TaxTMI 
TaxTMI 
2018 (12) TMI 459
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.... 2. That on the facts and in the circumstances of the case, the Ld. Pr. CIT (Central) has erred in law by rejecting the argument of the assessee that "assessment has to be completed in course of proceeding U/s-153A based on seized material only" (at para-8 last line) is not correct proposition of law and hence the order passed by the Pr. CIT (Central) U/s-263 needs to be annulled. 3. That on the facts and in the circumstances of the case, the Ld. Pr. CIT (Central) has erred in presuming that the expenditure of Rs. 35,79,213/- debited to the Profit & Loss A/c is not allowable expenses U/s.37(1) while framing the assessment u/s.153A is not proper in the eye of law and hence the order setting aside the assessment is bad in law and needs to be annulled. 4. That the order of the Ld. Pr. CIT (Central) being not based on the facts of the case of the appellant and being contrary to law, should hence be quashed and the appellant Company be given such relief or reliefs as prayed for. 5. That the appellant craves leave to amend, alter, modify, substitute, add to, abridge and/ or rescind any or all of the above grounds. 3. The facts in brief are that the a....
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....s assessment u/s.143(3) of the Act was completed on 16.12.2011 and the search was initiated in 2014 whereas the assessment order u/s.153A r.w.s.143(3) of the Act was passed on 31.03.2016. In the original assessment u/s.143(3) of the Act these facts were verified by the AO and completed the assessment. Further the assessment was concluded prior to the search and no incriminating material in respect of shortage of material was found in the course of search and, therefore, the order passed by the Pr. CIT is not in order and prayed for allowing the appeal. 7. Contra, ld. DR relied on the order of Pr. CIT and supported the findings of Pr. CIT. 8. We have heard the rival submissions and perused the material on record. The sole crux of the issue is as to whether the revision order passed u/s.263 of the Act satisfies the twin conditions being erroneous and prejudicial to the interest of Revenue. The contentions of ld. AR that the type of expenditure as referred by the Pr. CIT is inevitable to the assessee for claim and has been claiming from the earlier years and the department has been accepting the same. Further the assessee, in the course of earlier assessment u/s.143(3) dated 16.....
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....ow revolves on that the assessee has been incurring such expenditure from the earlier years as envisaged before us considering the type of business activity and claim of expenditure. But after the search proceedings on 25.02.2014 the AO has issued notices u/s.153A of the Act and based on the material available has made the addition in respect of share application money which is not disputed in the present appeal by the department. The Pr. CIT has observed that the assessee has no eligibility for the claim of expenditure. We are of the opinion on the subject matter of shortage of expenses envisaged by the ld. AR as per the questionnaire in the original assessment proceedings, where the assessee has satisfied the availability of evidence and the assessment was completed. We also found the substance in the submissions of ld. AR that the expenditure claimed by the assessee considering the business is normal in nature and the business operations of expenditure is arising out of shortages, which has already been submitted and completed assessments can be interfered with by the Assessing Officer while making the assessment under section 153A of the Act only on the basis of incriminatin....
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....9.9.2011 and 27.9.2012. 26. On the other hand, ld CIT DR is of the view that in a proceeding u/s.153A of the Act even in the case of unabated assessment, addition can be made dehors incriminating search material. Ld D.R. in support of his above view relied upon the following decisions. (a) E.N. Gopakumar v. Commissioner of Income-tax (Central) [2016] 75 taxmann.com 215 (Kerala): "Section 153A, read with section 132, of the Income-tax Act, 1961 - Search & seizure - Assessment in case of (Scope of) - Whether for issuance of a notice under section 153A(1)(a), it is not necessary that search on which it was founded should have necessarily yielded any incriminating material against assessee or person to whom such notice is issued - Held, yes - Whether, therefore, assessment proceedings generated by issuance of a notice under section 153A(1)(a) can be concluded against interest of assessee including making additions even without any incriminating material being available against assessee in search under section 132 on basis of which notice was issued under section 153A(1)(a) Held, yes [Paras 7 and 8] [In favour of revenue). " (b) Commissioner of Income....
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....i) Pr.CIT Vs. Meeta Gutgutia Prop. M/s.Fems "N" Petals [2017) 395 ITR 526 (Del), wherein it was held that it is only if during the course of search u/s.132 of the Act incriminating material justifying the re-opening of the assessments for six previous years is found that the invocation of section 153A qua search of the assessment years would be justified. iv) In case of Pr. CIT-2, Kolkata Vs. M/s Salasar Stock Broking Ltd., G.A.No.1929 of 2016 (ITAT No.264/Kol/2016), order dated 24.08.2016, the Hon'ble Kolkata High Court has held as under :- "We are in agreement with the views expressed by the Kamataka 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 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. In that view of the matter, we are unable to admi....