TaxTMI 
TaxTMI 
2018 (4) TMI 129
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the two assessment years in question. Learned counsel informs us that the Assessing Officer had framed regular assessments on 31.12.2008 and 31.12.2010; respectively assessing its abovestated capital gains as business income. Then came the impugned search on 09.08.2011 followed by consequential instant assessment proceedings raising the very substantive issue of capital gains versus business income once again. 3. Learned counsel then takes us to the CIT(A)'s order common in both the assessment years under challenge making it clear that there is no incriminating material found or seized during the above search as under: "4. Brief facts of the case are that there was an action u/s 132 on Anil Bholabhai Patel Group of cases on 9/8/2011, thus-notices u/s 153A carne to be issued by the ld. AO and the appellant filed the respective returns in response thereto. The appellant disclosed capital gains on transactions of sale of immovable properties, which ranged in number from 7-15 per year. The issue of Capital Gain Vs. Business Income has been discussed by the ld. AO in para 4 to 8 of the assessment order. After considering the appellant's submissions dated 17/2/2014, the ld. AO ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s as business income is upheld; such upholding is not on merit but merely by way of reiteration of total income as determined consequent to the order of the Hon. ITAT. Thus, the ground raised by the appellant for A.Y.2006-07 is partly allowed. 6. With respect to A.Y. 2008-09, from the statement of facts filed by the ld. AR, it appears that an assessment u/s 143(3) was framed by the AO prior to search, against which the appeal filed has already been decided by my ld. predecessor vide order dated 16/11/2011 and appellant is in further appeal before ITAT. In view of these facts, it is crystal clear that in absence of seized incriminating material supporting the addition on merit, neither the AO nor the undersigned is competent to review or revisit the issues already adjudicated by my Id. predecessor vide order dated 16/11/2011. It therefore, needs to be held that the ld. AO, in the absence of any incriminating material found and seized during the course of search referred to or relied upon by him in the assessment order and also in view of All Cargo Logistics and Kabul Chawla (supra), the Id. AO only needed to reiterate the total income as finally stood approved by the order dated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3. On facts, we take note of the undisputed fact that the return of income was filed for AY 2007-08 stood finalized prior to search owing the expiry of time limit for regular assessment under section 143(3) of the Act. We also note the averment made on behalf of the assessee that no incriminating material/document has been found in the course of the search proceedings which exhibits intention contrary to what is declared in the books of accounts maintained by the assessee. We note that the assertions made by the assessee to the effect that income arising on sale of capital asset has been treated as business income without reference to any incriminating material has remained unrebutted. As a corollary, its manifest that impugned realignment of income from one head to another has been made without reference to any incriminating material/document found as a result of search and seizure u/s.132 of the Act. We also take cognizance of the fact that the income tax return relevant to assessment was filed prior to the search in the normal course suo motu disclosing the impugned capital gain on sale of land/properties in question. The return so filed in the ordinary course were accepted u/s.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post- search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original ! assessment and the assessment under Section 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 assessme....