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2016 (6) TMI 127 - ITAT DELHI

2016 (6) TMI 127 - ITAT DELHI - TMI - Assessment u/s 153A - Held that:- Section 153A does not authorise the making of a de novo assessment in this particular assessment year. While under the first proviso, the AO is empowered to frame assessment for six years, under the second proviso only assessments which are pending on the date of initiation of search abate. The effect is that completed assessments do not abate. The assessments can be said to be pending only if the AO is statutorily required .....

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s.

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 No. 6208/Del/2013 - Dated:- 27-4-2016 - SHRI J.S. RE .....

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ation was carried out in the R.H. Group including the assessee on 10.2.2009. Statutory notice u/s 153A of the Income Tax Act, 1961 (hereinafter called the Act ) was issued on 15.10.2009 requiring the assessee to file her return of income. In response, the assessee filed the copy of the original return. During the 153A proceedings, the Assessing Officer noticed that the assessee had received two gifts of ₹ 2 lacs each during the year. The assessee was required to obtain the confirmations fr .....

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re, 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 Departmen .....

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essments which were pending on the date of initiation of search u/s 132 of the Act will abate and the assessment proceedings which have become final as on the date will not stand abated. It was further submitted that no incriminating material was found during the course of search to show that the gifts were not genuine. The Ld. AR submitted that the addition was made on the basis of a query raised during the assessment proceedings and not on the basis of any incriminating material found during t .....

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ely preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made. The first proviso 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 w .....

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powered to frame assessment for six years, under the second proviso only assessments which are pending on the date of initiation of search abate. The effect is that completed assessments do not abate. The assessments can be said to be pending only if the AO is statutorily required to do something further. If the section 143(2) notice has been issued, the assessment can be said to be pending. However the assessment in respect of a return processed u/s 143(1) is not pending because the AO is not r .....

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worthwhile to reproduce para 37 of the judgment of the Hon ble High Court of Delhi in the case of CIT Central - III vs. Kabul Chawla (supra) which lays down the entire law with regard to section 153A as under :- 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is under: I. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) w .....

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he 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 AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-se .....

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