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TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 792
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....is Bad-in law and void- ab-initio. 2. The Ld. CIT (A) erred in law and on facts in upholding the assumption of jurisdiction by the Assessing Officer u/s. 153C for the block period for Assessment Year 2008-09 without appreciating that no incriminating material for the year under consideration belonging to the Appellant was found during the search on a group company and thus the order under section 153C r.w.s. 153A of the IT Act is bad-in law and void-ab-initio. 3. The Ld. CIT (A) erred in law and on facts in upholding the action of the AO in respect of the additions made, which inter- alia can solely be made on the basis of only incriminating materials which admittedly, in the case of the appellant, is not available for the year under consideration and thus the order under section 153C r.w.s. 153A of the IT Act is Bad-in law and void-ab-initio." 3. From a perusal of the aforesaid grounds, we note that it is purely legal issue and since it does not require any examination of any new facts, we are inclined to admit the same by relying on the decision of the Hon'ble Supreme Court in the case of NTPC Vs. CIT (229 ITR 383) (SC). 4. Since both sides agree that facts relating to the ....
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....[which was the date of centralizing of assessee's case, because scrutiny assessment was completed on 21.11.2012 (supra)]; and therefore it was contented that the assessment for AY. 2008-09 was un-abated assessment in term of 2nd proviso to section 153A of the Act and therefore no addition should be made in the assessment years without the aid of un-earthed/seized incriminating materials (qua assessee qua assessment year); and since there was no incriminating material qua assessee qua AY, assessee contended that the concluded non-pending assessment years/un-abated assessment years, should not be disturbed. 9. The AO rejected the contention of the assessee; and first of all he reiterated the additions/income as assessed earlier by his predecessor as per assessment framed on 21/11/2012 (supra); and secondly [the only addition/disallowance made u/s 153C of the Act] disallowance of spill over additional depreciation (Rs. 62,73,43,996/-) and determined the total Income of the assessee at Rs. 2597,81,55,318 vide order dated 29.03.2016 (AO has made similar disallowance for AY. 2009-10 to the tune of Rs. 92,68,36,561/- and for AY. 2010-11 of Rs. 22,85,07,070/-). 10. Aggrieved by the afore....
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....is issue there was no incriminating/seized material in the hands of incumbent AO to reverse the action of his predecessor AO's (i.e. allowing additional depreciation of spill-over depreciation) and also Ld CIT(A) found that the action of predecessor AO on the issue was legally sustainable in the light of Hon'ble Karnataka High Court decision in CIT Vs. Rital India (380 ITR 423); and the Ld. CIT(A) has decided ground no. 2.5 (supra) by observing as under: - "20. I have carefully considered the order of the AO and the submission of the appellant. In the original assessment order passed on the 21.11.2012 the AO allowed additional depreciation as claimed by the appellant. Appellant also submitted that in earlier years similar claim has been allowed by AO. While completing assessment u/s 153C on 29.03.2016 the AO withdrew the claim of spill over additional depreciation. There is no connection of the claim of spill over additional depreciation allowance and seized material. In this case, while completing assessment u/s 153C, the AO has re-examined the claim allowed in completed assessment u/s 143(3) without anything on the record unearthed during the search which will show the claim wa....
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....preciation (Rs. 62,73,43,996/-) as claimed by assessee, in respect of the assets put to use for less than 180 day's in the immediate preceding AY. 2007-08. And in that year i.e. AY. 2007-08, assessee had claimed only 10% depreciation u/s 32(iia) of the Act because those assets were put to use only for less than 180 days. And therefore, in the relevant assessment year (AY. 2008-09), the assessee claimed the balance/additional depreciation of Rs. 62,73,43,996/-. And as noted, the AO had allowed the claim of spill-over additional depreciation to the tune of Rs. 62,73,43,996/- in the original assessment dated 21.11.2012 for AY 2008-09, which has been withdrawn by the present AO vide order u/s 153C of the Act on 29.03.2016 without the support of any incriminating/seized material. We note that the Ld. CIT(A) has made a finding of the fact that there is no connection of the claim of spill over additional depreciation allowance and seized material. These finding of facts of Ld. CIT(A) could not be controverted by the revenue before us. Thus, we find from perusal of AO's order u/s 153C of the Act as well as the impugned order of Ld. CIT(A) that the action of AO disallowing spill-over additi....
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....Assessment Year. Now the legislation has amended the provision by adding a proviso which, specifically recognizes the said right. The Madras High Court in Shri T. P. Textiles Pvt. Ltd, (supra) ruled that such proviso being clarificatory in nature, would apply to pending cases, covering past period also." 16. The Ld. AR of the assessee also has cited the decision of the Hon'ble Supreme Court in the case of PCIT Vs. Abhisar Buildwell (P.) Ltd. (2023) 454 ITR 212 (SC) wherein the Hon'ble Supreme Court was pleased to uphold the view taken by Hon'ble Delhi High Court in the case of Kabul Chawla (380 ITR 573) (Del) and inter-alia held that completed assessment can be interfered with by the Assessing Officer while making assessment under section 153A only on the basis of incriminating material unearthed during the course of search that was not produced or not already disclosed or made known in the course of original assessment. 17. In the case of CIT vs. Murli Agro Products reported as 49 taxmann.com 172(Bom) the Hon'ble High Court held: "9. What Section 153A contemplates is that, notwithstanding the regular provisions for assessment/reassessment contained in the IT Act, where search ....
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....nitiation of proceedings under Section 153A would not affect the assessment finalised on 29-12-2000. 12. Once it is held that the assessment finalized on 29.12.2000 has attained finality, then the deduction allowed under section 80 HHC of the Income-tax Act as well as the loss computed under the assessment dated 29-12-2000 would attain finality. In such a case, the A.O. while passing the independent assessment order under Section 153A read with Section 143(3) of the IT. Act could not have disturbed the assessment/ reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under Section 153A of the Income-tax Act establish that the reliefs granted under the finalised assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. 13. In the present case, there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings which would show that the relief under Section 80HHC was erroneous. In such a case, the A.O. while passing the assessment order under Section 153A read with Section 143(3) could not have disturbed the assessment order finalis....
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....rial found/unearthed during the course of search to suggest that the action of AO in the first round was vitiated/obtained by fraud/bogus claim. That is not the case of AO/Ld. DR, therefore, having found that for AY. 2008-09, the original assessment was passed u/s 143(3)/144C(13) of the Act on 21.11.2012, it has become final and not pending before AO (on date of search/centralization of assessee's case), therefore, for the purpose of assessment u/s 153C/153A of the Act, AY. 2008-09 is an un-abated assessment and therefore the action of AO reversing/withdrawing the claim allowed in the original assessment on same set-off facts without any incriminating/seized materials qua assessee qua assessment year is not legally sustainable and therefore we uphold the action of Ld. CIT(A) on the legal issue and hold that the AO's action of making disallowance of spill over depreciation of Rs. 62,73,43,996/- is legally unsustainable. And for that we rely on the decision of the Hon'ble Supreme Court in the case of CIT Vs. Singhad Technical Education Society 397 ITR 344 (SC) and ratio of the decision of Hon'ble Supreme Court in Abhisar Buildwell (P.) Ltd. (supra). 22. Therefore, the additional leg....