Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (11) TMI 43 - AT - Income TaxAssessment u/s. 153A - income earned from undisclosed sources - unexplained investment u/s. 69 - assessee has challenged legal issue regarding no incriminating material found during the course of search by the searched team and the addition is not on the basis of any incriminating material - Diversified views - HELD THAT:- There is no reference of any incriminating material on record. There is no any whisper in the assessment order that there was any undisclosed materials discovered by the search team. We also observed that the assessee had filed return of income u/s. 139(1) of the Act for both the above assessment years prior to the search, therefore, these two assessment years will become unabated. Therefore, it would be presumed that these two assessment years were completed assessments, which can be interfered only when there would be any incriminating material found during the course of search. It is a well settled position of law that when there are conflicting decisions of High Courts none of which is the jurisdictional High Court, then the decision favouring the assessee should be followed. For this, we derive support from the decision in the case of CIT vs. Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME COURT] - Therefore, we are of the considered view that the addition made by the taxing authorities are without correlating to any incriminating material found during the course of search, cannot be sustained. As per the decision of Kabul Chawla, [2015 (9) TMI 80 - DELHI HIGH COURT] completed assessments can be interfered with by the Assessing Officer while making the assessment under section 153A of the Act 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. AO has not referred to any incriminating material found during the course of search in the assessment order. Nothing is found contrary to the stated position of the assessee, therefore, the assessment framed u/s. 153A of the Act is not sustainable - Decided in favour of assessee. Addition made on estimation of profit - Whether no material in this respect relating/pertaining to the assessment year under consideration was found/seized during the course of search & seizure operation u/s. 132? - AY: 2010-2011 & 2011-2012 - HELD THAT:- On perusal of the assessment order, we noticed that the assessee has filed return of income for the said assessment year on 28.08.2014, which is much after the search. Similar is the position in the assessment year 2011-2012. Therefore, the contention of assessee is not acceptable that there was no incriminating material found during the course of search. Further we observe that the assessee had filed return of income for A.Y. 2011-2012 on 28.03.2013. In this assessment year the selection for scrutiny period and issue of notice u/s. 143(2) of the Act was also not expired on the date of search i.e. 21.08.2013. Therefore, these two assessment years are not to be treated as unabated assessment year as per the decision of many courts. Therefore, the case of the assessee shall be made on the normal course of the provisions as per Section 153A/143(3) of the Act. Accordingly, the CIT(A) has rightly held that the assessment has been completed by the AO on the basis of materials found during the course of search proceedings. NP estimation - net taxable profit calculation - HELD THAT:- We are in agreement with the views taken by the authorities below in estimating the net profit of the assessee in absence of production of books of accounts, however, with the consent of both the parties and looking to the business of the assessee, it will be just and proper to estimate the net taxable profit @15% of the total gross receipt by the assessee. Accordingly, we direct the AO to apply the net taxable profit @15% of the gross receipt. We further make it clear that after calculation of net taxable profit @15% by the AO, no further any deduction or depreciation, interest on capital and salary to partners or towards any other expenditure, shall be allowed and the net taxable profit should not be exceeded to the addition made by the AO.
|