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition' or disallowance can be made only on the basis of material collected during the search or requisition, in case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) ....
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....ubsequently, in Principal Commissioner of Income Tax- 1 v. Devangi alias Rupa (supra), another Bench of the Gujarat High Court reiterated the above legal position following its earlier decision in Principal Commissioner of Income Tax v. Saumya Construction P. Ltd. (supra) and of this Court in Kabul Chawla (supra). As far as Karnataka High Court is concerned, it has in CIT v. IBC Knowledge Park P. Ltd. (supra) followed the decision of this Court in Kabul Chawla (supra) and held that there had to be incriminating material qua each of the AYs in which additions were sought to be made pursuant to search and seizure operation. The Calcutta High Court in CIT-2 v. Salasar Stock Broking Ltd. (supra), too, followed the decision of this Court in Kabul Chawla (supra). In CIT v. Gurinder Singh Bawa(supra), the Bombay High Court held that: "6...once an assessment has attained finality for a particular year, i.e., it is not pending then the same cannot be subject to tax in proceedings under section 153A of the Act. This of course would not apply if incriminating materials are gathered in the course of search or during proceedings under section 153A of the Act which are contrary to and/o....