TaxTMI 
TaxTMI 
2023 (4) TMI 943
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....nt framed u/s 143(3) of the Act vide order dated 31/03/2016 is not legally valid and should be annulled. 2. The CIT(A) erred in law and on facts in confirming the estimated disallowance of Rs. 16,42,500/- being 10% of the foreign travel expenses of directors whereas no incriminating material in this regard belonging to the appellant was recovered during the search from the person searched. 3. The CIT(A) erred in law and on facts in confirming the disallowance of Rs. 16,42,500/-, i.e. 10% of the director's foreign travelling expenses merely on estimate by averring that personal element cannot be ruled out, while ignoring that no such disallowance can be made in the case of a company. Thus, the disallowance so made must be deleted." 3. Briefly stated, the assessee company is mainly engaged in the business of running of restaurants, beauty parlour services and manufacturing and retailing of garment business. For AY 2013-14, it filed its return on 26.09.2013 declaring nil income with current year loss of Rs. 50,70,816/-. The case was selected for compulsory scrutiny under CASS. Statutory notices were issued. In response thereto, details were furnished. The Ld. Asse....
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....essment is barred by limitation since the satisfaction contemplated under section 153C of the I.T. Act was recorded by A.O. on 29.01.2014. Accordingly, the date of search i.e., 09.11.2011 gets substituted by the date of recording of the satisfaction i.e., 29.01.2014 and the six preceding assessment years in the case of the assessee become A.Ys. 2008-2009 to 2013-2014. Accordingly, A.Y. 2007-2008 gets excluded. The contention of assessee has been accepted by the Tribunal and appeal of assessee has been allowed. The ITAT, Delhi A-Bench in the case of M/s. BNB Investments and Properties Ltd., (supra) in paras 7 to 10 considered the identical issue in the light of Judgment of Hon'ble Delhi High Court and accepted similar contention of assessee. The Order of the Tribunal is reproduced as under: "7. We have considered the rival submissions. Section 153C of the I.T. Act, 1961, as is applicable to assessment year under appeal reads as under : "153C. Assessment of income of any other person:- (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bul....
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.... of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. 7.1. The Hon'ble Delhi High Court in the case of Pr. CIT vs. Sarwar Agency P. Ltd., (2017) 397 ITR 400 (Delhi.) (HC) (supra), considering the identical issue held as under:- "Sub-section (1) of section 153C of the Income-tax Act, 1961 provides that the assessment or reassessment of the income of the "other person" would be in accordance with the provisions of section 153A. The first proviso to subsection (1) of section 153C further states that, in case of such other person, the reference to the date of initiation of search in the second proviso to section 153A(l) "shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person". In terms of section 153A(1)(b) of the Act. the Assessing Officer shall assess or reassess the tota....
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....f the provision under section 153C of the Act. On appeal: Held accordingly, dismissing the appeal, that the Tribunal was justified in holding that the notice issued to the assessee under section 153C of the Act for the assessment year 2006-07 was without jurisdiction since the assessment year was beyond the purview of issuance of notice in terms of the provision. 7.2. The ITAT, Delhi, B-Bench in the case of ACIT, C.C.-2, New Delhi vs. Empire Casting Pvt. Ltd., New Delhi (supra), held in paras 5 and 5.1 as under : "5. We have heard the rival submission on this issue and also perused the judgment dated 30th October, 2015 of the Hon'ble jurisdictional High Court in the case of CIT Vs RRJ Securities in ITA No. 164/2015 and ITA No. 175 to 177/2015. For ready reference, the relevant Para of the judgment is reproduced as under: "24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having....
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....rson other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of Section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for AY 2003-04 and AY 2004-05 were outside the scope of Section 153C of the Act and the AO had no jurisdiction to make an assessment of the Assessee's income for that year." 5.1. The fact that satisfaction u/s 153C of the Act in the case was recorded on 2nd November, 2009, is not disputed by both the parties. In the judgment cited above, the Hon'ble High Court has held that when the Assessing Officer of searched person and such other person in whose case proceedings under section 153C are initiated, is the same officer, then the date of recording of satisfaction would be construed as the date of handing over of the seized records by the Assessing Officer of searched person to the Assessing Officer of such other person in whose case proceedings under section 153C are initiated. Since the Hon'ble High Court has already construed the relevant provisions, we do not concur with the arguments advanced by the ld. CIT DR on this coun....
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....uments have been received by the A.O. on 29.08.2013. The satisfaction under section 153C have been recorded on 03.10.2013. The A.O. passed the assessment order under section 153B(1)(b) of the I.T. Act, considering the assessment year under appeal i.e., A.Y. 2012-2013 to be the year of search. However, the First Proviso to Section 153C of the I.T. Act provides that the 06 assessment years for which assessments or reassessments could be made under section 153C of the I.T. Act, would also have to be construed with reference to the date of handing-over of the assets or documents to the A.O. of the assessee. Therefore, the 06 assessment years under section 153C of I.T. Act in the case of assessee would be A.Y. 2008-2009 to 2013-2014. The A.O, therefore, shall have to pass the assessment order under section 153C of the I.T. Act. However, A.O. has not issued any notice under section 153C of the I.T. Act before initiating the proceedings against the assessee which is also admitted by the A.O. in reply to the assessee under RTI Act. The Amendment in Section 153C of the I.T. Act by the Finance Act, 2017, w.e.f. 01.04.2017 to the effect that block period for the person in respect of whom the ....