TaxTMI 
TaxTMI 
2018 (5) TMI 2123
X X X X Extracts X X X X
X X X X Extracts X X X X
....nable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of hearing of the appeal." Cross Objection 257/Del/2014 "The Ld.CIT(A) erred both in law and on facts in not quashing the entire addition of Rs. 3,65,75,000/- on the basis of legal ground that the additions in question have no relation whatsoever to the material or evidence found in the course of search and there were no pending assessment proceedings on the date of search abating under second proviso to S.153A(1)." 2. Brief facts of the case are as under: Assessee for the year under consideration had filed return of income declaring 'nil' income. A search and seizure operation was carried out in the premises of Mahesh Mehta group of cases on 30/06/09. As per search warrant and punchnama assessee company was also covered under section 132/133A of the Income Tax Act, 1961 (the Act). Case was centralised along with other cases of Mahesh Mehta group of cases/companies. Subsequently notice under section 153A of the Act was issued in response to the above assessment years on 13/04/10 for furnishing of returns. Assessee filed return of in....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of order of this Tribunal in ACIT vs. MKR Construction Pvt.Ltd., it is observed that similar addition was made without there being any material or information gathered during the course of search. Ld. AR placed reliance upon the copy of the punchnama placed at page 14-18 along with the copy of the statement of Sh. Mahesh Mehta under section 132 (4) of the Act placed at page 19-24 of paper book. From, punchnama it has been pointed out that nothing relating to share application money was found during search in case of present assessee and that answers to various questions raised in the statement of Sh. Mahesh Mehta, recorded during search did not refer to any share application money nor anything is mentioned about assessee linking with any document seized for assessment year under consideration before us. The only relevant question that has been referred to in the statement recorded, regarding assessee before us is as under: "Q.9. Kindly refer to bunch A-5 seized from your residence containing 102 pages and your attention is specifically initiated to page 97-99. Kindly state the facts of this transaction in detail. Ans. This bunch of paper is related to correspondence and agree....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly to be completed in the coming month and balance payment could be received by me after FTL. Q.10. In what way, this amount ofRs.18,50,01,100/- is received in your books of accounts ? Ans. As per my direction and direction of my wife, the entire amount was received in the companies M/s M.A. Projects (P) Ltd. and M/s M.K.R. Construction (P) Ltd." 4.3. Further in response to question no.15 raised by authorities, Sh.Mahesh Mehta offered for taxation additional unaccounted income in other concerns relevant for assessment year 2009-10 and 2010-11 but nothing has been surrendered or offered to tax relating to present assessee for assessment year under consideration before us. 4.4. It has been submitted by Ld.AR that nothing incriminating was found during search in case of assessee, relating to impugned additions for year under consideration and therefore no addition can be made within the scope of assessment under section 153A of the Act, more particularly when assessment has not abated, and statutory limit for issue of notice under section 143 (2) has expired. 5. On the contrary Ld.CIT,DR submitted that once Assessing Officer is required under law to assess or reassess for As....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... additions, not based on any incriminating material found during the course of search? It was held that no addition could be made in respect of the assessments that had become final in the event no incriminating material was found during search. The Bombay High Court relied on the earlier decision in CIT v. M/s. Murli Agro Products Ltd. (supra) and discussed the scope and ambit of the proceedings for assessment and reassessment of total income under Section 153A (1) of the Act and the provisos thereto. One of the specific pleas taken by the Assessee was that if no incriminating material was found during the course of search in respect of an issue then no addition in respect of any issue can be made to the assessment under Sections 153A and 153C. It was observed that the assessment or reassessment under Section 153A arises only when a search has been initiated and conducted and, therefore, "such an assessment has a vital link with the initiation and conduct of the search." The Court then reproduced and affirmed the decision of the Special Bench of the ITAT in All Cargo Global Logistics Ltd. v. Deputy Commissioner of Income Tax [2012] 23 taxmann.com 103 (Mum.) (SB) and answered the q....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments 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, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevan....