TMI Blog2016 (8) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... /Del/2013, C.O. No. 214/Del/2015 - - - Dated:- 29-6-2016 - SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant : Shri Ravi Jain, CIT DR For The Respondent : Shri A.K. Jain, CA ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER The present appeal has been preferred by the Department against the order dated 15.03.2013 passed by the Ld. CIT(A)-III, New Delhi for assessment year 2004-05 whereas the CO has been filed by the assessee. 2. The facts of the case, in brief, are that the above issues emerge from the fact that a search and seizure action was carried on assessee's premises on 20.08.2009 which is a part of Unity Group of companies. The other companies/concerns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had invested ₹ 10,00,000/-, ₹ 15,00,000/- and ₹ 25,00,000 respectively, did not comply with the notices issued under section 131. Accordingly ₹ 50,00,000 invested by them were treated as unexplained credit and addition was made to assessee's income by the AO. 4. In the appeal before the Ld. First Appellate Authority, the assessee challenged the assessment framed u/s 153A on the ground that no incriminating documents were found relating to it and, therefore, no addition could be made. The addition was challenged on merits also. The Ld. CIT (A) rejected the assessee s legal ground relating to the validity of proceedings u/s 153A but allowed the assessee s appeal on merits and deleted the entire addition. 5. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s framed by the Assessing officer in respect of closed assessment for which no incriminating material seized during the course of search and seizure action. 3. That on the facts and circumstances of the case, the Commissioner of Income Tax (Appeals) has erred both in law and on facts in confirming the action and Procedure followed by the Assessing officer during the proceeding u/s 153A of the I.T. Act, which is invalid in eyes of law being based on incorrect postulate that search assessment u/s 153A is de novo in nature whereas the same is to be based and confined to incriminating material unearthed during search operations. 4. That on facts and circumstances of the case the learned Assessing Officer has erred in charging intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supported the order of the AO. 10. We have carefully considered the material placed before us and the issue involved. Section 153A of the Act provides that where a search is initiated u/s 132 of the Act, the AO shall assess or reassess the total income of the six assessment years immediately 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the search, the addition has been rightly deleted by the Ld. CIT (A). It will also be 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) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the finding of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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