TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 604
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....U/s 153A of the Act. 2. BECAUSE all the evidence in relation to the aforesaid share application money/share capital raised during the year were furnished by the assessee company and no infirmity was found or pointed out therein, therefore, addition made and confirmed by CIT(A) is based on conjectures, surmises and suspicion only." 2. Brief facts qua the aforesaid issue raised are that assessee company has filed its return of income on 29.11.2006 showing loss of Rs. 5,45,979/-. The said return was subject to scrutiny and assessment order was passed u/s 143(3). Later on search and seizure operation was carried u/s 132(1) on 19.1.2009 on Kurele Group including Assessee Company and accordingly, a notice u/s 153A was issued. At the time of search the assessment for the assessment year 2006-07 has attained finality and accordingly in terms of second proviso to section 153A such an assessment is to be treated as unabated; and without any reference to any seized material or incriminating evidence found during the course of search. In the impugned proceedings, AO on the basis of balance sheet noted that fresh share application money has been received by the assessee aggregating to Rs. 1,....
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....tion, addition is beyond the scope of section 153A and in support he relied upon the following judgments: 1. Judgment of Hon'ble Delhi High Court dt. 25.05.2017 in the case of Pro CIT Vs. Meeta Gutgutia since reported in [2017] 82 taxmann.com 287 (Delhi) : 152 DTR 153 2. Judgment of Hon'ble Delhi High Court dt. 28.08.2015 in the case of CIT Vs. Kabul Chawla [2016) 380 ITR 573 (Delhi) : [2015} 234 Taxman 300 (Delhi). 3. Judgment of Hon'ble Kamataka High Court dt. 15.12.2015 in the case of CIT Vs. Lancy Constructions [2016} 237 Taxman 728 (Karnataka). 4. Unreported decision dated 14.11.2014 of Hon'ble Tribunal 'D' Bench, Delhi in the case of Dy. CIT vs. Kurele Paper Mills Pvt. Ltd. in ITA No.3761/Del/2011. 5. Unreported decision dated 06.07.2015 of Hon'ble Delhi High Court in the case of Pr.CIT vs. Kurele Paper Mills Pvt. Ltd. in ITA No.369/2015. 6. Hon'ble Supreme Court in the case of Pr. CIT VS. Kurele Paper Mills Pvt. Ltd. [2016J 380 ITR (St.) 65 in S.L.P. (C) No. 34554 of 2015 7. Judgment of Hon'ble Gujarat High Court dt. 14.03.2016 in the case of Pr. CIT Vs. Saumya Construction P. Ltd. [2016] 387 ITR 529 {Guj}." 5. He further su....
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....ssued 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 shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 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 assessmen....
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....ting to any one of the AYs could justify the reopening of the assessment for all the earlier AYs was considered both in Anil Kumar Bhatia {supra) and Chetan Das Lachman Das {supra). Incidentally, both these decisions were discussed threadbare in the decision of this Court in Kabul Chawla {supra). As far as Anil Kumar Bhatia {supra) was concerned, the Court in paragraph 24 of that decision noted that "we are not concerned with a case where no incriminating material was found during the search conducted under Section 132 of the Act. We therefore express no opinion as to whether Section I53A can be invoked even under such situation". That question was, therefore, left open. As far as Chetan Das Lachman Das {supra) is concerned, in para 11of the decision it was observed: "11. Section 153A (1) (b) provides for the assessment or reassessment of the total income of the six assessment years immediately preceding the assessment year relevant to the previous year in which the search took place. To repeat, there is no condition in this Section 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 avai....
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....plained as under: "22. In the firm opinion of this Court from a plain reading of the provision along with the purpose and purport of the said provision, which is intricately linked with search and requisition under Sections 132 and 132A of the Act, it is apparent that: (a) the assessments or reassessments, which stand abated in terms of II proviso to Section 153A of the Act, I.T.A. No.4679 & 4680/DEL/2014 20 the AO acts under his original jurisdiction, for which, assessments have to be made; (b) regarding other cases, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material; and (c) in absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made." 34. The argument of the Revenue that the AO was free to disturb income de hors the incriminating material while making assessment under Section 153A of the Act was specifically rejected by the Court on the ground that it was "not borne out from the scheme of the said provision" which was in the context of search and/or requisition. The Court also explained the purport of the words "asses....