TMI Blog2016 (6) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... ing because the AO is not required to do anything further about such a return. The power given by the first proviso to assess income for six assessment years has to be confined to the undisclosed income unearthed during search and cannot include items which are disclosed in the original assessment proceedings. It is seen on facts that as the return for the year had been processed u/s 143 (1) the assessment was not pending and as no material was found during the search, the addition has no feet to stand. Hon’ble High Court of Delhi in CIT Central –III vs. Kabul Chawla (2015 (9) TMI 80 - DELHI HIGH COURT ) we find that the addition of ₹ 4 lacs has been wrongly added to the income of the assessee.- Decided in favor of assessee - ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial was found relating to receipt of gifts / amounts totaling ₹ 4,00,000/-, therefore, the issue of ₹ 4,00,000/- could not had been the subject matter of examination u/s. 153 A. Consequentially, the addition of ₹ 4,00,000/- is illegal and without jurisdiction. 2. That under the facts and circumstances, the addition of ₹ 4,00,000/- for gifts of ₹ 2,00,000/- each received from Jagdish Rai Chawla and Sh. Harbhajan LaL is absolutely wrong in law as well as on merits. 3. Before us the Ld. AR for the assessee submitted that it is not the case of the Department that the addition of ₹ 4 lacs has been made on account of any incriminating material found during the course of search and seizure procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o states that the AO shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. The second proviso states that the assessment or reassessment relating to the said six assessment years pending on the date of initiation of the search u/s 132 shall abate. It is seen that in assessee s case search action was initiated and it is assessee s claim that the addition of ₹ 4 lacs was not tenable as the regular return had been filed where the particulars relating to the addition has been disclosed and the same had been accepted u/s 143 (1) of the Act and that no material has been found during the search to justify the addition. In our considered opinion section 153A does not authorise t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition that emerges is under: I. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring 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' 'of the aforementioned six years in s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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