TaxTMI 
TaxTMI 
2022 (9) TMI 302
X X X X Extracts X X X X
X X X X Extracts X X X X
....e sake of convenience. Let us take up the assessee appeal first in ITA No.1017/Mum/2018. 2. The assessee has raised the following grounds of appeal before us:- "That on the facts and in the circumstances of the case and in law, the Commissioner of Income Tax (Appeals) (hereinafter referred to as the CTT(A)) erred in holding that the proceedings u/s 153C r.w.s. 153A of the Income Tax Act 1961 (hereinafter referred to as the Act) has been validly initiated by the Assessing Officer (hereinafter referred to as AO). 2. That on the facts and in the circumstances of the case and in law, the CIT(A) erred in dismissing appellant's claim that re-examination of issues/genuine claims, which had obtained finality as per Order u/s 143(3) of the Act, are beyond the scope of assessment u/s 153C of the Act. 3. That on the facts and in the circumstances of the case and in law, the CIT(A) erred in not considering and dismissing the appellant's main Ground of Appeal No. 2 (before the CIT(A)} which was a question of law as to whether AO can re-examine the claims which had obtained finality as per Order u/s 143(3) of the Act and did not abate as per the provisions of section 153C r.w.s. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....framed u/s.153C of the Act for A.Y.2008-09 by making certain disallowances and additions without the existence of incriminating material for the year under consideration received from the Assessing Officer of the searched person. 4.1. We find that assessee company is engaged in the business of raising Iron ore, manufacturing of Nitrogen Gas, Ferro Alloys, Trading of Iron Ore and Ferro Alloys, generation of electricity (Windmill) and Railway Siding for captive use. The original return of income was filed by the assessee company for the A.Y.2008-09 on 30/09/2008 declaring total income of Rs.1173,01,47,760/-. This return was revised by the assessee on 30/03/2010. The assessment was completed u/s.143(3) of the Act on 22/12/2010 determining total income at Rs.1170,56,33,879/-. Later the assessment was sought to be reopened by issue of notice u/s.148 of the Act on 28/03/2013. The re-assessment was completed u/s.143(3) r.w.s. 147 of the Act on 31/01/2014. All these assessments were framed on the assessee company by the ld. AO in Kolkata as the registered office of the assessee company was situated in 10, Camac Street, Kolkata - 700 017 at that point in time. Later the case of the assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....id seized documents to the Assessing Officer of the assessee before us. Later notice u/s.153C of the Act was issued on the assessee company on 26/11/2014 to file the returns for A.Yrs. 2008-09 to 2013-14. In response to this notice, the assessee filed a fresh return of income on 31/12/2014 declaring total income of Rs.1134,14,41,426/- which was same as the returned income filed in response to notice u/s.148 of the Act. The assessment was completed u/s.153C r.w.s. 143(3) of the Act by the ld. AO on 29/03/2015 for the A.Y.2008-09 by determining the total income at Rs.1272,13,23,945/- under normal provisions of the Act and book profits of Rs.1238,23,41,899/- u/s.115JB of the Act. Under normal provisions of the Act, the following disallowances / additions were made:- i) Disallowance u/s.147 of the Act - Rs.17,15,98,000/- ii) Disallowance of prior period expenses -Rs. 3,86,365/- iii) Disallowance of expenditure on provision -Rs.5,84,29,722/- iv) Addition made on account of illegal Unaccounted provision -Rs.4,65,56,163/- v) Denial of deduction u/s.80IA of the Act -Rs.91,08,14,181/- 4.4. The ld. AR before us submitted that none of the aforesaid additions were made based on the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o be involved in illegal mining activity of Iron ore. After calculating discrepancy in the production data, the ld. AO worked out the addition on account of suppressed production of Rs.4,65,56,162/- (1,26,501 MTS x Rs.368.03 per MT) and made an addition for the same in the search assessment concluded u/s.153C of the Act. From the aforesaid narration of facts and the manner in which this addition has been made by the ld. AO, it could be safely concluded that the ld. AO had not relied upon any search material that has been handed over by the Assessing Officer of ABMCPL (being the searched person u/s.132 of the Act) and that this addition had been made by merely placing reliance on the Justice M B Shah commission report. The only incriminating material which was handed over to the Assessing Officer of the assessee herein was Annexure A-8 containing petty cash book. No additions have been made for A.Y.2008-09 in the impugned search assessment u/s.153C of the Act by placing reliance on the said petty cash book. Hence, it could be safely concluded that the addition made on account of illegal unaccounted production does not come out of any seized material received from the Assessing Off....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n this regard is dismissed as legally not tenable. 4.6. From the aforesaid narration of each of the disallowances / additions made, it could be safely concluded that none of the additions that were made by the ld. AO were based on reliance placed on search materials received from the Assessing Officer of the searched person. We hold that assessment for A.Y.2008-09 had originally been completed u/s.143(3) of the Act dated 22/12/2010. Later, the first re-assessment was framed in the hands of the assessee for A.Y.2008-09 u/s.143(3) r.w.s. 147 of the Act on 31/01/2014. Notice u/s.153C of the Act was issued to the assessee only on 26/11/2014. Hence, on the said date i.e. 26/11/2014, no proceedings of the assessee were pending. Hence, we hold that A.Y.2008-09 becomes an unabated / concluded assessment on the date of assumption of jurisdiction u/s.153C of the Act. The law is very well settled that in respect of concluded assessments, the earlier assessment completed should not be disturbed in the search assessments without existence of any incriminating material relatable to such assessment year. Reliance in this regard is placed on the decision of the Hon'ble Jurisdictional High Court i....