AI Drafter 
TaxTMI 
TaxTMI 
2017 (10) TMI 1541
X X X X Extracts X X X X
X X X X Extracts X X X X
....econd proviso to section 153A, the completed assessment(s) cannot be disturbed except only in the case where there is any undisclosed income found in the course of search or any incriminating documents pointing towards such undisclosed income is found in course of search or in the course of assessment proceedings U/s.153A of the Income Tax Act, 1961. 3. He failed to appreciate and ought to have held that in the present case, no incriminating material has been found which requires reexamination/review of any of the items which were the subject matter of examination in course of original assessment proceedings or in the proceedings under section 153A read with section 143(3) / 143(1) of the Income-tax Act, 1961. 4. The Appellant therefore prays that the order passed by the Assessing officer U/s 143(3) rws 153A of the IT Act, 1961 is arbitrary, contrary to the provisions of law, and the settled legal position and hence is liable to be quashed. Ground II: Amortizing the amount of business expenditure and depreciation aggregating of Rs. 2,92,58,647/-: 1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in upholding t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....income tax of Rs. 1,51,854/- treating the same as enduring in nature instead of allowing deduction of same in the subsequent assessment year i.e. assessment year 2009-10 in which the IPL - First season took place as all the expenses incurred were revenue in nature and were incurred after set up of business so as to be ready to participate in IPL Season1 which took place from April 18, 2008 to June 1, 2008. 2. The Appellant therefore prays that the Assessing Officer be directed to allow deduction of operating and administrative expenses of Rs. 2,91,06,793/- and claim of depreciation as per income tax of Rs. 1,51,854/- in the subsequent assessment year i.e. assessment year 2009-10 since all these expenses were incurred after set up of business so as to be ready to participate in IPL Season -1 which took place from April 18, 2008 to June 1, 2008. Ground V: The Appellant craves leave to add, alter and/or amend all or any of the foregoing grounds of appeal." 3. Regarding Ground No. 1, it is submitted by the learned AR of the assessee that this issue is covered in favour of the assessee by the tribunal order rendered in the case of ACIT vs. M/s Cornerstone P....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ement to carry forward of losses and set off of same in subsequent assessment years based upon the material available on record that were filed in course of the assessment proceedings for Assessment Year 2009-10 and 2010-1 land based upon which the assessment completed U/s. 143(1) claiming the loss amount was found correct and consequently no reopening of assessment by resorting to the provisions of section 147 or revision of assessment by resorting to the provisions of section 263 was made, It is contended that having regard to the second proviso to section 1534 the completed assessments cannot be disturbed except only in the case where there is any undisclosed income found in the course of search or any incriminating documents pointing towards such undisclosed income is found in the course of search or in the course of assessment proceedings u/s.153A of the Act. Treatment by AO: 2.5 The Assessing Officer on completion of assessment u/s 143(3) rws 153A has disallowed the claim of operating and administrative expenses of Rs. 2,91,06,793/- incurred by the Appellant and claim of depreciation as per income tax of Rs. 1,51,854/- as claimed in the return of income by h....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (xvii) Mumbai I TAT in the case of M/S. Vama Apparels (India) Pvt Limited Vs. Asst. CIT in 1. T.A. No. 5835/Mum/2005 for Assessment year-2002-03 (xviii) Mumbai IT AT in the case of A.C.I.T. Central Circle 2 vs Veena Developers in ITA Nos. 5820, 5821 & 822/Mum/2012 for Assessment Years: 2004-05, 2005-06 & 2006-07 (xix) Chennai Tribunal in the case of Shri A.B.S. Sanjay in ITA Nos. 1691, 1692 & for Assessment Years : 2003-04, 2004-05 & 2005-06. (xx) Delhi High Court in the case of Commissioner of Income-tax-VII v. Chetan Das Lachman 25 taxmann.com 227 (Delhi) (xxi) Delhi High Court in the case of ACIT, Central Circle-4, New Delhi v. India Ltd in ITA No.2637 /DEL/ 2010 for Assessment Year: 2003-2004. (xxii) New Delhi ITAT in the case of MGF Automobiles Ltd Vs. ACIT in ITA Nos.4212 a 4213/DEL/2011 for Assessment Year: 2004-05 a 2005-06 (xxiii) Mumbai ITAT in case of Assistant Commissioner of Income-tax, Cent. Cir. 33, Mumbai v. Jayendra P. 46 taxmann.com 457 (Mumbai - Trib.) 2.8 The appellant has Further contended that it is a settled position in law that in Assessment U/s 153A/153C additions cannot be made unless they ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in absence of any incriminating material. The appellant has cited some case laws in his favour: o Rajasthan High Court in the case of Jai Steel (India) v. ACIT ((259 CTR 281) (Raj.)] o Bombay High Court in the case of CIT v. Continental Warehousing Corporation (NhavaSheva) Ltd in ITA No.523 of 2013 well as in the case of CIT V. All Cargo Global Logistics Ltd in Appeal No. 1969 of 2013 [2015] 58 taxmann.com 78 (Bombay) o CIT vs Murli Agro Products Limited (49 taxmann.com 172) for AY 2008-09 o Allahabad High Court in the case of CIT v. Smt. Shaila Agarwal (2012) 346 ITR 130 (Allahabad) o CIT v Kabul Chawla (61 Taxman.com 412) (Del) (High Court) 6.2.3 In the case of Canara Housing Development Co 62 taxmann.com 250 (Karnataka), the Hon'ble Karnataka High Court has discussed the issue of conditions in which notice a/s 153A can be issued as under: 10. Section 153A of the Act starts with non obstante clause. The letters imposed upon Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub- section (1) o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eassess the total, income, taking note of the undisclosed income, if any, unearthed during the search. He has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153/4, by even making reassessments without any fetters. 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. When once the proceedings are initiated under Section 153A Of the Act, the legal effect is even in case where the assessment order is passed it stands reopened. In the eye of law there is no order of assessment, Re-opened means to deal with or begin with again. It means the Assessing Officer shall assess or reassess the total income of six assessment years. Once the assessment is reopened, the assessing authority can take note of the income disclosed in the earlier return, any undisclosed income found during search or and also any other income which is not disclosed in the earlier return or which is not unearthed during the search, in order to find out what is the "total income" of each year and then pass the assessment order. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of the jurisdictional court has not been considered by the later decision. Hence, Canara Housing development Co still holds good. Similarly, in the case of IBC Knowledge Park cited supra, the main issue before the Hon'ble High Court was related to section 153C. The Hon'ble Karnataka High Court has held that where no material belonging to a third party was found during a search, but only inference of undisclosed income was drawn, section 153C would have no application, That ease can not be, in my humble opinion, a binding precedent for an issue related to section 153A. 6.2.4 The other decisions cited are certainly in favour of the appellant but they are not the decision of the jurisdictional High Court. As of now, the decision of Canara Housing development Co vis binding on me, for the reasons discussed in the above paragraphs, In a recent decision in the case of St Francis Clay Decor Tiles 70 taxmann.com 234 (Kerala), a Similar view has been taken while discussing section 153A, The relevant para is under: "On a plain reading of section 153A it is clear that once search is initiated under section 132 or a requisition is made under section 132A after 31-5-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee, including undisclosed income, notwithstanding that returns for these years have already been processed u/s 143(1)(a). In the case of Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 64 taxmann.com 34 (SC), SLP has been granted against High Court's ruling that no addition can be made in respect Of assessments which have become final if no incriminating material is found during search or during 153A proceeding. 6.2.5 Therefore, in view Of the above judgements, it is held that the Assessing Officer is bound to assess and reassess the total income of an assessee in whose case a notice u/s 153A has been issued. The contention of the appellant that the Assessing Officer is not empowered to review/re-examine any issue in the proceedings under section 153A is not acceptable. Accordingly, this ground of appeal is, therefore, DISMISSED. 5. As per these paras reproduced from the order of CIT (A), it is seen that there is no finding to the effect that any incriminating material was found in search. As per the assessment order also, there is no reference to any incriminating material found in search. Learned CIT (A) has decided the issue against the ass....