TMI Blog2018 (3) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... eted assessment is not to be disturbed. - Decided in favour of assessee - ITA No.2839/DEL/2015 - - - Dated:- 19-3-2018 - SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant : Shri Ved Jain Ms Devina Sharma, Advocate Shri Ashish Chaddha, CA For The Respondent : Shri Vijay Verma, Sr. DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER Both these appeals have been filed by the assessee and challenge the order dated 27th February, 2015 passed by the Ld. CIT (Appeals). Since the issues involved in these appeals were identical, both the appeals were heard together and are being disposed of by this common order for the sake of convenience. 2. The brief facts of the case are that the assessee company is engaged in the business of manufacturing of CR Strips. It filed its return of income for A.Y. 2006-07 on 15th December, 2006. This return was accepted under Section 143(1) of the Income Tax Act, 1961 (hereinafter called the Act ). The return for the assessment year 2007-08 was filed on 13th March, 2008. This return was picked up for scrutiny and the assessment was framed under Section 143(3) of the Act v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned AO under Section 153A is bad and liable to be quashed as the same has been framed consequent to a search which itself was unlawful and invalid in the eye of law. 4. On the facts and circumstances of the case, learned CIT(A) has erred both on facts in law in rejecting the contention of the assessee that the proceedings initiated under Section 153A are bad in law in the absence of any incriminating material belonging to the assessee being found during the course of the search. 5. On the facts and circumstances of the case the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the AO has erred in going ahead with the reassessment order and not closing the reassessment proceedings, despite the fact that no incriminating material belonging to the assessee was found and has been subject matter of addition in any of the reassessment under section 153A for all the six years. 6(i) On the facts and circumstances of the case, the learned CIT(A) has erred in sustaining the additions/disallowances of ₹ 1,29,28,000/- made by the AO to the returned income of Rs. NIL. ( ii) That the additions and disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.1 The Ld. DR had no objection to this proposal of the Ld. AR. 4. It was submitted by the Ld. AR that the additions made by the AO were unsustainable in the absence of any incriminating material being found during the course of the search. It was submitted that the search had taken place on 28th January, 2011 and the assessment years under consideration were 2006-07 and 2007-08. Thus, the assessment proceedings for these years as on 28th January, 2011, i.e. the date of the search, were not pending and hence the same have not abated. It was further contended that in the absence of incriminating material, no addition could have been made by the AO in respect of completed assessments. The Ld. AR placed reliance on the judgment of the Jurisdictional Delhi High Court in the case of CIT vs. Kabul Chawla reported in 380 ITR 573(Delhi) in support of his contention. The Ld. AR further placed reliance on the following judgments: PCIT Vadodara-1, Versus RSA Digi Prints reported in 2017(9) TMI 530 (Gujrat) PCIT-2, Kolkata versus M/s Salasar Stock Broking Limited, (Calcutta) Pr. CIT, Delhi 02 vs. Best Infrastructure India (P) Ltd. reported in 2017 (10) TMI 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 as 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 relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Delhi High Court in the case of Smt. Dayawanti Gupta vs. CIT reported in 390 ITR 496 (Delhi), wherein it was held that material seized which is relevant to one particular assessment year is sufficient to infer a certain modus operandi adopted by the assessee for all the assessment years in question. It was held that the judgment in the case of Smt. Dayawanti Gupta vs. CIT (supra) was rendered in the peculiar facts of that case, whereby it was held that the material seized for one particular assessment year could lead to an inference regarding the modus operandi of the assessee for the other assessment years. It was explained that in the case of Dayawanti Gupta vs. CIT (supra), the assessee herself had made a statement admitting that the documents seized during the course of the search could pertain even to other assessment years. Thus, it was a case of documents found during search and admission by the assessee that such document/s could pertain to other assessment years as well. 6.3 In the present case, as stated hereinabove, the Ld. DR was fair enough to accept that no incriminating material, whatsoever, was found during the course of the search. The addition/s have be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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