TaxTMI 
TaxTMI 
2020 (1) TMI 914
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....nder tax without any restriction. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in holding that such assessment or re-assessment u/s 153A is to be restricted only to the incriminating materials found during the search. " 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of unexplained cash credit u/s 68 of the Act of Rs. 1,47,27,400/-. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the disallowance of 1/3 of expenditure as bogus amounting to Rs. 21,58,995/-. 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of suppression of closing stock of Rs. 4,59,049/-. 6. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the disallowance u/s 40(a)(ia) of the Act of Rs. 2,61,000/-. 7. On the facts and in the circumstances of the case and in law, the Ld. CI....
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.... assessee. Thus on the date of search i.e 15-03-2013 the assessment year under consideration became unabated. The 1st issue arises for our consideration whether the assessment in dispute can be considered as unabated in the given facts and circumstances. The answer stands in favor of the assessee. It is because the time permitted under the statute for selecting the case under scrutiny was up to 30 September 2012 but there was no notice issued for the scrutiny assessment. In this regard we find support and guidance from the order of Kolkata Tribunal in the case of Krishna Kumar Singhania Vs. DCIT reported in 88 taxmann.com 259 wherein it was held as under: "Hence now the only issue which is left to be addressed is the preliminary issue of whether the addition could be framed under section 153A in respect of a concluded proceeding without the existence of any incriminating materials found in the course of search. the scheme of the Act provides for abatement of pending proceedings as on the date of search. It was not in dispute that the assessment for the assessment year 2009-10 was not selected for scrutiny and the time limit for issuance of notice under section 143(2) had e....
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....arch. The scheme of the Act provides for abatement of pending proceedings as on date of search. It is not in dispute that the year under consideration has falls under the ambit of unabated assessment as on the date of search. There is no differentiation as found in the intent of the legislature to differentiate whether the assessments were originally framed u/s 143(1) or 143(3) or 147 of the Act. Therefore, if any incriminating material is not found during the course of search related to those concluded years, the Act does not confer any power on the ld. AO to disturb the finding given thereon and income determined thereon as finality has already been reached and no proceedings were pending on the date of search. 8. We find that the Hon'ble Delhi High Court in the case of CIT Central- III vs. Kabul Chawla reported in 380 ITR 573 (Del) has decided the impugned issue in favour of the assessee. The relevant extract of the order 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 t....
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....d or not already disclosed or made known in the course of original assessment." 8.1. We also find that the Hon'ble Jurisdictional Gujarat High Court in the case of Principal Commissioner of Income Tax vs. M/s. Saumya Construction Pvt. Ltd. reported in 387 ITR 529 has decided the issue in favor of the assessee by observing as under: "16. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz.,....