TMI Blog2016 (8) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... nt : Shri R.I. Patel, CIT/DR PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. The above captioned appeals are by the Assessee preferred against the order of the ld. CIT)(A)-I, Ahmedabad dated 28.01.2011 pertaining to A.Y. 2001-02 to 2007-08. 2. Appeals for A.Y. 2001-02 2002-03 have common issues and appeals of A.Y. 2003-04 to 2007-08 have identical issues, therefore, all these appeals were heard together and are disposed of by this common order for the sake of convenience. In IT(SS)A No. 293 294/Ahd/2011 pertaining to A.Y. 2001- 02 and 2002-03. 3. The assessee has challenged the validity of the assessment made u/s. 153A of the Act r.w.s. 143(3). As the facts in issues involved are identical for both these years, we heard the ld. counsel on the facts of A.Y. 2001-02. 4. Rival submissions were heard at length. Briefly stated the facts of the case are that a search and seizure operation was conducted at the residential premises of the assessee at Village Kochava, Tal. Mehsana on 01.11.2006. Accordingly, proceedings u/s. 153A was initiated and statutory notices u/s. 143(2) and 142(1) of the Act were issued and served upon the assessee. 5. While scrutinizing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f search. 9. We have given a thoughtful consideration to the orders of the authorities below. In our considered opinion, if no incriminating material is found then the assessment made u/s. 153A made without any reference to any incriminating material is bad in law. Our view is fortified by the decision of the Hon ble Bombay High Court in the case of Continental Warehousing Corporation 374 ITR 645 which reads as under:- Once it is held that the assessment has attained finality, then the AO while passing the independent assessment order u/s. 153A r.w. s 143(3) of the IT. Act could not have disturbed the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings u/s. 153A of the Income Tax Act establish that the reliefs granted under the finalized assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. If there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings, the AO while passing order u/s. 153A r.w.s. 143(3) cannot disturb the assessment order. 10.2. The Hon'ble High Court had an occasion to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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-search material or information available with the AO which can be related 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 date of search) and the word reassess' to completed assessment 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 findings of the search and any other material existing or brought on the record of the AO. vii. Comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) in respect of the disallowance of expenditure is that the expenditures are not supported by any documentary evidences. A perusal of the aforementioned chart shows that there is excess of expenditure over income only in respect of assessment years 2005-06, 2006-07 2007-08. Further, the A.O. has restricted the expenditure only to the extent of income shown by the assessee from pasupalan and milk sale. 16. In our considered opinion, once the A.O. has accepted the income from pasupalan and milk sale, it cannot be said that the assessee has not incurred any expenditure and further the expenditure incurred by the assessee have to be only to the extent of income shown. Even, otherwise considering the factual matrix as mentioned hereinabove, in our humble opinion, it cannot be said that the expenses are exorbitant and inflated. 17. The other allegation of the A.O. is that by showing excess loss, the assessee is setting off the losses from his other income is also ill founded because the only other income of the assessee is from salaries, dividends and interest. Interest from bank is exempt u/s. 80L of the Act and income from dividends is exempt u/s. 10(34) 10(35) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the hands of the assessee cannot be sustained. 25. Per contra, the ld. D.R. strongly supported the findings of the A.O. 26. We have given a thoughtful consideration to the sequence of events. We have carefully perused the orders of the authorities below. The undisputed fact is that a bakery was running at stud farm house of the assessee. It is also an undisputed fact that since last 5 years, the bakery was run by one Shri Anis Ansari who was paying rent of ₹ 2500 p.m. i.e. ₹ 30,000 per annum to Shri Harshadbhai Barot. What is not understandable is the authority of Shri Harshadbhai Barot taking rent from Shri Anis Ansari when he is not the owner of the property. In all probabilities Shri Harsahdbhai Barot must be collecting rent from Shri Anis Ansari on behalf of the Assessee. Much emphasis has been placed on the affidavit of Shri Harshadbhai Barot which is exhibited at page 78 79 of the paper book. 27. A perusal of the contents of the said affidavit shows that it is not an affidavit as per the law. There is no verification section in the said affidavit which is mandatory. Clause 4 of the said affidavit is also against the provisions of the law. Clause 4 re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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