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2015 (12) TMI 702

Assessment u/s 153A - disallowance u/s 14A - Held that:- In the absence of any incriminating material found during the course of search and the assessment proceedings having not been abated at the time of search, the Assessing Officer has no jurisdiction to make the addition under sect ion 153A of the Act . - Decided in favour of assessee. - ITA No.541 /Chd/2014 - Dated:- 8-12-2015 - SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER For the Petitioner : Shri Ashok Goyal For the .....

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7,10,574/- . 3. The assessee went in appeal before the learned CIT (Appeals) and apart from challenging the merits of the case, also raised a ground relating to the validity of assessment framed under sect ion 153A (1) (b) of the Act as according to the assessee, no incriminating material was found during the course of search which could war rant such an addition. Reliance was placed on the judgment of Rajasthan High Court in the case of Jai Steel ( India) Vs. ACIT reported in (2013) , 259 CTR 2 .....

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ng Officer is bound to issue notice to the assessee for each assessment years falling within six assessment years before the date of search. 4. Aggrieved by the said order , the Department has come up in appeal challenging the action of the learned CIT (Appeals) in deleting the disallowance made by the Assessing Officer under sect ion 14A of the Act , while the assessee has filed Cross Object ion challenging the act ion of the learned CIT (Appeals) in dismissing the ground relating to 153A. Sinc .....

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in an order passed under sect ion 153A of the Act are to be confined to any material found during the course of search only. For this proposition, reliance was placed on a judgment of Kolkata Bench of the Tribunal in the case of LMJ International Ltd. Vs. DCIT, 119 TTJ 214 (Kol ) and Hon'ble Jharkhand High Court in the case of Abhey Kumar Shroff Vs. CIT, 290 ITR 114 (Jharkhand) . 6. Before us, a compilation of three very recent judgments was also f i led for the proposition that in an assess .....

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t the assessments have been finalized before the date of search though the same has not been made under sect ion 143(3) of the Act . The time limit for the same has expired. This is also an undisputed fact that during the course of search no material leading to a disallowance under sect ion 14A of the Act was found. These facts have not been controverted by both the parties before us. Now, the quest ion to be decided by us is that in such a scenario whether the disallowance can be sustained or n .....

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................................We are of the view that for answering this question, guidance will have to be sought from section 132(1). If any books of account or other documents relevant to the assessment had not been produced in the course of original assessment and found in the course of search in our humble opinion such books of account or other documents have to be taken into account while making assessment or reassessment of total income under the aforesaid provision. Similar position wi .....

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8 (Bom) , whereby it has been held in very clear terms that in assessments that are abated, the Assessing Officer retains the original jurisdiction as well as jurisdiction confer red on him under sect ion 153A of the Act for which assessments shall be made for each of the six assessment years separately. However , In other cases, where assessments are not abated in addition to the income that has already been assessed, the assessment under sect ion 153A of the Act will be made only on the basis .....

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f the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. 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 AY .....

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nt and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A 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 .....

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