2018 (2) TMI 1629

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....n all the appeals the only issue which has been raised relates to disallowance made u/s 14A. The quantum of disallowance which has been challenged by the assessee before us for the aforesaid mentioned years are as under:- Assessment year Disallowance made u/s 14A 2005-06 Rs. 5,00,000/- 2007-08 Rs. 5,00,705/- 2011-12 Rs. 3,69,090/-   2. Before us Ld. Counsel for the assessee, Dr. Rakesh Gupta submitted that so far as the appeals for the assessment years 2005- 06, 2007-08 are concerned, the assessee besides challenging the said disallowance on merits, is also challenging the addition on the ground that same is beyond the scope of assessment u/s 153A, in as much as, for these years the assessments had attaine....

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....oximately Rs. 50,000/- in the return of income for the purpose of section 14A, whereas AO without there being any incriminating material found during the course of search has proceeded to work out the disallowance after applying rule 8D which admittedly was not applicable in the assessment year 2007-08. Thus, the addition made in these two assessment years are beyond the scope of assessment u/s 153A, in view of the judgments of Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla (2016) 380 ITR 573; and CIT vs. Meeta Gutgutia, (2017) 395 ITR 526. 3. As regards the disallowance of 14A in the assessment year 2011-12, he submitted that, this is the assessment of search year and in the return of income the assessee had declared divid....

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....ny and assessment u/s 143(3) was completed vide order dated 28.12.2007. As stated in the impugned assessment order itself that in the regular assessment order passed u/s 143(3) certain addition including the disallowance u/s 14A was made against which assessee had not filed any appeal. This interalia means that the said assessment order dated 28.12.2007 had attained finality. On the date of search, i.e., on 22.3.2011, ostensibly the said assessment order cannot be reckoned as abated assessment in terms of 2nd proviso to section 153A. Once it is an unabated assessment, then the addition which can be made in the assessment framed u/s 153A would only be with regard to incriminating material or document found during the course of search. This p....