TaxTMI 
TaxTMI 
2018 (12) TMI 403
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....nt cause from filing the appeals on time. Hence the delay is condoned and appeal admitted. 4. The assessee is a company and it filed its original return of income on 03/09/2009 for the Assessment Year 2009-10 declaring total income of Rs. 14,15,796/- and on 09/09/2010 for the Assessment Year 2010-11 declaring Nil income. A search and seizure operation u/s 132 of the Act, was conducted at the business and residential premises of Rashmi Group at Kolkata and other places, on 18/02/2013. Thereafter the Assessing Officer issued notices u/s 153A dt. 08/05/2014 for the Assessment Years 2009-10 & 2011-12 and was served upon the assessee on 25/06/2014. In response to the notices, the assessee filed revised returns for both the Assessment Years declaring total loss of Rs. 14,15,796/- for the Assessment Year 2009-10 and Nil income and book profit of Rs. 83,555/- for the Assessment Year 2010-11. The Assessing Officer completed the assessments for both the Assessment Years u/s 153A r.w.s. 143(3) of the Act on 31/03/2015 determining total income of the assessee at Rs. 3,69,15,770/- for the Assessment Year 2009-10 & Rs. 2,47,28,440/- for Assessment Year 2010-11. 4.1. Aggrieved the assessee ....
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....he IT Act, 1961- search and seizureassessment in case of (condition precedent)- Assessment Years 2002-03, 2005- 06 and 2006-07- whether completed assessment can be interfered with Assessing Officer while making assessment U/S 153A only on the basis of some incriminating materials unearthed during course of search which was not produced or not already disclosed or made known in course of original assessment- Held, yes- Pursuant to search carried out in the case of assessee, a notice U/S 153A(J) was issued- in course of assessment. The Statute nowhere makes it conditional that the Department has to unearth some incriminating material to conclude some method against the assessee in events where the assessment is triggered by a notice u/s 153(1)(a) of the Act. v. That on the fact and in the circumstances of the case, the Ld. CIT(A) had erred in allowing the assessee's appeal by observing that additions made by the AO in the assessment order passed u/s 153A/143(3) are not based on any incriminating documents/papers seized during the search operation." vi. That on the fact and in the circumstances of the case, the Ld. CIT(A) had erred in not adjudicating the appeal ....
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.... contended that none of the additions in question in this case was made based on any material found during the course of search, and hence the additions made by the Assessing Officer in the assessment framed u/s 153A r.w.s. 143(3) of the Act, during the course of assessments which have not abated, are bad in law. He submitted that the entire addition in question was of share application money received and alleged commission paid on the same in addition to disallowance u/s 14A of the Act, for Assessment Year 2010-11 as well as for Assessment Year 2009-10. He submitted that the cash trial is not part of the seized documents and was prepared by the revenue in post search proceedings and that they do not relate to the relevant Assessment Years and that the material based on which cash trial was prepared was bank statements of disclosed accounts and hence not incriminating material. He referred to page 2 to 5 of the assessment order and submitted that factual mistakes have been made by the Assessing Officer. The factual mistakes were pointed out for both the Assessment Years. 7.1. He relied on certain case-law to submit that deposits made in the earlier year cannot be taxed in the cu....
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....tted that the same should be upheld in view of the binding decisions of the Hon'ble Jurisdictional High Court on this matter. He distinguished the judgment of the Hon'ble Kerala High Court and submitted that even otherwise, the judgment cannot be followed in view of the binding nature of the judgment of the Hon'ble Jurisdictional High Court. 8. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:- 8.1. We first consider the legal position as to whether, an addition can be made in an assessment u/s 153A r.w.s. 143(3) of the Act, which is not based on any incriminating material found during the course of search and seizure, when the assessment for the Assessment Year in question has not abated. In the case on hand, the assessee filed its original return of income on 03/09/2009 for the Assessment Year 2009-10 and on 09/09/2010 for the Assessment Year 2010-11. The time limit for issual of notice u/s 143(2) of the Act, was 30/09/2010 and 30/09/2011 respectively for Assessment Year 2009-10 & 2010-11. The search and seizure ....
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....nn.com 149 (Calcutta) : In this case The Honourable Calcutta High Court expressed the following views: "We are in agreement with the views of the Karnataka High Court that incriminating material is a pre-requisite before power could have been exercised under section 153C read with section 153A. In the case before us, the assessing officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances." PCIT-2, Kolkata Vs. Salasar Stock Broking Limited (ITAT No. 264 of 2016) dated 24.08.2016 : (Calcutta) In this case, the Honorable Jurisdictional High Court observed that the Ld. ITAT, Kolkata was of the opinion that the assessing officer had no jurisdiction u/s 153A of the I.T. Act to reopen the concluded cases when the search & seizure did not disclose any incriminating material. In taking the aforesaid view, the Ld. ITAT relied upon the judgments of Delhi High....
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....o Section 153A the assessment for the Assessment Year 2006-07 was not pending and accordingly, has to be reckoned as unabated assessment. Under the jurisdiction of Hon'ble Delhi High Court, the law is well settled that in case of unabated assessment, the additions which can be roped-in, in the assessments framed u/s.153A, would only be with regard to any incriminating material or evidence unearthed or found during the course of search. If no incriminating material has been found during the course of search, then no addition can be made in the assessment years where assessments had attained finality. The relevant observations and the ratio laid down would be discussed in the later part of this order. 15. Now coming to the ratios laid down by the Hon'ble Jurisdictional High Court, first of all, in the case of Kabul Chawala (supra), the Hon'ble Court after discussing the issue threadbare and analysing the various judgments of different High Courts laid down the following legal proposition in terms of scope of addition which can be made u/s. 153A(1) which are as under:- "37. On a conspectus of Section 153A (1) of the Act, read with the provisos thereto, and in....
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....h or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment." This judgment of the Hon'ble Delhi High Court has been followed in several judgments not only by the Hon'ble Delhi High Court but also by other Hon'ble High Court like, Pr. CIT vs. Somaya Construction Pvt. Ltd. 387 ITR 529 (Guj), CIT vs. IBC Knowledge Park Pvt. Ltd. 385 ITR 346 (Kar) and CIT vs.Gurinder Singh Bawa reported in 386 ITR 483. In the latest judgment the Hon'ble Delhi High Court in Pr. CIT vs. Meeta Gutgutia, their Lordships reiterated the same principle after discussing and analyzing catena of decisions including that of Anil Kumar Bhatia (supra) and Dayawanti Gupta. The Hon'ble HighCourt observed and held as under:- "62. Subsequently, 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 ....
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....cedents is that, in the case of the unabated assessment which had attained finality on the date of search, which are reckoned as unabated assessments, no addition over and above the originally assessed income can be made sans any incriminating material found or unearthed during the course of search. The principle reiterated time and again is that something should be found as a result of search which is incriminating in nature so as to implicate the assessee and acquire jurisdiction to make the addition, because for the completed assessment, or in other words, assessment which are not abated, the Assessing Officer is required to make reassessment u/s.153A which is only possible when any incriminating material has been found during the course of search." The Hon'ble Delhi High Court in the case of Pr. CIT vs. Kurule Paper Mills P. Ltd. [2016] 380 ITR 571 (Delhi) held as follows:- 1. The Revenue has filed the appeal against an order dated 14.11.2014 passed by the Income Tax Appellate Tribunal (ITAT) in 3761/Del/2011 pertaining to the Assessment Year 2002-03. The question was whether the learned CIT (Appeals) had erred in law and on the facts in deleting the addition ....
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.... Act. No incriminating material has been found during the course of search. The alleged statements recorded from entry operators have been admittedly retracted by them and the Assessing Officer has not based the additions on these statements. Even otherwise, when copies of the alleged statements recorded by the revenue officials have not been given to the assessee, no addition can be made based on such evidence which is not confronted to the assessee. The contents of the statements are also not brought out in the assessment order. Only a general reference is made that there were certain statements recorded from various entry operators by the investigation wing. No addition can be made on such general observations. We also find that the assessee has not been given an opportunity to cross-examine any of these persons, based on whose statements, the ld. D/R claims that the additions have been made. The Hon'ble Supreme Court in the case of Kishinchand Chellaram vs. CIT, 125 ITR 713 (SC) had held that the opportunity of cross-examination must be provided to the assessee. The Jurisdictional High Court in the case of CIT Vs Eastern Commercial Enterprises (1994) 210 ITR 103 (Kol HC) held a....