TaxTMI 
TaxTMI 
2026 (6) TMI 1446
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....00/- under section 69 of the Act. 3. The brief facts of the case are that search and seizure operations were conducted u/s. 132 of the Act in Tyagi group of cases on 16.05.2018. The case of the assessee was also covered in these operations. The AO issued notice u/s. 153A of the Act on 15.01.2020. In response of this notice u/s. 153A, assessee filed return on 29.1.2020 declaring total income of Rs. 12,47,340/-. After submission of the return u/s. 153A, notice u/s. 143(2) issued to the assessee on 26.10.2020. thereafter, various other notices were issued to the assessee which have been duly complied with. Finally, assessment u/s. 153A of the Act was completed on 29.92.201, determining the total at Rs. 6,43,79,840/-. Against the aforesaid action of the AO, assessee appealed before the Ld. CIT(A). Ld. CIT(A) has partly allowed the appeal of the assessee. 4. Aggrieved, the Revenue is in appeal before us. 5. We have heard both the sides and perused the records. Ld. DR relied upon the order of the AO. However, Ld. AR for the assessee relied upon the order of the CIT(A) and requested to uphold the same wherein, Ld. CIT(A) has held as under:- 8. I have considered the mater....
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.... ground no. 3 and 4 are allowed. 14. Ground No. 5 and 6 are related to the addition of Rs. 75,50,000/- (Rs.45,50,000/- + Rs. 31,00,000/-)u/s 69 of the Act on account of unexplained investment in property made by the appellant merely on the basis of copy of agreement to sale (Ikraranamas) found during the search proceedings. 15. During the assessment and appellate proceedings, appellant submitted that he did not purchase any property from any of the persons as mentioned in the copy of agreements to sale (Ikraranamas) seized from the residence of Shadab Ahmed Siddiqui. However, appellant submitted that, he entered into an agreement with Mr. Vinod Kumar on 08.05.2017 for Rs. 45,50,000/- and has given advance/token money in cash of Rs. 1,00,000/- but later on, same was refunded by Mr. Vinod Kumar and deal was cancelled on the same day. Further, appellant also submitted that he never entered into any agreement with Ms. Priyanka Agarwal D/o Sh. Vijay Kumar Gupta for Rs. 31,00,000/-, that is the reason the said agreement to sale is not signed by any of the party. 16. Further, above additions were made on the basis of document found from the control and possessio....
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....refore, ground no. 5 and 6 are allowed. 22. Ground No.7 to 10 are related to addition of Rs. 2,71,32,500/- on account of additions made by grossing up gross receipts of Rs. 16,27,950/- @ 6% by rejecting the claim u/s 44AD of the Income Tax Act 1961. 23. The Assessing officer found that the appellant had disclosed a total income of Rs. 12,47,340/- after claiming various deductions. The appellant has disclosed a total receipt/turnover of Rs. 16,27,950/- in the return of income furnished u/s 153A of the Act. On such receipts, the appellant disclosed a net profit of Rs. 16,27,950/- (net profit @ 100% of gross receipts). 24. The main argument of the appellant is that appellant filed his return originally u/s 139 on 16.07.2018 after declaring his business receipts u/s 44AD. Thereafter, appellant again filed the same amount of income u/s 153A on 29.01.2020 declaring the same amount of income. Therefore, in the absence of incriminating material, Assessing Officer was not justified in denying the benefit computation u/s 44AD of the Act in framing assessment u/s 153A of the Act and also grossing up the gross receipts of Rs. 16,27,950/- @ 6% to Rs. 2,71,32,500/- ....
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....arch takes place under Section 132 of the Act, notice under Section 153 A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years, in other words there will be only one assessment order in respect of each of the six AYs "in which boih the disclosed and the undisclosed income would be brought to tax". Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the as....
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....l assessments, envisaged under the erstwhile regime, i.e., (i) block assessment under section 158BA to assess the 'undisclosed income' and (ii) regular assessment in accordance with the provisions of the Act to make assessment, qua income other than undisclosed income. Secondly, that the 'undisclosed income' was chargeable to tax at a special rate of 60% under section 113 whereas income other than 'undisclosed income' was required to be assessed under regular assessment procedure and was taxable at normal rate. Therefore, section 153A came to be inserted and brought on the statute. Under Section 153A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the 'undisclosed' income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153A and in case of search, there shall be block assessment, for six years. Search assessments/ block assessments under Section 153A are triggered by conducting of a valid search under Section 132 of the Act, 1961. The very purpose of search, which is a prerequisite/ trigger for invoking the provisions of sections 153A/153C is detection of un....
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....rch under Section 132 or making of requisition under Section 132-A, as the case may be, shall abate. (2) If any proceeding initiated or any order of assessment or reassessment made under subsection (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or Section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation. - For the removal of doubts, it is hereby declared that, - (i) save as otherwise provided in this section, Section 153-B and Section 153-C, all provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. " 24. As per the provisions of Section 153A, in case of a se....
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....ed in section 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under section 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. 25. If the submission on behalf of the Revenue that in case of search oven where no incriminating material is found during the course of search, even in case of unabated/ completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153A of the Act is linked with the search and requisition under Section 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant, to search or requisition. Therefore, only in a Case where the undisclosed income is found on the basis of incriminating mat....
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....ed/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs." 29. In this case, the assessment for the A.Y 2018-19 was completed u/s 143(1) on 29.01.2019 therefore, the Assessing Officer was required to make addition on the basis of seized material in the impugned assessment proceedings. As the addition is not made on the basis of seized material, therefore, the addition made by the Assessing Officer is liable to be deleted. 30. In view of the decision of the Hon'ble Supreme Court in the case of Pr.CIT Vs. Abhisar Buildwell Pvt. Ltd. in Civil Appeal No. 6580 of 2021 dated 24.04.2023 it is held that the Assessing Officer was not justified in making addition in respect of completed assessment without any incriminating material. 31. The addition made by the Assessing Officer is deleted. Therefore, ground no. 7 to 10 are allowed." 5.1 After perusing the aforesaid findings of the Ld. CIT(A), with regard to deletion of addition ....