TaxTMI 
TaxTMI 
2021 (6) TMI 949
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....e matters relate to common search proceeding and issues involved therein are common in nature, these are heard analogously and are being disposed of by a common order for the sake of convenience. IT(SS)A No. 130/Ahd/2018 (A.Y. 2011-12):- 2. At the time of hearing of the instant appeal the Ld. Senior Counsel appearing for the assessee submitted before us that the issues involved in this particular case have already been decided in favour of the assessee in the appeal preferred by the Revenue in IT(SS)A No. 179/Ahd/2019 in the case of DCIT vs. Smt. Sonal Uday Vora and in C.O. No. 107/Ahd/2019 in the case of Smt. Sonal Uday Vora vs. DCIT for the A.Y. 2011-12. The Ld. DR though relied upon the order passed by the Ld. AO the contention made by the Ld. Senior Counsel as mentioned hereinabove has not been able to controvert. The maintainability of such reassessment proceeding under Section 143 r.w.s. 153A of the Act was also raised before us on this count that the assessee herein has filed her original return of income on 28.09.2011 and the time limit of issuance of notice under Section 143(2) in the facts and circumstances of the case had already expired. Therefore, in the absen....
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....014. The assessee in response thereof filed her return of income on 09.01.2015. 6. The assessee had claimed exempt long-term capital gain under Section 10(38) of the Act to the tune of Rs. 12,41,24,932/-. 7. Revenue's case is this that such funds were routed to the beneficiaries in the guise of share capital, share premiums and unsecured loans. Such alleged managed exempt capital gain purchased in lieu of cash had been treated as income from unaccounted source and added to the total income of the assessee by the Ld. Assessing Officer. The same was, in turn, deleted by the Ld. CIT(A). Hence, the instant appeal before us. 8. In this aspect we have considered the judgment passed by the Ld. Tribunal in IT(SS)A No. 179/Ahd/2018 & C.O. No. 107/Ahd/2019 as has been relied upon by the Ld. AR. While dealing with issue the Ld. Tribunal has been pleased to observe as follows:- "7. In order to decide the issue as to whether in the absence of any incriminating material the completed assessment can be reiterated, we would like to consider the relevant statutory provision on this aspect. The provision of Section 153A deals with the issue in hand states as follows:- ""15....
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....cond proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the [Principal Commissioner or] Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation.-For the removal of doubts, it is hereby declared that, - (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year."" Thus, it appears that the relevant provision reveals that pending assessment on the date of search in respect of preceding six assessment years abate as per the second proviso. But the same does not include those assessments which have already attained finality or wherein the assessment orders have already been passed. When pending assessment abate in case of a search, the AO retains the original jurisdiction as well as the one conferred upon him under Section 153A of the Act fo....
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....usly an assessment has to be made under this section only on the basis of seized material'. In the 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 153A is relatable to abated proceedings (i.e., those pending on the date of search) and the word 'reassess' to complete assessment proceedings. 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 assessment year on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer. Completed assessments can be interfered with by the Assessing Officer while making the assessment under section 153A 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 ass....
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....We have further considered the judgment passed in the matter of Ld. CIT vs. Saumya Construction Pvt. Ltd. Tax Appeal No. 24 of 2016 passed by the jurisdictional High Court. While discussing the issue the Hon'ble Court has been pleased to observe as follows:- "(i) The Decision of Hon'ble Gujarat High Court in case of CIT Vs. Saumya Construction Pvt. Ltd (Tax appeal No. 24 of 2016) dated 14th March 2016, the facts and findings of which are restated as under: "18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs. 11,05,51,000/- on the basis of the material which was not found during the course of searc....
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....ing material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed." Thus, it is held that if in relation to any assessment year, no incriminating material is found no addition or disallowance can be made in respect to that assessment year in exercise of powers under Section 153A of the Act and the earlier assessment shall have to be reiterated. 12. We have further considered the particular fact of non-finding of incriminating material at the premises of the assessee during search proceeding as submitted by the Ld. AR. The provision of Section 153A cannot be made applicable if the incriminating material is not found at the time of search proceeding. Neither addition under Section 153A is permissible on the basis of incriminating material found from the place of third person or after complet....
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....ument for which satisfactory explanation had been given by the assessee and no addition was made by the Assessing Officer on this seized document. The seized document used by the Assessing Officer for making the addition in section 153A assessment were seized only from the office premises of 'C group of companies in which assessee was a director. In this regard, it would be pertinent to note that as per section 292C, there is a presumption that the documents, assets, books of account etc. found at the time of search in the premises of a person is always presumed to be belonging to him/them unless proved otherwise. This goes to prove that the presumption derived is a rebuttable presumption. Then in such a scenario, the person on whom presumption is drawn, has got every right to state that the said documents does not belong to him/them. The Assessing Officer if he is satisfied with such explanation, has got recourse to proceed on such other person (i.e., the person to whom the said documents actually belong to) in terms of section 153C by recording satisfaction to that effect by way of transfer of those materials to the Assessing Officer assessing the such other person. This is t....
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....d that in respect of abated assessments (i.e., pending proceedings on the date of search), fresh assessments are to be framed by the Assessing Officer under section 153A which would have a bearing on the determination of total income by considering all the aspects, wherein the existence of incriminating materials does not have any relevance. However, in respect of unabated assessments, the Legislature had conferred powers on the Assessing Officer to just follow the assessments already concluded unless there is an incriminating material found in the search to disturb the said concluded assessment. This would be the correct understanding of the provisions of section 153A, as otherwise, the necessity of bifurcation of abated and unabated assessments in section 153A would become redundant and would lose its relevance. Hence, the arguments advanced by the revenue in this regard deserves to be dismissed, [Para 10.7] In view of the aforesaid findings and respectfully following the judicial precedents relied upon hereinabove, the assessment already deemed to have been completed for the assessment year 2009-10, which was unabated/concluded assessment, on the date of search, deserves to be u....
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....n is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby, it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assessee the total income for the assessment year, which is clear from the first proviso thereto which provides 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. Subsection (2) of section 153A of the Act provides that if any proceeding or any order of assessm....
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....ase where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. 17. In the facts of the present case, a search came to be conducted on 07.10.2009 and the notice was issued to the assessee under section 153A of the Act for assessment year 2006-07 on 04.08.2010. In response to the notice, the assessee filed return of income on 18.11.2010. In terms of section 153B, the assessment was required to be completed within a period of two years from the end of the financial year in which the search came to be carried out, namely, on or before 31st March, 2012. Here insofar as the impugned addition is concerned, the notice in respect thereof came ....
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....Assessing Officer much subsequent to the search, that the impugned additions came to be made. 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 all 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, an assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. It in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India), Jodhpur v. Assistant Commissi....
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.... was conducted in the case of Shri Shah on 09th April, 2013 and in case of the appellant was on 04th September 2013. The so-called incriminating documents as relied upon by the Ld. AR was admittedly not found from the premises of the assessee but from the premises of Shirish Shah; the third party. As we found that the similar set off facts the Hon'ble High Court in the case of Saumya Construction Pvt. Ltd. (supra) has been pleased to upheld the order passed by the Ld. Tribunal in deleting addition made by the Ld. AR under Section 153A of the Act. 18. Thus, it appears that all along and all through the Ld. CIT(A) considered the relevant judgments applicable to the instant case as discussed hereinabove and rejected the decision made by the Ld. AO in treating the exempt long term capital gain as undisclosed income not sustainable under Section 153A of the Act and finally deleted the addition made by the AO based upon no incriminating documents found during the course of search at appellant's premises without any ambiguity so as to warrant interference. 19. We, therefore, upon being satisfied on the maintainability point itself reject such appeal preferred by the Reve....
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....CIT(A) has observed as follows:- "From the discussion above, in brief, it is clear that the document which has been relied upon for making the addition was not found from the premises of the appellant but found from the premises of Shri Shirish Shah. The said document was not in the handwriting of the appellant and it is not signed by the appellant or anyone on her behalf. In such circumstances, the said document is nothing but dumb document as far as the appellant is concerned and it is legally settled principle that additions cannot be made on the basis of dumb document. Further copy of statement of Shri Damodar Attal, employee of Shri Shirish Shah, which has been relied upon was not provided to the appellant, which is against the principles of natural justice. Moreover, Shri Shirish Shah himself has denied in the statement recorded by the AO that the provided bogus capital gain to the appellant. The date of transactions mentioned in the document, relied upon for making the additions, do not match with the date gathered from the SEBI by the AO and the same is admitted by the AO in the Assessment order. The appellant herself has been covered under search & seizur....