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Sudhir Engineering Co. Versus DCIT, Central Cir. 25, New Delhi.

2016 (6) TMI 50 - ITAT DELHI

Assessment framed under sec. 153A/143(3) - Disallowance on account of deduction claimed under sec. 80IB - Held that:- Following the ratios laid down in Kabul Chawla (2015 (9) TMI 80 - DELHI HIGH COURT ) hold that the assessment framed under sec. 153A/143(3) of the Act questioned in the present case is not valid in absence of incriminating material found during the course of search and abatement of assessment and reassessment already framed on the date of search. The assessment is accordingly qua .....

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Bedi, Sr. DR ORDER PER I.C. SUDHIR: JUDICIAL MEMBER The assessee has questioned first appellate order on several grounds raising the issue as to whether the Learned CIT(Appeals) was justified in sustaining a disallowance of ₹ 4,91,404 on account of deduction claimed under sec. 80IB of the Income-tax Act, 1961 in an assessment made under sec. 153A/143(3) of the Income-tax Act, 1961. 2. Heard and considered the arguments advanced by the parties in view of orders of the authorities below, ma .....

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ment of assessments made earlier on 15.12.2006 under sec. 143(3) of the Act and under sec. 143(3)/147 on 20.11.2009 on the date of search. He submitted that in such a situation, the Hon'ble jurisdictional High Court of Delhi in the case of Praveen Kumar Jolly vs. DG of Incometax( Inv.) and Ors. In WP(C) 8721/2014 and others vide order dated 22.3.2016 (copy filed) has been pleased to hold that even issuance of notice under sec. 153A is bad in law. 3.1 The Learned AR submitted further that in .....

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and notice under sec. 153A of the Act was issued to the assessee. In response the assessee filed its return of income at ₹ 3,02,83,247 on which the earlier assessments were framed. In the assessment framed under sec. 153A/143(3), the Assessing Officer has disallowed the claimed deduction under sec. 80IB at ₹ 4,91,404 which has been upheld by the Learned CIT(Appeals). 4. The Learned Senior DR on the other hand opposed the appeal with this contention that the authorities below have ri .....

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ion of which does not require consideration of fresh material outside the record can be raised even for the first time before the appellate authority. As an abundant precaution and to avoid technical defect if any the ground raised on the issue can be treated as an additional ground and the same may be allowed for adjudication by the ITAT, prayed the Learned AR. 6. Considering the above submissions, we find substance in the contentions of the Learned Senior DR that validity of initiation of proc .....

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in this regard. Parties were directed to advance their respective arguments on the issue. In response they adopted the above arguments advanced by them. 7. We find that there is no dispute on the fact that in the assessment framed under sec. 143(3) of the Act on 15.12.2006 and in the reassessment framed under sec. 147/143(3) of the Act framed on 30.11.2009, the Assessing Officer had allowed the claimed deduction under sec. 80IB of the Act. These assessments were framed well before the date of s .....

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in absence of incriminating material found during the course of search and abatement of assessment on the date of search, the assessment in question framed under sec. 153A/143(3) of the Act can be held as valid. This view is supported by the ratios laid down by the Hon'ble jurisdictional High Court of Delhi in its recent decision in the case of CIT vs. Kabul Chawla - [2016] - 380 ITR 573 (Delhi). The Hon'ble High Court has been pleased to summarized the legal position on the application .....

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ng him to file returns for six AYs immediately preceding the previous year relevant to the AY in which 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 .....

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ed to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the .....

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