TMI Blog2015 (6) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... -5-2015 - N K Saini, AM And I C Sudhir, JM,JJ. For the Appellants : Shri Ved Jain, Rano Jain, CA For the Respondent : Ms Sulekha Verma, CIT-DR ORDER Per: I C Sudhir: The assessee has impugned first appellate order on several grounds. The ground no. 1 is general in nature. In ground nos. 2 to 6 the assessee has questioned validity of initiation of proceedings u/s 153A of the Income Tax Act and framing of assessment in furtherance thereto r.w.s. 143(3) of the Act, in absence of incriminating material found during the course of search and pendency of assessment proceedings for the year on the date of search. 2. In ground no. 7 the disallowance on account of scrap sale for the purpose of deduction u/s 80IB of the Act has been questioned and in ground no. 8 disallowance made u/s 14A of the Act has been impugned. 3. Since the issue raised in ground nos. 2 to 6 is legal in nature and going to the root of the matter, we preferred to adjudicate it first. 4. We have heard and considered the arguments advanced by the parties on the issue, material available on record and the decisions relied upon in this regard. 5. The facts in brief are that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gineering Ltd. Vs. ACIT Ors. ITA Nos. 349/Del/2013 (2005-06) to 2007-08) ors. Order dated 11.04.2014 x) Raj Kumar Chawla Vs. ACIT ITA Nos. 1682/Del/2013 and ors. (A.Ys. 2004-05 ors) order dated 17.02.2015. 8. Learned CIT DR on the other hand submitted that there is no need of finding of incriminating material during the course of search to justify the validity of assessment framed under sec. 153A read with sec. 143(3) of the Income-tax Act, 1961 and the only requirement is that search has been conducted at the premises of the assessee under sec. 132 of the Act. In support, he placed reliance on the following decisions: i) CIT vs. Fila Tex India Ltd. - ITA No. 269/2014 dated 14.7.2014 (Del.); ii) Canara Housing Development Co. vs. DCIT - ITA No. 38/2014 dated 25.7.2014 (Karnataka) iii) CIT vs. Anil Kumar Bhatia 24 Taxman.com 98 (Del) iv) Promain Ltd. Vs. DCIT 95 ITD 489 (Del) (SB) v) M.B. Lal 279 ITR 298 (Del) vi) Dr. A.K. Bansal, 355 ITR 513 (All) vii) ITO vs. Varia Pratik Engineering 120 TTJ 1 (Ahd) viii) CIT vs. Raj Kumar Arora, ITA No. 56/2011 (All. H.C.) ix) DCIT vs. Apoorva Extrusion Pvt. Ltd. ors. ITA Nos. 3308/Del/2010 (A.Y. 2002-03) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. It has also discussed the decision of Hon'ble Jurisdictional Delhi High Court in the case of CIT vs. Anil Kumar Bhatia (2012) 211 Taxmann 453 (Del.), while deciding the issue. The relevant para No. 8 9 in this regard is being reproduced as under :- 8. We are unable to accept the contention advanced on behalf of the Revenue for the reason that if both the pending and completed assessment were to be taken on same pedestal, then there was no need to enshrine second proviso to sec. 153A(1) providing that the pending assessments within the period of six assessment years shall abate. The Hon'ble Delhi High Court in the case of Anil Kumar Bhatia (supra) dealt with a situation in which some incriminating material was found in respect of a non-pending assessment. It was in that background that the Hon'ble High Court held that sec. 153A applies if incriminating material is found even if assessments are completed. The question as to whether any addition can be made in respect of completed assessments when no incriminating material was found, was apparently left open. However, we find that there are sufficient indirect hints given by the Hon'ble Delhi High Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch, the total income shall be determined by restricting additions only to those which flow from incriminating material found during the course of search. If no incriminating material is found in respect of such completed assessment, then the total income in the proceedings u/s 153A shall be computed by considering the originally determined income. If some incriminating material is found in respect of 11 such assessment years for which the assessment is not pending, then the 'total income' would be determined by considering the originally determined income plus income emanating from the incriminating material found during the course of search. In the other scenario of the assessments pending on the date of search which would abate in terms of second proviso to sec. 153A(1), the total income shall be computed afresh uninfluenced by the fact whether or not there is any incriminating material. In fact, this is the position which follows when we read the judgment of the Hon'ble Delhi High Court in Anil Kumar Bhatia (supra) in juxtaposition to the special bench order in the case of All Cargo Global Logistics Ltd. (supra). The other judgment relied by the Ld. DR in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition, which is the subject matter of questions no. (II) and (III), was/is not justified in the assessment order u/s 153, as no incriminating material was found concerning the addition u/s 115JB of the Act. The Hon'ble High Court has rejected this contention of the assessee with this finding that u/s 153A of the Act, the additions need not to be restricted or limited to the incriminating material, which was found during the course of search. Thus, it is clear from the facts of this case before the Hon'ble High Court that several additions relying upon the incriminating material found in the course of search were made by the AO in the assessment proceedings u/s 153A of the Act and addition u/s 115JB was made by the AO in absence of incriminating material concerning this addition. This addition was questioned by the assessee on the basis that there was no incriminating material found concerning the addition made in the assessment u/s 153A of the Act, which has been rejected by the Hon'ble High Court with the above finding. It was held by the Hon'ble High Court that there cannot be multiple assessments, once sec. 153A of the Act is applicable. Section 153A(1) postu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra) and the decision of Special Bench of the Tribunal in the case of All Cargo Global Logistic Ltd. (supra). It has been observed by the Hon'ble High Court that the condition precedent for application of sec. 153A is that there should be a search u/s 132 and initiation of proceedings u/s 153A is not dependent on any undisclosed income being unearth during the such search. The Hon'ble Rajasthan High Court in the case of Jai Steel (supra) has been pleased to hold that if any books of accounts or other documents relevant to the assessment had not been produced in the course of original assessment and found in the course of search, such books of accounts or other documents have to be taken into consideration while assessing or re-assessing the total income under the provisions of sec. 153A of the Act. Even any undisclosed income or undisclosed property has been found after the conclusions of the search, same would also be taken into consideration. The requirement of assessment or re-assessment under the said section has to be read in the context of sections 132 or 132A of the Act, in much as, in case nothing incriminating is found on account of such search or requisition, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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