TaxTMI 
TaxTMI 
2022 (2) TMI 1508
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.....s. 143(3) of the Act. The second issue in this appeal of Revenue is as regards to the order of CIT(A) deleting the disallowance made by AO on account of interest on borrowed capital diverted for interest free advances amounting to Rs.6,84,951/- while framing assessment u/s.153A r.w.s. 143(3) of the Act. 3. Brief facts are that the assessee is a firm part of Saravana Group. A search & seizure action u/s.132 of the Act was conducted on the Saravana Group of cases on 18.08.2011. During the course of search proceedings various business premises were covered including the assessee's firm case M/s. Saravana Stores (Thanga Nagai Maligai). During the financial year 2005-06 relevant to assessment year 2006-07, the assessee has two units Thanga Nagai Maligai (TNM) and Textile (TEX) division. During the year under consideration the assessee firm had incurred expenditure on advertisement and annual maintenance contract but did not deduct TDS. The second issue is that the CIT(A) had deleted the disallowance of interest on borrowed capital diverted for interest free advances amounting to Rs.6,84,951/ -. 4. The assessee filed return of income for the relevant assessment year 2006-07 on 23.....
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.... per the decision of the Special Bench of the ITAT Mumbai in the case of All Cargo Global Logistics Ltd. v. DCIT [2012) 137 ITD 287 [Mum] (SB) wherein it is held that, where the assessments are completed and no assessment is pending at the time of assessment u/s 153A, reassessment can be made only if incriminating materials are collected in the course of search and the items included in the earlier AYs cannot be re- considered through re-assessment. The co-ordinate bench of the Tribunal in the case of A.B.S.Sanjay Vs.ACIT (supra) has followed the decision in the case of All cargo Global Logistics Ltd., Vs. DCIT (Supra), and the judgment of the Hon'ble Rajasthan High Court in the case of Jai Steel (India) Vs. ACIT reported as 88 DTR(Raj) 1 and deleted the additions made on similar grounds. 7.3 The Hon'ble High Courts and different benches of the Tribunal have been consistently taking a view that in case nothing incriminating is found on account of search of requisition, the question of re-assessment of the concluded assessment does not arise. Now, it is a well settled law that re-assessment of the concluded assessment is permitted in assessment u/s 153A only if incriminati....
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....f Continental Warehousing Corporation (Nhava Sheva) Ltd. (supra), wherein considering the judgment of the Special Bench of the Mumbai Tribunal in the case of All Cargo Global Logistics 137 ITD 287(SB) (Mum), considered this issue that, whether there is scope of assessment u/s. 153A of the Act in respect to completed assessment which is limited only to undisclosed income and undisclosed assets found during the course of search or not? Hon'ble High Court held that on a plain reading of section 153 of the Act it becomes clear that on initiation of the proceedings u/s. 153A of the Act, it is only the assessment/reassessment proceedings that are pending on the date of conducting search u/s. 132 of the Act stand abated and not the assessments/reassessments already final for those assessment years covered u/s. 153A of the Act. Hon'ble High Court also discussed the CBDT Circular No. 8 of 2003 dated 18.09.2003 reported in 263 ITR (st.) 61 at page 107 wherein CBDT has clarified that on initiation of proceedings u/s. 153A of the Act the proceedings pending in appeal, revision or rectification proceedings against final assessment shall not abate. It is only because the final assessment....
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....o far and to the extent as undisclosed income is found in the course of search. On the other hand, it has been argued by the Ld. Standing Counsel that abatement of pending assessment is only for the purpose of avoiding two assessments for the same year, one being regular assessment and the other being assessment u/s 153A. In other words these two assessments coalesce into one assessment. The second proviso does not contain any word or words to the effect that no reassessment shall be made in respect of a completed assessment. The language is clear in this behalf and therefore literal interpretation should be followed. Such interpretation does not produce manifestly absurd or unjust results as section 153A (i)(b) and the first proviso clearly provide for assessment or reassessment of all six years. It may cause hardship to some assesses where one or more of such assessments has or have been completed before the date of initiation of search. This is hardly of any relevance in view of clear and unambiguous words used by the legislature. This interpretation does not cause any absurd etc. results. There is no casus omissus and supplying any would be against the legislative intent and ag....
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....on 132 (1) does not use the word "incriminating document". Clauses (a) and (b) of section 132(1) employ the words "books of account or other documents". For harmonious interpretation of this provision with provision contained in section 153A, all the three conditions on satisfaction of which a warrant of search can be issued will have to be taken into account. Having held so, an assessment or reassessment u/s 153A arises only when a search has been initiated and conducted. Therefore, such an assessment has a vital link with the initiation and conduct of the search. We have mentioned that a search can be authorised on satisfaction of one of the three conditions enumerated earlier. Therefore, while interpreting the provision contained in section 153A, all these conditions will have to be taken into account. With this, we proceed to literally interpret to provision in 153A as it exists and read it alongside the provision contained in section 132(1). The provision comes into operation if a search or requisition is initiated after 31.5.2003. On satisfaction of this condition, the AO is under obligation to issue notice to the person requiring him to furnish the return of income of si....