TaxTMI 
TaxTMI 
2022 (7) TMI 1552
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....to the adjudication of the appeal before us are as under: * A search & seizure action u/s 132 of the Income Tax Act, 1961 has been conducted on 15.11.2017. * The Assessment Years pertain to 2013-14 & 2014-15. * For the A.Y. 2013-14, the assessment u/s 143(3) was completed on 05.09.2014 i.e. prior to the date of search. * The assessee filed return of income for the A.Y. 2014-15 u/s 139(1) on 18.11.2014 and the time limit for issue of notice u/s 143(2) expired on 13.09.2015 i.e. prior to the date of search. * Thus, the Assessment Years 2013-14 and 2014-15 are unabated assessment. * It is an undisputed fact that the assessment u/s 153A has been concluded without reference to any incriminating material or documents found and se....
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....gislative history of the provisions related to search assessments particularly the provisions prevailing be fore the new scheme of the search assessments which was introduced by the Finance Act, 2003. 2. In the earlier provisions, the search assessments were to be completed u/s 158BC of the Act and there was only one consolidated order for entire block period. There used to be two orders for a particular period in a search case- Block Assessment order u/s 158BC for undisclosed income and Normal Assessment under the regular provisions of the Act. However, this duality has been done away with in the new scheme and there is only one assessment order for every year, wherein disclosed as well as undisclosed income has to be assessed. This pos....
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..... The provisions envisage assessing the "total income" and not undisclosed income" In respect of the plea that the addition was not made on the basis of documents seized during the course of search, reliance is placed on the following decisions 1. E.N. Gopakumar Vs CIT [(2016) 75 taxmann.com 215 (Kerala))] where Hon'ble Kerala High Court held that assessment proceedings generated by issuance of a notice under section 153A(l)(a) can be concluded against interest of assessee including making additions even without any incriminating material being available against assessee in search under section 132 on basis of which notice was issued under section 153A(l)(a). The judgment in the case of E.N. Gopakumar was delivered after considering t....
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....found during search operation but also with regard to material available at time of original assessment. 4. DR. A. V. Sreekumar Vs CIT Kerala High Court 90 taxmann.com 355 (Kerala) Where pursuant to search and enquiry unaccounted consideration from purchaser had been unearthed, it could not be said that other material already available with Department had been relied upon in proceedings. 5. CIT Vs St. Francis Clay Decor Tiles (385 ITR 624) where Hon'ble Delhi Kerala Court held that notice issued under section 153A -return must be filed even if no incriminating documents discovered during search. 6. Vinod Kumar Gupta Vs DCIT ITA No. 1003 of 2017 where Hon'ble Delhi High Court upheld addition made on the basis of statements made by h....
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....r under section 143(l)(a) or section 143(3) prior to initiation of search/requisition, still Assessing Officer is empowered to reopen those proceedings under section 153A without any fetters and reassess total income taking note of undisclosed income, if any, unearthed during search. 9. Filatex India Ltd Vs CIT (49 taxmann.com 465) where Hon'ble Delhi High Court held that during assessment under section 153A, additions need not be restricted or limited to incriminating material, found during course of search. Thus, in view of the facts prevailing in the assessee's case and considering the various judicial pronouncements cited above, the additions made by the AO may be sustained." 6. Heard the arguments of both the parties and perused t....
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....t case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission. 70. The above distinguishing factors in Dayawanti Gupta (supra), therefore, do not detrac t from the settled legal position in Kabul Chawla (supra) which has been followed not only by this Court in its subsequent decisions but also by several other High Courts. 71. For all of the a forementioned reasons, the Court is of the view that the ITAT was justified in holding that the invocation of Section 153A by the Revenue for the AYs 2000-01 to 2003- 04 was without any legal basis as there was no incriminating material qua each of ....