TMI Blog2015 (11) TMI 1358X X X X Extracts X X X X X X X X Extracts X X X X ..... The proceedings initiated under section 153C and the assessment made in the instant case is also not valid in as much as there is no incriminating material found during the course of search, pertaining to A.Y. 2011-12. Since the notice issued under section 153C is held to be invalid, the assessment made thereon has no legs to stand and therefore it is not necessary to deal with other disallowances. - Decided in favour of assessee - ITA Nos. 1541 & 1543/Mum/2015, CO Nos. 97 & 99/Mum/2015 - - - Dated:- 12-10-2015 - D. Manmohan, VP For the Appellant : Shri A G Bhatkar For the Respondent : Shri Rushabh Mehta ORDER Per D Manmohan, VP These cross appeals are directed against the orders passed by CIT(A)-48, Mumbai and they pertain to assessment years 2007-08 and 2009-10. 2. In the appeals filed by the Revenue it was contended that the CIT(A) was not justified in deleting the disallowance of ₹ 14,17,804/ 17,48,744/- (for assessment years 2007-08 and 2009-10 respectively) on account of administrative and other overheads without appreciating the fact that the assessee had not commenced its business in as much as construction of Mall started and continued up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the proceedings under section 143(3) r.w.s. 153C are bad in law. It was also contended that disallowance of administrative and other overhead expenditure is not in accordance with law. 7. It may be noticed that the main plea of the assessee was that for the years under consideration there is no assessment pending as on the date of search and more over there is not even incriminating material found during the course of search which belonged to the assessee. In fact no undisclosed income or property was discovered in the course of search and hence proceedings under section 153C would not have been initiated. The CIT(A) observed that the decisions rendered in the context of section 153A by various courts are equally applicable in the context of the provisions of section 153C of the Act. He relied upon the decision of the Hon'ble Delhi High Court in the case of CIT vs. Anil Kumar Bhatia (82 CHH 113) wherein the court observed that it is mandatory on the part of the AO to initiate proceedings under section 153A of the Act, consequent to the search and seizure action under section 132(1) of the Act; having initiated the proceedings AO is empowered to examine all the material, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l has been found during the course of search. Explanation to Section 153A and Explanation 3 to section 147 speak of bringing to tax such income which has escaped assessment and only when some income escaped assessment then other additions can be sustained. In other words, if no addition is made on the basis of which an assessment is sought to be reopened then other additions/disallowances cannot be sustained. Reference was also made to the amendment to section 153C of the Act wherein it is stated that the AO can proceed against the person other than searched person if he is satisfied that the books of account or documents or assets seized have a bearing on determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (a) of section 153A. It was contended that though the amendment was brought into the statute book by Finance Act, 2014, the court have held that the same is curative and clarificatory in nature to make the provisions of section 153C workable and therefore it is retrospective in nature. He also relied upon the latest decision of the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla (judgement m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account seized belong to a person other than searched person and it is not necessary that document seized must show undisclosed income. The decision was rendered on the peculiar facts of that case and the court was concerned with forwarding of documents from the officer who carried out the search to the AO concerned and it is not with regard to the AO who had to issue a notice under section 153C of the Act. On the contrary, in the case of Hagwood Commercial Developers Pvt. Ltd. (ITA No. 1305/Mum/2015 dated 22.05.2015), which is one of the parties referred to during the search conducted in the premises of Provogue (India) Ltd., the Bench observed that issuance of notice under section 153C without any incriminating material is not sustainable in law. With regard to the decision of the Hon'ble Kerala High Court in the case of Dr. K.M. Mehaboob vs. DICT 26 taxmann.com 54 the learned counsel submitted that the decision was rendered in connection with the power of the AO of searched party to record satisfaction and it is not with regard to the AO who has to issue notice under section 153C of the Act. He thus strongly submitted that the notice issued under section 153C is bad in l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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