2022 (1) TMI 1240

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....which are common in both the appeals except the quantum of additions: 2. To dispose of these appeals, we refer to the facts in ITA No. 466/Hyd/2021 for AY 2015-16. The decision taken in this appeal shall mutatis-mutandis apply to the other appeal as well. 3. Briefly the facts of the case are that the assessee is a company in which public are substantially interested is engaged in the business of manufacturing composite Polymer Insulators. A search and survey operation u/s 132 of the Act was conducted in the case of M/s Olectra Greentech Ltd, being the assessee, and its other associated companies on 09/11/2017 and the assessee was one of the persons whose premises was covered u/s 132 of the Act. Consequent upon search, a notice u/s 153A wa....

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....me u/s 139(1) of the Act, which was processed u/s 143(1(a) of the Act. 4.1 In respect of interest income, it was submitted that the difference in the interest had been offered in subsequent years and, therefore, there is no loss to the revenue and in respect of prior period expenses, it was submitted that the in the earlier years, the assessee had not claimed any expenditure in the P&L Account and it was claimed the same as an expenditure when the expenditure was crystalized. In this regard, a detailed written submissions were furnished before the CIT(A). 4.2 The CIT(A) after considering the submissions of the assessee, confirmed the order of the AO. 5. Aggrieved by the order of CIT(A), the assessee is in appeal before the ITAT. 6. Befo....

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....that search was conducted on 09/11/2017 and accordingly, as per the notice issued by the AO, the assessee had filed its return of income u/s 153A of the Act on 21/03/2018. The AO made the additions on the basis of the books of account only without referring to any incriminating material found during the course of search. In respect of interest income, there was a difference in the financial statements and Form 26AS only, We find that the difference has been offered by the assessee in the subsequent assessment years, which is clear from the order of the CIT(A). In respect of prior period expenses, the assessee had debited it in P&L Account and the addition made on this count also by the AO only based on the books of account of assessee, whic....

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....ts 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 additions should be strictly made on the basis of evidence found in the course of the search,....