TMI Blog2016 (9) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... order that in the addition made for disallowance under section 40A(3) of the Act, there is no reference of any incriminating material found during the course of search. Thus, on the date of search, undisputedly no assessment was pending for abetment and it is also an undisputed fact of the present case that no incriminating material was found during the course of search. Thus, we find that on fulfillment of these two conditions i.e. no incriminating material was found during the course of search and no assessment was pending as on the date of the search, no addition could have been made in the proceeding under section 153A of the Act in the case of the assessee. We, thus, respectfully following the ratio laid down in the case of decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction and the same is not sustainable on various legal and factual grounds. iv. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234B of the Income Tax Act, 1961. v. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 2. The learned Authorized Representative of the assessee addressing the ground No. 2 of the appeal submitted that in the case of the assessee original return of income under section 139(1) of the Income-tax Act, 1961 (for short the Act ) for the year under consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n response, the assessee filed a letter stating that return filed originally under section 139(1) of the Act on 17/09/2009 might be treated as return filed in the response to the notice under section 153A of the Act. In the assessment proceedings under section 153A of the Act, the Assessing Officer has made disallowance under section 40A(3) of the Act, amounting to ₹ 14,19,644/-. The learned counsel of the assessee has challenged the jurisdiction in making assessment under section with 153A of the Act on the ground that no notice under section 143(2) of the Act was issued before the expiry of statutory period and, thus, the assessment was deemed as complete and no incriminating material was found, relying on the decision of the Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been disputed by the learned CIT (DR). Further, we find from the assessment order that in the addition made for disallowance under section 40A(3) of the Act, there is no reference of any incriminating material found during the course of search. Thus, on the date of search, undisputedly no assessment was pending for abetment and it is also an undisputed fact of the present case that no incriminating material was found during the course of search. Thus, we find that on fulfillment of these two conditions i.e. no incriminating material was found during the course of search and no assessment was pending as on the date of the search, no addition could have been made in the proceeding under section 153A of the Act in the case of the assessee. We, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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