AI Drafter 
TaxTMI 
TaxTMI 
2019 (11) TMI 1027
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....en raised in these six appeals arising from identical facts and circumstances and in pursuant to the same search and seizure action dated 22/07/2015, therefore, for the sake of convenience, all these six appeals were clubbed together for the purpose of hearing and disposal. For the purpose of recording the facts, the appeal in the case of DCIT Vs. M/s Motisons Buildtech Pvt. Ltd. in ITA No. 1322/JP/2018 is taken as a lead case. In this appeal, the revenue has raised following grounds: "1. Whether on the facts and the circumstances of the case CIT(A), has erred in deleting the addition of Rs. 3,68,27,500/- made u/s 68 of the Act, ignoring the fact that assets of the assessee company don't commensurate to premium charged and further ignoring the fact that neither any business activity was performed nor any business income has been shown by the assessee. 2. Whether on the facts and in the circumstances of the case and in law the CIT(A) is justified in deleting the addition of Rs. 3,68,27,500/- made u/s 68 of the IT Act ignoring the fact that neither any business activity was performed nor any business income has been shown by these concerns from whom share applic....
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....he A.O. in respect of all these assessment years on the ground that the addition made by the A.O. without any incriminating material found or seized during the search and seizure action is not legally tenable. Aggrieved by the orders of the ld. CIT(A), the revenue has filed these appeals. 4. Before us, the ld CIT-DR has submitted that it is not a simple case of repetititon of the addition by the A.O. but the A.O. has conducted a due enquiry by recording the statements of the persons concerned and only after the enquiry conducted by the A.O. it was held that the assessee has failed to establish the creditworthiness of these share applicants and genuineness of the transactions. The ld CIT-DR has contended that the A.O. has also brought on record the return of income of these share applicant companies and found that all these said applicant companies are paper companies without having any business activity. Thus, the ld. CIT-DR has contended that the A.O. was duly aware and conscious about the fact that there was an earlier search on 31/10/2012 and in pursuant to the earlier search, the assessments were framed U/s 153A as well as U/s 153B(1)(b) of the Act for these assessment years....
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....hat the scope of the assessment u/s 153A of Income Tax Act, 1961 is limited to some incriminating documents/evidence found as a result of search and the same does not empower to the AO to make additions in search assessment without having any incriminating material found as the result of search over and above to undisclosed assets/expenses/ income etc. found during the course of search. Search u/s 132 was carried on 22.07.2015 over the Motisons Group and during the course of search the Income Tax department did not find any document/ evidence/material to show that the assessee was having some unaccounted money/income which was brought in books of accounts in the form of share application/share premium and this fact is evident from the record found/seized as a result of search. From a plain reading of the provisions of section 153A, it is evident that if a search has been initiated under section 132(1) or requisition has been made under section 132A, then the Assessing Officer is obliged to issue notice under section 153A, requiring such person to furnish return of income of six years in the prescribed form for the immediately preceding the year of search. The Assessing Officer is l....
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....ons as well as relevant material on record. The additions made by the A.O. U/s 68 of the Act on account of share application money and share premium received by the assessee from the various companies have been deleted by the ld. CIT(A) on the ground that an identical addition was made by the A.O. while passing the assessment orders U/s 153A as well as U/s 153B(i)(b) of the Act which were also subjected to appeals and this Tribunal deleted those additions made by the A.O. pursuant to the first search dated 31/10/2012. The ld. CIT(A) noted the fact that the additions were made without any incriminating material found or seized during the course of search and seizure action dated 22/07/2015. These facts of making the earlier additions by the A.O. in respect of these share capital and share premium received by the assessee in the assessment orders passed in pursuant to the search dated 31/10/2012 are not in dispute. Further it is also undisputed fact that all these assessment proceedings were already completed and were not pending as on the date of search i.e. 22/07/2015. Thus, it is a relevant and material point to be considered whether the additions made by the A.O. without any incr....
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....e or revise his own decision in the proceedings U/s 153A of the Act in absence of any further incriminating material found or seized during the course of second search carried out on 22/07/2015. Therefore, in absence of any incriminating material found or seized disclosing any undisclosed income or unaccounted income, the addition made by the A.O. U/s 68 of the Act is not sustainable in law. There are binding precedents on this issue including the judgment of the Hon'ble Jurisdictional High Court in the case of Jai Steel (India) Vs ACIT (supra) as well as other decisions including the decision of Hon'ble Delhi High Court in the case of Pr.CIT Vs Meeta Gutgutia (supra). The said judgment of the Hon'ble Delhi High Court was challenged by the revenue before the Hon'ble Supreme Court, however, the SLP filed by the revenue was dismissed by the Hon'ble Supreme Court vide order dated 02/07/2018. We further note that an identical issue has been considered by this bench in the case of Kota Dall Mill Vs DCIT in ITA Nos. 997 to 1002/JP/2018 and 1119/JP/2018 and 1057 to 1062/JP2018 and 1210/JP/2018 vide order dated 31/12/2018 in para 6 as under: "6. We have considered the rival submis....
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...."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 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....
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....on of document 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. The Hon'ble Delhi High Court has reiterated its view in case of Principal CIT vs. Kurele Paper Mills (supra) in para 1 to 3 as under :- "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 of Rs. 89 lacs made by the Assessing Officer under Section 68 of the Income Tax Act, 1961 ('ACT') on bogus share capital. But, the issue was whether there was any incriminating material whatsoever found during the search to justify initiation of proceedings under Section 153A of the Act. 2. The Court finds that the order of the CIT(Appeals) reveals that there is a factual finding that "no incriminating evidence related to share capital issued was found during the course of search as is manifest from the order of the AO." Consequently, it was held that the....
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....ound during the search conducted under Section 132 of the Act. We therefore express no opinion as to whether Section 153A 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 11 of 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 available with the Assessing Officer which can be related to the evidence found. This, however, does not mean that the assessment under Section 153A can be arbitrary or made without 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." 58. In Kabul Chawla (supra), the Court discussed the decision in Filatex India Ltd. (supra) as well as the above two decisions and obse....
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....h, 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 "assess" and "reassess", which have been found at more than one place in Section 153A of the Act as under: "26. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or ....
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.... 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 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....
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....s that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or requisition under section 132A, as the case may be, shall abate. Sub-section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A of the Act. Similarly, sub-section (2) provides for rev....
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.... Act. ** ** ** 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions and disallowance in respect of an the six assessment years. In the opinion of this court, the said contention does not merit acceptance, inasmuch as. the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requis....
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....s referred to in Kabul Chawla (supra) has been affirmed by the Supreme Court by the dismissal of the Revenue's SLP on 7th December, 2015. The decision in Dayawanti Gupta 64. That brings us to the decision in Smt. Dayawanti Gupta (supra). As rightly pointed out by Mr. Kaushik, learned counsel appearing for the Respondent, that there are several distinguishing features in that case which makes its ratio inapplicable to the facts of the present case. In the first place, the Assessees there were engaged in the business of Pan Masala and Gutkha etc. The answers given to questions posed to the Assessee in the course of search and survey proceedings in that case bring out the points of distinction. In the first place, it was stated that the statement recorded was under Section 132(4) and not under Section 133A. It was a statement by the Assessee himself. In response to question no. 7 whether all the purchases made by the family firms, were entered in the regular books of account, the answer was: "We and our family firms namely M/s. Assam Supari Traders and M/s. Balaji Perfumes generally try to record the transactions made in respect of purchase, manufacturin....
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....Dayawanti Gupta (supra), it was observed as under: "23. This court is of opinion that the ITAT's findings do not reveal any fundamental error, calling for correction. The inferences drawn in respect of undeclared income were premised on the materials found as well as the statements recorded by the assessees. These additions therefore were not baseless. Given that the assessing authorities in such cases have to draw inferences, because of the nature of the materials - since they could be scanty (as one habitually concealing income or indulging in clandestine operations can hardly be expected to maintain meticulous books or records for long and in all probability be anxious to do away with such evidence at the shortest possibility) the element of guess work is to have some reasonable nexus with the statements recorded and documents seized. In tills case, the differences of opinion between the CIT (A) on the one hand and the AO and ITAT on the other cannot be the sole basis for disagreeing with what is essentially a factual surmise that is logical and plausible. These findings do not call for interference. The second question of law is answered again in favour of the reve....
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....05. As regards non-refundable security deposit, the CIT (A) accepted the AO's findings that treating the sum as 'goodwill written off on deferred basis' was not correct, hence the addition of Rs. 5,09,343 was held to be justified and correct. It was duly accounted for under 'liabilities' and transferred to income in a phased manner. This was not done by manipulating the account books of the Assessee as alleged by the Revenue. This would have been evident had the return been picked up for scrutiny under Section 143(3) of the Act. This, therefore, was not material which was subsequently unearthed during the search which was not already available to the AO. Consequently, the additions sought to be made by the AO on account of security deposits were rightly deleted by the CIT (A)." Thus the essential corollary of these decisions is that no addition can be made in the proceedings under section 153A in respect of the assessments which were completed prior to the date of search except based on some incriminating material unearthed during the search which was not already available to the AO. It is pertinent to note that the SLP filed by the revenue against the ....
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....n obstante clause with which sub-section (1) of Section 153A opens. The timelimit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. 21. Now there can be cases where at the time when the search is initiated or requisition is made, the assessment or reassessment proceedings relating to any assessment year falling within the period of the six assessment years mentioned above, may be pending. In such a case, the second proviso to sub-section (1) of Section 153A says that such pr....
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.... and the income that escaped assessment are clubbed together and assessed as the total income. In such a case, to reiterate, there is no question of any abatement of the earlier proceedings for the simple reason that no proceedings for assessment or reassessment were pending since they had already culminated in assessment or reassessment orders when the search was initiated or the requisition was made." (Emphasis supplied) 24. The said judgment also in no uncertain terms holds that the reassessment of the total income of the completed assessments have to be made taking note of the undisclosed income, if any, unearthed during the search and the income that escaped assessments are required to be clubbed together with the total income determined in the original assessment and assessed as the total income. The observations made in the judgment contrasting the provisions of determination of undisclosed income under Chapter XIVB with determination of total income under Sections 153A to 153C of the Act have to be read in the context of second proviso only, which deals with the pending assessment/reassessment proceedings. The further observations made in the context of de novo ass....
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....rpret the Second Proviso to Section 153A in a manner that where the assessment or reassessment proceedings are complete, and the matter is pending in appeal in the Tribunal, the entire proceedings will abate. 20. There is another aspect to the matter, namely that the abatement of any proceedings has serious causes and effect in as much as the abatement of the proceedings, takes away all the consequences that arise thereafter. In the present case after deducting bogus gifts in the regular assessment proceedings, the proceedings for penalty were drawn under Section 271(1)(c) of the Act. The material found in the search may be a ground for notice and assessment under Section 153A of the Act but that would not efface or terminate all the consequence, which has arisen out of the regular assessment or reassessment resulting into the demand or proceedings of penalty." (Emphasis supplied) The said judgment which essentially deals with second proviso to Section 153A of the Act also supports the conclusion, which we have reached hereinbefore. 28. It has been observed by the Hon'ble Supreme Court in K.P. Varghese v. ITO [1981] 131 ITR 597/7 Taxman 13 that "it is....
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.... accounts as well as partners' capital received by the assessee are nothing but assessee's own unaccounted and undisclosed income routed back in the garb of unsecured loans and partners' capital. There is no dispute that these transactions of unsecured loans and partners' capital contribution are duly recorded in the books of accounts and disclosed in the return of income which were already completed as the assessments for these four assessment years were not pending on the date of search, therefore, it is manifest from the record that during the course of search and seizure under section 132 of the Act in the case of the assessee no material much less the incriminating material was unearthed or any undisclosed income which was not disclosed in the books of accounts was detected or found. The only incriminating material which was referred by the AO is pages 21 to 26 of Annexure AS-1 in respect of long term capital gain earned by Shri Rajendra Agarwal and his family members. The said long term capital gain was disclosed by Shri Rajendra Agarwal in his statement under section 132(4) and, therefore, it was surrendered and offered to tax by Shri Rajendra Agarwal and his family members ....
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....s been held that the law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee, is on him. Where the nature and source thereof cannot be explained satisfactorily, it is open to the revenue to hold that it is the income of the assessee and no further burden is on the revenue to show that the income is from any particular source. It may also be pointed out that the burden of proof is fluid for the purposes of Section 68. Once assessee has submitted basic documents relating to identity, genuineness of transaction and creditworthiness then AO must do some inquiry to call for more details to invoke Section 68. b. The assessee firm has filed confirmation letters and this office carried out further enquiry to examine the reality of the transactions. An enquiry was sent to the Investigation Directorate Kolkata and it has been established that these investor or lender Companies are controlled by the entry operators. The statements of various entry operators are sufficient evide4nces to show that the unsecured loan and parther's capital are assessee's own undisclosed income brought into the books of the assessee unde....
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.... |capital Rs. 67,20,14,999/- Assessed income Rs. 70,02,98,459/- R/o Rs. 70,02,98,459/- The total income of the assessee in the status of Firm for Assessment Year 2010-11 relevant to Previous Year 2009-10 is assessed at Rs. 70,02,98,459/- u/s 153A read with section 143(3) of I.T. Act, 1961. The form ITNS-150 showing calculation of tax and interest chargeable, if any, is attached herewith and forms a part of this Order. A notice of demand u/s 156 of the Act and Challan for payment of tax, if payable, is hereby issued. Penalty notice u/s 274 rws 271(1)(c) is issued separately." The entire finding of the AO is based on the information received from the Investigation Wing Kolkata and statement of Shri Anand Sharma. The ld. CIT (A) though has not disputed the legal proposition on this issue, however, the contention of the assessee was turned down merely on the ground that the SLPs filed by the revenue in the cases of Kabul Chawla (supra) and M/s. All Cargo Global Logistics (supra) etc. have been admitted for decision by the Hon'ble Supreme Court. The relevant part of the finding of the ld. CIT (A) in para 3.2.2 and 3.2.4 at pages 35 and 36 are....
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....ent order nor in the order of the ld. CIT (A) there is any mention or finding that the additions have been made by the AO on the basis of any incriminating material found during the course of search and seizure in the case of the assessee. The AO has solely relied upon the report of the Investigation Wing Kolkata and statement of one Shri Anand Sharma recorded by the Investigation Wing during the survey under section 133A of the Act. Therefore, even if the information/report of the Investigation Wing Kolkata is considered as a relevant evidence, the same cannot be regarded as incriminating material unearthed during the course of search and seizure under section 132 of the IT Act in case of the assessee. The requirement for making the addition under section 153A in the assessment years where the assessment was not pending on the date of search and the proceedings are in the nature of reassessment is essentially the incriminating material disclosing undisclosed income which was not disclosed by the assessee. In the case in hand, the AO himself has not claimed any incriminating material found during the search and seizure in the case of the assessee. Accordingly, in ....
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....2nd search = 22.7.2015 S No. Description Date 1. Date of filing of ROI u/s 139 28.9.2012 2. Date of 1st search u/s 132 31.10.2012 3. Date of filing of return u/s 153A- ref 1st search 31.8.2013 4. Date of assessment u/s 143(3)/ 153A- ref 1st search 25.3.2015 5. Date of order passed by CIT(A)- ref 1st search 31.3.2017 6. Date of order of AO giving effect to CIT(A) order- 1st search 27.4.2017 7. Date of Hon'ble ITAT Jaipur order- ref 1st search 30 10 2017 8. Date of order of AO giving effect to Hon'ble ITAT Jaipur order- ref 1st search 28.12.2017 9 . Date of passing of order u/s 143(3)/153A - 2nd search 30.12.2017 5.3 I have perused the order of the AO and submissions made in this regard. Perusal of assessment order passed u/s 143(3)/153A shows that the additions made by the AO are not relatable to any seized material found during the course of 2nd search. I also find that for this A.Yr the assessments stood completed on the date of search. The AO repeated merely the assessment order on the date of search and the reason for reiterating the assessment is as under: 23. The....
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....hare capital and share premium have been received has hardly any business activity. Therefore, the share premium and share reserves shown by them are merely book entries and assessee has routed its undisclosed income in the grab of these companies. On the issue of share premium addition were made by then AO for AY 2012-13 treating the share premium as assessee's undisclosed income and was added u/s 56(1) of the I.T. Act. This order was challenged by the assessee before CIT(A) and then before the Hon'ble ITAT. The Hon'ble ITAT has held that the addition made earlier by then AO u/s 56(1) of the I.T. Act were not correct, so far as invoking of provisions of sec 56(1) of the I.T. Act is concerned in respect of share premium received and such addition can only be made u/s 68 of the I.T. Act. The Hon'ble ITAT has further held that the CIT(A) has no power to change the section from 56(1) to section 68 of the I.T. Act in the appellate proceedings and such addition u/s 68 can only be made by the assessing officer as per the definition of section 68 of the I.T. Act. In view of these observation the issue is decided as under. In the year under consideration a....
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....total share premium and share capital amounting to Rs. 3,68,27,500/- is hereby added to the total income of the assessee u/s 68 of the I.T. Act as undisclosed income of the assessee company. In my view, in short, the issues to be decided is: (A) Whether in case of an assessment is completed and not pending on the date of search, whether an AO is competent to travel beyond the evidence found as a result of search which does not suggest any undisclosed income? 6. For deciding issue (A) above, there cannot be better guidance than the decision of jurisdictional high court in the case of Jai Steel (India), (2013) 36 Taxmann.com 523. In the said case, die facts were that A search under Section 132(1) of die Act was conducted at various business premises of Suncity Alloys Group of Companies, Jodhpur, to which, the appellant firm belong and at the residence of directors/partners of various firms/companies on 20.02.2004. Several incriminating documents were recovered from the residential premises of such partners/directors and from business premises of the firms/companies of die group; notice under Section 153A of the Act was issued on 05.10.2004 for fili....
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....sessed. 19. The underline purpose of making assessment of total income under Section 153A of the Act is, therefore, to assess income which was not disclosed or would not have been disclosed. The purpose of second proviso is also very clear, inasmuch as, once a assessment or reassessment is 'pending' on the date of initiation of search or requisition and in terms of Section 153A a return is filed and the AO is required to assess the same, there cannot be two assessment orders determining the total income of the assessee for the said assessment year and, therefore, the proviso provides for abatement of such pending assessment and reassessment proceedings and it is only the assessment made under Section 153A of the Act would be the assessment for the said year. 20. The necessary corollary of the above second proviso is that the assessment or reassessment proceedings, which have already been 'completed' and assessment orders have been passed determining the assessee's total income and, such orders are 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 such ca....
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.... pending on the date of search will not abate and assessment for such non pending years will be only on the basis of incriminating material found during search. In respect of non-abated assessment, though the assessment is to be framed regarding, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material and in absence of any incriminating material, the completed assessment can be reiterated. Just as the appellant cannot raise any additional claim for any exemption/deduction in respect of unabated assessment where no incriminating material is found, the powers of the AC) will be also limited to make addition/disallowances only to the extent of incriminating material for a non-abated assessment. The judgment of jurisdictional high court in the case of Jai Steel (supra) has been considered in all the judgments of Delhi High court, Karnataka High Court and Gujarat High court relied upon by the appellant and therefore they ate not discussed herein. At the same time, useful reference can be made to the judgment of Hon'ble Bombay High Court in the case of Murali Agro Products Ltd. (2014) 49 Taxmann.com 172 wherein it ....
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.... 61 at 107) the CBDT has clarified that on initiation of proceedings under Section 153A the proceedings pending in appeal, revision or rectification proceedings against finalised assessment/ reassessment shall not abate. It is only because, the finalised assessments/reassessments do not abate, the appeal, revision or rectification pending against finalised assessments/ reassessments would not abate. Therefore, the argument of the revenue, that on initiation of proceedings under Section 153A the assessments/reassessments finalised for the assessment years covered under Section 153A of the Income-tax Act stand abated cannot be accepted. Similarly on annulment of assessment made under Section 153A (1) what stands revived is the pending assessment/reassessment proceedings which stood abated as per section 153A(1). 11. In the present case, as contended by Shri Mani, learned counsel for the assessee, the assessment for the assessment year 1998-99 was finalised on 29-12-2000 and search was conducted thereafter on 3-12-2003. Therefore, in the facts of the present case, initiation of proceedings under Section 153A would not affect the assessment finalised on 29-12-2000. 12....
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....all 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 he only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would he brought to tax", iv. Although Section 153A 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 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....
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....Department. The Hon'ble High Court of Rajasthan has dismissed all the appeals filed by the Department vide order dated 31.7.2018. In other words, all the grounds of appeal raised, as a result of 1st search, have now attained finality in favour of appellant. 7.2 Thus making additions again in the order u/s 143(3)/u/s 153A passed pursuant to 2nd search is not only legally untenable ( as per discussion in pan above) but also is violation of natural justice as it raises the substantial demand against the appellant on the issues which have already been decided in its favour by the highest fact finding body, the Hon'ble ITAT Jaipur. 7.3 Considering the above I am of the view that as the additions made by the AO are without any reference to the seized material, they are not legally tenable. The same are therefore directed to be deleted. The legal ground taken by the appellant is thus allowed. On merits, since the grounds have already been adjudicated by the Hon'ble ITAT Jaipur and there is not even a shred of new material/information/ seized documents the additions made by the AO are unsustainable on facts and in law. Same is directed to be deleted." Thus,....