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2016 (3) TMI 1064 - ITAT DELHI

2016 (3) TMI 1064 - ITAT DELHI - TMI - Validity of assessment u/s 153A - disallowance under the provisions of Section 40A(3) - Held that:- It is undisputed fact that there was no seized incriminating material suggesting any disallowance under the provisions of Section 40A(3) of the Act. A perusal of the assessment orders does not reveal that the impugned additions made in respect of both the assessment years, have neither been based on any incriminating material seized, nor there is any whisper .....

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ers passed by the CIT(A)-XXXIII, New Delhi on 26.7.2013 in relation to the assessment years 2007-08 & 2008-09 on the following grounds:- ITA No.5760/Del/2013 1. On the facts and in the circumstances of the case, the Learned CIT(A) erred in upholding the validity of order passed by the Assessing Officer u/s 153A on 20.07.2012. 2. On the facts and in the circumstances of the case, the Learned CIT(A) erred in partly allowing the appeal as he ought to have fully allowed the appeal. 3. On the fac .....

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he appellant may kindly be allowed to raise any additional ground in the course of hearing of the appeal. ITA No.5761/Del/2013 1. On the facts and in the circumstances of the case, the Learned CIT(A) erred in upholding the validity of order passed by the Assessing Officer u/s 153A on 20.07.2012. 2. On the facts and in the circumstances of the case, the Learned CIT(A) erred in partly allowing the appeal as he ought to have fully allowed the appeal. 3. On the facts and in the circumstances of the .....

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to raise any additional ground in the course of hearing of the appeal. 2. The brief facts of the case as recorded by the ld.AO are as under; 2.1. It is engaged in the business of real estate. A search and seizure operation was conducted u/s.132 of the Act on 23.03.2011 in the case of Group. Consequent upon search and seizure operations under Section 132 of the Income-tax Act, 1961 (for short the Act ) on the Amtek Group, the assessee was covered u/s.132(1) of the Act. A notice u/s.153A was issue .....

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by the order of the ld.AO, assessee preferred appeals for both the assessment years before the ld. CIT(A). The ld.CIT(A) confirmed the addition vide order dated26.07.2013., while confirming the addition, directed the Assessing Officer to reduce the amount of addition from the closing work-in-progress. The relevant extract from the order of the ld.CIT(A) is as under; Therefore, in my view disallowance u/s 40A(3) is proper. Now, coming to the facts of the case, there is so sale of land or its dev .....

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however, subsequently it is converted into stock-in-trade, to the extent of disallowance u/s 40A(3) value of work-in-progress would reduce at the time of conversion. 3. Being aggrieved by the order of CIT(A), the assessee is in appeals for both the assessment years challenging the very jurisdiction of the Assessing Officer to make the assessment under Section 153A in the absence of any seized incriminating material. 3.1. We shall first deal with the very root of jurisdiction of the assessment. .....

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about any seized incriminating material. Therefore, he submitted that the order of assessment made is null and void in the light of the decision of Hon ble Jurisdictional High Court in the case of CIT Vs. Kabul Chawla, ITA No. 707/2014, dated 28th August, 2015. He also relied on the decisions of a coordinate bench of ITAT, Delhi Bench in the case of M/s Saraswati Housing & Developers Vs. ACIT, ITA No. 5795/Del/2011, AY 2006-07, dated 1st March, 2013. 4. On the other hand, ld. CIT(DR) relied .....

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1. Now, the law is well settled that, no assessments can be made under Section 153A in the absence of any seized incriminating material. The Hon ble Delhi High Court after referring to the various precedents on the subject i.e. CIT Vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 58 Taxmann.com 78 (Bom.) and the decision of the Hon ble Bombay High Court in the case of CIT Vs. M/s. Murli Agro Products Ltd., ITA No. 36/2009, dated 29th October, 2010, has summarized the legal posit .....

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the search takes place. ii. Assessments and reassessments pending on the date of 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 .....

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