TMI Blog2016 (1) TMI 987X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the revenue in this regard for the assessment years 2003-04 and 2004-05 are dismissed. - Decided in favour of assessee. Also no disallowance u/s 14A of the Act could be made for the Asst Year 2004-05 by the Learned AO in the assessment framed u/s 153A of the Act in the absence of any incriminating materials found during the course of search with regard to the relevant assessment year and with regard to the relevant issue.- Decided in favour of assessee. - Mahavir Singh, JM And M Balaganesh, AM For the Appellant : None For the Respondent : Shri A K Tibrewal, FCA ORDER Shri M. Balaganesh, AM These appeals of the revenue arise out of the orders of the Learned CIT(A)- Central-II, Kolkata in Appeal No. 99A/CC-XXVII/CIT(A)-C-II/KOL./09-10 dated 31.3.2010 for Asst Year 2003-04 ; Appeal No. 100A/CC-XXVII/CIT(A)-CII/ KOL./09-10 dated 31.3.2010 for Asst Year 2004-05 ; Appeal No. 103A/CCXXVII/ CIT(A)-C-II/KOL./09-10 dated 8.4.2010 for Asst Year 2007-08 and ; Appeal No. 84/CC-XXVII/CIT(A)-C-II/KOL./10-11 dated 28.2.2011 for Asst Year 2008-09 against the order of assessment framed by the Learned AO on 3.8.2009 u/s 153A/143(3) of the Income Tax Act, 1961 (here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminating materials found during the course of search with respect to the relevant assessment year. Accordingly, the deduction u/s 80IB of the Act was denied for the subsequent asst years also by the Learned AO. The Learned AO also made disallowance u/s 14A of the Act for the Asst Year 2004-05 without any incriminating materials found during the course of search with respect to the relevant assessment year. On first appeal, the Learned CITA categorically held that since there was no search materials found during the course of search, deduction u/s 80IB of the Act which has already been granted u/s 143(3) proceedings for the Asst Years 2003-04 2004-05 cannot be disturbed and accordingly decided this ground in favour of the assessee. However on merits of the claim of the deduction u/s 80IB of the Act, he held that the assessee is not entitled for deduction u/s 80IB of the Act. Against this order, the revenue had preferred appeals before us and assessee had preferred cross objections before us. 4. When the case was called on, none was present on behalf of the department and we find that the revenue had sought adjournment for 20 cases listed before us on 23.11.2015. The reason men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equent assessment years. He pleaded before the Bench that the observation made by the Learned CIT(A) for the Asst Year 2007-08 in para 4 of his order is unwarranted. Later he filed a letter dated 23.11.2015 stating that the cross objections preferred by the assessee may be treated as withdrawn. 6. We have heard the Learned AR and perused the materials available on record. First let us consider the cross objections of the assessee. CO No. 140 / 2010 - Asst Year 2007-08 - Assessee CO CO No. 106 / 2010 - Asst Year 2003-04 - Assessee CO CO No. 107 / 2010 - Asst Year 2004-05 - Assessee CO We find that the Learned CIT(A) had made an observation in his appellate order for the Asst Year 2007-08 at para 4 page 4 as below:- I must mention here that if the position of law in respect of jurisdiction of Assessing Officer to assess any income u/s 153A is ever reversed by superior courts then on facts my order for Assessment Year 2003-04 on facts would be in favour of revenue. We find that this observation of the Learned CIT(A) is unwarranted as the appeal has been allowed by him on jurisdiction of Learned AO to assess any income u/s 153A for want of incriminating materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this [sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate : [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made.] [(2) If any proceeding init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready completed u/s 143(3) of the Act ; unless they are reopened u/s 147 of the Act for some other purpose in both the scenarios stated above. 6.4.2. The scheme of assessment proceedings contemplated u/s 153A of the Act are totally different and distinct from the proceedings contemplated u/s 147 of the Act and these procedures of assessment operate in different fields and have different purposes to be fulfilled altogether. 6.4.3. The expression 'assess or reassess' stated in section 153A(1)(b) has to be understood as below:- 'assess' means assessments to be framed in respect of abated assessment years irrespective of the fact whether there are any incriminating materials found during the course of search with respect to relevant assessment years; 'reassess' means assessments to be framed in respect of concluded assessment years where incriminating materials were found during the course of search in respect of the relevant assessment year. 6.5. Now let us see how the aforesaid provisions of section 153A of the Act and the scheme of assessment proceedings stated hereinabove fit into the facts of the instant case. For this purpose, the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the revenue before us. In the instant case, no incriminating materials are found relating to Asst Years 2003-04 and 2004-05 and hence the action of the Learned AO in disturbing the claim of deduction u/s 80IB of the Act cannot be appreciated. 6.7. We find that our understanding of the provisions of section 153A of the Act is also supported by the decision of the Hon'ble Bombay High Court in the case of CIT vs Continental Warehousing Corporation (Nhava Sheva) Ltd and All Cargo Global Logistics Ltd reported in (2015) 374 ITR 645 (Bom) vide order dated 21.4.2015, wherein the facts before the Bombay High Court and decision rendered thereon are as below :- Under section 153A of the Income-tax Act, 1961, which enables carrying out of search or exercise of power of requisition, assessment in furtherance thereof is contemplated. There is a mandate to issue notices under section 153(1)(a) and assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Thus, the crucial words search and requisition appear in the substantive provision and the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record by the Assessing Officer, that in other cases assessments would be made on the basis of the books of account and other documents found during the search and not produced during assessment and also on any other undisclosed income or property found during the search. On the issue of deduction under section BO-IA(4) the Tribunal held that the container freight station was an inland port and its income was entitled to deduction under section 80-IA(4) . On appeals: Held, dismissing the appeals, (i) that the notice under section 153A was founded on search. If there was no incriminating material found during the search then the Tribunal was right in holding that the power under section 153A being not expected to be exercised routinely, should be exercised if the search revealed any incriminating material. If that was not found then in relation to the second phase of three years, there was no warrant for making an order within the meaning of this provision. 6.8. In view of the aforesaid findings and judicial precedent relied upon, we hold that the denial of deduction u/s 80IB of the Act in the assessments framed u/s 153A of the Act for the Asst Years 2003-04 and 2004-05 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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