TaxTMI 
TaxTMI 
2019 (9) TMI 296
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....ing facts: (ii) That Rs. 13,73,372/- is the value adopted by Sub- registrar for re-allotment of both the plots to the assessee herself through JDA (Jaipur Development Authority) that too at nominal registration charges for the reason that both these plots were already owned by the assessee but as per prescribed procedure, she had to surrender them in favour of JDA for conversion in urban/residential plots. (iii) During the course of action u/s. 132 of IT Act at the residence of assessee and other relatives, no incriminating material or other documents evidencing any payment over and above the purchase price of both the society plots was found and therefore there was no justification in sustaining the addition; (iv) That the both the above referred plots of Society were sold after conversion for Rs. 3,75,000 each on 06.10.2016 (DLC rate Rs. 3,18,825/- for each plot of land). (v) That without prejudice to above sub-grounds, ld. CIT (A) was not justified in not allowing benefit under section 48 of IT Act on account of cost inflation." 4. Rival contentions have been heard and record perused. Facts in brief are that a search & seizure operation under section 132(1) of the Act w....
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....d the Sub-Registrar, Jaipur-IV, needs to be taken. Just as in the case of other assesses of the Tomar family, even in the case of the assessee, the said property appeared for the first time in the balance sheet of AY 2013-14. Also, it was found that the assessee got married to Shri Anurag Tomar later than 1997, whereas she claimed the purchase of plot nos. B-142 and B-143, just adjacent to plot nos. B-140 and B-141 of Shri Anurag Tomar, way back in 1997. 5. After referring various enquiries made with reference to the Pattas of plot No. B-142 and B-143, the A.O. observed as under: "The registered value of Rs. 6,86,686/- of plot no. B-142 and Rs. 6,86,686/-of plot no. B-143 is being taken for the reason that the purchase cost has been claimed by the assessee at a miniscule Rs. 20,116/- and Rs. 18,855/- for plot nos. B-142 and 143 respectively. There is no way in which it can be ascertained that only this cost was paid by the assessee for the purchase of the said plots. It was only to deflate the purchase cost of this plot that the assessee obtained the back-dated pattas from Baba RN Gaur, Grah Nirman Sahakari Samiti Ltd. If not, then the reason for furnishing false information dur....
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.... was made/sustained by both lower authorities as unexplained payments by assessee in purchasing both plots in A.Y. 2013-14. 9. The ld AR has further submitted that Rs. 13,73,372/- is the value adopted by Sub-registrar for re-allotment of both the plots to assessee himself through JDS (Jaipur Development Authority) that too at nominal registration charges for the reason that both these plots were already owned by the assessee but as per prescribed procedure, he had to surrender them in favour of JDA for conversion in urban/residential plots. 10. As per the ld AR, two unapproved society plots of land (plot No. B-142 & Plot No. B-143) were purchased by the assessee in the year 201213 (with backdated pattas of 1997). On both the plots, assessee had incurred following expenses/ payments in getting them converted into urban plot of land: Plot No. B-142 (293.33 Sq. yards) S.No. Date/year Head of payment Amount P.B. page 1. 2012-13 Cost of plot (to Housing Society) 20,116 6 2. 28.02.2014 Regularization etc to JDA 14,667 7 3. 03.03.2014 Lease deed stamps to JDA 27,480 8 4. 14.03.2014 Registration charges 9,928 9 5. 2012-15 Other expenses....
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....yments made to JDA (cost of improvement) for re-allotment in assessee's name through the office of Sub-registrar. Even ld. AO nowhere admitted or confirmed finding of any incriminating material or other evidence during course of search which could justify such addition. 14. The ld AR has also contended that the issue is covered by the decision of the Coordinate Bench in the case of Smt. Pallavi Tomar Vs ACIT in ITA No. 1028/JP/2017 order dated 24/07/2018 wherein similar addition was deleted on the plea that no incriminating material was found during the course of search. 15. On the other hand, the ld DR has contended that the incriminating document in the form of pattas of plot No. B-142 and B-143 were found during the course of search on the basis of which, the A.O. made detailed enquiry. In terms of the enquiry so made, the A.O. has correctly made addition of Rs. 13,73,372/-. He has further relied on the various findings and observation of the A.O. 16. We have considered the rival contentions and carefully gone through the orders of the authorities below and found from the record that during the course of search at the residence of the assessee, pattas of two plots No. B-1....
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....te of search. As per section 153A of the Act, once a search and seizure action is carried out, the AO has to assess or reassess the total income of the assessee in respect of 6 years immediately preceding the assessment year relevant to the previous year in which a search is conducted or requisition is made. In case the assessment is pending on the date of search the same shall be abated as per proviso to section 153A(1) of the Act and the AO is free to assess the income of the assessee as regular assessment. However, in case of completed assessment and not abated due to initiation of search u/s 132 or making of requisition u/s 132A the AO has to reassess the total income of the assessee and therefore, the assessment already completed can be tinkered with or distrusted until and unless incriminating material is found and seized during the course of search or requisition as case may be indicating undisclosed income of the assessee. Therefore, the scope and jurisdiction of the AO to reassess the total income of the assessee u/s 153A is limited only to the extent of the income disclosed by the incriminating material found and seized during the search and seizure action. The Assessing ....
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....hout 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 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 assess....
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....block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under Section 153A, however, the Assessing Officer has been given the power to assess or reassess the 'total income' of the six assessment years in question in separate assessment orders. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. 20. A question may arise as to how this is sought to be achieved where an assessment order had already been passed in respect of all or any of those six assessment years, either under Section 143(1)(a) or Section 143(3) of the Act. If such an order is already in existence, having obviously been passed prior to the initiation of the search/requisition, the Assessing Officer is empowered to reopen those proceedings and reassess the total income, taking note to the undisclosed income, if any, unearthed during the search. For this purpose, the fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections....
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....ssee which would include both the income declared in the returns, if any, furnished by the assessee as well as the undisclosed income, if any, unearthed during the search or requisition. The position thus emerging is that the search is initiated or requisition is made, they will abate making way for the Assessing Officer to determine the total income of the assessee in which the undisclosed income would also be included, but in case where the assessment or reassessment proceedings have already been completed and assessment orders have been passed determining the assessee's total income and such orders subsisting at the time when the search or the requisition is made, there is no question of any abatement since no proceedings are pending. In this latter situation, the Assessing Officer will reopen the assessments or reassessments already made (without having the need to follow the strict provisions or complying with the strict conditions of Sections 147, 148 and 151) and determine the total income of the assessee. Such determination in the orders passed under Section 153A would be similar to the orders passed in any reassessment, where the total income determined in the original....
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....#39;reassess' have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents. 27. The Allahabad High Court in Smt. Shaila Agarwal's (supra) has held as under:- "19. The second proviso to Section 153A of the Act, refers to abatement of the pending assessment or re-assessment proceedings. The word 'pending' does not operate any such interpretation, that wherever the appeal against such assessment or reassessment is pending, the same along with assessment or reassessment proceedings is liable to be abated. The principles of interpretation of taxing statutes do not permit the Court to interpret the Second P....
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....the binding precedents as cited above, the addition made by the AO is not sustainable, the same is deleted. In the result, the appeal filed by the assessee is allowed." 19. Thus, it is clear from the above decision of the Coordinate Bench that the addition was deleted on the plea of assessment being not pending on the date of search and no incriminating material was found during the course of search. However, in both the cases before us i.e. Dr. Swati Tomar and Dr. Anurag Tomar, assessments were pending. In so far as in case of Dr. Swati Tomar is concerned, the return for the relevant assessment year was filed on 04/6/2014 and six months for the issue of notice U/s 143(2) of the Act was not expired and the search took place on 30/10/2014. Similarly, in the case of Dr. Anurag Tomar, return was filed on 30/05/2014, the time period of issue of notice U/s 143(2) was very much there in so far as search was undertaken on 30/10/2014. Thus, we found that in both these cases, assessments were abated meaning thereby these were pending as on the date of search. We further observe that during the course of search, Pattas of these two plots were found and the amount paid for acquisition of t....