TMI Blog2018 (1) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... R Respondent by : Shri Debakumar Sonowal, DR ORDER Per Bench These cross appeals filed by the assessee and revenue are directed against order of the CIT(A)-3, Visakhapatnam vide ITA No.80/2015-16/CIT-(A)-3/VSP/2016-17 dated 22.2.2017, No.81/2015- 16/CIT-(A)-3/VSP/2016-17 dated 21.2.2017 and No.82/2015-16/CIT-(A)-3/VSP/2016-17 dated 21.2.2017 for the assessment years 2005-06, 2007-08 and 2008-09. Since, the facts are identical and issues are common, they are clubbed, heard together and disposed-off by way of this common order for the sake of convenience. ITA 261 354/Vizag/2017 (A.Y. 2005-06): 2. Brief facts of the case are that the assessee is an individual deriving income from house property, engaged in the business of lime stone, making of burnt lime, trading in lime products and quarrying of lime stone etc., and has filed the original return of income on 31.3.2006 admitting total income of ₹ 9,89,730/-. A search seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter called as 'the Act') was conducted on 21.1.2011 in the case of the assessee and during the course of search, the assessee had offered the additional income of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in bank account is beyond the scope of additions that can be made in an assessment u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961. 6. During the appeal hearing, the ld. A.R. argued that the addition made by the A.O. on account of ₹ 23,90,000/- towards unexplained cash deposits in the bank account and the other addition was towards unexplained gift received from his son. The assessee is in appeal with regard to the addition of ₹ 23,90,000/- and the revenue is in appeal against the deletion of addition of ₹ 62,83,906/-. The Ld. A.R. argued that the sum of ₹ 23,90,000/- cash was deposited in the bank accounts and the same was disclosed in the return of income. The assessee has filed a paper book in page No.6 of the paper book the assessee has disclosed the bank account and representing balance of ₹ 6,07,459/- in respect of Andhra bank, Piduguralla and the the return of income for the A.Y.2005-06 was filed on 31.3.2006. The time limit for issue of notice u/s 143(2) of the Act got expired. The Ld.A.R. argued that since the assessee had disclosed the bank account in the balance sheet and in the return of income, and any addition in respect of com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the A.Y. 2005-06. Time limit for issue of notice u/s 143(2) of the Act is expired on 31.3.2007. Since the period of limitation for issue of notice u/s 143(2) of the Act has been expired, the assessment deemed to have been completed and reached finality. As per the judicial precedents and the ruling of this Tribunal in the case law cited (supra), the coordinate bench held that where the assessment have been reached finality cannot be tinkered with unless there was a seized document indicating undisclosed income or the asset. For ready reference, we extract the relevant para of the order cited (supra): 11. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The only issue that arises for our consideration is whether on the facts and in the circumstances of the case, the A.O. is right in making additions without any seized materials in respect of assessment years for which the assessment proceedings have been concluded as on the date of search. The Ld. A.R. for the assessee, submitted that the issue has been already considered by the coordinate bench of Visakhapatnam ITAT in the case of Sri Hari Prasad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his assessments on the materials found during the course of search as was the case in the old procedure of block assessments. It is the contention of the assessee that the A.O. cannot disturb the completed assessment unless there was a seized material. The assessee further contended that where assessments are not pending as on the date of search and time limit for issue of notice u/s 143(2) of the Act has been expired, irrespective of the fact that those assessments have been completed u/s 143(1) or 143(3) of the Act, then the A.O. has no power to re-assess the income of those completed assessment years. We find force in the arguments of the assessee, for the reason that the coordinate bench of this Tribunal in ITA Nos.300 to 305/Vizag/2012, in case of L. Suryakantham Vs. ACIT, has considered similar issue and held that the A.O. had no jurisdiction to make additions u/s 153A of the Act, for the assessments which are not pending as on the date of search and also the time limit for issue of notice u/s 143(2) of the Act has been expired. The relevant portion of the order is extracted below: 19. We have heard both the parties, perused the materials available on record and gone thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessments on the powers of A.O. for making assessment/reassessment and the A.O. is not required to confine his assessments on the material found during the course of search as was the case in the old procedure of block assessments. The new procedure of block assessment was explained by way of provisions of section 153A of the Act. As per section 153A of the Act, the A.O. shall assess or reassess the total income of the specified six assessment years irrespective of the fact that the assessment of the said years were completed or pending as on the date of search. Therefore, the A.O. has reassessed the income of six assessment years and recomputed the profits afresh after considering the relevant facts available on record. It was the contention of the assessee that the A.O. cannot disturb the completed assessments unless there was a seized material. The assessee further contended that where assessments are not pending as on the date of search and time limit for issue of notices u/s 143(2) of the Act has been expired, irrespective of the fact that those assessments have been completed u/s 143(1) or 143(3) of the Act, then the A.O. has no power to reassess the income of those complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direct the A.O. to delete the additions made for the assessment year 2004-05, 2005-06 2007-08. 23. It is pertinent to discuss herein the case laws relied upon by the assessee. The assessee has relied upon the ITAT, special bench decision in the case of All Cargo Global Logistics Ltd. Vs. DCIT (2012) 137 ITD 287. The coordinate bench of this Tribunal, while deciding the issue in favour of the assessee held as under: In assessments that are abated, the AO aretains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessments shall be made for each of the six assessment years separately. In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (ii) undisclosed income or property discovered in the course of search. 24. The assessee relied upon, A.P. High Court decision in the case of CIT Vs. M/s. AMR India Ltd. in ITTA No.354 of 2014 dated 12.6.2014. The Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing cases:- (a) Sree Lalitha Constructions (J1TA No 368 of 2014) (b) M/s. Hyderabad House Pvt Ltd (ITTA No.266 of 2013) (c)M/s. AMR India ltd (FITA No.357 /v/2014) Further we agree with the contentions of the assessee that the decision rendered by the jurisdictional High Court in the case of Gopal Das Bhadruka (supra) have been rendered on the facts prevailing in those cases, since the issue relating to concluded assessments and pending assessments was not before the I1on'ble Andhra Pradesh High Court On the contrary, the above said three decisions of the jurisdictional High Court comes to the support of the assessee's contentions with regard to the legal proposition agitated before us, besides the decisions rendered by various other High Courts. Accordingly, we are of the view that the scope of enquiry in the case of unabated assessments, i.e., the assessment years in which proceedings are not pending, is that the undisclosed income should be ascertained only on the basis of materials found during the course of search. If no incriminating material showing any undisclosed income was found in the case of concluded proceedings, then the question of making a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respectfully following the decision of co-ordinate bench of Visakhapatnam, in the case of L. Suryakantham Vs. ACIT, in ITA Nos.300 to 305/Vizag/2012, we are of the view that the A.O. has made reassessment u/s 153A/153C of the Act, on the basis of information/material available in the return of income, without referring to any seized material. Therefore, following the special bench decision (supra) we hold that the A.O. had no jurisdiction to make additions u/s 153A of the Act, for the assessments which are not pending as on the date of search. The assessment for the assessment years 2005-06 to 2009-10 were not pending as on the date of search. The time limit for issue of notice under sec. 143(2) has been expired. Therefore, the A.O. has no jurisdiction to reassess the income for the assessment year 2005-06 to 2009-10 in the absence of any incriminating materials. The CIT(A) has rightly deleted the additions. We do not see any reason to interfere with the order of CIT(A). Hence, we inclined to uphold CIT(A) order and direct the A.O. to delete the additions made towards deemed dividend for the assessment year 2005-06 to 2009-10. 12. In this case, search was taken place on 24.7.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered is as to when returns of income filed u/s.139 of the Act are shown to have been accepted without an intimation u/s.143(1) of the Act or without any notice issued u/s.143(2) of the Act within the time limit contemplated by the proviso thereto, can be said to be assessment proceedings concluded that have not abated u/s.153A of the Act. Section 153A of the Act, uses the expressing pending assessment or reassessment . When a return is filed and when neither an acknowledgement or intimation u/s.143(1)of the Act is issued nor a notice u/s.143(2) of the Act is issued within the time limit laid down in the proviso to Secc.143(2) of the Act, the proceedings initiated by filing the return are closed. In the present case, the period for issuing the notice u/s 143(2) elapsed. Therefore the process has attained the finality which can only be assailed u/s 148 or 263 of the Act. It can thus be concluded that making of an addition in an assessment under section 153A of the Act, without the backing of incriminating material, is unsustainable even in a case where the original assessment on the date of search stood completed by absence of issue of intimation under section 143(1) of the Act or b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, addition made in respect of gifts during the year under consideration on identical facts was of the assessment year 2004-05 and the ITAT held the issue in favour of the assessee vide ITA No.154/Vizag/2010 which reads as under : We have also examined the bank accounts of the son of the appellant and we find that there are regular transactions in his bank account and most of the time he was having sufficient balance. The bank accounts show the creditworthiness of the donor. The donor has also filed an income tax return in the USA. This is a gift whereas appellant s son has gifted a substantial amount to his father and this type of case should not be doubted. Because in our society whenever children goes abroad for employment, they used to send their savings to their parents through gift. Since the transactions are overseas transactions, it should not be doubted unless and until some contrary is brought on record. In the instant case though the assessing officer has made its all efforts to get the transactions verified, but he could not bring anything on record to doubt the same. Under these circumstances, we are of the view that the genuineness of the gift received by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the orders of the authorities below. It is observed from the assessment order that the assessee has withdrawn sum of ₹ 2,25,00,000/- from First Tek Pvt. Ltd. which was recorded in the books of accounts of the First Tek Pvt. Ltd. This fact is evidenced by the page No.11 and 12 of the paper book submitted by the assessee. The fact that the transaction was recorded in the books of accounts of the First Tek Pvt. Ltd., is not disputed by the revenue. In fact the addition was made by the assessing officer on the basis of the account copy of the assessee in the books of First Tek Pvt. Ltd. There was no incriminating material made available in this case in respect of the addition of ₹ 1,72,05,000/-. On identical facts, in the earlier paragraphs of this order in the assessee s case we have deleted the addition following the Tribunal order in the case of P. Rama Raju in ITA Nos.424, 425 426/Vizag/2013 dated 31.7.2017. The relevant extract of the order is extracted in appeal cited above in ITA No.261/Vizag/2017. 15. Respectfully following the order, we allow the appeal of the assessee in ITA No.262/Vizag/2017 and dismiss the appeal of the revenue in ITA No.354/Vizag/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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