TaxTMI 
TaxTMI 
2024 (7) TMI 351
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.... supply of currency paper by CMF to Reserve Bank of India ["RBI"] including its subsidiaries. Pursuant to such agreement, the assessee was required to assist and aid CMF for procurement of tenders and carrying out supplies related to bank note paper to concerned buyers and in return, the assessee received a certain commission or share in profits. The agreement was initially valid up to 31.12.2007 and thereafter, it was extended up to 31.12.2012. From AYs 2007-08 to 2011-12, the assessee received the commission from CMF which was also duly reflected in his Income Tax Return ["ITR"]. For AY 2012-13, the assessee had not received any commission from CMF and eventually, the contract was terminated on 31.12.2012. 3. Shorn of unnecessary details, on 26.12.2016, a search and seizure operation was conducted in the case of the assessee under Sections 132 and 133A of the Income Tax Act, 1961 ["Act"]. During the course of search, a copy of agreement between the assessee and CMF was found. A notice under Section 153A of the Act was served on the assessee and the assessee responded that from AY 2012-13 onwards, he did not receive any commission from CMF pursuant to such agreement. Furthermor....
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....posed the submissions and argued that the instant appeals do not raise any substantial questions of law. She submitted that as per the contention of the Revenue, all the alleged incriminating material pertains to AYs 2016-17 and 2017-18 and therefore, the ITAT was correct in deleting the additions from AYs 2012-13 to 2015-16 as they are unabated assessments. Furthermore, she submitted that the material recovered during the search proceedings was not incriminating as the agreement between the assessee and CMF was already in the knowledge of the Revenue. She also argued that the ITAT was correct in holding that the Revenue was not able to show any indelible link that the payments received from the foreign entities were in relation to the agreement between CMF and the assessee for supply of banknote paper in India. In order to substantiate her arguments, she placed reliance on the decision of CIT (Central)-III v. Kabul Chawla 2015 SCC Online Del 11555. 9. We have heard the learned counsel appearing on behalf of the parties and perused the record. 10. At the outset, it is imperative to point out that the agreement between the assessee and the CMF was terminated on 31.12.2012 and ....
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.... reiterated and the abated assessment or reassessment can be made. The word "assess" in section 153A is relatable to abated proceedings (i.e., those pending on the date of search) and the word "reassess" to the completed assessment proceedings. (vi) In so far as the pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each assessment year on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer. (vii) Completed assessments can be interfered with by the Assessing Officer while making the assessment under section 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 were not produced or not already disclosed or made known in the course of original assessment." 12. Moreover, the above position of law was also fortified by the Supreme Court in the decision of Principal Commissioner of Income Tax, Central - 3 v. Abhisar Buildwel....
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....ular assessment. Thus, the foundation for making search assessments under Sections 153-A/153-C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search. 31. On a plain reading of Section 153-A of the 1961 Act, it is evident that once search or requisition is made, a mandate is cast upon the AO to issue notice under Section 153 of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. *** 33. As per the provisions of Section 153-A, in case of a search under Section 132 or requisition under Section 132-A, the AO gets the jurisdiction to assess or reassess the "total income" in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153-A, the assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years pending o....
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.... *** 36. In view of the above and for the reasons stated above, it is concluded as under: 36.1. That in case of search under Section 132 or requisition under Section 132-A, the AO assumes the jurisdiction for block assessment under Section 153-A; 36.2. All pending assessments/reassessments shall stand abated; 36.3. In case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the "total income" taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and 36.4. In case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132-A of the 1961 Act. However, the completed/un....
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....or the assessee had carried out any operation in India either for supply of currency notes or otherwise on or behalf of CMF or Fedrigoni. The Revenue has not brought anything on record that there was any business connection with assessee in India for carrying out such activities or either RBI or the CMF has stated that any payment for supply of currency notes or rendering of any services was made to assessee post 01.04.2011 to AY 2017-18, The allegations made by the AO and the interpretation on which he has drawn his presumption after referring to certain foreign entities, has been duly explained by ld. counsel as stated above which has not been rebutted before us nor has been found favour by the ld. CIT (A). ld. CIT(A) has given a very categorical finding statement that no to evidence prove that has agreement been found in the form of seized material or statement to prove that agreement of 2006 between CMF and assessee was extended beyond 31.12.2012 and beyond this period, CMF was under any obligation to share the profits with the assessee. Even in various information received true FTTR, not single information has been received that either Fedrigoni or CMF has given any money for ....