TMI Blog2015 (4) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee, against order dated 02.02.2010 08.02.2010 for the A.Ys. 2002-03 and 2004- 05 respectively, passed by Ld. CIT(A)-38, Mumbai for the quantum of assessment passed u/s 153 A r.w.s. 143(3) of the Income-tax Act. Since the facts and issues involved in both the appeals are common therefore, same are being disposed off by way of this consolidated order. 2. In various grounds of the appeal, assessee has mainly challenged the addition on account of deemed dividend u/s 2(22)(e) of ₹ 1,69,68,750/- in the A.Y. 2002-03 and sum of ₹ 4,62,91,123/-in the A.Y. 2004-05. Besides this, the assessee has also filed petition for admission of following as additional ground, which is common in both the years except for variation in the figures of deemed dividend. 1. The learned Commissioner of Income Tax (Appeals) erred in confirming and the learned Assessing Officer erred in passing the assessment order u/s 153A and the same is without jurisdiction and ban in law. 2. The learned Commissioner of Income Tax (Appeals) erred in confirming and the learned Assessing Officer erred in making addition of ₹ 1,69,68,750/- u/s 2(22)(e) in assessment order u/s 143(3) r.w.s. 153A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,65,76,000/- for the A.Y. 2004-05 was made, vide separate order dated 31.03.2009. 5. Before us, learned counsel submitted that during the course of search and seizure action, no incriminating document, material or unaccounted assets were found from the assessee. Even for the year of search i.e. A.Y. 2008-09, no addition has been made. The assessing officer without there being any incriminating material found in the course of search relating to the deemed dividend has made the addition on the basis of information already available in the return of income. This is also evident from the copy of panchnama and statement on oath of the assessee recorded at the time of search, the copy of which have been placed in the paper book form pages 135 to 139. Even in the assessment order there is no whisper about any material or document found at the time of search relating to the transaction of deemed dividend. The Ld. AO he has noted the facts about receiving of the payments by the assessee from M/s. Lotus investment, which was a division of M/s. La-fin Financial Services Pvt. Ltd. in which the assessee held 50% of share, from the balance sheets and records already filed along with the retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 19.06.2007 19.06.2007 From the above, it is evident that, prior to the date of search, the assessment for both the assessment years had attained finality as the return income stood assessed before the date of search. Accordingly, the assessment for the A.Ys. 2002-03 2003-04 does not gets abated in view of the second proviso to section 153A. The relevant provisions of section 153 A reads as under:- '153A. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall-- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be required which can be made on the basis of material already on record as well as material gathered during the course of search. However, the assessments which have already attained finality and does not get abated, then they have to be assessed on the same income and cannot include any time of income for which no incriminating material has been found. The reason being that the assessments which are pending and get abated, the entire income has to be determined which includes material already on record and also the material found as a result of search. However, statute has carved out the exception to those assessments which have attained finality, because those assessments does not get abated. In such a situation, the income which has already been assessed, the same cannot be disturbed unless some incriminating information or material is found suggesting that the income which already stood assessed requires to be reassessed on the basis of new material found. This proposition has been upheld and clarified by the Hon ble jurisdictional High Court in the case of Murli Agro Products Ltd. (supra) in the following manner:- 10). Thus on a plain reading of Section 153A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nothing on record' to suggest that any material was unearthed during the search or during the 153A proceedings which would show that the relief under Section, 80HHC was erroneous. In such a case, the A.O. while passing the assessment order under Section 153A read with Section 143(3) could not have disturbed the assessment order finalized on 29.12.2000 relating to Section 80 HHC deduction and consequently the CIT could not have invoked jurisdiction under section 263 of the Act. The principle and the ratio reiterated in para 12 of the aforesaid order makes it abundantly clear that, the assessing officer while passing the assessment order u/s 153A cannot disturb the assessments/reassessment order which had attained finality, unless material gathered in the course of search establishes that the earlier assessment finalized is contrary to the fact. 9. This principle has again been reiterated by the Hon ble Rajasthan High Court, wherein Lordships after analyzing the entire provision of section 153A, held and concluded as under:- 22. The underlying purpose of making assessment of total income under s. 153A of the Act is, therefore, to assess income which was not disclosed or w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained finality and admittedly there being no incriminating material found during the course of search relating to the addition made on account of deemed dividend, therefore, such an addition de hors any material found during the course of the search, cannot be roped in the assessment made u/s 153A by the assessing officer. 10. Now, coming to the decision of ITAT Mumbai Bench in the case of Satish L. Babladi, as relied upon Ld. DR, from the perusal of the said decision it is seen that the Tribunal has strongly relied upon the decision of Hon ble Delhi High Court in the case of CIT Vs. Anil Kumar Bhatia reported in (2013) ITR 493 (Delhi). The Hon ble Delhi High Court with regard to the question, as to whether any addition can be made in respect of completed assessment when no incriminating material was found has been left open to be answered. Other observations made by the Hon ble High Court is in the form of Obiter dicta because this specific issue has been left open. Moreover the Hon ble jurisdictional High Court in case of Murli Agro Products Ltd. (supra) has categorically clarified that the assessment which had attained finality cannot be disturbed unless incriminating mater ..... X X X X Extracts X X X X X X X X Extracts X X X X
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