TaxTMI 
TaxTMI 
2018 (12) TMI 642
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....g exemption under section 10(38) of the Act for capital gain of Rs. 1,16,74,502/-. The assessee has raised additional plea by way of additional grounds of appeal that disallowance of exemption under section 10(38) has been made erroneously in an assessment order passed under section 153A r.w.s. 143(3) because no incriminating material was found during the course of search. 3. Brief facts of the case are that a search and seizure operation was carried out in the group cases of Riddhi Siddhi on 22.9.2011 under section 132 of the Income Tax Act. A notice under section 153A was issued upon the assessee on 25.9.2012. In response to this notice, return was filed on 25.9.2012 declaring total income at Rs. 66,96,554/-. Original return under sect....
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....equent events by way of sale, or valuation of closing stock impact the profit and loss account of the holder. As has been noted by the Assessing Officer, the assessee company, in fact, has incurred loss on the ultimate transaction of sale of these very shares and the same has also been allowed by the Id. Assessing Officer. Not only this, for the subsequent assessment year, on account of fall in market price further loss is also held allowable by me in Appeal No.CIT(A)-12/714/DCIT/CC-2(4)/2013-14 decided by me along with this appeal. Obviously, tinder the scheme, the assessee cannot have the simultaneous and double benefit of firstly claiming exemption from capital gains and thereafter also claiming the loss at the time of actual sale. The L....
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.... further relied upon the following decisions: i) CIT Vs. Kabul Charwala, 380 ITR 0183 (Del) ii) CIT Vs. Kurele Papers, 380 ITR 571 (Del) iii) CIT Vs. Lata Jain, 384 ITR 543 (Del) 5. On the other hand, the ld.DR contended that though there may not have any incriminating material qua this issue, but there were material with regard to other issues, and therefore, the AO is justified in invoking jurisdiction under section 153A. The ld.AO has rightly taken up this issue once determination of total income was pending before him. 6. We have duly considered rival submissions and gone through the record carefully. A perusal of the CIT(A)'s order would reveal that only issue agitated by the assessee before the ld.CIT(....
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.... of section 153A. After a detailed analysis Hon'ble Court has summarized legal proposition emerging out for application of section 153A. Such proposition reads as under: "37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shal....
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....t 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 assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search 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." 7. It is also pertinent to note that in the case of CIT Vs. Kabul Chawla (supra) Hon'ble Court has observed that return....
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....ase like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition. In the present case, it is an admitted position that no incriminating material was found during the course of search, however, it is on the basis of some material collected by the Assessing Officer much subsequent to the search, that the impugned additions came to be made. On behalf of the appellant, it has been conte....