TaxTMI 
TaxTMI 
2022 (8) TMI 1226
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....ctions claimed originally and allowed in original order u/s 143(3) of the Act and not related to any incriminating material found during action u/s 132 of the Act. 2. The learned Commissioner of Income Tax (Appeals) - 11, Ahmedabad erred in confirming the action of the assessing officer in disallowing the claim of deduction u/s 80IA(4) in respect of following infrastructure projects undertaken by the appellant: Sr. No. of project referred by CIT (Appeals) Name of the project 1 Bhavnagar Trapaj Road 2 Jambusar Amod 3 Palanpur Pipeline Project 4 SH - 02 Ukalana - Budheal Road Project 5 SH - 14 (BJL) (M - 26) Road 5 SH - 17 STM Road 6 SH - 23 Sirsa Ukalana - Budheal Road Project 3. The learned Commissioner of Income Tax (Appeals) - 11, Ahmedabad erred in holding that appellant was not a developer of infrastructure facility in respect of projects specified by him and listed in ground No. 2 above. The appellant craves leave to add, amend, alter and withdraw any ground of appeal anytime up to the hearing of this appeal." 2.1 The Department has raised the following grounds of appeal: "1) On facts and ci....
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....the assessee as a "Developer" of infrastructure projects instead of "Work Contractor" as treated by the Assessing officer. 3) The Ld. CIT(A) has erred in law and/or on facts in allowing the employers contribution to P.P. which is paid beyond the due date specified as per P.P. Act. 4) On facts and circumstances of the case and in law, the CIT(A) ought to have upheld the disallowance of employees contribution to P.P. by the assessee. 5) On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. 6) It is, therefore, prayed that the order of the CIT (A) be set aside and that of the A.O. be restored to the above extent." 4. We shall first proceed with assessment year 2005-06. The brief facts of the case are that the original assessment order was passed on 28-12-2007, wherein certain additions were made to the returned income of the assessee. Thereafter, search under section 132 of the Act was carried out at the premises of the assessee company on 24-06-2010 and proceedings u/s 153A of the Act were initiated. During the course of assessment, the AO sought to make certain disallowances under se....
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....the assessee was not eligible for the deduction under section 80IA(4) as clarified by the said Explanation. The deductions and exemptions are special benefits and, as discussed earlier, it could be allowed only if the assessee is found to be eligible for the same on merit. If any deduction was wrongly allowed in the previous assessments the assessee cannot claim that it could not be disallowed in subsequent assessments under section 153A specially when the issue itself has not reached finality." 5. Accordingly, the AO made an addition of _ 8,09,00,367/- by disallowing the claim of deduction under section 80 IA(4) of the Act. 6. In appeal, the assessee challenged the validity of assessment framed under section 153A of the Act on the ground that at the time of search no incriminating documents were found so as to hold that the assessee is not eligible for deduction under section 80 IA(4) of the Act. However, Ld. CIT(Appeals) dismissed the assessee's appeal with the following observations: "6. The decisions relied by the appellant were carefully gone through and it was observed that the contents of the decisions were reproduced by the appellant in a distorted manner jus....
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....apparently, no incriminating material was found during the course of search on the basis of which assessment was framed disallowing the claim of the assessee under section 80IA of the Act. The basis of additions apparently may be inferred from the below observations made by Ld. Assessing Officer in the assessment order "Since, the original assessment was completed prior to insertion of this explanation the then Assessing Officer did not had the benefit or occasion to examine the claim of the assessee in the light of intention and meaning of the provision as clarified by the said Explanation". Thus, the order passed u/s 153A r.w.s. 143(3) of the Act was not on the basis of any incriminating material found during the course, but on the basis of revision of order sought to be made on the basis of insertion of new Explanation to section 80-IA, which was not existing at the time of completion of original assessment. Now, which shall also refer to the relevant extracts of the order of the Ld. CIT(Appeals) on this point: "6.1 The ratio of the decisions of the courts makes it abundantly clear that once action u/s 132 was carried or requisition u/s 132A initiated, it becomes mandat....
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....tion can be made on basis of material collected after the search. The Delhi High Court in the case of Kabul Chabla (2015) 380 ITR 573 (Delhi High Court) has held that completed assessment can be interfered by the Assessing Officer while making assessment u/s. 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 ware not produced or not already disclosed or made in the course of original assessment. The SLP filed by the Revenue against the above decision of Delhi High Court was dismissed by the Hon'ble Supreme Court vide SLP(C)No.018651/2016.The Gujarat High Court in the case of Pr. CIT v. Sunrise Finlease 89 Taxman.com 1 (Gujarat) has held that where no incriminating evidence against assessee was found or seized during the course of search so as to attract provisions of section 153A proceedings, no additions could be made on the basis of statement of director of assessee company which were recorded under section 131 much later after search. The Gujarat High Court in the case of PCIT v. Dipak Jashvantlal Panchal [2017] 88 taxmann.com 611 (....