TaxTMI 
TaxTMI 
2025 (4) TMI 989
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.... A.Y. 2011-12. 3. Brief facts of the case are that assessee company was engaged in the business of construction of infrastructure facilities and presently is under the process of corporate insolvency resolution process where the NCLT has approved the resolution plan vide its order dt. 11.06.2024. The return of income for the year under appeal was filed on 30.09.2011 declaring total income of Rs. 246,53,70,512/- which was later revised at a total income of Rs. 251,84,23,310/-. The assessment was originally completed u/s 143(3) vide order dated 28.03.2013 at a total income of Rs. 247,24,79,950/-by making the addition of Rs. 7109441/-. Thereafter, reassessment proceedings were initiated and the reassessment order was passed u/s 147 r.w.s 143(3) dated 28.12.2018 wherein the total income of the assessee was determined at Rs. 251,84,23,310/- i.e. the income declared by the assessee in the revised return. Thereafter, search and seizure action was carried out at the business premises of the assessee on 14.10.2020 simultaneously with Sh. Manoj Kumar Singh (founding member of legal firm M/s Singh & Associates), During the course of search at Shri Manoj Kumar Singh and his business associa....
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....ction. 4. That even on the facts and circumstances of the case, the proceedings initiated under Section 153A of I.T. Act, (the Act) against the appellant and the assessment framed under Section 153A/144 of I.T. Act, is in violation of the statutory conditions of the Act and the procedure prescribed under the applicable laws and as such the same is bad in the eye of law and liable to be set aside. 5. That the Ld.AO/CIT(A) has erred in law and on facts, by re-assessing the closed assessment inspite of the Assessee being protected under the moratorium u/s 153A of the Income Tax Act, 1961 and making the addition and/or disallowance not related to the material seized during the course of search and seizure action. 6. That on the facts and circumstances of the case the Ld.AO/CIT(A) has erred in passing the impugned assessment order on the basis of relying upon some vague references in parts of a seized/impounded document rather than relying upon the complete seized/impounded documents. 7. That on the facts and circumstances of the case the Ld.AO/CIT(A) has erred in passing the impugned assessment order by relying upon the part of the statement recorded....
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....he Act without referring to any incriminating material found and seized from the possession of the assessee and solely on the basis of the material found and statements recorded of third parties which are not related to the assessee as neither they were the directors nor employees of the assessee company. 7. Before us, the Ld. AR of the assessee submitted that in the case of the assessee the assessment proceedings u/s 143(3) of the Act and subsequent reassessment proceedings u/s 147 were concluded on 28.03.2013 and 20.12.2018 respectively, copy of such orders are placed in paper book pages 18-28. It is further submitted that the assessment year under appeal is unabated assessment year and no addition in unabated year could be in the absence of any incriminating material found and seized as a result of search in the case of the assessee. As per Ld. AR it is admitted position that no incriminating material was found/seized during the course of search conducted on the assessee and the additions were made solely based upon the material found and seized in the shape of pen drives, laptops, server discs, diaries, etc. from the possession of the Shri ManojKumar Singh and Sh. Devesh Sin....
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....onging to the assessee and thereafter upon the receiving such material and satisfaction note, by the Assessing Officer of the assesse that there was undisclosed income based on such material. Ld. AR submitted that the additions were made in the hands of the assessee company on the basis of statements and material found from the possession of third party without following the procedure laid down u/s 153C and, therefore, she prayed that the additions made and upheld by the Ld. CIT(A) deserves to be deleted. He placed reliance on the judgement of hon'ble Supreme court in the case of M/s Abhisar Buildwell reported in (2023) 454 ITR 212 (SC). 9. On the other hand, the Ld. CIT-DR vehemently supported the orders of the lower authorities and submitted that there was a common search carried out in the case of the assessee company and in the case of Sh. Manoj Singh Prop. Singh and Associates and if the documents containing certain undisclosed transactions with assessee were found from the possession of Sh. Manoj Kumar Singh, the same could be used as material in the case of the assessee also in the order passed u/s 153A of the Act. The ld. DR further submitted that in the case of Abhisar ....
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....he rival submissions and perused the materials available on record. From the perusal of the impugned order of AO, we find that the AO had solely relied upon the material found and seized during the course of search from the possession of Sh. Manoj Kumar Singh Prop. of Singh & Associates and his employees namely Shri Devesh Singh and Chandra Prakash. Besides this, the AO has placed further reliance on the statements given these persons wherein they accepted the movement of cash between the director of the assessee company and Sh. Manoj Kumar Singh. It is admitted position that search was simultaneously carried in the case of assessee company as well as on the Manoj Kumar Singh and his associates, however, looking to the nature of the business of the assessee company and of Sh. Manoj Kumar Singh, we find that both the entities are independent and separate entities engaged in different line of business and are not related to each other except Shri Manoj Kumar Singh is providing consultancy sieves to assessee. It could not be said that they are interrelated to each other to hold that the documents found from the possession of one person could be used in the case of other person as a co....
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...., in the case of a person in whose case search action under section 132 or action under section 132A have been conducted, and whether the Assessing Officer is satisfied that the assets or books of account or documents seized belong to another person, then, the assets or books of account or documents seized shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person, if he is that the books of accounts or documents or assets seized have a bearing on determination on the total income of such other person. It is proposed to amend sub-section (1) of the said section so as to provide that where the Assessing Officer is satisfied that, (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the of account or documents or assets, seized or requisitioned, shall be handed over to the Assessing Officer having jurisdic....
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....der section 153C of the Act for bringing the material found from the premise of Sh. Ashok Chaudhri to tax in the hands of the assessee. However, in the case under appeal before us, admittedly, Section 153C is not invoked in the case of the assessee and the assessment is framed under Section 153A. We, respectfully following the above decisions of Hon'ble Jurisdictional High Court, hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person." 17. Similarly, the Co-ordinate Bench of ITAT Delhi in the case of PCIT vs. Shivalik Mahajan in ITA No.5585/Del/2015 has held as under: "Obviously, the reference to the incriminating material in the above decisions of Hon'ble Jurisdictional High Court is in regard to incriminating material found as a result of search of the assessee's premises and not of any other assessee. The legislature has provided Section 153C by invoking the same the Revenue can utilize the incriminating material found in the case of search of any other person to the different assess....