TaxTMI 
TaxTMI 
2022 (8) TMI 134
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....by the A.O. of the searched person. 1.2 The learned CIT(A) further erred in not appreciating the fact that the Satisfaction Note for issuing Notice under section 153C of the Act did not mention the assessment year for which it belongs. 1.3 The learned CIT(A) erred in not appreciating the fact that the seized material referred in the Satisfaction Note was not "belonged" to the Appellant. 1.4 The learned CIT(A) further erred in not appreciating the fact that the Satisfaction Note was not displaying any reason or basis concluding that the seized material was belonged to the Appellant. 1.5 The appellant prays that the order passed under section 143(3) r/w section 153C of the Act be held as bad in law or void ab initio and as such was liable to be quashed. Without prejudice to the above, 2.1. On the facts and in circumstances of the case and in law, the Learned CIT(A) erred in no appreciating the fact that there was no "incriminating material" being found during the course of search based on which additions/disallowances were made under the assessment u/s. 143(3) r.w.s. 153C of the Act on the alleged ground that the assessment u/s. 143(3) of ....
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.... as that of the returned income as per original return filed by the assessee under section 139 of the Act. Due to initiation of assessment under section 153C of the Act, assessment under section 143(3) was abated. During the assessment proceedings, it was observed that assessee had offered income under head capital gain at Rs. 14,31,67,447 on sale of shares against which expenses were claimed at Rs. 1,72,65,457. In the absence of specific reply justifying allowability of the aforesaid expenditure under the head capital gains, expenditure claimed by the assessee were disallowed and accordingly, added to the taxable capital gains in the hands of the assessee. 6. In appeal before the learned CIT(A), assessee raised additional ground of appeal challenging the initiation of assessment under section 153C of the Act. Accordingly, remand report from the Assessing Officer was sought regarding the additional grounds raised by the assessee. In the remand report, Assessing Officer, inter-alia, submitted that assessee neither filed any objection after issuance of notice under section 153C nor filed any objection against the proceedings under section 153C, during the course of assessment proc....
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....A of the Act. Accordingly, notice dated 19/09/2011, under section 153C of the Act was issued to the assessee. As is evident, no objection was taken by the assessee against the finalisation of proceedings under section 153C of the Act during the course of assessment proceedings. It is also pertinent to note that as the scrutiny proceedings pursuant to notice issued under section 143(2) of the Act were pending, the same were abated after initiation of proceedings under section 153C of the Act. The assessee in its appeal before the learned CIT(A), for the first time, challenged the initiation of proceedings under section 153C of the Act, which was, inter-alia, dismissed vide impugned order. In appeal before us, the learned A.R. submitted that the books of account / documents, which were found in possession of M/s. Lexcorp Advisory Services Pvt. Ltd., were in draft form, which were provided by the assessee to the said entity for the purpose of finalisation of accounts after perusal of the draft, therefore, the said documents cannot be said to be "belong to' the assessee for the purpose of section 153C of the Act. It is also the submissions of the learned A.R. that since these documents....
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....supra) held that the photocopy of the document namely Profit & Loss Account and Balance Sheet found in the possession of shareholders and directors, during the course of search, cannot be held to be belonging to the taxpayer company and such photocopy shall belong only to the shareholder and director in whose possession the same were found, despite the fact that such documents were supplied by the taxpayer company. From careful perusal of the aforesaid decisions, as relied upon by the learned A.R., we find that in both the cases, the Hon'ble Courts were dealing with a situation wherein though the original documents were in the possession of the taxpayer, the photocopy of the same was found in possession of the searched person and on the basis of such photocopy of the documents, proceedings under section 153C of the Act were initiated in case of the taxpayer. We are of the view that both the decisions cited by the learned A.R., during the course of hearing, are factually distinguishable from the present case. As in the present case, the documents which were found in possession of the Lexcorp Advisory Services Pvt. Ltd. (searched entity) were the draft financials provided by the asse....
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....he admission of additional ground, the learned D.R. submitted that neither any addition has been made by the Assessing Officer under section 14A of the Act nor this issue was raised in appeal before the learned CIT(A). It was further submitted that no computation has been provided by the assessee as to how suo-moto disallowance under section 14A of the Act was offered by the assessee. 13. We have considered the rival submissions and perused the material available on record. From the perusal of the financials, we find that for the year under consideration, the assessee has earned dividend income of Rs.26,81,157. Further, the assessee while filing its return of income suo-moto disallowed Rs.1,72,65,457, under section 14A of the Act. However, the Assessing Officer did not make any further disallowance and return of income on this aspect was accepted. Recently, it has been held by various Hon'ble Courts that disallowance under section 14A has to be restricted to the dividend income earned. Accordingly, the assessee has made a fresh claim before us. We find that Hon'ble Supreme Court in Goetz India Ltd. v/s CIT, [2006] 284 ITR 323 and Hon'ble Jurisdictional High Court in CIT ....