AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (4) TMI 1555
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....following grounds: - "1. "Whether on the facts and in the circumstance of the case and in law, the Ld. CIT(A) erred in holding that the assessment u/s 53A does not entail fresh assessment and is limited to the material seized during the course of search." "Whether on the facts and in the circumstance of the case and in law, the Ld. CIT(A) failed to appreciate that u/si 53A the Assessing Officer is required to asses or reassess the total income of the assessee for six assessment years and is not restricted to undisclosed income based on seized material." "Whether on the facts and in the circumstance of the case and in law, the Ld. CIT(A) erred in confining the appeal to assessment u/s 153A and not disposing the appeal on merits of the case." 2. "Whether on the facts and in the circumstance of the case and in law, the Ld. CIT(A) erred in directing the Assessing Officer to set off carry forward unabsorbed depreciation ignoring the legal position exiting during that time which does not permit set off of unabsorbed depreciation beyond eight years."" 3. Briefly stated facts are that the assessee is a public limited Company engaged in the business of manufacturing of ferro alloys.....
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....ears referred to in clause (b) of Section 153A in the prescribed form and verified under the prescribed manner and within such period as may be specified in the notice. Clause (b) of Sec. 153A(1) provides that the A.0. shall assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. The first proviso to Section 153A(1) provides that the A.0. shall assess or reassess the total income in respect of each assessment year falling within such assessment years. As per second proviso to Section 153A(1), the assessment or reassessment, if any, relating to any assessment year falling within a period of six assessment years referred to in this section pending on the date of initiation of search under s. 132 or making of requisition under s. 132(a) as the case may shall abate. Evidently, in the instant case, the appellant's case falls under the second proviso to Section 153A(1) and thus, is a case of non-abatement of proceedings. It thus follows that it is assessments that are pending on the date of search that shall abate and not the completed one; it is in th....
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....s empowered to reopen those proceedings and reassess the total income, taking note of the undisclosed income, if any, unearthed during the scorch. He has been entrusted with the duty of bringing to tax the total income of any assessee whose case is covered by Sec. 53A, by even making reassessments without arty 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 s. 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. Reopened 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 a....
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....se, there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings which would show that the relief under section SOHHC was erroneous. In such a case, the A.O. while passing the assessment order under Section 153A read with Section 143(3) could not have disturbed the assessment order finalized on 29.12.2000 relating to Section 80HHC deduction and consequently the CI. T. could not have invoked jurisdiction under Section 263 of the Act." A perusal of the above quoted pronouncement of the Bombay High Court reveals that an assessment which was completed before the date of search and has attained finality can be disturbed only if material is gathered in the course of proceedings under s. 153A of the Act to justify that the relief granted under the finalized assessment was contrary to the fact unearthed during the course of 153A proceedings. Thus, unearthing new facts in the course of 153A proceedings is sine qua non for disturbing a finalized assessment. It is seen that in the case of the appellant herein no material was seized in the course of search; no new material has been unearthed in the course of proceedings under s. 153A. ....
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....09.2003 reported in 263 ITR (st.) 61 at page 107 wherein CBDT has clarified that on initiation of proceedings u/s. 153A of the Act the proceedings pending in appeal, revision or rectification proceedings against final assessment shall not abate. It is only because the final assessments do not abate the appeal, revision or rectification pending against final assessments would not abate. Therefore, Hon'ble High Court rejected the arguments of the Revenue that on initiation of proceedings u/s. 153A of the Act, the reassessment final for assessment years covered u/s. 153A of the Act stands abated. Only the pending assessments get revived u/s. 153A of the Act. Hon'ble High Court further held that once assessment has attained finality, then the AO while passing independent assessment order u/s. 153A/143(3) of the Act could not disturb the assessment order which has attained finality unless the material gathered in the course of search u/s. 132/153A of the Act established that the finality attained in the assessment were contrary to the facts unearthed during the course of search. The relevant portion of the judgment reads as under: - "31. We, therefore, hold that the Special Be....
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....ore the date of initiation of search. This is hardly of any relevance in view of clear and unambiguous words used by the legislature. This interpretation does not cause any absurd etc. results. There is no casus omissus and supplying any would be against the legislative intent and against the very rule in this behalf that it should be supplied for the purpose of achieving legislative intent. The submissions of the Ld. Counsels are manifold, the foremost being that the provision u/s 153A should be read in conjunction with the provision contained in section 132(1), the reason being that the latter deals with search and seizure and the former deals with assessment in case of search etc, thus, the two are inextricably linked with each other. Before proceeding further, we may now examine the provision contained in sub-section (2) of section 153, which has been dealt with by Ld. Counsel. It provides that if any assessment made under subsection (1) is annulled in appeal etc., then the abated assessment revives. However, if such annulment is further nullified, the assessment again abates. The case of the Ld. Counsel is that this provision further shows that completed assessments stand on ....
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.... the provision contained in section 132(1). The provision comes into operation if a search or requisition is initiated after 31.5.2003. On satisfaction of this condition, the AO is under obligation to issue notice to the person requiring him to furnish the return of income of six years immediately preceding the year of search. The word used is "shall" and, thus, there is no option but to issue such a notice. Thereafter he has to assess or reassess total income of these six years. In this respect also, the word used is "shall" and, therefore, the AO has no option but to assess or reassess the total income of these six years. The pending proceedings shall abate. This means that out of six years, if any assessment or reassessment is pending on the date of initiation of the search, it shall abate. In other words pending proceedings will not be proceeded with thereafter. The assessment has now to be made u/s 153A (1)(b) and the first proviso. It also means that only one assessment will be made under the aforesaid provisions as the two proceedings i.e. assessment or reassessment proceedings and proceedings under this provision merge into one. If assessment made under sub-section (1) is ....
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.... is clearly covered in favour of assessee and against the Revenue by the decision of Hon'ble Bombay High Court in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd. (Supra). Respectfully, following the same and in the given said of facts, we are of the view that this principal amount waived by the lender could not be added. Accordingly, we confirm the order of CIT(A) deleting the addition and dismiss this issue of Revenue's appeal. 7. Coming to Cross appeal of assessee in ITA No. 621/Mum/2015 for the AY 2005-06 and appeal No. 1166/Mum/2015 for the AY 2006-07, the assessee has raised a new claim altogether regarding electricity charges paid to NESCO amounting to Rs. 38.85 crores in AY 2005-06 and amounting to Rs. 16 crores in AY 2006-07. For AY 2005-06 assessee has raised following grounds: - "1. On the facts & circumstances of the case the Learned Commissioner of Income Tax (Appeals) has erred in rejecting the claim of the appellant that they are entitled to deduction of Rs. 38.85 Crores being the electricity charges payable to NESCO. The Learned Commissioner of Income Tax (Appeals) has wrongly rejected the claim of the appellant. The appellant prays that....